Document:

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                          ACCOUNT AND CONTROL AGREEMENT

                  This ACCOUNT AND CONTROL AGREEMENT, is made as of February 13,
2004 (this AGREEMENT), by and among GERMAN AMERICAN CAPITAL CORPORATION, a
Maryland corporation (LENDER), having an office at 60 Wall Street, New York, New
York 10005, 731 OFFICE ONE LLC, a Delaware limited liability company (BORROWER),
having an address for notice purposes c/o Alexander's Inc., 888 Seventh Avenue,
New York, New York 10019 and JP MORGAN CHASE, a New York banking organization
(CASH MANAGEMENT BANK), having an office at 4 New York Plaza, 13th Floor, New
York, New York 10004.

                  WHEREAS, Borrower is a party to that certain Loan and Security
Agreement, dated as of the date hereof, (as amended, supplemented or otherwise
modified from time to time, the Loan Agreement), pursuant to which Borrower
agreed to establish and maintain certain Collateral Accounts (as defined herein)
as further collateral for a loan (the LOAN) from Lender to Borrower;

                  WHEREAS, as required by the Loan Agreement, and in order to
further effectuate the security interest granted to Lender thereunder, Borrower
established pursuant to the Loan Agreement, the Collateral Accounts with Cash
Management Bank and, pursuant to the Loan Agreement, has granted to Lender a
perfected first priority security interests therein, which Collateral Accounts
are described on SCHEDULE 1A and 1B attached hereto; and

                  WHEREAS, as a condition to making the Loan, Lender is
requiring Borrower and Cash Management Bank to deliver this Agreement to further
effectuate the terms of the Loan Agreement.

                  NOW, THEREFORE, in consideration of foregoing premises, the
establishment of the Collateral Accounts, Ten Dollars ($10.00) paid in hand and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

1.       DEFINITIONS. Capitalized terms used but not otherwise defined herein
shall have the respective meanings given thereto in the Loan Agreement, unless
otherwise expressly provided herein. All references to sections shall be deemed
to be references to sections of this Agreement, unless otherwise indicated. In
the event that the Uniform Commercial Code as in effect in the State of New York
is revised subsequent to the date hereof, all references herein to sections of
the UCC shall be deemed to be references to the successor provisions and
requirements.

         APPROVED BANK shall mean a bank or other financial institution which
         has a minimum long-term unsecured debt rating of at least "A" and a
         minimum short-term unsecured debt rating of at least "A-1" by each of
         the Rating Agencies (one of which must be S&P), or if any such bank or
         other financial institution is not rated by all the Rating Agencies,
         then a minimum long-term rating of at least "A" and a minimum
         short-term unsecured debt rating of at least "A-1", or their respective
         equivalents, by two of the Rating Agencies, but in any event one of the
         two Rating Agencies shall be S&P.

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         COLLATERAL ACCOUNTS shall mean the accounts specified on SCHEDULES 1A
         and 1B hereto and any other account established by the Cash Management
         Bank pursuant to and in accordance with the provisions of this
         Agreement or the Loan Agreement.

         ELIGIBLE ACCOUNT shall mean (i) a segregated trust account or accounts
         maintained with the corporate trust department of a federal depository
         institution or state-chartered depository institution subject to
         regulations regarding fiduciary funds on deposit similar to Title 12 of
         the Code of Federal Regulations Section 9.10(b) which, in either case,
         has corporate trust powers, acting in its fiduciary capacity or (ii) a
         segregated account maintained at an Approved Bank.

         PERMITTED INVESTMENTS shall mean the following, subject to
         qualifications hereinafter set forth:

              (i)      obligations of, or obligations guaranteed as to principal
         and interest by, the U.S. government or any agency or instrumentality
         thereof, when such obligations are backed by the full faith and credit
         of the United States of America;

              (ii)     federal funds, unsecured certificates of deposit, time
         deposits, banker's acceptances, and repurchase agreements having
         maturities of not more than 365 days of any bank, the short-term debt
         obligations of which are rated A-1+ (or the equivalent) by each of the
         Rating Agencies, it being understood that the A-1+ benchmark rating and
         other benchmark ratings in this Agreement are intended to be the
         ratings, or the equivalent of ratings, issued by S&P

              (iii)    deposits that are fully insured by the Federal Deposit
         Insurance Corp.;

              (iv)     debt obligations that are rated AA (or the equivalent)
         by each of the Rating Agencies;

              (v)      commercial paper rated A - 1+ (or the equivalent) by
         each of the Rating Agencies;

              (vi)     investment in money market funds rated AAm or AAm - G
         (or the equivalent) by each of the Rating Agencies; and

              (vii)    such other investments as to which Lender shall have
         received a Rating Agency Confirmation.

         Notwithstanding the foregoing, PERMITTED INVESTMENTS (i) shall exclude
         any security with the S&P's "r" symbol (or any other Rating Agency's
         corresponding symbol) attached to the rating (indicating high
         volatility or dramatic fluctuations in their expected returns because
         of market risk), as well as any mortgage-backed securities and any
         security of the type commonly known as "strips"; (ii) shall not have
         maturities in excess of one year; (iii) shall be limited to those
         instruments that have a predetermined fixed dollar of principal due at
         maturity that cannot vary or change; and (iv) shall exclude any
         investment where the right to receive principal and interest derived
         from the underlying investment provides a yield to maturity in excess
         of 120% of the yield to maturity at par

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         of such underlying investment. Interest may either be fixed or
         variable, and any variable interest must be tied to a single interest
         rate index plus a single fixed spread (if any), and move
         proportionately with that index. No investment shall be made which
         requires a payment above par for an obligation if the obligation may be
         prepaid at the option of the issuer thereof prior to its maturity. All
         investments shall mature or be redeemable upon the option of the holder
         thereof on or prior to the earlier of (x) three months from the date of
         their purchase or (y) the Business Day preceding the day before the
         date such amounts are required to be applied hereunder.

         UCC shall mean the Uniform Commercial Code as in effect from time to
         time in the State of New York.

2.       ESTABLISHMENT AND MAINTENANCE OF THE COLLATERAL ACCOUNTS. The Cash
Management Bank hereby confirms and agrees that:

         a.       DEPOSIT ACCOUNT. It has established the Collection Account
                  identified on SCHEDULE 1A hereto in the name specified in
                  SCHEDULE 1A (such account(s) being referred to herein as the
                  DEPOSIT ACCOUNT). The Collection Account has been established
                  and shall be maintained by Cash Management Bank as a "deposit
                  account" as such term is defined in Section 9-102(a)(29) of
                  the UCC.

         b.       SECURITIES ACCOUNTS.

                  i.       It has established the Holding Account and the
                           Sub-Accounts as required pursuant to the Loan
                           Agreement, identified on SCHEDULE 1B hereto in the
                           names specified in SCHEDULE 1B (such account and the
                           sub-accounts referred to in SCHEDULE 1B hereof being
                           referred to herein as the SECURITIES ACCOUNTS). The
                           Holding Account and the Sub-Accounts will be, if
                           established pursuant to the Loan Agreement,
                           maintained by Cash Management Bank as one or more
                           "securities accounts" as such term is defined in
                           Section 8-501(a) of the UCC. The Sub-Accounts (i) may
                           be ledger or book entry accounts and need not be
                           actual accounts, (ii) shall be linked to the Holding
                           Account and (iii) shall be an Eligible Account to
                           which certain funds shall be allocated and from which
                           disbursements shall be made pursuant to the terms of
                           this Agreement. Except for any funds credited to the
                           Deposit Account, all property delivered to the Cash
                           Management Bank pursuant to the Loan Agreement and
                           all Permitted Investments shall be credited to the
                           Holding Account or one of the Sub-Accounts on the
                           Business Day following any deposit into the Deposit
                           Account. Each item of property (whether investment
                           property, financial asset, security, instrument, cash
                           or otherwise) credited to the Securities Accounts
                           shall be treated as a "financial asset" within the
                           meaning of Section 8-102(a)(9) of the UCC. All
                           securities or other property underlying any
                           "financial assets" (as defined in Section 8-102(a)(9)
                           of the UCC) credited to the Securities Accounts shall
                           be registered in the name of Cash Management Bank,
                           indorsed to Cash Management Bank or indorsed in blank
                           or credited to a securities account in the name of
                           the

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                           Cash Management Bank. In no case shall any financial
                           asset credited to the Collateral Accounts be
                           registered in the name of Borrower, payable to the
                           order of Borrower or specially endorsed to Borrower
                           except to the extent the foregoing have been
                           specially endorsed to Cash Management Bank or in
                           blank.

         c.       CHANGES TO ACCOUNTS. It shall not change the name or account
                  number of any Collateral Account without the express written
                  consent of the Lender.

3.       PERMITTED INVESTMENTS. Any amounts held in any of the Securities
Accounts shall be invested, liquidated and reinvested in Permitted Investments
and disbursed as directed in writing by Lender in accordance with this Agreement
(or in accordance with such other instructions as Borrower may from time to time
direct, which other instructions from Borrower shall be countersigned by Lender,
unless an Event of Default shall have occurred and be continuing, in which event
all amounts held in any of the Securities Accounts shall be invested, liquidated
and reinvested at Lender's direction in Lender's sole discretion); provided,
however, that the maturity of an adequate portion of the Permitted Investments
on deposit in the Securities Accounts shall be no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
therefrom pursuant to this Agreement and no Permitted Investment shall be
liquidated at a loss at the direction of Borrower except to the extent necessary
to make a required payment to Lender on a Payment Date. All Permitted
Investments shall identify Lender as the secured party having the benefit of a
collateral assignment of such Permitted Investments. Amounts held in the
Securities Accounts may be commingled for purposes of purchasing Permitted
Investments and Cash Management Bank shall maintain a record of amounts
allocated to each Securities Account. In no event shall Lender or Cash
Management Bank have any responsibility or liability for the types of
investments that Borrower may direct Lender to direct Cash Management Bank to
make, nor shall they have any duty or responsibility to confirm that the same
are in fact Permitted Investments.

4.       CONTROL OF ACCOUNTS.

         a.       RIGHTS OF LENDER. Borrower hereby irrevocably authorizes
                  Lender to exercise any and all rights of Borrower in respect
                  of the Collateral Accounts and to give Cash Management Bank
                  instructions, directions and entitlement orders in respect of
                  the Collateral Accounts as Lender shall deem necessary or
                  desirable in order to effectuate the provisions of this
                  Agreement and the Loan Agreement, provided that such
                  instructions are in accordance with the terms and provisions
                  hereof and of the Loan Agreement. Borrower hereby irrevocably
                  authorizes and instructs Cash Management Bank to execute any
                  such instructions, directions or entitlement orders Cash
                  Management Bank receives from Lender. Cash Management Bank
                  shall, subject to the terms of this Agreement, treat Lender as
                  entitled to exercise the rights that comprise any financial
                  asset credited to the Collateral Accounts. Cash Management
                  Bank acknowledges that it has received instructions to
                  transfer, and Cash Management Bank covenants that it shall
                  transfer, on a daily basis, all collected funds held in the
                  Collection Account to the Holding Account. Borrower is
                  responsible for monitoring the services provided hereunder and
                  shall notify Cash Management Bank of any errors within thirty
                  (30)

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                  calendar days after receipt of any report, statement or other
                  material containing or reflecting the error including an
                  account analysis statement, or such greater time period as may
                  be required by law.

         b.       LENDER CONTROL AND PERFECTION. Notwithstanding any other
                  provision of this Agreement, in addition to and not in
                  limitation of Lender's other rights: (i) with respect to each
                  Collateral Account that is a "securities account" within the
                  meaning of Section 8-501 of the UCC (including without
                  limitation the Securities Accounts and to the extent that
                  notwithstanding the intention of the parties the Deposit
                  Account is determined to be a securities account, the Deposit
                  Account), the Cash Management Bank shall comply with all
                  "entitlement orders" (as defined in the UCC) issued by the
                  Lender in accordance with the provisions of Section 4.a.
                  hereof without further consent by the Borrower or any other
                  Person; (ii) with respect to each Collateral Account that is a
                  "deposit account" within the meaning of Section 9-102(a)(29)
                  of the UCC (including, without limitation, the Deposit Account
                  and to the extent that notwithstanding the intention of the
                  parties any of the Securities Accounts are determined to be a
                  deposit account, the Securities Accounts), the Cash Management
                  Bank shall comply with all instruction issued by the Lender in
                  accordance with the provisions of Section 4.a. hereof
                  directing the disposition of funds in such accounts without
                  further consent by the Borrower or any other Person; and (iii)
                  except for the Borrower's right to select Permitted
                  Investments to the extent specified in Section 3 hereof, the
                  Cash Management Bank shall not honor any request of Borrower
                  for the withdrawal, transfer or other disposition of any
                  funds, investment property or other assets on deposit or
                  credited to any Collateral Account without the express prior
                  consent of Lender. The Cash Management Bank has not and will
                  not without Lender's prior express written consent enter into
                  any agreement or understanding with any other Person relating
                  to the Collateral Accounts. For purposes of perfecting the
                  Lender's security interest, the Cash Management Bank confirms
                  that any property (including, without limitation, Permitted
                  Investments) held by it is held as agent for the Lender.

         c.       DESIGNATION OF SERVICER. Borrower and Cash Management Bank
                  each hereby acknowledge that Lender has appointed and
                  designated GMAC Commercial Mortgage Corporation (SERVICER), as
                  agent of Lender, to administer and service the Loan and to
                  exercise Lender's rights under this Agreement and the Loan
                  Agreement. Lender may appoint and designate a replacement
                  servicer to execute Lender's rights with respect to the
                  Collateral Accounts at any time by delivering a notice of such
                  replacement, on or prior to the effective date of such
                  replacement, to Borrower and Cash Management Bank and Borrower
                  and Cash Management Bank shall recognize such replacement.

5.       ACCOUNT FEES; WAIVER OF SET-OFF AND LIENS; ADVERSE CLAIMS.

         a.       ACCOUNT FEES. The Borrower hereby agrees to pay the Cash
                  Management Bank reasonable compensation for the services to be
                  rendered hereunder, as such fees are identified in SCHEDULE 2.
                  Borrower shall separately pay the fees and expenses

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                  identified in the invoice and Cash Management Bank shall not
                  charge the Collateral Accounts for such fee.

         b.       WAIVER OF CLAIMS. In no event shall Cash Management Bank
                  obtain whether by agreement, operation of law or otherwise a
                  security interest in any of the Collateral Accounts or any
                  security entitlement or funds credited thereto, and to the
                  extent permitted by applicable law, Cash Management Bank
                  hereby agrees that such security interest shall be null and
                  void. To the extent any such security interest arises by
                  operation of law and cannot be waived, the Cash Management
                  Bank hereby subordinates such security interest to the
                  security interest of the Lender. Cash Management Bank hereby
                  waives all existing and future claims, rights of set-off and
                  liens, including, without limitation, banker's liens, against
                  the Collateral Accounts and all items and proceeds thereof
                  that come into Cash Management Bank's possession in connection
                  with the Collateral Accounts and all securities entitlements
                  or funds credited thereto; provided, that Cash Management Bank
                  shall have the right to charge the Collateral Accounts for (i)
                  all items deposited in, and credited to, the Collateral
                  Accounts after the date hereof and subsequently returned to
                  Cash Management Bank unpaid; (ii) overdrafts in the Collateral
                  Accounts; (iii) interest on overdrafts in the Collateral
                  Accounts; and (iv) interest and fees on any items deposited in
                  the Collateral Accounts and returned unpaid. If sufficient
                  funds are not available in the account, the Cash Management
                  Bank shall look to the Borrower for immediate reimbursement,
                  and the Borrower shall comply. Upon the indefeasible repayment
                  in full of the Loan and all Indebtedness and the termination
                  of this Agreement, the foregoing waiver of claims, rights of
                  set-off and liens shall terminate.

         c.       ADVERSE CLAIMS. Except for the claims and interest of Lender
                  and of Borrower in the Collateral Accounts, Cash Management
                  Bank does not know of any claim to, or interest in, the
                  Collateral Accounts or in any "financial asset" (as defined in
                  Section 8-102(a) of the UCC) credited thereto. If any Person
                  asserts any lien, encumbrance or adverse claim (including any
                  writ, garnishment, judgment, warrant of attachment, execution
                  or similar process) against the Collateral Accounts or in any
                  funds or financial asset carried therein, Cash Management Bank
                  shall promptly notify Lender and Borrower thereof and may
                  thereafter respond to such service in any manner authorized by
                  law or regulation, without further obligation to Lender or
                  Borrower.

6.       DEPOSITS; ACCOUNTS RECORDS.

         a.       DEPOSITS. Cash Management Bank shall receive and process, on a
                  daily basis, any deposits presented or sent to Cash Management
                  Bank for deposit in the Collection Account. Cash Management
                  Bank shall send to Servicer and Borrower: (i) copies of daily
                  credit advices specifying all amounts deposited in the
                  Collateral Accounts on a monthly basis as described in Section
                  6(b) below, (ii) any other advices or reports typically
                  furnished by Cash Management Bank in connection with accounts
                  similar to the Collateral Accounts and (iii) any other reports
                  reasonably requested by Borrower, Lender and Servicer.

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         b.       MONTHLY STATEMENTS. Cash Management Bank shall maintain a
                  record of all transfers to and from the Accounts and furnish
                  to Borrower, Lender and Servicer (i) a monthly statement of
                  the Collateral Accounts and (ii) promptly following request by
                  either Borrower, Lender and Servicer therefor, interim reports
                  on transfers to and from the Collateral Accounts.

         c.       NOTICE OF INSUFFICIENCY. Cash Management Bank shall notify
                  Borrower, Lender and Servicer promptly in the event that there
                  are insufficient funds on deposit in the Collection Account or
                  the Holding Account to make any of the transfers or
                  withdrawals directed by Lender or Servicer.

7.       CASH MANAGEMENT BANK NOT LIABLE; INDEMNITY.

         a.       NO LIABILITY. The Cash Management Bank shall not be liable for
                  acts or omissions caused by events beyond its reasonable
                  control including, without limitation, fire, casualty, failure
                  of equipment, telecommunications or data processing services,
                  lockout, strike, unavoidable accidents, acts of God, acts of
                  terrorists, riots, war or the issuance or operation of any
                  adverse governmental law, ruling, regulation, order or decree,
                  or an emergency that prevents the Cash Management Bank from
                  operating normally, except for its own gross negligence or
                  willful misconduct. The Cash Management Bank may rely and
                  shall be protected in acting or refraining from acting upon
                  any notice (including, without limitation, electronically
                  confirmed facsimiles of such notice) reasonably believed by
                  the Cash Management Bank in good faith to be genuine and to
                  have been signed or presented by the proper party or parties.

         b.       INDEMNITY. Borrower shall indemnify, defend and save harmless
                  the Cash Management Bank from all claims, actions, suits,
                  losses, damages, costs, expenses or liability of any nature
                  and type (including the reasonable fees and expenses of
                  outside counsel) arising out of or in connection with its
                  execution and performance of this Agreement, except to the
                  extent that such loss, liability or expense is due to the
                  gross negligence or willful misconduct of the Cash Management
                  Bank, its directors, officers, agents or employees. Anything
                  in this Agreement to the contrary notwithstanding, in no event
                  shall the Cash Management Bank be entitled to or liable for
                  special, indirect or consequential loss or damage of any kind
                  whatsoever (including but not limited to lost profits). Cash
                  Management Bank hereby acknowledges that any right of
                  indemnification from Borrower shall be subject and subordinate
                  in all respects to Borrower's obligations to Lender in
                  connection with the Loan.

8.       TERMINATION.

         a.       TERMINATION BY CASH MANAGEMENT BANK. Cash Management Bank may
                  resign from its responsibilities of this Agreement upon thirty
                  (30) days' prior written notice to Lender and Borrower,
                  provided, that in no event shall Cash Management Bank be
                  released of its obligations hereunder unless and until a
                  substitute Cash Management Bank has been designated and
                  assumed the

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                  obligations of Cash Management Bank under this Agreement in
                  writing. Borrower shall use its commercially reasonable
                  efforts to designate such a Cash Management Bank promptly
                  after receipt of notice of resignation from Cash Management
                  Bank and to cause such designated successor promptly to assume
                  the obligations of Cash Management Bank hereunder. Any such
                  replacement Cash Management Bank must be approved by Lender in
                  writing, which, provided such replacement Cash Management Bank
                  is an Approved Bank and executes and delivers to Lender a
                  replacement Account Agreement, such approval shall not be
                  unreasonably withheld, conditioned or delayed. If the Cash
                  Management Bank has resigned and a successor to the Cash
                  Management Bank has not been designated within thirty (30)
                  days after the date of the Cash Management Bank's resignation,
                  all funds in the Cash Management Account, checks payable to
                  the Cash Management Account and other materials received by
                  Cash Management Bank shall be delivered to Lender, or pursuant
                  to Lender's instructions, and the Cash Management Bank shall
                  have no further obligation act hereunder.

         b.       TERMINATION BY BORROWER AND LENDER. This Agreement may be
                  terminated upon delivery to Cash Management Bank of a notice
                  jointly signed by Lender and Borrower and shall automatically
                  terminate upon the indefeasible repayment in full of the Loan
                  and all Indebtedness (as defined in the Security Instrument).

         c.       CONTINUING OF OBLIGATIONS. Upon any termination of this
                  Agreement, Cash Management Bank shall continue to hold all
                  funds then held in the Collateral Accounts, or thereafter
                  presented to Cash Management Bank or received for deposit in
                  the Collateral Accounts, in accordance with this Agreement
                  until Cash Management Bank receives written instructions from
                  each of Lender and, provided no Event of Default has occurred
                  and is then continuing, Borrower, concerning the disposition
                  of such funds. Upon the termination of this Agreement, Cash
                  Management Bank shall transfer all funds and securities held
                  in the Collateral Accounts in accordance with such written
                  instructions of Lender and, provided no Event of Default has
                  occurred and is then continuing, Borrower.

9.       MISCELLANEOUS.

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

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                  If to Borrower:           731 Office One LLC
                                            c/o Alexander's, Inc.
                                            888 Seventh Avenue
                                            New York, New York 10019
                                            Attention: Ms. Wendy Silverstein
                                            Facsimile: (212) 894-7073
                                            Confirmation No. (212) 894-7000

                  with a copy (other than account reports and credit advices)
                  to:

                                            Proskauer Rose LLP
                                            1585 Broadway
                                            New York, New York 10036-8299
                                            Attention: Ronald D. Sernau, Esq.
                                            Facsimile: (212) 969 2900
                                            Confirmation No.: (212) 969-3000

                  If to Cash Management Bank:

                                            JP Morgan Chase
                                            ITS - Collateral Management
                                            4 New York Plaza, 13th Floor
                                            New York, New York 10004
                                            Attention: Bruce Vecchio, Vice
                                             President
                                            Facsimile: (212) 623-2802
                                            Confirmation No.: (212) 623-0431

                  and

                  If to Lender:

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

                  with a copy to:

                                            GMAC Commercial Mortgage Corporation
                                            200 Witmer Road
                                            Horsham, Pennsylvania 19044
                                            Attention: Managing Director, Global
                                            Facsimile: (215) 328-3478
                                            Confirmation No.: (215) 328-1030

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                  with a copy (other than account reports and credit advices)
                  to:

                                            Skadden, Arps, Slate, Meagher & Flom
                                             LLP
                                            Four Times Square
                                            New York, New York 10036-6522
                                            Attention:  Harvey R. Uris, Esq.
                                            Facsimile: (212) 735-2000
                                            Confirmation No.: (212) 735-3000

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

         b.       ENTIRE AGREEMENT. This Agreement constitutes the entire and
                  final agreement between Borrower and Lender with respect to
                  the subject matter hereof and may only be changed, amended,
                  modified or waived by an instrument in writing signed by
                  Borrower, Lender and Cash Management Bank.

         c.       NO WAIVER. No waiver of any term or condition of this
                  Agreement, whether by delay, omission or otherwise, shall be
                  effective unless in writing and signed by the party sought to
                  be charged and consented to in writing by Lender, and then
                  such waiver shall be effective only in the specific instance
                  and for the purpose for which given.

         d.       SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
                  and inure to the benefit of Borrower, Lender and Cash
                  Management Bank, their respective successors and permitted
                  assigns.

         e.       CAPTIONS. All paragraph, section, exhibit and schedule
                  headings and captions herein are used for reference only and
                  in no way limit or describe the scope or intent of, or in any
                  way affect, this Agreement.

         f.       COUNTERPARTS. This Agreement may be executed in counterparts,
                  each of which shall be an original and all of which when taken
                  together shall constitute one binding Agreement.

         g.       CONFLICTS. To the extent that any agreements other than the
                  Loan Agreement, currently existing, are inconsistent with this
                  Agreement, this Agreement shall supersede any other agreement
                  relating to the matters referred to herein. In the event of a
                  conflict between the terms an conditions of this Agreement and
                  the

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                  terms and conditions of the Loan Agreement, the terms and
                  conditions of the Loan Agreement shall control.

         h.       SEVERABILITY. The provisions of this Agreement are severable,
                  and if any one clause or provision hereof shall be held
                  invalid or unenforceable in whole or in part, then such
                  invalidity or unenforceability shall affect only such clause
                  or provision, or part thereof, and not any other clause or
                  provision of this Agreement.

         i.       FURTHER ASSURANCES. Borrower agrees that at any time and from
                  time to time, at the reasonable expense of Borrower, Borrower
                  will promptly execute and deliver all further instruments and
                  documents and take all further action, that may be reasonably
                  necessary or desirable, or that Lender may reasonably request,
                  in order to perfect and protect any security interest granted
                  or purported to be granted in the Loan Agreement, including,
                  without limitation, any security interests in and to any
                  Permitted Investments, or to enable Lender to exercise and
                  enforce its rights and remedies under the Loan Agreement or
                  hereunder with respect to any Account Collateral.

         j.       RELIANCE. The Cash Management Bank may rely and shall be
                  protected in acting or refraining from acting upon any written
                  notice, instruction or request furnished to it hereunder and
                  reasonably believed by it to be genuine and to have been
                  signed or presented by the proper party or parties. The Cash
                  Management Bank shall be under no duty to inquire into or
                  investigate the validity, accuracy or content of any such
                  document. The Cash Management Bank shall have no duty to
                  solicit any payments which may be due it hereunder.

         k.       COMMUNICATION. In the event funds transfer instructions are
                  given (other than in writing at the time of execution of the
                  Agreement), whether in writing, by telecopier or otherwise,
                  the Cash Management Bank is authorized to seek confirmation of
                  such instructions by telephone call-back, and the Cash
                  Management Bank may rely upon the confirmations of anyone
                  purporting to be the person or persons so designated. The
                  persons and telephone numbers for call-backs may be changed
                  only in a writing actually received and acknowledged by the
                  Cash Management Bank. The parties to this Agreement
                  acknowledge that such security procedure is commercially
                  reasonable.

         l.       ACCOUNT NUMBERS. It is understood that the Cash Management
                  Bank and the Lender's bank, with respect to any funds
                  transfer, may rely solely upon any account numbers or similar
                  identifying number provided by either of the other parties
                  hereto to identify (i) the Lender, (ii) the Lender's bank, or
                  (iii) an intermediary bank. The Cash Management Bank may apply
                  any of the reserved funds for any payment order it executes
                  using any such identifying number, even where its use may
                  result in a person other than the beneficiary being paid, or
                  the transfer of funds to a bank other than the beneficiary's
                  bank, or an intermediary bank designated.

                                       11
<PAGE>

         m.       GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED
                  IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT
                  TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW,
                  WITHOUT REGARD TO CHOICE OF LAW RULES. BORROWER AGREES THAT
                  ANY SUIT FOR THE ENFORCEMENT OF THIS NOTE OR ANY OTHER LOAN
                  DOCUMENT SHALL BE BROUGHT IN THE COURTS OF THE STATE OF NEW
                  YORK OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
                  NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF
                  PROCESS IN ANY SUCH SUIT BEING MADE UPON BORROWER IN THE
                  MANNER AND AT THE ADDRESS SPECIFIED FOR NOTICES IN THE LOAN
                  AGREEMENT. BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY
                  NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY
                  SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT
                  COURT.

         n.       JURY TRIAL WAIVER. EACH OF BORROWER, LENDER AND CASH
                  MANAGEMENT BANK, FOR ITSELF AND ALL PERSONS CLAIMING BY,
                  THROUGH OR UNDER IT, HEREBY EXPRESSLY, KNOWINGLY, VOLUNTARILY
                  AND INTENTIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
                  CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING UNDER
                  THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR
                  FUTURE MODIFICATION THEREOF OR (II) IN ANY WAY CONNECTED WITH
                  OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO
                  OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT (AS NOW OR
                  HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR
                  AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
                  TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
                  SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING
                  OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT
                  OR OTHERWISE; AND EACH OF BORROWER, LENDER AND CASH MANAGEMENT
                  BANK HEREBY AGREES AND CONSENTS THAT AN ORIGINAL COUNTERPART
                  OR A COPY OF THIS SECTION MAY BE FILED WITH ANY COURT AS
                  WRITTEN EVIDENCE OF THE CONSENT HERETO TO THE WAIVER OF ANY
                  RIGHT TO TRIAL BY JURY. EACH OF BORROWER, LENDER AND CASH
                  MANAGEMENT BANK ACKNOWLEDGES THAT IT HAS CONSULTED WITH LEGAL
                  COUNSEL REGARDING THE MEANING OF THIS WAIVER AND ACKNOWLEDGES
                  THAT THIS WAIVER IS AN ESSENTIAL INDUCEMENT FOR THE OTHER
                  EXECUTING THIS AGREEMENT AND LENDER MAKING THE LOAN. THIS
                  WAIVER SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.

         o.       ADDITIONAL CASH MANAGEMENT BANK PROVISIONS.

                                       12
<PAGE>

                  i.       The duties and responsibilities of the Cash
                           Management Bank hereunder shall be determined solely
                           by the express provisions of this Agreement, and no
                           other or further duties or responsibilities shall be
                           implied. The Cash Management Bank shall not have any
                           liability under, nor duty to inquire into the terms
                           and provisions of any agreement or instructions,
                           other than outlined in the Agreement. Cash Management
                           Bank shall not be under any obligation or duty to
                           perform any act which would involve it in expense or
                           liability or to institute or defend any suit in
                           respect hereof, or to advance any of its own monies.
                           The Cash Management Bank may execute any of its
                           powers and perform any of its duties hereunder
                           directly or through agents or attorneys (and shall be
                           liable only for the careful selection of any such
                           agent or attorney) and may consult with counsel,
                           accountants and other skilled persons to be selected
                           and retained by it. In the event that the Cash
                           Management Bank shall be uncertain as to its duties
                           or rights hereunder or shall receive instructions,
                           claims or demands from any party hereto which, in its
                           opinion, conflict with any of the provisions of this
                           Agreement, it shall be entitled to refrain from
                           taking any action and its sole obligation shall be to
                           keep safely all property held in escrow until it
                           shall be directed otherwise in writing by all of the
                           other parties hereto or by a final order or judgment
                           of a court of competent jurisdiction.

                  ii.      Any corporation into which the Cash Management Bank
                           in its individual capacity may be merged or converted
                           or with which it may be consolidated, or any
                           corporation resulting from any merger, conversion or
                           consolidation to which the Cash Management Bank in
                           its individual capacity shall be a party, or any
                           corporation to which substantially all the corporate
                           trust business of the Cash Management Bank in its
                           individual capacity may be transferred, shall be the
                           Cash Management Bank under this Agreement without
                           further act.

                  iii.     The parties hereto acknowledge that the foregoing
                           indemnities in Section 7(b) shall survive the
                           resignation or removal of the Cash Management Bank or
                           the termination of this Agreement.

                  iv.      The Borrower represents that the correct Taxpayer
                           Identification Number of 731 Office One LLC is
                           06-1716800. All interest or other income earned under
                           this Agreement shall be allocated to Borrower and
                           reported by Alexander's Inc. to the Internal Revenue
                           Service. Notwithstanding such written directions,
                           Cash Management Bank shall report and, as required,
                           withhold any taxes as it determines may be required
                           by any law or regulation in effect at the time of the
                           distribution. In addition, Cash Management Bank shall
                           withhold any taxes required by applicable law and
                           shall remit such taxes to the appropriate
                           authorities.

                  v.       The person executing this Agreement on its party's
                           behalf has been duly and properly authorized to do
                           so.

                                       13
<PAGE>

                     [REMAINDER OF PAGE INTENTIONALLY BLANK]

                                       14
<PAGE>

                  IN WITNESS WHEREOF, Borrower, Cash Management Bank and Lender
have duly executed this Account Agreement as of the day and year first above
written.

                                    BORROWER:

                                    731 OFFICE ONE LLC, a Delaware limited
                                    liability company

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

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

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

<PAGE>

                                    CASH MANAGEMENT BANK:

                                    JP MORGAN CHASE, a New York banking
                                    organization

                                    By: /s/ Sylvia Gosha
                                        ----------------------------------------
                                        Name:  Sylvia Gosha
                                        Title: Assistant Vice President

<PAGE>

                                    LENDER:

                                    GERMAN AMERICAN CAPITAL CORPORATION,
                                    a Maryland corporation

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

                                    By: /s/ Thomas R. Traynor
                                        ----------------------------------------
                                        Name:  Thomas R. Traynor
                                        Title: Authorized Signatory

<PAGE>

                                   SCHEDULE 1A

                               COLLECTION ACCOUNT

"731 Office One LLC f/b/o German American Capital Corporation, as secured party,
Collection Account" (Account Number 323962033).

                                   Schedule 1A

<PAGE>

                                   SCHEDULE 1B

                         HOLDING ACCOUNT AND SUBACCOUNTS

"731 Office One LLC f/b/o German American Capital Corporation, as secured party,
Holding Account" (Account Number 323962025) and the following sub-accounts of
the Holding Account:

         i.       "731 Office One LLC f/b/o German American Capital Corporation,
as secured party, Debt Service Reserve Account" (Account Number 323962025-01);

         ii.      "731 Office One LLC f/b/o German American Capital Corporation,
as secured party, Tax Reserve Account" (Account Number 323962025-02);

         iii.     "731 Office One LLC f/b/o German American Capital Corporation,
as secured party, Insurance Reserve Account" (Account Number 323962025-03);

         iv.      "731 Office One LLC f/b/o German American Capital Corporation,
as secured party, Structural Reserve Account" (Account Number 323962025-04);

         v.       "731 Office One LLC f/b/o German American Capital Corporation,
as secured party, Proceeds Reserve Account" (Account Number 323962025-05);

         vi.      "731 Office One LLC f/b/o German American Capital Corporation,
as secured party, Alterations Reserve Account" (Account Number 323962025-06);

         vii.     "731 Office One LLC f/b/o German American Capital Corporation,
as secured party, Operating Expense Reserve Account" (Account Number
323962025-07);

         viii.    "731 Office One LLC f/b/o German American Capital Corporation,
as secured party, Additional Debt Service Reserve Account" (Account Number
323962025-08); and

         ix.      "731 Office One LLC f/b/o German American Capital Corporation,
as secured party, Cash Trap Reserve Account" (Account Number 323962025-09).

                                   Schedule 1B

<PAGE>

                                   SCHEDULE 2

                                [JP MORGAN LOGO]

                  SCHEDULE OF FEES FOR SERVICES RELATED TO THE

                             731 OFFICE ONE LLC AND
                       GERMAN AMERICAN CAPITAL CORPORATION
                          ACCOUNT AND CONTROL AGREEMENT

I.       INITIAL FEE                                                    Waived

This fee covers the acceptance of the appointment, commenting
on the agreement and supporting documentation, setting up
Master Demand Deposit Account(s) and appropriate Sub-Accounts.
Payable upon closing.

II.      MONTHLY ADMINISTRATION FEE                                     $1,500

Covers the normal administration of the transaction including the
monitoring of the cash flows and the maintenance of the accounts
and sub-accounts as described in the transaction documents.
Payable each month in advance.

III.     ACTIVITY FEES (AS APPLICABLE):

Wire Transfer Fees:                               $25 per wire, in excess of 10
Investment Fees:                                                         Waived*

*Investment Processing Fees are waived if funds are maintained in the JPMorgan
Cash Escrow Service. If applicable, and unless instructed otherwise, all funds
shall be maintained as a Cash Escrow deposit on the Trust Ledger of JPMorgan
Chase Bank. The JPMorgan Chase Trust Cash Escrow service has a return rate,
based upon the average daily balance maintained during each month, of LIBOR less
50 basis points.

IV.      LEGAL FEES / OUT-OF-POCKET EXPENSES                            AT COST

It is not our intention to utilize counsel. However, to the extent that counsel
is deemed necessary, their fees and expenses will be passed on at cost.
Out-of-pocket expenses, if applicable, will be billed at cost, including but not
limited to, telephone, faxes, postage, stationary, delivery expenses, etc.

FEE SCHEDULE ASSUMPTIONS:

1.  JPMorgan Chase Bank is not responsible for providing tax reporting services.

2.  A Demand Deposit Account will be established to receive funds from a
    Commercial Property.

3.  JPMorgan Chase Bank may receive instructions from a Servicer, acceptable to
    us.

4.  Lockbox arrangements, if applicable, will be established through the
    JPMorgan Chase Bank Treasury Services Group. The fees for the lockbox will
    be in addition to those quoted above and agreed upon between the Borrower
    and the Treasury Services Group.

IMPORTANT NOTE: TO HELP IN THE FIGHT AGAINST THE FUNDING OF TERRORISM AND MONEY
LAUNDERING ACTIVITIES WE ARE REQUIRED ALONG WITH ALL FINANCIAL INSTITUTIONS TO
OBTAIN, VERIFY, AND RECORD INFORMATION THAT IDENTIFIES EACH PERSON WHO OPENS AN
ACCOUNT. WHEN YOU OPEN AN ACCOUNT, WE WILL ASK FOR INFORMATION THAT WILL ALLOW
US TO IDENTIFY YOU.

                                   Schedule 2<PAGE>

                       MANAGER'S CONSENT AND SUBORDINATION
                             OF MANAGEMENT AGREEMENT

                  This MANAGER'S CONSENT AND SUBORDINATION OF MANAGEMENT
AGREEMENT, is made as of February 13, 2004 (this AGREEMENT), by 731 oFFICE One
LLC, a Delaware limited liability company (BORROWER), having an address for
notice purposes c/o Alexander's Inc., 888 Seventh Avenue, New York, New York
10019, and ALEXANDER'S MANAGEMENT LLC, a New York limited liability company
(MANAGER), having an address at 888 Seventh Avenue, New York, New York 10019, to
and for the benefit of GERMAN AMERICAN CAPITAL CORPORATION, a Maryland
corporation (together with its successors and assigns, LENDER), having an
address at 60 Wall Street, New York, New York 10005.

                              W I T N E S S E T H:

                  WHEREAS, Borrower is the owner of a fee simple interest in the
real property commonly known as Office Unit 1 and Office Unit 2 of the Beacon
Court Condominium located at 731 Lexington Avenue, New York, New York, and more
particularly described on Exhibit A attached hereto and incorporated herein (the
PROPERTY);

                  WHEREAS, on the date hereof, in accordance with the terms of a
Loan and Security Agreement, dated as of the date hereof (as the same may be
amended and supplemented from time to time, the LOAN AGREEMENT), between Lender,
as lender, and Borrower, as borrower, Lender is making a loan to Borrower in the
principal amount of $400,000,000 (the LOAN), which Loan is evidenced by that
certain Amended, Restated and Consolidated Note, dated as of the date hereof (as
the same may be amended, substituted, replaced, exchanged and supplemented from
time to time, the NOTE), made by and between Borrower and Lender and secured by
that certain Amended, Restated and Consolidated Mortgage, Security Agreement,
Financing Statement and Assignment of Leases, Rents and Security Deposits, dated
as of the date hereof (as the same may be amended and supplemented from time to
time, the SECURITY INSTRUMENT), by and between Borrower and Lender and the other
Loan Documents (as defined in the Loan Agreement);

                  WHEREAS, Manager has been retained by Borrower to act as the
manager of the Properties and will derive substantial benefit from the making of
the Loan;

                  WHEREAS, as a condition to making the Loan, Lender has
required Borrower and Manager to deliver this Agreement for the benefit of
Lender; and

                  WHEREAS, the forgoing recitals are intended to form an
integral part of this Agreement.

<PAGE>

                  NOW, THEREFORE, in consideration of the Loan, foregoing
premises, Ten Dollars ($10.00) paid in hand, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Borrower and Manager agree as follows:

                  Section 1.        Definitions.

                           (a)      The following terms shall have the meaning
                  ascribed thereto:

                  Agreement: Shall have the meaning provided in the first
                  paragraph.

                  Borrower: Shall have the meaning provided in the first
                  paragraph.

                  Lender: Shall have the meaning provided in the first
                  paragraph.

                  Loan: Shall have the meaning provided in the Recitals.

                  Loan Agreement: Shall have the meaning provided in the
                  Recitals.

                  Management Agreement: Shall mean that certain Management
                  Agreement between Borrower and Manager dated of even date
                  herewith.

                  Manager: Shall have the meaning provided in the first
                  paragraph.

                  Note: Shall have the meaning provided in the Recitals.

                  Security Instrument: Shall have the meaning provided in the
                  Recitals.

                           (b)      Capitalized terms used but not otherwise
defined herein shall have the respective meanings given thereto in the Loan
Agreement, unless otherwise expressly provided herein. All references to
sections shall be deemed to be references to sections of this Agreement, unless
otherwise indicated.

                  Section  2. Assignment of Management Agreement. Borrower
hereby conditionally transfers, assigns and delivers unto Lender, and grants
Lender a security interest in, all of its right, title and interest in and to,
but none of its obligations under, the Management Agreement, said transfer and
assignment to automatically become a present, unconditional assignment, at
Lender's election by written notice to the Borrower, upon the occurrence and
during the continuance of an Event of Default. Manager hereby consents to the
assignment set forth in this paragraph. Notwithstanding the foregoing, upon
notice to Borrower and Manager transmitted after the occurrence and during the
continuance of an Event of Default, the foregoing assignment and transfer shall
automatically become a present, unconditional assignment, at Lender's option.

                  Section  3. Subordination of Management Agreement to Lien of
Security Instrument.

                                       2
<PAGE>

                           (a)      Subordination of Rights. Any and all liens,
rights and interests, whether choate or inchoate and including, without
limitation, all mechanic's and materialman's liens, owned, claimed or held, or
to be owned, claimed or held, by Manager pursuant to the Management Agreement in
and to the Properties, are and shall be, and are hereby made, in all respects
subordinate, subject and inferior to the liens and security interests created or
to be created for the benefit of Lender, its successors and assigns, and
securing the repayment and performance of the Obligations. Any indemnification
or other rights or claims of Manager against Borrower under or in connection
with the Management Agreement shall be fully subordinated to the Obligations.

                           (b)      Governed by Loan Documents. Manager agrees
that until such time as the Indebtedness has been repaid in full, the terms and
provisions of this Agreement and the other Loan Documents shall be superior to
the terms and provisions of the Management Agreement with respect to the payment
of any management fees thereunder and termination of the Management Agreement,
and to the extent that there are any inconsistencies between the Management
Agreement and this Agreement and the Loan Documents with respect to such terms
and provisions, the terms, provisions and conditions in this Agreement and the
Loan Documents shall govern in all respects. In the event of any inconsistency
between the terms of this Agreement and the terms of the Loan Agreement, the
terms of the Loan Agreement shall prevail. Without limiting the preceding
sentence, nothing in this Agreement shall modify the terms of the Loan Agreement
which (a) permit Borrower to amend, modify, cancel or terminate the Management
Agreement, (b) do not require a written management agreement and (c) permit
Borrower to replace Manager with a Qualified Manager in accordance with the
terms of the Loan Agreement.

                  Section 4.        Obligations and Rights of Lender.

                           (a)      Lender Not Obligated Under Management
Agreement. Manager agrees that, except as provided in this Section, nothing in
this Agreement shall impose upon Lender, and Lender shall not have, any
obligation for payment or performance in favor of Manager with respect to the
Management Agreement or the Property. In the event that Lender notifies Manager
in writing after the occurrence and during the continuance of an Event of
Default that Lender has elected to assert Borrower's rights under the Management
Agreement, Lender shall pay Manager the sums due Manager under the terms of the
Management Agreement for the period commencing on the effective date of Lender's
notice to Manager and ending on the expiration date or earlier termination of
the Management Agreement.

                           (b)      Continued Performance by Manager. Upon the
occurrence and during the continuance of an Event of Default, Manager shall, at
the request of Lender, continue performance, on behalf of Lender, of all of
Manager's obligations under the terms of the Management Agreement with respect
to the Property, provided that Lender gives Manager the notice provided for in
this Section and Lender or Borrower performs or causes to be performed the
obligations of Borrower to Manager under the

                                       3
<PAGE>

Management Agreement accruing or arising from and after, and with respect to the
period commencing upon, the effective date of such notice.

                           (c)      Right to Terminate. Notwithstanding anything
contained in the Management Agreement to the contrary, Lender, or Borrower at
Lender's direction, shall have the right to terminate the Management Agreement
(i) upon, or at any time after the occurrence and during the continuance of a
monetary Event of Default, (ii) with respect to any Manager that is not an
Affiliate of Borrower, upon, or at any time after the occurrence and during the
continuance of a material default (as determined by Lender in its sole and
absolute discretion) under the terms of the Management Agreement, (iii) upon, or
at any time after, a forty-nine percent (49%) or more change in control of the
ownership of Manager, unless Manager is a publicly traded company or a direct or
indirect wholly owned subsidiary of such publicly traded company (to the extent
such change in control in excess of forty-nine percent (49%) or more results in
a change in control of forty-nine percent (49%) or more in the publicly traded
company), (iv) at any time following the Manager becoming insolvent, or (v) at
any time following any act of gross negligence, fraud, misapplication of funds,
violation of the standard of care, or any other violation of its duties pursuant
to the Management Agreement beyond applicable notice and grace periods, if any,
thereunder, by giving Manager thirty (30) days prior written notice of such
termination, in which event Manager shall resign as manager of the Property
effective upon the end of such thirty (30) day period.

                           (d)      No Joint Venture. Lender has no obligation
to Manager with respect to the Loan and Manager shall not be a third party
beneficiary with respect to any of Lender's obligations to Borrower set forth in
the Loan Documents. The relationship of Lender to Borrower is one of a creditor
to a debtor, and Lender is not a joint venturer or partner of Borrower or
Manager.

                  Section 5.        Manager's Representations. Manager warrants
and represents to Lender that the following are true, complete and correct:

                                    (i)     Manager has agreed to act as
         property manager of the Property pursuant to the Management Agreement.

                                    (ii)    A true, correct and complete copy of
         the Management Agreement is attached as Exhibit B.

                                    (iii)   The Management Agreement is in full
         force and effect and has not been amended, modified or supplemented.

                                    (iv)    The entire agreement between Manager
         and Borrower for the management of the Property is evidenced by the
         Management Agreement.

                                    (v)     The Management Agreement constitutes
         the legal, valid and binding agreement of Manager, enforceable against
         Manager in accordance with its terms.

                                       4
<PAGE>

                                    (vi)    Manager is qualified and has full
         power and authority to perform all of its obligations under the
         Management Agreement and this Agreement.

                                    (vii)   Neither Manager nor, to Manager's
         best knowledge, Borrower is in default in the performance of any of
         their respective obligations under the Management Agreement and there
         is no condition which, with the giving of notice and/or the passing of
         time, would constitute a default under the Management Agreement.

                                    (viii)  Except for sums not currently due
         and payable that have been incurred in the ordinary course of business
         of the operation of the Property, no amounts are due to Manager under
         the Management Agreement on the date hereof.

                                    (ix)    Manager has not assigned, pledged or
         otherwise transferred or subcontracted its rights and/or obligations
         under the Management Agreement.

                                    (x)     Manager has all permits, licenses
         and other governmental authorizations necessary for it to perform its
         obligations under the Management Agreement.

                                    (xi)    Manager has received and reviewed a
         copy of the Loan Agreement.

                  Section 6.        Manager's Agreements.

                           (a)      Notice of Default. Manager shall give Lender
prompt written notice of any other default beyond applicable grace and cure
periods by Borrower under the Management Agreement.

                           (b)      No Termination of Management Agreement.
Manager shall not terminate the Management Agreement without first obtaining
Lender's prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed. Notwithstanding the foregoing, Manager shall
have the right to terminate the Management Agreement for default by Borrower
beyond applicable grace and cure periods with respect to non-payment of the
management fee due thereunder by giving Lender ten (10) days' prior written
notice of such termination. In the event Lender shall cure such non-payment
default in the aforesaid ten (10) day period, then any such termination notice
shall be deemed to void and of no further force or effect.

                           (c)      No Claim Against Lender. Manager shall not
look to, or make any claim against, Lender for payment of any accrued but unpaid
fees, including, without limitation, any termination fees, relating to the
Property or the Management Agreement pursuant to this Agreement or otherwise.

                                       5
<PAGE>

                           (d)      No Amendments. Manager shall not terminate
or materially amend or modify the Management Agreement without the prior written
consent of Lender, not to be unreasonably withheld, delayed or conditioned. In
the event Manager fails to secure such approval, the Management Agreement shall,
for the purposes of Manager's obligations to Lender pursuant to this Agreement,
including Manager's aforesaid obligation to continue performance thereunder for
Lender's benefit pursuant to the terms of this Agreement, be deemed not to have
been modified by such amendment.

                           (e)      Delivery of Rent Roll and Service Contracts.
Without duplication of any items actually delivered by Borrower, when such
delivery is required, pursuant to Article XI of the Loan Agreement, within ten
(10) business days of a request from Lender, such request not to be made more
than once per calendar month, Manager shall furnish to Lender a current rent
roll of all tenants of the Property, including a list of which tenants are in
default under their respective Leases, and a schedule of all other entities with
whom Manager has entered into contracts or other agreements relating to the
Property, together with copies of all such Leases, contracts or agreements.
Without duplication of any items actually delivered by Borrower, when such
delivery is required, pursuant to Article XI of the Loan Agreement, Manager
shall furnish Lender with copies of all reports, budgets and other information
that Borrower is entitled to receive under the Management Agreement. Upon
reasonable advance notice from Lender and during normal business hours, Manager
shall cooperate with Lender's representative in any inspection of the Property,
subject in all instances to the rights of Tenants and provided that neither
Lender nor any such Persons shall unreasonably interfere with the operation of
business on the Property.

                  Section 7.        Assignment of Rents and Leases. Manager
acknowledges that, in connection with the Loan, Borrower has pledged and
assigned to Lender pursuant to the Loan Documents, among other things, all of
Borrower's right, title and interest in and to all of the Leases now or
hereafter affecting the Property, including, without limitation, any of
Borrower's rights in and to any Security Deposits thereunder. To the extent
permitted under applicable law, Manager shall deliver to Lender for application
in accordance with the terms and conditions of the Loan Documents, all proceeds
relating to the Property from time to time being held by Manager and all Rents,
Security Deposits and other proceeds received from and after the date hereof
from any and all Tenants or other parties occupying or using any portion of the
Property.

                  Section 8.        Borrower Consent. Borrower has joined herein
to evidence its consent to all the covenants, acknowledgments and agreements of
Manager contained in this Agreement.

                  Section 9.        Miscellaneous.

                           (a)      Assignment. Lender shall have the right to
transfer, sell and assign its interest in this Agreement to any Person.

                           (b)      Further Assurances. Borrower and Manager
shall execute and acknowledge (or cause to be executed and acknowledged) and
deliver to Lender all

                                       6
<PAGE>

documents, and take all actions, reasonably required by Lender from time to time
to confirm the rights created or intended to be created under this Agreement, to
protect and further the validity, priority and enforceability of this Agreement
or otherwise carry out the purposes of this Agreement and the transactions
contemplated thereunder.

                           (c)      Notices. Any notice, election, request,
demand, report or statement which by any provision of this Agreement is required
or permitted to be given or served hereunder shall be in writing and shall be
given or served (i) by certified mail return receipt requested, postage prepaid
or (ii) in the manner required by the Loan Agreement provided that any such
notice shall be given to the Manager at the address set forth herein in the
recitals.

                           (d)      Entire Agreement. This Agreement constitutes
the entire and final agreement between Borrower, Manager and Lender with respect
to the subject matter hereof and may only be changed, amended, modified or
waived by an instrument in writing signed by Borrower, Manager and Lender.

                           (e)      No Waiver. No waiver of any term or
condition of this Agreement, whether by delay, omission or otherwise, shall be
effective unless in writing and signed by the party sought to be charged, and
then such waiver shall be effective only in the specific instance and for the
purpose for which given. No delay on Lender's part in exercising any right,
power or privilege under this Agreement or any other Loan Document shall operate
as a waiver of any privilege, power or right hereunder.

                           (f)      Successors and Assigns. This Agreement shall
be binding upon Borrower and Manager and their respective successors and assigns
and shall inure to the benefit of Lender and its successors and permitted
assigns. If Borrower consists of more than one person, the obligations and
liabilities of each such person hereunder and under the other Loan Documents
shall be joint and several.

                           (g)      Captions. All paragraph, section, exhibit
and schedule headings and captions herein are used for reference only and in no
way limit or describe the scope or intent of, or in any way affect, this
Agreement.

                           (h)      Counterparts. This Agreement may be executed
in counterparts, each of which shall be an original and all of which, when taken
together, shall constitute one binding Agreement.

                           (i)      Severability. The provisions of this
Agreement are severable, and if any one clause or provision hereof shall be held
invalid or unenforceable in whole or in part, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof,
and not any other clause or provision of this Agreement.

                           (j)      Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CHOICE OF LAW RULES. EACH OF BORROWER AND MANAGER AGREES THAT
ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT SHALL BE BROUGHT IN THE COURTS

                                       7
<PAGE>

OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AND CONSENT TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH
SUIT BEING MADE UPON BORROWER OR MANAGER IN THE MANNER AND AT THE ADDRESS
SPECIFIED FOR NOTICES IN THIS AGREEMENT. EACH OF BORROWER AND MANAGER HEREBY
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

                           (k)      JURY TRIAL WAIVER. EACH OF LENDER, BORROWER
AND MANAGER AND ALL PERSONS CLAIMING BY, THROUGH OR UNDER IT, HEREBY EXPRESSLY,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT,
INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION THEREOF OR
(II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF
BORROWER, MANAGER OR LENDER WITH RESPECT TO THIS AGREEMENT (AS NOW OR HEREAFTER
MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH
CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
EACH OF LENDER, BORROWER AND MANAGER HEREBY AGREES AND CONSENTS THAT AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION MAY BE FILED WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT HERETO TO THE WAIVER OF ANY RIGHT TO TRIAL BY JURY. EACH
OF LENDER, BORROWER AND MANAGER ACKNOWLEDGES THAT IT HAS CONSULTED WITH LEGAL
COUNSEL REGARDING THE MEANING OF THIS WAIVER AND EACH OF BORROWER AND MANAGER
ACKNOWLEDGES THAT THIS WAIVER IS AN ESSENTIAL INDUCEMENT FOR THE MAKING OF THE
LOAN. THIS WAIVER SHALL SURVIVE THE REPAYMENT OF THE LOAN.

                           (l)      Counterclaims and Other Actions. Each of
Borrower and Manager hereby expressly and unconditionally waives, in connection
with any suit, action or proceeding brought by Lender on this Agreement, any and
every right it may have to (i) interpose any counterclaim therein (other than a
counterclaim which can only be asserted in the suit, action or proceeding
brought by Lender on this Agreement and cannot be maintained in a separate
action) and (ii) have any such suit, action or proceeding consolidated with any
other or separate suit, action or proceeding.

                           (m)      Termination of Agreement. Except as set
forth in Section 9(k), this Agreement shall terminate upon full repayment of the
Loan and all Indebtedness.

                                       8
<PAGE>

                           (n)      Non-Recourse. Recourse with respect to any
claims arising under or in connection with this Agreement shall be limited to
the extent provided in Article XVIII of the Loan Agreement and the terms,
covenants and conditions of Article XVIII of the Loan Agreement are hereby
incorporated by reference as if fully set forth in this Agreement.

                     [REMAINDER OF PAGE INTENTIONALLY BLANK]

                                       9
<PAGE>

                  IN WITNESS WHEREOF, Borrower and Manager have duly executed
this Manager's Consent and Subordination of Management Agreement as of the date
first above written.

                                    BORROWER:

                                    731 OFFICE ONE LLC, a Delaware limited
                                    liability company

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

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

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

                                    MANAGER:

                                    ALEXANDER'S MANAGEMENT LLC, a New York
                                    limited liability company

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

                                    LENDER:

                                    GERMAN AMERICAN CAPITAL CORPORATION, a
                                    Maryland corporation

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

                                    By: /s/ Thomas R. Traynor
                                        ----------------------------------------
                                        Name:  Thomas R. Traynor
                                        Title: Authorized Signatory

<PAGE>

                                    EXHIBIT A

                                 (Office Unit 1)

The Condominium Unit (the "Unit") in the premises known as Beacon Court
Condominium and by the street number by the street number 151 East 58th Street,
Borough of Manhattan, City, County and State of New York, said Unit being
designated and described as "Office Unit 1" in the declaration (the
"Declaration") establishing a plan for condominium ownership of said premises
under Article 9-B of the Real Property Law of the State of New York (the
"Condominium Act"), dated December 4, 2003, and recorded in the New York County
office of the Register of The City of New York (the "City Register's Office") on
February 3, 2004, in CRFN No. 2004000064392, and also designated as Tax Lot 1002
in Block 1313 of Section 5 of the Borough of Manhattan on the Tax Map of the
Real Property Assessment Department of the City of New York and on the Floor
Plans of said building, certified by Peter Claman, Registered Architect, on
January 29, 2004, and filed in the Real Property Assessment Department of the
City of New York on January 30, 2004 as Condominium Plan No. 1350 also filed in
the City Register's Office on February 3, 2004 in CRFN No. 2004000064393. All
capitalized terms herein which are not separately defined herein will have the
meanings given to those terms in the Declaration or in the by-laws of Beacon
Court Condominium. (Said by-laws, as the same may be amended from time to time,
are hereinafter referred to as the "By-Laws.")

         TOGETHER with an undivided 49.0559% percentage interest in the General
Common Elements (as such term is defined in the Declaration);

         TOGETHER with the appurtenances and all the estate and rights in and to
the Unit;

         TOGETHER with, and subject to, the rights, obligations, easements,
restrictions and other provisions set forth in the Declaration and the By-Laws,
all of which constitute covenants running with the Land and will bind any person
having at any time any interest or estate in (any of) the Unit, as though
recited and stipulated at length herein;

The premises within which the Unit is located is more particularly described as:

ALL that certain plot, piece or parcel of land, situate, lying and being in the
borough of Manhattan, County, City and State of New York, bounded and described
as follows:

BEGINNING at the corner formed by the intersection of the southerly side of East
59th Street and the westerly side of Third Avenue;

RUNNING THENCE southerly, along the westerly side of Third Avenue, 200'-10" to
the northerly side of East 58th Street;

THENCE westerly, along the northerly side of East 58th Street 420' to the
easterly side of Lexington Avenue;

THENCE northerly along the easterly side of Lexington Avenue, 200'-10" to the
southerly side of East 59th Street;

THENCE easterly, along the southerly side of East 59th Street, 420' to the point
or place of BEGINNING.

TOGETHER with the benefits and SUBJECT to the burdens of the easements set forth
in the deed made by Seven Thirty One Limited Partnership to 59th Street
Corporation dated as of 8/1/2001 and recorded 8/8/2001 in Reel 3339 Page 1100.

<PAGE>

                                 (Office Unit 2)

The Condominium Unit (the "Unit") in the premises known as Beacon Court
Condominium and by the street number by the street number 151 East 58th Street,
Borough of Manhattan, City, County and State of New York, said Unit being
designated and described as "Office Unit 2" in the declaration (the
"Declaration") establishing a plan for condominium ownership of said premises
under Article 9-B of the Real Property Law of the State of New York (the
"Condominium Act"), dated December 4, 2003, and recorded in the New York County
office of the Register of The City of New York (the "City Register's Office") on
February 3, 2004, in CRFN No. 2004000064392, and also designated as Tax Lot 1003
in Block 1313 of Section 5 of the Borough of Manhattan on the Tax Map of the
Real Property Assessment Department of the City of New York and on the Floor
Plans of said building, certified by Peter Claman, Registered Architect, on
January 29, 2004, and filed in the Real Property Assessment Department of the
City of New York on January 30, 2004 as Condominium Plan No. 1350 also filed in
the City Register's Office on February 3, 2004 in CRFN No. 2004000064393. All
capitalized terms herein which are not separately defined herein will have the
meanings given to those terms in the Declaration or in the by-laws of Beacon
Court Condominium. (Said by-laws, as the same may be amended from time to time,
are hereinafter referred to as the "By-Laws.")

TOGETHER with an undivided 14.0095% percentage interest in the General Common
Elements (as such term is defined in the Declaration);

TOGETHER with the appurtenances and all the estate and rights in and to the
Unit;

TOGETHER with, and subject to, the rights, obligations, easements, restrictions
and other provisions set forth in the Declaration and the By-Laws, all of which
constitute covenants running with the Land and will bind any person having at
any time any interest or estate in (any of) the Unit, as though recited and
stipulated at length herein;

The premises within which the Unit is located is more particularly described as:

ALL that certain plot, piece or parcel of land, situate, lying and being in the
borough of Manhattan, County, City and State of New York, bounded and described
as follows:

BEGINNING at the corner formed by the intersection of the southerly side of East
59th Street and the westerly side of Third Avenue;

RUNNING THENCE southerly, along the westerly side of Third Avenue, 200'-10" to
the northerly side of East 58th Street;

THENCE westerly, along the northerly side of East 58th Street 420' to the
easterly side of Lexington Avenue;

THENCE northerly along the easterly side of Lexington Avenue, 200'-10" to the
southerly side of East 59th Street;

THENCE easterly, along the southerly side of East 59th Street, 420' to the point
or place of BEGINNING.

TOGETHER with the benefits and SUBJECT to the burdens of the easements set forth
in the deed made by Seven Thirty One Limited Partnership to 59th Street
Corporation dated as of 8/1/2001 and recorded 8/8/2001 in Reel 3339 Page 1100.

<PAGE>

                                    EXHIBIT B

                          COPY OF MANAGEMENT AGREEMENT

                                 (see attached)
<PAGE>

                               PROMISSORY NOTE A-X

New York, New York
$86,000,000 (initial and maximum notional amount)              February 13, 2004

         PROMISSORY NOTE A-X, dated as of February 13, 2004 (this NOTE), by 731
Office One LLC, a Delaware limited liability company (BORROWER), having an
address for notice purposes c/o Alexander's Inc., 888 Seventh Avenue, New York,
New York 10019, in favor of GERMAN AMERICAN CAPITAL CORPORATION, a Maryland
corporation (together with its successors and assigns, LENDER), having an office
at 60 Wall Street, New York, New York 10005.

         WHEREAS, Lender made a loan to Borrower in the original principal
amount of $400,000,000 (the LOAN);

         WHEREAS, Lender is the present owner and holder of that certain
Consolidated Amended and Restated Note, dated as of February 13, 2004, made by
Borrower in favor of Lender (the EXISTING NOTE), which Existing Note evidences
an indebtedness of Borrower to Lender in the original and current outstanding
principal amount of $400,000,000 (the EXISTING DEBT);

         WHEREAS, pursuant to the Loan Agreement (as hereinafter defined),
Borrower and Lender desire to sever the Existing Note into six (6) newly issued
substitute promissory notes in an aggregate principal amount equal to the
Existing Debt;

         WHEREAS, from and after the date hereof, the Existing Note shall be
amended, restated and superseded and the Loan shall be evidenced by (i) this
Promissory Note A-X, in the notional principal amount of $86,000,000; (ii) that
certain Promissory Note A-1, dated as of the date hereof, made by Borrower in
favor of Lender, in the principal amount of $90,000,000 (NOTE A-1); (iii) that
certain Promissory Note A-2, dated as of the date hereof, made by Borrower in
favor of Lender, in the principal amount of $95,000,000 (NOTE A-2); (iv) that
certain Promissory Note A-3, dated as of the date hereof, made by Borrower in
favor of Lender, in the principal amount of $35,000,000 (NOTE A-3); (v) that
certain Promissory Note A-4, dated as of the date hereof, made by Borrower in
favor of Lender, in the principal amount of $94,000,000 (NOTE A-4); and (vi)
that certain Promissory Note B, dated as of the date hereof, made by Borrower in
favor of Lender, in the principal amount of $86,000,000 (NOTE B); and

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

         NOW, THEREFORE, FOR VALUE RECEIVED, Borrower promises to pay to the
order of Lender the interest and other fees, expenses and charges provided in
this Note.

<PAGE>

1.       DEFINED TERMS.

         a.       Capitalized terms used but not otherwise defined herein shall
                  have the respective meanings given thereto in the Loan
                  Agreement (as defined below), unless otherwise expressly
                  provided herein. All references to sections shall be deemed to
                  be references to sections of this Note, unless otherwise
                  indicated.

         b.       The following terms shall have the meaning ascribed thereto:

         ANTICIPATED REPAYMENT DATE shall mean March 1, 2014.

         BORROWER shall have the meaning provided in the first paragraph hereof.

         EXISTING DEBT shall have the meaning provided in the Recitals to this
         Note.

         EXISTING NOTE shall have the meaning provided in the Recitals to this
         Note.

         INTEREST PERIOD shall have the meaning provided in Section 2.

         LENDER shall have the meaning provided in the first paragraph hereof.

         LOAN shall have the meaning provided in the Recitals to this Note.

         LOAN AGREEMENT shall mean the Loan and Security Agreement, dated the
         date hereof, between Borrower and Lender.

         MATURITY DATE shall mean March 1, 2029, or such earlier date on which
         the final payment of principal of Note B becomes due and payable as
         provided in the Loan Agreement or Note B, whether at such stated
         maturity date, by declaration of acceleration, or otherwise.

         MATURITY DATE PAYMENT shall have the meaning set forth in Section 3(e).

         MONTHLY AMOUNTS shall have the meaning provided in Section 3(a).

         NOTE shall have the meaning provided in the first paragraph hereof.

         NOTE A-1 shall have the meaning provided in the Recitals to this Note.

         NOTE A-2 shall have the meaning provided in the Recitals to this Note.

         NOTE A-3 shall have the meaning provided in the Recitals to this Note.

         NOTE A-4 shall have the meaning provided in the Recitals to this Note.

         NOTE B shall have the meaning provided in the Recitals to this Note.

                                       2
<PAGE>

         PAYMENT DATE shall be the first (1st) calendar day of each calendar
         month, whether or not such day is a Business Day, commencing on April
         1, 2014 and continuing to and including the Maturity Date.

         NOTIONAL AMOUNT shall mean $86,000,000 or so much of the aggregate
         principal amount that is outstanding under Note B from time to time.

         STATED INTEREST RATE shall mean the rate of 00.11875% per annum.

2.       INTEREST.

         a.       From and after the Anticipated Repayment Date, interest shall
                  accrue on the Notional Amount at the Stated Interest Rate.

         b.       Interest on the Notional Amount shall be calculated based on
                  the Stated Interest Rate on the basis of a fraction, the
                  denominator of which shall be 360 and the numerator of which
                  shall be the actual number of days in the relevant Interest
                  Period, except that interest due and payable for a period less
                  than a full month shall be calculated by multiplying the
                  actual number of days elapsed in such period by a daily rate
                  based on said 360 day year. Interest shall accrue from, and
                  including, the first (1st) day of the prior month and ending
                  on the last day of the prior month (an INTEREST PERIOD); in
                  each case without adjustment for any Business Day convention;
                  provided that the first accrual period shall commence on the
                  Anticipated Repayment Date.

         c.       The provisions of this Section 2 are subject in all events to
                  the provisions of Section 2.2.4 of the Loan Agreement.

3.       PAYMENTS.

         a.       Commencing on April 1, 2014 and on each and every Payment Date
                  thereafter until the Maturity Date, Borrower shall pay to
                  Lender interest accruing hereunder for the entire Interest
                  Period immediately preceding the month in which said Payment
                  Date occurs. There shall be no required payments of principal
                  under this Note.

         b.       All payments made by Borrower hereunder or under any of the
                  Loan Documents shall be made on or before 2:00 p.m. New York
                  City time or such later time as Lender or its servicer shall
                  apply amounts on deposit in the Holding Account in accordance
                  the terms of the Loan Documents. Any payments received after
                  such time shall be credited to the next following Business
                  Day.

         c.       All amounts advanced by Lender pursuant to the Loan Documents,
                  other than the principal amount of the Loan, or other charges
                  provided in the Loan Documents, shall be due and payable as
                  provided in the Loan Documents. In the event any such advance
                  or charge is not so repaid by

                                       3
<PAGE>

                  Borrower, Lender may, at its option, first apply any payments
                  received under this Note to repay such advances, together with
                  any interest thereon, or other charges as provided in the Loan
                  Documents, and the balance, if any, shall be applied in
                  payment of any installment of interest or principal then due
                  and payable.

         d.       All unpaid accrued interest, all interest that would accrue on
                  the Notional Amount through the end of the Interest Period
                  during which the Maturity Date occurs and all other fees and
                  sums then payable hereunder or under the Loan Documents
                  (collectively, the MATURITY DATE PAYMENT), shall be due and
                  payable in full on the Maturity Date.

         e.       Amounts due on this Note shall be payable, without any
                  counterclaim, setoff or deduction whatsoever, at the office of
                  Lender or its agent or designee at the address set forth on
                  the first page of this Note or at such other place as Lender
                  or its agent or designee may from time to time designate in
                  writing.

         f.       All amounts due under this Note shall be due and payable in
                  lawful money of the United States.

         g.       To the extent that Borrower makes a payment or Lender receives
                  any payment or proceeds for Borrower's benefit, which are
                  subsequently invalidated, declared to be fraudulent or
                  preferential, set aside or required to be repaid to a trustee,
                  debtor in possession, receiver, custodian or any other party
                  under any bankruptcy law, common law or equitable cause, then,
                  to such extent, the obligations of Borrower hereunder intended
                  to be satisfied shall be revived and continue as if such
                  payment or proceeds had not been received by Lender.

4.       MISCELLANEOUS.

         a.       WAIVER. Borrower and all endorsers, sureties and guarantors
                  hereby jointly and severally waive all applicable exemption
                  rights, valuation and appraisement, presentment for payment,
                  demand, notice of demand, notice of nonpayment or dishonor,
                  protest and notice of protest of this Note, and, except as
                  otherwise expressly provided in the Loan Documents, all other
                  notices in connection with the delivery, acceptance,
                  performance, default or enforcement of the payment of this
                  Note. Borrower consents to any and all extensions of time,
                  renewals, waivers or modifications that may be granted by
                  Lender with respect to the payment or other provisions of this
                  Note and to the release of the collateral securing this Note
                  or any part thereof, with or without substitution, and agrees
                  that additional makers may become parties hereto without
                  notice to them or affecting their liability under this Note.

                                       4
<PAGE>

         b.       NON-RECOURSE. Recourse with respect to any claims arising
                  under or in connection with this Note shall be limited to the
                  extent provided in Article XVIII of the Loan Agreement and the
                  terms, covenants and conditions of Article XVIII of the Loan
                  Agreement are hereby incorporated by reference as if fully set
                  forth in this Note.

         c.       NOTE SECURED. This Note and all obligations of Borrower
                  hereunder are secured by the Loan Agreement, the Security
                  Instrument and the other Loan Documents.

         d.       NOTICES. Any notice, election, request or demand which by any
                  provision of this Note is required or permitted to be given or
                  served hereunder shall be given or served in the manner
                  required for the delivery of notices pursuant to the Loan
                  Agreement.

         e.       ENTIRE AGREEMENT. This Note, together with the other Loan
                  Documents, constitutes the entire and final agreement between
                  Borrower and Lender with respect to the subject matter hereof
                  and thereof and may only be changed, amended, modified or
                  waived by an instrument in writing signed by Borrower and
                  Lender.

         f.       NO WAIVER. No waiver of any term or condition of this Note,
                  whether by delay, omission or otherwise, shall be effective
                  unless in writing and signed by the party sought to be
                  charged, and then such waiver shall be effective only in the
                  specific instance and for the purpose for which given. No
                  notice to, or demand on, Borrower shall entitle Borrower to
                  any other or future notice or demand in the same, similar or
                  other circumstances.

         g.       SUCCESSORS AND ASSIGNS. This Note shall be binding upon and
                  inure to the benefit of Borrower and Lender and their
                  respective successors and permitted assigns. Upon any
                  endorsement, assignment, or other transfer of this Note by
                  Lender or by operation of law, the term "Lender" as used
                  herein, shall mean such endorsee, assignee, or other
                  transferee or successor to Lender then becoming the holder of
                  this Note. The term "Borrower" as used herein shall include
                  the respective successors and assigns, legal and personal
                  representatives, executors, administrators, devisees, legatees
                  and heirs of Borrower, if any.

         h.       CAPTIONS. All paragraph, section, exhibit and schedule
                  headings and captions herein are used for reference only and
                  in no way limit or describe the scope or intent of, or in any
                  way affect, this Note.

         i.       COUNTERPARTS. This Note may be executed in counterparts, each
                  of which shall be an original and all of which, when taken
                  together, shall constitute one binding Note.

         j.       SEVERABILITY. The provisions of this Note are severable, and
                  if any one clause or provision hereof shall be held invalid or
                  unenforceable in whole

                                       5
<PAGE>

                  or in part, then such invalidity or unenforceability shall
                  affect only such clause or provision, or part thereof, and not
                  any other clause or provision of this Note.

         k.       GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED
                  IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT
                  TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW,
                  WITHOUT REGARD TO CHOICE OF LAW RULES. BORROWER AGREES THAT
                  ANY SUIT FOR THE ENFORCEMENT OF THIS NOTE OR ANY OTHER LOAN
                  DOCUMENT SHALL BE BROUGHT IN THE COURTS OF THE STATE OF NEW
                  YORK OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
                  NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF
                  PROCESS IN ANY SUCH SUIT BEING MADE UPON BORROWER IN THE
                  MANNER AND AT THE ADDRESS SPECIFIED FOR NOTICES IN THE LOAN
                  AGREEMENT. BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY
                  NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY
                  SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT
                  COURT.

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

                                       6
<PAGE>

                  THE LOAN. THIS WAIVER SHALL SURVIVE THE REPAYMENT OF THE LOAN.

         m.       COUNTERCLAIMS AND OTHER ACTIONS. Borrower hereby expressly and
                  unconditionally waives, in connection with any suit, action or
                  proceeding brought by Lender on this Note, any and every right
                  it may have to (i) interpose any counterclaim therein (other
                  than a mandatory or compulsory counterclaim which can only be
                  asserted in the suit, action or proceeding brought by Lender
                  on this Note and cannot be maintained in a separate action)
                  and (ii) have any such suit, action or proceeding consolidated
                  with any other or separate suit, action or proceeding.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       7
<PAGE>

         IN WITNESS WHEREOF, Borrower has caused this Note to be executed and
delivered as of the day and year first above written.

                                    BORROWER:

                                    731 OFFICE ONE LLC, a Delaware limited
                                    liability company

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

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

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

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