Document:

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                                                            Exhibit 10(v)(a)(4)

                    NOTE MODIFICATION AND SEVERANCE AGREEMENT

         THIS NOTE MODIFICATION AND SEVERANCE AGREEMENT (this "AGREEMENT") made
as of the 26th day of November, 2001, between ALEXANDER'S KINGS PLAZA, LLC
("PLAZA LLC"), a Delaware limited liability company, ALEXANDER'S OF KINGS, LLC
("KINGS LLC"), a Delaware limited liability company, and KINGS PARKING, LLC
("PARKING LLC"), a Delaware limited liability company, each having its principal
place of business at c/o Vornado Realty Trust, 210 Route 4 East, Paramus, New
Jersey 07652 (Plaza LLC, Kings LLC and Parking LLC are collectively referred to
as "BORROWER") and JPMORGAN CHASE BANK, successor by merger to MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, a New York banking corporation, having its principal
place of business at 270 Park Avenue, New York, New York 10017 ("LENDER").

                              W I T N E S S E T H:

         WHEREAS, Lender is the lawful owner and holder of the Amended, Restated
and Consolidated Promissory Note dated as of May 31, 2001 between Borrower and
Lender in the original principal sum of Two Hundred Twenty Three Million and
No/100 Dollars ($223,000,000.00) (the "ORIGINAL NOTE") which Original Note is
secured by that certain Amended, Restated and Consolidated Mortgage and Security
Agreement dated May 31, 2001, executed by Borrower for the benefit of Lender
(the "SECURITY INSTRUMENT") encumbering the premises described therein
(collectively, the "PREMISES") and which Original Note and Security Instrument
evidence and secure a loan in the amount of $223,000,000.00 to Borrower (the
"Loan"); and

         WHEREAS, Lender and Borrower have agreed to split the indebtedness
evidenced by the Original Note into three separate and distinct obligations of
indebtedness evidenced by: (a) that certain Amended and Restated Promissory Note
A1 date as of the date hereof in the principal sum of NINETY MILLION FOUR
HUNDRED THREE THOUSAND EIGHT HUNDRED FORTY SEVEN and No/100 Dollars
($90,403,847.00), executed and delivered by Borrower to Lender simultaneously
herewith (as the same may be amended, restated, replaced, supplemented,
substituted or otherwise modified from time to time "NOTE A1"); (b) that certain
Amended and Restated Promissory Note A2 dated as of the date hereof in the
principal sum of FIFTY MILLION and No/100 Dollars ($50,000,000.00), executed and
delivered by Borrower to Lender simultaneously herewith (as the same may be
amended, restated, replaced, supplemented, substituted or otherwise modified
from time to time "NOTE A2"); and (c) that certain Amended and Restated
Promissory Note B to be dated as of the date hereof in the principal sum of
EIGHTY ONE MILLION SIX HUNDRED FORTY SEVEN THOUSAND NINE HUNDRED THIRTY SIX and
53/100 Dollars ($81,647,936.53), executed and delivered by Borrower to Lender
simultaneously herewith (as the same may be amended, restated, replaced,
supplemented, substituted or otherwise modified from time to time "NOTE B"; Note
A1, Note A2 and Note B are collectively hereinafter referred to as the "NOTES").

         NOW THEREFORE, in consideration of the Premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

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                              ARTICLE 1: SEVERANCE

                  Effective as of the date hereof, the outstanding principal
balance of the indebtedness evidenced by the Original Note in the amount of TWO
HUNDRED TWENTY-TWO MILLION FIFTY ONE THOUSAND SEVEN HUNDRED EIGHTY THREE and
53/100 Dollars ($222,051,783.53) shall be, and is hereby, severed into three
portions such that the principal indebtedness of (A) Note A1 equals NINETY
MILLION FOUR HUNDRED THREE THOUSAND EIGHT HUNDRED FORTY SEVEN and No/100 Dollars
($90,403,847.00), (B) Note A2 equals FIFTY MILLION and No/100 Dollars
($50,000,000.00), and (C) Note B equals EIGHTY ONE MILLION SIX HUNDRED FORTY
SEVEN THOUSAND NINE HUNDRED THIRTY SIX and 53/100 Dollars ($81,647,936.53).

                            ARTICLE 2: PAYMENT TERMS

                  (a) For the aggregate of Note A1, Note A2 and Note B, Borrower
shall pay (i) an aggregate constant payment of $1,601,607.36 on December 10,
2001 and on the tenth (10th) day of each calendar month thereafter up to and
including the tenth (10th) day of May, 2011 (each, a "MONTHLY DEBT SERVICE
Payment") and (ii) an amount equal to the balance of the principal sum, all
interest thereon and all other amounts due on the Notes, the Security Instrument
and the Other Security Documents on the tenth (10th) day of June, 2011 (the
"MATURITY DATE"). Each such payment is to be applied in the following order and
priority:

                  (i) First, to the payment of interest then due on Note A1
         computed at the Applicable Interest Rate and the payment of interest
         then due on Note A2 computed at the Applicable Interest Rate, on a
         pro-rata basis (based on the then outstanding principal balance of Note
         A1 and Note A2) until such interest due on both notes is paid in full.
         The interest then due on such notes shall equal the amounts set forth
         on the amortization schedule attached hereto as Exhibit A (the
         "AMORTIZATION SCHEDULE");

                  (ii) Second, to the reduction of the principal sum of Note A1
         and to the reduction of the principal sum on Note A2, on a pro-rata
         basis (based on the then outstanding principal balance of Note A1 and
         Note A2). The principal payment then due on such notes shall equal the
         amounts set forth on the Amortization Schedule;

                  (iii) Third, to the payment of interest then due on Note B
         computed at the Applicable Interest Rate until such interest is paid in
         full. The interest then due on such note shall equal the amount set
         forth on the Amortization Schedule; and

                  (iv) Fourth, provided the outstanding principal balance of
         each of Note A1 and Note A2 is zero, to the reduction of the principal
         sum of Note B.

                  (b) The term "MONTHLY PAYMENT DATE" shall mean the tenth day
of each calendar month prior to the Maturity Date. If the Maturity Date or any
Monthly Payment Date or if the day when any payment required under any of the
Notes or the Security Instrument or the Other Loan Documents does not fall on a
Business Day, then the Maturity Date or such Monthly Payment Date, or such other
date as applicable, will deemed to be the Business Day immediately preceding
such day. Interest on the principal sum of each Note shall be calculated by
multiplying the actual number of days elapsed in the applicable period by a
daily rate based on a

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three hundred sixty (360) day year. The interest accrual period for the Monthly
Debt Service Payment due on December 10, 2001 shall commence on and include
November 10, 2001 and shall end on and include December 9, 2001. Each interest
accrual period after such period shall commence on the tenth (10th) day of each
calendar month during the term of the Notes and shall end on and include the
ninth (9th) day of the next occurring calendar month.

                              ARTICLE 3: INTEREST

                  The term "APPLICABLE INTEREST RATE" as used in the Security
Instrument, the Notes, this Agreement and the Other Security Documents shall
mean an interest rate equal to seven and four hundred sixty-two thousandths
percent (7.462%) per annum.

                                ARTICLE 4: DEBT

                  (a) The whole of the principal sum of the Notes, (b) interest,
default interest, late charges and other sums, as provided in the Notes, the
Modification Agreement, the Security Instrument or the Other Security Documents,
(c) all other monies agreed or provided to be paid by Borrower with respect to
the Notes, the Modification Agreement, the Security Instrument or the Other
Security Documents, (d) all sums advanced pursuant to the Security Instrument to
protect and preserve the Property and the lien and the security interest created
thereby, and (e) all sums advanced and costs and expenses incurred by Lender in
connection with the Debt (defined below) or any part thereof, any renewal,
extension, or change of or substitution for the Debt or any part thereof, or the
acquisition or perfection of the security therefor, whether made or incurred at
the request of Borrower or Lender (all the sums referred to in (a) through (e)
above shall collectively be referred to as the "DEBT") shall without notice
become immediately due and payable at the option of Lender if an Event of
Default (as defined in the Security Instrument) has occurred.

                          ARTICLE 5: DEFAULT INTEREST

                  Borrower does hereby agree that upon the occurrence of an
Event of Default, Lender shall be entitled to receive and Borrower shall pay
interest on the entire unpaid principal sum at a rate equal per annum to the
lesser of (a) four percent (4%) plus the Applicable Interest Rate and (b) the
maximum interest rate which Borrower may by law pay (the "DEFAULT RATE"). In the
event the Default Rate becomes applicable, Lender shall have the right to adjust
the amounts reflected in the Amortization Schedule to account for such Default
Rate. The Default Rate shall be computed from the occurrence of the Event of
Default until the earlier of the date upon which the Event of Default is cured
or the date upon which the Debt is paid in full. Interest calculated at the
Default Rate shall be added to the Debt, and shall be deemed secured by the
Security Instrument. This clause, however, shall not be construed as an
agreement or privilege to extend the date of the payment of the Debt, nor as a
waiver of any other right or remedy accruing to Lender by reason of the
occurrence of any Event of Default.

                        ARTICLE 6: REPAYMENT; DEFEASANCE

                  (a) The principal balance of the Notes may not be prepaid in
whole or in part prior to the Maturity Date except as expressly permitted
pursuant to sub-paragraph (l) hereof.

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                  (b) Subject to compliance with and satisfaction of the terms
and conditions of this Article 6, Borrower may elect, after the Lockout Period
Expiration Date (defined below), to either (i) defease all of the outstanding
principal balance of the Notes (a "COMPLETE DEFEASANCE"), or (ii) defease a
portion of the Notes (a "PARKING DEFEASANCE"; together with a Complete
Defeasance hereinafter, a "DEFEASANCE") in an amount equal to the Parking
Release Amount (defined below). If Borrower has elected a Complete Defeasance,
Borrower shall be entitled to a release (a "COMPLETE RELEASE") of the Property
from the lien of the Security Instrument and a return of all escrows held by or
on behalf of Lender with respect to the Loan upon delivery to Lender as security
for the payment of all interest and principal due and to become due pursuant to
the Notes throughout the term thereof (including the immediately succeeding
Monthly Payment Date and assuming the Notes are paid in full three (3) months
prior to the Maturity Date) of Defeasance Collateral (defined below) sufficient
to generate the Scheduled Defeasance Payments (defined below). If the Borrower
has elected a Parking Defeasance, Borrower shall be entitled to a partial
release (the "PARKING RELEASE") of the Parking Land (as defined in the Security
Instrument) from the lien of the Security Instrument (a "PARKING RELEASE";
together with a Complete Release, a "RELEASE") upon delivery to Lender as
security for the payment of all interest and principal due and to become due
pursuant to the Parking Note (defined below) throughout the term thereof
(including the immediately succeeding Monthly Payment Date and assuming the
Parking Note is paid in full three months prior to the Maturity Date) of
Defeasance Collateral sufficient to generate the Scheduled Defeasance Payments.
"LOCKOUT PERIOD EXPIRATION DATE" shall mean the earlier to occur of (i) June 10,
2004, or (ii) the second anniversary of the "startup day" within the meaning of
Section 860G(a)(9) of the IRS Code (defined below) of a REMIC Trust established
in connection with the last Securitization involving any portion of the Loan
(defined below). "PARKING RELEASE AMOUNT" shall mean an amount equal to Nine
Million One Hundred Seventy Nine Thousand and No/100 Dollars ($9,179,000.00). In
the event of a Parking Defeasance, the outstanding principal balance of Note A1
and Note A2 will be reduced pro-rata (based on the then outstanding principal
balance of Note A1 and Note A2), in an amount equal to the Parking Release
Amount until Note A1 and Note A2 are paid in full and any remaining unapplied
amounts shall be applied to reduce the principal balance of Note B, such
reductions will be a total sum equal to Parking Release Amount.

                  (c) As a condition precedent to a Defeasance, and prior to any
Release, Borrower shall have complied with all of the following:

                  (i) Borrower shall provide not less than thirty (30) days
         prior written notice to Lender of the Monthly Payment Date upon which
         it intends to effect a Defeasance hereunder (the "DEFEASANCE DATE"),
         which notice shall state whether such Defeasance is for a Complete
         Defeasance or a Parking Defeasance;

                  (ii) All accrued and unpaid interest and all other sums due
         and payable under the Notes, the Security Instrument and the Other
         Security Documents up to the Defeasance Date shall be paid in full on
         or prior to the Defeasance Date;

                  (iii) The Notes or the Parking Note, as applicable, shall
         thereafter be secured by the Defeasance Collateral delivered in
         connection with the Defeasance. After a Complete Defeasance of the
         Notes or a Parking Defeasance, the Notes or the Parking

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         Note, as applicable, shall not be prepaid in whole or in part or be the
         subject of any further Defeasance. In the event of a Parking
         Defeasance, Borrower shall prepare all necessary documents to modify,
         amend and restate the applicable Notes in the reduced amounts as
         determined in accordance with Article 4(b) above and issue a substitute
         note for a portion of the outstanding principal balance of Note A1
         ("PARKING NOTE A1"), Note A2 ("PARKING NOTE A2") and Note B ("PARKING
         NOTE B") as applicable under Article 4(b) above, in a total amount
         equal to Parking Release Amount (Parking Note A1, Parking Note A2,
         Parking Note B are collectively referred to as the "PARKING NOTE"). The
         Parking Note shall otherwise have terms identical to the corresponding
         Notes other than as may be necessary to reflect the Parking Defeasance.
         In connection with any such Parking Defeasance, the Monthly Debt
         Service Payment Amount due under the Notes and under the Parking Note
         shall be recomputed at the Applicable Interest Rate and the outstanding
         principal balance of the Notes, and the Parking Note, as applicable,
         remaining following such Parking Defeasance, based upon an amortization
         schedule of twenty-seven (27) years less the period from June 1, 2001
         to the date of such Parking Defeasance.

                  (iv) Borrower shall execute and deliver to Lender any and all
         certificates, opinions, documents or instruments that may be required
         by a prudent lender in connection with the Defeasance and Release,
         including, without limitation, a pledge and security agreement
         satisfactory to a prudent lender creating a first priority lien on the
         Defeasance Collateral (a "DEFEASANCE SECURITY AGREEMENT");

                  (v) Borrower shall have delivered to Lender an opinion of
         Borrower's counsel in form and substance that would be satisfactory to
         a prudent lender stating (A) that the Defeasance Collateral and the
         proceeds thereof have been duly and validly assigned and delivered to
         Lender and that Lender has a valid, perfected, first priority lien and
         security interest in the Defeasance Collateral delivered by Borrower
         and the proceeds thereof, and (B) that if the holder of the Notes or
         the Parking Note shall at the time of the Release be a REMIC (defined
         below), (1) the Defeasance Collateral has been validly assigned to the
         REMIC Trust which holds the Notes (the "REMIC TRUST"), (2) the
         Defeasance has been effected in accordance with the requirements of
         Treasury Regulation 1.860(g)-2(a)(8) (as such regulation may be amended
         or substituted from time to time) and will not be treated as an
         exchange pursuant to Section 1001 of the IRS Code and (3) the tax
         qualification and status of the REMIC Trust as a REMIC will not be
         adversely affected or impaired as a result of the Defeasance. The term
         "REMIC" shall mean a "real estate mortgage investment conduit" within
         the meaning of Section 860D of the IRS Code. "IRS CODE" shall mean the
         United States Internal Revenue Code of 1986, as amended, and the
         related Treasury Department regulations, including temporary
         regulations;

                  (vi) Borrower shall have delivered to Lender in connection
         with a Complete Defeasance only written confirmation from the Rating
         Agencies (defined in the Security Instrument) that such Defeasance will
         not result in a withdrawal, downgrade or qualification of the then
         current ratings by the applicable Rating Agencies of the Securities
         (defined in the Security Instrument). If required by the Rating
         Agencies or Lender, Borrower shall, at Borrower's expense, also deliver
         or cause to be delivered a

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         non-consolidation opinion with respect to the Defeasance Obligor (as
         defined below) in form and substance satisfactory to Lender and the
         Rating Agencies;

                  (vii) Borrower shall have delivered to Lender a certificate
         that would be satisfactory to a prudent lender given by Borrower's
         independent certified public accountant (which accountant shall be
         satisfactory to Lender) certifying that the Defeasance Collateral shall
         generate monthly amounts equal to or greater than the Scheduled
         Defeasance Payments; and

                  (viii) With respect to a Parking Defeasance, the following
         additional provisions and conditions shall apply:

                           (A) At the time Borrower requests such Parking
                  Release and at the time such Parking Release is granted, no
                  Event of Default has occurred and is continuing;

                           (B) Borrower shall submit to Lender, not less than
                  fifteen (15) days prior to the date of such release, a release
                  of such Parking Land from the lien of the Security Instrument
                  for execution by Lender. Such release shall be in a form
                  appropriate in the jurisdiction in which the Parking Land is
                  located and contain standard provisions protecting the rights
                  of the releasing lender. In addition, Borrower shall provide
                  all other documentation Lender reasonably requires to be
                  delivered by Borrower in connection with such Release,
                  together with an officer's certificate certifying that such
                  documentation (i) is in compliance with applicable law, (ii)
                  will effect such release in accordance with the terms of the
                  Notes and the Security Instrument and this Agreement, and
                  (iii) will not impair or otherwise adversely affect the
                  remaining real property or other collateral covered by the
                  Security Instrument or the liens, security interests and other
                  rights of Lender under the Notes and the Security Instrument
                  or any Lease (as defined in the Security Instrument); and

                           (C) All requirements under all laws, statutes, rules
                  and regulations applicable to the Parking Land necessary to
                  accomplish the release shall have been fulfilled, and evidence
                  thereof has been delivered to the Lender.

                  (d) In connection with any Defeasance hereunder, Borrower
shall (unless otherwise agreed to in writing by Lender), at Borrower's expense,
establish or designate a successor entity, which shall be a single purpose,
bankruptcy remote entity acceptable to a prudent lender, as such entity is
described in Section 4.3 of the Security Instrument (the "DEFEASANCE OBLIGOR")
and Borrower shall transfer and assign all obligations, rights and duties under
and to the Notes or the Parking Note, as applicable, together with the pledged
Defeasance Collateral to such Defeasance Obligor. Such Defeasance Obligor shall
assume the obligations under the Notes or the Parking Note, as applicable, and
any Defeasance Security Agreement, and Borrower shall be relieved of its
obligations under such documents except with respect to any provisions of the
Notes, the Security Instrument or the Other Security Documents which by their
terms expressly survive payment of the Debt in full.

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                  (e) Each of the obligations of the United States of America or
other government securities that are part of the Defeasance Collateral shall be
duly endorsed by the holder thereof as directed by Lender or accompanied by a
written instrument of transfer in form and substance that would be satisfactory
to a prudent lender (including, without limitation, such instruments as may be
required by the depository institution holding such securities or by the issuer
thereof, as the case may be, to effectuate book-entry transfers and pledges
through the book-entry facilities of such institution) in order to perfect upon
the delivery of the Defeasance Collateral a first priority security interest
therein in favor of the Lender in conformity with all applicable state and
federal laws governing the granting of such security interests. Borrower shall
authorize and direct that the payments received from such obligations shall be
made directly to Lender or Lender's designee and applied to satisfy the
obligations of Borrower or, if applicable, the Defeasance Obligor, under the
Notes.

                  (f) The Defeasance Collateral shall generate payments on or
prior to, but as close as possible to, the Business Day prior to each successive
Monthly Payment Date after the date of the Defeasance upon which payments are
required hereunder, in the case of a Complete Defeasance, or the Parking Note,
in the case of a Parking Defeasance, and in amounts equal to or greater than the
payments due on such dates (including, without limitation scheduled payments of
principal, interest, and any other regularly scheduled amounts) together with
the outstanding principal amount of the Notes or the Parking Note, as
applicable, which would be outstanding on the Monthly Payment Date that is three
(3) months prior to the Maturity Date (the "SCHEDULED DEFEASANCE PAYMENTS").
Provided no Event of Default has occurred and is continuing, any portion of such
monthly amounts generated by the Defeasance Collateral in excess of the
Scheduled Defeasance Payments shall be remitted to Borrower.

                  (g) Notwithstanding any release of the Security Instrument
granted pursuant to this Article 6 or any Defeasance hereunder, the Defeasance
Obligor shall, and hereby agrees to be bound by and obligated under Sections
3.1, 7.2, 7.4(a) (excluding items (ix) through (xii) inclusive and those
portions of xiii that relate to the Property), 11.2, and Articles 13 and 15 of
the Security Instrument; provided, however, that all references therein to
"Property" or "Personal Property" shall be deemed to refer only to the
Defeasance Collateral delivered to Lender.

                  (h) Any costs or expenses incurred or to be incurred in
connection with the Defeasance and any revenue, documentary stamp or intangible
taxes or any other tax or charge due in connection with the transfer of the
Notes, or otherwise required to accomplish the Defeasance shall be paid by
Borrower simultaneously with the occurrence of any Defeasance.

                  (i) The term "DEFEASANCE COLLATERAL" as used herein shall mean
non-callable and non-redeemable securities evidencing an obligation to timely
pay principal and interest in a full and timely manner that are (a) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged, or (b) to the extent acceptable to the Rating
Agencies, other "government securities" within the meaning of Section 2(a)(16)
of the Investment Company Act of 1940, as amended.

                  (j) Upon Borrower's compliance with all of the conditions to
Defeasance and a Release set forth in Article 5(b) through (i), Lender shall
release the Property or the Parking Land, as applicable, from the lien of the
Security Instrument and the Other Security Documents

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(or, at Borrower's request, assign such Security Instrument, or portion thereof
in the case of a Parking Release, in a accordance with Section 22.8 of the
Security Instrument), and, in the case of a Parking Release, Lender shall also
release Parking LLC from and after the date of the Parking Release from its
obligations under the Notes, the Security Instrument, the Agreement and the
Other Security Documents, other than those obligations which are expressly
intended to survive any satisfaction of the Debt. All costs and expenses of
Lender incurred in connection with the Defeasance and Release, including,
without limitation, Lenders' counsels' fees and expenses and any fees and
expenses of the Rating Agencies, shall be paid by Borrower simultaneously with
the delivery of the Release documentation.

                  (k) If a Default Prepayment (defined below) occurs, Borrower
shall pay to Lender the entire Debt, including, without limitation, an amount
(the "DEFAULT CONSIDERATION") equal to the greater of (i) the amount (if any)
which, when added to the outstanding principal amount of the Notes will be
sufficient to purchase Defeasance Collateral providing the required Scheduled
Defeasance Payments assuming a Complete Defeasance would be permitted hereunder,
or (ii) three percent (3%) of the Default Prepayment. For purposes of this
Agreement and the Notes, the term "DEFAULT PREPAYMENT" shall mean a prepayment
of the principal amount of this Agreement and the Notes made after the
acceleration of the Maturity Date under any circumstances, including, without
limitation, a prepayment occurring after an Event of Default or in connection
with reinstatement of the Security Instrument provided by statute under
foreclosure proceedings or exercise of a power of sale, any statutory right of
redemption exercised by Borrower or any other party having a statutory right to
redeem or prevent foreclosure, any sale in foreclosure or under exercise of a
power of sale or otherwise.

                  (l) Notwithstanding anything to the contrary herein, (i) upon
not less than fifteen (15) but not more than forty-five (45) days prior written
notice Borrower may prepay the principal balance of the Notes in whole during
the three (3) months prior to the Maturity Date and no prepayment consideration
shall be due and payable in connection therewith, but Borrower shall be required
to pay all other sums due hereunder and under the Security Instrument and the
Other Security Documents together with all interest which would have accrued on
the principal balance of the Notes after the date of prepayment to the next
Monthly Payment Date (the "INTEREST SHORTFALL PAYMENT"), if such prepayment
occurs on a date which is not a Monthly Payment Date; and (ii) if a complete or
partial prepayment results from the application of insurance proceeds or
condemnation awards pursuant to Sections 3.3, 3.6 or 4.4 of the Security
Instrument (an "INVOLUNTARY PREPAYMENT"), no prepayment consideration or Default
Consideration shall be due in connection therewith, but Borrower shall be
required to pay all other sums due hereunder, including, without limitation, the
Interest Shortfall Payment, if applicable. Upon an Involuntary Prepayment, the
Monthly Debt Service Payment shall be recomputed at the Applicable Interest Rate
and the outstanding principal balance of the Notes remaining following such
prepayment, based upon an amortization schedule of twenty-seven (27) years less
the period from June 1, 2001 to the date of such prepayment. In the event of any
Involuntary Prepayment which constitutes a partial prepayment, such prepayment
shall be applied by Lender first to the reduction of the principal sum of Note
A1 and to the reduction of the principal sum on Note A2, on a pro-rata basis
(based on the then outstanding principal balance of Note A1 and Note A2), until
Note A1 and Note A2 are paid in full, and then, provided the outstanding
principal balance of each of Note A1 and Note A2 is zero, to the reduction of
the principal sum of Note B, until Note B is paid in full.

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                              ARTICLE 7: SECURITY

                  (a) The Notes are secured by the Security Instrument and the
Other Security Documents. The Security Instrument covers the fee and leasehold
estate of Borrower in certain premises located in Kings County, State of New
York, and other property, as more particularly described therein (collectively,
the "PROPERTY") and intended to be duly recorded in said County. The term "OTHER
SECURITY DOCUMENTS" as used in this Agreement and the Notes shall mean all and
any of the documents, other than the Notes and the Security Instrument, now or
hereafter executed by Borrower in favor of Lender, which wholly or partially
secure or guarantee payment of the Notes or which were executed and/or delivered
in connection with the origination of the Loan. Whenever used, the singular
number shall include the plural, the plural number shall include the singular,
and the words "Lender" and "Borrower" shall include their respective successors,
assigns, heirs, executors and administrators.

                  (b) All of the terms, covenants and conditions contained in
the Security Instrument and the Other Security Documents are hereby made part of
this Agreement and the Notes to the same extent and with the same force as if
they were fully set forth herein.

                             ARTICLE 8: LATE CHARGE

                  If an Event of Default occurs with respect to a monetary
obligation payable under this Agreement or the Notes, Borrower shall pay to
Lender upon demand an amount equal to the lesser of five percent (5%) of the
unpaid sum or the maximum amount permitted by applicable law to defray the
expenses incurred by Lender in handling and processing the delinquent payment
and to compensate Lender for the loss of the use of the delinquent payment and
the amount shall be secured by the Security Instrument and the Other Security
Documents, but without duplication of the amounts paid pursuant to Article 5 in
respect of such payment.

                            ARTICLE 9: MISCELLANEOUS

                  (a) The Notes will be executed and delivered simultaneously
herewith, and such Notes and this Agreement collectively shall serve to amend
and restate the Original Note in its entirety in complete substitution (but not
in satisfaction) for the Original Note, as amended by the terms, provisions and
conditions contained in this Agreement. The principal indebtedness evidenced by
Note A1, the principal indebtedness evidenced by Note A2 and the principal
indebtedness evidenced by Note B constitute, in the aggregate, the same
principal indebtedness evidenced by the Original Note and secured by the
Security Instrument and do not create or secure any new or further indebtedness.

                  (b) Borrower hereby renews and extends its covenant and
agreement to pay the indebtedness evidenced by the Original Note, as amended and
restated, pursuant to this Agreement and the Notes, and Borrower hereby renews
and extends its covenant and agreement to perform, comply with and be bound by
each and every term and provision of the Original Note, as amended and restated
by the terms of this Agreement and the Notes. Borrower hereby confirms that
pursuant to the terms of the Security Instrument the Notes are cross-defaulted
in that a default by Borrower in the payment or performance of any of its
obligations under any of

                                      -9-
<PAGE>

the Notes (after applicable notice and cure periods, if any) shall be a default
under all of the Notes.

                  (c) Nothing contained in this Agreement, the Notes, the
Security Instrument or the Other Security Documents shall be deemed to
extinguish or increase the indebtedness evidenced by the Original Note and in no
way acts as a release or relinquishment of the liens created by the Security
Instrument or the Other Security Documents. Additionally, nothing contained in
this Agreement, the Notes, the Security Instrument or the Other Security
Documents shall be deemed a novation of the indebtedness evidenced by the
Original Note.

                  (d) Each of Note A1, Note A2 and Note B, as amended by the
terms, provisions and conditions contained in this Agreement, shall continue to
be secured by the Security Instrument and shall collectively be referred to as
the "Note" in the Security Instrument and in all of the Other Security
Documents. Borrower confirms and agrees that the Notes, are, and shall continue
to be, secured by the Security Instrument and by any other mortgages executed by
Borrower or its predecessor-in-interest to secure the Original Note, as the same
have been modified by the Security Instrument. Without in any way limiting the
generality of the foregoing, Lender has, and shall continue to enjoy, all of the
rights and remedies provided for in the Security Instrument, this Agreement, the
Notes and the Other Security Documents as heretofore or contemporaneously
herewith amended, restated and consolidated.

                  (e) Lender shall have the right to require Borrower to enter
into additional modifications of the Notes in accordance with that certain
Cooperation Letter dated May 31, 2001.

                  (f) This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York without regard to
principles of conflicts laws and any applicable law of the United States of
America.

                  (g) This Agreement may be executed in any number of duplicate
originals and each duplicate original shall be deemed to be an original without
resulting in any duplication of obligations, however. This Agreement may be
executed in several counterparts, each of which counterparts shall be deemed an
original instrument and all of which together shall constitute a single
Agreement.

                  (h) This Agreement shall be binding upon and inure to the
benefit of the parties and their respective heirs, legal representatives,
successors and assigns.

                  (i) All capitalized terms used in this Agreement which are not
defined herein shall have the meanings ascribed to them in the Security
Instrument and the Other Security Documents.

                  (j) Except as specifically modified and amended herein, all
other terms, conditions and covenants contained in the Security Instrument and
the Other Security Documents shall remain in full force and effect.

                                      -10-
<PAGE>

                  (k) All references in the Security Instrument and the Other
Security Documents to Note shall mean the Notes, as amended by the terms,
provisions and conditions contained in this Agreement.

                  (l) Unless otherwise defined in this Amendment, terms defined
in the Security Instrument and the Other Security Documents shall have their
defined meanings when used herein.

                  (m) The Notes, the Security Instrument and the Other Security
Documents, as amended by the terms, provisions and conditions contained in this
Agreement, constitute the entire and final agreement between the parties with
respect to the subject matter thereof and may not be changed, terminated or
otherwise varied, except by a writing duly executed by the parties.

                  (n) Borrower covenants and agrees that there is now due and
owing on the Original Note the outstanding principal sum of $222,051,783.53,
plus interest, and that there exist no defenses, counterclaims or offsets to its
obligations for the payment of the indebtedness evidenced by the Original Note
and secured by the Other Security Documents. The Security Instrument liens and
all liens securing payment of the Notes are hereby modified, extended, renewed,
carried forward in the amount of $222,051,783.53 and confirmed by Borrower in
all respects and shall remain in full force and effect until the amount of the
Notes then payable in accordance with the terms hereof, all accrued but unpaid
interest, and all extensions, renewals and rearrangements thereof and all sums
secured by the Notes, the Security Instrument and the Other Security Documents
shall be fully and finally paid.

                  (o) In the event of a conflict or inconsistency between the
terms of this Agreement and the Notes or the Security Instrument, the terms and
provisions of this Agreement shall govern.

                  (p) Borrower hereby certifies to Lender the following facts
knowing that Lender requires, and is relying upon, the representations contained
in this paragraph being done at Lender's request:

                  (i) All interest due to Lender through but not including the
         date hereof has been paid or waived;

                  (ii) As of the date of execution hereof, Borrower has no, and
         waives any, defenses, rights of setoff, counterclaim, claims, or causes
         of action of any kind or description against Lender as holder of this
         Agreement and the Notes, with respect to (i) payment of the principal
         sum described therein, (ii) payment of interest under this Agreement
         and the Notes,

                  (iii) payment of any other sums due and payable under this
         Agreement and the Notes, the Security Instrument or any of the Other
         Security Documents, or (iv) the performance of any obligations under
         this Agreement, the Notes, the Security Instrument and the Other
         Security Documents; (iii) This Agreement and the Notes, the Security
         Instrument and the Other Security Documents are valid and enforceable
         against Borrower in accordance with their respective terms subject to
         principles of equity and applicable bankruptcy, insolvency or similar
         laws generally affecting the enforcement of creditor's rights; and

                                      -11-
<PAGE>

                  (iv) It is understood and agreed that Lender, by virtue of
         executing this Agreement and the Notes, is not waiving any of its
         rights under the Security Instrument, this Agreement and the Notes or
         any of the Other Security Documents with respect to any defaults or
         Events of Default which may occur or arise from and after the date
         hereof.

                  (q) Borrower acknowledges and agrees that this Agreement and
the Notes amend and restate the Original Note, evidences the same indebtedness
evidenced thereby and creates no new or additional indebtedness, and that this
Agreement and the Notes are not intended to, nor shall they be construed to,
constitute a novation of the Original Note or the obligations contained therein.

                  (r) All recitals set forth on page 1 hereof are hereby
incorporated in and made a part this Agreement and the Notes to the same extent
as if herein set forth in full; provided, however, that said recitals shall not
be deemed to modify the express provisions set forth herein.

                            ARTICLE 10: EXCULPATION

                  (a) Except as otherwise provided herein, in the Security
Instrument, this Agreement or in the Other Security Documents, Lender shall not
enforce the liability and obligation of Borrower to perform and observe the
obligations contained in the Notes, the Security Instrument, this Agreement or
the Other Security Documents by any action or proceeding wherein a money
judgment shall be sought against Borrower, except that Lender may bring a
foreclosure action, action for specific performance or other appropriate action
or proceeding to enable Lender to enforce and realize upon the Notes, the
Security Instrument, this Agreement, the Other Security Documents, and the
interest in the Property, the Rents (as defined in the Security Instrument) and
any other collateral given to Lender created by the Notes, the Security
Instrument and the Other Security Documents; provided, however, that any
judgment in any such action or proceeding shall be enforceable against Borrower
only to the extent of Borrower's interest in the Property, in the Rents and in
any other collateral given to Lender. Lender, by accepting the Notes and the
Security Instrument, agrees that it shall not, except as otherwise provided in
this Article 10, sue for, seek or demand any deficiency judgment against
Borrower in any such action or proceeding, under or by reason of or under or in
connection with the Notes, the Other Security Documents, this Agreement or the
Security Instrument. The provisions of this Section shall not, however, (i)
constitute a waiver, release or impairment of any obligation evidenced or
secured by the Notes, the Other Security Documents, this Agreement or the
Security Instrument; (ii) impair the right of Lender to name Borrower as a party
defendant in any action or suit for judicial foreclosure and sale under the
Security Instrument; (iii) affect the validity or enforceability of the
Environmental Indemnity (as defined in the Security Instrument), or any guaranty
executed in connection with the Notes, the Security Instrument, this Agreement
or the Other Security Documents; (iv) impair the right of Lender to obtain the
appointment of a receiver; (v) impair the enforcement of the Assignment of
Leases and Rents executed in connection herewith; or (vi) impair the right of
Lender to obtain a deficiency judgment or other judgment on the Notes against
Borrower if necessary to obtain any insurance proceeds or condemnation awards to
which Lender would otherwise be entitled under the Security Instrument;
provided, however, Lender shall only enforce such judgment to the extent of such
insurance proceeds and/or condemnation awards.

                                      -12-
<PAGE>

                  (b) Notwithstanding the provisions of this Article 10 to the
contrary, Borrower shall be personally liable to Lender for the Losses (as
defined in the Security Instrument) it incurs due to: (i) fraud or intentional
misrepresentation by Borrower, Indemnitor (as defined in the Security
Instrument), Guarantor (as defined in the Security Instrument) or Vornado Realty
Trust in connection with the execution and the delivery of the Notes, the
Security Instrument, this Agreement or the Other Security Documents; (ii)
Borrower's misapplication or misappropriation of Rents received by Borrower
after the occurrence of an Event of Default; (iii) Borrower's misapplication or
misappropriation of tenant security deposits (including any such deposits,
escrows or reserves deposited by tenants for tenant improvement work) or Rents
collected in advance; (iv) the misapplication or the misappropriation of
insurance proceeds or condemnation awards or the failure to refund any tax
rebates due to any tenant no longer in occupancy at the Property; (v) to the
extent of Rents from the Property, Borrower's failure to pay Taxes (as defined
in the Security Instrument), Other Charges (as defined in the Security
Instrument) (except to the extent that sums sufficient to pay such amounts have
been deposited in escrow with Lender pursuant to the terms of the Security
Instrument), charges for labor or materials or other charges, that can create
prior liens on the Property; (vi) any act of physical waste or arson by
Borrower, any principal, affiliate, member or general partner thereof or by any
Indemnitor or Guarantor; (vii) Borrower's failure to comply with the provisions
of Sections 4.2, 12.1 and 12.2 and Article 8 (other than a violation of Article
8 set forth in subsection (c) below) of the Security Instrument; (viii)
Borrower's failure to comply with the provisions of Section 4.3 (other than
Section 4.3(h)) of the Security Instrument; (ix) Borrower's amendment or
modification to the Ground Lease (as defined in the Security Instrument) without
the prior written consent of Lender; and (x) Borrower's amendment or
modification to that certain Amended and Restated Construction Operation and
Reciprocal Easement Agreement dated as of June 18, 1998 by and among Macy's
Kings Plaza Real Estate, Inc. ("MACY'S"), Alexander's Kings Plaza Center, Inc.
("AKPC") and Alexander's Department Stores of Brooklyn, Inc. ("ADSB") and/or
Supplemental Agreement dated June 18, 1998 by and among Macy's, AKPC and ADSB
without the prior written consent of Lender.

                  (c) Notwithstanding the foregoing, (i) the agreement of Lender
not to pursue recourse liability as set forth in Subsection (a) above SHALL
BECOME NULL AND VOID and shall be of no further force and effect in the event of
Borrower's default under Article 8 of the Security Instrument caused by a
Transfer of the Property in violation of such article or the placement of a
voluntary Security Instrument lien against the Property, and (ii) the Debt shall
be fully recourse to Borrower in the event that (A) Borrower files a voluntary
petition under the Title 11 of the United States Bankruptcy Code (as amended,
the "BANKRUPTCY CODE") or any other Federal or state bankruptcy or insolvency
law; or (B) Guarantor or any other affiliate of Borrower which controls Borrower
files, or joins in the filing of, an involuntary petition against Borrower under
the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law,
or solicits or causes to be solicited petitioning creditors for any involuntary
petition against Borrower or from any Person, or (C) Borrower files an answer
consenting to or joining in any involuntary petition filed against it, by any
other Person under the Bankruptcy Code or any other Federal or state bankruptcy
or insolvency law, or solicits or causes to be solicited petitioning creditors
for any involuntary petition from any Person; or (D) any affiliate which
controls Borrower consents to or joins in an application for the appointment of
a custodian, receiver, trustee, or examiner for Borrower or any real property
portion of the Property; or (E) Borrower makes an assignment for the benefit of
creditors.

                                      -13-
<PAGE>

                  (d) Nothing herein shall be deemed to be a waiver of any right
which Lender may have under Section 506(a), 506(b), 1111(b) or any other
provision of the U.S. Bankruptcy Code to file a claim for the full amount of the
indebtedness secured by the Security Instrument or to require that all
collateral shall continue to secure all of the indebtedness owing to Lender in
accordance with the Notes, the Security Instrument, this Agreement and the Other
Security Documents.

                         [NO FURTHER TEXT ON THIS PAGE]

                                      -14-
<PAGE>

                  IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the date first above written.

                                        BORROWER:

                                        ALEXANDER'S KINGS PLAZA, LLC, a Delaware
                                        limited liability company

                                        By: /s/ Joseph Macnow
                                            -------------------------------
                                            Name:  Joseph Macnow
                                            Title:  Executive Vice President

                                        ALEXANDER'S OF KINGS, LLC, a Delaware
                                        limited liability company

                                        By: /s/ Joseph Macnow
                                            --------------------------------
                                            Name:  Joseph Macnow
                                            Title:  Executive Vice President

                                        KINGS PARKING, LLC, a Delaware limited
                                        liability company

                                        By: /s/ Joseph Macnow
                                            ---------------------------------
                                            Name:  Joseph Macnow
                                            Title: Executive Vice President

<PAGE>

                                        LENDER:

                                        JPMORGAN CHASE BANK, successor by merger
                                        to MORGAN GUARANTY TRUST COMPANY OF NEW
                                        YORK, a New York banking corporation

                                        By: /s/ Michael Mesard
                                            ----------------------------------
                                            Name: Michael Mesard
                                            Title Vice President

<PAGE>

                                    Exhibit A

                       (Attach the Amortization Schedule)

<PAGE>

                     AMENDED AND RESTATED PROMISSORY NOTE A1

$90,403,847.00                                               New York, New York
                                                              November 26, 2001

                  THIS AMENDED AND RESTATED PROMISSORY NOTE A1 (this "NOTE A1")
is made this 26th day of November, 2001, by and between ALEXANDER'S KINGS PLAZA,
LLC ("PLAZA LLC"), a Delaware limited liability company, ALEXANDER'S OF KINGS,
LLC ("KINGS LLC"), a Delaware limited liability company, and KINGS PARKING, LLC
("PARKING LLC"), a Delaware limited liability company, each having its principal
place of business at c/o Vornado Realty Trust, 210 Route 4 East, Paramus, New
Jersey 07652, as maker (Plaza LLC, Kings LLC and Parking LLC are collectively
referred to as "BORROWER") to JPMORGAN CHASE BANK, successor by merger to MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, a New York banking corporation having its
principal place of business at 270 Park Avenue, New York, New York 10017, as
payee ("LENDER").

                                 R E C I T A L S

                  WHEREAS, on May 31, 2001 Lender made a loan (the "LOAN") in
the aggregate principal amount of $223,000,000.00 to Borrower, which Loan was
evidenced by that certain Amended, Restated and Consolidated Promissory Note
dated as of May 31, 2001 (the "ORIGINAL NOTE"), and secured by, among other
things, that certain Amended, Restated and Consolidated Security Instrument
Security Agreement dated as of May 31, 2001 (the "SECURITY INSTRUMENT").

                  WHEREAS, that certain Note Modification and Severance
Agreement dated as of the date hereof (the "MODIFICATION AGREEMENT"), severs the
indebtedness evidenced by the Original Note into three separate and distinct
obligations of indebtedness evidenced by (a) this Note A1 evidencing the
principal sum of NINETY MILLION FOUR HUNDRED THREE THOUSAND EIGHT HUNDRED FORTY
SEVEN and No/100 Dollars ($90,403,847.00), (b) that certain Amended and Restated
Promissory Note A2 dated as of FIFTY MILLION and No/100 Dollars ($50,000,000.00)
("NOTE A2") and (c) that certain Amended and Restated Promissory Note B dated as
of the date hereof evidencing the principal sum of EIGHTY ONE MILLION SIX
HUNDRED FORTY SEVEN THOUSAND NINE HUNDRED THIRTY SIX and 53/100 Dollars
($81,647,936.53) ("NOTE B").

                  NOW, THEREFORE, in consideration of the premises, the
agreements hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby covenant and agree as follows, effective as of the date first above
written:

A. Borrower's indebtedness is NINETY MILLION FOUR HUNDRED THREE THOUSAND EIGHT
HUNDRED FORTY SEVEN and No/100 Dollars ($90,403,847.00), as evidenced by this
Note A1 in the principal amount of NINETY MILLION FOUR HUNDRED THREE THOUSAND
EIGHT HUNDRED FORTY SEVEN and No/100 Dollars ($90,403,847.00), together with
interest thereon as hereinafter provided.

<PAGE>

B. Borrower and Lender hereby agree that the portion of the Original Note having
been severed pursuant to the Modification Agreement into this Note A1 is hereby
amended, restated and replaced in its entirety with respect to the principal
indebtedness evidenced by this Note A1 (hereafter, this "NOTE") to read as
follows:

                               PROMISSORY NOTE A1

$90,403,847.00                                               New York, New York
                                                              November 26, 2001

                  FOR VALUE RECEIVED ALEXANDER'S KINGS PLAZA, LLC ("PLAZA LLC"),
a Delaware limited liability company, ALEXANDER'S OF KINGS, LLC ("KINGS LLC"), a
Delaware limited liability company, and KINGS PARKING, LLC ("PARKING LLC"), a
Delaware limited liability company, each having its principal place of business
at c/o Vornado Realty Trust, 210 Route 4 East, Paramus, New Jersey 07652, as
maker (Plaza LLC, Kings LLC and Parking LLC are collectively referred to as
"BORROWER"), hereby unconditionally promises to pay to the order of JPMORGAN
CHASE BANK, successor by merger to MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a
New York banking corporation, having an address at 60 Wall Street, New York, New
York 10260, as payee ("LENDER") or at such other place as the holder hereof may
from time to time designate in writing, the principal sum of NINETY MILLION FOUR
HUNDRED THREE THOUSAND EIGHT HUNDRED FORTY SEVEN and No/100 Dollars
($90,403,847.00), or so much thereof as is advanced, in lawful money of the
United States of America, with interest thereon to be computed from the date of
this Note at the Applicable Interest Rate, and to be paid in accordance with the
terms of this Note and that certain Note Modification and Severance Agreement
dated as of the date hereof between Borrower and Lender (the "MODIFICATION
AGREEMENT"). All capitalized terms not defined herein shall have the respective
meanings set forth in the Security Instrument or the Modification Agreement, as
applicable.

                            ARTICLE 1: PAYMENT TERMS

                  Borrower agrees to pay the principal sum of this Note and
interest on the unpaid principal sum of this Note from time to time outstanding
at the rates and at the times specified in the Modification Agreement and the
outstanding balance of the principal sum of this Note and all accrued and unpaid
interest thereon shall be due and payable on the Maturity Date. This Note may be
released and/or defeased in accordance with the Modification Agreement.

                      ARTICLE 2: OTHER SECURITY DOCUMENTS

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

                                      -2-
<PAGE>

                           ARTICLE 3: SAVINGS CLAUSE

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

                           ARTICLE 4: NO ORAL CHANGE:

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

                     ARTICLE 5: JOINT AND SEVERAL LIABILITY

                  If Borrower consists of more than one person or party, the
obligations and liabilities of each person or party shall be joint and several.

                               ARTICLE 6: WAIVERS

                  Except as otherwise provided in this Note, the Security
Instrument, the Modification Agreement or the Other Security Documents, Borrower
and all others who may become liable for the payment of all or any part of the
Debt do hereby severally waive presentment and demand for payment, notice of
dishonor, protest and notice of protest and non-payment and all other notices of
any kind. Except in connection with a Defeasance, no release of any security for
the Debt or extension of time for payment of this Note or any installment
hereof, and no alteration, amendment or waiver of any provision of this Note,
the Security Instrument, the Modification Agreement or the Other Security
Documents made by agreement between Lender or any other person or party shall
release, modify, amend, waive, extend, change, discharge, terminate or affect
the liability of Borrower, and any other person or entity who may become liable
for the payment of all or any part of the Debt, under this Note, the Security
Instrument, the Modification Agreement or the Other Security Documents. No
notice to or demand on Borrower shall be deemed to be a waiver of the obligation
of Borrower or of the right of Lender to take further action without further
notice or demand as provided for in this Note, the Security Instrument, the
Modification Agreement or the Other Security Documents. If Borrower is a
partnership, the agreements contained herein shall remain in full force and
effect,

                                      -3-
<PAGE>

notwithstanding any changes in the individuals or entities comprising the
partnership, and the term "Borrower," as used herein, shall include any
alternate or successor partnership, but any predecessor partnership and its
partners shall not thereby be released from any liability. If Borrower is a
corporation, the agreements contained herein shall remain in full force and
effect notwithstanding any changes in the shareholders comprising, or the
officers and directors relating to, the corporation, and the term "Borrower" as
used herein, shall include any alternate or successor corporation, but any
predecessor corporation shall not be relieved of liability hereunder. If
Borrower is a limited liability company, the agreements herein contained shall
remain in full force and effect, notwithstanding any changes in the individuals
or entities comprising the limited liability company and the term "Borrower," as
used herein, shall include any alternate or successor limited liability company,
but any predecessor limited liability company and its members shall not be
released from any liability. (Nothing in the foregoing sentence shall be
construed as a consent to, or a waiver of, any prohibition or restriction on
transfers of interests in such partnership, corporation or limited liability
company which may be set forth in the Security Instrument or any Other Security
Document.)

                              ARTICLE 7: TRANSFER

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

                        ARTICLE 8 WAIVER OF TRIAL BY JURY

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

                             ARTICLE 9 EXCULPATION

                  (a) Except as otherwise provided herein, in the Security
Instrument, the Modification Agreement or in the Other Security Documents,
Lender shall not enforce the liability and obligation of Borrower to perform and
observe the obligations contained in this Note, the Security Instrument, the
Modification Agreement or the Other Security Documents by any action or
proceeding wherein a money judgment shall be sought against Borrower, except
that Lender may bring a foreclosure action, action for specific performance or
other appropriate

                                      -4-
<PAGE>

action or proceeding to enable Lender to enforce and realize upon this Note, the
Security Instrument, the Modification Agreement, the Other Security Documents,
and the interest in the Property, the Rents (as defined in the Security
Instrument) and any other collateral given to Lender created by this Note, the
Security Instrument and the Other Security Documents; provided, however, that
any judgment in any such action or proceeding shall be enforceable against
Borrower only to the extent of Borrower's interest in the Property, in the Rents
and in any other collateral given to Lender. Lender, by accepting this Note and
the Security Instrument, agrees that it shall not, except as otherwise provided
in this Article 9, sue for, seek or demand any deficiency judgment against
Borrower in any such action or proceeding, under or by reason of or under or in
connection with this Note, the Other Security Documents, the Modification
Agreement or the Security Instrument. The provisions of this Section shall not,
however, (i) constitute a waiver, release or impairment of any obligation
evidenced or secured by this Note, the Other Security Documents, the
Modification Agreement or the Security Instrument; (ii) impair the right of
Lender to name Borrower as a party defendant in any action or suit for judicial
foreclosure and sale under the Security Instrument; (iii) affect the validity or
enforceability of the Environmental Indemnity (as defined in the Security
Instrument), or any guaranty executed in connection with this Note, the Security
Instrument, the Modification Agreement or the Other Security Documents; (iv)
impair the right of Lender to obtain the appointment of a receiver; (v) impair
the enforcement of the Assignment of Leases and Rents executed in connection
herewith; or (vi) impair the right of Lender to obtain a deficiency judgment or
other judgment on this Note against Borrower if necessary to obtain any
insurance proceeds or condemnation awards to which Lender would otherwise be
entitled under the Security Instrument; provided, however, Lender shall only
enforce such judgment to the extent of such insurance proceeds and/or
condemnation awards.

                  (b) Notwithstanding the provisions of this Article 9 to the
contrary, Borrower shall be personally liable to Lender for the Losses (as
defined in the Security Instrument) it incurs due to: (i) fraud or intentional
misrepresentation by Borrower, Indemnitor (as defined in the Security
Instrument), Guarantor (as defined in the Security Instrument) or Vornado Realty
Trust in connection with the execution and the delivery of this Note, the
Security Instrument, the Modification Agreement or the Other Security Documents;
(ii) Borrower's misapplication or misappropriation of Rents received by Borrower
after the occurrence of an Event of Default; (iii) Borrower's misapplication or
misappropriation of tenant security deposits (including any such deposits,
escrows or reserves deposited by tenants for tenant improvement work) or Rents
collected in advance; (iv) the misapplication or the misappropriation of
insurance proceeds or condemnation awards or the failure to refund any tax
rebates due to any tenant no longer in occupancy at the Property; (v) to the
extent of Rents from the Property, Borrower's failure to pay Taxes (as defined
in the Security Instrument), Other Charges (as defined in the Security
Instrument) (except to the extent that sums sufficient to pay such amounts have
been deposited in escrow with Lender pursuant to the terms of the Security
Instrument), charges for labor or materials or other charges, that can create
prior liens on the Property; (vi) any act of physical waste or arson by
Borrower, any principal, affiliate, member or general partner thereof or by any
Indemnitor or Guarantor; (vii) Borrower's failure to comply with the provisions
of Sections 4.2, 12.1 and 12.2 and Article 8 (other than a violation of Article
8 set forth in subsection (c) below) of the Security Instrument; (viii)
Borrower's failure to comply with the provisions of Section 4.3 (other than
Section 4.3(h)) of the Security Instrument; (ix) Borrower's amendment or
modification to the Ground Lease (as defined in the Security Instrument) without
the prior

                                      -5-
<PAGE>

written consent of Lender; and (x) Borrower's amendment or modification to that
certain Amended and Restated Construction Operation and Reciprocal Easement
Agreement dated as of June 18, 1998 by and among Macy's Kings Plaza Real Estate,
Inc. ("MACY'S"), Alexander's Kings Plaza Center, Inc. ("AKPC") and Alexander's
Department Stores of Brooklyn, Inc. ("ADSB") and/or Supplemental Agreement dated
June 18, 1998 by and among Macy's, AKPC and ADSB without the prior written
consent of Lender.

                  (c) Notwithstanding the foregoing, (i) the agreement of Lender
not to pursue recourse liability as set forth in Subsection (a) above SHALL
BECOME NULL AND VOID and shall be of no further force and effect in the event of
Borrower's default under Article 8 of the Security Instrument caused by a
Transfer of the Property in violation of such article or the placement of a
voluntary mortgage lien against the Property, and (ii) the Debt shall be fully
recourse to Borrower in the event that (A) Borrower files a voluntary petition
under the Title 11 of the United States Bankruptcy Code (as amended, the
"BANKRUPTCY CODE") or any other Federal or state bankruptcy or insolvency law;
or (B) Guarantor or any other affiliate of Borrower which controls Borrower
files, or joins in the filing of, an involuntary petition against Borrower under
the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law,
or solicits or causes to be solicited petitioning creditors for any involuntary
petition against Borrower or from any Person, or (C) Borrower files an answer
consenting to or joining in any involuntary petition filed against it, by any
other Person under the Bankruptcy Code or any other Federal or state bankruptcy
or insolvency law, or solicits or causes to be solicited petitioning creditors
for any involuntary petition from any Person; or (D) any affiliate which
controls Borrower consents to or joins in an application for the appointment of
a custodian, receiver, trustee, or examiner for Borrower or any real property
portion of the Property; or (E) Borrower makes an assignment for the benefit of
creditors.

                  (d) Nothing herein shall be deemed to be a waiver of any right
which Lender may have under Section 506(a), 506(b), 1111(b) or any other
provision of the U.S. Bankruptcy Code to file a claim for the full amount of the
indebtedness secured by the Security Instrument or to require that all
collateral shall continue to secure all of the indebtedness owing to Lender in
accordance with this Note, the Security Instrument, the Modification Agreement
and the Other Security Documents.

                             ARTICLE 10: AUTHORITY

                  Borrower represents that Borrower has full power, authority
and legal right to execute and deliver this Note, the Security Instrument, the
Modification Agreement and the Other Security Documents and that this Note, the
Security Instrument, the Modification Agreement and the Other Security Documents
constitute valid and binding obligations of Borrower.

                           ARTICLE 11: APPLICABLE LAW

                  This Note shall be deemed to be a contract entered into
pursuant to the laws of the State of New York and shall in all respects be
governed, construed, applied and enforced in accordance with the laws of the
State of New York.

                                      -6-
<PAGE>

                         ARTICLE 12: SERVICE OF PROCESS

                  (a) (i) Borrower will maintain a place of business or an agent
for service of process in New York, New York and give prompt notice to Lender of
the address of such place of business and of the name and address of any new
agent appointed by it, as appropriate. Borrower further agrees that the failure
of its agent for service of process to give it notice of any service of process
will not impair or affect the validity of such service or of any judgment based
thereon. If, despite the foregoing, there is for any reason no agent for service
of process of Borrower available to be served, and if it at that time has no
place of business in New York, New York, then Borrower irrevocably consents to
service of process by registered or certified mail, postage prepaid, to it at
its address given in or pursuant to the first paragraph hereof.

                  (ii) Borrower initially and irrevocably designates its Chief
         Financial Officer with offices on the date hereof at c/o Vornado Realty
         Trust, 210 Route 4 East, Paramus, New Jersey 07652 to receive for and
         on behalf of Borrower service of process in New York, New York with
         respect to this Note; provided that a copy will be simultaneously
         provided to Vornado Realty Trust, 210 Route 4 East, Paramus, New Jersey
         07652, Attention: Vice President for Real Estate.

                  (b) With respect to any claim or action arising hereunder or
under the Security Instrument, the Modification Agreement or the Other Security
Documents, Borrower (i) irrevocably submits to the nonexclusive jurisdiction of
the courts of the State of New York and the United States District Court located
in the Borough of Manhattan in New York, New York, and appellate courts from any
thereof, and (ii) irrevocably waives any objection which it may have at any time
to the laying on venue of any suit, action or proceeding arising out of or
relating to this Note brought in any such court, irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.

                  (c) Nothing in this Note will be deemed to preclude Lender
from bringing an action or proceeding with respect hereto in any other
jurisdiction.

                            ARTICLE 13: COUNSEL FEES

                  In the event that it should become necessary to employ counsel
to collect the Debt or to protect or foreclose the security therefor, Borrower
also agrees to pay all reasonable fees and expenses of Lender, including,
without limitation, reasonable attorney's fees for the services of such counsel
whether or not suit be brought.

                              ARTICLE 14: NOTICES

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

                                      -7-
<PAGE>

                  If to Borrower:  ALEXANDER'S KINGS PLAZA, LLC
                           ALEXANDER'S OF KINGS, LLC and
                           KINGS PARKING, LLC
                           c/o Vornado Realty Trust
                           210 Route 4 East
                           Paramus, New Jersey 07652
                           Attention:  Chief Financial Officer
                           Facsimile No.:  (201) 708-6210

                  With a copy to:  Winston & Strawn
                           200 Park Avenue
                           New York, New York 10166
                           Attention:  Peter J. Korda, Esq.
                           Facsimile No.:  (212) 294-4700

                                       and

                           Vornado Realty Trust
                           210 Route 4 East
                           Paramus, New Jersey 07652
                           Attention:  Vice President for Real Estate
                           Facsimile No.:  (201) 708-6207

                  If to Lender: JPMorgan Chase Bank,
                           successor by merger to Morgan Guaranty
                            Trust Company of New York
                           Commercial Mortgage Finance Group
                           60 Wall Street
                           New York, New York 10260
                           Attention:  Nancy Alto
                           Facsimile No.:  (212) 648-5274

                                       and

                           JPMorgan Chase Bank,
                           successor by merger to
                           Morgan Guaranty Trust Company of New York
                           Legal Department
                           270 Park Avenue, 39th Floor
                           New York, New York 10017
                           Attention:  Ronald A. Wilcox, Esq.
                           Facsimile No.:  (212) 270-2934

                                      -8-
<PAGE>

                  With a copy to:  Cadwalader, Wickersham & Taft
                           100 Maiden Lane
                           New York, New York 10038
                           Attention:  William P. McInerney, Esq.
                           Facsimile No.:  (212) 504-6666

or addressed as such party may from time to time designate by written notice to
the other parties.

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

                  "BUSINESS DAY" shall mean a day upon which commercial banks
are not authorized or required by law to close in New York, New York.

                           ARTICLE 15: MISCELLANEOUS

                  (a) Wherever pursuant to this Note (i) Lender exercises any
right given to it to approve or disapprove, (ii) any arrangement or term is to
be satisfactory to Lender, or (iii) any other decision or determination is to be
made by Lender, the decision of Lender to approve or disapprove, all decisions
that arrangements or terms are satisfactory or not satisfactory and all other
decisions and determinations made by Lender, shall be in the sole and absolute
discretion of Lender and shall be final and conclusive, except as may be
otherwise expressly and specifically provided herein.

                  (b) Wherever pursuant to this Note it is provided that
Borrower pay any costs and expenses, such costs and expenses shall include, but
not be limited to, all reasonable legal fees and disbursements of Lender.

                  (c) All recitals set forth on page 1 hereof are hereby
incorporated in and made a part of this Note to the same extent as if herein set
forth in full; provided, however, that said recitals shall not be deemed to
modify the express provisions set forth herein.

                         [NO FURTHER TEXT ON THIS PAGE]

                                      -9-
<PAGE>

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

                                          BORROWER:

                                          ALEXANDER'S KINGS PLAZA, LLC, a
                                             Delaware limited liability company

                                          By:  /s/ Joseph Macnow
                                               ---------------------------
                                               Name:  Joseph Macnow
                                               Title: Executive President

                                          ALEXANDER'S OF KINGS, LLC, a Delaware
                                               limited liability company

                                          By:  /s/ Joseph Macnow
                                               ---------------------------
                                               Name:  Joseph Macnow
                                               Title: Executive President

                                          KINGS PARKING, LLC, a Delaware limited
                                               liability company

                                          By:  /s/ Joseph Macnow
                                               ---------------------------
                                               Name:  Joseph Macnow
                                               Title:  Executive President

<PAGE>

                     AMENDED AND RESTATED PROMISSORY NOTE A2

$50,000,000.00                                                New York, New York
                                                               November 26, 2001

            THIS AMENDED AND RESTATED PROMISSORY NOTE A2 (this "NOTE A2") is
made this 26th day of November, 2001, by and between ALEXANDER'S KINGS PLAZA,
LLC ("PLAZA LLC"), a Delaware limited liability company, ALEXANDER'S OF KINGS,
LLC ("KINGS LLC"), a Delaware limited liability company, and KINGS PARKING, LLC
("PARKING LLC"), a Delaware limited liability company, each having its principal
place of business at c/o Vornado Realty Trust, 210 Route 4 East, Paramus, New
Jersey 07652, as maker (Plaza LLC, Kings LLC and Parking LLC are collectively
referred to as "BORROWER") to JPMORGAN CHASE BANK, successor by merger to MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, a New York banking corporation, having an
address at 60 Wall Street, New York, New York 10260, as payee ("LENDER").

                                 R E C I T A L S

            WHEREAS, on May 31, 2001 Lender made a loan (the "LOAN") in the
aggregate principal amount of $223,000,000.00 to Borrower, which Loan was
evidenced by that certain Amended, Restated and Consolidated Promissory Note
dated as of May 31, 2001 (the "ORIGINAL NOTE"), and secured by, among other
things, that certain Amended, Restated and Consolidated Security Instrument
Security Agreement dated as of May 31, 2001 (the "SECURITY INSTRUMENT").

            WHEREAS, that certain Note Modification and Severance Agreement
dated as of the date hereof (the "MODIFICATION AGREEMENT") severs the
indebtedness evidenced by the Original Note into three separate and distinct
obligations of indebtedness evidenced by (a) this Note A2 evidencing the
principal sum of FIFTY MILLION and No/100 ($50,000,000.00), (b) that certain
Amended and Restated Promissory Note A1 dated as of the date hereof evidencing
the principal sum of NINETY MILLION FOUR HUNDRED THREE THOUSAND EIGHT HUNDRED
FORTY SEVEN and No/100 Dollars ($90,403,847.00) ("NOTE A1") and (c) that certain
Amended and Restated Promissory Note B dated as of the date hereof evidencing
the principal sum of EIGHTY ONE MILLION SIX HUNDRED FORTY SEVEN THOUSAND NINE
HUNDRED THIRTY SIX and 53/100 Dollars ($81,647,936.53) ("NOTE B").

            NOW, THEREFORE, in consideration of the premises, the agreements
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby covenant
and agree as follows, effective as of the date first above written:

A. Borrower's indebtedness is FIFTY MILLION and No/100 ($50,000,000.00) as
evidenced by this Note A2 in the principal amount of FIFTY MILLION and No/100
($50,000,000.00), together with interest thereon as hereinafter provided.

B. Borrower and Lender hereby agree that the portion of the Original Note having
been severed pursuant to the Modification Agreement into this Note A2 is hereby
amended, restated
<PAGE>
and replaced in its entirety with respect to the principal indebtedness
evidenced by this Note A2 (hereafter, this "NOTE") to read as follows:

                               PROMISSORY NOTE A2

$50,000,000.00                                                New York, New York
                                                               November 26, 2001

            FOR VALUE RECEIVED ALEXANDER'S KINGS PLAZA, LLC ("PLAZA LLC"), a
Delaware limited liability company, ALEXANDER'S OF KINGS, LLC ("KINGS LLC"), a
Delaware limited liability company, and KINGS PARKING, LLC ("PARKING LLC"), a
Delaware limited liability company, each having its principal place of business
at c/o Vornado Realty Trust, 210 Route 4 East, Paramus, New Jersey 07652, as
maker (Plaza LLC, Kings LLC and Parking LLC are collectively referred to as
"BORROWER"), hereby unconditionally promises to pay to the order of JPMORGAN
CHASE BANK, successor by merger to MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a
New York banking corporation, having an address at 60 Wall Street, New York, New
York 10260, as payee ("LENDER") or at such other place as the holder hereof may
from time to time designate in writing, the principal sum of FIFTY MILLION and
NO/100 ($50,000,000.00), or so much thereof as is advanced, in lawful money of
the United States of America, with interest thereon to be computed from the date
of this Note at the Applicable Interest Rate, and to be paid in accordance with
the terms of this Note and that certain Note Modification and Severance
Agreement dated as of the date hereof between Borrower and Lender (the
"MODIFICATION AGREEMENT"). All capitalized terms not defined herein shall have
the respective meanings set forth in the Security Instrument or the Modification
Agreement, as applicable.

                            ARTICLE 1: PAYMENT TERMS

            Borrower agrees to pay the principal sum of this Note and interest
on the unpaid principal sum of this Note from time to time outstanding at the
rates and at the times specified in the Modification Agreement and the
outstanding balance of the principal sum of this Note and all accrued and unpaid
interest thereon shall be due and payable on the Maturity Date. This Note may be
released and/or defeased in accordance with the Modification Agreement.

                      ARTICLE 2: OTHER SECURITY DOCUMENTS

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

                                      -2-
<PAGE>
                           ARTICLE 3: SAVINGS CLAUSE

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

                           ARTICLE 4: NO ORAL CHANGE

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

                     ARTICLE 5: JOINT AND SEVERAL LIABILITY

            If Borrower consists of more than one person or party, the
obligations and liabilities of each person or party shall be joint and several.

                               ARTICLE 6: WAIVERS

            Except as otherwise provided in this Note, the Security Instrument,
the Modification Agreement or the Other Security Documents, Borrower and all
others who may become liable for the payment of all or any part of the Debt do
hereby severally waive presentment and demand for payment, notice of dishonor,
protest and notice of protest and non-payment and all other notices of any kind.
Except in connection with a Defeasance, no release of any security for the Debt
or extension of time for payment of this Note or any installment hereof, and no
alteration, amendment or waiver of any provision of this Note, the Security
Instrument, the Modification Agreement or the Other Security Documents made by
agreement between Lender or any other person or party shall release, modify,
amend, waive, extend, change, discharge, terminate or affect the liability of
Borrower, and any other person or entity who may become liable for the payment
of all or any part of the Debt, under this Note, the Security Instrument, the
Modification Agreement or the Other Security Documents. No notice to or demand
on Borrower shall be deemed to be a waiver of the obligation of Borrower or of
the right of Lender to take further action without further notice or demand as
provided for in this Note, the Security Instrument, the Modification Agreement
or the Other Security Documents. If Borrower is a partnership, the agreements
contained herein shall remain in full force and effect,

                                      -3-
<PAGE>
notwithstanding any changes in the individuals or entities comprising the
partnership, and the term "Borrower," as used herein, shall include any
alternate or successor partnership, but any predecessor partnership and its
partners shall not thereby be released from any liability. If Borrower is a
corporation, the agreements contained herein shall remain in full force and
effect notwithstanding any changes in the shareholders comprising, or the
officers and directors relating to, the corporation, and the term "Borrower" as
used herein, shall include any alternate or successor corporation, but any
predecessor corporation shall not be relieved of liability hereunder. If
Borrower is a limited liability company, the agreements herein contained shall
remain in full force and effect, notwithstanding any changes in the individuals
or entities comprising the limited liability company and the term "Borrower," as
used herein, shall include any alternate or successor limited liability company,
but any predecessor limited liability company and its members shall not be
released from any liability. (Nothing in the foregoing sentence shall be
construed as a consent to, or a waiver of, any prohibition or restriction on
transfers of interests in such partnership, corporation or limited liability
company which may be set forth in the Security Instrument or any Other Security
Document.)

                              ARTICLE 7: TRANSFER

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

                       ARTICLE 8: WAIVER OF TRIAL BY JURY

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

                             ARTICLE 9: EXCULPATION

            (a) Except as otherwise provided herein, in the Security Instrument,
the Modification Agreement or in the Other Security Documents, Lender shall not
enforce the liability and obligation of Borrower to perform and observe the
obligations contained in this Note, the Security Instrument, the Modification
Agreement or the Other Security Documents by any action or proceeding wherein a
money judgment shall be sought against Borrower, except that Lender may bring a
foreclosure action, action for specific performance or other appropriate

                                      -4-
<PAGE>
action or proceeding to enable Lender to enforce and realize upon this Note, the
Security Instrument, the Modification Agreement, the Other Security Documents,
and the interest in the Property, the Rents (as defined in the Security
Instrument) and any other collateral given to Lender created by this Note, the
Security Instrument and the Other Security Documents; provided, however, that
any judgment in any such action or proceeding shall be enforceable against
Borrower only to the extent of Borrower's interest in the Property, in the Rents
and in any other collateral given to Lender. Lender, by accepting this Note and
the Security Instrument, agrees that it shall not, except as otherwise provided
in this Article 9, sue for, seek or demand any deficiency judgment against
Borrower in any such action or proceeding, under or by reason of or under or in
connection with this Note, the Other Security Documents, the Modification
Agreement or the Security Instrument. The provisions of this Section shall not,
however, (i) constitute a waiver, release or impairment of any obligation
evidenced or secured by this Note, the Other Security Documents, the
Modification Agreement or the Security Instrument; (ii) impair the right of
Lender to name Borrower as a party defendant in any action or suit for judicial
foreclosure and sale under the Security Instrument; (iii) affect the validity or
enforceability of the Environmental Indemnity (as defined in the Security
Instrument), or any guaranty executed in connection with this Note, the Security
Instrument, the Modification Agreement or the Other Security Documents; (iv)
impair the right of Lender to obtain the appointment of a receiver; (v) impair
the enforcement of the Assignment of Leases and Rents executed in connection
herewith; or (vi) impair the right of Lender to obtain a deficiency judgment or
other judgment on this Note against Borrower if necessary to obtain any
insurance proceeds or condemnation awards to which Lender would otherwise be
entitled under the Security Instrument; provided, however, Lender shall only
enforce such judgment to the extent of such insurance proceeds and/or
condemnation awards.

            (b) Notwithstanding the provisions of this Article 9 to the
contrary, Borrower shall be personally liable to Lender for the Losses (as
defined in the Security Instrument) it incurs due to: (i) fraud or intentional
misrepresentation by Borrower, Indemnitor (as defined in the Security
Instrument), Guarantor (as defined in the Security Instrument) or Vornado Realty
Trust in connection with the execution and the delivery of this Note, the
Security Instrument, the Modification Agreement or the Other Security Documents;
(ii) Borrower's misapplication or misappropriation of Rents received by Borrower
after the occurrence of an Event of Default; (iii) Borrower's misapplication or
misappropriation of tenant security deposits (including any such deposits,
escrows or reserves deposited by tenants for tenant improvement work) or Rents
collected in advance; (iv) the misapplication or the misappropriation of
insurance proceeds or condemnation awards or the failure to refund any tax
rebates due to any tenant no longer in occupancy at the Property; (v) to the
extent of Rents from the Property, Borrower's failure to pay Taxes (as defined
in the Security Instrument), Other Charges (as defined in the Security
Instrument) (except to the extent that sums sufficient to pay such amounts have
been deposited in escrow with Lender pursuant to the terms of the Security
Instrument), charges for labor or materials or other charges, that can create
prior liens on the Property; (vi) any act of physical waste or arson by
Borrower, any principal, affiliate, member or general partner thereof or by any
Indemnitor or Guarantor; (vii) Borrower's failure to comply with the provisions
of Sections 4.2, 12.1 and 12.2 and Article 8 (other than a violation of Article
8 set forth in subsection (c) below) of the Security Instrument; (viii)
Borrower's failure to comply with the provisions of Section 4.3 (other than
Section 4.3(h)) of the Security Instrument; (ix) Borrower's amendment or
modification to the Ground Lease (as defined in the Security Instrument) without
the prior

                                      -5-
<PAGE>
written consent of Lender; and (x) Borrower's amendment or modification to that
certain Amended and Restated Construction Operation and Reciprocal Easement
Agreement dated as of June 18, 1998 by and among Macy's Kings Plaza Real Estate,
Inc. ("MACY'S"), Alexander's Kings Plaza Center, Inc. ("AKPC") and Alexander's
Department Stores of Brooklyn, Inc. ("ADSB") and/or Supplemental Agreement dated
June 18, 1998 by and among Macy's, AKPC and ADSB without the prior written
consent of Lender.

            (c) Notwithstanding the foregoing, (i) the agreement of Lender not
to pursue recourse liability as set forth in Subsection (a) above SHALL BECOME
NULL AND VOID and shall be of no further force and effect in the event of
Borrower's default under Article 8 of the Security Instrument caused by a
Transfer of the Property in violation of such article or the placement of a
voluntary mortgage lien against the Property, and (ii) the Debt shall be fully
recourse to Borrower in the event that (A) Borrower files a voluntary petition
under the Title 11 of the United States Bankruptcy Code (as amended, the
"BANKRUPTCY CODE") or any other Federal or state bankruptcy or insolvency law;
or (B) Guarantor or any other affiliate of Borrower which controls Borrower
files, or joins in the filing of, an involuntary petition against Borrower under
the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law,
or solicits or causes to be solicited petitioning creditors for any involuntary
petition against Borrower or from any Person, or (C) Borrower files an answer
consenting to or joining in any involuntary petition filed against it, by any
other Person under the Bankruptcy Code or any other Federal or state bankruptcy
or insolvency law, or solicits or causes to be solicited petitioning creditors
for any involuntary petition from any Person; or (D) any affiliate which
controls Borrower consents to or joins in an application for the appointment of
a custodian, receiver, trustee, or examiner for Borrower or any real property
portion of the Property; or (E) Borrower makes an assignment for the benefit of
creditors.

            (d) Nothing herein shall be deemed to be a waiver of any right which
Lender may have under Section 506(a), 506(b), 1111(b) or any other provision of
the U.S. Bankruptcy Code to file a claim for the full amount of the indebtedness
secured by the Security Instrument or to require that all collateral shall
continue to secure all of the indebtedness owing to Lender in accordance with
this Note, the Security Instrument, the Modification Agreement and the Other
Security Documents.

                             ARTICLE 10: AUTHORITY

            Borrower represents that Borrower has full power, authority and
legal right to execute and deliver this Note, the Security Instrument, the
Modification Agreement  and the Other Security Documents and that this Note,
the Security Instrument, the Modification Agreement and the Other Security
Documents constitute valid and binding obligations of Borrower.

                           ARTICLE 11: APPLICABLE LAW

            This Note shall be deemed to be a contract entered into pursuant to
the laws of the State of New York and shall in all respects be governed,
construed, applied and enforced in accordance with the laws of the State of New
York.

                                      -6-
<PAGE>
                         ARTICLE 12: SERVICE OF PROCESS

            (a) (i) Borrower will maintain a place of business or an agent for
service of process in New York, New York and give prompt notice to Lender of the
address of such place of business and of the name and address of any new agent
appointed by it, as appropriate. Borrower further agrees that the failure of its
agent for service of process to give it notice of any service of process will
not impair or affect the validity of such service or of any judgment based
thereon. If, despite the foregoing, there is for any reason no agent for service
of process of Borrower available to be served, and if it at that time has no
place of business in New York, New York, then Borrower irrevocably consents to
service of process by registered or certified mail, postage prepaid, to it at
its address given in or pursuant to the first paragraph hereof.

                  (ii) Borrower initially and irrevocably designates its Chief
         Financial Officer with offices on the date hereof at c/o Vornado Realty
         Trust, 210 Route 4 East, Paramus, New Jersey 07652 to receive for and
         on behalf of Borrower service of process in New York, New York with
         respect to this Note; provided that a copy will be simultaneously
         provided to Vornado Realty Trust, 210 Route 4 East, Paramus, New Jersey
         07652, Attention: Vice President for Real Estate.

            (b) With respect to any claim or action arising hereunder or under
the Security Instrument, the Modification Agreement or the Other Security
Documents, Borrower (i) irrevocably submits to the nonexclusive jurisdiction of
the courts of the State of New York and the United States District Court located
in the Borough of Manhattan in New York, New York, and appellate courts from any
thereof, and (ii) irrevocably waives any objection which it may have at any time
to the laying on venue of any suit, action or proceeding arising out of or
relating to this Note brought in any such court, irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.
            (c) Nothing in this Note will be deemed to preclude Lender from
bringing an action or proceeding with respect hereto in any other jurisdiction.

                            ARTICLE 13: COUNSEL FEES

            In the event that it should become necessary to employ counsel to
collect the Debt or to protect or foreclose the security therefor, Borrower also
agrees to pay all reasonable fees and expenses of Lender, including, without
limitation, reasonable attorney's fees for the services of such counsel whether
or not suit be brought.

                              ARTICLE 14: NOTICES

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

                                      -7-
<PAGE>
            If to Borrower: ALEXANDER'S KINGS PLAZA, LLC
                  ALEXANDER'S OF KINGS, LLC and
                  KINGS PARKING, LLC
                  c/o Vornado Realty Trust
                  210 Route 4 East
                  Paramus, New Jersey 07652
                  Attention: Chief Financial Officer
                  Facsimile No.: (201) 708-6210

            With a copy to:  Winston & Strawn
                  200 Park Avenue
                  New York, New York 10166
                  Attention: Peter J. Korda, Esq.
                  Facsimile No.: (212) 294-4700

                                       and

                  Vornado Realty Trust
                  210 Route 4 East
                  Paramus, New Jersey 07652
                  Attention: Vice President for Real Estate
                  Facsimile No.: (201) 708-6207

            If to Lender: JPMorgan Chase Bank,
                  successor by merger to Morgan Guaranty
                   Trust Company of New York
                  Commercial Mortgage Finance Group
                  60 Wall Street
                  New York, New York 10260
                  Attention: Nancy Alto
                  Facsimile No.: (212) 648-5274

                                       and

                  JPMorgan Chase Bank,
                  successor by merger to
                  Morgan Guaranty Trust Company of New York
                  Legal Department
                  270 Park Avenue, 39th Floor
                  New York, New York 10017
                  Attention: Ronald A. Wilcox, Esq.
                  Facsimile No.: (212) 270-2934

                                      -8-
<PAGE>
            With a copy to: Cadwalader, Wickersham & Taft
                  100 Maiden Lane
                  New York, New York 10038
                  Attention: William P. McInerney, Esq.
                  Facsimile No.: (212) 504-6666

or addressed as such party may from time to time designate by written notice to
the other parties.

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

            "BUSINESS DAY" shall mean a day upon which commercial banks are not
authorized or required by law to close in New York, New York.

                           ARTICLE 15: MISCELLANEOUS

            (a) Wherever pursuant to this Note (i) Lender exercises any right
given to it to approve or disapprove, (ii) any arrangement or term is to be
satisfactory to Lender, or (iii) any other decision or determination is to be
made by Lender, the decision of Lender to approve or disapprove, all decisions
that arrangements or terms are satisfactory or not satisfactory and all other
decisions and determinations made by Lender, shall be in the sole and absolute
discretion of Lender and shall be final and conclusive, except as may be
otherwise expressly and specifically provided herein.

            (b) Wherever pursuant to this Note it is provided that Borrower pay
any costs and expenses, such costs and expenses shall include, but not be
limited to, all reasonable legal fees and disbursements of Lender.

            (c) All recitals set forth on page 1 hereof are hereby incorporated
in and made a part of this Note to the same extent as if herein set forth in
full; provided, however, that said recitals shall not be deemed to modify the
express provisions set forth herein.

                        [NO FURTHER TEXT ON THIS PAGE]

                                      -9-
<PAGE>
            IN WITNESS WHEREOF, Borrower has duly executed this Note as of the
day and year first above written.

                                    BORROWER

                                    BORROWER:

                                    ALEXANDER'S KINGS PLAZA, LLC, a Delaware
                                       limited liability company

                                    By:   /s/ Joseph Macnow
                                       ----------------------------------
                                       Name:  Joseph Macnow
                                       Title: Executive President

                                    ALEXANDER'S OF KINGS, LLC, a Delaware
                                       limited liability company

                                    By:   /s/ Joseph Macnow
                                       ----------------------------------
                                       Name:  Joseph Macnow
                                       Title: Executive President

                                    KINGS PARKING, LLC, a Delaware limited
                                       liability company

                                    By:   /s/ Joseph Macnow
                                       ----------------------------------
                                       Name:  Joseph Macnow
                                       Title: Executive President
<PAGE>

                     AMENDED AND RESTATED PROMISSORY NOTE B

$81,647,936.53                                                New York, New York
                                                               November 26, 2001

            THIS AMENDED AND RESTATED PROMISSORY NOTE B (this "NOTE B") is made
this 26th day of November, 2001, by and between ALEXANDER'S KINGS PLAZA, LLC
("PLAZA LLC"), a Delaware limited liability company, ALEXANDER'S OF KINGS, LLC
("KINGS LLC"), a Delaware limited liability company, and KINGS PARKING, LLC
("PARKING LLC"), a Delaware limited liability company, each having its principal
place of business at c/o Vornado Realty Trust, 210 Route 4 East, Paramus, New
Jersey 07652, as maker (Plaza LLC, Kings LLC and Parking LLC are collectively
referred to as "BORROWER") to JPMORGAN CHASE BANK, successor by merger to MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, a New York banking corporation, having an
address at 60 Wall Street, New York, New York 10260, as payee ("LENDER").

                                 R E C I T A L S

            WHEREAS, on May 31, 2001 Lender made a loan (the "LOAN") in the
aggregate principal amount of $223,000,000.00 to Borrower, which Loan was
evidenced by that certain Amended, Restated and Consolidated Promissory Note
dated as of May 31, 2001 (the "ORIGINAL NOTE"), and secured by, among other
things, that certain Amended, Restated and Consolidated Security Instrument
Security Agreement dated as of May 31, 2001 (the "SECURITY INSTRUMENT").

            WHEREAS, that certain Note Modification and Severance Agreement
dated as of the date hereof (the "MODIFICATION AGREEMENT") severs the
indebtedness evidenced by the Original Note into three separate and distinct
obligations of indebtedness evidenced by (a) this Note B evidencing the
principal sum of EIGHTY ONE MILLION SIX HUNDRED FORTY SEVEN THOUSAND NINE
HUNDRED THIRTY SIX and 53/100 Dollars ($81,647,936.53), (b) that certain Amended
and Restated Promissory Note A1 dated as of the date hereof evidencing the
principal sum of NINETY MILLION FOUR HUNDRED THREE THOUSAND EIGHT HUNDRED FORTY
SEVEN and No/100 Dollars ($90,403,847.00), ("NOTE A1"), and (c) that certain
Amended and Restated Promissory Note A2 dated as of the date hereof evidencing
the principal sum of FIFTY MILLION and No/100 Dollars ($50,000,000.00) ("NOTE
A2").

            NOW, THEREFORE, in consideration of the premises, the agreements
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby covenant
and agree as follows, effective as of the date first above written:

A. Borrower's indebtedness is EIGHTY ONE MILLION SIX HUNDRED FORTY SEVEN
THOUSAND NINE HUNDRED THIRTY SIX and 53/100 Dollars ($81,647,936.53), as
evidenced by this Note B in the principal amount of EIGHTY ONE MILLION SIX
HUNDRED FORTY SEVEN THOUSAND NINE HUNDRED THIRTY SIX and 53/100 Dollars
($81,647,936.53), together with interest thereon as hereinafter provided.
<PAGE>
B. Borrower and Lender hereby agree that the portion of the Original Note having
been severed pursuant to the Modification Agreement into this Note B is hereby
amended, restated and replaced in its entirety with respect to the principal
indebtedness evidenced by this Note B (hereafter, this "NOTE") to read as
follows:

                                PROMISSORY NOTE B

$81,647,936.53                                                New York, New York
                                                               November 26, 2001

            FOR VALUE RECEIVED ALEXANDER'S KINGS PLAZA, LLC ("PLAZA LLC"), a
Delaware limited liability company, ALEXANDER'S OF KINGS, LLC ("KINGS LLC"), a
Delaware limited liability company, and KINGS PARKING, LLC ("PARKING LLC"), a
Delaware limited liability company, each having its principal place of business
at c/o Vornado Realty Trust, 210 Route 4 East, Paramus, New Jersey 07652, as
maker (Plaza LLC, Kings LLC and Parking LLC are collectively referred to as
"BORROWER"), hereby unconditionally promises to pay to the order of JPMORGAN
CHASE BANK, successor by merger to MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a
New York banking corporation, having an address at 60 Wall Street, New York, New
York 10260, as payee ("LENDER"), or at such other place as the holder hereof may
from time to time designate in writing, the principal sum of EIGHTY ONE MILLION
SIX HUNDRED FORTY SEVEN THOUSAND NINE HUNDRED THIRTY SIX and 53/100 Dollars
($81,647,936.53), or so much thereof as is advanced, in lawful money of the
United States of America, with interest thereon to be computed from the date of
this Note at the Applicable Interest Rate, and to be paid in accordance with the
terms of this Note and that certain Note Modification and Severance Agreement
dated as of the date hereof between Borrower and Lender (the "MODIFICATION
AGREEMENT"). All capitalized terms not defined herein shall have the respective
meanings set forth in the Security Instrument or the Modification Agreement, as
applicable.

                            ARTICLE 1: PAYMENT TERMS

            Borrower agrees to pay the principal sum of this Note and interest
on the unpaid principal sum of this Note from time to time outstanding at the
rates and at the times specified in the Modification Agreement and the
outstanding balance of the principal sum of this Note and all accrued and unpaid
interest thereon shall be due and payable on the Maturity Date. This Note may be
released and/or defeased in accordance with the Modification Agreement.

                      ARTICLE 2: OTHER SECURITY DOCUMENTS

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

                                      -2-
<PAGE>
                           ARTICLE 3: SAVINGS CLAUSE

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

                           ARTICLE 4: NO ORAL CHANGE:

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

                     ARTICLE 5: JOINT AND SEVERAL LIABILITY

            If Borrower consists of more than one person or party, the
obligations and liabilities of each person or party shall be joint and several.

                               ARTICLE 6: WAIVERS

            Except as otherwise provided in this Note, the Security Instrument,
the Modification Agreement or the Other Security Documents, Borrower and all
others who may become liable for the payment of all or any part of the Debt do
hereby severally waive presentment and demand for payment, notice of dishonor,
protest and notice of protest and non-payment and all other notices of any kind.
Except in connection with a Defeasance, no release of any security for the Debt
or extension of time for payment of this Note or any installment hereof, and no
alteration, amendment or waiver of any provision of this Note, the Security
Instrument, the Modification Agreement or the Other Security Documents made by
agreement between Lender or any other person or party shall release, modify,
amend, waive, extend, change, discharge, terminate or affect the liability of
Borrower, and any other person or entity who may become liable for the payment
of all or any part of the Debt, under this Note, the Security Instrument, the
Modification Agreement or the Other Security Documents. No notice to or demand
on Borrower shall be deemed to be a waiver of the obligation of Borrower or of
the right of Lender to take further action without further notice or demand as
provided for in this Note, the Security Instrument, the Modification Agreement
or the Other Security Documents. If Borrower is a partnership, the agreements
contained herein shall remain in full force and effect,

                                      -3-
<PAGE>
notwithstanding any changes in the individuals or entities comprising the
partnership, and the term "Borrower," as used herein, shall include any
alternate or successor partnership, but any predecessor partnership and its
partners shall not thereby be released from any liability. If Borrower is a
corporation, the agreements contained herein shall remain in full force and
effect notwithstanding any changes in the shareholders comprising, or the
officers and directors relating to, the corporation, and the term "Borrower" as
used herein, shall include any alternate or successor corporation, but any
predecessor corporation shall not be relieved of liability hereunder. If
Borrower is a limited liability company, the agreements herein contained shall
remain in full force and effect, notwithstanding any changes in the individuals
or entities comprising the limited liability company and the term "Borrower," as
used herein, shall include any alternate or successor limited liability company,
but any predecessor limited liability company and its members shall not be
released from any liability. (Nothing in the foregoing sentence shall be
construed as a consent to, or a waiver of, any prohibition or restriction on
transfers of interests in such partnership, corporation or limited liability
company which may be set forth in the Security Instrument or any Other Security
Document.)

                              ARTICLE 7: TRANSFER

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

                       ARTICLE 8: WAIVER OF TRIAL BY JURY

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

                             ARTICLE 9: EXCULPATION

            (a) Except as otherwise provided herein, in the Security Instrument,
the Modification Agreement or in the Other Security Documents, Lender shall not
enforce the liability and obligation of Borrower to perform and observe the
obligations contained in this Note, the Security Instrument, the Modification
Agreement or the Other Security Documents by any action or proceeding wherein a
money judgment shall be sought against Borrower, except that Lender may bring a
foreclosure action, action for specific performance or other appropriate

                                      -4-
<PAGE>
action or proceeding to enable Lender to enforce and realize upon this Note, the
Security Instrument, the Modification Agreement, the Other Security Documents,
and the interest in the Property, the Rents (as defined in the Security
Instrument) and any other collateral given to Lender created by this Note, the
Security Instrument and the Other Security Documents; provided, however, that
any judgment in any such action or proceeding shall be enforceable against
Borrower only to the extent of Borrower's interest in the Property, in the Rents
and in any other collateral given to Lender. Lender, by accepting this Note and
the Security Instrument, agrees that it shall not, except as otherwise provided
in this Article 9, sue for, seek or demand any deficiency judgment against
Borrower in any such action or proceeding, under or by reason of or under or in
connection with this Note, the Other Security Documents, the Modification
Agreement or the Security Instrument. The provisions of this Section shall not,
however, (i) constitute a waiver, release or impairment of any obligation
evidenced or secured by this Note, the Other Security Documents, the
Modification Agreement or the Security Instrument; (ii) impair the right of
Lender to name Borrower as a party defendant in any action or suit for judicial
foreclosure and sale under the Security Instrument; (iii) affect the validity or
enforceability of the Environmental Indemnity (as defined in the Security
Instrument), or any guaranty executed in connection with this Note, the Security
Instrument, the Modification Agreement or the Other Security Documents; (iv)
impair the right of Lender to obtain the appointment of a receiver; (v) impair
the enforcement of the Assignment of Leases and Rents executed in connection
herewith; or (vi) impair the right of Lender to obtain a deficiency judgment or
other judgment on this Note against Borrower if necessary to obtain any
insurance proceeds or condemnation awards to which Lender would otherwise be
entitled under the Security Instrument; provided, however, Lender shall only
enforce such judgment to the extent of such insurance proceeds and/or
condemnation awards.

            (b) Notwithstanding the provisions of this Article 9 to the
contrary, Borrower shall be personally liable to Lender for the Losses (as
defined in the Security Instrument) it incurs due to: (i) fraud or intentional
misrepresentation by Borrower, Indemnitor (as defined in the Security
Instrument), Guarantor (as defined in the Security Instrument) or Vornado Realty
Trust in connection with the execution and the delivery of this Note, the
Security Instrument, the Modification Agreement or the Other Security Documents;
(ii) Borrower's misapplication or misappropriation of Rents received by Borrower
after the occurrence of an Event of Default; (iii) Borrower's misapplication or
misappropriation of tenant security deposits (including any such deposits,
escrows or reserves deposited by tenants for tenant improvement work) or Rents
collected in advance; (iv) the misapplication or the misappropriation of
insurance proceeds or condemnation awards or the failure to refund any tax
rebates due to any tenant no longer in occupancy at the Property; (v) to the
extent of Rents from the Property, Borrower's failure to pay Taxes (as defined
in the Security Instrument), Other Charges (as defined in the Security
Instrument) (except to the extent that sums sufficient to pay such amounts have
been deposited in escrow with Lender pursuant to the terms of the Security
Instrument), charges for labor or materials or other charges, that can create
prior liens on the Property; (vi) any act of physical waste or arson by
Borrower, any principal, affiliate, member or general partner thereof or by any
Indemnitor or Guarantor; (vii) Borrower's failure to comply with the provisions
of Sections 4.2, 12.1 and 12.2 and Article 8 (other than a violation of Article
8 set forth in subsection (c) below) of the Security Instrument; (viii)
Borrower's failure to comply with the provisions of Section 4.3 (other than
Section 4.3(h)) of the Security Instrument; (ix) Borrower's amendment or
modification to the Ground Lease (as defined in the Security Instrument) without
the prior

                                      -5-
<PAGE>
written consent of Lender; and (x) Borrower's amendment or
modification to that certain Amended and Restated Construction Operation and
Reciprocal Easement Agreement dated as of June 18, 1998 by and among Macy's
Kings Plaza Real Estate, Inc. ("MACY'S"), Alexander's Kings Plaza Center, Inc.
("AKPC") and Alexander's Department Stores of Brooklyn, Inc. ("ADSB") and/or
Supplemental Agreement dated June 18, 1998 by and among Macy's, AKPC and ADSB
without the prior written consent of Lender.

            (c) Notwithstanding the foregoing, (i) the agreement of Lender not
to pursue recourse liability as set forth in Subsection (a) above SHALL BECOME
NULL AND VOID and shall be of no further force and effect in the event of
Borrower's default under Article 8 of the Security Instrument caused by a
Transfer of the Property in violation of such article or the placement of a
voluntary mortgage lien against the Property, and (ii) the Debt shall be fully
recourse to Borrower in the event that (A) Borrower files a voluntary petition
under the Title 11 of the United States Bankruptcy Code (as amended, the
"BANKRUPTCY CODE") or any other Federal or state bankruptcy or insolvency law;
or (B) Guarantor or any other affiliate of Borrower which controls Borrower
files, or joins in the filing of, an involuntary petition against Borrower under
the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law,
or solicits or causes to be solicited petitioning creditors for any involuntary
petition against Borrower or from any Person, or (C) Borrower files an answer
consenting to or joining in any involuntary petition filed against it, by any
other Person under the Bankruptcy Code or any other Federal or state bankruptcy
or insolvency law, or solicits or causes to be solicited petitioning creditors
for any involuntary petition from any Person; or (D) any affiliate which
controls Borrower consents to or joins in an application for the appointment of
a custodian, receiver, trustee, or examiner for Borrower or any real property
portion of the Property; or (E) Borrower makes an assignment for the benefit of
creditors.

            (d) Nothing herein shall be deemed to be a waiver of any right which
Lender may have under Section 506(a), 506(b), 1111(b) or any other provision of
the U.S. Bankruptcy Code to file a claim for the full amount of the indebtedness
secured by the Security Instrument or to require that all collateral shall
continue to secure all of the indebtedness owing to Lender in accordance with
this Note, the Security Instrument, the Modification Agreement and the Other
Security Documents.

                             ARTICLE 10: AUTHORITY

            Borrower represents that Borrower has full power, authority and
legal right to execute and deliver this Note, the Security Instrument, the
Modification Agreement  and the Other Security Documents and that this Note,
the Security Instrument, the Modification Agreement and the Other Security
Documents constitute valid and binding obligations of Borrower.

                           ARTICLE 11: APPLICABLE LAW

            This Note shall be deemed to be a contract entered into pursuant to
the laws of the State of New York and shall in all respects be governed,
construed, applied and enforced in accordance with the laws of the State of New
York.

                                      -6-
<PAGE>
                         ARTICLE 12: SERVICE OF PROCESS

            (a) (i) Borrower will maintain a place of business or an agent for
service of process in New York, New York and give prompt notice to Lender of the
address of such place of business and of the name and address of any new agent
appointed by it, as appropriate. Borrower further agrees that the failure of its
agent for service of process to give it notice of any service of process will
not impair or affect the validity of such service or of any judgment based
thereon. If, despite the foregoing, there is for any reason no agent for service
of process of Borrower available to be served, and if it at that time has no
place of business in New York, New York, then Borrower irrevocably consents to
service of process by registered or certified mail, postage prepaid, to it at
its address given in or pursuant to the first paragraph hereof.

                  (ii) Borrower initially and irrevocably designates its Chief
         Financial Officer with offices on the date hereof at c/o Vornado Realty
         Trust, 210 Route 4 East, Paramus, New Jersey 07652 to receive for and
         on behalf of Borrower service of process in New York, New York with
         respect to this Note; provided that a copy will be simultaneously
         provided to Vornado Realty Trust, 210 Route 4 East, Paramus, New Jersey
         07652, Attention: Vice President for Real Estate.

            (b) With respect to any claim or action arising hereunder or under
the Security Instrument, the Modification Agreement or the Other Security
Documents, Borrower (i) irrevocably submits to the nonexclusive jurisdiction of
the courts of the State of New York and the United States District Court located
in the Borough of Manhattan in New York, New York, and appellate courts from any
thereof, and (ii) irrevocably waives any objection which it may have at any time
to the laying on venue of any suit, action or proceeding arising out of or
relating to this Note brought in any such court, irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.
            (c) Nothing in this Note will be deemed to preclude Lender from
bringing an action or proceeding with respect hereto in any other jurisdiction.

                            ARTICLE 13: COUNSEL FEES

            In the event that it should become necessary to employ counsel to
collect the Debt or to protect or foreclose the security therefor, Borrower also
agrees to pay all reasonable fees and expenses of Lender, including, without
limitation, reasonable attorney's fees for the services of such counsel whether
or not suit be brought.

                              ARTICLE 14: NOTICES

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

                                      -7-
<PAGE>
            If to Borrower: ALEXANDER'S KINGS PLAZA, LLC
                  ALEXANDER'S OF KINGS, LLC and
                  KINGS PARKING, LLC
                  c/o Vornado Realty Trust
                  210 Route 4 East
                  Paramus, New Jersey 07652
                  Attention: Chief Financial Officer
                  Facsimile No.: (201) 708-6210

            With a copy to: Winston & Strawn
                  200 Park Avenue
                  New York, New York 10166
                  Attention: Peter J. Korda, Esq.
                  Facsimile No.: (212) 294-4700

                                       and

                  Vornado Realty Trust
                  210 Route 4 East
                  Paramus, New Jersey 07652
                  Attention: Vice President for Real Estate
                  Facsimile No.: (201) 708-6207

            If to Lender: JPMorgan Chase Bank,
                  successor by merger to
                  Morgan Guaranty Trust Company of New York
                  Commercial Mortgage Finance Group
                  60 Wall Street
                  New York, New York 10260
                  Attention: Nancy Alto
                  Facsimile No.: (212) 648-5274

                                       and

                  JPMorgan Chase Bank,
                  successor by merger to
                  Morgan Guaranty Trust Company of New York
                  Legal Department
                  270 Park Avenue, 39th Floor
                  New York, New York 10017
                  Attention: Ronald A. Wilcox, Esq.
                  Facsimile No.: (212) 270-2934

                                      -8-
<PAGE>
            With a copy to: Cadwalader, Wickersham & Taft
                  100 Maiden Lane
                  New York, New York 10038
                  Attention: William P. McInerney, Esq.
                  Facsimile No.: (212) 504-6666

or addressed as such party may from time to time designate by written notice to
the other parties.

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

            "BUSINESS DAY" shall mean a day upon which commercial banks are not
authorized or required by law to close in New York, New York.

                           ARTICLE 15: MISCELLANEOUS

            (a) Wherever pursuant to this Note (i) Lender exercises any right
given to it to approve or disapprove, (ii) any arrangement or term is to be
satisfactory to Lender, or (iii) any other decision or determination is to be
made by Lender, the decision of Lender to approve or disapprove, all decisions
that arrangements or terms are satisfactory or not satisfactory and all other
decisions and determinations made by Lender, shall be in the sole and absolute
discretion of Lender and shall be final and conclusive, except as may be
otherwise expressly and specifically provided herein.

            (b) Wherever pursuant to this Note it is provided that Borrower pay
any costs and expenses, such costs and expenses shall include, but not be
limited to, all reasonable legal fees and disbursements of Lender.

            (c) All recitals set forth on page 1 hereof are hereby incorporated
in and made a part of this Note to the same extent as if herein set forth in
full; provided, however, that said recitals shall not be deemed to modify the
express provisions set forth herein.

                        [NO FURTHER TEXT ON THIS PAGE]

                                      -9-
<PAGE>
            IN WITNESS WHEREOF, Borrower has duly executed this Note as of the
day and year first above written.

                                    BORROWER

                                    BORROWER:

                                    ALEXANDER'S KINGS PLAZA, LLC, a Delaware
                                       limited liability company

                                    By:  /s/ Joseph Macnow
                                       -------------------------------------
                                       Name:  Joseph Macnow
                                       Title: Executive President

                                    ALEXANDER'S OF KINGS, LLC, a Delaware
                                       limited liability company

                                    By:  /s/ Joseph Macnow
                                       -------------------------------------
                                       Name:  Joseph Macnow
                                       Title: Executive President

                                    KINGS PARKING, LLC, a Delaware limited
                                       liability company

                                    By:  /s/ Joseph Macnow
                                       -------------------------------------
                                       Name:  Joseph Macnow
                                       Title: Executive President
<PAGE>

                    CONSENT AND REAFFIRMATION OF INSTRUMENTS

            As of November 26, 2001, the undersigned, ALEXANDER'S, INC., a
Delaware corporation ("Guarantor 1") is a guarantor under that certain Guaranty
("Guaranty") dated as of May 31, 2001; and ALEXANDER'S KINGS PLAZA, LLC,
ALEXANDER'S OF KINGS, LLC, and KINGS PARKING, LLC, each a Delaware limited
liability company (collectively, "Guarantor 2"), and Guarantor 1 are all parties
to that certain Environmental Indemnity Agreement ("Environmental Agreement")
dated as of May 31, 2001, and Guarantor 1 and Guarantor 2 (collectively,
"Guarantors") do hereby:

      (i) Consent to and acknowledge the execution and delivery of the Note
      Modification and Severance Agreement made by Borrower and Lender on the
      date hereof (the "Agreement") and acknowledge and agree that the Agreement
      does not and shall not impair, reduce or adversely affect the obligations
      of Guarantor 1 under the Guaranty or the obligations of the Guarantors
      under the Environmental Agreement.

      (ii) Warrant and represent that there are no defenses, offsets or
      counterclaims with respect to Guarantor 1's obligations under the Guaranty
      or the Guarantors' obligations under the Environmental Agreement.

      (iii) Consent to and acknowledge that the obligations contained in the
      Guaranty and the Environmental Agreement, as applicable, are continuing
      and in full force and effect.

This Consent and Reaffirmation of Instruments is for convenience only and shall
not be construed as a requirement of law.

          [The balance of this page has been intentionally left blank]
<PAGE>
            The party hereto has caused this Consent and Reaffirmation of
Instruments to be duly executed by their duly authorized representative, as of
the day and year first above written.

                                       GUARANTOR 1:

                                       ALEXANDER'S, INC.,
                                          a Delaware Corporation

                                       By:     /s/ Joseph Macnow
                                          -------------------------------
                                          Name: Joseph Macnow
                                          Title: Executive Vice President
<PAGE>
            The parties hereto have caused this Consent and Reaffirmation of
Instruments to be duly executed by their duly authorized representatives, except
with respect to any terms hereof which pertain solely and only to the Guaranty,
as of the day and year first above written.

                                       GUARANTOR 2:

                                       ALEXANDER'S KINGS PLAZA, LLC,
                                          a Delaware limited liability company

                                       By:       /s/ Joseph Macnow
                                          -------------------------------------
                                          Name:  Joseph Macnow
                                          Title: Executive Vice President

                                       ALEXANDER'S OF KINGS, LLC,
                                          a Delaware limited liability company

                                       By:       /s/ Joseph Macnow
                                          -------------------------------------
                                          Name:  Joseph Macnow
                                          Title: Executive Vice President

                                       KINGS PARKING, LLC,
                                          a Delaware limited liability company

                                       By:       /s/ Joseph Macnow
                                          -------------------------------------
                                          Name:  Joseph Macnow
                                          Title: Executive Vice President<PAGE>
                                                             Exhibit 10(v)(c)(1)

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

                                USD 68,000,000.00

                                 LOAN AGREEMENT

                                     between

                               ALX of PARAMUS LLC

                                       as

                                    Borrower

                                      and

                         SVENSKA HANDELSBANKEN AB (publ)

                                       as

                                     Lender

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

                           Dated as of October 2, 2001

                            -------------------------
<PAGE>
                                 LOAN AGREEMENT

                                Table of Contents

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>

1.  Definitions .........................................................    5

2.  The Loan ............................................................    9

    2.1   Agreement to Lend .............................................    9
    2.2   Purpose of Loan ...............................................    9
    2.3   Method of Disbursement ........................................    9
    2.4   Interest ......................................................   10
    2.5   Election of Applicable Rate ...................................   10
    2.6   Repayment of the Loan .........................................   11
    2.7   Payment Procedures ............................................   11
    2.8   Prepayment of Loan ............................................   12
    2.9   Loan Account ..................................................   12

3.  Funding and Yield Protection ........................................   13

    3.1   Substitute Interest Rate ......................................   13
    3.2   Increased Costs ...............................................   13
    3.3   Reserves ......................................................   14
    3.4   Capital Adequacy ..............................................   15
    3.5   Illegality ....................................................   15
    3.6   Funding Losses ................................................   16

4.  Expenses ............................................................   16

5.  Representations and Warranties ......................................   17

    5.1   Organization of Borrower ......................................   17
    5.2   Power and Authority ...........................................   17
    5.3   Authorization of Borrowing ....................................   17
    5.4   Agreement Binding .............................................   17
    5.5   Compliance with Law ...........................................   18
    5.6   Consents ......................................................   18
    5.7   Litigation ....................................................   18
    5.8   Other Obligations .............................................   18
    5.9   Title to Property .............................................   18
    5.10  Special Purpose Entity Representation .........................   19

6.  Covenants ...........................................................   25
</TABLE>

                                       2
<PAGE>
<TABLE>
<S>                                                                        <C>
    6.1   Inspection; Environmental Status ..............................   25
    6.2   Notice ........................................................   25
    6.3   Taxes .........................................................   26
    6.4   Other Obligations .............................................   26
    6.5   Additional Indebtedness .......................................   26
    6.6   Fundamental Changes ...........................................   26
    6.7   Net Worth .....................................................   27
    6.8   Lease and Sublease Covenants of Property ......................   27
    6.9   Encumbrances ..................................................   28
    6.10  Continuing Special Purpose Entity
          Representation ................................................   28
    6.11  Certain Proceeds ..............................................   28
    6.12  Escrow ........................................................   29

7.  Conditions of Loan Advance ..........................................   29

8.  Security ............................................................   31

    8.1   Delivery of Security ..........................................   31
    8.2   Registration ..................................................   32
    8.3   After-Acquired Property and Further
          Assurances ....................................................   32

9.  Events of Default ...................................................   33

    9.1   Events of Default .............................................   36
    9.2   Consequence of Default ........................................   36
    9.3   Remedies Cumulative and Waivers ...............................   37
    9.4   Limited Recourse Obligations ..................................   38

10. Miscellaneous .......................................................   38

    10.1  USD Transaction ...............................................   38
    10.2  Entire Agreement ..............................................   39
    10.3  Waiver; Cumulative Rights .....................................   39
    10.4  Binding Effect ................................................   39
    10.5  Governing Law .................................................   39
    10.6  Submission to Jurisdiction ....................................   39
    10.7  Notices .......................................................   40
    10.8  Severability ..................................................   42
    10.9  Counterparts ..................................................   42
    10.10 Time of the Essence ...........................................   42
    10.11 Further Assurances ............................................   42
</TABLE>

                                       3
<PAGE>
                                    EXHIBITS

<TABLE>
<S>                                                                   <C>
    Exhibit A - Assignment of Leases and Rents.....................   44

    Exhibit B - Form of Environmental Indemnity Agreement..........   45

    Exhibit C - Schedule of Permitted Liens and Encumbrances.......   46

    Exhibit D - Form of Fee Mortgage...............................   47

    Exhibit E - Limited Recourse Promissory Note...................   48

    Exhibit F - Notice of Borrowing................................   50

    Exhibit G - Escrow Instructions................................   51

    Exhibit H - Proposed Subtenant Locations.......................   52
</TABLE>

                                       4
<PAGE>
                                 LOAN AGREEMENT

         LOAN AGREEMENT (the "Agreement") dated as of the 2nd day of October,
2001 by and between ALX of Paramus LLC, a limited liability company, organized
under the laws of the State of Delaware, with its executive offices located at
210 Route 4 East, Paramus, New Jersey 07652 (the "Borrower") and SVENSKA
HANDELSBANKEN AB (publ), a banking corporation organized under the laws of the
Kingdom of Sweden, including any branch, agency or other office thereof located
at 153 East 53rd Street, 37th Floor, New York, New York 10022 (the "Bank").

1. Definitions.

         When used herein, the following terms shall have the meanings set forth
below:

         "Applicable Rate" means the LIBOR Rate or the Fixed Rate at which
interest shall accrue on the Loan, such Applicable Rate to be elected by the
Borrower pursuant to Section 2.5 hereof.

         "Assignment" means the Assignment of Leases and Rents dated as of the
date hereof, pursuant to which the Borrower assigns leases and rents in respect
of the Property (including the Ground Lease and any sublease, and rents under
any thereof, and the Guaranty) to the Bank as part of the Security, which shall
be in the form attached hereto as Exhibit A.

         "Banking Day" means a day, other than a Saturday or Sunday, on which
banks are open for business in New York City, New York.

         "Drawdown Date" means the date on which the Loan shall be advanced by
the Bank, which shall be not later than thirty (30) days after the date of this
Agreement.

                                       5
<PAGE>
         "Escrow Agent" means the escrow agent designated by the Bank as such
pursuant to the Escrow Instructions.

         "Escrow Instructions" means the Escrow Instructions between and among
the Borrower, the Ground Lessee, the Bank and the Escrow Agent, which shall be
in the form of Exhibit G hereto.
         "Event of Default" shall have the meaning set forth in Section 9.1.

         "Fee Mortgage" means the Mortgage, Security Agreement and Fixture
Financing Statement dated as of the date hereof from the Borrower to the Bank
pursuant to which the Borrower grants to the Bank a first priority security
interest in the Property to secure repayment of the Loan and as further provided
therein, subject to no liens or encumbrances except as set forth on Exhibit C
annexed hereto, which Fee Mortgage shall be in the form attached hereto as
Exhibit D.

         "Fixed Rate" means the per annum interest rate equal to (i) the Bank's
cost of funding for the relevant Interest Period plus (ii) eight-tenths of one
percent (.8%) per annum, offered by the Bank and accepted by the Borrower
pursuant to Section 2.5 hereof, not later than 11:00 A.M. New York City time on
the date of commencement of the relevant Interest Period.

         "Ground Lease" means the Ground Lease Agreement dated as of October 4,
2001 between Ground Lessee and the Borrower pursuant to which the Borrower shall
lease the Property to the Ground Lessee.

         "Ground Lessee" means IKEA Property, Inc., a corporation organized
under the laws of the State of Delaware, which is the lessee of the Property
under the Ground Lease.

                                       6
<PAGE>
         "Guarantor" means IKEA Holding US, Inc., a corporation organized under
the laws of the State of Delaware, which owns, directly or indirectly, all of
the capital shares of the Ground Lessee.

         "Guaranty" means the Guaranty Agreement dated as of October 4, 2001
from the Guarantor to the Borrower, pursuant to which the Guarantor guaranties
the Ground Lessee's obligations under the Ground Lease.

         "Indemnity Agreement" means the Environmental Indemnity Agreement dated
as of the date hereof pursuant to which the Borrower agrees to indemnify the
Bank with respect to hazardous and toxic substances in the form attached hereto
as Exhibit B.

         "Inducement Certificate" shall mean a certificate dated the date
hereof, setting forth certain representations to the Bank by the transferor of
the Property to the Borrower, with respect to the financial condition, business,
assets and liabilities, and other relevant information as may be requested by
the Bank concerning such transferor and its affiliates and the circumstances of
such transfer.

 "Interest Payment Date" means the earlier of (i) the last day of each
Interest Period or (ii) the date one month following the Drawdown Date and each
date one month following the previous Interest Payment Date.

         "Interest Period" means the period commencing on the Drawdown Date or
the last day of the Interest Period then ending and (i) if the Borrower has
elected that the Applicable Rate shall be an LIBOR Rate, having a duration of
one, two, three, six or twelve months and (ii) if the Borrower has elected that
the Applicable Rate shall be a Fixed Rate, having a duration of over 12 months
up to 120 months, as the Borrower shall designate pursuant to Section 2.5
hereof. Notwithstanding the foregoing, (a) the last Interest Period commencing
prior to the Maturity

                                       7
<PAGE>
Date shall end on the Maturity Date, (b) any Interest Period that would
otherwise end on a day that is not a Banking Day shall be extended to the next
succeeding Banking Day unless that Banking Day falls in another calendar month
in which case the Interest Period shall end on the first preceding Banking Day,
(c) any Interest Period that begins on the last Banking 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 also end on the last Banking Day
of a calendar month, and (d) notwithstanding anything in this definition to the
contrary, "Interest Period" shall also mean with respect to any amounts in
default, such periods as the Bank shall elect.

         "LIBOR" means the per annum interest rate at which Dollar deposits in
the amount of the Loan outstanding as of the commencement of the relevant
Interest Period are offered for such Interest Period as stated on Telerate page
3750 fixed at approximately 11:00 A.M. London time on the date three Banking
Days prior to the commencement of the relevant Interest Period.

         "LIBOR Rate" means the rate per annum equal to (i) one-, two-, three-,
six- or twelve-month LIBOR, as the Borrower may elect pursuant to Section 2.5
hereof, plus (ii) eight-tenths of one percent (.8 %) per annum.

         "Loan" means the aggregate principal amount of USD 68,000,000 advanced
by the Bank to the Borrower hereunder or, where the context may require, the
amount thereof then outstanding.

         "Loan Documents" means this Agreement the Note, the Security and any
certificates or documents given in connection with the transactions contemplated
hereby or thereby.

         "Maturity Date" means the date which is ten (10) years after the
Drawdown Date.

                                       8
<PAGE>
         "Net Worth" means the excess of the Borrower's assets over its
liabilities determined as of the end of each fiscal year in accordance with
United States generally accepted accounting principles consistently applied.

         "Note" means the promissory note of the Borrower evidencing the Loan in
the form attached hereto as Exhibit E.

         "Property" means the lands and any improvements and fixtures thereon,
in the town of Paramus, New Jersey (comprising approximately 30 acres) described
on Exhibit A to the Fee Mortgage, on which the Ground Lessee intends to develop
a retail store facility.

         "Security" has the meaning set forth in Section 8.1.

         "USD" means dollars in the lawful money of the United States of
America.

2. The Loan.

         2.1      AGREEMENT TO LEND. Subject to the terms and conditions of this
Agreement, the Bank agrees to advance the Loan to the Borrower as provided
below.

         2.2      PURPOSE OF LOAN. The Borrower shall use the proceeds of the
                  Loan to refinance indebtedness secured by the Property in
connection with transfer of the Property to the Borrower to facilitate the
Ground Lease and for general business purposes of the Borrower.

         2.3      METHOD OF DISBURSEMENT. The Borrower shall borrow the Loan in
one advance on the Drawdown Date, provided that the Borrower shall have given
the Bank Notice of Borrowing in the form of Exhibit F hereto setting forth the
proposed Drawdown Date not later than 11:00 a.m., New York City time, three
Banking Days prior thereto. The Loan shall be advanced in immediately available
funds to such account as the Borrower shall specify by notice given to the Bank
prior to the Drawdown Date.

                                       9
<PAGE>
         2.4      INTEREST.

                  (a)      The Borrower agrees to pay to the Bank interest on
         the Loan outstanding from time to time at a rate per annum (subject to
         Section 2.4(b)) equal to the Applicable Rate. Accrued interest shall be
         payable in arrears on each Interest Payment Date.

                  (b)      Notwithstanding anything to the contrary contained
         herein, upon the occurrence of an Event of Default, the Borrower shall,
         upon notice by the Bank (effective upon receipt) pay on demand default
         interest on the Loan outstanding, from the date of such default to the
         date the default is cured by the Borrower, at a rate which is two
         percent (2%) above the Applicable Rate (the "Default Interest Rate").

                  (c)      All interest hereunder shall accrue on the basis of a
         360-day year and actual days elapsed and shall accrue from and
         including the first day of an Interest Period to but not including the
         last day of an Interest Period.
                  (d) The yearly rate of interest which is equivalent to the
         Applicable Rate in effect from time to time is the product of:

                           (i)      the Applicable Rate then in effect (which is
                  based upon a 360-day year); and

                           (ii)     the number of days in the current calendar
                  year (365 or 366, as the case may be) divided by 360.

         2.5      ELECTION OF APPLICABLE RATE. Unless hereinafter specified in
this Section 2.5, prior to the Drawdown Date the Borrower, by notice to the Bank
consented to by the Ground Lessee, shall elect an LIBOR Rate or a Fixed Rate and
specify the duration of the first Interest Period (that is, (i) in the case of
an LIBOR Rate, one, two, three, six or twelve months, or (ii) in the case of a
Fixed Rate, a duration of over 12 months up to 120 months). Thereafter, on the
date (i)

                                       10
<PAGE>
three Banking Days prior to the end of each Interest Period (in the case of a
LIBOR Rate), or (ii) which is the last day of each Interest Period (in the case
of a Fixed Rate), the Borrower, with the consent of the Ground Lessee, shall
specify the duration of the next Interest Period (that is, (i) in the case of a
LIBOR Rate, one, two, three, six or twelve months, or (ii) in the case of a
Fixed Rate, a duration of over 12 months up to 120 months). The Interest Period
elected shall not extend beyond the Maturity Date.

         2.6      REPAYMENT OF THE LOAN. The Borrower shall repay the Loan in
one installment of USD 68,000,000 on the Maturity Date. All outstanding
principal amount of the Loan, together with accrued but unpaid interest, fees,
loan funding or breakage losses, and expenses owing with respect to the Loan,
shall be finally due and payable on the Maturity Date.

         2.7      PAYMENT PROCEDURES.

                  (a) All sums payable to the Bank hereunder or to the Bank
under any document contemplated hereby, shall be payable in New York, New York
in USD by wire transfer in immediately available funds without set-off or
counterclaim not later than 1:00 p.m. New York time on the day in question to
the account of the Bank at such place as the Bank may specify from time to time
by written notice to the Borrower and the Escrow Agent.

                  (b) If any payment of principal or interest would otherwise be
payable on a day which is not a Banking Day, such payment shall be payable on
the next succeeding Banking Day, and such extension shall be included in the
computation of interest.

                  (c) If at any time the Borrower is required by law to make any
deduction or withholding in respect of any taxes, duties or other charges from
any payment due hereunder, the sum due from the Borrower in respect of such
payment shall be increased to the extent necessary to ensure that, after the
making of such deduction or withholding, the Bank receives and retains a

                                       11
<PAGE>
net sum equal to the sum that it would have received had no such deduction or
withholding been required to be made. The Borrower shall promptly deliver to the
Bank receipts, certificates or other proof evidencing the amounts (if any) paid
or payable in respect of such deduction or withholding.

                  (d) Payments to the Bank pursuant to this Agreement shall be
made by the Escrow Agent in accordance with the Escrow Instructions to the
extent of funds available thereunder for such payments. Any deficiency in such
available funds shall be paid to the Bank directly by the Borrower.

         2.8      PREPAYMENT OF LOAN. The Borrower may at its option prepay the
Loan, in whole, at any time, together with accrued interest thereon to the date
of prepayment, subject to the following: (a) the Borrower shall give the Bank
irrevocable notice of such prepayment (effective on receipt) not less than three
Banking Days prior thereto; (b) amounts prepaid may not be reborrowed; and (c)
the Borrower shall pay to the Bank together with such prepayment an amount equal
to all funding losses and costs incurred by the Bank as a result of the
prepayment as such funding losses and costs shall be determined by the Bank and
notified to the Borrower. The Bank, upon becoming entitled to be paid funding
losses and costs shall deliver a certificate to the Borrower certifying as to
such amounts and, in the absence of manifest error, such certificate shall be
conclusive and binding for all purposes.

         2.9      LOAN ACCOUNT. The Bank shall open and maintain on its books a
loan account in the Borrower's name which shows the advance of the Loan,
repayments, the computation and payment of interest, and other amounts due and
sums paid hereunder. Such loan account shall be conclusive and binding on the
Borrower as to the amount at any time due from the Borrower, absent manifest
error.

                                       12
<PAGE>
3. Funding and Yield Protection.

         3.1      SUBSTITUTE INTEREST RATE. If on or before the date on which
the LIBOR Rate is to be determined for any Interest Period, the LIBOR Rate for
periods equal to the relevant Interest Period are not being offered to the Bank
in New York or the LIBOR Rate does not accurately reflect the Bank's cost for
making the loan for any reason whatsoever, or if the Borrower has failed to
elect the Applicable Rate for any reason, then (i) the Bank shall promptly give
notice of such determination to the Borrower and (ii) the Bank's obligation to
make the Loan at the LIBOR Rate shall be suspended until the Bank gives notice
to the Borrower that the circumstances giving rise to such determination no
longer exist. The parties shall immediately thereafter enter into negotiations
in good faith with a view to agreeing on an alternate mutually acceptable basis
of determining the interest rate to be applicable to the Loan. If at the expiry
of thirty (30) days from the date of such notice no alternate basis has been
agreed upon, then the Bank shall specify an alternate interest rate and interest
period and set forth the terms thereof in a notice to the Borrower in which the
Bank shall certify that in its reasonable judgment such terms generate for the
Bank a yield approximately equivalent to that provided for in this Agreement
(which terms shall thereupon be conclusive and binding, absent manifest error,
on the Borrower retroactively from the beginning of the period for which such
notice was given). The foregoing procedure shall be repeated if the
circumstances that made it necessary continue beyond the interest period set in
accordance with such procedure.

         3.2      INCREASED COSTS. If any change in any law, regulation or
treaty, or in the interpretation or administration thereof by any United States,
Swedish or other governmental authority or central bank or comparable agency
charged with the interpretation or administration

                                       13
<PAGE>
thereof, or compliance by the Bank with any request or directive (whether or not
having the force of law) of any authority charged with the interpretation or
administration thereof (a "Change of Law"), shall in the sole determination of
the Bank:

                  (a) subject the Bank to any tax, levy or other governmental
charge with respect to this Agreement, the Escrow Instructions, the Loan or its
obligation to make the Loan or change the basis of taxation of payments by the
Borrower to the Bank in respect of this Agreement or the Loan (other than any
tax on or measured by the overall net income of the Bank); or

                  (b) impose, modify or hold applicable any reserve, special
deposit or similar requirement against assets of, deposits or other liabilities
of or for the account of, or loans or commitments by, the Bank with respect to
the Loan; or

                  (c) impose on the Bank any other condition with respect to
this Agreement, the Escrow Instructions or the Loan or its obligation to make
the Loan; and the result of any of the foregoing is to increase the cost to the
Bank of making or maintaining the Loan or to reduce the amount of any sum
received or receivable by the Bank under this Agreement, the Escrow
Instructions, or the Note, then the Bank shall notify the Borrower of such
increased cost or reduced amounts and the Borrower shall pay to the Bank on
demand from time to time such additional amounts as may be necessary to
reimburse the Bank for such increased cost or to compensate the Bank for such
reduced amounts.

         3.3      RESERVES. If at any time by reason of Regulation D of the
Board of Governors of the Federal Reserve System (including any successor
thereto), as revised from time to time, the Bank is required in its judgment to
maintain reserves with respect to LIBOR Rate liabilities, then the Bank shall
notify the Borrower of such requirement and upon demand by the Bank, the
Borrower shall immediately pay to the Bank, from time to time as specified by
the Bank,

                                       14
<PAGE>
amounts which shall be sufficient to compensate the Bank for the cost of
maintaining reserves against the deposits or other funds obtained by the Bank to
make or maintain the Loan.

         3.4      CAPITAL ADEQUACY. If in the Bank's judgment any Change of Law
regarding capital adequacy has the effect of reducing the rate of return on the
Bank's capital as a consequence of its commitment hereunder or its making of the
Loan pursuant to this Agreement to a level below that which the Bank could have
achieved but for such Change of Law (taking into consideration the Bank's
policies with respect to capital adequacy) by an amount deemed by the Bank to be
material, then the Bank shall notify the Borrower of such change of law and upon
demand by the Bank, the Borrower shall pay to the Bank, from time to time as
specified by the Bank, such additional amount or amounts which shall be
sufficient to compensate Bank for such reduction in respect of its commitment to
the Borrower hereunder, or its advance of the Loan.

         3.5      ILLEGALITY. Notwithstanding any other provision of this
Agreement, if the Bank determines that any Change of Law makes it unlawful to
fund the Loan at an Applicable Rate, or otherwise to make or maintain the Loan
or to receive any amount payable under this Agreement, or the Note, then (i) the
Bank shall give notice of such determination to the Borrower, and (ii) the
Borrower shall either convert the Loan to another Applicable Rate selected by
the Bank (as to which the Bank shall certify that in its reasonable judgment
such rate generates for the Bank a yield approximately equivalent to that
provided for in this Agreement and which rate shall thereupon be conclusive and
binding, absent manifest error, on the Borrower retroactively from the beginning
of the period for which such notice was given), or prepay the Loan in full,
together with interest accrued to the date of prepayment, on the last day of the
current Interest Period or, if the Bank determines that such law, regulation,
treaty or change requires such conversion or prepayment prior to such date, on
demand of the Bank.

                                       15
<PAGE>
         3.6      FUNDING LOSSES. Except as permitted under Section 2.7(b)
hereof, if the Borrower (i) fails to fulfill the conditions set forth in Section
7 by the times specified for their fulfillment; (ii) fails to pay as and when
due any payment of principal or interest on the Loan, or (iii) makes any payment
of principal on the Loan other than on the last day of an Interest Period
(including a payment by reason of the Bank's receipt of casualty insurance
proceeds, a condemnation award or the sale of the Property pursuant to the
Ground Lessee's purchase option contained in the Ground Lease prior to the
Maturity Date, or otherwise), then the Borrower shall pay the Bank the amount of
any losses, costs and expenses reasonably incurred as a consequence thereof,
including any loss of margin or expenses incurred in liquidating or re-employing
deposits or other funds acquired to make the Loan.

4. Expenses.

         The Borrower shall, whether or not the Loan is advanced, reimburse the
Bank on demand for all reasonable costs and expenses incurred by the Bank in
connection with its negotiation, preparation and execution of this Agreement,
the Security and the other documentation hereunder (including any amendments,
waivers or consents required during the term hereof), including without
limitation, the reasonable fees and expenses of counsel for the Bank and of
other professional advisers and all out-of-pocket costs, incurred in the
administration and enforcement of and preservation of its rights under this
Agreement and the Security and in the determination of whether there has
occurred an Event of Default or an event that, with the giving of notice or the
passing of time, or both, would constitute an Event of Default. Such expenses
shall be reimbursed whether or not the Bank gives notice of such Event of
Default or event or demands acceleration of the Loan or takes other action to
enforce the provisions of this

                                       16
<PAGE>
Agreement. All such expenses shall bear interest at the Applicable Rate from the
date of invoicing thereof by the Bank to the Borrower and until paid by the
Borrower.

5. Representations and Warranties.

         The Borrower hereby represents and warrants to the Bank as follows:

         5.1      ORGANIZATION OF BORROWER. The Borrower is a limited liability
company duly organized and validly existing under the laws of its jurisdiction
of formation.

         5.2      POWER AND AUTHORITY. The Borrower has full legal right, power
and authority to carry on its present business, to own its property and assets
and to perform its obligations hereunder, under the Escrow Instructions and
under the Security, and is licensed, registered and qualified to own such
property and carry on its business.

         5.3      AUTHORIZATION OF BORROWING. All appropriate and necessary
action has been taken by the Borrower to authorize the execution and delivery of
this Agreement, the Escrow Instructions and the Security and to authorize the
performance and observance of the terms hereof and thereof.

         5.4      AGREEMENTS BINDING. Assuming due execution and delivery by the
parties thereto other than the Borrower, this Agreement, the Escrow Instructions
and the Note constitute, and the Security when executed and delivered pursuant
hereto will constitute, the legal, valid and binding obligations of the
Borrower, enforceable in accordance with their respective terms. The execution,
delivery and performance of this Agreement, the Note, the Escrow Instructions
and the Security will not result in a violation of the constituent governing
instruments of the Borrower or any resolutions adopted by the members of the
Borrower, violate any provision of law or other governmental directive (assuming
that no such violation will occur as a result of the

                                       17
<PAGE>
status or capacity or any activity of the Bank), or conflict with or result in
the breach of any provision of any agreement to which the Borrower is a party or
by which it or any of its property or assets is bound, and will not constitute a
default or an event that with the giving of notice or the passing of time, or
both, would constitute a default under any such agreement, or require any
approval or consent of any governmental authority or agency having jurisdiction
except such as has already been obtained.

         5.5      COMPLIANCE WITH LAW. The Borrower is conducting its business
and operations in all material respects in compliance with all applicable laws
and directives of governmental authorities having the force of law. The Borrower
has filed all tax returns required to be filed and has paid all taxes due in
respect of the ownership of its assets, or the conduct of its operations except
to the extent that the payment of such taxes is being contested in good faith by
the Borrower, adequate reserves having been provided for the payment thereof.

         5.6      CONSENTS. All licenses, consents and approvals required from
and all registrations and filings required to be made with any governmental or
other public body or authority to authorize the performance by the Borrower of
its obligations under this Agreement, the Note, the Escrow Instructions and the
Security have been obtained and effected.

         5.7      LITIGATION. There are no legal actions or arbitration or other
proceedings pending or, to the best of the Borrower's knowledge, threatened
against the Borrower.

         5.8      OTHER OBLIGATIONS. The Borrower is not in default in any
material respect in the performance, observance or fulfillment of any
obligation, covenant or condition in any agreement or instrument to which it is
a party or by which it is bound.

         5.9      TITLE TO PROPERTY. The Borrower has, and when it executes and
delivers the Security will have, good title to the Property, free and clear of
any mortgage, charge, lien,

                                       18
<PAGE>
security interest or other encumbrance, whether fixed or floating (other than
the liens and encumbrances described on Exhibit C annexed hereto), on any such
assets and no person has any agreement or right to acquire an interest in such
assets other than as provided herein.

         5.10     SPECIAL PURPOSE ENTITY REPRESENTATIONS. The Borrower hereby
further represents to the Bank (which representations shall survive until one
year after the earlier of (x) the end of the term of the Agreement or (y)
repayment of the Loan and all amounts due under this Agreement), as follows:

                  (a) the Borrower has not and will not change its
organizational documents in any material term or manner, or in a manner which
adversely affects the Borrower's existence as a single purpose entity;

                  (b) to the fullest extent permitted by law, the Borrower has
not and will not enter into any transaction of merger or consolidation, or
liquidate or dissolve itself (or suffer any liquidation or dissolution), or
acquire by purchase or otherwise all or substantially all the business or assets
of, or any stock or other evidence of beneficial ownership of, any entity;

                  (c) except as provided for in the Loan Documents, the Borrower
has not and will not guarantee, pledge its assets for the benefit of, or
otherwise become liable on or in connection with any obligation of any other
entity or person;

                  (d) the Borrower has and will not own any material asset other
than (i) the Property and (ii) incidental personal property necessary for the
operation of the Property, and the Borrower shall not form, acquire or hold any
subsidiary;

                  (e) the Borrower has not engaged, is not engaged and will not
engage, directly or indirectly, in any business other than the ownership,
management and operation and maintenance of the Property;

                                       19
<PAGE>
                  (f) the Borrower has not and will not enter into any contract
or agreement with any affiliate (singularly, "Affiliate" and collectively,
"Affiliates") of the Borrower, including the Member (as defined in the
Borrower's LLC agreement (the "LLC Agreement") as of the date hereof, except
upon terms and conditions that are intrinsically fair, commercially reasonable
and substantially similar to those that would be available on an arms-length
basis with third parties other than any Affiliates;

                  (g) the Borrower has not incurred and will not incur any debt,
secured or unsecured, direct or contingent (including guaranteeing any
obligation), other than (i) the Loan, (ii) trade payables incurred in the
ordinary course of its respective business of owning and operating the Property
and the routine administration of the Borrower, which do not in the aggregate
exceed $100,000, and which are not more than 60 days past the date incurred and
which amounts are normal and reasonable under the circumstances, provided such
liabilities are not evidenced by a note and are paid when due, and (iii) such
other liabilities that may be permitted pursuant to the Fee Mortgage, and no
debt other than the Loan may be secured (whether senior, subordinate or pari
passu) by the Property;

                  (h) the Borrower has not made and will not make any loans or
advances to any entity or person (including any Affiliates);

                  (i) the Borrower is currently and in the future shall remain
solvent and shall pay its debts from its own assets as the same shall become due
(to the extent it has assets available for such purpose);

                  (j) the Borrower has done or caused to be done and will do all
things necessary to preserve its limited liability company existence and will
observe in all material respects all formalities applicable to it;

                                       20
<PAGE>
                  (k) the Borrower will conduct and operate its business as
presently conducted and operated;

                  (l) the Borrower has and will maintain its financial
statements, books and records and bank accounts, separate from those of its
Affiliates or any other person or entity; the Borrower's assets and liabilities
have not and shall not be listed as assets and liabilities on the financial
statements of any other entity, except that the assets and liabilities of the
Borrower may be listed on the consolidated financial statements of Alexander's,
Inc. and its consolidated subsidiaries, and except as required by generally
accepted accounting principles; and the Borrower shall prepare unaudited
quarterly and annual financial statements which shall substantially comply with
generally accepted accounting principles;

                  (m) the Borrower is and will be, and at all times will hold
itself out to the public as, a legal entity separate and distinct from any other
entity (including any Affiliates); the Borrower shall not identify itself as a
division of any other entity or person and shall correct any known
misunderstanding regarding its separate identity; and the Borrower shall conduct
business in its own name;

                  (n) the Borrower will maintain sufficient employees (which may
be no employees) and currently maintains and intends to maintain in the future
adequate capital for the normal obligations reasonably foreseeable in a business
of its size and character and in light of its contemplated respective business
operations;

                  (o) to the fullest extent permitted by law, the Borrower will
not seek its dissolution or winding up, in whole or in part;

                  (p) the Borrower will not commingle its funds and other assets
with those of any Affiliate or any other entity or person;

                                       21
<PAGE>
                  (q) the Borrower has and will maintain its assets in such a
manner that it is not prohibitively costly or difficult to segregate, ascertain
or identify its individual assets from those of any Affiliate or any other
entity or person;

                  (r) the Borrower does not and will not hold itself out to be
responsible for the debts or obligations of any Affiliate or any other entity or
person except to the extent required by the Loan Documents;

                  (s) the Borrower will not do any act which would make it
impossible for it to carry on its ordinary business;

                  (t) the Borrower will establish and maintain its office
through which its business will be conducted separate and apart from those of
its Affiliates or shall allocate fairly and reasonably any overhead and expense
for shared office space with its Affiliates;

                  (u) the Borrower will pay any of its liabilities out of its
own funds, including any salaries of its employees, not out of funds of any
Affiliate;

                  (v) the Borrower will use stationery, invoices, and checks
separate from its Affiliates;

                  (w) the Borrower will not possess or assign the Property or
incidental personal property necessary for the operation of the Property for
other than a business or company purpose;

                  (x) the Borrower will not sell, encumber or otherwise dispose
of all or substantially all of the Property or incidental personal property
necessary for the operation of the Property, except as permitted by the Fee
Mortgage;

                  (y) the Borrower will not hold title to its assets (including
the Property) other than in its name;

                                       22
<PAGE>
                  (z) the Borrower will at all times have at least one
Independent Director (as defined in the LLC Agreement dated as of August 24,
2001); in the event of death, incapacity, resignation or removal of an
Independent Director, the Member shall immediately replace such Independent
Director with another Independent Director; and no action of the Borrower which
requires the consent of the Independent Director as provided in the LLC
Agreement shall be taken in the absence of an affirmative vote of the
Independent Director;

                  (aa) the Borrower will not acquire the obligations or
securities of any Affiliates, including the Member;

                  (bb) the Borrower will not, without the unanimous consent of
its directors, including the affirmative vote of the Independent Director,
institute proceedings to be adjudicated bankrupt or insolvent; or consent to the
institution of bankruptcy or insolvency proceedings against it; or file a
petition seeking, or consent to, reorganization or relief under any applicable
federal or state law relating to bankruptcy; or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) for a substantial part of its property; or make any assignment for the
benefit of its creditors; or admit in writing its inability to pay its
respective debts generally as they become due; or take any action in furtherance
of any such action;

                  (cc) the LLC Agreement (Section 5(c)) provides that upon the
occurrence of any event that causes the Member to cease to be a member of the
Borrower (with certain limited exceptions) the Independent Director shall,
without any action of any person and simultaneously with the Member ceasing to
be a member of the Borrower, automatically be admitted to the Borrower as a
Special Member (as defined in the LLC Agreement dated as of August 24, 2001) and
shall continue the Borrower without dissolution; the LLC Agreement also provides
that no

                                       23
<PAGE>
Special Member may resign from the Borrower or transfer its rights as a Special
Member unless (i) a successor Special Member has been admitted to the Borrower
by executing a counterpart to the LLC Agreement, and (ii) such successor has
also accepted its appointment as Independent Director pursuant to Section 10 of
the LLC Agreement, provided, however, a Special Member shall automatically cease
to be a member of the Borrower upon the admission to the Borrower of a
substitute Special Member;

                  (dd) the membership interests in Borrower are non-transferable
and not subject to any pledge;

                  (ee) the provisions of this Section have been incorporated
into the Borrower's constituent governing instruments, with requisite
authorization by the Borrower's sole Member for the same, and require unanimity
action of the Independent Director for any bankruptcy, dissolution, liquidation,
merger, consolidation or change from the provisions set forth in this Section
5.10;

                  (ff) the Borrower has no contracts other than arms-length
agreements with unaffiliated providers of professional services and the
agreements contemplated by this Agreement, except for the following: a
Management and Development Agreement dated as of the 6th day of February, 1995,
between Alexander's, Inc. on behalf of various subsidiaries, and Vornado Realty
Trust, as Manager (as heretofore modified and amended, the "Management
Agreement") and a Real Estate Retention Agreement dated July 20, 1992 between
Vornado, Inc. and Keen Realty Consultants Inc., as consultants, and Alexander's,
Inc. and certain subsidiaries (as heretofore modified and amended, the "Agency
Agreement"); and

                  (gg) the Borrower has not co-mingled assets with any
Affiliates and shall not use any assets or Loan proceeds to pay or guaranty any
debts of its stockholder(s) or any affiliated

                                       24
<PAGE>
entity (provided that the foregoing shall not restrict the Borrower from
distributing Loan proceeds (as a distribution or loan) to its member or an
affiliated entity for such purposes).

6. Covenants.

         The Borrower hereby covenants to the Bank that, until the Loan and all
amounts payable hereunder are indefensibly repaid to the Bank, the Borrower
shall perform the following obligations or the following conditions shall remain
true and correct, as applicable:

         6.1      INSPECTION; ENVIRONMENTAL STATUS. The Borrower shall permit
the Bank and its representatives, upon notice to the Borrower, at all reasonable
times to inspect the Property, and the Borrower's activities, books of account
and records and shall cause its representatives, employees and accountants to
give their full cooperation and assistance in connection with any visits by or
financial conferences with the Bank or its representatives. The Borrower shall
cause the Property to be maintained free from hazardous substances and
environmental contaminants in accordance with the Ground Lease and the Indemnity
Agreement and shall provide, or cause to be provided, to the Bank from time to
time such information as the Bank may reasonably request (which may include
updated environmental inspections or surveys) with respect to the environmental
condition of the Property.

         6.2      NOTICE. The Borrower shall promptly give notice to the Bank of
(i) any dispute between the Borrower and any governmental authority with respect
to payment of taxes or any other matter if such dispute involves potential
liability to the Borrower of USD 100,000 or more; (ii) the occurrence of any
Event of Default or event that, with the giving of notice or the passing of
time, or both, would constitute an Event of Default hereunder; and/or (iii) the
occurrence of any default or breach or other event that, with the giving of
notice or the passing of time, or both,

                                       25
<PAGE>
would constitute an event of default or breach under any other agreement to
which the Borrower is a party and which could have a material adverse effect on
the Borrower's condition (financial or otherwise).

         6.3      TAXES. The Borrower shall pay and discharge, or cause to be
paid and discharged, all taxes and governmental charges upon it or against any
of its property or assets prior to the date after which penalties attach for
failure to pay, except to the extent that the Borrower, the Ground Lessee, any
subtenant of the Ground Lessee, or any mortgagee of any thereof, is contesting
in good faith its obligation to pay such taxes or charges, adequate reserves
having been set aside for the payment thereof. The Borrower shall make timely
filings of all tax returns and all state and other governmental reports required
to be filed or submitted under any applicable laws or regulations.

         6.4      OTHER OBLIGATIONS. The Borrower shall punctually pay and
perform all contractual obligations hereunder and pursuant to agreements to
which it is a party or by which it is bound at any time during the term of this
Agreement.

         6.5      ADDITIONAL INDEBTEDNESS. The Borrower shall not, without the
prior written consent of the Bank (which shall be given or withheld in the
Bank's sole discretion), create, incur, assume or otherwise become liable for
any indebtedness.

         6.6      FUNDAMENTAL CHANGES.

                  (a) Without the prior written consent of the Bank (which shall
be given or withheld in the Bank's sole discretion) the Borrower shall not merge
or consolidate with, or acquire any interest in, any other person or entity. The
Borrower shall not liquidate, wind-up or dissolve itself (whether voluntarily or
by operating of law), or institute any preceding for the foregoing, nor shall
either cease to do or terminate its business or operations. The Borrower

                                       26
<PAGE>
shall give the Bank not less than ninety (90) days prior written notice of any
change of the Borrower's corporate name, the location of its principal executive
offices, its jurisdiction of incorporation, or any amendment to its certificate
of incorporation or by-laws.

                  (b) The Borrower shall not convey, sell, assign, transfer,
pledge, lease, encumber, hypothecate or grant a security interest in or
otherwise dispose of the Property (except pursuant to the Ground Lessee's
purchase option pursuant to Section 46 of the Ground Lease), the Ground Lease or
rents thereunder, or any interest in any of the foregoing.

         6.7      NET WORTH. The Borrower shall maintain a positive Net Worth.

         6.8      LEASE AND SUBLEASE COVENANTS. Without the prior written
consent of the Bank (which may be granted or withheld in the Bank's sole
discretion, except as otherwise hereinafter provided), the Borrower shall not
consent to any sublease, assignment, amendment, modification or termination of
the Ground Lease. Any assignment of the Ground Lease by the Ground Lessee will
require the Bank's prior written consent. The Bank will not unreasonably
withhold its consent to subleases of the Property at fair market rents which
meet the criteria for subleases set forth in the Ground Lease, and, if such
consent is given, will (i) grant sublessees recognition and non-disturbance and
(ii) permit sublessee leasehold financing and recording of a mortgage securing
such subleasehold financing; provided that the Ground Lessee shall have provided
the Bank with (a) reasonably detailed information regarding the proposed
sublessee, (b) a term sheet which details the principal terms for the proposed
sublease, (c) financial statements for the proposed sublessee, (d) the location
of any sublease improvements on the Property, and (e) the form of the proposed
sublease; and provided, further, that the only grounds for withholding consent
by the Bank shall be a lack of long-term financial viability of the proposed
sublessee or a proposed use of the Property by the sublessee which is
environmentally sensitive. The Bank's

                                       27
<PAGE>
prior written approval shall be required as to the location of any improvements
on the Property by a sublessee to the extent the same differs from the Ground
Lessee's proposed subtenant locations attached as Exhibit H hereto and the Bank
shall not be required to consent to more than two such subleases of the Property
in effect at any one time. This provision is material inducement for the Bank
extending the Loan to the Borrower.

         6.9      ENCUMBRANCES. Except for the Fee Mortgage, the Ground Lease
and the Assignment, the Borrower shall not permit the Property, the Ground Lease
or the Ground Lease Rents to be subject to any liens, charge, encumbrance or
other security interest without the prior written consent of the Bank; provided
that the foregoing restrictions shall not apply to (i) liens for taxes,
assessments or other governmental charges or levies if the same shall not at the
time be delinquent; (ii) liens arising out of pledges or deposits under
workman's compensation laws, unemployment insurance, old age pensions, or social
security or retirement benefits or similar legislation; (iii) liens of
contractors, mechanics, materialmen, carriers, landlords and other similar
common law or statutory liens arising in the ordinary course of business; (iv)
mortgages to finance construction of improvements as described on Exhibit C to
this Agreement; and (v) sublease financing consented to by the Bank.

         6.10     CONTINUING SPECIAL PURPOSE ENTITY REPRESENTATIONS. The
Borrower shall take or refrain from taking, as the case may be, all such actions
as may be necessary so that the representations of the Borrower in Section 5.10
hereof shall continue to be true and correct for the period specified therein.

         6.11     CERTAIN PROCEEDS. Subject to the rights of sublessees and
subleasehold financings which have been approved by the Bank, the Borrower
shall, if required by the Bank, pay to the Bank, to be applied by the Bank to
prepay the Loan: (x) any condemnation award on the

                                       28
<PAGE>
Property used for Ground Lessee's purposes with respect to (i) 25% or more of
such portion of the Property or (ii) less than 25% of such portion of the
Property, unless the Ground Lessee shall demonstrate to the reasonable
satisfaction of the Bank that the Ground Lessee's use of the remaining Property
for Ground Lessee's intended use remains financially viable; (y) any casualty
insurance proceeds from destruction of 25% or more of the Ground Lessee's
Property improvements; and (z) any purchase price proceeds from the Ground
Lessee's exercise of its purchase option pursuant to Section 46 of the Ground
Lease (such payment in any case not to exceed the amounts due and payable
hereunder).

         6.12     ESCROW. The Borrower will take such action as on its part may
be required to maintain the Escrow Instructions in effect and to perform its
obligations thereunder.

7. Conditions of Loan Advance.

         The obligation of the Bank to advance the Loan is subject to the Bank's
prior receipt, in form and substance satisfactory to the Bank, of the following:

                  (a) Due execution and delivery by the appropriate parties
thereto of the Agreement, the Note, the Ground Lease, the Guaranty, the Escrow
Instructions, the Environmental Indemnity, the Security and the Inducement
Letter.

                  (b) Evidence of the authority of the persons executing this
Agreement, the Note, the Ground Lease, the Guaranty, the Escrow Instructions,
the Environmental Indemnity, the Security, the Inducement Certificate and the
other documents contemplated herein and therein, together with specimen
signatures of such persons.

                                       29
<PAGE>
                  (c) A certified copy of the constituent documents, each as
amended to date, and a certificate of good standing issued by the Secretary of
State of the jurisdiction of organization, for each of the Borrower, the Ground
Lessee and the Guarantor.

                  (d) Certified copies of all necessary resolutions of the
Members or Boards of Directors and stockholders, as the case may be, of each of
the Borrower, the Ground Lessee and the Guarantor, as the case may be, approving
the terms of this Agreement, the Ground Lease, the Guaranty and the other
Security and the transactions contemplated by this Agreement.

                  (e) A duly completed Notice of Borrowing substantially in the
form of Exhibit F from an authorized officer of the Borrower.

                  (f) The Security shall have been executed and delivered and
all filings or recordings necessary or desirable in connection therewith shall
have been made.

                  (g) Such opinions of counsel to the Borrower, the Ground
Lessee and the Guarantor as the Bank may request.

                  (h) Such evidence as the Bank may require of the Bank's first
priority security interest in the Property, the Ground Lease and rents under the
Ground Lease, and the Guaranty, in each case subject to no prior liens or
encumbrances other than those set forth on Exhibit C annexed hereto.

                  (i) The Bank's receipt of a current survey of the Property
showing only encroachments and easements as are satisfactory to the Bank.

                  (j) The Bank's receipt of an Environmental Indemnity Agreement
from Borrower to the Bank, which shall (a) be prepared by the Bank's legal
counsel, (b) be in form and substance satisfactory to the Bank and its legal
counsel, (c) be non-recourse to Borrower and its stockholders, directors,
officers and affiliates and (d) provide that any claim thereunder must be

                                       30
<PAGE>
brought within one year after (i) repayment in full of the Loan or (ii) the
Bank's sale of the Property after obtaining title thereto.

                  (k) The Bank's receipt of a policy of mortgagee title
insurance from First American Title Insurance Company of New York, Inc. showing
marketable title in Borrower and insuring the Fee Mortgage as a first lien and
the Ground Lease as a second lien on the Property, with endorsements (if
available) as to (i) the non-recharacterization of the Ground Lease or the Loan
Documents, and (ii) excluding any creditors' rights exceptions.

                  (l) Payment of the fees and expenses of the Bank's legal
counsel with respect to negotiation and documentation of this Agreement and the
transactions contemplated hereunder.

                  (m) Such other consents, approvals, instruments, documents and
further assurances relating to this Agreement and the Security as the Bank may
require.

         The conditions set forth in this Section 7 are inserted for the sole
benefit of the Bank and may be waived by the Bank, in whole or in part (with or
without terms or conditions to such waiver).

8. Security.

         8.1      DELIVERY OF SECURITY. The Borrower, the Ground Lessee and the
Guarantor, as the case may be, shall execute and deliver, or cause to be
executed and delivered, to the Bank the following:

                  (a) the Fee Mortgage;

                  (b) the Ground Lease;

                  (c) the Guaranty; and

                  (d) the Assignment;

                                       31
<PAGE>
as continuing collateral security for the performance by the Borrower of all of
its obligations hereunder (the "Security").

         8.2      REGISTRATION. The Borrower shall, at its expense, register,
file or record the Security in all offices where such registration, filing or
recording is necessary or of advantage to the creation, perfection and
preserving of the Security applicable to it including, without limitation, any
land registry offices; provided, however, that the foregoing obligation of the
Borrower shall only apply whenever the Borrower is requested to do so by the
Bank. The Borrower shall renew such registrations, filings and recordings from
time to time as and when required to keep them in full force and effect whenever
the Borrower is requested to do so by the Bank. The forms of the Mortgage and
the Assignment and statements have been prepared, and where appropriate
registered and filed, based upon the laws of New Jersey applicable thereto in
effect at the date hereof, and the parties hereto acknowledge that such laws may
change. The Bank shall have the right to require that any such forms be amended
and/or re-filed to reflect any changes in such laws, whether arising as a result
of statutory amendments, court decisions or otherwise, in order to confer upon
the Bank the security interests intended to be created thereby, except that in
no event shall the Bank require that any such amendment be effected if the
result thereof would be to grant the Bank greater rights than is otherwise
contemplated herein, impose on the Borrower materially greater obligations than
imposed hereunder, or deprive the Borrower of any material rights hereunder.

         8.3      AFTER-ACQUIRED PROPERTY AND FURTHER ASSURANCES. The Borrower
shall from time to time execute and deliver all such further deeds or other
instruments of conveyance, assignment, transfer, mortgage, pledge or charge in
connection with all assets acquired by the Borrower after the date hereof and
intended to be subject to the security interests created hereby

                                       32
<PAGE>
including any insurance thereon; provided, however, that the foregoing
obligation of the Borrower shall only apply whenever the Borrower is requested
to do so by the Bank.

9. Events of Default.

         9.1      EVENTS OF DEFAULT. Each of the following events and
occurrences shall constitute an Event of Default under this Agreement:

                  (a) the Borrower fails to make payment (i) with respect to
interest or principal, within five (5) days of the due date thereof, or (ii)
with respect to any other amount the Borrower is obligated to pay under this
Agreement, within ten (10) days after a request for payment therefor by the
Bank, or (iii) the Borrower or the Ground Lessee fails to make payment when the
same is due and payable (subject to any applicable grace periods thereunder) of
any amount that the Borrower or the Ground Lessee, as the case may be, is
obliged to pay under the Escrow Instructions or the Security;

                  (b) any representation or warranty made by the Borrower herein
or with regard hereto (including the Security), by the Ground Lessee in or with
regard to the Ground Lease, or by the Guarantor in or with regard to the
Guaranty, in any way shall have been incorrect or misleading in any material
respect when made or confirmed, or any certificate or opinion of any thereof or
its counsel furnished hereunder proves to have been false or misleading as of
its date in any material respect, and the facts giving rise to such
misrepresentation or breach of warranty remain uncorrected thirty (30) days
after notice thereof from the Bank to the Borrower;

                  (c) failure to perform or violation of any provision of this
Agreement (other than paragraphs (a), (j), (k) or (l) of this Section 9.1) or
the Security, by the Borrower, the Ground Lessee or the Guarantor, as the case
may be, which failure or violation is not remediable or, if

                                       33
<PAGE>
remediable, continues unremedied for a period of thirty (30) days after notice
thereof from the Bank to the Borrower, the Ground Lessee or the Guarantor, as
the case may be (unless such failure or violation cannot by its nature
reasonably be remedied within such thirty (30) day period, in which case no
Event of Default shall occur so long as the Borrower, the Ground Lessee or the
Guarantor, as the case may be, promptly commences to remedy the same within such
thirty (30) day period and diligently and continuously prosecutes the same to
completion);

                  (d) an Event of Default or default shall occur and be
continuing under the Security, or (subject to any applicable grace or cure
period stipulated therein) any other agreement, document or instrument executed
and delivered to the Bank by the Borrower, the Ground Lessee, or the Guarantor
relating to any of its obligations under any of the Loan Documents;

                  (e) any of the Security ceases to be in full force and effect;

                  (f) termination of Ground Lease, the occurrence of an Event of
Default under the Ground Lease or the assignment of the Ground Lease to any
party not acceptable to the Bank acting in its sole discretion, or if the Ground
Lessee or another entity related to the Ground Lessee acceptable to the Bank is
not the lessee in occupancy under the Ground Lease of the portion of the
Property identified on Exhibit H hereto to be occupied by the Ground Lessee;

                  (g) any governmental registration or approval granted or
required in connection with this Agreement or that materially affects the
Security is terminated or revoked or modified in any manner unacceptable to the
Bank;

                  (h) the Borrower, the Ground Lessee or the Guarantor fails to
pay any principal or interest due (subject to any applicable grace or cure
period stipulated therein) in respect of indebtedness for borrowed money under
any other agreement or document evidencing, securing,

                                       34
<PAGE>
guaranteeing or otherwise relating to thereto (unless the same is subject to any
bona fide contest of liability therefore), [or there occurs any other event of
default or other event that, with the giving of notice or the passing of time
(subject to any applicable grace or cure period stipulated therein), or both,
would constitute an event of default on its part under any such agreement];

                  (i) any judgment or decree for money damages or for a fine or
penalty in excess of USD 100,000 (or its equivalent in other currency) or an
attachment or levy on any of the property of the Borrower, the Ground Lessee or
the Guarantor in excess of USD 100,000 (or its equivalent in any other currency)
is entered against any thereof and is not paid, discharged, bonded or stayed
within thirty (30) days after knowledge such obligor of the existence of such
judgment, decree, attachment or levy;

                  (j) the Borrower, the Ground Lessee or the Guarantor (i)
becomes insolvent or unable to pay its debts when due, (ii) commits any act of
bankruptcy, including filing a petition in any bankruptcy, reorganization,
winding-up or liquidation proceeding, (iii) fails to have any such petition
filed by any other party discharged within thirty (30) days, (iv) makes an
assignment for the benefit of creditors, or (v) admits in writing its inability
to pay its debts;

                  (k) the Borrower, the Ground Lessee or the Guarantor
institutes any proceeding for its dissolution or termination;

                  (l) a moratorium shall be agreed or declared in respect of any
indebtedness of the Borrower, the Ground Lessee or the Guarantor in excess of
USD $100,000;

                  (m) any governmental authority or agency shall have seized,
compulsorily purchased or appropriated all or a substantial part of the assets
of the Borrower (other than the Property), the Ground Lessee or the Guarantor,
unless such seizure, purchase or appropriation is contested in good faith by the
Borrower, the Ground Lessee or the Guarantor, as the case may be,

                                       35
<PAGE>
and the Borrower, the Ground Lessee or the Guarantor, as the case may be, has
entered into alternative security arrangements with the Bank which are
satisfactory to the Bank, in its sole discretion;

                  (n) it becomes unlawful for the Borrower, the Ground Lessee or
the Guarantor to perform any material obligation hereunder or under any other
document executed in connection herewith;

                  (o) the Mortgage or the Assignment shall cease to be a valid
and perfected first priority security interest as against third parties;

                  (p) the Property shall not be zoned for the usage presently
contemplated by the Ground Lessee (as hereinabove specified) or if as the result
of a condemnation or a casualty affecting 25% or more of the Property as
utilized, or contemplated to be utilized, by Ground Lessee, such usage of the
Property is no longer financially viable;

                  (q) the Guarantor shall disaffirm the Guaranty or the Ground
Lessee shall seek to terminate the Ground Lease; or

                  (r) any event occurs with respect to the Borrower, the Ground
Lessee or the Guarantor that, in the reasonable opinion of the Bank, materially
and adversely affects such entity's condition, financial or otherwise, or its
ability to perform fully and punctually its obligations hereunder and under the
Security and any other document contemplated hereby or thereby.

         9.2      CONSEQUENCE OF DEFAULT. If an Event of Default shall occur,
the Bank may, by notice to the Borrower, declare the entire Loan together with
accrued interest and any other sum payable hereunder to be immediately due and
payable and the same shall thereupon become due and payable without presentment,
demand, protest or notice of any kind, other than the notice

                                       36
<PAGE>
specifically required by this Section 9.2, all of which are expressly waived by
the Borrower. The Borrower shall also pay to the Bank default interest at the
rate specified in Section 2.4(b), as well as any costs and expenses relating to
an Event of Default, including the fees and expenses of counsel. If an Event of
Default, or an event that with the giving of notice or the passing of time, or
both, would constitute an Event of Default shall occur, the Bank shall have no
further obligation to lend hereunder. No waiver of any Event of Default shall
constitute a waiver of any other or any succeeding Event of Default or of the
continuance of the Event of Default so waived except in accordance with the
terms of such waiver. Upon an Event of Default, the Borrower shall have the
option either (i) to repay all amounts due on the Loan or (ii) to deliver to the
Bank a deed in lieu of foreclosure of the Property, in which case Borrower shall
not challenge or raise any defenses to such deed in lieu (and shall prohibit
Ground Lessee from so doing), nor shall Borrower challenge or raise any
objections to the Bank's remedies under the Loan Documents.

         9.3      REMEDIES CUMULATIVE AND WAIVERS. For greater certainty, it is
expressly understood and agreed that the rights and remedies of the Bank
hereunder or under the Security or any instrument executed pursuant to this
Agreement are cumulative and are in addition to and not in substitution for any
rights or remedies provided by law or by equity; and any single or partial
exercise by the Bank of any right or remedy for a default or breach of any term,
covenant, condition or agreement contained in this Agreement or other document
or instrument executed pursuant to this Agreement shall not be deemed to be a
waiver of or to alter, affect or prejudice any other right or remedy or other
rights or remedies to which the Bank may be lawfully entitled for such default
or breach. Any waiver by the Bank of the strict observance, performance or
compliance with any term, covenant, condition or other matter contained herein
and any indulgence granted, either expressly or by course of conduct, by the
Bank shall be effective only

                                       37
<PAGE>
in the specific instance and for the purpose for which it was given and shall be
deemed not to be a waiver of any rights and remedies of the Bank under this
Agreement as a result of any other default or breach hereunder or thereunder.

         9.4      LIMITED RECOURSE OBLIGATION. Notwithstanding any other
provisions hereof, the Borrower shall have no personal liability to the Bank in
respect of the Loan and the Bank's remedies shall be limited to the Security,
except in the case of any claim arising out of any of the following actions of
the Borrower: (i) fraud or intentional misrepresentation by the Borrower or any
of its Affiliates in connection with the execution and delivery of the Note or
other Loan Documents; (ii) misapplication of security deposits under the Ground
Lease; (iii) collection of Rents (as such term is defined in the Assignment)
under the Ground Lease more than one month in advance; (iv) misapplication of
casualty insurance proceeds or condemnation awards or Purchase Option sale
proceeds under the Ground Lease; (v) indemnification pursuant to the
Environmental Indemnity; and (vi) any breach of Sections 5.10 or 6.11 hereof.

10. Miscellaneous

         10.1     USD TRANSACTION. This is an international loan transaction in
which the specification of USD and payment in New York, New York are of the
essence, and USD shall be the currency of account and of payment in all events.
The payment obligation hereunder shall not be discharged by an amount paid in
another currency or in another place, whether pursuant to a judgment or
otherwise, to the extent that the amount so paid on prompt conversion to USD and
transfer to New York, New York under normal banking procedures does not yield
the amount of USD in New York, New York due hereunder. In the event that any
payment, whether pursuant to a judgment or otherwise, upon conversion and
transfer does not result in payment of such

                                       38
<PAGE>
amount of USD in New York, New York, the Bank shall be entitled to immediate
payment of, and shall have a separate cause of action for, the USD deficiency.

         10.2     ENTIRE AGREEMENT. This Agreement and the documents referred to
herein constitute the entire obligation of the parties hereto with respect to
the subject matter hereof and shall supersede any prior expressions of intent or
understandings with respect to this transaction.

         10.3     WAIVER, CUMULATIVE RIGHTS. The failure or delay of the Bank to
require performance by the Borrower of any provision of this Agreement shall not
affect its right to require performance of such provision unless and until such
performance has been waived by the Bank in writing. Each and every right granted
to the Bank hereunder or under any other document or instrument delivered
hereunder or in connection herewith, or allowed at law or in equity, shall be
cumulative and may be exercised from time to time.

         10.4     BINDING EFFECT. This agreement shall be binding upon and shall
be enforceable by Borrower and the Bank and their respective successors and
assigns, except that the Borrower shall have no right to assign its obligations
hereunder.

         10.5     GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York, without
reference to principles of conflict of laws.

         10.6     SUBMISSION TO JURISDICTION.

                  (a) The Borrower hereby irrevocably consents that any legal
action or proceedings against it or any of its property with respect to this
Agreement, the Escrow Instructions or the Security may be brought in any court
of the State of New York or any Federal Court of the United States of America
located in the City and State of New York, United States of America, or both, as
the Bank may elect, and by execution and delivery of this Agreement the Borrower

                                       39
<PAGE>
hereby submits to an accepts with regard to any such action or proceeding, for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The Borrower further irrevocably consents
to the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to the Borrower at its address set forth in Section 10.7
The foregoing, however, shall not limit the rights of the Bank to serve process
in any other manner permitted by law or to bring any legal action or proceeding
or to obtain execution of judgment in any jurisdiction.

                  (b)      THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
SECURITY IN THE STATE OF NEW YORK. THE BORROWER HEREBY FURTHER IRREVOCABLY
WAIVES ANY RIGHT THE BORROWER MAY NOW OR HEREAFTER HAVE TO A TRIAL BY JURY. THE
BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT THE STATE OF NEW YORK
IS NOT A CONVENIENT FORUM FOR ANY SUCH SUIT, ACTION OR PROCEEDING.

         10.7     NOTICES. Any notice hereunder shall be in writing and shall be
personally delivered, transmitted by postage prepaid registered or certified
mail, or by facsimile, to the parties as follows:

                  To the Borrower:        ALX of Paramus LLC
                                          c/o Alexander's Inc.
                                          210 Route 4 East
                                          Paramus, NJ   07652
                                          Attn:   Chief Financial Officer
                                          Facsimile No.:  (201) 587-6210

                                       40
<PAGE>
                                          ALX of Paramus LLC
                                          c/o Alexander's Inc.
                                          210 Route 4 East
                                          Paramus, NJ   07652
                                          Attn:   Vice President-Real Estate
                                          Facsimile No.:  (201) 587-6207

                  With a copy (for
                  information purposes
                  only) to:               Winston & Strawn
                                          200 Park Avenue
                                          New York, NY  10166-4193
                                          Attn:    Neil Underberg, Esq.
                                          Facsimile No.:  (212) 294-4700

                  To the Bank:            Svenska Handelsbanken AB (publ)
                                          153 East 53rd Street, 37th Floor
                                          New York, New York 10022
                                          Attn:   Corporate Banking Department
                                          Facsimile No.:  (212) 326-5110

                  With a copy (for
                  information purposes
                  only) to:               Sussman Sollis Ebin Tweedy & Wood, LLP
                                          767 Fifth Avenue, 8th Floor
                                          New York, NY  10153-0898
                                          Attn:    Robert F. Ebin, Esq.
                                          Facsimile No.:  (212) 688-8386

Copies of such notices, for informational purposes only, shall be transmitted by
mail to counsel to the parties, as the parties may from time to time designate.
All notices and other communications shall be deemed to have been duly given on
the date of receipt if delivered personally; on the date five days after posting
if transmitted by mail; or in the case of a facsimile, at the time sent;
provided that any notice to be given to the Bank shall be effective only when
actually received by the Bank. Either party may change its address for purposes
hereof by notice to the other.

                                       41
<PAGE>
         10.8     SEVERABILITY. If any one or more of the provisions contained
in this Agreement or any document executed in connection herewith shall be
invalid, illegal or unenforceable in any respect under any applicable law, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired. Anything in this Agreement
to the contrary notwithstanding, the obligation of the Borrower to pay interest
on the Loan and the Note shall be subject to the limitation that no payment of
such interest shall be required to the extent that receipt of such payment would
be contrary to applicable usury laws.

         10.9     COUNTERPARTS. This Agreement may be signed in any number of
counterparts. Any single counterpart or a set of counterparts signed, in either
case, by all the parties hereto shall constitute a full and original agreement
for all purposes.

         10.10    TIME OF ESSENCE. Time shall be of the essence of this
Agreement with respect to payments required hereunder.

         10.11    FURTHER ASSURANCES. Each party hereto will promptly and duly
execute and deliver such further documents to make such further assurances for
and take such further action reasonably requested by any party to whom such
first party is obligated, all as may be reasonably necessary to carry out more
effectively the intent and purpose of this Agreement and the other Loan
Documents.

                   [Balance of Page Intentionally Left Blank]

                                       42
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first written
above.

                                          ALX OF PARAMUS LLC

ATTEST:
                                          By:  /s/ Joseph Macnow
                                             --------------------------------
                                          Name:    Joseph Macnow
                                                   --------------------------
                                          Title:   Executive Vice President
                                                   --------------------------
                                                   Finance and Administration
                                                   --------------------------
By:   /s/ Patrick Hogan
   -------------------------
Name Patrick Hogan
Title:  Vice President
                                          SVENSKA HANDELSBANKEN AB (publ)
                                          NEW YORK BRANCH

                                          By:  /s/ Jonas Daun
                                             --------------------------------
                                          Name:    Jonas Daun
                                                   --------------------------
                                          Title: Senior Vice President
                                                 ----------------------------

                                          By: /s/ Mark Cleary
                                             ---------------------------------
                                          Name:    Mark Cleary
                                                   --------------------------
                                          Title: Senior Vice President
                                                 ----------------------------

                                       43

<PAGE>
                                    EXHIBIT A

                         ASSIGNMENT OF LEASES AND RENTS

         THIS ASSIGNMENT OF LEASES AND RENTS (hereinafter this "ASSIGNMENT") is
made as of October 2, 2001 by ALX OF PARAMUS LLC, a Delaware limited liability
company, with a mailing address of 210 Route 4 East, Paramus, New Jersey 07652,
Attention: Vice President - Real Estate ("ASSIGNOR"), to SVENSKA HANDELSBANKEN
AB (PUBL), having an office at 153 East 53rd Street, 37th Floor, New York, New
York 10022, Attention: Corporate Banking Department ("ASSIGNEE").

                              W I T N E S S E T H:

         WHEREAS, the Assignee is about to make the Loan (hereinafter defined)
to the Assignor, to be evidenced by the Note (hereinafter defined) and secured
by the Mortgage (hereinafter defined), and which Mortgage is now a first lien on
the Premises (hereinafter defined); and

         WHEREAS, the Assignor is the landlord under the Ground Lease
(hereinafter defined), and the Assignee will not lend the Mortgage Amount
(hereinafter defined) unless the Assignor assigns all of the Assignor's right,
title and interest in and to the Ground Lease, the Guaranty (hereinafter
defined), the Rent (hereinafter defined) and all other Leases (hereinafter
defined) to the Assignee as additional security for the Loan in accordance with
the terms of this Assignment;

         NOW, THEREFORE, the Assignor, in consideration of the premises and in
order to further secure the Mortgage Amount, all interest due thereon, and all
other costs and expenses due under the Mortgage and hereunder, hereby agrees as
follows:

                  1.       DEFINITIONS.

                           (a) Assignor and Assignee hereby agree that unless
the context otherwise specifies or requires, the following terms shall have the
meanings herein specified, such definitions to be applicable equally to the
singular and the plural forms of such terms:

                           "ASSIGNMENT" means this Assignment of Leases and
Rents.

                           "DEFAULT" means the events and circumstances
described as such in Article IV of the Mortgage, including the expiration of any
notice or cure period applicable thereto under the Mortgage, the Loan Agreement
or this Assignment.

                                       44
<PAGE>
                           "ESCROW AGENT" means the escrow agent designated by
Assignee as such pursuant to the Escrow Agreement.

                           "ESCROW AGREEMENT" means that certain escrow
agreement between and among the Assignor, the Ground Lessee, the Assignee and
the Escrow Agent dated as of the date hereof.

                           "GOVERNMENTAL AUTHORITY" means any nation or
government, any local, municipal, county, state or other political subdivision
thereof, any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government and any court or
arbitrator.

                           "GROUND LEASE" means that certain lease of the
Premises dated as of October 4, 2001, between Assignor, as landlord and Ground
Lessee, as tenant.

                           "GROUND LESSEE" means IKEA Property, Inc., a Delaware
corporation, which is the tenant under the Ground Lease.

                           "GUARANTOR" means IKEA Holding US, Inc., a Delaware
corporation.

                           "GUARANTY" means that certain guaranty and agreement
dated as of October 4, 2001, made by the Guarantor in favor of Assignor and
Assignee.

                           "IMPROVEMENTS" means all buildings, structures and
other improvements presently existing or hereafter constructed on the land
described in Exhibit A attached hereto.

                           "LEASE" means any lease, sublease, license or other
agreement, now or hereafter existing, to which Assignor is a party or to which
Assignor succeeds as landlord and under the terms of which any person other than
Assignor has or acquires any right to occupancy or use of the Mortgaged
Property, or any part thereof, or interest therein, including without limitation
(i) the Ground Lease, together with any and all extensions, renewals,
modifications and replacements thereof, (ii) all guarantees of the Lessees'
obligations thereunder, and (iii) that certain letter from Ground Lessee to
Assignor dated as of October 4, 2001 concerning recommendations made by Ground
Lessee's environmental consultant.

                           "LESSEE" means the lessee, sublessee, licensee,
tenant or other person having the right to occupy or use all or any part of the
Mortgaged Property under a Lease.

                           "LIABILITIES" means all indebtedness, obligations and
liabilities of Assignor arising under the Note, the Mortgage, and any renewals,
extensions, amendments or modifications thereof, or any other Loan Document and
any and all fees, costs or expenses incurred by Assignee, including, but not
limited to, taxes, recording expenses and attorneys' fees in connection with the
closing of the Loan and the consummation thereof, and after Default, the
administration and collection thereof, all costs incurred of whatever nature by
Assignee in the

                                       45
<PAGE>
exercise of any rights hereunder or any Loan Document and all other amounts
payable by Assignor under the Note and the Mortgage.

                           "LOAN" means the $68,000,000.00 loan from Assignee to
Assignor as evidenced by the Note, and secured by the Mortgage.

                           "LOAN AGREEMENT" means that certain loan agreement
dated as of the date hereof between Assignor, as borrower and Assignee, as
lender.

                           "LOAN DOCUMENTS" means, collectively, the Loan
Agreement, the Note, the Mortgage, this Assignment and any other document
executed or delivered by or on behalf of Assignor in connection with the Loan.

                           "MORTGAGE" means that certain Mortgage, Security
Agreement and Fixture Financing Statement dated as of the date hereof in the
Mortgage Amount made by Assignor to Assignee.

                           "MORTGAGE AMOUNT" means the principal sum of
$68,000,000.00.

                           "NOTE" means that certain limited recourse promissory
note dated as of the date hereof in the Mortgage Amount made by Assignor to
Assignee, together with all renewals, amendments, supplements, restatements,
extensions and modifications thereof and thereto.

                           "PERSON" means an individual, a partnership, a
corporation, a business trust, a joint stock company, a trust, an unincorporated
association, a joint venture, a Governmental Authority or any other entity of
whatever nature.

                           "PREMISES" means the land located in the Borough of
Paramus, County of Bergen, and State of New Jersey, being designated on the
Borough of Paramus Tax Map as Block 1202, Lot 1 and Block 1101, Lot 3, and being
more particularly described in Exhibit A annexed hereto, together with the
Improvements thereon and hereafter constructed thereon or therein, and all of
the easements, rights, privileges and appurtenances thereunto belonging or in
anyway appertaining thereto including, but not limited to, all of the estate,
right, title, interest, claim or demand whatsoever of Assignor therein and in
and to the strips and gores, streets and ways adjacent thereto, whether in law
or in equity, in possession or expectancy, now or hereafter acquired and also
any other realty or personalty encompassed by the term "Mortgaged Property" as
defined in the Mortgage.

                           "RECORDING OFFICE" means the public recording office
in which the Mortgage must be recorded in the County where the Premises is
located in order to obtain a mortgage lien on the Mortgaged Property.

                           "RENT" means the fixed rents, additional rents and
other consideration payable to or for the account or benefit of Assignor by the
Lessee under the terms of a Lease,

                                       46
<PAGE>
including but not limited to the proceeds of the Purchase Option granted to
Ground Lessee in Section 46 of the Ground Lease.

                           (b) Except as expressly defined herein, terms used
herein that are defined in the Mortgage shall have the same meaning herein as
therein.

                  2. ASSIGNMENT. The Assignor, as additional security for the
payment of the Mortgage Amount and interest provided in the Mortgage and to
secure the performance of each and every obligation contained in the Note and
Mortgage, hereby assigns to the Assignee all the right, title and interest of
the Assignor presently held or hereafter acquired in and to the Leases including
but not limited to the Ground Lease and any subleases thereof, and the Rent due,
or to become due, thereunder together with (a) all security deposits, issues,
profits, revenues, receipts, income, accounts and other receivables (including
without limitation lease termination fees, purchase option fees and expenses
payable under any Lease) and income thereunder and all of the other benefits
thereunder; (b) any guaranties of the Leases or any of them including but not
limited to the Guaranty; (c) all of Assignor's right, power or authority (i) to
alter or modify the Leases; (ii) to exercise or to refrain from exercising any
option or election at any time available to the Assignor under the Leases; and
(iii) to collect the Rent, either with or without entry upon the Premises, the
proceeds of any such collection to be applied as set forth in the Mortgage; and
(d) all of Assignor's right, power or authority to exercise any other rights and
remedies of the Assignor under the Leases. This Assignment confers upon Assignee
a power coupled with an interest and it cannot be revoked by Assignor. The
Assignee, by its acceptance of this Assignment, grants a license to Assignor to
collect the Rent, subject to the terms of paragraph 3(a) of this Assignment and
subject further to the terms and conditions of the Escrow Agreement.

                  3.       DEFAULT AND REMEDIES OF ASSIGNEE.

                           (a) If a Default occurs, and until such Default shall
have been fully cured, the license of the Assignor to collect the Rent will
cease and terminate, and thereupon, the Assignee is hereby authorized at its
option to enter and take possession of all or any part of the Mortgaged
Property, and to perform all acts necessary for the operation and maintenance of
the Mortgaged Property in the same manner and to the same extent that the
Assignor might reasonably so act. In furtherance of such rights, the Assignee is
hereby authorized by the Assignor, but is under no obligation, to collect the
Rent and to enforce the performance of any or all terms of any Lease, as the
Assignee may elect, including but not limited to: (i) all rights granted to the
Assignee as specified in paragraph 2 above; (ii) the right to let and relet the
Premises or any part thereof; (iii) the right to sue for possession of the
Premises or any part thereof; and (iv) the right to assign the Assignor's right,
title and interest in the Leases, the Rents and the Mortgaged Property to any
Person acquiring the Mortgaged Property or any part thereof through foreclosure
or otherwise. Such assignee shall not be liable to account to the Assignor for
the Rents thereafter accruing.

                           (b) Upon the occurrence of a Default, Assignee may,
but shall not be obliged to do so, (i) perform or discharge any obligation of
the Assignor under the Leases (or this

                                       47
<PAGE>
Assignment), and may defend any action or proceeding which may affect the
Assignee's rights, the Assignee to have reimbursement, as an addition to the
Liabilities, on demand for any sums so expended; and (ii) exercise any rights
and remedies of the Assignor under the Leases (without taking or asserting the
right to take possession of the Premises, or any part thereof, and without
collecting or asserting the right to collect the Rents), including without
limitation enforcement of the indemnities, covenants and other provisions of the
Ground Lease and the Guaranty.

                           (c) Assignee shall be entitled to elect in writing to
accelerate the maturity of the Note if (i) Assignor fails to make payment when
the same is due and payable of any amount that the Assignor is obliged to pay
under this Assignment, or (ii) Assignor fails to perform or violates any
provision of this Assignment which failure or violation is not remediable or if
remediable, continues unremedied for a period of thirty (30) days after notice
thereof from the Assignee to the Assignor (unless such failure or violation
cannot by its nature reasonably be remediated within such thirty (30) day
period, in which case no default shall occur so long as the Assignor promptly
commences to remediate the same within such thirty (30) day period and
diligently and continuously prosecutes the same to completion).

                  4. REPRESENTATIONS AND WARRANTIES. The Assignor represents and
warrants to the Assignee that:

                           (a) the only Lease executed by Assignor as landlord
and now in existence is the Ground Lease;

                           (b) the Ground Lease is valid, in full force and
effect according to its terms, is not in default, and has not been changed,
supplemented, modified or amended;

                           (c) the Assignor is the absolute owner of the Ground
Lease and the Rent due, or to become due, thereunder, having full right and
authority to assign the Ground Lease and Rent thereof to the Assignee;

                           (d) the Assignor is not in default under the terms of
the Ground Lease;

                           (e) the Lessee under the Ground Lease has the right
to possession and control of all of the Premises leased to it under the Ground
Lease (except as otherwise set forth in such Lessee's estoppel certificate
attached hereto), and such Lessee is paying Rent in accordance with the terms of
the Ground Lease;

                           (f) no Rent has been, or will hereafter be,
anticipated, discounted, released, waived, compromised, or otherwise discharged,
except as may be expressly permitted by the prior written consent of the
Assignee;

                           (g) the Lessee under the Ground Lease has no defense,
setoff or counterclaim against the Assignor;

                           (h) the Assignor has not executed any other
assignment of the subject matter of this Assignment;

                                       48
<PAGE>
                           (i) no commission or other compensation is due any
real estate broker or salesperson in connection with the Ground Lease;

                           (j) the Lessee under the Ground Lease has not paid
Assignor, and Assignor does not presently hold, any security deposit under the
Ground Lease;

                           (k) the Ground Lease, and the Lessee's rights
thereunder, are subject and subordinate to the lien of the Mortgage and to all
renewals, modifications, consolidations, replacements and extensions thereof;

                           (l) the Assignor is not required to perform any work
or improvements under the Ground Lease; and

                           (m) the Guaranty is valid, in full force and effect
according to its terms, is not in default, and has not been changed,
supplemented, modified or amended; the Assignor has full right and authority to
assign the Guaranty to the Assignee; the Guarantor has no defense, set off or
counterclaim against Assignor with respect to the Guaranty.

                  5.       COVENANTS.  The Assignor hereby covenants and agrees:

                           (a) upon demand by Assignee, to assign to Assignee,
by separate instrument in form and substance satisfactory to Assignee, any and
all Leases, and/or all Rent payable thereunder, including, but not limited to,
the Ground Lease or any Lease which may be executed after the date hereof;

                           (b) not to accept from any Lessee, nor permit any
Lessee to pay, Rent for more than one month in advance except for payment in the
nature of security for performance of Lessee's obligations;

                           (c) to comply with the terms and provisions of each
Lease including, without limitation, the payment of all sums required to be paid
by Assignor or which Assignor has an option to pay under any Lease in order to
prevent any reduction in or offset against any Rent payable under any Lease or
any default thereunder;

                           (d) not to amend, extend, cancel, abridge, or
otherwise modify, or accept surrender of, or renew, any Lease without the
written consent of Assignee;

                           (e) not to assign, transfer, pledge, subordinate or
mortgage any Lease without the written consent of Assignee;

                           (f) not to assign, transfer, pledge, subordinate or
mortgage any Rent;

                           (g) not to waive, excuse, release or condone any
nonperformance of any covenant of any Lease by any Lessee;

                                       49
<PAGE>
                           (h) to give to Assignee a duplicate notice of each
default by each Lessee;

                           (i) to cause each Lessee to agree (and each Lessee
under each Lease executed after the date hereof does so agree) to give to
Assignee written notice of each and every default by Assignor under such
Lessee's Lease and not exercise any remedies under such Lease unless Assignee
fails to cure such default within a reasonable period after Assignee has
received such notice, provided that Assignee shall never have any obligation or
duty to cure any such default;

                           (j) to enforce its rights with regard to all Leases;

                           (k) not to enter into any lease, letting or license
arrangement affecting the Mortgaged Property or any part thereof without the
prior written approval of Assignee;

                           (l) to hold in a separate account, and apply, all
security deposits paid to Assignor in accordance with the Leases;

                           (m) not to consent to any sublease by Ground Lessee
of the Premises or any part thereof, or any other lease, letting or license
arrangement affecting any portion of the Mortgaged Property, without the prior
written approval of Assignee, which approval Assignee shall be entitled to
withhold in Assignee's absolute discretion if any such sublease is not a
Qualified Sublease (as defined in the Loan Agreement); and

                           (n) if any tenant under any Lease is or becomes the
subject of any proceeding under the Federal Bankruptcy Code, as amended from
time to time, or any other federal, state or local statute which provides for
the possible termination or rejection of any Lease assigned hereby, Assignor
covenants and agrees that if any such Lease is so terminated or rejected, no
settlement for damages shall be made without the prior written consent of
Assignee, which consent shall not be unreasonably withheld, provided, however,
Assignee's consent may be withheld in Assignee's sole discretion in the event a
Default has occurred or if an event has occurred which with the giving of notice
or the passage of time or both would constitute a Default. Any check in payment
of damages for termination or rejection of any such Lease will be made payable
both to Assignor and Assignee. Assignor hereby assigns any such payment to
Assignee and further covenants and agrees that upon the request of Assignee,
Assignor will duly endorse to the order of Assignee any such check, the proceeds
of which shall be applied in accordance with SECTION 4.08 of the Mortgage.

                  6. ASSIGNEE NOT RESPONSIBLE. This Assignment shall not operate
to place responsibility for the control, care, management or repair of the
Premises upon the Assignee, nor for the carrying out of any of the terms and
conditions of the Leases; nor shall it operate to make the Assignee responsible
or liable for any waste committed on the Premises by the Lessees or anyone else,
or for any dangerous or defective condition of the Premises, or for any
negligence in the management, upkeep, repair or control of the Premises
resulting in loss or injury or death to any Lessee, licensee, employee or
stranger.

                                       50
<PAGE>
                  7. ASSIGNEE AS CREDITOR OF LESSEES. Assignee, and not the
Assignor, will be the creditor of any Lessee in respect of assignments for the
benefit of creditors and bankruptcy, reorganization, insolvency, dissolution,
or receivership proceedings affecting any such Lessee. However, Assignor, and
not the Assignee, shall be the party obligated to make timely filing of claims
in such proceedings and to pursue creditor's rights therein. The Assignee shall
have the right to apply any monies received by it as such creditor in reduction
of the unpaid principal, interest and any other amounts due under the Note.

                  8. VIOLATIONS OF THIS ASSIGNMENT. Any act done or attempted in
violation of any covenant or agreement of the Assignor under this Assignment
shall be wholly void as against the Assignee.

                  9. LEASE GUARANTIES ETC. Assignor will not without the prior
written consent of the Assignee, alter, modify, cancel, or terminate any
guaranties of any Lease, including but not limited to the Guaranty, nor agree to
any subordination of any Lease, nor permit any material alteration of or
addition to the Premises by any Lessee without obtaining Assignee's prior
written consent.

                  10. NECESSARY INSTRUMENTS. Assignor will execute and deliver
to the Assignee, and Assignor hereby appoints the Assignee as the Assignor's
attorney-in-fact to execute and deliver during the term of this Assignment, all
further instruments as Assignee may deem necessary to make this assignment and
any further assignment of the Leases and Rents effective.

                  11. CHANGES IN MORTGAGE. Notwithstanding any change or
variation in the terms of the Mortgage or the Liabilities, including any
increase or decrease in the Mortgage Amount or in the interest rate, or any
release of part or parts of the Premises from the lien of the Mortgage, this
Assignment shall continue in full force and effect in accordance with its terms
as additional security for the Assignee's benefit.

                  12. OTHER SECURITY. Assignee may take security in addition to
the security already given the Assignee for the payment and/or performance of
the Liabilities, or release any security so taken, and may release any Person
primarily or otherwise liable for the Liabilities or any part thereof, may grant
or make extensions, renewals, modifications or indulgences with respect to the
Liabilities or the Mortgage or any replacements thereof, which replacement of
the Liabilities or Mortgage may be on the same or different terms than the
present terms thereof, and may apply any security held by it to the satisfaction
of the Liabilities, without prejudice to any of its rights hereunder.

                  13. ADDITIONAL LEASES. Assignor will give the Assignee prompt
notice of any lease entered into between the Lessee under the Ground Lease and
any Person for space at the Premises.

                  14. EXERCISE OF ASSIGNEE'S RIGHTS. Assignee's failure to
exercise any of its rights under this Assignment for any period of time, or at
any time or times, will not constitute a waiver thereof. Assignee's rights and
remedies hereunder are cumulative, and not in lieu of, but

                                       51
<PAGE>
in addition to, any other rights and remedies Assignee has under the Mortgage or
under any other Loan Document, and may be exercised by Assignee in its sole and
absolute judgment and discretion.

                  15. AMENDMENTS, MODIFICATIONS ETC. No amendment, modification,
or cancellation of this Assignment or any part hereof will be enforceable
without Assignee's prior written consent.

                  16. TIME OF ESSENCE. Time shall be of the essence of this
Assignment with respect to payments required hereunder.

                  17. CONFLICTING PROVISIONS. In the event of any conflict or
inconsistency between this Assignment and any of the provisions of the Loan
Agreement or the Mortgage, the provisions of the document selected by Lender
shall prevail.

                  18. BINDING AGREEMENT. Each and every provision hereof shall
bind and shall inure to the benefit of the Assignee, and its successors and
assigns.

                  19. GOVERNING LAW. This Assignment shall be governed by, and
construed and enforced in accordance with, the laws of the State of New Jersey.

                  20. TERMINATION OF ASSIGNMENT. Upon payment in full of all
Liabilities, this Assignment shall become and be null and void and no further
force and effect.

                  21. NOTICES. Any notice that Assignor or Assignee may desire
or be required to give to the other shall be in writing and shall be mailed or
delivered in accordance with the terms of PARAGRAPH 5.01 of the Mortgage to the
intended recipient thereof at its address hereinabove set forth or as such
intended recipient may, from time to time, by notice in writing, designate to
the sender pursuant hereto. Except as otherwise specifically required herein,
notice of the exercise of any right or option granted to Assignee by this
Assignment is not required to be given.

                  22. SUCCESSORS AND ASSIGNS. This Assignment and all provisions
hereof shall inure to the benefit of Assignee and shall be binding upon
Assignor, its successors and assigns, and all other persons or entities claiming
under or through Assignor and the word "Assignor," when used herein, shall
include all such persons and entities and any others liable for the payment of
the indebtedness secured hereby or any part thereof, whether or not they have
executed the Note or this Assignment. The word "Assignee," when used herein,
shall include Assignee's successors, assigns and legal representatives,
including all other holders, from time to time, of the Note. This Assignment
shall run with the land constituting the Premises.

                  23. SURVIVAL. The rights of the Assignee to collect and
receive the rents assigned hereunder or to exercise any of the rights or powers
herein granted to the Assignee shall, to the extent not prohibited by law,
extend also to the period from and after the filing of any suit to foreclose the
lien of the Mortgage, including but not limited to any period after entry of a
judgment in foreclosure and any period allowed by law for the redemption of the
Premises after any foreclosure sale.

                                       52
<PAGE>
                  24. LITIGATION. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
ASSIGNOR HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS ASSIGNMENT SHALL BE TRIED AND DETERMINED EITHER IN THE STATE OR
FEDERAL COURT LOCATED IN THE COUNTY OF BERGEN, STATE OF NEW JERSEY, OR, AT THE
SOLE OPTION OF LENDER, IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK OR IN ANY
OTHER COURT IN WHICH LENDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND
WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. TO THE
MAXIMUM EXTENT PERMITTED BY LAW, ASSIGNOR HEREBY EXPRESSLY WAIVES ANY RIGHT IT
MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS PARAGRAPH 24. TO
THE MAXIMUM EXTENT PERMITTED BY LAW, ASSIGNOR HEREBY WAIVES PERSONAL SERVICE OF
PROCESS UPON ASSIGNOR, AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE
BY REGISTERED MAIL DIRECTED TO ASSIGNOR AT THE ADDRESS STATED IN THE MORTGAGE
AND SERVICE SO MADE WILL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT.

              [The balance of this page intentionally left blank.]

                                       53
<PAGE>
                  25. JURY WAIVER. TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH
OF ASSIGNOR AND ASSIGNEE HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY ACTION, CAUSE OF ACTION, CLAIM, DEMAND OR PROCEEDING ARISING UNDER OR WITH
RESPECT TO THIS ASSIGNMENT, OR IN ANY WAY CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE DEALINGS OF ASSIGNOR AND ASSIGNEE WITH RESPECT TO THIS
ASSIGNMENT, OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE. TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH OF ASSIGNOR AND ASSIGNEE
HEREBY AGREES THAT ANY SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND OR PROCEEDING
SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT ASSIGNOR OR ASSIGNEE
MAY FILE A COPY OF THIS ASSIGNMENT WITH ANY COURT OR OTHER TRIBUNAL AS WRITTEN
EVIDENCE OF THE CONSENT OF EACH OF ASSIGNOR AND ASSIGNEE TO THE WAIVER OF ITS
RIGHT TO TRIAL BY JURY. ASSIGNOR AGREES THAT IT WILL NOT ASSERT ANY CLAIM
AGAINST ASSIGNEE ON THE THEORY OF LIABILITY FOR SPECIAL, INDIRECT,
CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES.

         IN WITNESS WHEREOF, the Assignor has duly executed this instrument the
day and year first above written.

                                    ASSIGNOR:

WITNESS:                            ALX OF PARAMUS LLC

/s/ Patrick Hogan                   By:  /s/ Joseph Macnow
------------------------------      --------------------------------------------
                                         Joseph Macnow, Executive Vice President
As to Joseph Macnow                      of Finance and Administration

/s/ Brian Kurtz                     By:  /s/ Steven Santora
------------------------------      --------------------------------------------
                                         Steven Santora, Assistant Secretary
As to Steven Santora

                                 ACKNOWLEDGMENT

STATE OF ____________      )
                           )  SS.
COUNTY OF ____________     )

         I CERTIFY that on October ____, 2001, Joseph Macnow, personally
appeared before me and this person acknowledged under oath, to my satisfaction,
that this person:

                                       54
<PAGE>
         (a) signed the attached instrument as Executive Vice President of
Finance and Administration of ALX of Paramus LLC, a limited liability company of
the State of Delaware, named in this instrument, and

         (b) is authorized to execute the attached instrument on behalf of such
limited liability company; and

         (c) executed the attached instrument as the act of such limited
liability company.

                                            ____________________________________
                                            Notary Public

STATE OF ____________      )
                           )  SS.
COUNTY OF ____________     )

         I CERTIFY that on October ___, 2001, Steven Santora, personally
appeared before me and this person acknowledged under oath, to my satisfaction,
that this person:

         (a) signed the attached instrument as Assistant Secretary of ALX of
Paramus LLC, a limited liability company of the State of Delaware, named in this
instrument, and

         (b) is authorized to execute the attached instrument on behalf of such
limited liability company; and

         (c) executed the attached instrument as the act of such limited
liability company.

                                            ____________________________________
                                            Notary Public

                                       55
<PAGE>
                                    EXHIBIT A
                        LEGAL DESCRIPTION OF THE PREMISES

PARCEL I:

BEING ALL that tract or parcel of land and premises, situated, lying and being
in the Borough of Paramus, County of Bergen State of New Jersey and being more
particularly described as follows:

Beginning at the point of intersection of the Northerly line of New Jersey State
Highway Route 4 (being 65.00 feet measured at right angles from the center line)
with the Easterly line of the Garden State Parkway all as shown on a certain map
entitled "Major Subdivision for Paramus/Alexander's/Hahn/Somes-Alterman,
N.J.S.H. Route 4 West and J.J.S.H. Route 17 South, Paramus, Bergen County, New
Jersey", prepared by Lapatka Associates, Inc., dated 12-24-87 and bearing
1-16-89 as its latest revision date, filed in the Bergen County Clerk's Office
on 10-4-89 as Map No. 8695 and running; thence,

1)       Along the Easterly line of the Garden State Parkway, North 60 Degrees
         and 27 minutes and 15 seconds East, 428.16 feet to a point; thence,

2)       Along the same, North 59 degrees and 19 minutes and 52 seconds East,
         199.97 feet to a point; thence,

3)       Along the same, North 57 degrees and 31 minutes and 44 seconds East,
         195.58 feet to a point; thence,

4)       Along the same, North 53 degrees and 35 minutes and 28 seconds East,
         198.81 feet to a point; thence,

5)       Along the same, North 49 degrees and 42 minutes and 46 seconds East,
         197.95 feet to a point; thence,

6)       Along the same, North 46 degrees and 32 minutes and 53 seconds East,
         287.90 feet to a point; thence,

7)       Along the same, North 41 degrees and 09 minutes and 46 seconds East,
         232.45 feet to a point; thence,

8)       Continuing along the Easterly line of the Garden State Parkway, North
         37 degrees and 42 minutes and 15 seconds East, 88.66 feet to a point;
         thence,

9)       Along the Southerly line of Lot 1 in Block 1201 as shown on the
         referenced subdivision, South 51 degrees and 53 minutes and 42 seconds
         East, 205.30 feet to a point; thence,

10)      Along the Easterly line of Lot 1 in Block 1201, North 38 degrees and 06
         minutes and 18 seconds East, 85.00 feet to a point; thence,

                                       56
<PAGE>
11)      Along the Southerly line of Lot 2 in Block 1201 as shown on the
         referenced subdivision, South 51 degrees and 53 minutes and 42 seconds
         East, 400.00 feet to a point; thence

12)      Along the Easterly line of Lot 2 in Block 1201, North 38 degrees and 06
         minutes and 18 seconds East, 15.00 feet to a point; thence,

13)      Along the Southerly line of Lot 12 in Block 1201 as shown on the
         referenced subdivision, South 51 degrees and 53 minutes and 42 seconds
         East, 140.72 feet to a point; thence

14)      Along the Westerly line of N.J.S.H Route 17 (120.00 feet wide), South
         07 degrees and 53 minutes and 26 seconds West, 385.88 feet to a point;
         thence,

15)      Along the Easterly line of Lot 7 in Block 1202 as shown on the
         referenced subdivision, North 02 degrees and 31 minutes and 19 seconds
         West, 42.63 feet to a point on a curve; thence,

16)      Westerly, along the Northerly line of Lot 7 in Block 1202 on a curve to
         the right having a radius of 25.00 feet, central angle of 73 degrees
         and 42 minutes and 40 seconds (chord bearing North 89 degrees and 01
         minutes and 40 seconds West), an arc distance of 32.16 feet to a point
         of tangency; thence,

17)      Along the same, North 52 degrees and 10 minutes and 20 seconds West,
         97.92 feet to a point; thence,

18)      Along a Westerly line of Lot 7 in Block 1202, South 39 degrees and 35
         minutes and 56 seconds West, 111.89 feet to a point; thence,

19)      Along the same, South 37 degrees and 39 minutes and 55 seconds West,
         93.00 feet to a point; thence,

20)      Along a Southerly line of Lot 7 in Block 1202, South 52 degrees and 20
         minutes and 05 seconds East, 100.00 feet to a point; thence,

21)      Along a Westerly line of Lot 7 in Block 1202, South 37 degrees and 39
         minutes and 55 seconds West, 25.00 feet to a point; thence,

22)      Along a Southerly line of Lot 7 in Block 1202, South 52 degrees and 20
         minutes and 05 seconds West, 176.20 feet to a point; thence,

23)      Along the Westerly line of N.J.S.H. Route 17, South 07 degrees and 53
         minutes and 26 seconds West, 1.49 feet to a point; thence,

24)      Along the same, South 07 degrees and 37 minutes and 51 seconds West,
         44.71 feet to a point; thence,

                                       57
<PAGE>
25)      Along the Northerly line of existing Lot 2 in Block 1203 being lands,
         now or formerly, of the New Jersey Department of Transportation, North
         52 degrees and 20 minutes and 05 seconds West, 9.32 feet to a point;
         thence,

26)      Along the Westerly line of existing lot 2 in Block 1203, South 37
         degrees and 39 minutes and 55 seconds West, 100.00 feet to a point;
         thence,

27)      Along the Southerly line of the same and existing Lot 3 in Block 1203
         being lands, now or formerly, of Gabriel Associates, South 52 degrees
         and 20 minutes and 05 seconds East, 67.13 feet to a point; thence,

28)      Along the Westerly line of N.J.S.H. Route 17, South 07 degrees and 37
         minutes and 51 seconds West, 4.46 feet to a point of curvature; thence,

29)      Southwesterly, along the Westerly line of the ramp from N.J.S,H. Route
         17 (Southbound) to N.J.S.H. Route 4 (Westbound) on a curve to the right
         having a radius of 290.00 feet, an arc distance of 254.39 feet to a
         point of tangency; thence,

30)      Along the same, South 57 degrees and 53 minutes and 26 seconds West,
         281.78 feet to a point; thence,

31)      Along the same, South 70 degrees and 18 minutes and 16 seconds West,
         111.35 feet to a point; thence,

32)      Along the same, North 87 degrees and 45 minutes and 06 seconds West,
         81.43 feet to a point; thence,

Along the Northerly line of N.J.S.H. Route 4, North 72 degrees and 06 minutes
and 34 seconds West, 1,490.31 feet to the point or place of beginning.

Subject to easements and restrictions of record.

Being Lot 1 in Block 1202 as appearing on the referenced Subdivision Map No.
8695 containing 1,712,916 square feet or 39.3231 acres more or less.

Excepting therefrom lands acquired by the State of New Jersey by the
Commissioner of Transportation pursuant to Declaration of Taking for Road
Widening, recorded November 25, 1997, in Book 8023, Page 304, as instrument
#144855.

Including specifically that part of Lot 7, in Block 1202, pursuant to Deed Book
8042, Page 097, (Exchange Deed, between The State of New Jersey, Department of
Transportation and Alexander's Department Stores of New Jersey, Inc.), recorded
February 6, 1998, as instrument #018103.

PARCEL II:

                                       58
<PAGE>
BEING ALL that tract or parcel of land and premises, situated, lying and being
in the Borough of Paramus, County of Bergen State of New Jersey and being more
particularly described as follows:

Beginning at the intersection of the Westerly right of way line of the Garden
State Parkway and the new Southerly line of Tax Map Lot 7 in Tax Map Block 1802,
said point having a New Jersey State Plane Grid Coordinate of North 763,178.759
and East 2,163,678.175, all as laid down on a certain map entitled "Location
Survey, Lot 3, Block 1101, Paramus, Bergen County, New Jersey", dated 10-26-93
and bearing 2-8-94 as its latest revision date, prepared by Lapatka Associates,
Inc., Paramus, New Jersey. Said point also being measured Southwesterly along
the Westerly right of way line of the Garden State Parkway from its intersection
with the Southerly R.O.W. Line of Century Road, all as laid down on a certain
map entitled "Garden State Parkway, Section 1, Survey of Westerly right of way
line, South of Century Road, Paramus, N.J.", dated November 23, 1966, Sheet No.
32 of 33, prepared by Boswell Engineering Company, Ridgefield Park, New Jersey,
along the following bearings and distances:

A)       South 10 degrees and 11 minutes and 03 seconds West, along the Westerly
         right of way line of the Garden State Parkway as described above, for a
         distance of 136.71 feet to a bend in the same; thence,

B)       South 05 degrees and 33 minutes and 26 seconds West, along the same,
         for a distance of 185.87 feet to a bend in the same; thence,

C)       South 09 degrees and 55 minutes and 07 seconds West, along the same,
         for a distance of 185.78 feet to a bend in the same; thence,

D)       South 14 degrees and 54 minutes and 37 seconds West, along the same,
         for a distance of 174.89 feet to a bend in the same; thence,

E)       South 20 degrees and 48 minutes and 46 seconds West, along the same,
         for a distance of 182.94 feet to a bend in the same; thence,

F)       South 25 degrees and 46 minutes and 10 seconds West, along the same,
         for a distance of 161.01 feet to a bend in the same; thence,

G)       South 28 degrees and 52 minutes and 02 seconds West, along the same,
         for a distance of 82.49 feet to the new Southerly line of Tax Map Lot 7
         in Tax Map Block 1802, being the point and place of beginning and
         running from the beginning point hereindescribed; thence,

1)       South 28 degrees and 52 minutes and 02 seconds West, along the Westerly
         right of way line of the Garden State Parkway as described above, for a
         distance of 95.64 feet to a bend in the same; thence,

                                       59
<PAGE>
2)       South 34 degrees and 53 minutes and 01 seconds West, along the same,
         for a distance of 173.10 feet to a bend in the same; thence,

3)       South 37 degrees and 55 minutes and 47 seconds West, along the same,
         for a distance of 183.83 feet to a bend in the same; thence,

4)       South 41 degrees and 07 minutes and 31 seconds West, along the same,
         for a distance of 177.89 feet to a bend in the same; thence,

5)       South 43 degrees and 34 minutes and 47 seconds West, along the same,
         for a distance of 171.17 feet to a bend in the same; thence,

6)       South 47 degrees and 27 minutes and 33 seconds West, along the same,
         for a distance of 30.73 feet to its intersection with the Northerly
         right of way line of Summit Avenue extended, as laid down on a certain
         map entitled "Map Showing S.E. Wood - Summit Avenue Subdivision, West
         Hackensack, Midland Township, Bergen County, New Jersey", filed in the
         Bergen County Clerk 's Office on June 16, 1997 as Map No. 773; thence,

7)       North 52 degrees and 20 minutes and 05 seconds West, along the
         Northerly right of way line of Summit Avenue extended, for a distance
         of 20.00 feet more or less to the centerline of Sprout Brook as it
         previously existed; thence,

8)       Northerly, along the various courses of the "centerline of Sprout Brook
         as located in the field" as it formerly existed and laid down on a
         certain map entitled "New Jersey Highway Authority, Garden State
         Parkway, Section I, General Property Map", Sheets No. 29 and 30 of 33,
         prepared by Fay, Spofford & Thorndike, Consulting Engineers, Boston,
         Massachusetts and Clifton, New Jersey, for a distance of approximately
         960 feet to its intersection with the aforementioned new Southerly line
         of Tax Map Lot 7 in Tax Map Block 1802; thence,

9)       South 52 degrees and 36 minutes and 40 seconds East, along the new
         Southerly line of Tax Map Lot 7 in Tax Map Block 1802, for a distance
         of approximately 370 feet to the point and place of beginning.

TOGETHER with all right, title and interest in and to that certain limited
Easement for Right of way as set forth in Deed Book 7796, Page 505, Bergen
County, New Jersey.

                CONSENT, ACKNOWLEDGMENT OF RECEIPT OF ASSIGNMENT
           OF LEASES AND RENTS AND MORTGAGE, AND ESTOPPEL CERTIFICATE
                             BY IKEA PROPERTY, INC.

                                       60
<PAGE>
1.       All capitalized terms herein shall have the same meaning as set forth
         in the Assignment of Leases and Rents (the "Assignment") to which this
         is attached.

2.       The undersigned, knowing that Assignee relies upon the statements made
         by and agreements of the undersigned herein in making the Loan, hereby
         consents to the execution and delivery of the Assignment by Assignor to
         Assignee and the undersigned hereby acknowledges and/or agrees to the
         following:

         (a)      The undersigned received a copy of the fully executed
                  Assignment and Mortgage on the date hereof; and

         (b)      The right of Assignee upon the occurrence of a Default to
                  exercise any or all of the rights and remedies of the Assignor
                  under the Leases (without (i) being the fee owner of the
                  Premises, (ii) taking or asserting the right to take
                  possession of the Premises, or any part thereof, (iii)
                  collecting or asserting the right to collect the Rents due
                  under the Leases, or (iv) assuming any of the liabilities or
                  obligations of landlord thereunder); and

         (c)      The right and standing of the Assignee to enforce any or all
                  of the rights and remedies granted to the Assignee by the
                  Assignor in the Assignment, notwithstanding (i) the Assignee
                  has no resulting obligations to the undersigned; (ii) the
                  Assignor may be in default under the Ground Lease; (iii) the
                  Assignee has not assumed any of the obligations or liabilities
                  of the landlord under the Ground Lease; and (iv) the Assignee
                  may not then be the fee owner of the Premises; and

         (d)      In the event Assignee seeks to enforce any or all of the
                  rights and remedies granted to the Assignee by the Assignor
                  under the Assignment, the Assignee shall have no obligation to
                  the undersigned (i) to cure any default by Assignor under the
                  Ground Lease or (ii) to perform any of the terms, covenants or
                  conditions of the Ground Lease. The undersigned hereby waives
                  any claim against the Assignee, its successors and assigns,
                  with respect to Assignor's acts or omissions under the Ground
                  Lease; and

         (e)      No amendment or modification to the Ground Lease shall be
                  effective unless the prior written consent of Assignee is
                  obtained; and

         (f)      Upon receipt by the undersigned of notice from Assignee that a
                  Default has occurred and demand therefor, the undersigned
                  agrees to pay directly to Assignee all Fixed Rent (as such
                  term is defined in the Ground Lease) payable thereafter; and

         (g)      Subject to the terms of the Loan Agreement, the undersigned
                  shall not enter into any subleases with respect to the
                  Premises without the prior written consent of the Mortgagee.

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<PAGE>
3.       At your request, and knowing that you rely upon the accuracy of the
         information contained herein in completing the Loan, the undersigned
         hereby certifies, as of the date hereof, as follows:

         (a)      The undersigned is a Delaware corporation, duly organized and
                  validly existing under the laws of the State of Delaware and
                  in good standing therein. The undersigned is duly qualified to
                  transact business in the State of New Jersey as a foreign
                  corporation.

         (b)      The undersigned has the power and authority (i) to lease the
                  Premises from Assignor, (ii) to execute, acknowledge and
                  deliver (1) the Ground Lease and (2) this Consent,
                  Acknowledgment of Receipt of the Assignment and Mortgage, and
                  Estoppel Certificate (the "Consent"), and (3) to perform and
                  be bound by the obligations, agreements and covenants required
                  to be performed by, or binding upon, the undersigned under the
                  Ground Lease and the Consent. Michael McDonald is authorized
                  to execute and deliver the Ground Lease and the Consent on
                  behalf of the undersigned.

         (c)      The execution and delivery of the Ground Lease and the Consent
                  do not, and the performance by the undersigned of its
                  obligations thereunder will not, (i) violate, be in conflict
                  with, result in the breach of, or constitute (with due notice
                  or lapse of time, or both) a default under, (1) any provision
                  of the undersigned's Certificate of Incorporation or its
                  by-laws, or (2) any law, regulation, order, decree, writ or
                  injunction of any court, public board or body, or (3) any
                  agreement, indenture, note or other instrument which is
                  binding upon the undersigned or its properties, and (ii)
                  except to the extent valid consents have been obtained,
                  require the consent of any person or entity whatsoever,
                  including, without limitation, any governmental authority or
                  any of the undersigned's directors or shareholders.

         (d)      The execution and delivery of the Ground Lease and the Consent
                  by the undersigned have been duly authorized by all requisite
                  action of the undersigned and the Ground Lease and the Consent
                  have been executed and delivered by the undersigned. The
                  Ground Lease and the Consent are the legal, valid and binding
                  obligations of the undersigned, enforceable against the
                  undersigned in accordance with their respective terms.

         (e)      There is no action, suit, proceeding, inquiry or
                  investigation, at law or in equity, pending before any court,
                  public board or body, or to our knowledge, threatened, against
                  the undersigned or its properties nor is there any basis
                  therefor, wherein an unfavorable decision, ruling, or finding
                  would in any way materially and adversely affect the
                  transactions contemplated by the Loan Documents, the Ground
                  Lease or the financial condition of the undersigned or which
                  would adversely affect the validity and/or enforceability of
                  the Loan Documents or the Ground Lease.

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<PAGE>
(f)      The Ground Lease is currently in full force and effect and constitutes
         the entire agreement with respect to our use and occupancy of the
         Premises.

(g)      The Ground Lease has not been changed, amended, modified or
         supplemented in any way.

(h)      The Ground Lease does not require the landlord thereunder to perform
         any work or to make any improvements with respect to the Premises.

(i)      The term of the Ground Lease commences on October 4, 2001 and the
         expiration date of the Ground Lease is October 3, 2041.

(j)      The undersigned claims no off-sets, set-offs, rebates, concessions,
         abatements or defenses against or with respect to rent, additional rent
         or other sums payable by the undersigned under the terms of the Ground
         Lease.

(k)      There are no defaults by Assignor under the terms of the Ground Lease
         and no event has occurred which, with the giving of notice or the
         passage of time or both, would constitute a default by Assignor under
         the Ground Lease. Assignor has no obligation to pay the undersigned for
         any improvements made or to be made by the undersigned to the Premises
         or any part thereof.

(l)      The undersigned does not have, and has not exercised, (i) an option to
         purchase the Premises or any part thereof; (ii) a right of first
         refusal with respect to the Premises; or (iii) an option to extend or
         renew the Ground Lease, except as may be expressly stated in the Ground
         Lease.

(m)      Rent under the Ground Lease has not been paid for any period after
         October 31, 2001. The monthly rent presently payable under the terms of
         the Ground Lease is as stated in the Ground Lease. Assignor is not
         providing, and has no obligation to provide, any services to the
         undersigned.

(n)      The undersigned has not paid any security deposit to Assignor.

(o)      The Ground Lease, and the undersigned's rights under, and leasehold
         estate created by, the Ground Lease, are subject and subordinate to the
         Mortgage and to all renewals, modifications, consolidations,
         replacements and extensions thereof.

(p)      The undersigned is the tenant under the Ground Lease, has accepted
         possession of the Premises and is in sole possession of the Premises.
         The undersigned has not (i) assigned its interest under the Ground
         Lease, or (ii) sublet the Premises or any part thereof, or (iii)
         otherwise transferred its interest in the Ground Lease or the Premises,
         and subordinate to the Mortgage and to all renewals, modifications,
         consolidations, replacements and extensions thereof.

                                       63
<PAGE>
         (q)      The undersigned is the tenant under the Ground Lease, has
                  accepted possession of the Premises and is in sole possession
                  of the Premises. The undersigned has not (i) assigned its
                  interest under the Ground Lease, or (ii) sublet the Premises
                  or any part thereof, or (iii) otherwise transferred its
                  interest in the Ground Lease or the Premises, or (iv) received
                  any notice of assignment of the rents due or to become due
                  under the Ground Lease.

         (r)      The undersigned has not filed and is not the subject of any
                  filing for bankruptcy or reorganization under federal
                  bankruptcy laws.

         (s)      The address for notices to the undersigned is correctly set
                  forth in the Ground Lease.

         (t)      Upon notification to the undersigned that ownership of the
                  Premises has been transferred, the undersigned agrees to
                  attorn to the new owner and to recognize it as landlord under
                  the Ground Lease.

         (u)      The person signing on behalf of the undersigned is duly
                  authorized to sign this instrument for the undersigned.

         IN WITNESS WHEREOF, the undersigned has duly executed this instrument
on and as of October 2, 2001.

ATTEST:                                     IKEA PROPERTY, INC.

/s/ James Quinn                              By:  /s/   Michael McDonald
                                                  Name: Michael McDonald
                                                  Its:  President

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<PAGE>
                                 ACKNOWLEDGMENT

STATE OF NEW JERSEY        )
                           )  SS.
COUNTY OF                  )

         I CERTIFY that on October ___, 2001, _________________, personally
appeared before me and this person acknowledged under oath, to my satisfaction,
that this person:

         (a) signed the attached instrument as _______________ of IKEA Property,
Inc., a corporation of the State of Delaware, named in this instrument, and

         (b) is authorized to execute the attached instrument on behalf of such
corporation; and

         (c) executed the attached instrument as the act of such corporation.

                                            ____________________________________
                                            Notary Public
Record and Return to:

Steven G. Rogers, Esq.
First American Title Insurance
    Company of New York
633 Third Avenue
New York, NY 10017

                                       65
<PAGE>
                                    EXHIBIT B

                        ENVIRONMENTAL INDEMNITY AGREEMENT

THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this "AGREEMENT") is made as of the 2nd
day of October, 2001, by ALX OF PARAMUS LLC, a Delaware limited liability
company, with a mailing address of 210 Route 4 East, Paramus, New Jersey 07652,
Attention: Chief Financial Officer ("BORROWER"), to SVENSKA HANDELSBANKEN AB
(PUBL) ("LENDER"), with a mailing address of 153 East 53rd Street, 37th Floor,
New York, New York 10022, Attention: Corporate Banking Department.

                              W I T N E S S E T H:

         WHEREAS, Borrower has executed and delivered to Lender a Limited
Recourse Promissory Note of even date herewith (together with all renewals,
amendments, supplements, restatements, extensions, and modifications thereof and
thereto, the "NOTE"), wherein Borrower promises to pay to the order of Lender
the principal amount of $68,000,000.00 in repayment of a loan from Lender in
like amount (the "LOAN"), together with interest thereon, at rates of interest
and otherwise as set forth in the Note, which Note is due and payable on or
before the MATURITY DATE (as defined in the Note). The Note is secured, inter
alia, by a mortgage, security agreement and fixture financing statement of even
date herewith (the "MORTGAGE") made by Borrower granting a lien on certain real
estate, improvements and personal property located thereon and legally described
on EXHIBIT A attached hereto and hereby made a part hereof (the "PROPERTY"). As
additional security for repayment of the Note, Borrower is executing and/or
delivering to Lender certain other documents including, without limitation, that
certain Loan Agreement between Borrower and Lender of even date herewith (the
"LOAN AGREEMENT") and that certain Assignment of Leases and Rents made by
Borrower for the benefit of Lender of even date herewith (the "ASSIGNMENT") (the
Note, the Mortgage, the Loan Agreement, the Assignment, this Agreement and all
other documents which are executed and delivered as additional evidence of, or
security for repayment of, the Loan, whether now or hereafter existing, and all
renewals, amendments, supplements, extensions and modifications thereof and
thereto, are collectively referred to hereinafter as the "LOAN DOCUMENTS"); and

         WHEREAS, as one of the conditions of making the Loan and advances,
credit and other financial accommodations heretofore or hereinafter made to
Borrower by Lender, Lender is requiring the execution and delivery of this
Agreement.

         NOW, THEREFORE, to induce Lender to make the Loan, and advances, credit
and other financial accommodations heretofore or hereinafter made to Borrower by
Lender, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower hereby represents,
warrants, covenants, and otherwise agrees as follows:

         1. Except as set forth in that certain two-volume Phase I Environmental
Site Assessment dated August 30, 2001 ( the "2001 SITE ASSESSMENT") prepared by
P.T. & L. Environmental Consultants, Inc. under Project No. 012364, and that
certain Limited Phase II Environmental Investigation Report dated October 2,
2001 (the "2001 SUPPLEMENTAL REPORT") prepared by P.T. & L. Environmental
Consultants, Inc. under Project No. 012380, and except as

                                       66
<PAGE>
set forth in that certain Phase I Environmental Site Assessment dated December
1, 1993 (the "1993 SITE ASSESSMENT") prepared by Certified Engineering & Testing
Co., Inc. under Project No. N30112 (the 2001 Site Assessment, 2001 Supplemental
Report, and 1993 Site Assessment, including all attachments and appendices to
the foregoing, are referred to collectively as the "ENVIRONMENTAL REPORT")
Borrower represents and warrants, to the best of its knowledge, that there are
no Hazardous Substances (as hereinafter defined) in the environment at, upon or
under the Property in quantities or concentrations exceeding those allowed
pursuant to applicable Environmental Laws and further represents and warrants
that during the periods of ownership of the Property by Borrower, and, to the
best of its knowledge, prior to Borrower's acquisition of its interest therein,
there have not been any Releases of any Hazardous Substances at, upon or under
the Property in quantities or concentrations exceeding those allowed pursuant to
applicable Environmental Laws. Borrower warrants that it will not cause or allow
there to be any Hazardous Substances Managed (as hereinafter defined) at, upon
or under the Property in a manner that does not comply with all applicable
Environmental Laws or Releases (as hereinafter defined) at, upon or under the
Property in violation of applicable Environmental Laws including but not limited
to Management (as hereinafter defined) or Releases (as hereinafter defined) in
connection with any operations, construction, restoration, rehabilitation, or
repairs on or at the Property.

         2. Except as otherwise set forth in the Environmental Report, Borrower
represents and warrants that there are no above ground storage tanks ("ASTS") or
underground storage tanks ("USTS") at, upon or under the Property, and further
represents and warrants that during the periods of ownership of the Property by
Borrower, and, to the best of its knowledge, prior to Borrower's acquisition of
its interest therein, there have been no ASTs or USTs at, upon or under the
Property. Borrower warrants that it will not cause or allow any ASTs or USTs to
be installed at, upon or under the Property.

         3. Borrower covenants and agrees (i) to comply with all applicable
Environmental Laws (as hereinafter defined) and Environmental Permits (as
hereinafter defined); (ii) to require the tenants and others operating on the
Property at its request to comply with applicable Environmental Laws and
Environmental Permits; (iii) to provide Lender immediate notice of any
correspondence, notices, demands or communications of any nature whatsoever
received by Borrower relating to any alleged or actual violation, or any
investigation of any alleged or actual violation, of any applicable
Environmental Law or relating to any alleged or actual presence of Hazardous
Substances at, under, over or upon the Property, and to immediately provide
Lender copies of any such correspondence, notices, demands or communications
which are in writing; (iv) to comply with Borrower's undertaking set forth in
that certain letter dated as of the date hereof from Borrower to Lender
concerning the 2001 Supplemental Report; and (v) to advise Lender in writing as
soon as Borrower becomes aware of any Environmental Condition or circumstance
which makes any of Borrower's representations or warranties contained herein
incomplete or inaccurate. In the event Lender determines that there is any
evidence that any such Environmental Condition or circumstance exists, whether
or not described in any communication or notice to Borrower or Lender, Borrower
agrees, at its own expense and at the request of Lender, to permit an
environmental audit to be conducted by Lender or an independent agent selected
by Lender. This provision shall not relieve Borrower from conducting its own
environmental audits or taking any other steps necessary to comply with any
applicable Environmental Law or Environmental Permits. If, in the opinion of
Lender, there exists any

                                       67
<PAGE>
uncorrected violation of any applicable Environmental Law or Environmental
Permits or any Environmental Condition which requires or may require any
cleanup, removal or other remedial action under any applicable Environmental
Law, and such cleanup, removal or other remedial action is not conducted in
compliance in all respects with all applicable Environmental Laws and in a
continuously diligent manner, the same shall, at the option of Lender,
constitute an Event of Default under the Loan Agreement.

         4. Lender and Indemnitees (as hereinafter defined) and their respective
agents and representatives, shall have the right, subject to the rights of
tenants under any lease, at any reasonable time to enter and visit the Property
for the purposes of observing the Property, taking and removing soil or
groundwater samples, and conducting tests on any part of the Property. Neither
Lender nor Indemnitees shall have a duty, however, to visit or observe the
Property or to conduct tests, and no site visit, observation or testing by
Lender or any Indemnitee shall impose any liability on Lender or any Indemnitee.
In no event shall any site visit, observation or testing by Lender or any
Indemnitee be a representation that Hazardous Substances are or are not present
in, on or under the Property, or that there has been or shall be compliance with
any law, regulation or ordinance pertaining to Hazardous Substances or any other
applicable governmental law. Neither Borrower nor any other party is entitled to
rely on any site visit, observation or testing by Lender or any Indemnitee.
BORROWER ACKNOWLEDGES THAT NEITHER LENDER NOR ANY INDEMNITEE OWES ANY DUTY OF
CARE TO PROTECT BORROWER OR ANY OTHER PARTY AGAINST, OR TO INFORM BORROWER OR
ANY OTHER PARTY OF, ANY HAZARDOUS SUBSTANCES OR ANY OTHER ADVERSE CONDITION
AFFECTING THE PROPERTY. Lender and Indemnitees shall disclose to Borrower, and
may in the sole and absolute discretion of Lender and Indemnitees disclose to
any other party, any report or findings made as a result of, or in connection
with, any site visit, observation or testing by Lender or Indemnitees. Borrower
understands and agrees that neither Lender nor Indemnitees makes any
representation or warranty to Borrower or any other party regarding the truth,
accuracy or completeness of any such report or findings that may be disclosed.
Borrower also understands that, depending on the results of any site visit,
observation or testing by Lender or any Indemnitee which are disclosed to
Borrower, Borrower may have a legal obligation to notify one or more
environmental agencies of the results and that such reporting requirements are
site-specific and are to be evaluated by Borrower without advice or assistance
from Lenders or Indemnitees. Lender or any Indemnitee shall give Borrower
reasonable notice before entering the Property, and any such party shall make
reasonable efforts to avoid interfering with Borrower's or Ground Lessee's (as
such term is defined in the Mortgage) use of the Property in exercising any
rights provided in this PARAGRAPH 4.

         5. Borrower represents and warrants that (i) all necessary
Environmental Permits pertaining to the Property have been obtained by the
appropriate party, and that all reports, notices, and other documents required
under any applicable Environmental Law in connection with the Property have been
filed; (ii) Borrower is not a party to any litigation or administrative
proceeding arising under any applicable Environmental Law in connection with the
Property, nor to the best knowledge of Borrower is there any such litigation or
proceeding contemplated or threatened; (iii) to its best knowledge the Property
is free from any judgment, decree, order or citation related to or arising out
of any applicable Environmental Law; and (iv) until the Loan is paid in full,
the Property shall not be used in any manner that would either subject the
Property or any part thereof to the provisions of the New Jersey Industrial Site
Recovery Act, N.J.S.A.

                                       68
<PAGE>
13:1k-6 et seq ("ISRA") or cause the Property to be deemed an "industrial
establishment" unless subject to a valid "de Minimis Quantity Exemption"
pursuant to the provisions of ISRA.

         6. Borrower covenants and agrees that it will indemnify, defend and
hold harmless Lender and any and all current, future or former officers,
directors, employees or agents of Lender (collectively, the "INDEMNITEES") from
any and all Losses (as hereinafter defined) in any way arising from: (i) any
breach of any covenant, representation or warranty in this Agreement; (ii) any
Environmental Liability (as hereinafter defined); (iii) any failure to obtain or
comply with any Environmental Permit; (iv) any Release (as hereinafter defined);
(v) any Management; (vi) any Environmental Condition (as hereinafter defined);
(vii) the presence of any Hazardous Substance at any property other than the
Property which is present due to either (A) any direct or indirect
transportation whatsoever of a Hazardous Substance from the Property, or by any
Indemnitor, to the property at which such Hazardous Substance is present and
cause any tenant or occupant of the Property to cause an indemnity like this to
be delivered in the Lender's favor and any guarantors or subtenants or (B)
migration or other movement from the Property to such other property of a
Hazardous Substance Released at the Property; and (viii) any Response (as
hereinafter defined) arising out of or in connection with any of the matters
described in this PARAGRAPH 6. This indemnification shall not apply to matters
arising due to Lender's gross negligence or willful misconduct. Borrower's
defense of Lender pursuant to this PARAGRAPH 6 shall be by legal counsel
retained by Borrower and acceptable to Lender, in Lender's reasonable judgment,
it being acknowledged that Borrower's current legal counsel in connection with
the Loan would be acceptable for such purpose, and all out-of-pocket costs
associated therewith including all legal fees, costs and expenses of all actions
and reasonable legal fees of additional counsel appointed by Lender to supervise
any actions, shall be paid by Borrower.

         7. Borrower hereby consents and agrees that Lender or any Indemnitee
may at any time and from time to time without further consent from Borrower do
any of the following events, and the liability of Borrower under this Agreement
shall be unconditional and absolute and shall in no way be impaired or limited
by any of the following events, whether occurring with or without notice to
Borrower or with or without consideration: (i) any extensions of time for
performance required by any of the Loan Documents or extension or renewal of the
Note; (ii) any sale, assignment or foreclosure of the Note, the Mortgage or any
of the other Loan Documents or any sale or transfer of the Property (whether by
deed in lieu of foreclosure or otherwise); (iii) any change in the composition
of Borrower; (iv) the accuracy or inaccuracy of the representations and
warranties made by Borrower herein or in any of the Loan Documents; (v) the
release of Borrower or of any other person or entity from performance or
observance of any of the agreements, covenants, terms or conditions contained in
any of the Loan Documents by operation of law, Lender's or Indemnitees'
voluntary act or otherwise; (vi) the release or substitution in whole or in part
of any security for the Loan; (vii) Lender's failure to record the Mortgage or
to file any financing statement (or Lender's improper recording or filing
thereof) or to otherwise perfect, protect, secure or insure any lien or security
interest given as security for the Loan; (viii) the modification of the terms of
any one or more of the Loan Documents; or (ix) the taking or failure to take any
action of any type whatsoever. No such action which Lender or any Indemnitee
shall take or fail to take in connection with the Loan Documents or any
collateral for the Loan, nor any course of dealing with Borrower or any other
person, shall limit, impair or release Borrower's obligations hereunder, affect
this Agreement in any way or afford Borrower any recourse against Lender or any
Indemnitee. Nothing contained in this PARAGRAPH 7 shall be

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<PAGE>
construed to require Lender or any Indemnitee to take or refrain from taking any
action referred to herein.

         8.       The following definitions apply throughout this Agreement:

         (a)      The term " ENVIRONMENTAL CONDITION" shall mean the presence of
                  any Hazardous Substance at, upon, over, under or emanating
                  from the Property.

         (b)      The term "ENVIRONMENTAL LAWS" shall mean all federal, state,
                  and local laws, statutes, rules, regulations, ordinances,
                  permits, guides, orders, consent decrees, including with
                  respect to the forgoing, any judicial and administrative
                  actions and decrees, relating to health, safety and
                  environmental matters as now exist and as may be enacted or
                  amended after the date hereof. Such laws and regulations
                  include, but are not limited to, the Resource Conservation and
                  Recovery Act, 42 U.S.C. Section 6901 et seq., as amended; the
                  Comprehensive Environmental Response, Compensation and
                  Liability Act, 42 U.S.C. Section 9601 et seq., as amended
                  ("CERCLA"); the Toxic Substance Control Act, 15 U.S.C. Section
                  2601 et seq., as amended; the Clean Water Act 33 U.S.C.
                  Section 1251 et seq., as amended; the Clean Air Act, 42 U.S.C.
                  Section 7401 et seq., as amended; the Spill Compensation and
                  Control Act, N.J.S.A. 58:10-23.11 et seq., as amended; the
                  Industrial Site Recovery Act, N.J.S.A. 13:1k-6 et seq., as
                  amended; the Underground Storage of Hazardous Substances Act,
                  N.J.S.A. 58:10A-21 et seq., as amended; the Toxic Catastrophe
                  Prevention Act, N.J.S.A. 13:1K-19, et seq., as amended; the
                  Worker and Community Right to Know Act, N.J.S.A. 34:5A-1, et
                  seq., as amended; the Pollution Prevention Act, N.J.S.A.
                  13:D-35, et seq., as amended; the Solid Waste Management Act,
                  N.J.S.A. 13:1E-1, et seq., as amended; the Solid Waste Utility
                  Control Act, N.J.S.A. 48:13A-1, et seq., as amended; the Air
                  Pollution Control Act, N.J.S.A. 26:2C-1, et seq., as amended;
                  the Water Pollution Control Act, N.J.S.A. 58:10A-1, et seq.,
                  as amended; the Flood Hazard Control Act, N.J.S.A. 58:16A-50,
                  et seq., as amended; the Freshwater Wetlands Protection Act,
                  N.J.S.A. 12:3-1, et seq., as amended; the Noise Control Act,
                  N.J.S.A. 13:IG-1, et seq., as amended; the Pesticide Control
                  Act, N.J.S.A. 13:1F-1, et seq., as amended; federal, state and
                  local environmental cleanup programs; federal, state and local
                  environmental lien programs; Occupational Safety and Health
                  Act of 1970, 29 U.S.C. Section 651 et seq., as amended
                  ("OSHA"); and U.S. Department of Transportation regulations
                  applicable to the transportation of Hazardous Substances.

         (c)      The term "ENVIRONMENTAL LIABILITY" shall mean any and all
                  liabilities, whether fixed, absolute, or contingent, arising
                  under any applicable Environmental Law or arising under or in
                  connection with any Environmental Permit or Environmental
                  Condition; any and all claims of any nature whatsoever by a
                  third party (including but not limited to governmental
                  agencies) arising in any way under any applicable
                  Environmental Law or arising under or in connection with any
                  Environmental Permit or Environmental Condition, including but
                  not limited to demands for environmental cleanup,
                  investigation or corrective action; any and all Losses
                  incurred or sustained as a result of alleged or actual
                  violations of applicable Environmental Laws or Environmental
                  Permits, any and all alleged or actual Environmental
                  Conditions, any and all Releases, any and all Management, or
                  any and all Responses.

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<PAGE>
                  (d)      The term "ENVIRONMENTAL PERMIT" shall mean
                           authorization by any governmental entity to conduct
                           activities governed in whole or in part by one or
                           more Environmental Laws.

                  (e)      The term "HAZARDOUS SUBSTANCE" shall mean hazardous
                           substances, hazardous wastes, hazardous waste
                           constituents, hazardous by-products, hazardous
                           materials, hazardous chemicals, extremely hazardous
                           substances, pesticides, oil and other petroleum
                           products and toxic substances, including, without
                           limitation, asbestos and PCBs, as those terms are
                           defined pursuant to or encompassed by any
                           Environmental Law or by trade custom and usage.

                  (f)      The term "LENDER" shall mean and include Lender and
                           Lender's successors, assigns, parents, subsidiaries
                           and affiliated companies, and legal representatives,
                           including all other holders, from time to time, of
                           the Note or any participation therein.

                  (g)      The terms "LOSS" or "LOSSES" shall mean any and all
                           costs, expenses and expenditures, including, without
                           limitation, court costs and reasonable attorneys',
                           experts' and consultants' fees and costs of
                           litigation or any other losses whatsoever, including,
                           without limitation, costs and expenses of
                           investigation, cleanup, prevention of migration,
                           monitoring, evaluating, assessment, removal or
                           remediation of Hazardous Substances whether or not
                           such costs or expenses are incurred in response to
                           any governmental or third party action, claim or
                           directive; damages; punitive damages actually
                           awarded; obligations; deficiencies; liabilities,
                           whether fixed, absolute, accrued, contingent or
                           otherwise and whether direct, primary or secondary,
                           known or unknown; claims; encumbrances; penalties;
                           demands; assessments; and judgments.

                  (h)      The terms "MANAGE", "MANAGED" or "MANAGEMENT " shall
                           mean the generation, handling, manufacturing,
                           processing, treatment, storing, use, reuse,
                           refinement, recycling, reclaiming, blending, burning,
                           recovery, incineration, accumulation, transportation,
                           transfer, disposal, release or abandonment of any
                           Hazardous Substances, by any person at any property
                           (including but not limited to facilities or
                           properties other than the Property, as applicable).

                  (i)      The terms "RELEASE", "RELEASED" or "RELEASES " shall
                           mean any actual or threatened spilling, leaking,
                           pumping, pouring, emitting, emptying, discharging,
                           injecting, escaping, leaching, dumping or disposing
                           of Hazardous Substances into the environment.

                  (j)      The terms "RESPOND" or "RESPONSE" shall mean any
                           action taken by any person, whether or not in
                           response to a governmental or third party action,
                           claim or directive, to correct, remove, remediate,
                           clean up, prevent migration of, monitor, evaluate,
                           investigate or assess, as appropriate, any Release of
                           a Hazardous Substance, Environmental Condition,
                           Management or actual or alleged violation of an
                           Environmental Law or Environmental Permit.

         9. The representations, warranties, covenants and agreements contained
in this Agreement, including, but not limited to, the obligations of Borrower to
indemnify Lender and the other Indemnitees as set forth in PARAGRAPH 6 hereof,
shall survive the foreclosure of any lien on the Property by Lender or a third
party or the conveyance thereof by deed in lieu of foreclosure (and shall not be
limited to the amount of any deficiency in any foreclosure sale of

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Property) and all other indicia of the termination of the relationship between
Borrower and Lender, including, but not limited to, the repayment of all amounts
due under the Loan Documents, the cancellation of the Note and the release of
any and all of the Loan Documents.

         10. Notwithstanding any other provisions hereof, the Borrower shall
have no personal liability to the Lender in respect of this Agreement and the
Lender's remedies hereunder shall be limited to the Security (as that term is
defined in the Loan Agreement), except in the case of any claim arising out of
fraud or intentional misrepresentation by the Borrower or either of its
immediate predecessors in title to the Property in connection with the execution
and delivery of this Agreement or any of the other Loan Documents.

         11. In the event that Lender or any of the other Indemnitees incurs any
costs (including reasonable attorneys' fees, and expenses and court costs) or
Losses to collect or enforce Borrower's obligations hereunder, Borrower shall,
upon demand by Lender or the other Indemnitees, immediately reimburse Lender or
the other Indemnitees therefor, plus interest from the date so incurred until
paid at the Default Interest Rate (as that term is defined in the Note),
including, but not limited to, reasonable attorneys' fees and expenses and court
costs incurred in any litigation, and bankruptcy and administrative proceedings,
and appeals therefrom.

         12. Notwithstanding anything to the contrary contained in any of the
other Loan Documents, the obligations and liabilities of Borrower and shall be
binding upon and enforceable against Borrower and its successors and assigns.

         13. Any notice or demand that Lender or Borrower may desire or be
required to give to the other such party shall be in writing and shall be given
and deemed received in accordance with the provisions of Section 10.7 of the
Loan Agreement.

         14. All rights and remedies set forth in this Agreement are cumulative,
and Lender may recover judgment thereon, issue execution therefor, and resort to
every other right or remedy available at law or in equity, without first
exhausting and without affecting or impairing the security of any right or
remedy afforded hereby. Unless expressly provided in this Agreement to the
contrary, no consent or waiver, whether express or implied, by any party to or
of any breach or default by any other party in the performance by such other
party of its obligations hereunder shall be deemed a consent to or waiver of the
performance of any other obligation hereunder. Any claim asserted by Lender
under this Agreement must be brought within one (1) year after (i) repayment in
full of the Loan or (ii) the Lender's sale of the Property after obtaining title
thereto.

         15. If any provision of this Agreement, or any paragraph, sentence,
clause, phrase or word, or the application thereof, in any circumstance, is held
invalid, the validity of the remainder of this Agreement shall be construed as
if such invalid part were never included herein. As used in this Agreement, the
singular shall include the plural and vice-versa, and masculine, feminine and
neuter pronouns shall be fully interchangeable, when the context so requires.

         16. To the extent permitted by law, Borrower, for itself and its
successors, hereby waives and agrees not to assert or take advantage of (i) any
assertion or claim that the automatic stay provided by 11 U.S.C. Section 362
(arising upon the voluntary or involuntary bankruptcy proceeding of Borrower) or
any other stay provided under any other debtor relief law (whether statutory,
common law, case law or otherwise) of any jurisdiction whatsoever, now or
hereafter in effect, which may be or become applicable, shall operate or be
interpreted to stay, interdict, condition, reduce or inhibit the ability of any
Indemnitee to enforce any of its rights, whether now or hereafter acquired,
which any Indemnitee may have against Borrower or the collateral for

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the Loan, and (ii) any modification of the Loan Documents or any obligation of
Borrower relating to the Loan by operation of law or by action of any court,
whether pursuant to the Bankruptcy Reform Act of 1978, as amended or recodified
(the "BANKRUPTCY CODE"), or under any other present or future federal or state
law or statute regarding bankruptcy, reorganization or other relief to debtors
(collectively, "DEBTOR RELIEF LAWS"), or otherwise. Borrower covenants and
agrees that upon the commencement of a voluntary or involuntary bankruptcy
proceeding by or against any Borrower, Borrower shall not seek a supplemental
stay or otherwise pursuant to 11 U.S.C. Section 105 or any other provision of
the Bankruptcy Code or any other Debtor Relief Laws, to stay, interdict,
condition, reduce or inhibit the ability of any Indemnitee to enforce any rights
of any Indemnitee against Borrower by virtue of this Agreement or otherwise.

         17. Reference to the Borrower herein shall be deemed to include both of
Borrower's immediate predecessors in title to the Property.

         18. This Agreement may be executed in one or more counterparts, each of
which shall constitute an original, and all of which together shall constitute
one and the same instrument.

         19. THE VALIDITY OF THIS AGREEMENT, ITS CONSTRUCTION, INTERPRETATION
AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO, SHALL BE DETERMINED
UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK (WITHOUT GIVING EFFECT TO NEW YORK CHOICE OR CONFLICTS OF LAW PRINCIPLES).
BORROWER AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AGREEMENT SHALL BE TRIED AND LITIGATED EITHER IN STATE OR FEDERAL COURTS LOCATED
IN BERGEN COUNTY, NEW JERSEY OR, AT THE SOLE OPTION OF LENDER, IN THE BOROUGH OF
MANHATTAN, CITY OF NEW YORK, OR IN ANY OTHER COURT IN WHICH LENDER SHALL
INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY. TO THE MAXIMUM EXTENT PERMITTED BY
LAW, BORROWER HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS PARAGRAPH 19. TO THE MAXIMUM
EXTENT PERMITTED BY LAW, BORROWER HEREBY WAIVES PERSONAL SERVICE OF PROCESS UPON
BORROWER, AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED
MAIL DIRECTED TO BORROWER AT THE ADDRESS PROVIDED FOR IN PARAGRAPH 13 OF THIS
AGREEMENT AND SERVICE SO MADE WILL BE DEEMED TO BE COMPLETED UPON ACTUAL
RECEIPT.

              [The balance of this page intentionally left blank.]

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20. TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWER AND LENDER HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY ACTION, CAUSE OF ACTION, CLAIM, DEMAND
OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT, OR IN ANY WAY
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE DEALINGS OF BORROWER AND LENDER
WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE. TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWER AND LENDER
HEREBY AGREE THAT ANY SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND OR PROCEEDING
SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT BORROWER OR LENDER MAY
FILE A COPY OF THIS AGREEMENT WITH ANY COURT OR OTHER TRIBUNAL AS WRITTEN
EVIDENCE OF THE CONSENT OF LENDER AND BORROWER TO THE WAIVER OF ITS RIGHT TO
TRIAL BY JURY. BORROWER AGREES THAT IT WILL NOT ASSERT ANY CLAIM AGAINST LENDER
ON THE THEORY OF LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR
PUNITIVE DAMAGES.

         IN WITNESS WHEREOF, Borrower has executed this Agreement as of the date
set forth above.

Witness:                                ALX OF PARAMUS LLC

/s/ Patrick Hogan                       By: /s/ Joseph Macnow
                                        Joseph Macnow, Executive Vice President
                                        of Finance and Administration

/s/ Brian Kurtz                         By: /s/ Steven Santora
                                        Steven Santora, Assistant Secretary

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<PAGE>
                                    EXHIBIT A
                                LEGAL DESCRIPTION

PARCEL I:

BEING ALL that tract or parcel of land and premises, situated, lying and being
in the Borough of Paramus, County of Bergen State of New Jersey and being more
particularly described as follows:

Beginning at the point of intersection of the Northerly line of New Jersey State
Highway Route 4 (being 65.00 feet measured at right angles from the center line)
with the Easterly line of the Garden State Parkway all as shown on a certain map
entitled "Major Subdivision for Paramus/Alexander's/Hahn/Somes-Alterman,
N.J.S.H. Route 4 West and J.J.S.H. Route 17 South, Paramus, Bergen County, New
Jersey", prepared by Lapatka Associates, Inc., dated 12-24-87 and bearing
1-16-89 as its latest revision date, filed in the Bergen County Clerk's Office
on 10-4-89 as Map No. 8695 and running; thence,

1)       Along the Easterly line of the Garden State Parkway, North 60 Degrees
         and 27 minutes and 15 seconds East, 428.16 feet to a point; thence,

2)       Along the same, North 59 degrees and 19 minutes and 52 seconds East,
         199.97 feet to a point; thence,

3)       Along the same, North 57 degrees and 31 minutes and 44 seconds East,
         195.58 feet to a point; thence,

4)       Along the same, North 53 degrees and 35 minutes and 28 seconds East,
         198.81 feet to a point; thence,

5)       Along the same, North 49 degrees and 42 minutes and 46 seconds East,
         197.95 feet to a point; thence,

6)       Along the same, North 46 degrees and 32 minutes and 53 seconds East,
         287.90 feet to a point; thence,

7)       Along the same, North 41 degrees and 09 minutes and 46 seconds East,
         232.45 feet to a point; thence,

8)       Continuing along the Easterly line of the Garden State Parkway, North
         37 degrees and 42 minutes and 15 seconds East, 88.66 feet to a point;
         thence,

9)       Along the Southerly line of Lot 1 in Block 1201 as shown on the
         referenced subdivision, South 51 degrees and 53 minutes and 42 seconds
         East, 205.30 feet to a point; thence,

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<PAGE>
10)      Along the Easterly line of Lot 1 in Block 1201, North 38 degrees and 06
         minutes and 18 seconds East, 85.00 feet to a point; thence,

11)      Along the Southerly line of Lot 2 in Block 1201 as shown on the
         referenced subdivision, South 51 degrees and 53 minutes and 42 seconds
         East, 400.00 feet to a point; thence

12)      Along the Easterly line of Lot 2 in Block 1201, North 38 degrees and 06
         minutes and 18 seconds East, 15.00 feet to a point; thence,

13)      Along the Southerly line of Lot 12 in Block 1201 as shown on the
         referenced subdivision, South 51 degrees and 53 minutes and 42 seconds
         East, 140.72 feet to a point; thence

14)      Along the Westerly line of N.J.S.H Route 17 (120.00 feet wide), South
         07 degrees and 53 minutes and 26 seconds West, 385.88 feet to a point;
         thence,

15)      Along the Easterly line of Lot 7 in Block 1202 as shown on the
         referenced subdivision, North 02 degrees and 31 minutes and 19 seconds
         West, 42.63 feet to a point on a curve; thence,

16)      Westerly, along the Northerly line of Lot 7 in Block 1202 on a curve to
         the right having a radius of 25.00 feet, central angle of 73 degrees
         and 42 minutes and 40 seconds (chord bearing North 89 degrees and 01
         minutes and 40 seconds West), an arc distance of 32.16 feet to a point
         of tangency; thence,

17)      Along the same, North 52 degrees and 10 minutes and 20 seconds West,
         97.92 feet to a point; thence,

18)      Along a Westerly line of Lot 7 in Block 1202, South 39 degrees and 35
         minutes and 56 seconds West, 111.89 feet to a point; thence,

19)      Along the same, South 37 degrees and 39 minutes and 55 seconds West,
         93.00 feet to a point; thence,

20)      Along a Southerly line of Lot 7 in Block 1202, South 52 degrees and 20
         minutes and 05 seconds East, 100.00 feet to a point; thence,

21)      Along a Westerly line of Lot 7 in Block 1202, South 37 degrees and 39
         minutes and 55 seconds West, 25.00 feet to a point; thence,

22)      Along a Southerly line of Lot 7 in Block 1202, South 52 degrees and 20
         minutes and 05 seconds West, 176.20 feet to a point; thence,

23)      Along the Westerly line of N.J.S.H. Route 17, South 07 degrees and 53
         minutes and 26 seconds West, 1.49 feet to a point; thence,

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<PAGE>
24)      Along the same, South 07 degrees and 37 minutes and 51 seconds West,
         44.71 feet to a point; thence,

25)      Along the Northerly line of existing Lot 2 in Block 1203 being lands,
         now or formerly, of the New Jersey Department of Transportation, North
         52 degrees and 20 minutes and 05 seconds West, 9.32 feet to a point;
         thence,

26)      Along the Westerly line of existing lot 2 in Block 1203, South 37
         degrees and 39 minutes and 55 seconds West, 100.00 feet to a point;
         thence,

27)      Along the Southerly line of the same and existing Lot 3 in Block 1203
         being lands, now or formerly, of Gabriel Associates, South 52 degrees
         and 20 minutes and 05 seconds East, 67.13 feet to a point; thence,

28)      Along the Westerly line of N.J.S.H. Route 17, South 07 degrees and 37
         minutes and 51 seconds West, 4.46 feet to a point of curvature; thence,

29)      Southwesterly, along the Westerly line of the ramp from N.J.S,H. Route
         17 (Southbound) to N.J.S.H. Route 4 (Westbound) on a curve to the right
         having a radius of 290.00 feet, an arc distance of 254.39 feet to a
         point of tangency; thence,

30)      Along the same, South 57 degrees and 53 minutes and 26 seconds West,
         281.78 feet to a point; thence,

31)      Along the same, South 70 degrees and 18 minutes and 16 seconds West,
         111.35 feet to a point; thence,

32)      Along the same, North 87 degrees and 45 minutes and 06 seconds West,
         81.43 feet to a point; thence,

Along the Northerly line of N.J.S.H. Route 4, North 72 degrees and 06 minutes
and 34 seconds West, 1,490.31 feet to the point or place of beginning.

Subject to easements and restrictions of record.

Being Lot 1 in Block 1202 as appearing on the referenced Subdivision Map No.
8695 containing 1,712,916 square feet or 39.3231 acres more or less.

Excepting therefrom lands acquired by the State of New Jersey by the
Commissioner of Transportation pursuant to Declaration of Taking for Road
Widening, recorded November 25, 1997, in Book 8023, Page 304, as instrument
#144855.

Including specifically that part of Lot 7, in Block 1202, pursuant to Deed Book
8042, Page 097, (Exchange Deed, between The State of New Jersey, Department of
Transportation and

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<PAGE>
Alexander's Department Stores of New Jersey, Inc.), recorded February 6, 1998,
as instrument #018103.

PARCEL II:

BEING ALL that tract or parcel of land and premises, situated, lying and being
in the Borough of Paramus, County of Bergen State of New Jersey and being more
particularly described as follows:

Beginning at the intersection of the Westerly right of way line of the Garden
State Parkway and the new Southerly line of Tax Map Lot 7 in Tax Map Block 1802,
said point having a New Jersey State Plane Grid Coordinate of North 763,178.759
and East 2,163,678.175, all as laid down on a certain map entitled "Location
Survey, Lot 3, Block 1101, Paramus, Bergen County, New Jersey", dated 10-26-93
and bearing 2-8-94 as its latest revision date, prepared by Lapatka Associates,
Inc., Paramus, New Jersey. Said point also being measured Southwesterly along
the Westerly right of way line of the Garden State Parkway from its intersection
with the Southerly R.O.W. Line of Century Road, all as laid down on a certain
map entitled "Garden State Parkway, Section 1, Survey of Westerly right of way
line, South of Century Road, Paramus, N.J.", dated November 23, 1966, Sheet No.
32 of 33, prepared by Boswell Engineering Company, Ridgefield Park, New Jersey,
along the following bearings and distances:

A)       South 10 degrees and 11 minutes and 03 seconds West, along the Westerly
         right of way line of the Garden State Parkway as described above, for a
         distance of 136.71 feet to a bend in the same; thence,

B)       South 05 degrees and 33 minutes and 26 seconds West, along the same,
         for a distance of 185.87 feet to a bend in the same; thence,

C)       South 09 degrees and 55 minutes and 07 seconds West, along the same,
         for a distance of 185.78 feet to a bend in the same; thence,

D)       South 14 degrees and 54 minutes and 37 seconds West, along the same,
         for a distance of 174.89 feet to a bend in the same; thence,

E)       South 20 degrees and 48 minutes and 46 seconds West, along the same,
         for a distance of 182.94 feet to a bend in the same; thence,

F)       South 25 degrees and 46 minutes and 10 seconds West, along the same,
         for a distance of 161.01 feet to a bend in the same; thence,

G)       South 28 degrees and 52 minutes and 02 seconds West, along the same,
         for a distance of 82.49 feet to the new Southerly line of Tax Map Lot 7
         in Tax Map Block 1802, being the point and place of beginning and
         running from the beginning point hereindescribed; thence,

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<PAGE>
1)       South 28 degrees and 52 minutes and 02 seconds West, along the Westerly
         right of way line of the Garden State Parkway as described above, for a
         distance of 95.64 feet to a bend in the same; thence,

2)       South 34 degrees and 53 minutes and 01 seconds West, along the same,
         for a distance of 173.10 feet to a bend in the same; thence,

3)       South 37 degrees and 55 minutes and 47 seconds West, along the same,
         for a distance of 183.83 feet to a bend in the same; thence,

4)       South 41 degrees and 07 minutes and 31 seconds West, along the same,
         for a distance of 177.89 feet to a bend in the same; thence,

5)       South 43 degrees and 34 minutes and 47 seconds West, along the same,
         for a distance of 171.17 feet to a bend in the same; thence,

6)       South 47 degrees and 27 minutes and 33 seconds West, along the same,
         for a distance of 30.73 feet to its intersection with the Northerly
         right of way line of Summit Avenue extended, as laid down on a certain
         map entitled "Map Showing S.E. Wood - Summit Avenue Subdivision, West
         Hackensack, Midland Township, Bergen County, New Jersey", filed in the
         Bergen County Clerk 's Office on June 16, 1997 as Map No. 773; thence,

7)       North 52 degrees and 20 minutes and 05 seconds West, along the
         Northerly right of way line of Summit Avenue extended, for a distance
         of 20.00 feet more or less to the centerline of Sprout Brook as it
         previously existed; thence,

8)       Northerly, along the various courses of the "centerline of Sprout Brook
         as located in the field" as it formerly existed and laid down on a
         certain map entitled "New Jersey Highway Authority, Garden State
         Parkway, Section I, General Property Map", Sheets No. 29 and 30 of 33,
         prepared by Fay, Spofford & Thorndike, Consulting Engineers, Boston,
         Massachusetts and Clifton, New Jersey, for a distance of approximately
         960 feet to its intersection with the aforementioned new Southerly line
         of Tax Map Lot 7 in Tax Map Block 1802; thence,

9)       South 52 degrees and 36 minutes and 40 seconds East, along the new
         Southerly line of Tax Map Lot 7 in Tax Map Block 1802, for a distance
         of approximately 370 feet to the point and place of beginning.

TOGETHER with all right, title and interest in and to that certain limited
Easement for Right of way as set forth in Deed Book 7796, Page 505, Bergen
County, New Jersey.

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                                    EXHIBIT C

                  SCHEDULE OF PERMITTED LIENS AND ENCUMBRANCES

1.       Liens and encumbrances reflected on the mark-up of title report as
         issued at closing of the Mortgage

2.       The Fee Mortgage

3.       The Ground Lease

4.       The Guaranty

5.       A mortgage securing a loan for the construction by the Ground Lessee of
         the initial improvements on the Property, provided (i) such mortgage is
         fully subordinated to the Fee Mortgage, (ii) the holder of such
         mortgage is and remains an entity which is a member of the IKEA Group
         of companies, (iii) neither such mortgage nor any participation in such
         mortgage may be sold, assigned, collateralized or securitized and (iv)
         such mortgage may not be recorded until all improvements funded by such
         loan have been fully completed and the Ground Lessee shall have taken
         possession and commenced operation of such improvements pursuant to the
         Ground Lease.

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<PAGE>
                                    EXHIBIT D

                              FORM OF FEE MORTGAGE

                                    [TO COME]

                                       81
<PAGE>
                                    EXHIBIT E

                                LIMITED RECOURSE
                                 PROMISSORY NOTE

Amount: USD 68,000,000.00                                        October 2, 2001

         FOR VALUE RECEIVED, ALX of Paramus LLC, a limited liability company
organized under the laws of the State of Delaware with an office at 210 Route 4
East, Paramus, New Jersey 07652 (the "Borrower") unconditionally promises to pay
to Svenska Handelsbanken AB (publ), including any branch, agency or other office
located at 153 East 53rd Street, New York, New York 10022 (the "Bank"), the
principal sum of Sixty-Eight Million US Dollars (USD 68,000,000) and to pay
interest on the unpaid principal amount hereof at a rate per annum as set forth
below.

         This Note is issued pursuant to the terms of a loan agreement dated as
of October 2, 2001 between the Borrower and the Bank (the "Loan Agreement"), and
is subject to the terms thereof and is entitled to the benefits therein
provided. In the event of any discrepancy between the terms hereof and the Loan
Agreement, the Loan Agreement shall govern.

         The principal hereof shall be repayable in installments in accordance
with the terms of the Loan Agreement. Interest hereon shall accrue at the rates
and be payable at the times and place in the manner set forth in the Loan
Agreement. The principal and interest on this Note shall be payable in lawful
money of the United States in immediately available funds without set-off or
counterclaim.

         Upon the occurrence of an Event of Default as defined in the Loan
Agreement, the principal of and accrued interest on this Note may be declared
due and payable in the manner and with the effect provided in the Loan
Agreement, without presentment, demand, protest or notice of any kind, each of
which is hereby expressly waived by the Borrower.

         This Note may only be prepaid in accordance with the terms of the Loan
Agreement.

         This Note is secured by and entitled to the benefits of the Mortgage,
Security Agreement and Fixture Financing Statement of this date (the
"Mortgage"), between the Bank and the Borrower. In the event of non-payment of
this Note, the Bank shall have no recourse to the Borrower personally, except as
may be otherwise provided in the Loan Agreement.

         The Borrower acknowledges that the Loan evidenced by this Note is a
commercial transaction and waives its rights to notice and hearing allowed by
any state or federal law with respect to any prejudgement remedy which the
holder may desire to use, and further, waives diligence, demand, presentment for
payment, notice of nonpayment, protest and notice of protest, and notice of any
renewals or extensions of this note. The Borrower acknowledges that it makes
this waiver knowingly, voluntarily, without duress and only after extensive
consideration of the ramifications of this waiver with its attorney.

         THE BORROWER WAIVES TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION,
PROCEEDING OR ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO
THIS NOTE OR THE FINANCING TRANSACTION OF WHICH THIS NOTE IS A PART OF THE
DEFENSE OR ENFORCEMENT OF ANY OF THE HOLDER'S RIGHTS AND REMEDIES IN CONNECTION
THEREWITH. THE BORROWER ACKNOWLEDGES THAT IT MAKES THIS

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<PAGE>
WAIVER KNOWINGLY, VOLUNTARILY, WITHOUT DURESS AND ONLY AFTER EXTENSIVE
CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEY.

         This Note shall be governed by and interpreted in accordance with the
laws of the State of New York.

         Executed as of the date set forth above.

                                             ALX OF PARAMUS LLC

Attest:  /s/ Patrick Hogan                   By: /s/ Joseph Macnow
                                             Name: Joseph Macnow
                                             Title: Executive Vice President
                                                    Finance and Administration

                                       83
<PAGE>
                                    EXHIBIT F

                                       84
<PAGE>
                               NOTICE OF BORROWING

                                    EXHIBIT G

                               ESCROW INSTRUCTIONS

         THESE ESCROW INSTRUCTIONS ("Escrow Instructions"), dated as of October
4, 2001, are by and among Svenska Handelsbanken AB (publ), a banking corporation
organized under the laws of the Kingdom of Sweden, including any branch, agency
or other office thereof located at 153 East 53rd Street, 37th Floor, New York,
NY 10022 ("BANK"), ALX of Paramus LLC, a limited liability company organized
under the laws of the State of Delaware ("BORROWER"), IKEA Property, Inc., a
corporation organized under the laws of the State of Delaware ("LESSEE"), and
The Bank of New York, a corporation organized under the laws of the State of New
York, as escrow agent ("Escrow Agent").

         WHEREAS, simultaneously herewith BORROWER, as Lessor, is entering into
a Ground Lease with LESSEE, dated as of the date hereof, pursuant to which
LESSEE will lease certain Property (as defined therein) from BORROWER for a term
of forty (40) years; and

         WHEREAS, simultaneously herewith BORROWER is entering into a Loan
Agreement, dated as of the date hereof, with BANK pursuant to which BANK will
lend to BORROWER, the principal amount of USD 68,000,000 for a term of ten (10)
years (the "Loan"); and

         WHEREAS, pursuant to the Loan Agreement, BORROWER has agreed to secure
the Loan by, among others, assignment to BANK of (i) leases and rents relating
to the Property, including (but not limited to) the Ground

                                       85
<PAGE>
Lease and rents thereunder, and (ii) a Guaranty and Agreement dated as of the
date hereof from Ikea Holding US, Inc., a Delaware corporation, as guarantor
("GUARANTOR"), pursuant to which GUARANTOR has guaranteed LESSEE's obligations
under the Ground Lease; and in furtherance thereof BORROWER is entering into an
Assignment of Leases and Rents dated as of the date hereof ("Assignment"); and

         WHEREAS, BORROWER, LESSEE and BANK desire to enter into these Escrow
Instructions in furtherance of the Loan Agreement and the Ground Lease for the
purpose of establishing payment procedures in respect of (i) Fixed Rent (as
defined in the Ground Lease) payable by LESSEE under the Ground Lease; and (ii)
interest payable by BORROWER to BANK pursuant to the Loan Agreement; and

         WHEREAS, all acts, conditions and things required by law to exist, to
have happened and to have been performed precedent to and in connection with the
execution and delivery of these Escrow Instructions do exist, have happened and
have been performed in due time, form and manner as required by law and the
parties hereto are duly authorized to execute and deliver these Escrow
Instructions.

         NOW, THEREFORE, in furtherance of the Assignment to secure the payment
of interest payable under the Loan Agreement out of Fixed Rent payable under the
Ground Lease, for the benefit of BANK, and its successors and assigns, and
intending to be legally bound hereby, BORROWER, LESSEE and BANK have entered
into these Escrow Instructions to Escrow Agent, and hereby confirm and agree
that Escrow Agent, acting as agent for BANK, to the extent of Loan Interest
payable under the Loan Agreement, has a first priority security interest in all
funds paid to Escrow Agent hereunder, and in all accounts, and funds therein,
together with all monies, documents, instruments, receipts and investments now
or hereafter acquired by Escrow Agent hereunder in its capacity as such, and all
general intangibles and accounts (as those terms are defined by the New York
Uniform Commercial Code) of BORROWER or LESSEE arising from or related to the
funds and security interest described in these Escrow Instructions, both those
now in existence and those that shall hereafter arise, together with the
proceeds thereof (the "Collateral") and that Escrow Agent is receiving, holding
and disbursing the Collateral as agent for the BANK.

         TO HAVE AND TO HOLD, the Collateral to Escrow Agent and its successors
and its assigns forever for the benefit of the BANK, as security, as set forth
herein, subject to the covenants and conditions hereinafter set forth.

                                    Article 1
                         DEFINITIONS AND RULES OF USAGE

                                       86
<PAGE>
         As used herein, unless the context otherwise requires, capitalized
terms used and not defined herein shall have the respective meanings assigned to
them in the Loan Agreement (a copy of which will be provided to Escrow Agent by
the Bank), and are incorporated herein by reference. In addition, the following
terms used herein shall have the following meanings:

         "Eligible Institution" shall mean a bank or trust company formed under
the laws of the United States or any State thereof, or a State-registered branch
of a foreign bank, in any case with aggregate assets or funds held in trust in
excess of USD $1 billion.

         "Loan Interest" shall mean interest payable at the Applicable Rate or
the Default Interest Rate, as the case may be, as defined in the Loan Agreement.

         "Operative Documents" shall mean the Loan Agreement, the Assignment and
the Ground Lease.

         "Permitted Investments" shall mean a money market fund having a rating
of at least AaM or AaM-G by S&P or equivalent by Moody's.

                                    Article 2
               ESTABLISHMENT OF ESCROW ACCOUNT; STATUS OF PARTIES

         2.1 Escrow Account. There is hereby established with Escrow Agent a
special account designated the "ALX PARAMUS Escrow Account", herein referred to
as the "Escrow Account". Escrow Agent shall maintain the Escrow Account,
separate and apart from all other funds and monies held by it, and shall deposit
into, withdraw and transfer any sums contained therein only as provided in these
Escrow Instructions. Escrow Agent shall administer and maintain the Escrow
Account in accordance with the terms of these Escrow Instructions.

         2.2 Ownership of the Escrow Account. BORROWER is the owner of the
Escrow Account for Federal income tax purposes and will be subject to Federal
income tax on the net earnings, if any, of the Escrow Account, but shall not be
entitled to possession of any funds on deposit in the Escrow Account, until the
earlier of such time as (x) the liens of the Assignment have been released and
discharged or (y) such funds have been transferred to BORROWER from the Escrow
Account in accordance with Article 3 hereof.

         2.3 Capacity of Escrow Agent.

                  (a) Escrow Agent as Agent for the BANK. Escrow Agent is acting
hereunder as agent of and solely for the benefit of the BANK, for purposes of
receiving, holding and disbursing such monies and investments (collectively,
"Escrow Property") as are at any time held by Escrow Agent in the Escrow Account
pursuant to these Escrow Instructions and in disbursing, transferring, and
otherwise handling such Escrow Property. Escrow Agent is holding such Escrow
Property and security interest subject to the terms, conditions and provisions
hereof. Subject to

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the terms and conditions hereof, Escrow Agent, for the benefit of the BANK,
shall have sole dominion and control of the Escrow Account, and, provided that
Escrow Agent shall comply with the terms hereof, BORROWER shall have no rights
of withdrawal therefrom prior to disbursement to BORROWER from the Escrow
Account and the release and discharge of such security interest as provided
herein.

                  (b) Acceptance of Appointment. Escrow Agent hereby accepts its
appointment and agrees to act as set forth in these Escrow Instructions. Each of
the parties hereto consents to the appointment of Escrow Agent and to the
acceptance by Escrow Agent of such appointment.

         2.4 Direction of Payments to Escrow Agent. BORROWER hereby irrevocably
directs LESSEE to make all payments of Fixed Rent (or payments in lieu thereof)
under or pursuant to the Ground Lease to Escrow Agent (collectively, "Assigned
Payments") for disbursement as hereinafter provided. BORROWER and LESSEE shall
cause all payments of Assigned Payments to be made to Escrow Agent and Escrow
Agent shall disburse such payments in accordance with these Escrow Instructions.
BORROWER will cause any payments of Assigned Payments mistakenly made to
BORROWER by LESSEE to be promptly paid over to Escrow Agent hereunder. BORROWER,
upon request of Escrow Agent, promptly shall execute and deliver any instrument,
assignment or other instruction consistent with or in furtherance of the
direction of all payments of Assigned Payments to Escrow Agent pursuant to this
Section 2.4.

                                    Article 3
                  ESTABLISHMENT AND ADMINISTRATION OF ACCOUNT;

           Receipt and Disbursement of Monies Received By Escrow Agent

         3.1      Escrow Account, Payment Instructions; Flow of funds.

                  (a) DEPOSIT OF MONIES RECEIVED. All payment of Assigned
Payments received by Escrow Agent shall immediately be deposited in the Escrow
Account for application as set forth herein. All Assigned Payments received by
BORROWER shall be promptly turned over to Escrow Agent for deposit into the
Escrow Account.

                  (b) Flow of funds. Promptly upon the receipt by Escrow Agent
of any Assigned Payment, Escrow Agent shall apply such Assigned Payment in the
order and according to the priorities set forth below:

                           (i) by transferring to the BANK any amounts certified
by the BANK to Escrow Agent as being due and owing thereto in respect of Loan
Interest; and

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                           (ii) by transferring to BORROWER all remaining funds.

provided that if BANK shall not have given Escrow Agent a Payment Notice (as
hereinafter in Section 3.2 provided) as to the amount of Loan Interest or
Default Interest, as the case may be, to be paid to BANK out of any Fixed Rent
payment, such Fixed Rent payment shall be maintained by Escrow Agent in the
Escrow Account until receipt of such Payment Notice. Pending receipt of such
Payment Notice, Escrow Agent shall invest such funds in Permitted Investments
with the shortest possible maturities in accordance with written instructions
from BANK.

                  (c) Escrow Account Shortfall. If there are insufficient funds
on deposit in the Escrow Account to pay the Loan Interest or Default Interest,
as the case may be, on any Interest Payment Date in accordance with a Payment
Notice delivered to Escrow Agent, Escrow Agent shall (i) pay such amounts as
shall be held in the Escrow Account to BANK and (ii) shall give notice of the
shortfall to BORROWER, LESSEE and BANK. Upon receipt of funds which BORROWER or
LESSEE indicates in writing are intended to cover such shortfall amount from
BORROWER or LESSEE, Escrow Agent shall promptly pay such shortfall amount to
BANK.

                  (d) Closing of Escrow Account. Upon written notice from BANK
that no amounts remain unpaid pursuant to the Loan Agreement, the balance, if
any, in the Escrow Account shall be transferred to BORROWER and the Escrow
Account shall be closed. BANK will give Escrow Agent prompt written notice when
no amounts remain unpaid pursuant to the Loan Agreement.

                  (e) Commingling of Investments. All investments made by Escrow
Agent pursuant to Section 3.1(b) shall be held in the name of Escrow Agent, and
shall be held by Escrow Agent as agent of BANK. For purposes of investment,
Escrow Agent may commingle monies in the Escrow Account.

                  (f) Payment Method. All payments of Fixed Rent to Escrow
Agent, and all disbursements or investment of monies by Escrow Agent shall be
made by bank wire transfer in immediately available funds in accordance with
written instructions to be provided to the parties by Escrow Agent. Payments to
any party hereunder shall be made to such account(s) ass such party shall have
advised Escrow Agent by written notice.

         3.2 PAYMENT NOTICE. Simultaneous with the execution hereof, and from
time thereafter as appropriate (and in any event not later than two (2) days
prior to an Interest Payment Date (as specified on the Payment Notice)), BANK
shall give to Escrow Agent, with copies to BORROWER and LESSEE, a Payment Notice
which

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sets forth (i) the amount of Loan Interest or Default Interest (as the case may
be) due and payable on such Interest Payment Date and (ii) the due date of such
payment. Such Payment Notice shall be binding and conclusive on Escrow Agent
unless prior to disbursement in respect thereof Escrow Agent shall have received
from BORROWER a written objection to the amount of such interest payment set
forth in the Payment Notice, in which event Escrow Agent shall continue to hold
any funds received in the Escrow Account pending receipt of a joint statement
from BANK and BORROWER as to the amount due in respect of such interest payment.

                                    Article 4
                              Terms and Conditions

         4.1 Escrow Agent Duties. The duties, responsibilities and obligations
of Escrow Agent shall be limited to those expressly set forth herein and no
duties, responsibilities or obligations shall be inferred or implied. Escrow
Agent shall not be subject to, nor required to comply with, any other agreement
between or among LESSEE, BORROWER or BANK or to which any of them is a party,
even though reference thereto may be made herein, or to comply with any
direction or instruction (other than those contained herein or delivered in
accordance with these Escrow Instructions) from LESSEE, BORROWER or BANK or any
entity acting on its behalf. Escrow Agent shall not be required to, and shall
not, expend or risk any of its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder.

         4.2 Beneficiaries. These Escrow Instructions are for the exclusive
benefit of the parties hereto and their respective successors and permitted
assigns hereunder, and shall not be deemed to give, either express or implied,
any legal or equitable right, remedy, or claim to any other entity or person
whatsoever.

         4.3 Compliance With Orders. If at any time Escrow Agent is served with
any judicial or administrative order, judgment, decree, writ or other form of
judicial or administrative process which in any way affects Escrow Property
(including but not limited to orders of attachment or

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garnishment or other forms of levies or injunctions or stays relating to the
transfer of Escrow Property), Escrow Agent is authorized to comply therewith in
any manner as it or its legal counsel of its own choosing deems appropriate; and
if Escrow Agent complies with any such judicial or administrative order,
judgment, decree, writ or other form of judicial or administrative process,
Escrow Agent shall not be liable to any of the parties hereto or to any other
person or entity even though such order, judgment, decree, writ or process may
be subsequently modified or vacated or otherwise determined to have been without
legal force or effect.

         4.4 (a) Limitations on Liability. Escrow Agent shall not be liable for
any action taken or omitted or for any loss or injury resulting from its actions
or its performance or lack of performance of its duties hereunder in the absence
of bad faith, gross negligence or willful misconduct on its part. In no event
shall Escrow Agent be liable (i) for acting in accordance with or relying upon
any instruction, notice, demand, certificate or document from LESSEE, BORROWER
or BANK or any entity acting on such party's behalf, (ii) for any consequential,
punitive or special damages, (iii) for the acts or omissions of its nominees,
correspondents, designees, subagents or subcustodians, or (iv) for an amount in
excess of the value of the Escrow Property, valued as of the date of deposit.

                  (b) Non-Payment of Fees. If any fees, expenses or costs
incurred by, or any obligations owed to, Escrow Agent hereunder are not promptly
paid when due, Escrow Agent may reimburse itself therefor from the Escrow
Property and may sell, convey or otherwise dispose of any Escrow Property for
such purpose.

                  (c) Security Interest of Escrow Agent. As security for the due
and punctual performance of any and all obligations of BORROWER, BANK and LESSEE
to Escrow Agent hereunder, now or hereafter arising, of BORROWER, BANK and
LESSEE, individually and collectively, hereby pledge, assign and grant to Escrow
Agent a continuing security interest in, and a lien on, the Escrow Property and
all distributions thereon or additions thereto (whether such additions are the
result of deposits by LESSEE, BORROWER or BANK or the investment of Escrow
Property). The security interest of Escrow Agent shall at all times be valid,
perfected and enforceable by Escrow Agent against LESSEE, BORROWER or BANK and
all third parties in accordance with the terms of these Escrow Instructions.

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<PAGE>
         (d) Consultation with Counsel. Escrow Agent may consult with legal
counsel at the expense of the LESSEE, BORROWER and/or BANK as to any matter
relating to these Escrow Instructions, and Escrow Agent shall not incur any
liability in acting in good faith in accordance with any advice from such
counsel.

                  (e) Force Majeure. Escrow Agent shall not incur any liability
for not performing any act or fulfilling any duty, obligation or responsibility
hereunder by reason of any occurrence beyond the control of Escrow Agent
(including but not limited to any act or provision of any present or future law
or regulation or governmental authority, any act of God or war, or the
unavailability of the Federal Reserve Bank wire or telex or other wire or
communication facility).

         4.5 Collection of Funds. Unless otherwise specifically set forth
herein, Escrow Agent shall proceed as soon as practicable to collect any checks
or other collection items at any time deposited hereunder. All such collections
shall be subject to Escrow Agent's usual collection practices or terms regarding
items received by Escrow Agent for deposit or collection. Escrow Agent shall not
be required, or have any duty, to notify anyone of any payment or maturity under
the terms of any instrument deposited hereunder, nor to take any legal action to
enforce payment of any check, note or security deposited hereunder or to
exercise any right or privilege which may be afforded to the holder of any such
security.

         4.6 Monthly Statements. Escrow Agent shall provide to LESSEE, BORROWER,
and BANK monthly statements identifying transactions, transfers or holdings of
Escrow Property and each such statement shall be deemed to be correct and final
upon receipt thereof by the LESSEE, BORROWER and BANK unless Escrow Agent is
notified in writing to the contrary within thirty (30) business days of the date
of such statement.

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         4.7 Disclaimer. Escrow Agent shall not be responsible in any respect
for the form, execution, validity, value or genuineness of documents or
securities deposited hereunder, or for any description therein, or for the
identity, authority or rights of persons executing or delivering or purporting
to execute or deliver any such document, security or endorsement.

         4.8 Notices. Notices, instructions or other communications shall be in
writing and shall be personally delivered, transmitted by postage prepaid
registered or certified mail, or by facsimile, to the parties as follows:

                  To BORROWER:              ALX of Paramus LLC
                                            c/o Vornado Realty Trust
                                            210 Route 4 East
                                            Paramus, NJ   07652
                                            Attn:    Chief Financial Officer
                                            Facsimile No.:  (201) 708-6210

                                            ALX of Paramus LLC
                                            c/o Vornado Realty Trust
                                            210 Route 4 East
                                            Paramus, NJ   07652
                                            Attn:    Vice President-Real Estate
                                            Facsimile No.:  (201) 708-6207

                  With a copy (for
                  information purposes
                  only) to:                 Winston & Strawn
                                            200 Park Avenue
                                            New York, NY  10166-4193
                                            Attn:    Neil Underberg, Esq.
                                            Facsimile No.:  (212) 294-4700

                  To BANK:                  Svenska Handelsbanken AB (publ)
                                            153 East 53rd Street, 37th Floor
                                            New York, New York 10022
                                            Attn: Corporate Banking Department
                                            Facsimile No.:  (212) 326-5110

                  With a copy (for
                  information purposes

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<PAGE>
                  only) to:             Sussman Sollis Ebin Tweedy & Wood, LLP
                                        767 Fifth Avenue, 8th Floor
                                        New York, NY  10153-0898
                                        Attn:    Robert F. Ebin, Esq.
                                        Facsimile No.:  (212) 688-8386

                  To LESSEE:            IKEA Property Inc.
                                        496 West Germantown Pike
                                        Plymouth Meeting, Pennsylvania 19462
                                        Attention:  President
                                        Facsimile No.:  (610) 567-2856

                  With a copy (for
                  information purposes
                  only) to:             Marvin, Larsson, Henkin & Scheuritzel
                                        1500 Market Street, Centre Square West

                                        Suite 3510
                                        Philadelphia, Pennsylvania  19102
                                        Attention:  David J. Larsson, Esq.
                                        Facsimile No.:  (216) 656-4202

                  TO ESCROW AGENT:
                  THE BANK OF NEW YORK
                                        c/o United States Trust Company
                                        114 West 47th Street
                                        New York,NY  10036
                                        Attention:  Corporate Trust Department
                                        Facsimile No.:  (212) 852-1625

Copies of such notices, for information purposes only, shall be transmitted by
mail to counsel to the parties, as the parties may from time to time designate.
All notices and other communications shall be deemed to have been duly given on
the date of receipt if delivered personally; on the date five days after posting
if transmitted by United States mail; or in the case of a facsimile, at the time
sent; provided that any notice to be given to Escrow Agent shall be effective
only when actually received by Escrow Agent's Corporate Trust Department. Any
party may change its address for purposes hereof by notice to the other parties
hereto. Escrow Agent is authorized to comply with and rely upon any notices,
instructions or other communications believed by it to have been sent or given
by LESSEE, BORROWER or BANK or by a person or persons authorized by LESSEE,
BORROWER or BANK. Whenever under the

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terms hereof the time for giving a notice or performing an act falls upon a
Saturday, Sunday, or banking holiday, such time shall be extended to the next
day on which Escrow Agent is open for business.

         4.9 Indemnities. LESSEE, BORROWER and BANK, jointly and severally,
shall be liable for and shall reimburse and indemnify Escrow Agent, its agents,
attorneys and employees and hold Escrow Agent, its agents, attorneys and
employees harmless from and against any and all claims, losses, liabilities,
costs, damages or expenses (including reasonable attorneys' fees and expenses)
(collectively, "Losses") arising from or in connection with or related to these
Escrow Instructions or being Escrow Agent hereunder (including but not limited
to Losses incurred by Escrow Agent in connection with its successful defense, in
whole or in part, of any claim of bad faith, gross negligence or willful
misconduct on its part), provided, however, that nothing contained herein shall
require Escrow Agent to be indemnified for Losses caused by its gross negligence
or willful misconduct.

         4.10 Removal or Resignation of Escrow Agent. (a) LESSEE, BORROWER and
BANK may remove Escrow Agent at any time by giving to Escrow Agent thirty (30)
calendar days' prior notice in writing signed by the LESSEE, BORROWER and BANK.
Escrow Agent may resign at any time by giving to LESSEE, BORROWER and BANK
thirty (30) calendar days' prior written notice thereof.

                  (b) Within ten (10) calendar days after giving the foregoing
notice of removal to Escrow Agent or receiving the foregoing notice of
resignation from Escrow Agent, LESSEE, BORROWER and BANK shall jointly agree on
and appoint a successor Escrow Agent. If a successor Escrow Agent has not
accepted such appointment by the end of such 10-day period, Escrow Agent may, in
its sole discretion, deliver the Escrow Property to BANK at the address provided
herein or may apply to a court of competent jurisdiction for the appointment of
a successor Escrow Agent or for other appropriate relief. The costs and expenses
(including reasonable attorneys' fees and expenses) incurred by Escrow Agent in
connection with such proceeding shall be paid by, and be deemed a joint and
several obligation of, the LESSEE, BORROWER and BANK.

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<PAGE>
                  (c) Upon receipt of the identity of the successor Escrow
Agent, and such successor Escrow Agent's written agreement to be bound by these
Escrow Instructions, Escrow Agent shall either deliver the Escrow Property then
held hereunder to the successor Escrow Agent, less Escrow Agent's fees, costs
and expenses or other obligations owed to Escrow Agent, or hold such Escrow
Property (or any portion thereof), pending distribution, until all such fees,
costs and expenses or other obligations are paid.

                  (d) Upon delivery of the Escrow Property to successor Escrow
Agent, Escrow Agent shall have no further duties, responsibilities or
obligations hereunder.

                  (e) Any corporation into which Escrow Agent may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which Escrow Agent shall be a party, or any corporation
succeeding to the business of Escrow Agent, which executes an agreement of
assumption to perform every obligation of Escrow Agent hereunder and (in the
case of a person other than Escrow Agent) shall be the successor of Escrow Agent
hereunder, without the execution or filing of any document or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

         4.11 Ambiguities or Disputes. (a) In the event of any ambiguity or
uncertainty hereunder or in any notice, instruction or other communication
received by Escrow Agent hereunder, Escrow Agent may, in its sole discretion,
refrain from taking any action other than retaining possession of the Escrow
Property, unless Escrow Agent receives written instructions, signed by LESSEE,
BORROWER and BANK, which eliminate such ambiguity or uncertainty.

                  (b) In the event of any dispute between or conflicting claims
by or among the LESSEE, BORROWER and BANK and/or any other person or entity with
respect to any Escrow Property, Escrow Agent shall be entitled, in its sole
discretion, to refuse to comply with any and all claims, demands or instructions
with

                                       96
<PAGE>
respect to such Escrow Property so long as such dispute or conflict shall
continue, and Escrow Agent shall not be or become liable in any way to the
LESSEE, BORROWER or BANK for failure or refusal to comply with such conflicting
claims, demands or instructions. Escrow Agent shall be entitled to refuse to act
until, in its sole discretion, either (i) such conflicting or adverse claims or
demands shall have been determined by a final order, judgment or decree of a
court of competent jurisdiction, which order, judgment or decree is not subject
to appeal, or settled by agreement between the conflicting parties as evidenced
in a writing satisfactory to Escrow Agent or (ii) Escrow Agent shall have
received security or an indemnity satisfactory to it sufficient to hold it
harmless from and against any and all Losses which it may incur by reason of so
acting. Escrow Agent may, in addition, elect, in its sole discretion, to
commence an interpleader action or seek other judicial relief or orders as it
may deem, in its sole discretion, necessary. The costs and expenses (including
reasonable attorneys' fees and expenses) incurred in connection with such
proceeding shall be paid by, and shall be deemed a joint and several obligation
of, LESSEE, BORROWER and BANK.

         4.12 Governing Law. These Escrow Instructions shall be interpreted,
construed, enforced and administered in accordance with the internal substantive
laws (and not the choice of law rules) of the State of New York. LESSEE,
BORROWER and BANK hereby submit to the personal jurisdiction of and each agrees
that all proceedings relating hereto shall be brought in courts located within
the Borough of Manhattan in the City and State of New York. Each of LESSEE,
BORROWER and BANK hereby waives the right to trial by jury and to assert
counterclaims in any such proceedings. To the extent that in any jurisdiction
LESSEE, BORROWER or BANK may be entitled to claim, for itself or its assets,
immunity from suit, execution, attachment (whether before or after judgment) or
other legal process, each hereby irrevocably agrees not to claim, and hereby
waives, such immunity. Each of LESSEE, BORROWER and BANK waives personal service
of process and consent to service of process by certified or registered mail,
return receipt requested, directed to it at the addresses last specified for
notices hereunder, and such service shall be deemed completed five (5) calendar
days after the same is so mailed.

         4.13 Amendment. Except as otherwise permitted herein, these Escrow
Instructions may be modified only by a written amendment signed by all the
parties hereto, and no waiver of

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any provision hereof shall be effective unless expressed in a writing signed by
the party to be charged.

         4.14 Waivers. The rights and remedies conferred upon the parties hereto
shall be cumulative, and the exercise or waiver of any such right or remedy
shall not preclude or inhibit the exercise of any additional rights or remedies.
The waiver of any right or remedy hereunder shall not preclude the subsequent
exercise of such right or remedy.

         4.15 Due Authorization. Each of LESSEE, BORROWER and BANK, singly and
not jointly, hereby represents and warrants (a) that these Escrow Instructions
have been duly authorized, executed and delivered on its behalf and constitute
its legal, valid and binding obligation and (b) that the execution, delivery and
performance of these Escrow Instructions by it do not and will not violate any
applicable law or regulation.

         4.16 Partial Invalidity. The invalidity, illegality or unenforceability
of any provision of this Agreement shall in no way affect the validity, legality
or enforceability of any other provision; and if any provision is held to be
enforceable as a matter of law, the other provisions shall not be affected
thereby and shall remain in full force and effect.

         4.17 Entire Agreement. These Escrow Instructions shall constitute the
entire agreement of the parties with respect to the subject matter and
supersedes all prior oral or written agreements in regard thereto.

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<PAGE>
         4.18 Termination. This Agreement shall terminate upon the distribution
of all Escrow Property to be paid into and distributed from the Escrow Account.
The provisions of this Article 4 shall survive termination of these Escrow
Instructions and/or the resignation or removal of Escrow Agent.

         4.19 Reference to The Bank of New York and IKEA. Except for any
disclosure required by law (or among the parties and their counsel), no printed
or other material in any language, including prospectuses, notices, reports, and
promotional material (I) which mentions "The Bank of New York" by name or the
rights, powers, or duties of Escrow Agent under these Escrow Instructions shall
be issued by any other parties hereto, or on such party's behalf, without the
prior written consent of Escrow Agent, or (ii) which mentions LESSEE (or any
IKEA entity) by name, shall be issued by Escrow Agent, without the prior written
consent of LESSEE.

         4.20 Headings. The headings contained in these Escrow Instructions are
for convenience of reference only and shall have no effect on the interpretation
or operation hereof.

         4.21 Counterparts. These Escrow Instructions may be executed by each of
the parties hereto in any number of counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original and all such
counterparts shall together constitute one and the same agreement.

         4.22 Tax Matters. Escrow Agent does not have any interest in the
Escrowed Property deposited hereunder but is serving as escrow holder only and
having only possession thereof. BORROWER shall pay or reimburse Escrow Agent
upon request for any transfer taxes or other taxes relating to the Escrowed
Property

                                       99
<PAGE>
incurred in connection herewith and shall indemnify and hold harmless Escrow
Agent any amounts that it is obligated to pay in the way of such taxes. Any
payments of income from the Escrow Account shall be subject to withholding
regulations then in force with respect to United States taxes. The parties
hereto will provide Escrow Agent with appropriate W-9 forms for tax I.D., number
certifications, or W-8 forms for non-resident alien certifications. It is
understood that Escrow Agent shall be responsible for income reporting only with
respect to income earned on investment of funds which are a part of the Escrowed
Property and is not responsible for any other reporting. This paragraph and
paragraph 4.9 shall survive notwithstanding any termination of these Escrow
Instructions or the resignation of Escrow Agent.

         4.23 Compensation of Escrow Agent. Except as provided in this Section
4.23, Escrow Agent agrees that it shall have no rights against BORROWER, LESSEE
or BANK for any fee as compensation for its services hereunder.

                  (i)      BORROWER shall pay Escrow Agent an annual fee of
                           $6,000, payable upon execution of this Agreement and
                           thereafter on each anniversary date of this
                           Agreement. The annual fee shall be pro-rated for any
                           portion of a year.

                  (ii)     BORROWER shall be responsible for and shall reimburse
                           Escrow Agent upon demand for all out-of-pocket
                           expenses, disbursements and advances incurred or made
                           by Escrow Agent in connection with these Escrow
                           Instructions, except any such expense, disbursement
                           or advance as may be attributable of its own
                           negligence, willful misconduct or bad faith.

         4.24 Certain Notices. Escrow Agent shall give to BANK, LESSEE and
BORROWER copies of all certificates, agreements, determinations, notices and
documents received by it (other than from such party) pursuant to these Escrow
Instructions.

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         4.25 Notice of Non-Receipt of Assigned Payments. Escrow Agent shall
notify BANK, LESSEE and BORROWER if LESSEE has failed to pay any payment of
Assigned Payments by the third Banking Day after the date such payment is due.

         4.26 Records. Escrow Agent shall be responsible for the keeping a copy
of these Escrow Instructions and all appropriate books and records relating to
the receipt and disbursements of all monies that may be received as Escrow Agent
under these Escrow Instructions or under any other Operative Document and shall,
upon request of LESSEE, BORROWER or BANK make available such books and records
at its principal escrow office during normal business hours for inspection and
copying. Escrow Agent shall not be liable for any tax due and payable except for
any tax based on or measured by amounts paid to Escrow Agent as fees and
compensation in connection with the transactions contemplated hereby.

         4.27 Recording and Filing. BANK shall be responsible for the recording
and filing in the appropriate governmental offices of financing statements,
continuation statements and any supplemental instruments or documents of further
assurance as may be required by law or requested by the BANK or Escrow Agent in
order to perfect the security interests created by the Operative Documents or
these Escrow Instructions.

         4.28 Assignment. These Escrow Instructions may not be assigned by
BORROWER or LESSEE, except upon written consent of BANK (which may be given or
withheld in BANK's sole discretion).

         4.29 Binding on Successors. These Escrow Instructions shall be binding
upon and inure to the benefit of the parties and their respective successors and
permitted assigns. A purchaser of the Escrow Property at a foreclosure sale or a
deed-in-lieu of foreclosure sale shall be deemed to be the successor to BANK
hereunder.

         4.30 Further Assurances. Each party hereto will promptly and duly
execute and deliver such further documents to make such further assurances for
and take such further action reasonably requested by any party to whom such
first party is obligated, all as may be reasonably necessary to carry out more
effectively the intent and purpose of these Escrow Instructions in accordance
with the other Operative Documents.

                                      101
<PAGE>
         IN WITNESS WHEREOF, the parties have caused these Escrow Instructions
to be executed by their duly authorized representatives as of the date first
above written.

                                             BANK
                                             SVENSKA HANDELSBANKEN AB (publ)

                                             By:  /s/ Jonas Daun
                                             Name and Title:    Jonas Daun,
                                             SENIOR VICE PRESIDENT

                                             BY:  /S/ MARK CLEARY
                                             Name and Title: Mark Cleary
                                             Senior Vice President

BORROWER

                                             ALX OF PARAMUS LLC

                                             By:  /s/ Joseph Macnow
                                             Name and Title: Joseph Macnow
                                             Executive Vice President
                                             Finance and Administration

ESCROW AGENT

                                             THE BANK OF NEW YORK

                                             By:  /s/ H. William Weber
                                             Name and Title:  H. William Weber,
                                             Authorized Signer

LESSEE

                                             IKEA PROPERTY, INC.

                                             By:  /s/ Michael McDonald
                                             Name and Title: Michael McDonald
                                             President

                                      102
<PAGE>
                                    EXHIBIT H

                          PROPOSED SUBTENANT LOCATIONS

                                    [TO COME]

                                      103

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