Document:

EXHIBIT 10.37
                         RECKSON ASSOCIATES REALTY CORP.
                      AMENDED AND RESTATED CREDIT AGREEMENT

                                   dated as of

                                 August 4, 1999

                                     between

                        RECKSON SERVICE INDUSTRIES, INC.,

                                   as Borrower

                                       and

                      RECKSON OPERATING PARTNERSHIP, L.P.,

                                    as Lender

                          relating to the operations of

                        RECKSON SERVICE INDUSTRIES, INC.

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                                Table of Contents

                                                                            Page

                                   ARTICLE I.
                                  DEFINITIONS

Section 1.1       Definitions..................................................1
                  (a)      Terms Generally.....................................1
                  (b)      Other Terms.........................................1

                                   ARTICLE II.
                          THE REVOLVING CREDIT FACILITY

Section 2.1       Commitment and Loans.........................................7
Section 2.2       Borrowing Procedure..........................................7
Section 2.3       Termination and Reduction of Commitment......................7
Section 2.4       Repayment....................................................8
Section 2.5       Optional Prepayment..........................................8

                                  ARTICLE III.
                                INTEREST AND FEES

Section 3.1       Interest Rate................................................8
Section 3.2       Interest on Overdue Amounts..................................8
Section 3.3       Maximum Interest Rate........................................9

                                   ARTICLE IV.
                            DISBURSEMENT AND PAYMENT

Section 4.1       Method and Time of Payments..................................9
Section 4.2       Compensation for Losses......................................9
Section 4.3       Withholding and Additional Costs............................10
                  (a)      Withholding........................................10
                  (b)      Additional Costs...................................10
                  (c)      Certificate, Etc...................................11
Section 4.4       Expenses; Indemnity.........................................11
Section 4.5       Survival....................................................12

                                   ARTICLE V.
                         REPRESENTATIONS AND WARRANTIES

Section 5.1       Representations and Warranties..............................12
                  (a)      Good Standing and Power............................12
                  (b)      Authority..........................................12
                  (c)      Authorizations.....................................12
                  (d)      Binding Obligation.................................12

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                  (e)      Litigation.........................................12
                  (f)      No Conflicts.......................................13
                  (g)      Taxes..............................................13
                  (h)      Properties.........................................13
                  (i)      Compliance with Laws and Charter Documents.........13
                  (j)      No Material Adverse Effect.........................13
                  (k)      Disclosure.........................................13
Section 5.2       Survival....................................................14

                                   ARTICLE VI.
                              CONDITIONS PRECEDENT

Section 6.1       Conditions to the Availability of the Commitment and
                    Letters of Credit.........................................14
                  (a)      This Agreement.....................................14
                  (b)      Certificate of Incorporation and By-Laws...........14
                  (c)      Representations and Warranties.....................14
                  (d)      Other Documents....................................14
Section 6.2       Conditions to All Loans and Letters of Credit...............14
                  (a)      Borrowing Request..................................15
                  (b)      No Default.........................................15
                  (c)      Debt-to-Equity Ratio...............................15
                  (d)      Representations and Warranties; Covenants..........15
                  (e)      REIT Status of Reckson.............................15
                  (f)      Certain Loans Subject to Reckson's Approval........15
Section 6.3       Satisfaction of Conditions Precedent........................15

                                  ARTICLE VII.
                                   COVENANTS

Section 7.1       Affirmative Covenants.......................................15
                  (a)      Financial Statements; Compliance Certificates......15
                  (b)      Existence..........................................16
                  (c)      Compliance with Law and Agreements.................16
                  (d)      Authorizations.....................................16
                  (e)      Inspection.........................................16
                  (f)      Maintenance of Records.............................17
                  (g)      Notice of Defaults and Adverse Developments........17
Section 7.2       Negative Covenants..........................................17
                  (a)      Mergers, Consolidations and Sales of Assets........17
                  (b)      Liens..............................................17
                  (c)      Indebtedness.......................................17
                  (d)      Dividends..........................................18
                  (e)      Certain Amendments.................................18

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                                  ARTICLE VIII.
                                EVENTS OF DEFAULT

Section 8.1       Events of Default...........................................18

                                   ARTICLE IX.
                          EVIDENCE OF LOANS; TRANSFERS

Section 9.1       Evidence of Loans and Letters of Credit.....................20

                                   ARTICLE X.
                                LETTERS OF CREDIT

Section 10.1      Letters of Credit...........................................20
                  (a)      Types and Amounts..................................20
                  (b)      Conditions.........................................21
                  (c)      Issuance of Letters of Credit......................21
                  (d)      Reimbursement Obligations; Duties of the Lender....21
                  (e)      Payment of Reimbursement Obligations...............22
                  (f)      Letter of Credit Fee Charges.......................22
                  (g)      Letter of Credit Reporting Requirements............22
                  (h)      Indemnification; Exoneration.......................23

                                   ARTICLE XI.
                                  MISCELLANEOUS

Section 11.1      Applicable Law..............................................23
Section 11.2      Waiver of Jury..............................................24
Section 11.3      Jurisdiction and Venue; Service of Process..................24
Section 11.4      Confidentiality.............................................24
Section 11.5      Amendments and Waivers......................................24
Section 11.6      Cumulative Rights; No Waiver................................25
Section 11.7      Notices.....................................................25
Section 11.8      Certain Acknowledgments.....................................25
Section 11.9      Separability................................................25
Section 11.10     Parties in Interest.........................................26
Section 11.11     Execution in Counterparts...................................26

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     AMENDED AND RESTATED CREDIT AGREEMENT,  dated as of August 4, 1999, between
Reckson Service Industries,  Inc., a Delaware corporation, and Reckson Operating
Partnership, L.P., a Delaware limited partnership, relating to the operations of
Reckson Service Industries, Inc.

                              W I T N E S S E T H:

     WHEREAS,  the  Borrower has  requested  the Lender to commit to lend to the
Borrower up to $100 million on a revolving basis for  acquisitions of assets and
general corporate purposes;

     WHEREAS,  the Lender is willing to make revolving credit loans on the terms
and conditions provided herein; and

     WHEREAS,  the  parties  hereto  desire to amend and  restate  their  credit
agreement  dated June 15, 1998 to allow for the  issuance of one or more Letters
of Credit in favor of the Lender for the benefit of the Borrower;

     NOW, THEREFORE, the parties agree as follows:

                                   ARTICLE I.

                                  DEFINITIONS

     Section 1.1 Definitions.

     (a) Terms  Generally.  The definitions  ascribed to terms in this Agreement
apply equally to both the singular and plural forms of such terms.  Whenever the
context may require,  any pronoun  shall be deemed to include the  corresponding
masculine,  feminine  and neuter  forms.  The words  "include",  "includes"  and
"including"  shall  be  interpreted  as  if  followed  by  the  phrase  "without
limitation".  The  phrase  "individually  or in the  aggregate"  shall be deemed
general  in scope  and not to refer to any  specific  Section  or clause of this
Agreement. All references herein to Articles,  Sections,  Exhibits and Schedules
shall be deemed  references  to  Articles  and  Sections  of, and  Exhibits  and
Schedules to, this Agreement  unless the context shall  otherwise  require.  The
table of contents,  headings  and  captions  herein shall not be given effect in
interpreting or construing the provisions of this Agreement. Except as otherwise
expressly  provided  herein,  all references to "dollars" or "$" shall be deemed
references to the lawful money of the United States of America.

     (b) Other Terms.  The  following  terms have the meanings  ascribed to them
below or in the Sections of this Agreement indicated below:

          "Adjusted  Indebtedness"  means,  with  respect to the  Borrower,  the
     Borrower's Indebtedness determined without regard for any amounts described
     in clause (viii) of the definition of "Indebtedness."

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          "Affiliate"  means, with respect to any Person,  any other Person that
     controls, is controlled by, or is under common control with, such Person.

          "Agreement"  means  this  credit  agreement,  as it  may  be  amended,
     modified or supplemented from time to time.

          "Available  Commitment"  means, on any day, an amount equal to (i) the
     Commitment  on such day  minus  (ii) the  aggregate  outstanding  principal
     amount of Loans on such day.

          "Borrower"  means  Reckson  Service   Industries,   Inc.,  a  Delaware
     corporation.

          "Borrowing Date" means,  with respect to any Loan or Letter of Credit,
     the Business Day set forth in the  relevant  Borrowing  Request as the date
     upon which the Borrower desires to borrow such Loan or Letter of Credit;

          "Borrowing  Request"  means a request by the  Borrower for a Loan or a
     Letter of Credit,  which shall specify (i) the requested Borrowing Date and
     (ii) the aggregate amount of such Loan or Letter of Credit.

          "Business  Day" means any day that is not a Saturday,  Sunday or other
     day on which commercial banks in The City of New York are authorized by law
     to close.

          "Capital Lease  Obligations"  means,  with respect to any Person,  the
     obligation of such Person to pay rent or other amounts under any lease with
     respect to any  property  (whether  real,  personal  or mixed)  acquired or
     leased by such Person that is required to be  accounted  for as a liability
     on a consolidated balance sheet of such Person.

          "Commercial  Letter of Credit" means any documentary  letter of credit
     issued by an Issuing  Bank  pursuant to Section 10.1 for the account of the
     Lender on behalf of the Borrower.

          "Commercial  Services"  means  businesses  that  provide  services for
     occupants of office,  industrial  and other property types that Reckson may
     not be permitted to provide  under  Federal tax laws  applicable  to a real
     estate  investment  trust or that have not  traditionally  been provided by
     Reckson.

          "Commitment"  means $100  million,  as such amount may be reduced from
     time to time pursuant to Section 2.3.

          "Commitment  Termination  Date" means the earlier to occur of (i) June
     15, 2003 and (ii) the date, if any, on which the Commitment is terminated.

          "Confidential  Information" means information  delivered to the Lender
     by or on  behalf  of the  Borrower  in  connection  with  the  transactions
     contemplated   by  or  otherwise   pursuant  to  this   Agreement  that  is
     confidential  or  proprietary  in nature at the time it is so  delivered or
     information obtained by the Lender in the course of its review of the books

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     or records of the Borrower  contemplated  herein;  provided  that such term
     shall not include  information W that was publicly known or otherwise known
     to the Lender prior to the time of such disclosure,  (ii) that subsequently
     becomes  publicly  known  through no act or  omission  by the Lender or any
     Person acting on the Lender's behalf, (iii) that otherwise becomes known to
     the Lender  other than  through  disclosure  by the  Borrower  or (iv) that
     constitutes financial information delivered to the Lender that is otherwise
     publicly available.

          "Credit Obligations" means, at any particular time, the sum of (i) the
     outstanding  principal  amount  of the  Loans at such  time,  plus (ii) the
     Letter of Credit Obligations at such time.

          "Default"  means any event or circumstance  which,  with the giving of
     notice or the passage of time, or both, would be an Event of Default.

          "EBITDA" means for any fiscal period,  the  Consolidated Net Income or
     Consolidated  Net Loss, as the case may be, for such fiscal  period,  after
     restoring  thereto  amounts  deducted  for  (a)  extraordinary  losses  (or
     deducting   therefrom   any   amounts   included   therein  on  account  of
     extraordinary gains) and special charges, (b) depreciation and amortization
     (including  write-offs or write-downs) and special charges,  (c) the amount
     of  interest  expense  of  the  Borrower  and  its  Subsidiaries,  if  any,
     determined on a consolidated basis in accordance with GAAP, for such period
     on the aggregate principal amount of their consolidated  indebtedness,  (d)
     the amount of tax expense of the  Borrower  and its  Subsidiaries,  if any,
     determined on a consolidated basis in accordance with GAAP, for such period
     and (e) the aggregate amount of fixed and contingent rentals payable by the
     Borrower and its Subsidiaries,  if any,  determined on a consolidated basis
     in accordance with GAAP, for such period with respect to leases of real and
     personal property.

          "Effective Date" has the meaning assigned to such term in Section 6.1.

          "Event of Default"  has the  meaning  assigned to such term in Section
     8.1.

          "GAAP" means generally accepted accounting principles, as set forth in
     the opinions and  pronouncements of the Accounting  Principles Board of the
     American  Institute of Certified  Public  Accountants  and  statements  and
     pronouncements of the Financial Accounting Standards Board or in such other
     statements  by such other  entities  as may be  approved  by a  significant
     segment of the accounting profession of the United States of America.

          "Governmental Authority" means any nation or government,  any state or
     other political  subdivision  thereof and any entity exercising  executive,
     legislative,   judicial,  regulatory  or  administrative  functions  of  or
     pertaining to government.

          "Guaranty"  means,  with  respect  to  any  Person,   any  obligation,
     contingent or otherwise, of such Person guaranteeing or having the economic
     effect of guaranteeing  any

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     Indebtedness  of any other  Person (the  "primary  obligor") in any manner,
     whether directly or indirectly, and including any obligation of such Person
     (i) to  purchase  or pay (or  advance or supply  funds for the  purchase or
     payment of) such Indebtedness or to purchase (or to advance or supply funds
     for the purchase  of) any  security  for the payment of such  Indebtedness,
     (ii) to  purchase  property,  securities  or  services  for the  purpose of
     assuring  the  holder  of  such   Indebtedness   of  the  payment  of  such
     Indebtedness or (iii) to maintain  working  capital,  equity capital or the
     financial condition or liquidity of the primary obligor so as to enable the
     primary obligor to pay such Indebtedness.  The term "Guaranteed" shall have
     the corresponding meaning.

          "Indebtedness"  means, with respect to any Person, (i) all obligations
     of such Person for  borrowed  money or for the deferred  purchase  price of
     property or services  (including all obligations,  contingent or otherwise,
     of such Person in connection with letters of credit,  bankers' acceptances,
     interest  rate  swap  agreements,  interest  rate cap  agreements  or other
     similar  instruments,  including currency swaps) other than indebtedness to
     trade  creditors and service  providers  incurred in the ordinary course of
     business and payable on usual and customary terms,  (ii) all obligations of
     such  Person  evidenced  by  bonds,  notes,  debentures  or  other  similar
     instruments,   (iii)  all   indebtedness   created  or  arising  under  any
     conditional  sale or  other  title  retention  agreement  with  respect  to
     property acquired by such Person (even though the remedies available to the
     seller or lender under such agreement are limited to  repossession  or sale
     of such property),  (iv) all Capital Lease Obligations of such Person,  (v)
     all obligations of the types described in clauses (i), (ii),  (iii) or (iv)
     above  secured  by  (or  for  which  the  obligee  has an  existing  right,
     contingent or otherwise, to be secured by) any Lien upon or in any property
     (including  accounts,  contract rights and other intangibles) owned by such
     Person,  even though  such Person has not assumed or become  liable for the
     payment  of such  Indebtedness,  (vi) all  preferred  stock  issued by such
     Person which is redeemable,  prior to full  satisfaction  of the Borrower's
     obligations under this Agreement  (including repayment in full of the Loans
     and all interest accrued thereon), other than at the option of such Person,
     valued  at  the  greater  of  its  voluntary  or  involuntary   liquidation
     preference  plus accrued and unpaid  dividends,  (vii) all  Indebtedness of
     others  Guaranteed  by such  Person  and  (viii)  all  Indebtedness  of any
     partnership of which such Person is a general partner.

          "Indemnitee" has the meaning assigned to such term in Section 4.4(b).

          "Intercompany Agreement" means the intercompany agreement, dated as of
     the date hereof, by and between the Borrower and the Lender.

          "Interest  Period" means,  with respect to any Loan, each  three-month
     period  commencing  on the  date  such  Loan  is  made or at the end of the
     preceding Interest Period, as the case may be; provided, however, that:

          (i) any Interest  Period that would otherwise end on a day that is not
     a Business  Day shall be extended  to the next  Business  Day,  unless such
     Business Day falls

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     in another  calendar month, in which case such Interest Period shall end on
     the next preceding Business Day;

          (ii) any  Interest  Period that begins on the last  Business  Day of a
     calendar month (or on a day for which there is no numerically corresponding
     day in the  calendar  month  at the end of  such  Interest  Period)  shall,
     subject to clause (iii) below,  end on the last  Business Day of a calendar
     month; and

          (iii)  any  Interest   Period  that  would  otherwise  end  after  the
     Commitment  Termination  Date then in effect  shall end on such  Commitment
     Termination Date.

          "Issuing  Bank" means The Chase  Manhattan  Bank or such other banking
     institution  selected  by the  parties  hereto  to issue a Letter of Credit
     pursuant to Section 10.1(c)(ii) hereof.

          "Lender" means Reckson Operating Partnership, L.P., a Delaware limited
     partnership.

          "Letter of Credit"  means any  Commercial  Letter of Credit or Standby
     Letter of Credit.

          "Letter of Credit Fee" has the meaning set forth in Section 10.1(f).

          "Letter of Credit  Obligations" means, at any particular time, the sum
     of (i)  all  outstanding  Reimbursement  Obligations,  (ii)  the  aggregate
     undrawn  face amount of all  outstanding  Letters of Credit,  and (iii) the
     aggregate face amount of all Letters of Credit  requested by the Lender but
     not yet issued.

          "Letter of Credit  Reimbursement  Agreement"  means, with respect to a
     Letter  of  Credit,   such  form  of  application   therefor  and  form  of
     reimbursement agreement therefor (whether in a single or several documents,
     taken  together) as an Issuing  Bank may employ in the  ordinary  course of
     business for its own  account,  with such  modifications  thereto as may be
     agreed upon by such Issuing  Bank and the Lender and as are not  materially
     adverse (in the  judgment of such  Issuing  Bank) to the  interests  of the
     Lender;  provided,  however, in the event of any conflict between the terms
     of any Letter of Credit  Reimbursement  Agreement and this  Agreement,  the
     terms of this Agreement shall control.

          "Lien" means, with respect to any asset of a Person, (i) any mortgage,
     deed of trust, lien, pledge, encumbrance, charge or security interest in or
     on  such  asset,  (ii)  the  interest  of a  vendor  or  lessor  under  any
     conditional  sale  agreement,  capital lease or title  retention  agreement
     relating to such asset,  and (iii) in the case of securities,  any purchase
     option,  call or similar  right of any other  Person  with  respect to such
     securities.

          "Loans" has the meaning assigned to such term in Section 2.1.

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          "Material Adverse Effect" means any material and adverse effect on (i)
     the consolidated business,  properties,  condition (financial or otherwise)
     or   operations,   present  or   prospective,   of  the  Borrower  and  its
     Subsidiaries, (ii) the ability of the Borrower timely to perform any of its
     material  obligations,  or of the Lender to exercise any remedy, under this
     Agreement or (iii) the legality, validity, binding nature or enforceability
     of this Agreement.

          "Net Assets" means,  with respect to the Borrower,  the greater of (i)
     the sum of the Borrower's paid-in capital and retained earnings or (ii) the
     excess  of the Value of all of the  Borrower's  assets of any kind over the
     Borrower's Adjusted Indebtedness.

          "Permitted  Liens"  means,  collectively,  the  following:  (i)  Liens
     expressly approved by the Lender,  which approval shall not be unreasonably
     withheld;  (ii) Liens  imposed  by any  Governmental  Authority  for taxes,
     assessments  or  charges  not yet due or that are being  contested  in good
     faith by appropriate  proceedings and for which adequate reserves are being
     maintained (in accordance with GAAP);  and (iii) Liens existing on the date
     hereof.

          "Person" means any individual, sole proprietorship, partnership, joint
     venture,  trust,  unincorporated  organization,  association,  corporation,
     institution,  public  benefit  corporation,  entity or government  (whether
     Federal,  state,  county,  city,  municipal  or  otherwise,  including  any
     instrumentality, division, agency, body or department thereof).

          "Prime Rate" means the prime rate (or if a range is given, the highest
     prime rate) listed under "Money Rates" in The Wall Street  Journal for such
     date or, if The Wall Street Journal is not published on such date,  then in
     The Wall Street Journal most recently published.

          "Reckson"   means  Reckson   Associates   Realty  Corp.,   a  Maryland
     corporation.

          "Reimbursement   Obligations"   means  the  aggregate   non-contingent
     reimbursement  or repayment  obligations  of the  Borrower  with respect to
     amounts drawn under Letters of Credit.

          "Responsible  Officer" means the chief executive  officer,  president,
     chief financial officer,  chief accounting  officer,  treasurer or any vice
     president, senior vice president or executive vice president of the General
     Partner.

          "RSVP-ROP  Facility  Agreement"  means the credit  agreement dated the
     date hereof  between  Borrower and Lender in respect of the  operations  of
     Reckson Strategic Venture Partners, LLC.

          "SEC" means the Securities  and Exchange  Commission (or any successor
     Governmental Authority).

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          "Standby  Letter of Credit"  means any Letter of Credit  issued by the
     Issuing Bank pursuant to Section 10.1 for the account of the Lender,  which
     is not a Commercial Letter of Credit.

          "Subsidiary"  means,  at any time and with respect to any Person,  any
     other  Person the  shares of stock or other  ownership  interests  of which
     having  ordinary voting power to elect a majority of the board of directors
     or with respect to other  matters of such Person are at the time owned,  or
     the  management  or policies of which is otherwise at the time  controlled,
     directly or indirectly through one or more intermediaries  (including other
     Subsidiaries) or both, by such first Person.  Unless otherwise qualified or
     the  context  indicates  clearly  to  the  contrary,  all  references  to a
     "Subsidiary" or  "Subsidiaries"  in this Agreement refer to a Subsidiary or
     Subsidiaries of the Borrower.

          "Taxes" has the meaning assigned to such term in Section 4.3(a).

          "Value"  means,  with respect to any asset owned by the Borrower,  the
     present value of the net cash flow reasonably  projected by the Borrower to
     be received with respect to its ownership of such assets,  discounted at an
     interest rate that the Borrower reasonably determines appropriate given the
     risks  associated  with such asset and such projected net cash flow, but in
     no event at an  interest  rate lower than 2% above the Prime Rate in effect
     at the time that the determination of Value is made.

                                  ARTICLE II.

                          THE REVOLVING CREDIT FACILITY

     Section 2.1 Commitment and Loans.  Until the Commitment  Termination  Date,
subject to the terms and conditions of this Agreement, the Lender agrees to make
revolving credit loans (collectively,  "Loans") in dollars to the Borrower in an
aggregate principal amount at any one time outstanding,  and taking into account
any Letters of Credit  issued  pursuant to the terms of Article X, not to exceed
the Commitment.

     Section 2.2 Borrowing  Procedure.  In order to borrow a Loan,  the Borrower
shall give a Borrowing Request to the Lender, by telephone, telex or telecopy or
in writing,  not later than 10:30 A.M., New York time, on the third Business Day
before the  Borrowing  Date (or such later time or date as the Lender may in its
sole  discretion  permit).  (If any Borrowing  Request is made otherwise than in
writing,  Borrower  shall promptly  confirm such Borrowing  Request in writing.)
Subject to  satisfaction,  or waiver by the  Lender,  of each of the  applicable
conditions  precedent  contained in Article VI, on the Borrowing Date the Lender
shall make available, in immediately available funds, to the Borrower the amount
of the requested Loan.

     Section 2.3  Termination  and  Reduction  of  Commitment.  The Borrower may
terminate the Commitment, or reduce the amount thereof, by giving written notice
to the Lender,  not later than 5:00 P.M.,  New York time, on the fifth  Business
Day prior to the date of termination or reduction (or such later time or date as
the Lender may in its sole discretion permit).

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<PAGE>

     Section 2.4 Repayment. Loans shall be repaid, together with all accrued and
unpaid interest thereon, on the Commitment Termination Date.

     Section 2.5  Optional  Prepayment.  The Borrower may prepay Loans by giving
notice  (specifying  the Loans to be prepaid in whole or in part,  the principal
amount  thereof to be prepaid  and the date of  prepayment)  to the  Lender,  by
telephone,  telex,  telecopy or in writing  not later than 12:00 noon,  New York
time, on the fourth  Business Day preceding the proposed date of prepayment  (or
such later time or date as the Lender may in its sole  discretion  permit).  (If
any such  prepayment  notice is made otherwise  than in writing,  Borrower shall
promptly  confirm such notice in writing.) Each such prepayment  shall be at the
aggregate principal amount of the principal being prepaid, together with accrued
interest  on the  principal  being  prepaid  to the date of  prepayment  and the
amounts  required by Section 4.3.  Subject to the terms and  conditions  of this
Agreement, prepaid Loans may be reborrowed.

                                  ARTICLE III.

                                INTEREST AND FEES

     Section 3.1 Interest Rate. Each Loan shall bear interest from the date made
until the date repaid,  payable in arrears,  with respect to Interest Periods of
three months or less, on the last day of such Interest Period,  and with respect
to Interest  Periods longer than three months,  on the day which is three months
after  the  commencement  of such  Interest  Period  and on the last day of such
Interest Period,  at a rate per annum equal to the greater of (i) the sum of (x)
2% and (y) the Prime Rate for the applicable  Interest Period and (ii) 12%. With
respect to each Loan  outstanding  for one year or  longer,  such 12% rate shall
increase  to 12.48%,  12.98%,  13.50% and  14.04% as of the  anniversary  of the
making of such Loan,  for the  second,  third,  fourth and fifth years that such
Loan is outstanding, respectively.  Notwithstanding the foregoing, if the amount
of  interest  to be paid by the  Borrower  to the Lender  exceeds  the amount of
EBITDA of the Borrower for the immediately  preceding  calendar  quarter (ending
the last day of September,  December, March, or June), the Borrower shall not be
obligated  to repay the amount of interest  in excess of EBITDA of the  Borrower
for such period.  Any such amount of unpaid interest shall be added to principal
and shall accrue  interests  thereon.  Payments under the Notes shall be applied
first to any fees,  costs or expenses due under the Notes or hereunder,  then to
interest,  and then to principal.  Notwithstanding  any other  provision of this
Agreement,  all  outstanding  principal  and  interest of the Loan and all other
amounts payable  hereunder,  if not sooner paid, shall be due and payable on the
Commitment Termination Date.

     Section 3.2 Interest on Overdue  Amounts.  All overdue  amounts  (including
principal,  interest and fees)  hereunder,  and,  during the  continuance of any
Event of Default  that  shall have  occurred,  each Loan,  shall bear  interest,
payable on demand,  at a rate per annum  equal to the  greater of (i) the sum of
(x) 3% and (y) Prime Rate for the applicable  Interest Period and (ii) 13%. With
respect to each Loan  outstanding  for one year or  longer,  such 13% rate shall
increase  to 13.48%,  13.98%,  14.50% and  15.04% as of the  anniversary  of the
making of such Loan for the second, third, fourth and fifth years that such Loan
is outstanding, respectively.

                                       8
<PAGE>

     Section 3.3 Maximum  Interest  Rate.  (a) Nothing in this  Agreement  shall
require  the  Borrower  to pay  interest at a rate  exceeding  the maximum  rate
permitted by applicable  law.  Neither this Section nor Section 11.1 is intended
to limit the rate of  interest  payable  for the  account  of the  Lender to the
maximum  rate  permitted  by the laws of the  State  of New  York (or any  other
applicable  law) if a higher  rate is  permitted  with  respect to the Lender by
supervening provisions of U.S. Federal law.

     (b) If the amount of interest  payable for the account of the Lender on any
interest  payment  date  in  respect  of  the  immediately   preceding  interest
computation  period,  computed  pursuant to this Article  III,  would exceed the
maximum  amount  permitted by  applicable  law to be charged by the Lender,  the
amount of interest  payable for its account on such interest  payment date shall
automatically be reduced to such maximum permissible amount.

     (c) If the  amount of  interest  payable  for the  account of the Lender in
respect of any interest computation period is reduced pursuant to Section 3.3(b)
and the amount of interest  payable for its account in respect of any subsequent
interest  computation  period would be less than the maximum amount permitted by
law to be charged by the  Lender,  then the amount of  interest  payable for its
account in respect  of such  subsequent  interest  computation  period  shall be
automatically  increased to such maximum permissible amount; provided that at no
time shall the  aggregate  amount by which  interest paid for the account of the
Lender has been  increased  pursuant to this Section 3.3(c) exceed the aggregate
amount by which  interest  paid for its account  has  theretofore  been  reduced
pursuant to Section 3.3(b).

                                  ARTICLE IV.

                            DISBURSEMENT AND PAYMENT

     Section 4.1 Method and Time of Payments.

     (a) All payments by the Borrower  hereunder shall be made without setoff or
counterclaim  to the Lender,  for its  account,  in dollars  and in  immediately
available funds to the account of the Lender  theretofore  designated in writing
to the Borrower not later than 12:00 noon,  New York time,  on the date when due
or,  in the case of  payments  pursuant  to  Sections  4.3 and 4. 4 or  payments
otherwise  specified  as payable  upon demand,  forthwith  upon  written  demand
therefor.

     (b) Whenever  any payment  from the Borrower  shall be due on a day that is
not a Business  Day, the date of payment  thereof  shall be extended to the next
succeeding Business Day. If the date for any payment of principal is extended by
operation  of law or  otherwise,  interest  thereon  shall be  payable  for such
extended time.

     Section 4.2 Compensation for Losses. (a) If (i) the Borrower prepays Loans,
(ii) the  Borrower  revokes any  Borrowing  Request or (iii) Loans (or  portions
thereof)  shall become or be declared to be due prior to the scheduled  maturity
thereof,  then  the  Borrower  shall  pay to the  Lender  an  amount  that  will
compensate  the  Lender  for any loss  (other  than lost  profit)  or premium or
penalty  incurred by the Lender as a result of such  prepayment,  declaration or

                                       9
<PAGE>

revocation in respect of funds obtained for the purpose of making or maintaining
the Lender's Loans, or any portion thereof.  Such compensation  shall include an
amount  equal to the excess,  if any,  of (i) the amount of interest  that would
have accrued on the amount so paid or prepaid,  or not borrowed,  for the period
from the date of such payment or prepayment or failure to borrow to the last day
of such  Interest  Period (or, in the case of a failure to borrow,  the Interest
Period that would have commenced on the expected Borrowing Date) in each case at
the  applicable  rate of interest for such Loan over (ii) the amount of interest
(as reasonably  determined by the Lender) that would have accrued on such amount
were it on deposit  for a  comparable  period with  leading  banks in the London
interbank market.

     (b) If requested by the Borrower, in connection with a payment due pursuant
to this  Section 4.2,  the Lender  shall  provide to the Borrower a  certificate
setting  forth  in  reasonable  detail  the  amount  required  to be paid by the
Borrower to the Lender and the computations made by the Lender to determine such
amount.  In the absence of manifest error,  such certificate shall be conclusive
as to the amount required to be paid.

     Section 4.3 Withholding and Additional Costs.

     (a) Withholding.  All payments under this Agreement  (including payments of
principal and interest) shall be payable to the Lender free and clear of any and
all present and future taxes, levies, imposts, duties, deductions, withholdings,
fees, liabilities and similar charges (collectively,  "Taxes"). If any Taxes are
required  to be  withheld  or  deducted  from  any  amount  payable  under  this
Agreement,  then the amount payable under this  Agreement  shall be increased to
the  amount  which,  after  deduction  from such  increased  amount of all Taxes
required  to be withheld  or  deducted  therefrom,  will yield to the Lender the
amount stated to be payable under this  Agreement.  The Borrower shall also hold
the Lender  harmless and  indemnify it for any stamp or other taxes with respect
to the preparation,  execution, delivery, recording,  performance or enforcement
of this Agreement (all of which shall be included within "Taxes"). If any of the
Taxes  specified  in this  Section  4.3(a) are paid by the Lender,  the Borrower
shall,  upon  demand of the  Lender,  promptly  reimburse  the  Lender  for such
payments,  together  with any  interest,  penalties  and  expenses  incurred  in
connection  therewith.  The Borrower shall deliver to the Lender certificates or
other valid  vouchers for all Taxes or other charges  deducted from or paid with
respect to payments made by the Borrower hereunder.

     (b) Additional Costs. Subject to Section 4.3(c), and without duplication of
any amounts payable described in Section 4.2 or 4.3(a), if after the date hereof
any  change in any law or  regulation  or in the  interpretation  thereof by any
court  or   administrative   or   Governmental   Authority   charged   with  the
administration  thereof or the enactment of any law or  regulation  shall either
(1) impose,  modify or deem  applicable any reserve,  special deposit or similar
requirement against the Lender's Commitment or Loans or (2) impose on the Lender
any other condition  regarding this  Agreement,  its Commitment or the Loans and
the result of any event  referred  to in clause (1) or (2) shall be to  increase
the cost to the Lender of  maintaining  its  Commitment or any Loans made by the
Lender  (which  increase  in cost shall be  calculated  in  accordance  with the
Lender's  reasonable  averaging and attribution  methods) by an amount which the
Lender deems to be material, then, upon demand by the Lender, the Borrower shall
pay to the Lender an amount equal to such increase in cost.

                                       10
<PAGE>

     (c) Certificate,  Etc. If requested by the Borrower, in connection with any
demand for payment pursuant to this Section 4.3, the Lender shall provide to the
Borrower a certificate  setting  forth in  reasonable  detail the basis for such
demand,  the amount  required  to be paid by the  Borrower  to the  Lender,  the
computations made by the Lender to determine such amount and satisfaction of the
conditions  set forth in the next  sentence.  Anything  to the  contrary  herein
notwithstanding,  the Lender  shall not have the right to demand any  payment or
compensation under this Section 4.3 (i) with respect to any period more than 180
days prior to the date it has made a demand  pursuant to this  Section  4.3, and
(ii) to the extent that the Lender  determines  in good faith that the  interest
rate on the relevant  Loans  appropriately  accounts for any  increased  cost or
reduced  rate of return.  In the  absence of  manifest  error,  the  certificate
referred to above shall be conclusive as to the amount required to be paid.

     Section 4.4 Expenses;  Indemnity.  (a) The Borrower  agrees:  (i) to pay or
reimburse  the  Lender  for all  reasonable  out-of-pocket  costs  and  expenses
incurred in connection with the preparation and execution of, and any amendment,
supplement or modification  to, this Agreement and any other documents  prepared
in connection  herewith or therewith,  and the  consummation of the transactions
contemplated hereby and thereby,  including,  without limitation, the reasonable
fees and  disbursements of Brown & Wood LLP, counsel to the Lender;  and (ii) to
pay or reimburse the Lender for all  reasonable  costs and expenses  incurred in
connection  with the  enforcement  or  preservation  of any  rights  under  this
Agreement  and any such other  documents,  including,  without  limitation,  the
reasonable fees and  disbursements  of counsel to the Lender.  The Borrower also
agrees to indemnify the Lender against any transfer  taxes,  documentary  taxes,
assessments  or  charges  made by any  Governmental  Authority  by reason of the
execution and delivery of this Agreement.

     (b) The  Borrower  agrees  to  indemnify  the  Lender  and  its  directors,
officers,  partners,  employees,  agents and  Affiliates  (for  purposes of this
paragraph,  each, an "Indemnitee") against, and to hold each Indemnitee harmless
from,  any and all claims,  liabilities,  damages,  losses,  costs,  charges and
expenses  (including  fees and  expenses  of  counsel)  incurred  by or asserted
against any Indemnitee arising out of, in any way connected with, or as a result
of (i)  the  execution  or  delivery  of  this  Agreement  or any  agreement  or
instrument  contemplated  by this  Agreement,  the  performance  by the  parties
thereto of their respective obligations under this Agreement or the consummation
of the transactions and the other  transactions  contemplated by this Agreement,
(ii)  the use of the  proceeds  of the  Loans or (iii)  any  claim,  litigation,
investigation or proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee,  be  available  to the extent  that such  losses,  claims,  damages,
liabilities  or  related  expenses  are  determined  by  a  court  of  competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.

     (c) All amounts due under this Section 4.4 shall be payable in  immediately
available funds upon written demand therefor.

     Section 4.5  Survival.  The  provisions  of Sections 4.2, 4.3 and 4.4 shall
remain  operative and in full force and effect  regardless of the  expiration of
the term of this Agreement,  the consummation of the  transactions  contemplated
hereby,  the repayment of any of the Loans,

                                       11
<PAGE>

the   reduction  or   termination   of  the   Commitment,   the   invalidity  or
unenforceability   of  any  term  or  provision  of  this   Agreement,   or  any
investigation made by or on behalf of the Lender.

                                   ARTICLE V.

                         REPRESENTATIONS AND WARRANTIES

     Section 5.1 Representations  and Warranties.  In order to induce the Lender
to  enter  into  this  Agreement  and to  make  Loans  and the  other  financial
accommodations  to the  Borrower  and to induce the Lender to obtain  Letters of
Credit on its behalf as described herein,  the Borrower  represents and warrants
to the Lender as follows:

          (a) Good  Standing and Power.  The Borrower and each  Subsidiary  is a
     limited partnership or corporation,  duly organized and validly existing in
     good standing under the laws of the jurisdiction of its organization;  each
     has the power to own its property and to carry on its business as now being
     conducted;  and  each  is  duly  qualified  to do  business  and is in good
     standing in each  jurisdiction  in which the  character  of the  properties
     owned or leased by it therein or in which the  transaction  of its business
     makes  such  qualification  necessary,  except  where the  failure to be so
     qualified,  or to be in good  standing,  individually  or in the aggregate,
     could not reasonably be expected to have a Material Adverse Effect.

          (b)  Authority.  The Borrower has full power and  authority to execute
     and  deliver,  and  to  incur  and  perform  its  obligations  under,  this
     Agreement,  which has been duly  authorized  by all  proper  and  necessary
     action.  No consent  or  approval  of limited  partners  is  required  as a
     condition to the validity or performance  of, or the exercise by the Lender
     of any of its rights or remedies under, this Agreement.

          (c)   Authorizations.   All   authorizations,   consents,   approvals,
     registrations,   notices,   exemptions   and  licenses  with  or  from  any
     Governmental  Authority  or  other  Person  necessary  for  the  execution,
     delivery  and  performance  by the  Borrower  of,  and the  incurrence  and
     performance  of each of its  obligations  under,  this  Agreement,  and the
     exercise  by the  Lender of its  remedies  under this  Agreement  have been
     effected or obtained and are in full force and effect.

          (d)  Binding  Obligation.  This  Agreement  constitutes  the valid and
     legally binding  obligation of the Borrower  enforceable in accordance with
     its  terms,   subject  as  to  enforcement   to   bankruptcy,   insolvency,
     reorganization,  moratorium  and  similar  laws  of  general  applicability
     relating  to  or  affecting   creditors'   rights  and  to  general  equity
     principles.

          (e) Litigation. There are no proceedings or investigations now pending
     or,  to the  knowledge  of the  Borrower,  threatened  before  any court or
     arbitrator or before or by any Governmental  Authority which,  individually
     or in the  aggregate,  if  determined  adversely  to the  interests  of the
     Borrower or any Subsidiary, could reasonably be expected to have a Material
     Adverse Effect.

                                       12
<PAGE>

          (f) No  Conflicts.  There is no statute,  regulation,  rule,  order or
     judgment,  and no provision of any agreement or instrument binding upon the
     Borrower or any Subsidiary, or affecting their properties, and no provision
     of the certificate of limited  partnership,  certificate of  incorporation,
     agreement  of limited  partnership  or  by-laws  (or  similar  constitutive
     instruments)  of the  Borrower  or any  Subsidiary,  that  would  prohibit,
     conflict  with or in any way impair the  execution  or delivery  of, or the
     incurrence or performance of any  obligations of the Borrower  under,  this
     Agreement,  or result in or require the creation or  imposition of any Lien
     on  property of the  Borrower or any  Subsidiary  as a  consequence  of the
     execution, delivery and performance of this Agreement.

          (g) Taxes. The Borrower and the Subsidiaries  each has filed or caused
     to be filed  all tax  returns  that are  required  to be filed and paid all
     taxes that are  required to be shown to be due and payable on said  returns
     or on any  assessment  made against it or any of its property and all other
     taxes, assessments,  fees, liabilities,  penalties or other charges imposed
     on it or any of its property by any Governmental Authority,  except for any
     taxes, assessments, fees, liabilities, penalties or other charges which are
     being  contested  in good  faith and  (unless  the  amount  thereof  is not
     material to the  Borrower's  consolidated  financial  condition)  for which
     adequate reserves have been established in accordance with GAAP.

          (h) Properties.  The Borrower and the  Subsidiaries  each has good and
     marketable title to, or valid leasehold interests in, all of its respective
     properties and assets.  All such assets and properties are so owned or held
     free and clear of all Liens, except Permitted Liens.

          (i) Compliance with Laws and Charter  Documents.  Neither the Borrower
     nor any Subsidiary is, or as a result of performing any of its  obligations
     under this Agreement will be, in violation of (a) any law,  statute,  rule,
     regulation or order of any Governmental  Authority  applicable to it or its
     properties  or  assets  or (b)  its  certificate  of  limited  partnership,
     certificate of incorporation,  agreement of limited partnership, by-laws or
     any similar document.

          (j) No Material  Adverse  Effect.  Since May 15,  1997,  there has not
     occurred or arisen any event, condition or circumstance that,  individually
     or in the  aggregate,  could  reasonably  be  expected  to have a  Material
     Adverse Effect.

          (k)  Disclosure.  All  information  relating  to the  Borrower  or its
     Subsidiaries  delivered  in writing to the  Lender in  connection  with the
     negotiation,  execution and delivery of this Agreement is true and complete
     in all material  respects.  There is no material fact of which the Borrower
     is aware which,  individually  or in the  aggregate,  would  reasonably  be
     expected  adversely to influence the Lender's credit  analysis  relating to
     the  Borrower  and its  Subsidiaries  which has not been  disclosed  to the
     Lender in writing.

                                       13
<PAGE>

     Section  5.2  Survival.  All  representations  and  warranties  made by the
Borrower  in  this  Agreement,  and in the  certificates  or  other  instruments
prepared or delivered in connection with or pursuant to this Agreement, shall be
considered  to have been relied upon by the Lender,  (ii)  survive the making of
Loans and the issuance of or payment  under any Letter of Credit  regardless  of
any  investigation  made by, or on behalf of, the Lender and (iii)  continue  in
full force and effect as long as the  Commitment  has not been  terminated  and,
thereafter,  so long as any Loan,  Letter of Credit fee or other amount  payable
under this Agreement remains unpaid.

                                  ARTICLE VI.

                              CONDITIONS PRECEDENT

     Section 6.1 Conditions to the Availability of the Commitment and Letters of
Credit.  The  obligations of the Lender  (including its obligators in respect of
Letters of Credit)  hereunder are subject to, and the Lender's  Commitment shall
not become  available  until the earliest date (the  "Effective  Date") on which
each of the following  conditions  precedent shall have been satisfied or waived
in writing by the Lender:

          (a) This Agreement. The Lender shall have received this Agreement duly
     executed and delivered by the Borrower.

          (b) Certificate of  Incorporation  and By-Laws.  The Lender shall have
     received the following:

          (i) a copy of the Certificate of Incorporation of the Borrower,  as in
     effect  on the  Effective  Date,  certified  by the  Secretary  of State of
     Delaware,  and a  certificate  from such  Secretary of State as to the good
     standing of the Borrower, in each case as of a date reasonably close to the
     Effective Date; and

          (ii) a certificate of a Responsible Officer of the Borrower, dated the
     Effective  Date,  and stating that attached  thereto is a true and complete
     copy of the By-Laws of the Borrower as in effect on such date.

          (c) Representations and Warranties. The representations and warranties
     contained in Section 5.1 shall be true and correct on the  Effective  Date,
     and the Lender shall have received a  certificate,  signed by a Responsible
     Officer of the Borrower, to that effect.

          (d) Other  Documents.  The  Lender  shall  have  received  such  other
     certificates,  opinions and other  documents as the Lender  reasonably  may
     require.

     Section 6.2 Conditions to All Loans and Letters of Credit.  The obligations
of the Lender to make each Loan and to obtain  Letters of Credit are  subject to
the conditions  precedent that, on the date of each Loan or Letter of Credit and
after giving effect thereto,  each of the following  conditions  precedent shall
have been satisfied, or waived in writing by the Lender:

                                       14
<PAGE>

          (a)  Borrowing  Request.  The Lender  shall have  received a Borrowing
     Request in accordance with the terms of this Agreement.

          (b) No Default. No Default or Event of Default shall have occurred and
     be continuing,  nor shall any Default or Event of Default occur as a result
     of the making of such Loan or obtaining such Letter of Credit.

          (c)  Debt-to-Equity  Ratio.  The Lender shall have  received  from the
     Borrower  a  certificate  demonstrating  that the  ratio of the  Borrower's
     Adjusted Indebtedness to the Borrower's Net Assets, taking into account the
     requested  Loan or Letter of Credit and the assets,  if any, to be acquired
     by the Borrower  with the proceeds of such Loan or Letter of Credit,  shall
     not exceed 4-to-1.

          (d) Representations and Warranties; Covenants. The representations and
     warranties  contained in Section 5. 1 shall have been true and correct when
     made and (except to the extent that any  representation  or warranty speaks
     as of a date certain)  shall be true and correct on the Borrowing Date with
     the same effect as though such  representations and warranties were made on
     such  Borrowing  Date; and the Borrower shall have complied with all of its
     covenants and agreements under this Agreement.

          (e) REIT  Status of  Reckson.  The  borrowing  shall not,  in the sole
     judgment of the Lender, endanger Reckson's status as a REIT.

          (f) Certain  Loans  Subject to Reckson's  Approval.  In respect of any
     Loan or  Letter  of Credit or Loans or  Letters  of Credit  aggregating  in
     excess of $10 million,  any single Commercial  Service, as well as any Loan
     or Letter of Credit relating to an investment by Borrower in any area other
     than Commercial  Services,  Reckson shall have approved the Lender's making
     such Loan or obtaining such Letter of Credit in its sole discretion.

     Section 6.3 Satisfaction of Conditions Precedent.  Each of (i) the delivery
by the Borrower of a Borrowing  Request (unless the Borrower notifies the Lender
in writing to the contrary prior to the Borrowing  Date) and (ii) the acceptance
of the  proceeds  of a Loan or the  delivery  of the  Letter of Credit  shall be
deemed to constitute a  certification  by the Borrower that, as of the Borrowing
Date,  each of the  conditions  precedent  contained  in  Section  6. 2 has been
satisfied  with respect to the Loan then being made or the Letter of Credit then
being issued.

                                  ARTICLE VII.

                                   COVENANTS

     Section 7.1 Affirmative  Covenants.  Until  satisfaction in full of all the
obligations  of  the  Borrower  under  this  Agreement  and  termination  of the
Commitment of the Lender hereunder, the Borrower will:

     (a) Financial Statements; Compliance Certificates. Furnish to the Lender:

                                       15
<PAGE>

          (i) as soon as available,  but in no event more than 60 days following
     the end of each of the first three quarters of each fiscal year,  copies of
     the  Borrower's  Quarterly  Report on Form 10-Q  being  filed with the SEC,
     which shall include a consolidated  balance sheet and  consolidated  income
     statement of the Borrower and the Subsidiaries for such quarter;

          (ii) as  soon  as  available,  but in no  event  more  than  120  days
     following  the end of each fiscal  year,  a copy of the  Borrower's  Annual
     Report on Form 10-K  being  filed with the SEC,  which  shall  include  the
     consolidated  financial  statements  of the Borrower and the  Subsidiaries,
     together  with a report  thereon by Ernst & Young LLP (or  another  firm of
     independent  certified public  accountants  reasonably  satisfactory to the
     Lender), for such year;

          (iii)  within five  Business  Days of any  Responsible  Officer of the
     Borrower  obtaining  knowledge of any Default or Event of Default,  if such
     Default  or  Event  of  Default  is then  continuing,  a  certificate  of a
     Responsible  Officer of the  Borrower  stating that such  certificate  is a
     "Notice of Default"  and setting  forth the details  thereof and the action
     which the Borrower is taking or proposes to take with respect thereto; and

          (iv) such additional information, reports or statements, regarding the
     business,  financial condition or results of operations of the Borrower and
     its Subsidiaries, as the Lender from time to time may reasonably request.

     (b)  Existence.  Except as  permitted  by  Section 7.  2(a),  maintain  its
existence in good  standing  and qualify and remain  qualified to do business in
each jurisdiction in which the character of the properties owned or leased by it
therein or in which the  transaction of its business is such that the failure to
qualify,  individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect.

     (c) Compliance with Law and Agreements.  Comply,  and cause each Subsidiary
to comply, with all applicable laws, ordinances,  orders, rules, regulations and
requirements  of all  Governmental  Authorities  and with all agreements  except
where the  necessity  of  compliance  therewith  is  contested  in good faith by
appropriate  proceedings or where the failure to comply therewith,  individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

     (d)  Authorizations.  Obtain,  make and keep in full  force and  effect all
authorizations from and registrations with Governmental Authorities required for
the validity or enforceability of this Agreement.

     (e) Inspection.  Permit, and cause each Subsidiary to permit, the Lender to
have one or more of its officers and employees,  or any other Person  designated
by the Lender,  to visit and inspect any of the  properties  of the Borrower and
the  Subsidiaries  and to examine the minute  books,  books of account and other
records of the Borrower and the  Subsidiaries,  and to photocopy  extracts  from
such  minute  books,  books of account  and other  records,  and to discuss  its
affairs,  finances  and  accounts  with its  officers  and  with the  Borrower's
independent

                                       16
<PAGE>

accountants,  during  normal  business  hours  and  at  such  other
reasonable  times, for the purpose of monitoring the Borrower's  compliance with
its obligations under this Agreement.

     (f) Maintenance of Records. Keep, and cause each Subsidiary to keep, proper
books of record and account in which full, true and correct entries will be made
of all dealings or transactions of or in relation to its business and affairs.

     (g) Notice of Defaults and Adverse Developments. Promptly notify the Lender
upon the  discovery  by any  Responsible  officer of the  occurrence  of (i) any
Default or Event of Default; (ii) any event, development or circumstance whereby
the  financial  statements  most  recently  furnished  to the Lender fail in any
material  respect to present  fairly,  in  accordance  with GAAP,  the financial
condition and operating  results of the Borrower and the  Subsidiaries as of the
date of such financial statements;  (iii) any material litigation or proceedings
that are instituted or threatened (to the knowledge of the Borrower) against the
Borrower or any Subsidiary or any of their  respective  assets;  (iv) any event,
development or  circumstance  which,  individually  or in the  aggregate,  could
reasonably  be expected to result in an event of default (or, with the giving of
notice or lapse of time or both, an event of default) under any Indebtedness and
the amount thereof;  and (v) any other development in the business or affairs of
the  Borrower  or any  Subsidiary  if the effect  thereof  would  reasonably  be
expected,  individually or in the aggregate,  to have a Material Adverse Effect;
in each case describing the nature thereof and the action the Borrower  proposes
to take with respect thereto.

     Section  7.2  Negative  Covenants.  Until  satisfaction  in full of all the
obligations  of  the  Borrower  under  this  Agreement  and  termination  of the
Commitment of the Lender hereunder, the Borrower will not:

     (a)  Mergers,  Consolidations  and Sales of Assets.  Wind up,  liquidate or
dissolve its affairs or enter into any merger,  consolidation or share exchange,
or  convey,  sell,  lease or  otherwise  dispose  of (or  agree to do any of the
foregoing at any future time),  whether in one or a series of transactions,  all
or any substantial part of its assets, or permit any Subsidiary so to do, unless
such transaction or series of transactions are expressly approved by the Lender,
which approval shall not be unreasonably withheld.

     (b) Liens.  Create,  incur, assume or suffer to exist any Lien upon or with
respect  to any of its  property  or  assets,  whether  now  owned or  hereafter
acquired,  or assign or  otherwise  convey any right to receive  income,  except
Permitted Liens.

     (c) Indebtedness.  Create,  incur,  issue,  assume,  guarantee or suffer to
exist any Indebtedness, except:

          (i)  Indebtedness  to the  Lender  under this  Agreement  or under the
     RSVP-ROP Facility Agreement,

          (ii)  Non-recourse  Indebtedness  of the Borrower  and any  Subsidiary
     secured by  mortgages,  encumbrances  or liens  specifically  permitted  by
     Section 7. 2(b), and

                                       17
<PAGE>

          (iii) Indebtedness  expressly approved by the Lender in writing, which
     approval may be withheld in the Lender's sole discretion.

     (d) Dividends.  Declare any dividends on any of its shares of capital stock
unless such  dividend or  distribution  is expressly  approved in writing by the
Lender.

     (e) Certain  Amendments.  Amend,  modify or waive, or permit to be amended,
modified or waived,  any provision of its Certificate of  Incorporation  unless,
within not less than 5 days prior to such amendment,  modification or waiver (or
such later time as the Lender may in its sole discretion  permit),  the Borrower
shall have given the Lender notice  thereof,  including  all relevant  terms and
conditions thereof, and the Lender shall have consented in writing thereto.

                                 ARTICLE VIII.

                                EVENTS OF DEFAULT

     Section  8.1  Events of  Default.  If one or more of the  following  events
(each, an "Event of Default") shall occur:

     (a) The Borrower shall fail duly to pay any principal of any Loan or Letter
of Credit when due,  whether at  maturity,  by notice of  intention to prepay or
otherwise; or

     (b) The  Borrower  shall  fail duly to pay any  interest,  fee or any other
amount payable under this Agreement within two days after the same shall be due;
or

     (c) Borrower shall fail duly to observe or perform any term,  covenant,  or
agreement contained in Section 7. 2; or

     (d) The  Borrower  shall fail duly to observe  or perform  any other  term,
covenant or agreement  contained in this Agreement,  and such failure shall have
continued unremedied for a period of 30 days; or

     (e) Any  representation  or warranty made or deemed made by the Borrower in
this  Agreement,  or any statement or  representation  made in any  certificate,
report or opinion  delivered by or on behalf of the Borrower in connection  with
this  Agreement,  shall prove to have been false or  misleading  in any material
respect when so made or deemed made; or

     (f) The Borrower shall fail to pay any Indebtedness (other than obligations
here under) in an amount of $100,000 or more when due; or any such  Indebtedness
having an  aggregate  principal  amount  outstanding  of  $100,000 or more shall
become or be declared to be due prior to the expressed maturity thereof; or

     (g) An involuntary case or other proceeding shall be commenced  against the
Borrower seeking liquidation,  reorganization or other relief with respect to it
or its debts under any  applicable  bankruptcy,  insolvency,  reorganization  or
similar law or seeking the  appointment  of a custodian,  receiver,  liquidator,
assignee,  trustee,  sequestrator  or similar  official of it or any substantial
part of its property, and such involuntary case or other proceeding shall remain

                                       18
<PAGE>

undismissed  and  unstayed  for a period  of more  than 60 days;  or an order or
decree approving or ordering any of the foregoing shall be entered and continued
unstayed and in effect; or

     (h) The Borrower shall  commence a voluntary  case or proceeding  under any
applicable  bankruptcy,  insolvency,  reorganization or similar law or any other
case or  proceeding to be  adjudicated  a bankrupt or insolvent,  or any of them
shall  consent  to the entry of a decree or order for  relief in  respect of the
Borrower in an involuntary case or proceeding  under any applicable  bankruptcy,
insolvency,  reorganization  or other similar law or to the  commencement of any
bankruptcy or insolvency case or proceeding  against any of them, or any of them
shall file a  petition  or answer or consent  seeking  reorganization  or relief
under any  applicable  law,  or any of them shall  consent to the filing of such
petition or to the appointment of or taking possession by a custodian, receiver,
liquidator,  assignee, trustee, sequestrator or similar official of the Borrower
or any  substantial  part  of  its  property,  or the  Borrower  shall  make  an
assignment for the benefit of creditors,  or the Borrower shall admit in writing
its  inability  to pay its debts  generally  as they become due, or the Borrower
shall take corporate action in furtherance of any such action;

     (i) One or more judgments  against the Borrower or attachments  against its
property,  which in the aggregate exceed $100,000, or the operation or result of
which could be to interfere  materially  and  adversely  with the conduct of the
business  of the  Borrower  remain  unpaid,  unstayed  on appeal,  undischarged,
unbonded, or undismissed for a period of more than 30 days; or

     (j) Any court or governmental  or regulatory  authority shall have enacted,
issued,  promulgated,   enforced  or  entered  any  statute,  rule,  regulation,
judgment,  decree, injunction or other order (whether temporary,  preliminary or
permanent)  which  is in  effect  and  which  prohibits,  enjoins  or  otherwise
restricts, in a manner that, individually or in the aggregate,  could reasonably
be  expected  to  have a  Material  Adverse  Effect,  any  of  the  transactions
contemplated under this Agreement; or

     (k) Any Event of Default shall occur and be  continuing  under the RSVP-ROP
Facility Agreement.

then,  and at any time  during the  continuance  of such Event of  Default,  the
Lender  may,  by  written  notice to the  Borrower,  take  either or both of the
following actions,  at the same or different times: (i) terminate  forthwith the
Commitment,  Credit  Obligations  and any  obligations  of the  Lender to obtain
Letters  of Credit  pursuant  to this  Agreement  and (ii)  declare  any  Credit
Obligations  then  outstanding to be due,  whereupon the principal of the Credit
Obligations so declared to be due,  together with accrued  interest  thereon and
any unpaid amounts  accrued under this  Agreement,  shall become  forthwith due,
without  presentment,  demand,  protest or any other  notice of any kind (all of
which are hereby expressly  waived by the Borrower);  provided that, in the case
of any Event of  Default  described  in Section  8. 1(g) or (h)  occurring  with
respect to the Borrower,  the  Commitment  and any  obligations of the Lender to
obtain Letters of Credit  pursuant to this  Agreement  shall  automatically  and
immediately terminate and the principal of all Loans then outstanding,  together
with  accrued  interest  thereon  and any  unpaid  amounts  accrued  under  this
Agreement,  shall automatically and immediately become due without  presentment,

                                       19
<PAGE>

demand,  protest  or any  other  notice  of any kind  (all of which  are  hereby
expressly waived by the Borrower).

                                  ARTICLE IX.

                          EVIDENCE OF LOANS; TRANSFERS

     Section 9.1  Evidence of Loans and Letters of Credit.  (a) The Lender shall
maintain  accounts  evidencing  the  indebtedness  of the Borrower to the Lender
resulting from each Loan made by the Lender and each Letter of Credit issued for
the  benefit  of the  Borrower  from  time to time,  including  the  amounts  of
principal  and  interest  payable  and paid to the Lender in respect of Loans or
Letters of Credit.

     (b) The Lender's  written  records  described  above shall be available for
inspection during ordinary business hours by the Borrower from time to time upon
reasonable prior notice to the Lender.

     (c) The entries made in the Lender's written or electronic  records and the
foregoing accounts shall be prima facie evidence of the existence and amounts of
the indebtedness of the Borrower therein recorded;  provided,  however, that the
failure  of the  Lender  to  maintain  any  such  account  or such  records,  as
applicable, or any error therein, shall not in any manner affect the validity or
enforceability of any obligation of the Borrower to repay any Loan actually made
by the Lender in accordance with the terms of this Agreement.

                                   ARTICLE X.

                                LETTERS OF CREDIT

     Section 10.1 Letters of Credit.  Until the Commitment  Termination Date and
subject  to the terms and  conditions  set forth in this  Agreement,  the Lender
hereby agrees to obtain from an Issuing Bank for the account of the Borrower one
or more Letters of Credit, subject to the following provisions:

     (a) Types and Amounts.  The Lender shall not have any obligation to obtain,
or cause the amendment or extension of any Letter of Credit at any time:

          (i) if the aggregate Letter of Credit  Obligations with respect to the
     Issuing Bank,  after giving effect to the issuance,  amendment or extension
     of the Letter of Credit requested hereunder, shall exceed any limit imposed
     by law or regulation upon the Issuing Bank;

          (ii) if, immediately after giving effect to the issuance, amendment or
     extension of such Letter of Credit, (1) the Letter of Credit Obligations at
     such time would exceed  [$10,000,000] or (2) the Credit Obligations at such
     time would exceed the  Commitment  at such time,  or (3) one or more of the
     conditions precedent contained in Sections 6.1 or 6.2, as applicable, would
     not on such  date be  satisfied,  unless  such  conditions  are

                                       20
<PAGE>

     thereafter  satisfied and written notice of such  satisfaction  is given to
     the Lender (and the Lender  shall not  otherwise  be required to  determine
     that,  or take  notice  whether,  the  conditions  precedent  set  forth in
     Sections 6.1 or 6.2, as applicable, have been satisfied);

          (iii) which has an  expiration  date later than the earlier of (A) the
     date one (1)  year  after  the  date of  issuance  (without  regard  to any
     automatic  renewal  provisions  thereof)  or  (B)  the  Business  Day  next
     preceding the scheduled Commitment Termination Date; or

          (iv) which is in a currency other than dollars.

     (b)  Conditions.  In addition to being subject to the  satisfaction  of the
conditions  precedent  contained  in Sections  6.1 and 6.2, as  applicable,  the
obligation  of the  Lender  to  obtain  from an  Issuing  Bank,  or to cause the
amendment or extension of any Letter of Credit is subject to the satisfaction in
full of the following conditions:

          (i) if the Lender so requests,  the Borrower  shall have  executed and
     delivered to the Lender a Letter of Credit Reimbursement Agreement and such
     other  documents  and  materials  as may be required  pursuant to the terms
     thereof; and

          (ii) the terms of the proposed  Letter of Credit shall be satisfactory
     to the Lender in its sole discretion.

     (c) Issuance of Letters of Credit.  (i) The Borrower  shall give the Lender
written  notice  that it requires  the  issuance of a Letter of Credit not later
than 11:00 a.m.  (New York time) on the third (3rd)  Business Day  preceding the
requested date for issuance  thereof under this Agreement.  Such notice shall be
irrevocable  unless  and until  such  request  is denied by the Lender and shall
specify (A) that the requested Letter of Credit is either a Commercial Letter of
Credit or a Standby  Letter of Credit,  (B) the  stated  amount of the Letter of
Credit  requested,  (C) the  effective  date (which shall be a Business  Day) of
issuance of such  Letter of Credit,  (D) the date on which such Letter of Credit
is to expire  (which  shall be a Business Day and no later than the Business Day
immediately preceding the scheduled Commitment  Termination Date), (E) that such
Letter of Credit is to be issued  for the  benefit  of the  Borrower,  (F) other
relevant  terms of such Letter of Credit,  (G) the Available  Commitment at such
time and (H) the amount of the then outstanding Letter of Credit Obligations.

          (ii) The Lender shall give the Borrower written notice,  or telephonic
     notice confirmed promptly thereafter in writing, of the issuance, amendment
     or extension of a Letter of Credit.

     (d) Reimbursement Obligations; Duties of the Lender.

          (i)  Notwithstanding  any  provisions to the contrary in any Letter of
     Credit Reimbursement Agreement:

               (A) the Borrower  shall  reimburse  the Lender for amounts  drawn
          under its Letter of Credit,  in  dollars,  no later than the date (the
          "Reimbursement  Date")

                                       21
<PAGE>

          which is the  earlier  of (I) the  time  specified  in the  applicable
          Letter of Credit  Reimbursement  Agreement and (II) three (3) Business
          Days after the Borrower  receives  written notice from the Lender that
          payment has been made under such Letter of Credit by the Issuing Bank;
          and

               (B) all  Reimbursement  Obligations with respect to any Letter of
          Credit  shall  bear  interest  at the Prime  Rate in  accordance  with
          Section 3.1 from the date of the relevant drawing under such Letter of
          Credit until the Reimbursement Date.

          (ii) The Lender shall give the Borrower written notice,  or telephonic
     notice confirmed  promptly  thereafter in writing,  of all drawings under a
     Letter of Credit and the  payment  (or the  failure to pay when due) by the
     Borrower, as the case may be, on account of a Reimbursement Obligation.

          (iii) In determining  whether to pay under any Letter of Credit, it is
     understood  that the Issuing  Bank shall have no  obligation  other than to
     confirm  that any  documents  required to be  delivered  under a respective
     Letter of Credit  appear to have  been  delivered  and that they  appear on
     their face to comply with the requirements of such Letter of Credit.

     (e) Payment of Reimbursement Obligations.  (i) The Borrower unconditionally
agrees  to pay to the  Lender,  in  dollars,  the  amount  of all  Reimbursement
Obligations,  interest  and other  amounts  payable  to the  Lender  under or in
connection  with the  Letters of Credit when such  amounts are due and  payable,
irrespective of any claim, setoff, defense or other right which the Borrower may
have at any time against the Lender or any other Person.

     (f) Letter of Credit Fee Charges. In connection with each Letter of Credit,
the  Borrower  hereby  covenants  to pay to the Lender the  following  Letter of
Credit Fee  payable  quarterly  in  arrears  (on the first  Banking  Day of each
calendar  quarter  following the issuance of each Letter of Credit):  a fee, for
the Lender's own account,  computed  daily on the amount of the Letter of Credit
issued  and  outstanding  at a rate  per  annum  equal to the  Lender's  cost in
obtaining the Letter of Credit plus a spread equal to the difference between the
interest  rate payable on Loans  hereunder  and the  Lender's  cost of borrowing
under its credit  facility (or, in the absence of a credit  facility,  the Prime
Rate as announced by Citibank NA).  Notwithstanding  the  foregoing,  if amounts
payable  pursuant to this Section  10.1(f),  together with any interest  payable
pursuant to Section  3.1,  exceed the amount of EBITDA of the  Borrower  for the
immediately  preceding  calendar  quarter  (ending  the last  day of  September,
December,  March or June),  the  Borrower  shall not be  obligated  to repay the
amounts  payable under this Section  10.1(f)  which,  when added to the interest
payable  pursuant to Section 3.1 exceeds EBITDA of the Borrower for such period.
Any such amount in excess of EBITDA  shall be added to principal  hereunder  and
shall accrue interest thereon in accordance with Section 3.1.

     (g) Letter of Credit  Reporting  Requirements.  The Lender shall,  upon the
request  of  the  Borrower,  provide  to the  Borrower  separate  schedules  for
Commercial  Letters of Credit and Standby Letters of Credit issued as Letters of
Credit, in form and substance reasonably  satisfactory to the Borrower,  setting
forth the aggregate Letter of Credit Obligations outstanding

                                       22
<PAGE>

to it at the end of each month and any  information  requested  by the  Borrower
relating  to the date of  issue,  account  party,  amount,  expiration  date and
reference number of each Letter of Credit issued as contemplated hereunder.

     (h)  Indemnification;  Exoneration.  (i) In addition  to all other  amounts
payable to the Lender, the Borrower hereby agrees to defend, indemnify, and save
the Lender harmless from and against any and all claims,  demands,  liabilities,
penalties,  damages,  losses  (other than loss of  profits),  reasonable  costs,
reasonable charges and reasonable expenses (including  reasonable attorneys fees
but  excluding  taxes)  which  the  Lender  may  incur  or  be  subject  to as a
consequence,  direct or  indirect,  of (A) the  issuance of any Letter of Credit
other  than as a result of the gross  negligence  or willful  misconduct  of the
Lender, as determined by a court of competent  jurisdiction,  or (B) the failure
of the Issuing  Bank to honor a drawing  under such Letter of Credit as a result
of any act or omission,  whether rightful or wrongful,  of any present or future
de jure or de facto government or Governmental Authority.

          (ii) As  between  the  Borrower  on the one hand and the Lender on the
     other hand, the Borrower assumes all risks of the acts and omissions of, or
     misuse of Letters of Credit by, the  respective  beneficiary of the Letters
     of Credit.  In furtherance and not in limitation of the foregoing,  subject
     to the  provisions of the Letter of Credit  Reimbursement  Agreements,  the
     Lender  shall not be  responsible  for: (A) the form,  validity,  legality,
     sufficiency,   accuracy,  genuineness  or  legal  effect  of  any  document
     submitted by any party in connection  with the application for and issuance
     of the  Letters of Credit,  even if it should in fact prove to be in any or
     all respects invalid, insufficient,  inaccurate,  fraudulent or forged; (B)
     the validity,  legality or sufficiency of any  instrument  transferring  or
     assigning  or  purporting  to  transfer or assign a Letter of Credit or the
     rights or benefits  thereunder  or proceeds  thereof,  in whole or in part,
     which may prove to be invalid or ineffective for any reason; (C) failure of
     the Borrower to duly comply with conditions  required in order to draw upon
     such Letter of Credit;  (D) errors,  omissions,  interruptions or delays in
     transmission or delivery of any messages, by mail, cable, telegraph,  telex
     or   otherwise,   whether  or  not  they  be  in  cipher;   (E)  errors  in
     interpretation   of  technical   terms;  (F)  any  loss  or  delay  in  the
     transmission  or  otherwise  of any  document  required  in order to make a
     drawing  under any  Letter of Credit or of the  proceeds  thereof;  (G) the
     misapplication  by the  Borrower of the  proceeds of any drawing  Letter of
     Credit; and (H) any consequences  arising from causes beyond the control of
     the Lender, other than of the foregoing resulting from the gross negligence
     or willful misconduct of the Lender.

                                   ARTICLE XI

                                  MISCELLANEOUS

     Section  11.1  Applicable  Law.  THIS  AGREEMENT  SHALL BE  GOVERNED BY AND
CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK  APPLICABLE  TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.

                                       23
<PAGE>

     Section 11.2 Waiver of Jury. THE BORROWER AND THE LENDER EACH HEREBY WAIVES
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,  DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT,  CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF,  RELATED  TO,  OR  CONNECTED  WITH  THIS  AGREEMENT,  OR  THE  RELATIONSHIPS
ESTABLISHED HEREUNDER.

     Section 11.3  Jurisdiction and Venue;  Service of Process.  1. The Borrower
and the Lender each hereby irrevocably submits to the non-exclusive jurisdiction
of any state or federal court in the Borough of Manhattan,  The City of New York
for the  purpose of any suit,  action,  proceeding  or  judgment  relating to or
arising  out of this  Agreement  and to the  laying of venue in the  Borough  of
Manhattan  The  City of New  York.  The  Borrower  and the  Lender  each  hereby
irrevocably  waives,  to the fullest  extent  permitted by  applicable  law, any
objection  to the  laying of the venue of any such  suit,  action or  proceeding
brought in the aforesaid courts and hereby irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.

     (b)  Borrower  agrees  that  service  of  process  in any  such  action  or
proceeding  may be effected by mailing a copy thereof by registered or certified
mail (or any  substantially  similar  form of  mail),  postage  prepaid,  to the
Borrower at its address set forth in subsection 11.7 or at such other address of
which the Lender shall have been notified pursuant thereto. The Borrower further
agrees that nothing  herein shall affect the right to effect  service of process
in any  other  manner  permitted  by law or shall  limit the right to sue in any
other jurisdiction; and

     (c) The Borrower  waives,  to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this subsection any special, exemplary, punitive or consequential damages.

     Section 11.4  Confidentiality.  The Lender  agrees (on behalf of itself and
each of its Affiliates,  partners,  officers,  employees and representatives) to
use its best efforts to keep  confidential,  in accordance  with their customary
procedures  for  handling  confidential   information  of  this  nature  and  in
accordance with commercially  reasonable  business  practices,  any Confidential
Information; provided that nothing herein shall limit the disclosure of any such
information (i) to the extent required by statute,  rule, regulation or judicial
process, (ii) to counsel for the Lender, (iii) to auditors or accountants,  (iv)
by the Lender to an Affiliate thereof,  or (v) in connection with any litigation
relating to  enforcement  of this  Agreement;  provided  further,  that,  unless
specifically  prohibited  by  applicable  law or court order,  the Lender shall,
prior to disclosure  thereof,  notify the Borrower of any request for disclosure
of  any  Confidential   Information  (x)  by  any   Governmental   Authority  or
representative thereof or (y) pursuant to legal process.

     Section 11.5  Amendments  and Waivers.  (a) Any provision of this Agreement
may be  amended,  modified,  supplemented  or  waived,  but  only  by a  written
amendment  or  supplement,  or written  waiver,  signed by the  Borrower and the
Lender.

                                       24
<PAGE>

     (b) Except to the extent  expressly set forth therein,  any waiver shall be
effective only in the specific  instance and for the specific  purpose for which
such waiver is given.

     Section 11.6 Cumulative Rights; No Waiver.  Each and every right granted to
the  Lender  hereunder  or under  any other  document  delivered  in  connection
herewith,  or allowed it by law or equity, shall be cumulative and not exclusive
and may be exercised  from time to time. No failure on the part of the Lender to
exercise,  and no  delay in  exercising,  any  right  will  operate  as a waiver
thereof,  nor will any  single or  partial  exercise  by the Lender of any right
preclude  any other or future  exercise  thereof  or the  exercise  of any other
right.

     Section  11.7  Notices.  Any  communication,  demand  or notice to be given
hereunder will be duly given when delivered in writing or by telecopy to a party
at its  address  as  indicated  below or such  other  address  as such party may
specify in a notice to the other party hereto. A communication, demand or notice
given pursuant to this Agreement shall be addressed:

          If to the Borrower, to:

                    Reckson Service Industries, Inc.
                    225 Broadhollow Road
                    Melville, New York  11747

                    Telecopy:          (516) 719-7400

                    Attention:          Chief Financial Officer

          If to the Lender, to:

                    Reckson Operating Partnership, L.P.
                    225 Broadhollow Road
                    Melville, New York  11747

                    Telecopy:          (516) 694-6900

                    Attention:          Chief Financial Officer

     This Section  11.7 shall not apply to notices  referred to in Article II of
this Agreement, except to the extent set forth therein.

     Section 11.8 Certain  Acknowledgments.  The  Borrower  hereby  confirms and
acknowledges  that  (a) the  Lender  does  not have  any  fiduciary  or  similar
relationship  to the Borrower by virtue of this  Agreement and the  transactions
contemplated  herein and that the  relationship  established  by this  Agreement
between the Lender and the  Borrower  is solely that of creditor  and debtor and
(b) no joint  venture  exists  between the  Borrower and the Lender by virtue of
this Agreement and the transactions contemplated herein.

     Section  11.9  Separability.  In case  any  one or  more of the  provisions
contained in this Agreement shall be invalid,  illegal or  unenforceable  in any
respect  under  any  law,  the  validity,

                                       25
<PAGE>

legality and enforceability of the remaining  provisions  contained herein shall
not in any way be affected or impaired thereby.

     Section 11.10 Parties in Interest. This Agreement shall be binding upon and
inure to the  benefit  of the  Borrower  and the  Lender  and  their  respective
successors  and  assigns,  except  that the  Borrower  may not assign any of its
rights  hereunder  without  the prior  written  consent of the  Lender,  and any
purported assignment by the Borrower without such consent shall be void.

     Section 11.11 Execution in Counterparts.  This Agreement may be executed in
any number of  counterparts  and by the  different  parties  hereto on  separate
counterparts, each of which when so executed and delivered shall be an original,
but all the counterparts shall together constitute one and the same instrument.

                                       26
<PAGE>

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

                                          RECKSON SERVICE INDUSTRIES, INC.,
                                          as Borrower

                                          By:______________________________
                                               Name:
                                               Title:

                                          RECKSON OPERATING PARTNERSHIP, L.P.,
                                          as Lender

                                          By:  Reckson Associates Realty Corp.,
                                               its general partner

                                          By:______________________________
                                               Name:
                                               Title:

                                       27EXHIBIT 10.38

                         RECKSON ASSOCIATES REALTY CORP.

                  SECOND AMENDED AND RESTATED LETTER AGREEMENT

                                                               November 30, 1999

Reckson Service Industries Inc.
10 East 53rd Street
New York, New York 10022

                Re: Second Amended and Restated Credit Agreements

Dear Sirs:

         Reference is made to the Amended and Restated Credit  Agreement,  dated
as of August 4, 1999, between Reckson Service Industries, Inc., as Borrower (the
"Borrower") and Reckson  Operating  Partnership,  L.P., as Lender (the "Lender")
relating to the operations of the Borrower (the "RSI Facility"), and the Amended
and Restated Credit Agreement,  dated as of August 4, 1999, between the Borrower
and the Lender relating to Reckson Strategic Venture Partners LLC (together with
the RSI Facility,  the "Credit  Facilities").  Capitalized terms used herein and
not  otherwise  defined  shall have the  meaning  ascribed  to such terms in the
Credit Facilities.

         You have  advised  us of your  proposal  to  obtain  (i) a $60  million
secured  loan  from  Warburg   Dillon  Read  and  UBS  AG  (or  other   lenders)
substantially  on the  terms  set  forth on the term  sheet  attached  hereto as
Exhibit A (the "Secured $60 million  Loan") and (ii) a $75 million  secured loan
from Reckson Strategic Venture Partners LLC (or other lenders)  substantially on
the terms set forth in the term sheet attached hereto as Exhibit B (the "Secured
$75 million Loan" and,  together with the Secured $60 million Loan, the "Secured
Loans").  You have also advised us of your  proposal to issue up to $200 million
in preferred stock (the "Preferred Stock").

<PAGE>

     1.   Amendments.  We hereby agree to the following amendments to the Credit
          Facilities:

          a.   Section 1.1(b) is hereby amended to add the following definition:
               "Adjusted EBITDA" shall mean, for any fiscal quarter, EBITDA less
               any  amounts  payable  (i) by any  subsidiary  in  respect of the
               Indebtedness of such Subsidiary  (including,  but not limited to,
               Indebtedness of VANTAS  Incorporated  and the Secured $75 million
               Loan) and (ii) by the  Borrower  in  respect of the  Secured  $60
               million Loan.

          b.   The third  sentence  of Section 3.1 of the Credit  Agreements  is
               hereby  amended  by  deleting  the  references  to  "EBITDA"  and
               replacing such references with the term "Adjusted EBITDA."

     2. Consents. We hereby consent to the following:

          a.   The Liens to be granted  under the Secured  Loans shall be deemed
               to be Permitted Liens for purposes of the Credit Facilities.

          b.   In accordance with Section  7.2(c)(iii) of the Credit Facilities,
               the  incurrence of  Indebtedness  under the Secured Loans and the
               payment of interest thereon is hereby approved.

          c.   In  accordance  with  Sections  7.2(d)  and  7.2(e) of the Credit
               Facilities, the filing of one or more Certificates of Designation
               and any amendments thereto in respect of the Preferred Stock, and
               the payment by the  Borrower of  dividends  to the holders of the
               Preferred Stock, is hereby approved.

     3.   Fees. It is understood that a fee equal to shares of common stock, par
          value  $.01  per  share,  of the  Borrower  shall  be  paid to us upon
          delivery of this  letter in  consideration  of the matters  covered in
          this letter.

                            Very truly yours,

                            RECKSON OPERATING PARTNERSHIP, L.P.

                            By: Reckson Associates Realty Corp., general partner

                            By:___________________________________
                                 Name:
                                 Title:

Confirmed and Accepted:
RECKSON SERVICE INDUSTRIES, INC.

By:_________________________
    Name:
    Title:

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