Document:

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                                                                   EXHIBIT 10.16

                           PURCHASE AND SALE AGREEMENT

                                     BETWEEN

                        PREFCO FIVE LIMITED PARTNERSHIP,

                        A CONNECTICUT LIMITED PARTNERSHIP

                                   ("PREFCO")

                                       AND

                     AMERICAN FINANCIAL RESOURCE GROUP, LLC

                      A DELAWARE LIMITED LIABILITY COMPANY

                                 ("PURCHASER"),

                             PREFCO V HOLDINGS LLC,

                     A CONNECTICUT LIMITED LIABILITY COMPANY

                              ("GENERAL PARTNER"),

               AND PITNEY BOWES REAL ESTATE FINANCING CORPORATION,

                             A DELAWARE CORPORATION

                               ("LIMITED PARTNER")

                                 August 9, 2002

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                           PURCHASE AND SALE AGREEMENT

          THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of the
9th day of August, 2002 between PREFCO FIVE LIMITED PARTNERSHIP, a Connecticut
limited partnership (successor in interest to PREFCO V Limited Partnership,
"Prefco"), AMERICAN FINANCIAL RESOURCE GROUP, LLC, a Delaware limited liability
company (together with any of its assignees, "Purchaser"), and PREFCO V HOLDINGS
LLC, a Connecticut limited liability company (the "General Partner") and PITNEY
BOWES REAL ESTATE FINANCING CORPORATION, a Delaware corporation (the "Limited
Partner", and, together with the General Partner, the "Partners").

                              Preliminary Statement

          WHEREAS, Prefco is the owner (i) of an estate for years (the "Estate
for Years") expiring on August 31, 2010 (the "Estate for Years Expiration Date")
in those certain parcels of land more particularly described in Exhibits A-1
through A-85 annexed hereto and made a part hereof (the "Land"), and (ii) in fee
of (a) all buildings, improvements and structures now or hereafter located on
the Land (the "Improvements") and (b) certain equipment and fixtures attached
thereto (the Estate for Years, Option Rights (defined below), Improvements,
equipment, and fixtures are hereinafter collectively referred to as the
"Property"); and

          WHEREAS, Carolina-Relco Limited Partnership, a Connecticut limited
partnership ("Remainderman"), is the fee owner of the Land, subject to the
Estate for Years; and

          WHEREAS, the Property is subject to the terms and conditions of that
certain lease (the "Lease") between Prefco, as landlord, and First Union
Corporation and First Union National Bank, successor in interest by merger or
otherwise, as tenant ("Lessee"), as more fully described in Exhibit B annexed
hereto and made a part hereof; and

          WHEREAS, the Land and the Property are encumbered by that certain
mortgage described in Exhibit C annexed hereto and made a part hereof (which
mortgage, together with the promissory notes secured thereby and any related
loan documents, are together called the "Mortgage"); and

          WHEREAS, Prefco, Remainderman and Lessee are parties to that certain
agreement (the "Tripartite Agreement") dated as of July 31, 1990 setting forth
the understanding among the parties with respect to certain rights of the lessee
under the Lease relating to the purchase of the Property and the Land and
certain other matters; and

          WHEREAS, Prefco desires to convey all of its right, title and interest
in and to the Property, and Purchaser desires to purchase all of Prefco's
interest in the Property; and

          WHEREAS, the Purchaser and PREFCO may, at the option of either party,
structure the transaction contemplated hereby as a purchase and sale of all of
the partnership interests in Prefco (the "Partnership Interests"), in which
event each Partner would convey all of its right, title and interest in and to
the Partnership Interests held by it to Purchaser.

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          NOW, THEREFORE, for and in consideration of the premises and the
mutual representations, warranties and covenants contained herein and other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Prefco, Partners and Purchaser hereby agree as follows:

          1. Purchase and Sale of the Property. On the Closing Date and
subject to the terms and conditions of this Agreement, Prefco shall sell, assign
and convey, and Purchaser or its assignee shall purchase, the Property on the
terms and conditions provided in this Agreement.

          2. Closing Documents. On the Closing Date and subject to the terms and
conditions of this Agreement, Prefco, Partners and Purchaser shall enter into
the Closing Documents to which they are a party.

          3. Purchase Price. Purchaser shall pay, and Prefco shall accept, as
the purchase price (the "Purchase Price") for the Property, in addition to
Purchaser's acquiring the Property subject to the Mortgage (or Purchaser
prepaying all or any part of the loan as evidenced by those certain Series A
9.70% Secured Note Due 2000, Series B 9.91% Secured Note Due 2004, Series C
10.01% Secured Note Due 2007, Series D 10.01% Secured Note Due 2010, Series E
10.42% Secured Note Due 2010, Series F 10.55% Secured Note due 2010 (the
"Notes"), which Notes are secured by the Mortgage, as more fully set forth
below), the amount of Fifty Four Million Six Hundred Thousand and 00/100 Dollars
($54,600,000.00), as increased or decreased pursuant to the provisions of
Sections 7 and 13 hereof, which Purchase Price shall be paid by Purchaser as
follows:

             (i)   simultaneously with the execution of this Agreement,
Purchaser shall deposit with the Title Company (as defined is Section 7 (ii)
hereof), as escrow agent (the "Escrow Agent"), the sum of Two Hundred Fifty
Thousand and 00/100 Dollars ($250,000.00) (together with any interest earned
thereon, the "Deposit");

             (ii)  simultaneously with Purchaser's satisfaction or waiver of
the conditions precedent set forth in Section 7 hereof, Purchaser shall deposit
with Escrow Agent the sum of Two Hundred Fifty Thousand and 00/100 Dollars
($250,000.00), which amount will be added to and become part of the Deposit; and

             (iii) At Closing, Purchaser shall pay or shall cause the Escrow
Agent to pay to Prefco (or its designees) the Deposit ($500,000.00 plus accrued
interest thereon) plus the balance of the Purchase Price in the amount of Fifty
Four Million One Hundred Thousand and 00/100 Dollars ($54,100,000.00)(as
increased or decreased pursuant to the provisions of Sections 7 and 13 hereof)
in immediately available funds by wire transfer to accounts designated by
Prefco. Purchaser acknowledges that the Property is subject to the Mortgage and
that the Purchase Price shall not be diminished or otherwise reduced by reason
thereof, including, without limitation, reductions by reason of the pay off of
all or any part of the existing financing, prepayment penalties, or otherwise
(whether Purchaser elects to prepay all or any part of the loan as evidenced by
the Notes and secured by the Mortgage).

          4. Deposit; Escrow Terms. The Deposit shall be deposited by Escrow
Agent

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in an interest bearing account and the interest shall be payable to whichever
party is entitled to receive the Deposit. The parties acknowledge that Escrow
Agent is holding the Deposit and interest thereon solely as a stakeholder at
their request and for their convenience, that Escrow Agent shall not be deemed
to be the agent of either party in carrying out its role as Escrow Agent
hereunder, and that Escrow Agent shall not be liable to either party for any act
or omission on its part unless taken or suffered in bad faith or in willful
disregard of this Agreement or involving its gross negligence. Prefco and
Purchaser shall jointly and severally indemnify and hold Escrow Agent harmless
from and against any and all claims, liabilities and expenses (including
reasonable attorneys' fees and disbursements and court costs) which Escrow Agent
may incur in connection with any dispute over the distribution of the Deposit,
except with respect to actions or omissions taken or suffered by Escrow Agent in
bad faith or in willful disregard of this Agreement or involving Escrow Agent's
gross negligence. Escrow Agent may act or not act in its role as escrow agent
hereunder in full reliance upon and with the advice of counsel which it may
select and shall be fully protected in so acting or not acting. Escrow Agent has
acknowledged its agreement to act as escrow agent in accordance with this
Agreement by signing in the place indicated on the signature page of this
Agreement. Escrow Agent may at any time discharge its duties hereunder by
depositing the Deposit with a court of competent jurisdiction. If the Closing
occurs, the Deposit shall be applied toward the Purchase Price and paid to
Prefco or the Partners, as applicable. If the Closing does not occur for any
reason other than a Purchaser's default, then the Deposit shall be returned to
Purchaser.

          5. "As-Is". Purchaser accepts the Property "AS-IS," "WHERE IS," with
all faults and defects as of the date hereof and the Closing Date. Purchaser
represents that it is relying solely upon its inspection of the Property, if
any, for all purposes whatsoever including, without limitation, the
determination of the character, size (including quantity of acreage), condition
(whether environmental or otherwise), accessibility, compliance with applicable
laws, state of repair and title and zoning, except as expressly set forth in
this Agreement. Purchaser acknowledges that there have been no representations,
warranties, guaranties, statements or information of any kind, express or
implied (including, but not limited to, implied warranties of merchantability
and fitness for a particular purpose), made or furnished to Purchaser by Prefco
or any of its employees or agents, except as expressly set forth in this
Agreement. This Section 5 shall survive the termination of this Agreement or the
Closing.

          6. Environmental. Prefco makes no representations or warranties to
Purchaser that the Property is now or will be through the Closing Date in
compliance with applicable federal, state, regional, county or local laws,
statutes, rules, regulations or ordinances, concerning environmental matters or
the environment. Without limitation and in furtherance of the foregoing, it is
expressly agreed between Purchaser and Prefco that the Land and Improvements are
being transferred to and accepted by Purchaser pursuant to this Agreement in
their present, strict "AS IS, WHERE IS" environmental condition as of the
Closing Date and with all environmental faults, including without limitation any
environmental defects involving hazardous materials in, on, under or emanating
from the Land or Improvements, whether latent or patent, disclosed or
undisclosed, asserted or unasserted, known or unknown. Purchaser is not relying
on any environmental representation or environmental warranties of any kind
whatsoever, express or implied, from Prefco as to any matter concerning the
environmental condition or

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environmental quality (surface or subsurface) of the Land and Improvements and
hereby expressly and unconditionally waives and releases any and all implied
warranties relevant to the environmental condition and/or environmental quality
of the same. Nothing set forth in any other section of this Agreement shall be
interpreted or construed to be a representation or warranty relating to
compliance with environmental, health and safety matters. This Section 6 shall
survive the termination of this Agreement or the Closing.

          7.  Approvals and Conditions; Indemnity.

          (a) The obligations of Prefco and Purchaser under this Agreement shall
be subject to and contingent upon timely satisfaction of the following
conditions, which conditions, if not satisfied or waived as hereinafter
provided, shall entitle Prefco or Purchaser, as the case may be, to terminate
this Agreement in accordance with (and within the time periods set forth in)
this Section 7:

          (i) Review of Documentation Relating to the Property; Physical
              Inspection of the Land and Improvements. Prefco has heretofore
              provided Purchaser with copies of all documentation concerning the
              Property which is in Prefco's possession or control, including
              without limitation, any existing title policies covering Prefco's
              interest in the Land and Improvements, the Lease, the Mortgage,
              the Tripartite Agreement and that certain Option Agreement dated
              as of July 31, 1990 between Investment Partners Leasing
              Corporation and Prefco (the "Option Agreement"). In addition,
              Prefco covenants and agrees to send Lessee the letter in the form
              attached hereto as Exhibit G, and to use commercially reasonable
              efforts in obtaining the materials requested therein; provided,
              however, that such commercially reasonable efforts shall not be
              construed to require Prefco to threaten or initiate litigation,
              grant any concession or pay any consideration. Prefco shall
              continue to cooperate with Purchaser in providing information and
              documents to assist in Purchaser's investigation of the Property.
              Purchaser may, at Purchaser's sole risk and expense, undertake
              such physical inspection of the Land and Improvements as Purchaser
              deems necessary or appropriate subject to the rights of Lessee
              under the Lease.

              Notwithstanding any other provisions contained in this Agreement
              to the contrary, Purchaser understands and agrees that any on-site
              inspections of the Property shall be conducted in accordance with
              the provisions of the Lease. Purchaser agrees to indemnify against
              and hold Prefco harmless from any claims by third parties for
              liabilities, costs, expenses (including reasonable attorney's
              fees), damages or injuries arising out of or resulting from the
              inspection by Purchaser or its agents, and notwithstanding
              anything to the contrary in this Agreement, such obligation to
              indemnify and hold Prefco harmless shall survive Closing or any
              termination of this Agreement. All on-site inspections shall occur
              at any reasonable time during normal business hours, upon the
              giving of reasonable notice, if the

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              inspecting parties take precautions not to unreasonably
              inconvenience Tenant or any persons occupying the Property in
              accordance with the Lease, and are accompanied by an employee or
              other representative of Tenant at all times during such entry or
              inspection. Notwithstanding anything contained in the foregoing to
              the contrary, Purchaser understands and agrees that it may be
              excluded from inspecting areas of the Property designated as
              security areas by Tenant, including, without limitation, vaults,
              modular vaults and automatic teller machines. Without limitation
              of the foregoing, Prefco agrees to afford Purchaser and a
              reasonable number of its authorized agents the right to
              communicate with Lessee, any subtenants of Lessee (with the
              permission of Lessee), and Remainderman, provided that Prefco
              shall be entitled to have a representative present, whether in
              person or by telephone, as the case may be, during any such
              communications between Purchaser and such parties.

              Upon the termination of this Agreement in accordance with its
              terms, Purchaser shall keep confidential all such information and
              if requested by Prefco, shall furnish to Prefco copies of the
              written reports, summaries, analyses or results of all such
              inspections, which Prefco may use or may disclose to any potential
              purchaser of the Property. Purchaser shall pay in full, prior to
              delinquency, all bills and invoices for labor and material of any
              kind arising from the inspection of the Land and Improvements. If
              there is any damage to or disturbance of any portion of the Land
              and Improvements in connection with any inspection thereof,
              Purchaser shall restore such portion of the Land and Improvements
              as nearly as practicable to its original condition prior to such
              damage or disturbance including, without limitation, damage to
              landscaping or trees.

              Purchaser shall have one hundred twenty (120) days from the date
              hereof (the "Inspection Period") within which it may, at its sole
              cost and expense, review the documentation (including, without
              limitation, the Option Agreement, Lease and Tripartite Agreement)
              and the physical and environmental condition of the Land and
              Improvements. Purchaser shall have until the end of the Inspection
              Period to disapprove of the documentation and/or the physical and
              environmental condition of the Land and Improvements and to
              terminate this Agreement by delivering a written notice (a
              "Termination Notice") to Prefco on or before the expiration of the
              Inspection Period, with time being of the essence with respect to
              Purchaser's obligation to deliver such notice. If for any reason
              whatsoever Purchaser determines, in its sole discretion, that the
              Property, the documentation or any aspect thereof is unsuitable
              for Purchaser's acquisition, Purchaser shall have the right to
              terminate this Agreement by delivering said Termination Notice to
              Prefco prior to the expiration of the Inspection Period, and if
              Purchaser gives such notice of termination within the Inspection
              Period, this Agreement shall terminate, and the provisions

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              of Section 7(b) shall control. If Purchaser decides to go forward
              with the purchase at or prior to the end of the Inspection Period,
              it will deliver written notice (an "Approval Notice") to Prefco to
              that effect. If Prefco does not receive an Approval Notice or a
              Termination Notice from Purchaser before the end of the Inspection
              Period, with time being of the essence, Purchaser shall be deemed
              to have disapproved of the documentation and the physical and
              environmental condition of the Land and Improvements and all other
              matters relating thereto, and Purchaser shall be considered to
              have delivered a Termination Notice in accordance with the
              provisions hereof.

              The provisions of this Section 7(a)(i) shall survive termination
              of this Agreement or Closing.

              (ii) Approval of Title and Survey. Upon execution of this
              Agreement, Purchaser shall be entitled, but shall not be required,
              to order (A) a commitment for an owner's policy of title insurance
              (the "Commitment") issued by a title company selected by Purchaser
              and approved by Prefco (the "Title Company") pursuant to which the
              Title Company commits to issue an owner's policy of title
              insurance in such amounts as are reasonably requested by Purchaser
              (the "Title Policy") and (B) a survey of the Land (the "Survey")
              in form acceptable to Purchaser and the Title Company (in the
              event Purchaser elects to obtain title insurance). The costs of
              the Title Policy (together with any endorsements requested by
              Purchaser) and Survey shall be paid by Purchaser. During the
              Inspection Period, Purchaser shall have the opportunity to review
              the condition of title and survey. At any time prior to the
              expiration of the Inspection Period, Purchaser may disapprove the
              Survey and the title exceptions, by delivering written notice (a
              "Disapproval Notice") to Prefco stating with particularity the
              exceptions which Purchaser disapproves and the reasons for such
              disapproval. Time is of the essence with respect to Purchaser's
              obligation to deliver such Disapproval Notice. Prefco, at its
              option, shall have fifteen (15) days, from and after delivery of
              Purchaser's Disapproval Notice, to agree to undertake to cause the
              surveyor or the Title Company, as the case may be, to remove such
              objectionable exceptions. Purchaser acknowledges that Prefco shall
              not be obligated to undertake to cause the Title Company to remove
              any of the title exceptions. If Prefco agrees to undertake to
              remove any objectionable exceptions, Prefco will use diligent
              efforts to cause the removal of such exceptions within thirty (30)
              days after it agrees to such undertaking, provided however that
              the Scheduled Closing Date may be adjourned by Prefco, if
              necessary, for an additional period of sixty (60) days to remove
              such objectionable exceptions (provided that Prefco is diligently
              pursuing such removal). If Prefco does not agree to undertake to
              remove such exceptions or shall fail to remove such objectionable
              exceptions within such time, Purchaser may (a) elect to

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              waive its objections and close on the Closing Date, (b) terminate
              this Agreement by delivering a Termination Notice to Prefco within
              three (3) business days after Prefco's failure to remove such
              exceptions, or (c) terminate this Agreement by delivering a
              Termination Notice to Prefco within three (3) business days after
              Prefco's failure to remove such exceptions with respect to the
              particular property for which it sent a Disapproval Notice;
              provided, however, that Purchaser shall not be permitted to
              terminate this Agreement with respect to a particular property or
              properties for which it sent a Disapproval Notice which,
              individually or in the aggregate, constitute greater than five
              percent (5.0%) of the equity value of all Properties. In the event
              Purchaser elects option (c) as set forth in the immediately
              preceding sentence, Purchaser shall be entitled to receive a
              credit in its favor against the Purchase Price in respect of due
              diligence expenses, such due diligence expenses not to exceed Five
              Thousand and 00/100 Dollars ($5,000.00) for each property that
              Purchaser has terminated this Agreement with respect to in
              accordance with the foregoing provisions. Notwithstanding the
              foregoing, Purchaser shall not be entitled to any such
              reimbursement if the transaction contemplated by this Agreement
              does not close for any reason whatsoever, and shall not be
              entitled to any such reimbursement in an amount greater than Fifty
              Thousand and 00/100 Dollars ($50,000.00). Purchaser's failure to
              respond within such three (3) business day period shall be deemed
              an election to terminate this Agreement, and the provisions of
              Section 7(b) shall control. In the event Prefco does not receive a
              Disapproval Notice from Purchaser prior to the end of the
              Inspection Period, with time being of the essence, Purchaser shall
              be deemed to have approved the Survey and the condition of title
              as set forth in the Commitment through the last day of the
              Inspection Period. Any title exceptions or survey exceptions not
              objected to by Purchaser or otherwise waived and accepted by
              Purchaser shall be deemed "Permitted Exceptions" to the conveyance
              to Purchaser by Prefco.

              Purchaser may, at or prior to Closing, notify Prefco in writing
              (the "Gap Notice") of any objections to title: (a) raised by the
              Title Company between the expiration of the Inspection Period and
              the Closing; and (b) not disclosed by the Title Company or
              otherwise known to Purchaser prior to the expiration of the
              Inspection Period. If Purchaser sends a Gap Notice to Prefco,
              Purchaser and Prefco shall have the same rights and obligations
              with respect to such notice as apply to a Disapproval Notice in
              accordance with the provisions of this Section 7(a)(ii).

              In addition to and without limiting the foregoing, Purchaser shall
              verbally inform Prefco not more than thirty (30) nor less than
              twenty (20) days after the date hereof, and from time to time
              thereafter at Prefco's reasonable request, of the status of
              Purchaser's document review (including without limitation title
              and survey) and Property inspection pursuant to this Section

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              7, including a statement of those items and/or documents which
              Purchaser is still reviewing and/or inspecting with respect to the
              Property.

         (b)  Effect of Termination. If this Agreement is terminated pursuant to
this Section 7, the Deposit shall be refunded to Purchaser and Purchaser shall
return to Prefco or destroy on behalf of Prefco all documents delivered by
Prefco to Purchaser pursuant to this Agreement. Upon completion of all of the
foregoing, this Agreement shall be deemed terminated and no party shall have any
further rights against or obligations to the other parties hereunder, except as
to those obligations which are expressly stated to survive the termination of
this Agreement.

         (c)  Indemnity. Purchaser shall indemnify and hold harmless Prefco from
and against any and all liability, loss, cost and expense (including, without
limitation, reasonable attorneys' fees and disbursements) arising from any
action by Purchaser or any of its agents, employees or contractors in connection
with any entry onto the Land and Improvements and/or any physical inspection of
the same. This provision shall survive the termination of this Agreement or the
Closing.

         8.   Costs; Prorations. Except as otherwise provided by this Agreement,
each party shall pay the out-of-pocket costs and expenses incurred by it in
connection with this Agreement and the transactions contemplated hereby. Subject
to the terms and provisions of this Agreement, in the event Purchaser elects to
prepay some or all of the loan as evidenced by the Notes and secured by the
Mortgage, any costs incurred in connection with the prepayment of all or any
part of said loan, as evidenced by the Notes and secured by the Mortgage and
payable to the holder thereof shall be paid by Purchaser upon demand, whether or
not this Closing shall occur. There shall be no apportionments, except for any
rent under the Lease in excess of debt service on the Mortgage, which excess
will be pro-rated from the immediately preceding rent and debt service payment
date to and including the Closing Date (all other expenses being the
responsibility of the Lessee under the Lease both before and after the Closing
Date).

         9.   Remedies on Default.

              (i)  Default by Purchaser. In the event that Closing fails to
occur by reason of a default by Purchaser, Prefco shall be entitled, as its sole
remedy, to terminate this Agreement and receive the Deposit as liquidated
damages for default under this Agreement; it being agreed between the parties
hereto that the actual damages to Prefco in the event of such default are
impractical to ascertain and the amount of the Deposit is a reasonable estimate
thereof.

              (ii) Default by Prefco. In the event that Prefco or any Partner
defaults in the performance of its obligations under this Agreement for any
reason other than Purchaser's default, Purchaser shall be entitled to (a)
terminate this Agreement and receive the return of the Deposit, or (b) seek
specific performance of this Agreement by Prefco or the Partners.
Notwithstanding the foregoing, in the event that all of the closing conditions
set forth in this Agreement have been satisfied, including, without limitation,
those set forth in Section 13 hereof, and thereafter Prefco or any Partner
willfully defaults in the performance of this Agreement,

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Purchaser shall be permitted to pursue an action for damages against Prefco and
the Partners relative to such willful default, but such damages shall in no
event exceed the lesser of Purchaser's actual reasonable out of pocket expenses
or the sum of Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00).
Purchaser acknowledges and agrees that in no event shall Prefco's or any
Partner's liability pursuant to this Section 9(ii) exceed the lesser of
Purchaser's actual reasonable out of pocket expenses or the sum or Two Hundred
Fifty Thousand and 00/100 Dollars ($250,000.00). As a condition precedent to
Purchaser's right to pursue an action for damages as set forth above, Purchaser
shall be ready, willing and able to perform all of its covenants and obligations
to be performed or delivered on or before the Closing including, without
limitation, delivery of the balance of the Purchase Price. If Purchaser fails to
satisfy such requirements, Prefco shall be entitled to an immediate dismissal of
any action for damages and an immediate removal of any lis pendens affecting the
Property.

          10. Insurance; Casualty or Condemnation. If any portion of the
Improvements are materially damaged or destroyed by fire or other casualty prior
to the Closing, or in the event Prefco shall receive notice of any taking or any
threatened taking of all or any material portion of the Land or Improvements,
this Agreement shall nevertheless remain in full force and effect, without any
adjournment of the Closing Date and without any adjustment of the Purchase
Price. Prefco and each Partner shall assign all of its rights in and to any
interest it may have to the proceeds payable by any party to Prefco or the
Partner, if any, as a result of such casualty or condemnation affecting the Land
or Improvements, as applicable.

          11. Representations, Warranties and Covenants of Purchaser. Purchaser
represents, warrants and covenants to Prefco as of the date hereof as follows,
which representations, warranties and covenants shall be deemed to have been
made again as of the Closing:

          (a) Purchaser is a limited liability company duly organized and
              validly existing under the laws of the State of Delaware and is
              duly qualified as a foreign entity in each jurisdiction where the
              nature of its business or the character of its properties requires
              such qualification;

          (b) Purchaser has all requisite power and authority to carry on its
              business and to execute and deliver this Agreement and each of the
              Closing Documents (as hereinafter defined) and to perform its
              obligations under this Agreement and each of the Closing
              Documents; and the individual executing this Agreement on behalf
              of Purchaser hereby represents and warrants that he, she or it has
              the capacity set forth on the signature page hereof with full
              power and authority to bind Purchaser to the terms hereof;

          (c) this Agreement has been duly authorized by all necessary actions,
              duly executed and delivered by Purchaser and constitutes a legal,
              valid and binding obligation of Purchaser enforceable against it
              in accordance with its terms except as the enforcement may be
              limited by (i) the effect of the laws and judicial decisions of
              the State of Delaware, (ii) the discretion of any court or
              governmental or public body, authority, bureau or agency

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                 before which any proceeding may be brought or (iii) bankruptcy,
                 insolvency, reorganization, moratorium or similar laws
                 affecting creditors' rights generally;

            (d)  to the best of Purchaser's knowledge, no consent, license,
                 approval or authorization of, or filing, registration or
                 declaration with, or exemption by, any governmental or public
                 body, authority, bureau or agency is required in connection
                 with the execution, delivery or performance by Purchaser of
                 this Agreement and all of the other Closing Documents, other
                 than those which have been obtained;

            (e)  Purchaser's execution, delivery and performance of this
                 Agreement and the other Closing Documents does not and will not
                 violate (i) Purchaser's certificate of formation, operating
                 agreement or the terms of any security issued by it, or (ii) to
                 the best of Purchaser's knowledge, any law, governmental
                 regulation, judgment, order, writ, injunction or decree
                 applicable to Purchaser in any manner which will materially
                 adversely affect Purchasers ability to perform its obligations
                 hereunder, (iii) provided that all necessary consents are
                 obtained, do not and will not constitute a default or event of
                 default under any instrument, contract, agreement, lease or
                 other undertaking to which Purchaser is a party or by which it
                 or any of its properties may be subject or bound in a manner
                 which will materially adversely affect its ability to perform
                 the same, or (iv) do not result and will not result in the
                 creation or imposition of any lien, pledge, mortgage, claim,
                 charge or encumbrance upon any of its property, except as
                 permitted by the Closing Documents;

            (f)  to the best of Purchaser's knowledge without any inquiry, there
                 is no action, suit or proceeding pending or to the best of
                 Purchaser's knowledge, threatened against or affecting
                 Purchaser in any court, or by or before any federal, state,
                 municipal or other governmental department, commission, board,
                 bureau or instrumentality which would have any effect on
                 Purchaser's ability to execute and perform its obligations
                 under this Agreement;

            (g)  Purchaser has not dealt with any broker, agent or finder in
                 connection with the transaction contemplated by this Agreement.
                 To the extent Purchaser engages a broker in connection with
                 obtaining financing for the acquisition of the Property, the
                 obligations with respect to such broker in connection with such
                 financing shall be the responsibility of Purchaser. Purchaser
                 shall indemnify and hold harmless Prefco from and against any
                 cost, expense (including without limitation reasonable
                 attorneys' fees and disbursements), claim, liability or damage
                 arising out of any claim or demand by any broker, consultant,
                 finder or similar agent claiming to have dealt with Purchaser
                 in connection with this Agreement and the transaction

                                       10

<PAGE>

                 contemplated hereby;

            (h)  Purchaser and each of Purchaser's assignees, if any, shall
                 comply with all the requirements, representations, covenants
                 and negative covenants, as the same may be amended from time to
                 time, contained in the Lease, the Tripartite Agreement and the
                 Option Agreement (the foregoing documents are hereinafter
                 collectively referred to as the "Operative Documents");

            (i)  Purchaser has not filed any voluntary petition in bankruptcy or
                 been adjudicated as bankrupt or insolvent, or filed any
                 petition or answer seeking any reorganization, liquidation,
                 dissolution or similar or other relief for debtors, or sought
                 or consented to or acquiesced in the appointment of any
                 trustee, receiver, conservator or liquidator for all or any
                 substantial part of its properties; and

            (j)  the making, execution and delivery of this Agreement by
                 Purchaser has been induced by no representations, warranties,
                 covenants or agreements other than those expressly set forth in
                 this Agreement.

            12.  Representations, Warranties and Covenants of Prefco. Prefco
represents, warrants and covenants to Purchaser as of the date hereof as
follows, which representations, warranties and covenants shall be deemed to have
been made again as of the Closing:

            (a)  Prefco has all requisite power and authority to carry on its
                 business and to perform its obligations under this Agreement
                 and each of the other Closing Documents;

            (b)  Prefco is a limited partnership duly organized, validly
                 existing and in good standing under the laws of the State of
                 Connecticut and has all requisite power and authority to carry
                 on its business and to execute and deliver this Agreement and
                 each of the other Closing Documents; and the individual
                 executing this Agreement on behalf of Prefco hereby represents
                 and warrants that he, she or it has the capacity set forth on
                 the signature page hereof with full power and authority to bind
                 Prefco to the terms hereof;

            (c)  this Agreement has been duly authorized by all necessary
                 actions, duly executed and delivered by Prefco and constitutes
                 a legal, valid and binding obligation of Prefco enforceable
                 against it in accordance with its terms except as the
                 enforcement may be limited by (i) the effect of the laws and
                 judicial decisions of the State of Connecticut, (ii) the
                 discretion of any court or governmental or public body,
                 authority, bureau or agency before which any proceeding may be
                 brought or (iii) bankruptcy, insolvency, reorganization,
                 moratorium or similar laws affecting creditors' rights
                 generally;

            (d)  to the best of Prefco's knowledge, no consent, license,
                 approval or

                                       11

<PAGE>

                 authorization of, or filing, registration or declaration with,
                 or exemption or other action by, any governmental or public
                 body, authority, bureau or agency is required in connection
                 with the execution, delivery or performance by Prefco of this
                 Agreement or the transactions herein contemplated or the
                 Closing Documents to which it is a party other than those which
                 have been obtained;

            (e)  Prefco's performance, execution and delivery of this Agreement
                 and the other Closing Documents (i) do not and will not violate
                 (x) Prefco's limited partnership agreement or the terms of any
                 security issued by it, or (y) to the best of Prefco's
                 knowledge, any law, governmental regulation, judgment, order,
                 writ, injunction or decree applicable to Prefco in any manner
                 which will materially adversely affect Prefco's ability to
                 perform its obligations hereunder, (ii) provided that all
                 necessary consents are obtained (including, without limitation,
                 consents of the registered owners of the Notes and any other
                 applicable party), do not and will not violate the provisions
                 of, or constitute a default or an event of default under the
                 Mortgage, (iii) provided that all necessary consents are
                 obtained, do not and will not constitute a default or an event
                 of default under any instrument, contract, agreement, lease or
                 other undertaking to which Prefco is a party or by which any of
                 its properties may be subject or bound in a manner which will
                 materially adversely effect its ability to perform the same; or
                 (iv) do not result and will not result in the creation or
                 imposition of any lien, pledge, mortgage, claim, charge or
                 encumbrance upon any of its property pursuant to such agreement
                 or instrument, except as permitted by the Closing Documents;

            (f)  to the best of Prefco's knowledge without any inquiry, there is
                 no action, suit or proceeding pending or threatened against or
                 affecting Prefco or the Property in any court, or by or before
                 any federal, state, municipal or other governmental department,
                 commission, board, bureau, agency or instrumentality which
                 would have any effect on Prefco's ability to execute and
                 perform its obligations under this Agreement;

            (g)  Prefco is not a "foreign person" as defined in Section 1445 of
                 the Internal Revenue Code;

            (h)  Prefco has not filed any voluntary petition in bankruptcy or
                 been adjudicated as bankrupt or insolvent, or filed any
                 petition or answer seeking any reorganization, liquidation,
                 dissolution or similar relief under any federal bankruptcy or
                 insolvency laws, or other relief for debtors, or sought or
                 consented to or acquiesced in the appointment of any trustee,
                 receiver, conservator or liquidator of all or any substantial
                 part of its properties or interest in the Land or the Property;

            (i)  Prefco has not dealt with any broker in the negotiations of the
                 transactions

                                       12

<PAGE>

                 contemplated by this Agreement. Prefco shall indemnify and hold
                 harmless Purchaser from and against any cost, expense
                 (including without limitation reasonable attorneys' fees and
                 disbursements), claim, liability or damage arising out of any
                 claim or demand by any broker, consultant, finder or similar
                 agent claiming to have dealt with Prefco in connection with
                 this Agreement and the transaction contemplated hereby;

            (j)  to Prefco's actual knowledge, the Lease is in full force and
                 effect and has not been modified, except by that certain
                 Agreement Re: Modification of Lease, dated November 27, 1995,
                 that certain Modification Agreement dated as of September 30,
                 1992, that certain Modification Agreement dated as of January
                 22, 1996, and that certain Modification Agreement dated as of
                 December 20, 1999, and Prefco has no actual knowledge of any
                 current material default in the performance of the obligations
                 of any party under the Lease;

            (k)  after the date hereof and prior to the Closing, except as
                 required under the Lease, Prefco shall not sell or otherwise
                 transfer without Purchaser's consent any part of the Property,
                 or any interest therein (provided, however, that Purchaser
                 acknowledges Prefco is permitted to enter into negotiations for
                 the sale of the Property, and, at such time, Purchaser shall
                 deliver its consent to Prefco (without delay) to enter into
                 such negotiations);

            (l)  after the date hereof and prior to the Closing, except as
                 required under the Lease, Prefco shall not enter into or
                 approve any new leases and/or subleases of the Land and
                 Improvements, or amend, modify or extend the Lease, without the
                 prior written consent of Purchaser (which consent shall not be
                 unreasonably withheld or delayed), except as required pursuant
                 to the terms and conditions of the Lease;

            (m)  to the best of Prefco's knowledge, Prefco is the owner of the
                 Estate for Years in the Land, and, to the best of Prefco's
                 knowledge, is the fee owner of the Improvements and Property,
                 all of which are subject to the Permitted Exceptions.
                 Notwithstanding the foregoing, Prefco makes no representations,
                 warranties or covenants with respect to any title matters, it
                 being expressly agreed that Purchaser is relying solely on
                 title insurance commitments issued by the Title Company with
                 respect to such matters;

            (n)  the making, execution and delivery of this Agreement by Prefco
                 has been induced by no representations, warranties, covenants
                 or agreements other than those expressly set forth in this
                 Agreement; and

            (o)  to the best of Prefco's knowledge, Prefco has not received any
                 written condemnation notice with respect to the Property,
                 except that Prefco was contacted in or about February, 2001
                 with a request to donate certain

                                       13

<PAGE>

                 property and grant an easement to the Gwinnett County
                 Department of Transportation of Georgia with respect to certain
                 property located at 6155 S. Buford Highway, Norcross, Georgia
                 and 5405 Jimmy Carter Blvd., Norcross, Georgia, however this
                 matter has been inactive since August, 2001.

            13.  Closing; Conditions to Closing.

     (a) Closing. As used herein, "Closing" shall mean the closing of the
transactions contemplated herein on the Closing Date (as hereinafter defined).
Either party shall have the option, exercisable by such party by delivery of
written notice to the other party and the Partners within five (5) days prior to
the Closing Date (the "Equity Purchase Notice"), to restructure the transaction
contemplated hereby as a purchase and sale of all of the outstanding Partnership
Interests in Prefco ("Equity Purchase"). In the event either party exercises
such option, the parties hereto hereby agree that this Agreement shall
automatically be amended as set forth on Exhibit I hereto; provided, however,
that if either party objects to consummating the transaction as an Equity
Purchase, which such objection must be exercised, if at all, by providing
written notice of such objection to the other party and the Partners within one
(1) day of the receipt of the Equity Purchase Notice (the "Equity Purchase
Objection Notice"), then such Equity Purchase Objection Notice shall be deemed
void, and the transaction shall proceed as previously contemplated subject to
the provisions of this Agreement, with each party bearing one-half (1/2) of any
transfer taxes required pursuant to applicable law. The Closing shall take place
through an escrow with the Title Company with the closing documents and actions
not previously delivered or taken to be delivered to the Title Company or taken
on or before the Closing Date in New York, New York at the offices of Prefco's
attorneys, as specified by Prefco. The Closing Date shall be on or before
January 31, 2003 (the "Scheduled Closing Date") (the Scheduled Closing Date, as
adjourned from time to time as provided for more fully below shall be the
"Closing Date"). At any time after the expiration of the Inspection Period and
prior to the Scheduled Closing Date, Purchaser may adjourn the Scheduled Closing
Date as hereinafter provided. Purchaser may adjourn the Scheduled Closing Date
for a period of up to thirty (30) days (the "First Adjournment Option") by
delivering written notice of such adjournment to Prefco on or before the
Scheduled Closing Date. In the event Purchaser exercises the First Adjournment
Option, Purchaser may further adjourn the adjourned Closing Date for an
additional period of up to thirty (30) days (the "Second Adjournment Option") by
delivering written notice of the exercise of such Second Adjournment Option to
Prefco, provided, that in no event may the Closing be extended to a date which
is later than March 31, 2003. In the event Purchaser exercises the First
Adjournment Option, the Purchase Price shall be increased in the amount of Two
Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) and, in the event
Purchaser exercises the Second Adjournment Option, the Purchase Price shall be
increased in the additional amount of Two Hundred Fifty Thousand and 00/100
Dollars ($250,000.00).

     (b) Conditions to Closing (Purchaser). Purchaser's obligations under this
Agreement to proceed with Closing are subject to the satisfaction (or waiver to
the extent they may be waived as hereinafter provided) of the following
conditions on or before the Closing Date:

                                       14

<PAGE>

          (i)    Prefco shall deliver an estoppel certificate to Purchaser from
Lessee in the form attached hereto as Exhibit D.

          (ii)   Prefco shall deliver an estoppel certificate to Purchaser from
Prefco in the form attached hereto as Exhibit H.

          (iii)  The Lessee and any third parties enjoying a right of first
refusal or other similar rights to purchase the Property, if any, shall have
waived said rights. This condition may not be waived by Prefco or Purchaser.

          (iv)   In the event Purchaser elects to assume the obligations under
the Mortgage, Purchaser shall have obtained the right to assume such Mortgage
from the beneficiaries holding the Mortgage or, if Purchaser elects to prepay
all or any part of the obligations evidenced by the Notes and secured by the
Mortgage, Purchaser shall have obtained the requisite consent to make such
prepayment from all necessary parties.

          (v)    Purchaser shall have reached a separate agreement with
Remainderman, on terms mutually acceptable to Purchaser and Remainderman, for
the purchase of said Remainderman's fee interest in the Land. Prefco shall only
be required to use commercially reasonable efforts in assisting Purchaser in
such negotiations, and such commercially reasonable efforts shall not, without
limitation, be construed to require Prefco to grant any concession or pay any
consideration

          (vi)   Prefco shall have obtained any consents identified in Section
12(e) hereof.

          (vii)  All of the representations and warranties of Prefco contained
in this Agreement shall be true and correct as of the date of Closing and Prefco
shall have performed and satisfied all agreements, covenants and conditions it
is required to perform and satisfy under this Agreement prior to or at Closing,
or, in the event this Agreement is restructured as an Equity Purchase, all of
the representations and warranties of Prefco and the Partners contained in this
Agreement shall be true and correct as of the date of Closing and Prefco and the
Partners shall have performed and satisfied all agreements, covenants and
conditions that they are required perform and satisfy under this Agreement prior
to or at Closing.

          (viii) Purchaser shall have received fully executed copies of the
Closing Documents.

    (c) Conditions to Closing (Prefco). Prefco's obligations under this
Agreement to proceed with Closing are subject to the satisfaction (or waiver to
the extent they may be waived as hereinafter provided) of the following
conditions on or before the Closing Date:

          (i)    Prefco shall be able to obtain an estoppel certificate from
Lessee in the form attached hereto as Exhibit D.

                                       15

<PAGE>

          (ii)   All of the representations and warranties of Purchaser
contained in this Agreement shall be true and correct as of the date of Closing
and Purchaser shall have performed and satisfied all agreements, covenants and
conditions it is required to perform and satisfy under this Agreement prior to
or at Closing.

          (iii)  Purchaser shall have paid the Purchase Price as set forth in
Section 3.

          (iv)   Prefco shall have received fully executed copies of the Closing
Documents.

     (d)  Failure of Conditions to Closing. In the event one or more of the
conditions to Closing described in Section 13(b) hereof is not satisfied or
waived on or before the Closing, and the failure of such conditions to be
satisfied is not a result of a default by Prefco, Partners or Purchaser, then
Purchaser shall have the right to terminate this Agreement and the escrow
created hereby by giving written notice of termination to Prefco. In the event
one or more of the conditions to Closing described in Section 13(c) hereof are
not satisfied or waived on or before the Closing, and the failure of such
conditions to be satisfied is not a result of a default by Prefco, Partners or
Purchaser, then Prefco shall have the right to terminate this Agreement and the
escrow created hereby by giving written notice of termination to Purchaser.

          14.    Documents to be Delivered at Closing. At or prior to Closing,
the following documents, certificates, opinions and agreements (the "Closing
Documents"), in form and substance satisfactory to Prefco and Purchaser shall be
executed and/or delivered by the respective parties thereto:

          (i)    Special Warranty Deed to the Estate for Years in Land and fee
                 simple in Improvements (in substantially the form attached
                 hereto as Exhibit E-1 with respect to the parcels located in
                 North Carolina and in substantially the form attached hereto as
                 Exhibit E-2 with respect to the parcels located in Florida),
                 and Limited Warranty Deed to the Estate for Years in Land and
                 fees simple in Improvements (in substantially the form attached
                 hereto as Exhibit E-3 with respect to the parcels located in
                 Georgia), unless the transaction is structured as an Equity
                 Purchase, in which case the foregoing shall not be required;

          (ii)   an Assignment and Assumption Agreement (in substantially the
                 form attached hereto as Exhibit F), unless the transaction is
                 restructured as an Equity Purchase, in which case the foregoing
                 shall not be required;

          (iii)  appropriate resolutions and consents of Prefco and/or the
                 Partners (or evidence that such consent is not required);

          (iv)   Secretary's certificates and corporate resolutions of Purchaser
                 and Prefco and/or the Partners;

                                       16

<PAGE>

          (v)    Incumbency certificates of Prefco and/or the Partners and
                 Purchaser;

          (vi)   Good standing certificates of Prefco and/or the Partners and
                 Purchaser;

          (vii)  Transfer Tax Affidavits/Forms, if any, unless the transaction
                 is restructured as an Equity Purchase, in which case the
                 foregoing shall not be required;

          (viii) "Nonforeign" Person Certificates from Prefco pursuant to Treas.
                 Reg. 1.1445-2T(b)(2), unless the transaction is restructured as
                 an Equity Purchase, in which case the foregoing shall not be
                 required;

          (ix)   any other documents required to transfer to Purchaser all
                 right, title, and interest of Prefco in, to, or in any way
                 arising out of or connected with the Property or the Operative
                 Documents, and, in the event the transaction is restructured as
                 an Equity Purchase, any other documents required to transfer to
                 Purchaser all right, title, and interest of the Partners in,
                 to, or in any way arising out of or connected with the
                 Partnership Interests;

          (x)    Title affidavits and any other documents reasonably required by
                 the Title Company;

          (xi)   Proof as to the waiver and/or lapse of all rights of first
                 refusal and/or first offer, if any;

          (xii)  a certificate by each of Prefco and Purchaser (and the Partners
                 in the event that the transaction is restructured as an Equity
                 Purchase) to the effect that their respective representations
                 and warranties contained herein are true and correct as of the
                 Closing; and

          (xiii) Any other documents required pursuant to this Agreement or
                 reasonably requested by the Title Company.

          15.    Purchaser's Assignees. Purchaser, at Purchaser's sole cost and
expense, may designate separate assignees to acquire title to the Property, or
in the event that the transaction is restructured as an Equity Purchase, the
Partnership Interests. In the event Purchaser elects to take title to the
Property subject to the Mortgage, any assignment of this Agreement or
Purchaser's rights hereunder shall be subject to the terms of the Mortgage
pertaining to transfers. In the event Purchaser elects to prepay all or any part
of the loan as evidenced by the Notes and secured by the Mortgage, any such
prepayment shall be subject to the terms of the Mortgage and any other
conditions required by the registered owners of such Notes or other applicable
party.

          16.    Notices. All notices, offers, acceptances, rejections,
consents, requests and other communications hereunder shall be in writing and
shall be deemed to have been given (i) when delivered in person or (ii) when
sent by telecopier (with receipt confirmed) or (iii) on receipt after being sent
by express mail or delivery service guaranteeing overnight delivery,

                                       17

<PAGE>

provided that in the case of clause (ii) a copy is mailed by first class
registered or certified mail, postage prepaid, return receipt requested, in each
case addressed as follows:

          As to Prefco and/or Partners:  c/o Pitney Bowes Credit Corporation
                                         27 Waterview Drive
                                         Shelton, CT 06484-4361
                                         Attention: Mr. Michael Naughton
                                         Telephone: (203) 922-4076
                                         Facsimile: (203) 922-4083

          with a copy to:                Kelley Drye & Warren LLP
                                         101 Park Avenue
                                         New York, New York 10178
                                         Attention: John A. Garraty, Jr., Esq.
                                         Telephone: (212) 808-7653
                                         Facsimile: (212) 808-7897

          As to Purchaser:               American Financial Resource Group, LLC
                                         1725 The Fairway
                                         Jenkintown, Pennsylvania 19046
                                         Attention: Sonya Huffman
                                         Telephone: (215) 887-2280
                                         Facsimile: (215) 481-0200

          with a copy to:                Morgan, Lewis & Bockius LLP
                                         1701 Market Street
                                         Philadelphia, Pennsylvania 19103
                                         Attention: Edward J. Matey, Jr., Esq.
                                         Telephone: (215) 963-5000
                                         Facsimile: (215) 963-5299

or to such other person or address as either party shall furnish to the other
party in writing.

          17. Entire Agreement. This Agreement contains the entire agreement
between Prefco, Partners and Purchaser with respect to the purchase and sale
contemplated hereby and supersedes any prior agreements with respect thereto.

          18. Further Acts. Each party, upon the request of the other, agrees to
perform such further acts and to execute and deliver such other documents as are
reasonably necessary to carry out the provisions of this Agreement.

          19. Survival of Obligations. The representations, warranties and
indemnities of the parties hereto as set forth in this Agreement shall, except
as otherwise provided in this Agreement, survive the termination of this
Agreement, and shall survive the Closing and the execution, delivery and
recording of the agreements, certificates, instruments and other

                                       18

<PAGE>

documents referred to herein.

         20. No Waiver. No waiver of any provision of this Agreement shall be
effective unless it is in writing, signed by the party against whom it is
asserted and any such written waiver shall only be applicable to the specific
instance to which it relates and shall not be deemed to be a continuing or
future waiver.

         21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same Agreement.

         22. Governing Law; Consent to Jurisdiction and Venue. This Agreement
shall be construed and interpreted in accordance with the laws of the State of
Connecticut. Prefco, Partners and Purchaser agree that all disputes arising out
of or relating to this Agreement and all actions to enforce this Agreement shall
be exclusively adjudicated in the state courts of Connecticut or the federal
courts sitting in Connecticut or having appellate jurisdiction with respect
thereto and Prefco, Partners and Purchaser hereby irrevocably submit to the
jurisdiction of such courts in any suit, action or proceeding arising out of or
relating to this Agreement or in any action to enforce this Agreement. So far as
is permitted under applicable law, this consent to personal jurisdiction shall
be self-operative and no further instrument or action, other than service of
process as required by law, shall be necessary in order to confer jurisdiction
upon the person of Prefco, Partners or Purchaser in any such court.

         23. Exhibits. All of the Exhibits annexed hereto are incorporated
herein by reference and form part of this Agreement.

         24. Miscellaneous. In the event that any provision of this Agreement
shall be determined to be void or unenforceable, such determination shall not
affect the remaining provisions of this Agreement; and this Agreement shall not
be construed against the party preparing it but shall be construed as if both
parties prepared this Agreement.

         25. Third Parties. This Agreement shall not be deemed to confer in
favor of any third parties any rights whatsoever as third-party beneficiaries,
the parties hereto intending by the provisions hereof to confer no such benefits
or status.

         26. Jury Waiver. PREFCO, PARTNERS AND PURCHASER WAIVE, TO THE FULLEST
EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTER-CLAIM FILED BY EITHER PARTY (AND THEIR RESPECTIVE NOMINEES, DESIGNEES,
AND ASSIGNEES), WHETHER IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF THIS
AGREEMENT OR THE SALE OF THE PROPERTY OR ANY ACTS OR OMISSIONS OF ANY SUCH
PERSON, ITS OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS IN CONNECTION THEREWITH.
THIS SECTION 27 SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT OR THE CLOSING.

         27. Successors and Assigns. Subject to the provisions of Section 16

hereof,

                                       19

<PAGE>

this Agreement shall be binding upon and inure to the benefit of each of the
parties hereto and their respective permitted transferees, successors and
assigns.

         28. No Joint Venture. Notwithstanding anything to the contrary
contained herein, this Agreement shall not be deemed or construed to make the
parties hereto partners or joint venturers, or to render either party liable for
any of the debts or obligations of the other, it being the intention of the
parties to merely create the relationship of seller and purchaser with respect
to the Property to be conveyed as contemplated hereby.

         29. Confidentiality. Each party agrees to maintain in confidence the
dealings, negotiations and agreements of the parties with respect to this
Agreement and the transaction contemplated hereby, and neither of them shall
make any disclosure of any information regarding those matters (except to their
members, officers, directors, employees, accountants, lenders, attorneys,
consultants, appropriate governmental personnel, and others who have a need for
that information and who agree to comply with this provision, and except as to
any information which is a matter of public record or provided in connection
with applicable governmental proceedings), (a) unless both Prefco and Purchaser
otherwise agree in writing, or (b) except as may be necessary in order to comply
with applicable law after consultation with legal counsel.

         30. Saturdays, Sundays or Holidays. In the event that any of the dates
specified in this Agreement shall fall on a Saturday, Sunday or a holiday, then
the date of such action shall be deemed to be extended to the next business day.

         31. Section Headings. Section headings of this Agreement are solely for
convenience of reference and shall not govern the interpretation of any of the
provisions of this Agreement. References to "Sections" are to Sections of this
Agreement, unless otherwise specifically provided.

         32. Section 1031 Exchange. Purchaser and Prefco agree to execute any
documents necessary for Prefco to effectuate the transfer of the subject
property as reasonably requested by Prefco, including, without limitation, an
assignment of any purchase agreement to a "qualified intermediary" as defined in
Treas. Reg. 1.103(k) - 1(g)(4) if requested by such qualified intermediary in
order for said party to be able to effectuate a "like kind exchange" pursuant to
Internal Revenue Code Section 1031 and the regulations promulgated thereunder,
provided that such actions by Prefco have no material adverse impact on
Purchaser.

         33. Cooperation. Prefco, Partners and Purchaser hereby agree to
cooperate with each other in providing all information, documents and other
materials within their reasonable control necessary to assist Purchaser in the
investigation of the Property and Prefco as contemplated by this Agreement.
Purchaser agrees to reasonably cooperate with Prefco and Partners in order to
minimize any transfer taxes and similar taxes imposed on Prefco or Partners in
connection with the transaction, including without limitation, as provided
above, structuring the transaction as a sale of Partnership Interests in Prefco,
provided that Purchaser shall not be required to take any action which will
increase the risks or the costs of the transaction to Purchaser.

                                       20

<PAGE>

         34. Interim Covenants. From and after the date hereof and up to and
including the Closing Date or the termination of this Agreement, Prefco and
Partners shall promptly deliver (to the extent actually received by Prefco or
the Partners) to Purchaser copies of written default notices, notices of
lawsuits (including, without limitation, condemnation proceedings), and notices
of violations affecting the Property, Prefco or the Partnership Interests. In
addition, Prefco and the Partners shall deliver (to the extent actually received
by Prefco or the Partners) to Purchaser copies of written default notices,
notices of lawsuits (including, without limitation, condemnation proceedings),
and notices of violations affecting the Property, Prefco or the Partnership
Interests which are now in the possession of Prefco or Partners.

               [the remainder of the page is intentionally blank]

                                       21

<PAGE>

         IN WITNESS WHEREOF, Prefco and Purchaser have caused this Agreement to
be executed, under seal, by their respective signatories thereunto duly
authorized.

                           PREFCO:

                           PREFCO FIVE LIMITED PARTNERSHIP, a Connecticut
                           limited partnership

                               By:   Prefco V Holdings LLC, a Connecticut
                                     limited liability company, its general
                                     partner

                                     By:  Harlow Aircraft Inc., sole member

                                          By:   ________________________________
                                                Name: __________________________
                                                Title: _________________________

                           PARTNERS:

                           PREFCO V HOLDINGS LLC, a Connecticut limited
                           liability company

                                     By:  Harlow Aircraft Inc., sole member

                                          By:   ________________________________
                                                Name: __________________________
                                                Title: _________________________

                           PITNEY BOWES REAL ESTATE FINANCING CORPORATION, a
                           Delaware corporation

                               By:   _______________________________
                                     Name: _________________________
                                     Title: ________________________

                                       22

<PAGE>

                           PURCHASER:

                           AMERICAN FINANCIAL RESOURCE GROUP, LLC, a Delaware
                           limited liability company

                               By: _____________________________________
                                   Name: _______________________________
                                   Title: ______________________________

                                       23

<PAGE>

                           ESCROW AGENT:

                           By: _____________________________________
                               Name: _______________________________
                               Title: ______________________________

                                   24

<PAGE>

                            EXHIBITS A-1 THROUGH A-85

                       [legal descriptions to be inserted]

<PAGE>

                                    EXHIBIT B

                                      Lease

         That certain Lease dated July 31, 1990 between First Union Corporation
and First Union National Bank (successor in interest by merger or otherwise), as
lessee, and PREFCO Five Limited Partnership (successor in interest to PREFCO V
Limited Partnership), as lessor, as amended by that certain Agreement Re:
Modification of Lease, dated November 27, 1995, that certain Modification
Agreement dated as of September 30, 1992, that certain Modification Agreement
dated as of January 22, 1996, and that certain Modification Agreement dated as
of December 20, 1999.

<PAGE>

                                    EXHIBIT C

                                    Mortgage

         That certain Trust Indenture, Deed of Trust and Security Agreement made
by PREFCO V Limited Partnership, a Connecticut Limited Partnership (now known as
Prefco Five Limited Partnership) and Carolina-Relco Limited Partnership, as
grantors, to the Chase Manhattan Bank (National Association) (now known as JP
Morgan Chase Bank) as corporate trustee and Charles J. Heinzelman (now Andrew M.
Deck) as individual trustee, jointly as the trustees, and the Registered Owners
of Notes, as beneficiaries.

<PAGE>

                                    EXHIBIT D

   First Union Corporation and First Union National Bank Estoppel Certificate

To:         American Financial Resource Group, LLC ("American Financial")

Re:         Lease dated July 31, 1990, as amended by that certain Agreement Re:
            Modification of Lease dated November 27, 1995, that certain
            Modification Agreement dated as of September 30, 1992, that certain
            Modification Agreement dated as of January 22, 1996, and that
            certain Modification Agreement dated as of December 20, 1999
            (collectively "Lease")

Landlord:   PREFCO Five Limited Partnership, a Connecticut limited partnership,
            successor in interest to PREFCO V Limited Partnership

Tenant:     First Union Corporation and First Union National Bank, successor in
            interest by merger or otherwise

Premises:   See Exhibits "A-1 through A-85" attached hereto and incorporated
            herein by reference

Ladies and Gentlemen:

     The undersigned is the tenant ("Tenant") pursuant to the Lease. Tenant
understands that Landlord and American Financial have entered into that certain
Purchase and Sale Agreement dated _______ ___, 2002, and further understands
that American Financial is relying on the statements made by it in this Estoppel
Certificate. Tenant hereby certifies, represents and warrants to American
Financial as follows as of the date set forth below:

1.   A true, correct and complete copy of the Lease is attached hereto as
     Exhibit B which is incorporated herein by this reference. The Lease has not
     been amended, modified, supplemented or superseded in any manner
     whatsoever, except as specifically stated above. The Lease constitutes a
     complete statement of the agreements, covenants, terms and conditions of
     Landlord and Tenant with respect to the letting of the Premises, and there
     are no other agreements or understandings between Landlord and Tenant with
     respect to the Premises or the Lease, except for that certain Option
     Agreement, Option and Subordination Agreement, Tripartite Agreement, and
     Assignment of Lease, copies of which are attached hereto as Exhibit C.

2.   The term of the Lease commenced on July 31, 1990 and will end on August 31,
     2010.

3.   The Lease is in full force and effect and has not been terminated with
     respect to the Premises.

4.   To the best of Tenant's knowledge, there are no defaults under the Lease
     (i) in the payment of rent or any other amounts due under the Lease or (ii)
     in the observance or performance of

                                      -28-

<PAGE>

     any other agreement, covenant, term or condition to be observed or
     performed by Landlord or Tenant. Tenant has no knowledge of any state of
     facts or events that, with the passage of time or the giving of notice, or
     both, would constitute a default by Landlord or Tenant.

5.   Tenant has paid all installments of: (i) Basic Rent (as defined in the
     Lease) that is payable to Landlord through the month of _________, and (ii)
     Additional Rent (as defined in the Lease) that is payable to Landlord, if
     any, through the month of _________.

6.   To the best of Tenant's knowledge, all conditions under the Lease to be
     performed by Landlord have been completed to its satisfaction. To the best
     of Tenant's knowledge, there is no work to be performed by Tenant that has
     not been completed, and there are no defects or deficiencies that may
     entitle Landlord to cancel the Lease or to receive any other benefit or
     relief. Tenant has no knowledge that the Premises are not in compliance
     with any federal, state or local law, statute, rule, regulation, code or
     ordinance applicable to the Premises. Tenant has not received notice of any
     "casualty" (as defined in the Lease) or of a pending or threatened
     "condemnation" (as defined in the Lease) with respect to the Premises.
     Tenant has not given Landlord notice that it intends to terminate the Lease
     or to provide a substitute parcel with respect to the Premises pursuant to
     Paragraph 13 of the Lease.

7.   Landlord did not require a security deposit from Tenant under the Lease.

8.   The party executing this Estoppel Certificate on behalf of Tenant is fully
     authorized and empowered to do so.

9.   Tenant is the sole tenant under the Lease and is the sole tenant in
     possession of the Premises, or any portion thereof, except as set forth on
     Exhibits D-1 through D-___.

                  [remainder of page intentionally left blank]

                                      -29-

<PAGE>

     The certifications, representations and warranties herein made shall be
binding upon Tenant, its heirs, legal representatives, successors and assigns,
and shall inure to benefit of American Financial and its respective successors
and assigns.

Dated:_______________, 2003

                                 FIRST UNION CORPORATION

                                   By: _______________________
                                       Name: _________________
                                       Title: ________________

                                 FIRST UNION NATIONAL BANK

                                   By: _______________________
                                       Name: _________________
                                       Title: ________________

                                      -30-

<PAGE>

                     EXHIBITS A-1 THROUGH A-85 TO EXHIBIT D

                 [legal descriptions to be attached at Closing]

                                      -31-

<PAGE>

                             EXHIBIT B TO EXHIBIT D

       [lease and all amendments/modifications to be attached at Closing]

                                      -32-

<PAGE>

                             EXHIBIT C TO EXHIBIT D

        [option agreement, option and subordination agreement, tripartite
          agreement and assignment of lease to be attached at Closing]

<PAGE>

                      EXHIBITS D-1 THROUGH D- TO EXHIBIT D

                     [insert legal descriptions at Closing]

<PAGE>

                                   EXHIBIT E-1

                                                          [NORTH CAROLINA - LAND
                                                        ESTATE AND IMPROVEMENTS]

Prepared by and after recording                              Property No. ______
return to:                                                   Street Address:
___________________                                          ___________________
___________________                                          ___________________
___________________                                          ___________________
___________________

Parcel Identification No. ___________
Tax Lot Number: ____________
Excise Tax: $ ______________

                              SPECIAL WARRANTY DEED

            (Estate for Years in Land and Fee Simple in Improvements)

     PREFCO FIVE LIMITED PARTNERSHIP, a Connecticut limited partnership,
successor in interest to PREFCO V LIMITED PARTNERSHIP, a Connecticut limited
partnership, the address of which is c/o Pitney Bowes Credit Corporation, 27
Waterview Drive, Shelton, Connecticut 06484 ("Grantor"), in consideration of Ten
and 00/100 Dollars ($10.00) and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, have and by these
presents do grant, bargain, sell, and convey to AMERICAN FINANCIAL RESOURCE
GROUP, LLC, a Delaware limited liability company, having its principal place of
business at ________________ ("Grantee"), an estate for years ("Land Estate") in
that parcel or parcels of land in the County of _____________, State of North
Carolina, more particularly described on Exhibit A attached hereto and made a
part hereof, and in Grantor's right, title, and interest, if any, in and to all
streets and roads abutting the said parcel or parcels and all easements,
privileges, tenements, hereditaments, and appurtenances belonging unto said
parcel or parcels or in anywise appertaining thereto (the "Premises"), said Land
Estate to terminate at the end of August 31, 2010.

     TOGETHER WITH all right, title, and interest of Grantor as the fee owner
of, in, and to all buildings and improvements now located on the Premises and
hereafter located or erected thereon, in replacement of existing buildings and
improvements, whether below or above grade level, and all easements, privileges,
tenements, hereditaments, and appurtenances belonging unto said buildings and
improvements or in anywise appertaining thereto (all such buildings and
improvements being collectively referred to as the "Improvements"), which are
intended to be and remain real property, and to become and remain the sole and
exclusive property of Grantee and its successors and assigns.

<PAGE>

     SUBJECT TO only those matters affecting title to the Land Estate and the
Improvements that are described on Exhibit B attached hereto and made a part
hereof.

     TO HAVE AND TO HOLD the Land Estate, and all privileges and appurtenances
thereto belonging, unto Grantee and its successors and assigns through and
including August 31, 2010 and to have and to hold the Improvements unto Grantee
and its successors and assigns forever.

     And Grantor covenants with Grantee that Grantor is seized of the Land
Estate and the Improvements, has the right to convey the same, that title
thereto is marketable and free and clear of all encumbrances except as herein
stated and that, except as herein stated, Grantor will warrant and defend the
title against the lawful claims of all persons claiming by, through or under
Grantor.

     IT BEING THE INTENT of Grantor and Grantee to convey to Grantee all of
Grantor's interest in the Premises and the Improvements [NOTE: ADDITIONAL
LANGUAGE TO BE INCLUDED IN THE EVENT CAROLINA - RELCO SELLS ITS REMAINDER
INTEREST TO GRANTEE PURSUANT TO SEPARATE AGREEMENT].

     The designation Grantor and Grantee as used herein shall include said
parties, their successors and assigns, and shall include singular, plural,
masculine, feminine or neuter as required by context.

                  [remainder of page intentionally left blank]

<PAGE>

     IN WITNESS WHEREOF, Grantor has caused this deed to be executed and its
seal to be hereto affixed and attested by its officers hereunto duly authorized,
as of the ____ day of _____________, 2003.

                                      GRANTOR:

                                      PREFCO FIVE LIMITED PARTNERSHIP, a
                                      Connecticut limited partnership

                                      By:   Prefco V Holdings LLC, a Connecticut
                                            limited liability company, its
                                            general partner

                                            By:   Harlow Aircraft Inc., sole
                                                  member

                                                 By:   _______________________
                                                       Name: _________________
                                                       Title: ________________

<PAGE>

STATE OF CONNECTICUT             )
                                 : SS.:
County of HARTFORD               )

          On the ___ day of_________________ , 2003 before me, the undersigned,
a Notary Public in and for said State, personally appeared _______________,
known to me on the basis of satisfactory evidence to be the individual(s) whose
name(s) is/are subscribed to the within instrument and acknowledged that
he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person
upon behalf of which the individual(s) acted, executed the instrument.

                                          _____________________________________
                                          Notary Public

<PAGE>

                            EXHIBIT A TO EXHIBIT E-1

                 [legal descriptions to be attached at Closing]

<PAGE>

                            EXHIBIT B TO EXHIBIT E-1

              [to be added at Closing as set forth in Title Policy]

<PAGE>

                                   EXHIBIT E-2

                                                                 [FLORIDA - LAND
                                                        ESTATE AND IMPROVEMENTS]

Prepared by and after recording                            Property No. ________
return to:                                                 Street Address:
__________________________                                 _____________________
__________________________                                 _____________________
__________________________                                 _____________________
__________________________

Property Appraiser's
Parcel Identification
Number: RE # __________________

STATE OF FLORIDA                                     Grantee Tax ID #___________
COUNTY OF _____________________

                              SPECIAL WARRANTY DEED

            (Estate for Years in Land and Fee Simple in Improvements)

     THIS INDENTURE is made as of the ____ day of ______________, 2003, from
PREFCO FIVE LIMITED PARTNERSHIP, a Connecticut limited partnership, successor in
interest to PREFCO V LIMITED PARTNERSHIP, a Connecticut limited partnership, the
address of which is c/o Pitney Bowes Credit Corporation, 27 Waterview Drive,
Shelton, Connecticut 06484 ("Grantor"), to AMERICAN FINANCIAL RESOURCE GROUP,
LLC, a Delaware limited liability company, having its principal place of
business at _____________ ("Grantee").

     WITNESSETH that Grantor, for and in consideration of the sum or Ten and
00/100 Dollars ($10.00) in hand paid, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, hereby grants,
bargains, and conveys to Grantee an estate for years (the "Land Estate") in the
interest of Grantor in the following (a) that parcel or parcels of land situate,
lying, and being in the County of _________________, State of Florida, more
particularly described in Exhibit A attached hereto and incorporated herein by
reference, (b) all right, title and interest of Grantor, if any, in and to all
streets and roads abutting the said parcel or parcels and (c) all easements,
privileges, tenements, hereditaments, and appurtenances belonging unto said
parcel or parcels or in anywise appertaining thereto (collectively, the
"Premises"), said estate for years to expire on August 31, 2010.

     TOGETHER WITH all of the interest of Grantor as the fee simple owner of,
in, and to all buildings and improvements now located on the Premises, whether
below or above grade

<PAGE>

level, and all easements, privileges, tenements, hereditaments, and
appurtenances belonging unto said buildings and improvements or in anywise
appertaining thereto (all such buildings and improvements being collectively
referred to as the "Improvements"), which are intended to be and remain real
property and to become and remain the sole and exclusive property of Grantee and
its successors and assigns.

     SUBJECT TO only those matters affecting title to the Land Estate and the
Improvements that are set forth on Exhibit B attached hereto and incorporated
herein by reference.

     TO HAVE AND TO HOLD the Land Estate and all privileges and appurtenances
thereto belonging, unto Grantee and its successors and assigns through and
including August 31, 2010 and to have and to hold the Improvements unto Grantee
and its successors and assigns forever.

     And Grantor covenants with Grantee that Grantor is seized of the Land
Estate and the Improvements, has the right to convey the same, that title
thereto is marketable, and Grantor does hereby specifically warrant the title to
the Land Estate and the Improvements and will defend the same against the lawful
claims of all person claiming by, through, or under Grantor, and no other.

     IT BEING THE INTENT of Grantor and Grantee to convey to Grantee an estate
for years in the Premises and fee simple title to the Improvements, [NOTE:
ADDITIONAL LANGUAGE TO BE INCLUDED IN THE EVENT CAROLINA - RELCO SELLS ITS
REMAINDER INTEREST TO GRANTEE PURSUANT TO SEPARATE AGREEMENT].

     The designations Grantor and Grantee as used herein shall include said
parties, their heirs, administrators, executors, successors, and assigns, and
shall include singular, plural, masculine, feminine, or neuter as required by
context.

                  [remainder of page intentionally left blank]

<PAGE>

     IN WITNESS WHEREOF, Grantor has caused this instrument to be executed in
its name by its duly authorized officers and caused its corporate seal to be
hereto affixed the day and year first above written.

                                    GRANTOR:

SIGNED AND SEALED IN                PREFCO FIVE LIMITED
THE PRESENCE OF:                    PARTNERSHIP, a Connecticut limited
                                    Partnership

_______________________________

Name: _________________________     By:  Prefco V Holdings LLC, a  Connecticut
          (Type or Print)                limited liability company, its general
                                         partner

Name: _________________________          By:  Harlow Aircraft Inc., sole member
          (Type or Print)

                                             By: _______________________________
                                                 Name: _________________________
                                                 Title: ________________________

                                                 [Affix Corporate seal]

<PAGE>

STATE OF CONNECTICUT            )
                                :  SS.:
COUNTY OF HARTFORD              )

          On the ___ day of ________________, 2003 before me, the undersigned, a
Notary Public in and for said State, personally appeared _______________, known
to me on the basis of satisfactory evidence to be the individual(s) whose
name(s) is/are subscribed to the within instrument and acknowledged that
he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person
upon behalf of which the individual(s) acted, executed the instrument.

                                        ________________________________________
                                        Notary Public

<PAGE>

                            EXHIBIT A TO EXHIBIT E-2

                 [legal descriptions to be attached at Closing]

<PAGE>

                            EXHIBIT B TO EXHIBIT E-2

              [to be added at Closing as set forth in Title Policy]

<PAGE>

                                   EXHIBIT E-3

                                                          [GEORGIA - LAND ESTATE
                                                               AND IMPROVEMENTS]

                                                      Property Number: _________

                                                       Street Address:
                                                       _________________________
                                                       _________________________
                                                       _________________________

Prepared by and after recording
Return to:

___________________________
___________________________
___________________________
___________________________

STATE OF GEORGIA
COUNTY OF _____________________

                              LIMITED WARRANTY DEED
            (Estate for Years in Land and Fee Simple in Improvements)

     THIS INDENTURE is made the ___ day of ________________ , 2003 between
PREFCO FIVE LIMITED PARTNERSHIP, a Connecticut limited partnership, successor in
interest to PREFCO V LIMITED PARTNERSHIP, a Connecticut limited partnership
("Grantor"), the address of which is c/o Pitney Bowes Credit Corporation, 27
Waterview Drive, Shelton, Connecticut 06484, to AMERICAN FINANCIAL RESOURCE
GROUP, LLC, a Delaware limited liability company ("Grantee"), having its
principal place of business at_________________.

     WITNESSETH that: Grantor, for and in consideration of the sum of Ten and
00/100 Dollars ($10.00) in hand paid at and before the sealing and delivery of
these presents, the receipt and adequacy of which are hereby acknowledged, has
granted, bargained, sold, aliened, conveyed, and confirmed, and by these
presents does grant, bargain, sell, alien, convey, and confirm unto Grantee an
estate for years (the "Land Estate") in that parcel or parcels of land in
__________________ County, Georgia, more particularly described in Exhibit A
attached hereto and incorporated herein by reference and in Grantor's right,
title, and interest, if any, in and to all streets and roads abutting the said
parcel or parcels and all easements, privileges, tenements, hereditaments, and
appurtenances belonging unto said parcel or parcels or in anywise appertaining
thereto (the "Premises"), said Land Estate to expire

<PAGE>

on August 31, 2010.

     TOGETHER WITH all right, title, and interest of Grantor as the fee simple
owner of, in, and to all buildings and improvements now located on the Premises
and hereafter located or erected on the Premises in replacement of existing
buildings and improvements, whether below or above grade level, and all
easements, privileges, tenements, hereditaments, and appurtenances belonging
unto said buildings and improvements or in anywise appertaining thereto (all
such buildings and improvements being collectively referred to as the
"Improvements"), which are intended to be and remain real property and to become
and remain the sole and exclusive property of Grantee and its successors and
assigns.

     SUBJECT TO only those matters affecting title to the Land Estate and the
Improvements that are set forth on Exhibit B attached hereto and incorporated
herein by reference.

     TO HAVE AND TO HOLD the Land Estate, with all and singular the rights,
members, privileges, and appurtenances thereof, to the same being, belonging, or
in anywise appertaining, to the only proper use, benefit, and behoof of Grantee
through and including August 31, 2010; and to have and to hold the Improvements,
with all and singular the rights, members, and appurtenances thereof, to the
same being, belonging, or in anyway appertaining, to the only proper use,
benefit, and behoof of Grantee forever in FEE SIMPLE.

     And Grantor covenants with Grantee that Grantor is seized of the Land
Estate and the Improvements, has the right to convey the same, title thereto is
marketable, Grantor has done nothing to impair such title as Grantor received,
and Grantor, except as herein stated, will warrant and forever defend the right
and title to the Land Estate and the Improvements unto Grantee against the
claims of all persons owning, holding, or claiming by, through, or under
Grantor.

     IT BEING THE INTENT of Grantor and Grantee to convey to Grantee the Land
Estate and the fee simple title in the Improvements [NOTE: ADDITIONAL LANGUAGE
TO BE INCLUDED IN THE EVENT CAROLINA - RELCO SELLS ITS REMAINDER INTEREST TO
GRANTEE PURSUANT TO SEPARATE AGREEMENT].

     The designations Grantor and Grantee as used herein shall include said
parties, their heirs, administrators, executors, successors, and assigns, and
shall include singular, plural, masculine, feminine, or neuter as required by
context.

                  [remainder of page intentionally left blank]

<PAGE>

         IN WITNESS WHEREOF, Grantor, by its duly authorized officers, has
signed and sealed this deed the day and year above written.

Signed, sealed, and                           GRANTOR:
delivered this ______ day
of ____________, 2003                         PREFCO FIVE LIMITED

                                              PARTNERSHIP, a Connecticut limited
                                              partnership
__________________________

Unofficial Witness                            By: Prefco V Holdings LLC, a
                                                  Connecticut limited liability
                                                  company, its general partner

__________________________
Notary Public                                     By: Harlow Aircraft Inc., sole
                                                      member

[Notarial Stamp or Seal]
                                                      By: ______________________
                                                          Name: ________________
                                                          Title: _______________

My commission expires:                                Attest: __________________
                                                          Name: ________________
                                                          Title: _______________

___________________________
                                                      [Affix Corporate Seal]

<PAGE>

STATE OF CONNECTICUT           )
                               : SS.:
COUNTY OF HARTFORD             )

          On the ___ day of _____________ , 2003 before me, the undersigned, a
Notary Public in and for said State, personally appeared _______________, known
to me on the basis of satisfactory evidence to be the individual(s) whose
name(s) is/are subscribed to the within instrument and acknowledged that
he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person
upon behalf of which the individual(s) acted, executed the instrument.

                                    ____________________________________________
                                    Notary Public

<PAGE>

                            EXHIBIT A TO EXHIBIT E-3

                 [legal descriptions to be attached at Closing]

<PAGE>

                            EXHIBIT B TO EXHIBIT E-3

              [to be added at Closing as set forth in Title Policy]

<PAGE>

                                    EXHIBIT F

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

         THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment") is made
and effective as of this ______ day of __________, 2003 (the "Closing Date"),
between PREFCO FIVE LIMITED PARTNERSHIP, a Connecticut limited partnership
(successor in interest to PREFCO V Limited Partnership ("Assignor")), and
AMERICAN FINANCIAL RESOURCE GROUP, LLC, a ____________ limited liability company
("Assignee").

                               W I T N E S S E T H

          WHEREAS, Prefco is the owner (i) of an estate for years (the
"Estate for Years") expiring on August 31, 2010 (the "Estate for Years
Expiration Date") in those certain parcels of land more particularly described
in Exhibits A-1 through A-85 annexed hereto and made a part hereof (the "Land"),
and (ii) in fee of (a) all buildings, improvements and structures now or
hereafter located on the Land (the "Improvements") and (b) certain equipment and
fixtures attached thereto (the Estate for Years, Option Rights (defined below),
Improvements, equipment, and fixtures are hereinafter collectively referred to
as the "Property"); and

         WHEREAS, Carolina-Relco Limited Partnership, a Connecticut limited
partnership ("Remainderman"), is the fee owner of the Land, subject to the
Estate for Years; and

         WHEREAS, Assignor has options, pursuant to the Option and Subordination
Agreement (the "Option Agreement") dated as of July 31, 1990, between Assignor,
as optionee, and Remainderman, as optionor, including without limitation (i) the
option to lease the Land for a period beyond the Estate for Years Expiration
Date, (ii) the option to purchase the Land, and (iii) the option to refinance
the Property (which options are together called the "Option Rights"); and

         WHEREAS, the Land and the Improvements are subject to the terms and
conditions of that certain lease (the "Lease") between Assignor, as landlord,
and First Union Corporation and First Union National Bank, successor in interest
by merger or otherwise to First Union National Bank of North Carolina, First
Union National Bank of Georgia, and First Union National Bank of Florida, as
tenant ("Lessee"), as more fully described in Exhibit B annexed hereto and made
a part hereof; and

         WHEREAS, Assignor, Remainderman and Lessee are parties to that certain
agreement (the "Tripartite Agreement") dated as of July 31, 1990 setting forth
the understanding among the parties with respect to certain rights of the lessee
under the Lease relating to the purchase of the Property and the Land and
certain other matters; and

         WHEREAS, pursuant to the terms and conditions of the Purchase and Sale
Agreement dated as of _________ ___, 2002, between Assignor and Assignee,
Assignor has agreed to assign to Assignee all of its right, title and interest
in, to and under the Option

<PAGE>

Agreement, the Lease and the Tripartite Agreement (collectively, the "Operative
Documents") upon the terms and conditions hereof; and

         WHEREAS, Assignee desires to assume all of Assignor's obligations under
the Operative Documents arising on and after on the Closing Date upon the terms
and conditions hereof.

         NOW, THEREFORE, in consideration of the sum of One Dollar ($1.00), the
mutual covenants and agreements hereinafter set forth and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

         1.   Assignor hereby assigns, transfers and sets over to Assignee all
of its right, title and interest in, to and under the Operative Documents upon
the terms and conditions herein set forth, to have and to hold the same unto
Assignee, its successors and assigns, forever, subject to all of the terms,
covenants and conditions of the Operative Documents.

         2.   Assignee hereby accepts the assignment of Assignor's right, title
and interest in, to and under the Operative Documents upon the terms and
conditions herein set forth and hereby assumes and shall fully punctually pay
and perform and observe all of the terms, covenants and conditions of the
Operative Documents by Assignor arising from and after the Closing Date.

         3.   Assignor shall indemnify and hold harmless Assignee from and
against any and all claims, liabilities, obligations, costs and expenses,
including, without limitation, reasonable attorneys' fees, which arise out of
the Operative Documents and relate to the period prior to the Closing Date.
Assignee shall indemnify and hold harmless Assignor from and against any and all
claims, liabilities, obligations, costs and expenses, including, without
limitation, reasonable attorneys, fees, which arise out of the Operative
Documents and relate to the period on or after the Closing Date.

         4.   This Assignment may be amended at any time by Assignor and
Assignee but only by an instrument in writing signed by Assignor and Assignee.

         5.   This Assignment shall be binding upon and inure to the benefit of
Assignor and Assignee and their respective successors and assigns.

         6.   This Assignment may be executed in two or more counterparts, all
of which shall be considered one and the same Assignment.

         7.   This Assignment shall be governed and construed in accordance with
the laws of the State of Nebraska, without regard to any applicable principles
of conflicts of laws.

                            [signature pages follow]

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Assignment to
be signed by their respective officers thereunto duly authorized as of the date
first written above.

                              ASSIGNOR:

                              PREFCO FIVE LIMITED PARTNERSHIP, a Connecticut
                              limited partnership

                                     By: Prefco V Holdings LLC, a Connecticut
                                         limited liability company, its general
                                         partner

                                         By: Harlow Aircraft Inc., sole member

                                            By: __________________________
                                                Name: ____________________
                                                Title: ___________________

<PAGE>

                                    ASSIGNEE:

                                    AMERICAN FINANCIAL RESOURCE GROUP, LLC,
                                    a Delaware limited liability company

                                             By: ____________________
                                                 Name: ______________
                                                 Title: _____________

<PAGE>

STATE OF CONNECTICUT                )
                                    : SS.:
County OF HARTFORD                  )

         On the ___ day of _________________, 2003 before me, the undersigned, a
Notary Public in and for said State, personally appeared _______________, known
to me on the basis of satisfactory evidence to be the individual(s) whose
name(s) is/are subscribed to the within instrument and acknowledged that
he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person
upon behalf of which the individual(s) acted, executed the instrument.

                                    ______________________________________
                                    Notary Public

<PAGE>

                                 ACKNOWLEDGEMENT

                [insert appropriate acknowledgement for assignee]

<PAGE>

                     EXHIBITS A-1 THROUGH A-85 TO EXHIBIT F

                 [legal descriptions to be attached at Closing]

<PAGE>

                                    EXHIBIT G
                         PREFCO FIVE LIMITED PARTNERSHIP
                               27 Waterview Drive
                         Shelton, Connecticut 06484-4361

________, 2002

Attention: Corporate Real Estate
First Union Corporation
Two First Union Center
Charlotte, NC 28288-0340

First Union Corporation
One First Union Center
301 South College Street
Charlotte, NC 28288-0013
Attention: General Counsel

Re:  Lease Agreement dated July 31, 1990 ("Lease")

Dear Tenant:

             The undersigned has entered into a Purchase and Sale Agreement with
American Financial Resource Group, LLC ("American Financial") to purchase the
portfolio of properties contained in the Lease. In connection with such
agreement, we are requesting that you provide the following documentation with
regard to each property subject to the Lease:

     1.   Copies of all Environmental Reports (Article 10);
     2.   Copies of all notices of violations;
     3.   Copies of any notices of condemnation;
     4.   Copies of all of the subleases for each property;
     5.   Listing of properties no longer occupied by Tenant;
     6.   Alterations and Improvements to the properties in excess of $400,000;
          and
     7.   Copies of Tenants most recent year end financial statements.
             Please forward copies of these documents to the attention of Joe
Surace at the

                                      -2-

<PAGE>

address indicated above. If you have any questions, please contact Joe directly
at (203) 922-4078.

PREFCO FIVE LIMITED PARTNERSHIP, a
Connecticut limited partnership

         By:  Prefco V Holdings LLC, a
              Connecticut limited liability
              company, its general partner

              By:  Harlow Aircraft Inc.,
                   sole member

                   By: _________________________
                       Name: ___________________
                       Title: __________________

                                      -3-

<PAGE>

                                    EXHIBIT H

              Prefco Five Limited Partnership Estoppel Certificate

To:         American Financial Resource Group, LLC ("American Financial")

Re:         Lease dated July 31, 1990, as amended by that certain Agreement Re:
            Modification of Lease dated November 27, 1995, that certain
            Modification Agreement dated as of September 30, 1992, that certain
            Modification Agreement dated as of January 22, 1996, and that
            certain Modification Agreement dated as of December 20, 1999
            (collectively "Lease")

Landlord:   PREFCO Five Limited Partnership, a Connecticut limited partnership,
            successor in interest to PREFCO V Limited Partnership

Tenant:     First Union Corporation and First Union National Bank, successor in
            interest by merger or otherwise

Premises:   See Exhibits "A-1 through A-85" attached hereto and incorporated
            herein by reference

Ladies and Gentlemen:

     The undersigned is the landlord ("Landlord") pursuant to the Lease.
Landlord and American Financial have entered into that certain Purchase and Sale
Agreement dated _______ ___, 2002 relating to the sale of the Premises, and
Landlord understands that American Financial is relying on the statements made
by it in this Estoppel Certificate. Landlord hereby certifies, represents and
warrants to American Financial as follows as of the date set forth below:

1.   A true, correct and complete copy of the Lease is attached hereto as
     Exhibit B which is incorporated herein by this reference. The Lease has not
     been amended, modified, supplemented or superseded in any manner
     whatsoever, except as specifically stated above. The Lease constitutes a
     complete statement of the agreements, covenants, terms and conditions of
     Landlord and Tenant with respect to the letting of the Premises, and there
     are no other agreements or understandings between Landlord and Tenant with
     respect to the Premises or the Lease, except for that certain Option
     Agreement, Option and Subordination Agreement, Tripartite Agreement, and
     Assignment of Lease, copies of which are attached hereto as Exhibit C.

2.   The term of the Lease commenced on July 31, 1990 and will end on August 31,
     2010.

3.   The Lease is in full force and effect and has not been terminated with
     respect to the Premises.

4.   To the best of Landlord's knowledge, there are no defaults under the Lease
     (i) in the payment of rent or any other amounts due under the Lease or (ii)
     in the observance or performance of

                                       -4-

<PAGE>

     any other agreement, covenant, term or condition to be observed or
     performed by Landlord or Tenant. Landlord has no knowledge of any state of
     facts or events that, with the passage of time or the giving of notice, or
     both, would constitute a default by Landlord or Tenant.

7.   Landlord has received all installments of: (i) Basic Rent (as defined in
     the Lease) that is payable to Landlord through the month of ______________,
     and (ii) Additional Rent (as defined in the Lease) that is payable to
     Landlord, if any, through the month of

8.   To the best of Landlord's knowledge, all conditions under the Lease to be
     performed by Tenant have been completed to the satisfaction of Landlord. To
     the best of Landlord's knowledge, there is no work to be performed by
     Tenant that has not been completed, and there are no defects or
     deficiencies that may entitle Landlord to cancel the Lease or to receive
     any other benefit or relief. Landlord has no knowledge that the Premises
     are not in compliance with any federal, state or local law, statute, rule,
     regulation, code or ordinance applicable to the Premises. Landlord has not
     received notice of any "casualty" (as defined in the Lease) or of a pending
     or threatened "condemnation" (as defined in the Lease) with respect to the
     Premises. Landlord has not received notice from Tenant that Tenant intends
     to terminate the Lease or to provide a substitute parcel with respect to
     the Premises pursuant to Paragraph 13 of the Lease.

7.   Landlord did not require a security deposit from Tenant under the Lease.

10.  The party executing this Estoppel Certificate on behalf of Landlord is
     fully authorized and empowered to do so.

                  [remainder of page intentionally left blank]

                                       -5-

<PAGE>

     The certifications, representations and warranties herein made shall be
binding upon Landlord, its heirs, legal representatives, successors and assigns,
and shall inure to benefit of American Financial and its respective successors
and assigns.

Dated:_______________, 2003

                            PREFCO FIVE LIMITED PARTNERSHIP, a Connecticut
                            limited partnership

                                   By:   Prefco V Holdings LLC, a Connecticut
                                         limited liability company, its general
                                         partner

                                         By:   Harlow Aircraft Inc., sole member

                                               By:   _______________________
                                                     Name: _________________
                                                     Title: ________________

                                       -6-

<PAGE>

                     EXHIBITS A-1 THROUGH A-85 TO EXHIBIT H

                 [legal descriptions to be attached at Closing]

                                       -7-

<PAGE>

                             EXHIBIT B TO EXHIBIT H

       [lease and all amendments/modifications to be attached at Closing]

                                       -8-

<PAGE>

                             EXHIBIT C TO EXHIBIT H

        [option agreement, option and subordination agreement, tripartite
          agreement and assignment of lease to be attached at Closing]

<PAGE>

                                    EXHIBIT I

                             AMENDMENTS TO AGREEMENT

Section 1 shall be amended and restated to read as follows:

          1.   Purchase and Sale of Partnership Interests. On the Closing Date
and subject to the terms and conditions of this Agreement, each Partner shall
sell, assign and convey, and Purchaser shall purchase, the Partnership Interest
held by Partner on the terms and conditions provided in this Agreement.

Section 3 shall be amended and restated to read as follows:

          3.   Purchase Price. Purchaser shall pay, and the Partners shall
accept, pro rata based on the percentage of Partnership Interests owned by them
respectively ("Pro Rata Interest"), as the purchase price (the "Purchase Price")
for the Partnership Interests, in addition to the Purchaser acquiring the
Partnership Interests in Prefco subject to the Mortgage on the Property (or
Purchaser otherwise satisfying the Mortgage, by prepayment or otherwise), the
amount of Fifty Four Million Six Hundred Thousand and 00/100 Dollars
($54,600,000.00), as increased or decreased pursuant to the provisions of
Sections 7 and 13 hereof, which Purchase Price shall be paid by Purchaser as
follows:

               (i)    simultaneously with the execution of this Agreement,
Purchaser shall deposit with the Title Company (as defined is Section 7 (ii)
hereof), as escrow agent (the "Escrow Agent"), the sum of Two Hundred Fifty
Thousand and 00/100 Dollars ($250,000.00) (together with any interest earned
thereon, the "Deposit");

               (ii)   simultaneously with Purchaser's satisfaction or waiver of
the conditions precedent set forth in Section 7 hereof, Purchaser shall deposit
with Escrow Agent the sum of Two Hundred Fifty Thousand and 00/100 Dollars
($250,000.00), which amount will be added to and become part of the Deposit; and

               (iii)  At Closing, Purchaser shall pay or shall cause the Escrow
Agent to pay to the Partners (or their designees) the Deposit ($500,000.00 plus
accrued interest thereon) plus the balance of the Purchase Price in the amount
of Fifty Four Million One Hundred Thousand and 00/100 Dollars ($54,100,000.00)
(as increased or decreased pursuant to the provisions of Sections 7 and 13
hereof) in immediately available funds by wire transfer to accounts designated
by the Partners, such amount to be paid to the Partners based on their Pro Rata
Interest. Purchaser acknowledges that the Property is subject to the Mortgage
and that the Purchase Price shall not be diminished or otherwise reduced by
reason thereof, including, without limitation, reductions by reason of the pay
off of existing financing, prepayment penalties, or otherwise.

<PAGE>

A new Section 12A shall be added to the Agreement to read as follows:

          12A. Representations, Warranties and Covenants of Partners. Each
Partner, jointly and severally, represents, warrants and covenants to Purchaser
as of the date hereof as follows, which representations, warranties and
covenants shall be deemed to have been made again as of the Closing:

          (a)  Partner has all requisite power and authority to carry on its
               business and to perform its obligations under this Agreement and
               each of the other Closing Documents;

          (b)  Partner is an entity duly organized, validly existing and in good
               standing under the laws of the State of Connecticut or Delaware,
               as applicable, and has all requisite power and authority to carry
               on its business and to execute and deliver this Agreement and
               each of the other Closing Documents; and the individual executing
               this Agreement on behalf of Partner hereby represents and
               warrants that he, she or it has the capacity set forth on the
               signature page hereof with full power and authority to bind
               Partner to the terms hereof;

          (c)  this Agreement has been duly authorized by all necessary actions,
               duly executed and delivered by Partner and constitutes a legal,
               valid and binding obligation of Partner enforceable against it in
               accordance with its terms except as the enforcement may be
               limited by (i) the effect of the laws and judicial decisions of
               the State of Connecticut or Delaware, as applicable, (ii) the
               discretion of any court or governmental or public body,
               authority, bureau or agency before which any proceeding may be
               brought or (iii) bankruptcy, insolvency, reorganization,
               moratorium or similar laws affecting creditors' rights generally;

          (d)  to the best of Partner's knowledge, no consent, license, approval
               or authorization of, or filing, registration or declaration with,
               or exemption or other action by, any governmental or public body,
               authority, bureau or agency is required in connection with the
               execution, delivery or performance by Partner of this Agreement
               or the transactions herein contemplated or the Closing Documents
               to which it is a party other than those which have been obtained;

          (e)  Partner's performance, execution and delivery of this Agreement
               and the other Closing Documents (i) do not and will not violate
               (x) Partner's certificate of formation or other charter document,
               bylaws, operating agreement or partnership agreement, as
               applicable, or (y) to the best of Partner's knowledge, any law,
               governmental regulation, judgment, order, writ, injunction or
               decree applicable to Partner in any manner which will materially
               adversely affect Partner's ability to perform its obligations

<PAGE>

               hereunder, (ii) provided that all necessary consents are
               obtained, do not and will not violate the provisions of, or
               constitute a default or an event of default under the Mortgage,
               (iii) provided that all necessary consents are obtained, do not
               and will not constitute a default or an event of default under
               any instrument, contract, agreement, lease or other undertaking
               to which Partner is a party or by which any of its properties may
               be subject or bound in a manner which will materially adversely
               effect its ability to perform the same; or (iv) do not result and
               will not result in the creation or imposition of any lien,
               pledge, mortgage, claim, charge or encumbrance upon any of its
               property pursuant to such agreement or instrument, except as
               permitted by the Closing Documents;

          (f)  to the best of Partner's knowledge without any inquiry, there is
               no action, suit or proceeding pending or threatened against or
               affecting Partner or the Property in any court, or by or before
               any federal, state, municipal or other governmental department,
               commission, board, bureau, agency or instrumentality which would
               have any effect on Partner's ability to execute and perform its
               obligations under this Agreement;

          (g)  Partner is not a "foreign person" as defined in Section 1445 of
               the Internal Revenue Code;

          (h)  Partner has not filed any voluntary petition in bankruptcy or
               been adjudicated as bankrupt or insolvent, or filed any petition
               or answer seeking any reorganization, liquidation, dissolution or
               similar relief under any federal bankruptcy or insolvency laws,
               or other relief for debtors, or sought or consented to or
               acquiesced in the appointment of any trustee, receiver,
               conservator or liquidator of all or any substantial part of its
               properties or interest in the Land or the Property;

          (i)  Partner has not dealt with any broker in the negotiations of the
               transactions contemplated by this Agreement. Partner shall
               indemnify and hold harmless Purchaser from and against any cost,
               expense (including without limitation reasonable attorneys' fees
               and disbursements), claim, liability or damage arising out of any
               claim or demand by any broker, consultant, finder or similar
               agent claiming to have dealt with Partner in connection with this
               Agreement and the transaction contemplated hereby;

          (j)  to Partner's actual knowledge, the Lease is in full force and
               effect and has not been modified, except by that certain
               Agreement Re: Modification of Lease, dated November 27, 1995,
               that certain Modification Agreement dated as of September 30,
               1992, that certain Modification Agreement dated as of January 22,
               1996, and that certain Modification Agreement dated as of
               December 20, 1999, and Partner has no actual knowledge of any
               current material default in the performance of the obligations of
               any

<PAGE>

               party under the Lease;

          (k)  after the date hereof and prior to the Closing, except as
               required under the Lease, Partner shall not sell or otherwise
               transfer without Purchaser's consent all or any part of the
               Partnership Interest held by it, or any interest therein;

          (l)  after the date hereof and prior to the Closing, except as
               required under the Lease, Partner shall not permit Prefco to
               enter into or approve any new leases and/or subleases of the Land
               and Improvements, or amend, modify or extend the Lease, without
               the prior written consent of Purchaser (which consent shall not
               be unreasonably withheld or delayed), except as required pursuant
               to the terms and conditions of the Lease;

          (m)  to the best of Partner's knowledge, Prefco is the owner of the
               Estate for Years in the Land, and, to the best of Partner's
               knowledge, Prefco is the fee owner of the Improvements and
               Property, all of which are subject to the Permitted Exceptions.
               Notwithstanding the foregoing, Partner makes no representations,
               warranties or covenants with respect to any title matters, it
               being expressly agreed that Purchaser is relying solely on title
               insurance commitments issued by the Title Company with respect to
               such matters;

          (n)  the making, execution and delivery of this Agreement by Partner
               has been induced by no representations, warranties, covenants or
               agreements other than those expressly set forth in this
               Agreement;

          (o)  Partners own the Partnership Interests held by them free and
               clear of all liens, trusts, encumbrances, security interests,
               charges, options and claims of any kind. Partners own all
               outstanding equity and voting interests in Prefco. All of the
               Partnership Interests have been duly authorized and validly
               issued, are fully paid and non-assessable, were not issued in
               violation of the terms of any agreement or other understanding
               binding upon Prefco and were issued in compliance with all
               applicable charter documents of Prefco and to the best of its
               knowledge, all applicable federal, state and foreign securities
               laws, rules and regulations. There are no outstanding
               subscriptions, options, warrants, convertible securities, calls,
               commitments, agreements or rights (contingent or otherwise) of
               any character to purchase or otherwise acquire from Prefco or
               either Partner any partnership interests of, or any securities
               convertible into, the partnership interests of Prefco. There are,
               and have been, no preemptive rights with respect to the issuance
               of the partnership interests of Prefco;

          (p)  Prefco has no subsidiaries and no stock or other equity, voting
               or ownership interest (whether controlling or not) in any
               corporation, association, partnership, joint venture or other
               entity;

<PAGE>

          (q)  To the best of its knowledge, Prefco is not subject to or in
               violation of any judgment, decree, order or decision of any
               federal, state or local court or governmental agency or authority
               or any statute, law, ordinance, rule or regulation of any
               federal, state, local or other governmental agency or body or of
               any other type of regulatory body;

          (r)  Prefco does not now conduct nor has it ever conducted any
               business except for the ownership of the Property. Except for the
               Lease (together with recorded copies of Short Form Lease and
               Memorandum of Lease), Mortgage, Note Purchase Agreement, Series A
               9.70% Secured Note Due 2000, Series B 9.91% Secured Note Due
               2004, Series C 10.01% Secured Note Due 2007, Series D 10.01%
               Secured Note Due 2010, Series E 10.42% Secured Note Due 2010,
               Series F 10.55% Secured Note due 2010, Assignment of Lease,
               various UCC Financing Statements, Agreement of Sale and Purchase,
               Tripartite Agreement, Option and Subordination Agreement, Option
               Agreement, Owner's Certificate, Power of Attorney, and all other
               operative documents (including, without limitation, all
               modification agreements and documents relating thereto), Prefco
               is not a party to, or subject to any liability, obligation or
               restriction of any kind under, any written or oral contract,
               agreement, instrument, license or other document or instrument
               that constitutes a contract under applicable law;

          (s)  to the best of Partner's knowledge without any inquiry, (i) there
               is no claim, action, lawsuit, arbitration, administrative or
               other proceeding, or criminal or other governmental
               investigation, inquiry or prosecution pending or threatened
               against Prefco (together, "Litigation"), (ii) no claim has been
               asserted and no event has occurred that might reasonably be
               expected to result in Litigation against Prefco and (iii) there
               is no reasonable basis for any such claim;

          (t)  intentionally omitted;

          (u)  Prefco does not now have nor has it ever had any employees;

          (v)  attached as Schedule 12A(v) is a pro-forma balance sheet as of
               the date hereof; Prefco has no liabilities except as set forth on
               such balance sheet;

          (w)  Prefco is a partnership for federal, state and local income tax
               purposes;

          (x)  Prefco has delivered to Purchaser true, correct and complete
               copies of its certificate of limited partnership and partnership
               agreement;

          (y)  on the Closing Date, the Partners shall cause all present
               managers, officers and directors of Prefco to resign as of the
               Closing Date;

<PAGE>

A new Section 12B shall be added to the Agreement to read as follows:

     12B. Indemnity. From and after the Closing, the Partners, jointly and
severally, shall indemnify and hold harmless Purchaser and each of Purchaser's
managers, directors, officers, partners, members, stockholders, employees, and
their successors and assigns (each, a "Purchaser Indemnified Party") from and
against any costs and expenses (including attorney's fees), judgments, fines,
losses, claims and damages (collectively, "Damages"), incurred by any Purchaser
Indemnified Party resulting from, related to or arising out of in any way to any
(a) misrepresentation, omission, breach of warranty or nonfulfillment of any
agreement or covenant by or on the part of the Partners pursuant to Section 12A
above and (b) liabilities, obligations or the operations of Prefco which arise
out of or relate to any period prior to or on the Closing Date.<PAGE>

                                                                   Exhibit 10.20

                              EMPLOYMENT AGREEMENT
                                     BETWEEN
                              NICHOLAS S. SCHORSCH
                                       AND
                            FIRST STATES GROUP, L.P.

         This Employment Agreement (the "Agreement"), dated as of May 15, 2003
("Effective Date"), between First States Group, L.P., a Delaware limited
partnership (the "Company"), and Nicholas S. Schorsch (the "Executive"):

         WHEREAS, American Financial Realty Trust, a Maryland real estate
investment trust (the "REIT"), is a limited partner and the sole owner of the
general partner of the REIT;

         WHEREAS, this Agreement amends and restates the Employment Agreement
between the REIT (which was assigned to the Company) and the Executive, dated
September 10, 2002 (the "Original Agreement");

         WHEREAS, the Executive has extensive experience in owning and operating
real estate companies which own commercial real estate and, prior to entering
into the Original Agreement, had been the owner of certain businesses that, in
connection with the formation of the REIT and the private placement of common
shares ("Common Shares") of beneficial ownership, par value $.001 per share of
the REIT (referred to herein as the "144A Offering"), were acquired by the REIT
or the Company; and

         WHEREAS, the Company wishes to continue to employ the Executive in the
capacities and on the terms and conditions set out below, and the Executive has
agreed to continue such employment, in the capacities and on the terms and
conditions set forth below; and

         NOW, THEREFORE, the Company and the Executive, in consideration of the
respective covenants set out below, hereby agree as follows:

     1. EMPLOYMENT.

               (a) POSITIONS. The Executive shall be employed by the Company as
its President and Chief Executive Officer. The Executive shall also be an
officer of the REIT as its Vice Chairman of the Board of Trustees ("Board"),
President and Chief Executive Officer.

               (b) DUTIES. The Executive's principal employment duties and
responsibilities shall be those duties and responsibilities customary for the
positions of President and Chief Executive Officer and such other executive
duties and responsibilities as the Board shall from time to time reasonably
assign to the Executive. The Executive shall be responsible for and have
authority over the day-to-day operational management of the Company and the
REIT. The Executive shall report directly to the Board. All other officers of
the Company and the REIT shall report to the Executive or such person(s) as the
Executive may designate from time to time.

                                       1

<PAGE>

               (c) EXTENT OF SERVICES. Except for illnesses and vacation
periods, the Executive shall devote a substantial majority of his business time
and attention and his best efforts to the performance of his duties and
responsibilities under this Agreement. Notwithstanding the foregoing, Executive
(i) shall be permitted to continue to manage, operate and devote time and
attention to those properties and businesses he owned, operated or controlled at
the time of the 144A Offering that were not transferred to or purchased by the
Company or the REIT in connection with the 144A Offering or any properties and
businesses that were transferred to the Company and that Executive subsequently
reacquires pursuant to the terms of the Contribution Agreement dated September
4, 2002 (collectively referred to herein as the "Excluded Businesses"), (ii) may
make any passive investment where he is not obligated or required to, and shall
not in fact, devote any managerial efforts, (iii) may participate in charitable,
academic or community activities, and in trade or professional organizations, or
(iv) may hold directorships in other companies consistent with the Company's
conflict of interest policies and corporate governance guidelines as in effect
from time to time.

     2. TERM. This Agreement shall become effective as of the Effective Date and
shall continue in full force and effect thereafter for a term of five (5) years
and shall be automatically extended for an additional one-year period on each
one-year anniversary of the Effective Date, including an anniversary that occurs
within the initial five (5) year term (referred to herein as a "Term Date"),
unless either party terminates this Agreement not later than sixty (60) days
prior to a Term Date by providing written notice to the other party of such
party's intent not to renew, or it is sooner terminated pursuant to Section 7.
For purposes of this Agreement, "Term" shall mean the actual duration of the
Executive's employment hereunder, taking into account any extensions pursuant to
this Section 2 or early termination of employment pursuant to Section 7.

     3. BASE SALARY. The Company shall pay the Executive a base salary annually
(the "Base Salary"), which shall be payable in periodic installments according
to the Company's normal payroll practices. The initial Base Salary shall be
$400,000. The Board or the Compensation and Human Resources Committee of the
REIT (the "Compensation Committee") shall review the Base Salary at least once a
year to determine whether the Base Salary should be increased effective January
1 of each year during the Term; provided, however, that on January 1, 2004, the
initial Base Salary shall be increased to $424,000, and on each January 1
thereafter during the Term, the Base Salary shall be increased by a minimum
positive amount equal to the Base Salary in effect on January 1 of the prior
year multiplied by the increase in the Consumer Price Index for such year. The
amount of the increase shall be determined before March 31 of each year and
shall be retroactive to January 1. The Base Salary, including any increases,
shall not be decreased during the Term. For purposes of this Agreement, the term
"Base Salary" shall mean the amount established and adjusted from time to time
pursuant to this Section 3.

     4. ANNUAL CASH INCENTIVE AWARDS.

         (a) ANNUAL INCENTIVE BONUS. The Executive shall be entitled to receive
an annual cash incentive bonus for each fiscal year during the Term of this
Agreement consistent with a bonus policy adopted by the Compensation Committee
("Bonus Policy"). If the Executive or the Company, as the case may be, satisfies
the performance criteria contained in such Bonus Policy for a fiscal year, he
shall receive an annual incentive bonus in an amount determined by the
Compensation Committee and subject to ratification by the Board, if required.

                                       2

<PAGE>

If the Executive or the Company, as the case may be, fails to satisfy the
performance criteria contained in such Bonus Policy for a fiscal year, the
Compensation Committee may determine whether any incentive bonus shall be
payable to Executive for that year, subject to ratification by the Board, if
required. Beginning January 1, 2004, the Bonus Policy shall contain both
individual and group goals established by the Compensation Committee.
Notwithstanding the foregoing, in no event shall the annual incentive bonus
payable to Executive be less than a guaranteed bonus amount, irrespective of
whether the Executive satisfies the performance criteria contained in the Bonus
Policy as in effect for such fiscal year (the "Guaranteed Bonus"). The initial
Guaranteed Bonus shall be $31,250 per month. The Board or the Compensation
Committee shall review the Guaranteed Bonus at least once a year to determine
whether the Guaranteed Bonus should be increased effective January 1 of each
year during the Term; provided, however, that on January 1, 2004, the Guaranteed
Bonus shall be increased to $33,125 per month. The Guaranteed Bonus portion of
the annual incentive bonus shall be paid during the fiscal year pursuant to the
Company's normal payroll practices. The balance of the annual incentive bonus
(the incremental portion of the annual incentive bonus in excess of the
Guaranteed Bonus amount, if any) shall be paid to the Executive no later than
thirty (30) days after the date the Compensation Committee determines whether
the criteria in the Bonus Policy for such fiscal year were satisfied. For
purposes of this Agreement, the term "Incentive Bonus" shall mean the amount
established pursuant to this Section 4(a).

         (b) OUTPERFORMANCE PLAN BONUS. The REIT has established the 2003
Outperformance Plan (the "OPP") as an incentive compensation plan for key
employees with awards determined based on the annual and the three-year total
return to shareholders of the REIT. The Executive shall be eligible to
participate in the OPP in an amount as determined by the Compensation Committee.
The Compensation Committee has established that, during the Term of this
Agreement, the Executive will receive a minimum allocation of at least 40.0% of
the aggregate outperformance reward under the OPP or under any outperformance
plan that replaces the OPP before the end of the three-year term of the OPP; and
the Executive will receive economically consistent results appropriate in
respect of his position as Chief Executive Officer for any outperformance plan
for executives that the Company or the REIT puts into effect after the OPP. The
Executive, as Chief Executive Officer, will have the right to make
recommendations to the Compensation Committee as to which Company employees are
eligible to receive an allocation under the OPP and the amount of that
allocation, subject to Compensation Committee review and approval.

     5. STOCK BASED AWARDS.

         (a) 2002 EQUITY INCENTIVE PLAN OPTION GRANTS. The REIT has established
the 2002 Equity Incentive Plan ("Equity Incentive Plan"). Under the Original
Agreement, on the closing of the 144A Offering, the REIT granted the Executive
an initial grant of options to purchase 1,515,625 Common Shares (the "Initial
Grant Options"). The Initial Grant Options have an exercise price of $10.00 per
share and a term of ten (10) years and will vest and become exercisable with
respect to 25% of the underlying Common Shares on the one-year anniversary of
the date of grant and 6.25% of the underlying Common Shares on the last day of
each fiscal quarter thereafter until fully vested; provided, however, that the
Executive will be 100% vested in the Initial Grant Options upon (i) a Change in
Control (as defined herein), (ii) a termination by the Company without Cause (as
defined herein), (iii) a termination by the

                                       3

<PAGE>

Executive for Good Reason (as defined herein), (iv) his death, or (v) his
becoming Permanently Disabled (as defined herein), and that Executive will
forfeit all unvested Initial Grant Options if he is terminated for Cause or he
terminates his employment hereunder for other than Good Reason. Executive shall
be eligible to receive future option grants as determined by the Compensation
Committee.

         (b) 2002 EQUITY INCENTIVE PLAN RESTRICTED SHARE AWARDS. The Equity
Incentive Plan provides for the issuance of Common Shares as restricted Common
Shares ("Restricted Share Grants") to the extent that such Common Shares are
available thereunder. The Executive shall be eligible to receive Restricted
Share Grants as approved by the Compensation Committee, and if the Compensation
Committee approves Restricted Share Grants to executives of the Company, then,
as appropriate in the context, the Executive will receive Restricted Share
Grants consistent with, and appropriate in respect of, his position as Chief
Executive Officer. Restricted Share Grants awarded to the Executive shall be
subject to vesting at the rate of 33.33% of the underlying Common Shares on the
one-year anniversary of the effective date of the issuance of Common Shares as
Restricted Share Grants and 8.33% of the underlying Common Shares on the last
day of each fiscal quarter thereafter until fully vested; provided, however,
that the Executive will be 100% vested and all restrictions will lapse upon (i)
a Change in Control (as defined herein), (ii) a termination by the Company
without Cause (as defined herein), (iii) a termination by the Executive for Good
Reason (as defined herein), (iv) his death, (v) his becoming Permanently
Disabled (as defined herein), or (vi) the Company's failure to renew this
Agreement, and that Executive will forfeit all unvested Restricted Share Grants
if he is terminated for Cause or he terminates for other than Good Reason. The
Common Shares issued as Restricted Share Grants will have voting and dividend
rights.

6. BENEFITS.

         (a) VACATION. The Executive shall be entitled to eight (8) weeks of
vacation per full calendar year. The Executive shall be entitled to cash in lieu
of any unused vacation time.

         (b) SICK AND PERSONAL DAYS. The Executive shall be entitled to sick and
personal days on an as needed basis.

         (c) EMPLOYEE BENEFITS.

               (i)  PARTICIPATION IN EMPLOYEE BENEFIT PLANS. The Executive and
his spouse and eligible dependents, if any, and their respective designated
beneficiaries where applicable, will be eligible for and entitled to participate
in any Company sponsored employee benefit plans, including but not limited to
benefits such as group health, dental, accident, disability insurance, group
life insurance, and a 401(k) plan, as such benefits may be offered from time to
time, on a basis no less favorable than that applicable to other executives of
the Company.

               (ii) SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. The Company shall
provide to the Executive a supplemental executive retirement plan ("SERP")
benefit on the terms and conditions set forth in Appendix A to this Agreement.

                                       4

<PAGE>

               (iii) DISABILITY INSURANCE. The Company shall maintain, at its
cost, supplemental renewable long-term disability insurance as agreed to by the
Company and the Executive.

         (d) OTHER BENEFITS.

               (i)   ANNUAL PHYSICAL. The Company shall provide, at its cost, a
medical examination for the Executive on an annual basis by a licensed physician
in the Philadelphia, Pennsylvania area selected by the Executive.

               (ii)  CAR ALLOWANCE. The Company shall pay Executive a monthly
car allowance of $2,000.

               (iii) TAX PREPARATION AND FINANCIAL PLANNING. The Company shall
pay or promptly reimburse the Executive for costs incurred by him in connection
with tax preparation and financial planning assistance, to be furnished by such
advisors as chosen by the Executive, up to a maximum aggregate of $30,000
annually.

               (iv)  DIRECTORS AND OFFICERS INSURANCE. During the Term and the
Severance Period, the Executive shall be entitled to director and officer
insurance coverage for his acts and omissions while an officer and director of
the Company and the REIT on a basis no less favorable to him than the coverage
provided to current officers and directors.

               (v)   LIFE INSURANCE. The Company may purchase on the life of the
Executive $15 million of key man life insurance with the Company as the
beneficiary of the death benefit. The Company shall purchase on the life of the
Executive a 30 year vanishing premium, whole life insurance policy with a death
benefit of $15 million with the Executive as the owner of the policy and the
beneficiary of the death benefit, which payments will be compensation to the
Executive, and the Company will pay to the Executive such additional amount as
necessary to have no tax effect on the Executive (the "Executive Life Insurance
Program"). The Executive Life Insurance Program shall be issued by a AA or
better rated (by AM Best) insurer. The Company will obtain bids for this program
and review the final program with the Executive and the Chairman of Compensation
Committee for approval. The program will be structured to comply with all
requirements of the Sarbanes-Oxley Act or similar requirements.

               (vi)  EXPENSES, OFFICE AND SECRETARIAL SUPPORT. The Executive
shall be entitled to reimbursement of all reasonable expenses, in accordance
with the Company's policy as in effect from time to time and on a basis no less
favorable than that applicable to other executives of the Company, including,
without limitation, telephone, reasonable travel and reasonable entertainment
expenses incurred by the Executive in connection with the business of the
Company, promptly upon the presentation by the Executive of appropriate
documentation. The Executive shall also be entitled to appropriate office space,
administrative support, and such other facilities and services as are suitable
to the Executive's positions and adequate for the performance of the Executive's
duties.

               (vi)  FINANCIAL ASSISTANT. The Company shall pay or promptly
reimburse the Executive for costs incurred by him in connection with the
employment by the

                                       5

<PAGE>

Executive of an assistant to manage the Executive's financial affairs, plus such
additional amount as necessary to have no tax effect on the Executive.

     7. TERMINATION. The employment of the Executive by the Company pursuant to
this Agreement shall terminate upon the occurrence of any of the following:

         (a) DEATH OR PERMANENT DISABILITY. Immediately upon Death or Permanent
Disability of the Executive. As used in this Agreement, "Permanent Disability"
shall mean an inability due to a physical or mental impairment to perform the
material services contemplated under this Agreement for a period of six (6)
months, whether or not consecutive, during any 365-day period. A determination
of Permanent Disability shall be made by a physician satisfactory to both the
Executive and the Company, provided that if the Executive and the Company do not
agree on a physician, the Executive and the Company shall each select a
physician and these two together shall select a third physician, whose
determination as to Permanent Disability shall be binding on all parties. The
appointment of one or more individuals to carry out the offices or duties of the
Executive during a period of the Executive's inability to perform such duties
and pending a determination of Permanent Disability shall not be considered a
breach of this Agreement by the Company.

         (b) FOR CAUSE. At the election of the Company and subject to the
provisions of this Section 7(b), immediately upon written notice by the Company
to the Executive of his termination for Cause. For purposes of this Agreement,
"Cause" for termination shall be deemed to exist solely in the event of (i) the
conviction of the Executive of, or the entry of a plea of guilty or nolo
contendere by the Executive to, a felony (exclusive of any felony relating to
negligent operation of a motor vehicle and not including a conviction, plea of
guilty or nolo contendere arising solely under a statutory provision imposing
criminal liability upon the Executive on a per se basis due to the Company
offices held by the Executive, so long as any act or omission of the Executive
with respect to such matter was not taken or omitted in contravention of any
applicable policy or directive of the Board), (ii) a willful breach of his duty
of loyalty which is materially detrimental to the Company, (iii) a willful
failure to perform or adhere to explicitly stated duties that are consistent
with the terms of this Agreement, or the Company's reasonable and customary
guidelines of employment or reasonable and customary corporate governance
guidelines or policies, including without limitation any business code of ethics
adopted by the Board, or to follow the lawful directives of the Board (provided
such directives are consistent with the terms of this Agreement), which, in any
such case, continues for thirty (30) days after written notice from the Board to
the Executive, or (iv) gross negligence or willful misconduct in the performance
of the Executive's duties. For purposes of this Section 7(b), no act, or failure
to act, on the Executive's part will be deemed "gross negligence" or "willful
misconduct" unless done, or omitted to be done, by the Executive not in good
faith and without a reasonable belief that the Executive's act, or failure to
act, was in the best interest of the Company. The parties agree that in order to
terminate the Executive pursuant to Subsections (ii) and (iv) hereof, the
Company shall first be required to prove to the reasonable satisfaction of the
Executive that he engaged in improper conduct under these Subsections, and if
the Executive shall not agree with the Company's assessment of his conduct, then
the Executive shall not be terminated until an arbitrator, as provided for in
Section 13(b), has determined that the Executive's conduct constituted improper
conduct under the applicable Subsection.

                                       6

<PAGE>

         (c) WITHOUT CAUSE; WITHOUT GOOD REASONS. At the election of the
Company, without Cause, and at the election of the Executive, without Good
Reason, in either case upon thirty (30) days prior written notice to the
Executive or the Company, as the case may be.

         (d) FOR GOOD REASON. At the election of the Executive, for Good Reason.
For purposes of this Agreement, "Good Reason" shall mean any of the following
actions or omissions, provided the Executive notifies the Company of his
determination that Good Reason exists within 60 days of the action or omission
on which such determination is based:

               (i)    removal from the Board,

               (ii)   failure to renew this Agreement at any Term Date,

               (iii)  a material reduction of the Executive's duties,
responsibilities or reporting requirements, or the assignment to the Executive
of any duties, responsibilities, or reporting requirements that are inconsistent
with his positions as President, Chief Executive Officer, and Vice Chairman of
the Board, as the case may be,

               (iv)   a reduction by the Company in the Executive's annual Base
Salary,

               (v)    the Company's failure to continue in effect the Equity
Incentive Plan or the OPP, unless comparable alternative compensation
arrangements (embodied in ongoing substitute or alternative plans) have been
provided to the reasonable satisfaction of the Executive,

               (vi)   a reduction or loss of employee benefits or material
fringe benefits, both in terms of the amount of the benefit and the level of the
Executive's participation therein, enjoyed by the Executive under the employee
benefit and welfare plans of the Company, including without limitation such
benefits as group health, dental, 401(k), accident, disability insurance, or
group life insurance, that is caused by the Company except as is required by
applicable law,

               (vii)  absent the Executive's prior written consent, the
requirement by the Company that the principal place of business at which the
Executive performs his duties be changed to a location that is outside of a 50
mile radius of Jenkintown, Pennsylvania. The parties acknowledge that for these
purposes, Executive's principal place of business will be Jenkintown,
Pennsylvania for approximately 36 to 38 weeks per calendar year, and the
remainder, as the Executive decides, will be in Richmond, Virginia and Avalon,
New Jersey, or

               (viii) a breach by the Company of any provision of this Agreement
that continues for a period of thirty (30) days after Executive provides written
notice to the Company of such breach.

     8. EFFECTS OF TERMINATION.

         (a) TERMINATION ON PERMANENT DISABILITY; BY THE COMPANY WITHOUT CAUSE;
BY THE EXECUTIVE FOR GOOD REASON. If the employment of the

                                       7

<PAGE>

Executive should terminate by reason of his becoming Permanently Disabled, a
termination by the Company for any reason other than Cause, or by the Executive
for Good Reason, then the Company shall pay all compensation and benefits for
the Executive as follows:

               (i)    any Base Salary, Incentive Bonus, expense reimbursements
and all other compensation related payments that are payable as of his
termination of employment date that are related to his period of employment
preceding his termination date, and

               (ii)   any Incentive Bonus that has been allocated, awarded or
otherwise determined but unpaid as of the effective date of his termination, and

               (iii)  the amount equal to his (A) Base Salary, plus (B) his
Guaranteed Bonus, at the rates in effect on the effective date of his
termination of employment, that would have been paid or payable during the five
(5) year period immediately following the effective date of his termination (the
"Severance Period").

         The sum of the amount payable under subsections (ii) and (iii) hereof
is referred to herein as his "Severance Payment".

               (iv)   The Severance Payment shall be made in a single, lump sum
cash payment no later than thirty (30) days after the effective date of the
Executive's termination of employment. With respect to any Severance Payment
attributable to a period after the expiration of the Noncompete Period (as
defined herein), such payment shall be reduced for compensation earned from
other employment or self-employment after that date, and the Executive shall
refund to the Company any amount due as a result of such reduction; provided,
however, that there shall be no reduction for any amounts earned or paid to him
with respect to the Excluded Businesses.

               (v)    The Company shall allow the Executive to continue to
participate during the Severance Period in any and all of the employee benefit
and welfare plans and programs of the Company, excluding any 401(k) plan, in
which the Executive was entitled to participate immediately prior to his
termination, to the same extent and upon the same terms as the Executive
participated in such plans prior to his termination, provided that the
Executive's continued participation is permissible or otherwise practicable
under the general terms and provisions of such benefit plans and programs.
During the Severance Period, the Company shall pay for the Executive's continued
participation in said employee benefit and welfare plans, including but not
limited to premiums for group health, dental, accident, disability insurance,
directors and officers insurance, group life insurance, and his car allowance,
but excluding any 401(k) plan. To the extent that continued participation is
neither permissible nor practicable, the Company shall take such actions as may
be necessary to provide the Executive with substantially comparable benefits
(without additional cost to the Executive) outside the scope of such plans
including, without limitation, reimbursing the Executive for his costs in
obtaining such coverage, such as COBRA premiums paid by the Executive and/or his
eligible dependents. If the Executive engages in regular employment after his
termination of employment (whether as an executive or as a self-employed person
but excluding his management or operation of the Excluded Businesses), any
employee benefit and welfare benefits received by the Executive in consideration
of such employment which are similar in nature to the employee benefit and

                                       8

<PAGE>

welfare benefits provided by the Company will relieve the Company of its
obligation under this Section 8(a) to provide comparable benefits to the extent
of the benefits so received.

               (vi)   The Executive's stock options awarded under the Equity
Incentive Plan (or any other or successor plan) shall immediately become 100%
vested and he shall have the period specified in the option grant in which to
exercise his vested stock options, including those stock options that vested
upon his Termination of Employment.

               (vii)  The Executive's restricted Common Shares awarded under the
Equity Incentive Plan (or any other or successor plan) shall immediately become
100% vested and all restrictions shall lapse.

               (viii) The Executive's SERP benefit shall immediately become 100%
vested.

               (ix)   The Executive Life Insurance Program would be fully funded
by the Company.

               (x)    Prior to January 1, 2004, the Executive would be entitled
to receive 75% of his OPP allocation, and thereafter, the Executive would be
entitled to receive 100% of his OPP allocation; provided, however that this
subsection (ix) shall not apply for any termination by the Executive for a Good
Reason other than a Good Reason in Section 7(d)(i) and in Section 7(d)(iii).
This OPP allocation would be paid to the Executive after the OPP reward is
determined at the end of the OPP plan term, and will be reduced by a minimum
amount paid as severance at the time of his termination of employment. This
minimum amount paid at the time of his termination of employment would be equal
to the OPP reward for the Executive determined at the date of his termination of
employment (applying the 75% allocation during the for a termination prior to
January 1, 2004, if applicable), and the Compensation Committee would have the
discretion to pay the minimum amount to the Executive in cash or Common Shares
or a combination of cash and Common Shares.

         (b) TERMINATION ON DEATH. Upon a termination of employment due to the
Executive's death, the Executive shall become 100% vested in his stock options
and restricted Common Shares awarded under the Equity Incentive Plan. The
Executive's personal representative shall have the period specified in the
option grant in which to exercise his vested stock options, including those
stock options that vested on death. The Company shall pay to the Executive's
personal representative any Base Salary, Incentive Bonus, expense reimbursements
and all other compensation related payments that are payable as of his date of
death and that are related to his period of employment preceding his date of
death. Executive's surviving spouse or beneficiary shall receive his vested SERP
benefit, determined on the date of his death, payable pursuant to the terms of
the SERP as in effect on the date of his death.

         (c) BY THE COMPANY FOR CAUSE OR BY THE EXECUTIVE WITHOUT GOOD REASON.
In the event that the Executive's employment is terminated by the Company for
Cause or by the Executive without Good Reason, the Company shall pay the
Executive his Base Salary, Incentive Bonus, expense reimbursements and all other
compensation related payments that are payable as of his termination of
employment date and that are related to his

                                       9

<PAGE>

period of employment preceding his termination date. Executive shall be entitled
to exercise his vested stock options, determined as of his termination date,
pursuant to the terms of the option grant. All unvested options and unvested
restricted Common Shares shall be forfeited on his termination date.

         (d) TERMINATION OF AUTHORITY. Immediately upon the Executive
terminating or being terminated from his employment with the Company for any
reason, notwithstanding anything else appearing in this Agreement or otherwise,
the Executive will stop serving the functions of his terminated or expired
positions, and shall be without any of the authority or responsibility for such
positions. On request of the Board at any time following his termination of
employment for any reason, the Executive shall resign from the Board if then a
member.

     9. CHANGE OF CONTROL.

         (a) CHANGE OF CONTROL. For purposes of this Agreement, a "Change of
Control" will be deemed to have taken place upon the occurrence of any of the
following events:

               (i)   any person, entity or affiliated group, excluding the
Company or any employee benefit plan of the Company, acquiring more than 50% of
the then outstanding voting shares of the REIT,

               (ii)  the consummation of any merger or consolidation of the REIT
into another company, such that the holders of the voting shares of the REIT
immediately prior to such merger or consolidation is less than 50% of the voting
power of the securities of the surviving company or the parent of such surviving
company,

               (iii) the complete liquidation of the REIT or the sale or
disposition of all or substantially all of the REIT's assets, such that after
the transaction, the holders of the voting shares of the REIT immediately prior
to the transaction is less than 50% of the voting securities of the acquiror or
the parent of the acquiror, or

               (iv)  a majority of the Board votes in favor of a decision that a
Change of Control has occurred.

         (b) CERTAIN BENEFITS UPON A CHANGE OF CONTROL. In the event of a Change
of Control, the Executive shall become 100% vested in the stock options and
restricted Common Shares awarded under the Equity Incentive Plan (or any other
or successor plan) and in his SERP benefit.

         (c) EXCISE TAX.

               (i)   In the event that any payment or benefit received or to be
received by the Executive in connection with a change in control or a
termination of the Executive's employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any
person whose actions result in a change in control or any person affiliated with
the Company or such person) (all such payments and benefits being hereinafter
called "Total Payments"), such that the Executive will be subject (in whole or
in part)

                                       10

<PAGE>

to the excise tax imposed under Code Section 4999 ("Excise Tax") on such
payments and benefits, then the Company shall pay to the Executive an additional
amount (the "Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of the Excise Tax and any federal, state and local
income tax on the Gross-Up Payment, will be equal to the total amount of
payments required to be paid pursuant to this Agreement. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal income taxes at the highest marginal rate of federal income taxation
in the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state and
locality of the Executive's residence on such date, net of the maximum deduction
in federal income taxes which could be obtained from deduction of such state and
local taxes.

               (ii)  The Executive or the Company may request, prior to the time
any payments under this Agreement are made, a determination of whether any or
all of the Total Payments will be subject to the Excise Tax and, if so, the
amount of such Excise Tax and the federal, state and local income tax imposed on
the Gross-Up Payment. If such a determination is requested, it shall be made
promptly, at the Company's expense, by tax counsel selected by the Executive and
approved by the Company (with such approval not being unreasonably withheld),
and such determination shall be conclusive and binding on both parties. The
Company agrees to provide any information reasonably requested by such tax
counsel. Tax counsel may engage accountants or other experts, at the Company's
expense, to the extent deemed necessary or advisable for them to reach a
determination. For these purposes, the term "tax counsel" shall mean a law firm
with expertise in federal income tax matters.

               (iii) In the event that the Excise Tax is subsequently determined
to be less than the amount taken into account hereunder, the Executive will
repay to the Company, at the time that the amount of such reduction in Excise
Tax is finally determined, the portion of the Gross-Up Payment attributable to
such reduction plus that portion of the Gross-Up Payment attributable to the
Excise Tax and federal, state and local income tax imposed on the Gross-Up
Payment, without any interest thereon. In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder, the Company will
make an additional Gross-Up Payment in respect of such excess and in respect of
any portion of the Excise Tax with respect to which the Company had not
previously made a Gross-Up Payment (plus any interest, penalties or additions
payable by the Executive with respect to such excess and such portion) at the
time that the amount of such excess is finally determined, without any interest
thereon.

               (iv)  Each party agrees to notify the other party, in writing, of
any claim that, if successful, would require the payment by the Company of a
Gross-Up Payment or might entitle the Company to a refund of all or part of any
previous Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after the Executive or
Company is informed in writing of such claim or otherwise becomes aware of such
claim. If notice of the claim arose as a result of a claim made against the
Executive by a taxing authority, Executive shall not pay such claim prior to the
expiration of the thirty (30) day period following the date on which he gives
notice to the Company. If the Company notifies the Executive in writing prior to
the expiration of such period that it desires to contest such claim, the
Executive shall: (A) give the Company any information reasonably requested by
the Company relating to such claim, (B) take such action in connection with
contesting such claim as

                                       11

<PAGE>

the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney selected by the Executive and approved by the Company (with such
approval not being unreasonably withheld), (C) cooperate with the Company in
good faith in order to effectively contest such claim, and (D) permit the
Company to reasonably participate in any proceedings relating to such claim. The
Company shall bear and pay directly all costs and expenses (including legal fees
and additional interest and penalties) incurred in connection with such contest
and shall indemnify and hold the Executive harmless, on an after-tax basis, for
any Excise Tax (including interest and penalties with respect thereto) imposed
as a result of such representation and payment of costs and expenses.

               (v)   Notwithstanding the foregoing, the Company shall control
all audits and proceedings taken in connection with any claim, audit or
proceeding involving Excise Taxes or Gross-Up Payments and, at its sole option,
may pursue or forego any and all administrative appeals, proceedings, hearings
and conferences with the taxing authority in respect of any such claim, audit or
proceeding and may, at its sole option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the tax in any permissible manner,
and the Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs the Executive to pay such tax and sue for a refund, the Company
shall advance the amount of such payment to the Executive, on an interest-free
basis (including interest or penalties with respect thereto) and shall indemnify
and hold the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance. The Company shall be required to consult with and keep the
Executive fully apprised of developments and actions being considered or taken
with respect to such claim, audit or proceeding. The Company's control of the
contest shall be limited to issues with respect to which such a Gross-Up Payment
would be payable or refundable hereunder and the Executive shall be entitled to
settle or contest, as the case may be, any other issue. Each party agrees to
keep the other party fully apprised of developments concerning such claim, audit
or proceeding and to cooperate with the other in good faith in order to
effectively resolve such claim, audit or proceeding.

               (vi)  For purposes of this Subsection (c), a determination of
whether a payment is subject to Excise Taxes, including but not limited to, a
determination of change in control, shall be made pursuant to Code Section 280G.

         10. CONFIDENTIAL INFORMATION. The Executive recognizes and acknowledges
that certain assets of the Company constitute Confidential Information. The term
"Confidential Information" as used in this Agreement shall mean all information
which is known only to the Executive or the Company, other employees of the
Company, or others in a confidential relationship with the Company, and relating
to the Company's business including, without limitation, information regarding
clients, customers, pricing policies, methods of operation, proprietary Company
programs, sales products, profits, costs, markets, key personnel, formulae,
product applications, technical processes, and trade secrets, as such
information may exist from time to time, which the Executive acquired or
obtained by virtue of work performed for the Company, or which the Executive may
acquire or may have acquired knowledge of during the

                                       12

<PAGE>

performance of said work. The Executive shall not, during or after the Term,
disclose all or any part of the Confidential Information to any person, firm,
corporation, association, or any other entity for any reason or purpose
whatsoever, directly or indirectly, except as may be required pursuant to his
employment hereunder, unless and until such Confidential Information becomes
publicly available other than as a consequence of the breach by the Executive of
his confidentiality obligations hereunder. In the event of the termination of
his employment, whether voluntary or involuntary and whether by the Company or
the Executive, the Executive shall deliver to the Company all documents and data
pertaining to the Confidential Information and shall not take with him any
documents or data of any kind or any reproductions (in whole or in part) or
extracts of any items relating to the Confidential Information. The Company
acknowledges that prior to his employment with the Company, the Executive has
lawfully acquired extensive knowledge of the industries and businesses in which
the Company engages in business, and that the provisions of this Section 10 are
not intended to restrict the Executive's use of such previously acquired
knowledge.

         In the event that the Executive receives a request or is required (by
deposition, interrogatory, request for documents, subpoena, civil investigative
demand or similar process) to disclose all or any part of the Confidential
Information, the Executive agrees to (a) promptly notify the Company in writing
of the existence, terms and circumstances surrounding such request or
requirement, (b) consult with the Company on the advisability of taking legally
available steps to resist or narrow such request or requirement, and (c) assist
the Company in seeking a protective order or other appropriate remedy. In the
event that such protective order or other remedy is not obtained or that the
Company waives compliance with the provisions hereof, the Executive shall not be
liable for such disclosure unless disclosure to any such tribunal was caused by
or resulted from a previous disclosure by the Executive not permitted by this
Agreement.

     11. NON-COMPETITION AND NONSOLICITATION. During the Term and for a period
of 18 calendar months after the termination of the Executive's employment (the
"Noncompete Period"), the Executive shall not, directly or indirectly, either as
a principal, agent, employee, employer, stockholder, partner or in any other
capacity whatsoever: (a) engage or assist others engaged, in whole or in part,
in any business which is engaged in a business or enterprise that is
substantially similar to the business of the Company that the Company was
engaged in during the period of the Executive's employment with the Company, or
(b) without the prior consent of the Board, employ or solicit the employment of,
or assist others in employing or soliciting the employment of, any individual
employed by the Company at any time while the Executive was also so employed.
Notwithstanding anything else herein to the contrary, the provisions of this
Section 11 shall not apply in the event the Executive's employment is terminated
for any reason other than a termination by the Company for Cause or a
termination by the Executive without Good Reason.

         Nothing in this Section 11 shall impede, restrict or otherwise
interfere with the Executive's management and operation of the Excluded
Businesses. Further, nothing in this Section 11 shall prohibit Executive from
making any passive investment in a public company, or where he is the owner of
five percent (5%) or less of the issued and outstanding voting securities of any
entity, provided such ownership does not result in his being obligated or
required to devote any managerial efforts.

                                       13

<PAGE>

         The Executive agrees that the restraints imposed upon him pursuant to
this Section 11 are necessary for the reasonable and proper protection of the
Company and its subsidiaries and affiliates, and that each and every one of the
restraints is reasonable in respect to subject matter, length of time and
geographic area. The parties further agree that, in the event that any provision
of this Section 11 shall be determined by any court of competent jurisdiction to
be unenforceable by reason of its being extended over too great a time, too
large a geographic area or too great a range of activities, such provision shall
be deemed to be modified to permit its enforcement to the maximum extent
permitted by law.

     12. INTELLECTUAL PROPERTY. During the Term, the Executive shall promptly
disclose to the Company or any successor or assign, and grant to the Company and
its successors and assigns without any separate remuneration or compensation
other than that received by him in the course of his employment, his entire
right, title and interest in and to any and all inventions, developments,
discoveries, models, or any other intellectual property of any type or nature
whatsoever ("Intellectual Property"), whether developed by him during or after
business hours, or alone or in connection with others, that is in any way
related to the business of the Company, its successors or assigns. This
provision shall not apply to books or articles authored by the Executive during
non-work hours, consistent with his obligations under this Agreement, so long as
such books or articles (a) are not funded in whole or in part by the Company,
and (b) do not contain any Confidential Information or Intellectual Property of
the Company. The Executive agrees, at the Company's expense, to take all steps
necessary or proper to vest title to all such Intellectual Property in the
Company, and cooperate fully and assist the Company in any litigation or other
proceedings involving any such Intellectual Property.

     13. DISPUTES.

         (a) EQUITABLE RELIEF. The Executive acknowledges and agrees that upon
any breach by the Executive of his obligations under Sections 10, 11, or 12
hereof, the Company will have no adequate remedy at law, and accordingly will be
entitled to specific performance and other appropriate injunctive and equitable
relief.

         (b) ARBITRATION. Excluding only requests for equitable relief by the
Company under Section 13(a), in the event that there is any claim or dispute
arising out of or relating to this Agreement or the breach hereof, and the
parties hereto shall not have resolved such claim or dispute within 60 days
after written notice from one party to the other setting forth the nature of
such claim or dispute, then such claim or dispute shall be settled exclusively
by binding arbitration in Montgomery county, Pennsylvania, in accordance with
the Employment Dispute Resolution Rules of the American Arbitration Association
("Rules"), by an arbitrator mutually agreed upon by the parties hereto or, in
the absence of such agreement, by an arbitrator selected according to such
Rules. Notwithstanding the foregoing, if either the Company or the Executive
shall request, such arbitration shall be conducted by a panel of three (3)
arbitrators, one selected by the Company, one selected by the Executive and the
third selected by agreement of the first two arbitrators, or, in the absence of
such agreement, in accordance with such Rules. Judgment upon the award rendered
by such arbitrator(s) shall be entered in any Court having jurisdiction thereof
upon the application of either party. The parties agree to use their reasonable
best efforts to have such arbitration completed as soon as is reasonably
practicable. Notwithstanding anything herein to the contrary, the losing party
shall pay the reasonable costs

                                       14

<PAGE>

and expenses (including reasonable attorney fees and expenses) of the prevailing
party with respect to such arbitration, except the Executive, if he is the
losing party, shall not be required to pay such expenses and costs if the claim
relates to statutory discrimination claims that he would not otherwise be
required to pay if such claim had been brought in a court of competent
jurisdiction.

         (c) LEGAL FEES. The Company shall pay or promptly reimburse the
Executive for the reasonable legal fees and expenses incurred by the Executive
   in successfully enforcing or defending any right of the Executive pursuant to
this Agreement.

     14. INDEMNIFICATION. The Company shall indemnify the Executive, to the
maximum extent permitted by applicable law, against all costs, charges and
expenses incurred or sustained by the Executive, including the cost of legal
counsel selected and retained by the Executive in connection with any action,
suit or proceeding to which the Executive may be made a party by reason of the
Executive being or having been an officer, director, or employee of the Company.

     15. COOPERATION IN FUTURE MATTERS. The Executive hereby agrees that for a
period of 18 months following his termination of employment he shall cooperate
with the Company's reasonable requests relating to matters that pertain to the
Executive's employment by the Company, including, without limitation, providing
information or limited consultation as to such matters, participating in legal
proceedings, investigations or audits on behalf of the Company, or otherwise
making himself reasonably available to the Company for other related purposes.
Any such cooperation shall be performed at scheduled times taking into
consideration the Executive's other commitments, and the Executive shall be
compensated at a reasonable hourly or per diem rate to be agreed upon by the
parties to the extent such cooperation is required on more than an occasional
and limited basis. The Executive shall not be required to perform such
cooperation to the extent it conflicts with any requirements of exclusivity of
services for another employer or otherwise, nor in any manner that in the good
faith belief of the Executive would conflict with his rights under or ability to
enforce this Agreement.

     16. GENERAL.

         (a) NOTICES. All notices and other communications hereunder shall be in
writing or by written telecommunication, and shall be deemed to have been duly
given if delivered personally or if sent by overnight courier or by certified
mail, return receipt requested, postage prepaid or sent by written
telecommunication or telecopy, to the relevant address set forth below, or to
such other address as the recipient of such notice or communication shall have
specified in writing to the other party hereto, in accordance with this Section
16(a).

     If to the Company, to:    First States Group, L.P.
                               c/o American Financial Realty Group
                               1725 The Fairway
                               Jenkintown, PA 19046
                               Attn: Chairman of the Board of Trustees
                               Facsimile: 215-887-2585

                                       15

<PAGE>

     If to Executive, at his last residence shown on the records of the Company.

Any such notice shall be effective (i) if delivered personally, when received,
(ii) if sent by overnight courier, when receipted for, (iii) if mailed, five (5)
days after being mailed, and (iv) on confirmed receipt if sent by written
telecommunication or telecopy, provided a copy of such communication is sent by
regular mail, as described above.

         (b) SEVERABILITY. If any provision of this Agreement is or becomes
invalid, illegal or unenforceable in any respect under any law, the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired.

         (c) WAIVERS. No delay or omission by either party hereto in exercising
any right, power or privilege hereunder shall impair such right, power or
privilege, nor shall any single or partial exercise of any such right, power or
privilege preclude any further exercise thereof or the exercise of any other
right, power or privilege.

         (d) COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. In making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart.

         (e) ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of the Company's successors and the Executive's personal or legal
representatives, executors, administrators, heirs, distributees, devisees and
legatees. This Agreement shall not be assignable by the Executive, it being
understood and agreed that this is a contract for the Executive's personal
services. Otherwise, this Agreement shall not be assignable by the Company
except that the Company may assign it in connection with a transaction involving
the succession by a third party to all or substantially all of the Company's
business and/or assets (whether direct or indirect and whether by purchase,
merger, consolidation, liquidation or otherwise). When assigned to a successor,
the assignee shall assume this Agreement and expressly agree to perform this
Agreement in the same manner and to the same extent as the Company would be
required to perform it in the absence of such an assignment. For all purposes
under this Agreement, the term "Company" shall include any successor to the
Company's business and/or assets that executes and delivers the assumption
agreement described in the immediately preceding sentence or that becomes bound
by this Agreement by operation of law.

         (f) ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties, supersedes all prior agreements and understandings, including
the Original Agreement, whether written or oral, relating to the subject matter
hereof and may not be amended except by a written instrument hereafter signed by
the Executive and a duly authorized representative of the Board (other than the
Executive).

         (g) GOVERNING LAW. This Agreement and the performance hereof shall be
construed and governed in accordance with the laws of the Commonwealth of
Pennsylvania, without giving effect to principles of conflicts of law.

                                       16

<PAGE>

         (h) CONSTRUCTION. The language used in this Agreement shall be deemed
to be the language chosen by the parties to express their mutual intent, and no
rule of strict construction shall be applied against any party. The headings of
sections of this Agreement are for convenience of reference only and shall not
affect its meaning or construction. Whenever any word is used herein in one
gender, it shall be construed to include the other gender, and any word used in
the singular shall be construed to include the plural in any case in which it
would apply and vice versa.

         (i) PAYMENTS AND EXERCISE OF RIGHTS AFTER DEATH. Any amounts payable
hereunder after the Executive's death shall be paid to the Executive's
designated beneficiary or beneficiaries, whether received as a designated
beneficiary or by will or the laws of descent and distribution. The Executive
may designate a beneficiary or beneficiaries for all purposes of this Agreement,
and may change at any time such designation, by notice to the Company making
specific reference to this Agreement. If no designated beneficiary survives the
Executive or the Executive fails to designate a beneficiary for purposes of this
Agreement prior to his death, all amounts thereafter due hereunder shall be
paid, as and when payable, to his spouse, if she survives the Executive, and
otherwise to his estate.

         (j) CONSULTATION WITH COUNSEL. The Executive acknowledges that he has
had a full and complete opportunity to consult with counsel or other advisers of
his own choosing concerning the terms, enforceability and implications of this
Agreement, and that the Company has not made any representations or warranties
to the Executive concerning the terms, enforceability and implications of this
Agreement other than as are reflected in this Agreement.

         (k) WITHHOLDING. Any payments provided for in this Agreement shall be
paid net of any applicable income tax withholding required under federal, state
or local law.

         (l) CONSUMER PRICE INDEX. For purposes of this Agreement, the term
"CPI" refers to the Consumer Price Index as published by the Bureau of Labor
Statistics of the United States Department of Labor, U.S. City Average, All
Items for Urban Wage Earners and Clerical Workers (1982-1984=100). If the CPI is
hereafter converted to a different standard reference base or otherwise revised,
the determination of the CPI adjustment shall be made with the use of such
conversion factor, formula or table for converting the CPI, as may be published
by the Bureau of Labor Statistics, or, if the bureau shall no longer publish the
same, then with the use of such conversion factor, formula or table as may be
published by an agency of the United States, or failing such publication, by a
nationally recognized publisher of similar statistical information.

         (m) SURVIVAL. The provisions of Sections 10, 11, 12, 13, 14 and 15
shall survive the termination of this Agreement.

                                       17

<PAGE>

       IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have caused this Agreement to be duly executed as of the date first above
written.

FIRST STATES GROUP, L.P.                 NICHOLAS S. SCHORSCH
By:    First States Group, LLC
       Its general partner

    By:___________________________       ______________________________
       Name:
       Title:

Dated: May __, 2003                      Dated: May __, 2003

GUARANTEE:

The obligations of First States Group, L.P. under this Employment Agreement,
dated May 15, 2003, with Nicholas S. Schorsch, shall be guaranteed by American
Financial Realty Trust.

AMERICAN FINANCIAL REALTY TRUST

By:    ______________________________
       Name:
       Title:

Dated: May __, 2003

                                       18

<PAGE>

                                   APPENDIX A

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

         The Company shall maintain for the benefit of the Executive a
non-qualified supplemental executive retirement plan ("SERP") which shall
provide to the Executive a minimum annual pension, commencing at the Executive's
attaining age 60 and payable as a single life annuity, equal to 50% of the
Executive's average annual compensation (including Base Salary, Incentive Bonus
and payments under the OPP) for the three (3) calendar years of the last ten
(10) years of his employment by the Company which produce the highest average
amount (or the annualized average of such compensation for his actual period of
employment if less than three (3) calendar years) with a maximum annual benefit
of $475,000. The Executive shall vest in his SERP benefit over a 5-year period,
pursuant to the following vesting schedule:

         Year 1    22%

         Year 2    43%

         Year 3    63%

         Year 4    82%

         Year 5    100%

         A year of vesting service under the SERP is the 12-month period ending
on each anniversary of his commencement of his employment with the Company,
provided he is an employee of the Company on that vesting date. Executive also
shall become 100% vested in his SERP benefit upon (a) the effective date of a
Change of Control, (b) his termination date if the Company terminates him
without Cause, (c) his termination date if he terminates for Good Reason, (d)
the date he dies, or (e) the date he becomes Permanently Disabled.

         The Executive's annual SERP benefit shall be paid to the Executive in
annual payments commencing on the first day of the month immediately following
his 60th birthday, or if later, his termination of employment with the Company
after age 60 (referred to herein as his "Retirement Date") and continuing
annually thereafter until the year in which the Executive dies. The Executive
may elect, at least 30 days prior to the date on which SERP benefit payments are
scheduled to begin, to receive monthly installment payments. The Executive shall
receive his annual SERP benefit for a minimum of ten (10) years. The Executive
may elect, within 30 days of his termination of employment date, that payment of
his vested SERP benefit shall commence at any time selected by the Executive
after he shall have terminated employment from the Company, provided that if
payment begins prior to the Executive's 60th birthday, such payment shall be
actuarially reduced to account for the commencement of such payments prior to
age 60. Payment of such SERP benefits shall continue until the date of the
Executive's death if he has received at least ten (10) annual payments. In the
event Executive dies prior to receiving ten (10) annual SERP payments, his
surviving spouse (or his designated beneficiary) shall receive the actuarial
equivalence of the balance due him in a single, lump sum cash payment. If
Executive dies prior to the time benefit payments are scheduled to begin, his
surviving spouse (or designated beneficiary) shall receive the actuarial
equivalence of his vested SERP benefit,

                                       19

<PAGE>

determined as of the date of his death, in a single, lump sum cash payment. For
purposes of determining actuarial equivalence, the 1983 GAM Mortality Table and
interest at the average rate on 30 year Treasury Securities shall be used.

         The SERP is an unfunded plan and the Executive is an unsecured general
creditor of the Company. The Company shall establish a "rabbi trust" to be used
in connection with the SERP.

                                       20

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