Exhibit 10(i)(D)(1)

MODIFICATION AND EXTENSION OF CREDIT AGREEMENT

This MODIFICATION AND EXTENSION OF CREDIT AGREEMENT (this "AGREEMENT") dated as of the 14 day of April, 2000, between ALEXANDER'S, INC., a Delaware corporation, having an address at c/o Vornado Realty Trust, Park 80 West, Plaza II, Saddle Brook, New Jersey 07663 ("BORROWER") and FIRST UNION NATIONAL BANK (formerly known as First Fidelity Bank, National Association), having an address at 550 Broad Street, Newark, New Jersey 07102 ("LENDER").

R E C I T A L S:

WHEREAS, Lender is the current holder of that certain Promissory Note dated March 15, 1995 in the original principal amount of $20,000,000.00 made by Borrower to Lender (as amended by the Note Modification and Extension Agreement dated as of March 29, 1999 between Borrower and Lender and as further modified by Note Modification and Extension Agreement of even date herewith, referred to herein as the "NOTE"), which was executed and delivered in substitution for the Promissory Note dated March 15, 1995 in the original principal amount of $30,000,000.00, pursuant to the Note and Mortgage Modification and Severance Agreement dated June 18, 1998 by and among Alexander's of Fordham Road, Inc., Alexander's, Inc., Alexander's of Third Avenue, Inc., Alexander's Rego Park Center, Inc., Alexander's of Rego Park II, Inc., Alexander's of Rego Park III, Inc., Seven Thirty One Limited Partnership, Alexander's Department Stores of Lexington Avenue, Inc., Alexander's of Brooklyn, Inc., Alexander's Department Stores of New Jersey, Inc. and First Union National Bank ;

WHEREAS, the Note was made pursuant to that certain Credit Agreement between Borrower and Lender dated March 15, 1995 ("ORIGINAL CREDIT AGREEMENT"), which Credit Agreement was amended by (i) letter agreement dated March 29, 1995 between Lender and Borrower, (ii) two letter agreements between Lender and Borrower, each dated March 24, 1997, (iii) Modification and Extension of Credit Agreement dated as of March 15, 1998 between Borrower and Lender, (iv) Modification of Credit Agreement dated as of June 18, 1998 between Borrower and Lender and (v) Modification and Extension of Credit Agreement dated as of March 29, 1999 (the "1999 CREDIT AGREEMENT MODIFICATION") between Borrower and Lender (such Original Credit Agreement, as so modified, the "CREDIT AGREEMENT"), which Note evidences a loan in the original principal amount of $30,000,100.00 (the "LOAN") made by Lender to Borrower;

WHEREAS, the Note is secured by, inter alia, (A) those certain Mortgages, Assignments of Leases, Security Agreements and Fixture Filings, each dated March 15, 1995 (as heretofore amended, collectively, the "MORTGAGES"), in the original principal amount of $30,000,100.00 (except for the 59th Street Mortgage) and given by (i) Alexander's of Fordham Road, Inc. to Lender and recorded on March 22, 1995 in the Office of the City Register, Bronx County in Reel 1310, Page 68, (ii) Alexander's, Inc. to Lender and recorded on March 22, 1995 in the Office of the City Register, Bronx County in Reel 1310, Page 1,
(iii) Seven Thirty One Limited Partnership ("59TH STREET OWNER") to Lender (original principal amount of $30,000,000.00) and recorded on March 20, 1995 in the Office of the City Register, New York County in Reel 2192, Page 1291(the "59TH STREET MORTGAGE"), (iv) Alexander's, Inc. to Lender and recorded on March 17, 1995 in the Office of the City Register, Queens County in Reel

4088, Page 615, (v) Alexander's, Inc. to Lender and recorded on March 17, 1995 in the Office of the City Register, Queens County in Reel 4088, Page 659 and
(vi) Alexander's Department Stores of New Jersey, Inc. to Lender and recorded on March 17, 1995 in the Office of the County Clerk, Bergen County, New Jersey in Book 8953, Page 802 and (B) those certain Assignments of Leases and Rents, each dated March 15, 1995, which are identified on Schedule A annexed hereto and made a part hereof (the "ASSIGNMENTS OF LEASES AND RENTS"); and

WHEREAS, the Note and the Loan are guaranteed by certain wholly owned subsidiaries of Borrower and the 59th Street Owner pursuant to the following documents: (i) that certain Guaranty of Payment in favor of Lender dated as of March 15, 1995 ("1995 GUARANTY") made by Alexander's of Fordham Road, Inc., Alexander's of Rego Park, Inc., Alexander's of Rego Park II, Inc., Alexander's of Rego Park III, Inc., Alexander's of Third Avenue, Inc., Alexander's of Flushing, Inc., Alexander's Department Stores of New Jersey, Inc. and Alexander's Department Stores of Lexington Avenue, Inc. (collectively, the "1995 GUARANTORS") and the 1998 Released Guarantors (as hereinafter defined) and (ii) that certain Guaranty dated as of March 29, 1999 made by the 59th Street Owner (the "1999 GUARANTOR") in favor of Lender (the "1999 GUARANTY" and together with the 1995 Guaranty and the 1999 Guaranty, collectively, the "GUARANTY"); and

WHEREAS, Alexander's Rego Park Center, Inc. (the "1997 GUARANTOR") executed a Guaranty of Payment in favor of Lender dated March 24, 1997 (the "1997 GUARANTY"), which 1997 Guaranty was later released pursuant to a letter agreement by and among Borrower, Lender, Alexander's Rego Park Center, Inc., Alexander's of Rego Park, Inc. and others dated May 12, 1999, which letter agreement also confirmed the release of Alexander's of Rego Park, Inc. from the 1995 Guaranty (Alexander's Rego Park Center, Inc. and Alexander's of Rego Park, Inc., collectively, the "1999 RELEASED GUARANTORS");

WHEREAS, pursuant to a certain Modification and Reaffirmation of Guaranty dated as of June 18, 1998, Alexander's of Brooklyn, Inc., Alexander's Department Stores of Brooklyn, Inc. and ADMO Realty Corp.(collectively, the "1998 RELEASED GUARANTORS") were released as guarantors under the 1995 Guaranty;

WHEREAS, the 1995 Guarantors and the 1999 Guarantor, with the exclusion of the 1998 Released Guarantors and the 1999 Released Guarantors, collectively referred to herein as the "GUARANTORS;" and

WHEREAS, Borrower has requested that Lender extend and modify the Loan as provided in this Agreement and to amend the terms of the Credit Agreement and Lender is willing, subject to the terms and conditions hereinafter set forth, to extend and modify the Loan in the manner hereinafter provided; and

WHEREAS, as a condition to Lender executing and delivering this Agreement, Lender has required that Guarantors reaffirm the Guaranty and amend the Guaranty to cover all obligations of Borrower to Lender, as modified by this Agreement, and the Guarantors have agreed to reaffirm the Guaranty as hereinafter provided; and

WHEREAS, Borrower and Alexander's Department Stores of Lexington Avenue, Inc. ("ALEX-LEX") executed a certain Pledge Agreement dated as of March 15, 1995 by and among Borrower, Alex-Lex and Lender (as modified by the 1999 Credit Modification Agreement, the "PLEDGE AGREEMENT"), to further secure the Note and the Loan;

WHEREAS, as a condition to Lender executing and delivering this Agreement, Lender has required that Alex-Lex and Borrower reaffirm the Pledge Agreement and Alex-Lex and Borrower have agreed to reaffirm and amend the Pledge Agreement as hereinafter provided.

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

1. EXTENSION OF MATURITY DATE. The definition of "Maturity Date" appearing on page 8 of the Credit Agreement is hereby deleted in its entirety and replaced by the following definition:

"'Maturity Date' means MARCH 15, 2001."

2. CHANGE IN INTEREST RATE.

a. Section 2.04(a) appearing on page 14 of the Original Credit Agreement was amended and replaced as set forth in Paragraph 2.a. of the 1999 Credit Agreement Modification. Such revised Section 2.04(a) as set forth in the 1999 Credit Agreement Modification is hereby deleted in its entirety and replaced by the following new Section 2.04(a):

"(a) Ordinary Interest. The Borrower shall pay interest on the unpaid principal amount of the Loan owing to the Lender from the Closing Date, until such principal amount shall be paid in full, payable in arrears on the fifteenth day of each calendar month (each an "Interest Payment Date") at a rate per annum (the "Interest Rate") equal to

(i) prior to the second anniversary of the Closing Date, 13.80% or, provided that the Lender shall have executed the Intercreditor Agreement pursuant to which the obligations of the Borrower owing to the Subordinate Lender under the Vornado Credit Agreement shall be subordinated to the Loan Obligations, 9.86%,

(ii) on or after the second anniversary of the Closing Date but prior to the third anniversary of the Closing Date, (A) 7.25% or, provided that the Lender shall have executed the Intercreditor Agreement pursuant to which the obligations of the Borrower owing to the Subordinate Lender under the Vornado Credit Agreement shall be subordinated to the Loan Obligations, 3.25% plus (B) the One-Year Treasury Rate,

(iii) on or after the third anniversary of the Closing Date but prior to March 29, 1999 (the "1999 LOAN EXTENSION CLOSING DATE"), 7.94%

(iv) on or after the 1999 Loan Extension Closing Date until the 2000 Modification Effective Date (as hereinafter defined) (A) the greater of (x)12.0% per annum and (y) the 1999 Modification LIBOR-Based Rate (as defined in the

2000 Credit Agreement Modification) or, (B) provided that the Lender shall have executed the Intercreditor Agreement pursuant to which the obligations of the Borrower owing to the Subordinate Lender under the Vornado Credit Agreement shall be subordinated to the Loan Obligations, the 1999 Modification LIBOR-Based Rate; and

(v) on or after the 2000 Modification Effective Date, until all amounts owing under this Credit Agreement are paid in full, the 2000 Modification LIBOR- Based Rate.

Interest shall be calculated daily on the basis of the actual number of days elapsed over a 360 day year. The 1999 Modification LIBOR-Based Rate and the 2000 Modification LIBOR-Based Rate, respectively, shall remain in effect, subject to the provisions of the 1999 Credit Agreement Modification and 2000 Credit Agreement Modification, respectively, for the entire 1999 Modification Interest Period and the entire 2000 Modification Interest Period, respectively, for which they are, respectively, determined. As used herein, the term "2000 MODIFICATION EFFECTIVE DATE" shall mean the later of
(1) March 15, 2000 and (2) April 14, 2000. As used herein, the term "1999 CREDIT AGREEMENT MODIFICATION" shall mean the Modification and Extension of Credit Agreement between Borrower and Lender dated March 29, 1999."

b. As used in subparagraph 2.a. above and elsewhere in this Agreement, the following terms shall have the respective meanings given to them below:

i. "1999 MODIFICATION LIBOR-BASED RATE" shall mean at a rate equal to LIBOR (as hereinafter defined) plus 1.90 percent per annum, as determined by Lender prior to the commencement of each 1999 Modification Interest Period.

ii. "2000 MODIFICATION LIBOR-BASED RATE" shall mean at a rate equal to LIBOR plus 1.85 percent per annum, as determined by Lender prior to the commencement of each 2000 Modification Interest Period.

iii. "LIBOR" shall mean, with respect to each day during each 1999 Modification Interest Period or 2000 Modification Interest Period, as the case may be, the rate (rounded to the next higher 1/100 of 1%) for U.S. dollar deposits of one month maturity as reported on Telerate page 3750 as of 11:00 a.m., London time, on the second London business day before the relevant 1999 Modification Interest Period or 2000 Modification Interest Period, as the case may be, begins (or if not so reported, then as determined by Lender from another recognized source or interbank quotation). Notwithstanding the foregoing, if the undersigned hedges the 1999 Modification LIBOR- Based Rate or the 2000 Modification LIBOR-Based Rate, as the case may be, by entering into an interest rate swap agreement with Lender, LIBOR shall be rounded five decimal places in accordance with the 1991 ISDA Definitions published by the International Swaps and Derivatives Association, Inc.

iv. "1999 MODIFICATION INTEREST PERIOD" shall mean, initially, the period commencing on the 1999 Loan Extension Closing Date and ending on April 15, 1999, and, thereafter, each period commencing on the last day of the immediately preceding 1999

Modification Interest Period and ending on the next Interest Payment Date (as defined in the restated Section 2.04 (a) of the Credit Agreement as contained above), provided, (i) any 1999 Modification Interest Period that would otherwise end on a day which is not a New York business day shall be extended to the next New York business day, unless such extension would carry such 1999 Modification Interest Period into the next month, in which event such 1999 Modification Interest Period shall end on the preceding New York business day; (ii) any 1999 Modification Interest Period that ends in a month for which there is no day which numerically corresponds to the Interest Payment Date shall end on the last New York business day of such month and (iii) any 1999 Modification Interest Period that would otherwise extend past the 2000 Modification Effective Date shall end on the day immediately preceding the 2000 Modification Effective Date.

v. "2000 MODIFICATION INTEREST PERIOD" shall mean, initially, the period commencing on the 2000 Modification Effective Date and ending on May 15, 2000, and, thereafter, each period commencing on the last day of the immediately preceding 2000 Modification Interest Period and ending on the next Interest Payment Date (as defined in the restated Section 2.04 (a) of the Credit Agreement as contained above), provided, (i) any 2000 Modification Interest Period that would otherwise end on a day which is not a New York business day shall be extended to the next New York business day, unless such extension would carry such 2000 Modification Interest Period into the next month, in which event such 2000 Modification Interest Period shall end on the preceding New York business day; (ii) any 2000 Modification Interest Period that ends in a month for which there is no day which numerically corresponds to the Interest Payment Date shall end on the last New York business day of such month and (iii) any 2000 Modification Interest Period that would otherwise extend past the Maturity Date shall end on the Maturity Date.

3. PAYMENT OF ACCRUED INTEREST; BORROWER'S ESTOPPEL. Borrower is paying to Lender on the date hereof all accrued and unpaid interest to the date hereof (collectively, the "Accrued Interest") on the Note (as modified by this Agreement). Borrower hereby acknowledges and agrees that, after giving credit for such payment, there is now owing under the Note and the Loan the outstanding principal balance of TWENTY MILLION and 00/100 DOLLARS ($20,000,000.00). The aforesaid sum is owing by Borrower to Lender without claim, defense, offset or counterclaim of any kind or nature whatsoever.

4. PREPAYMENT.

a. Section 2.03 of the Original Credit Agreement was amended and replaced as set forth in Paragraph 4 of the 1999 Credit Agreement Modification. Such revised Section 2.03 as set forth in the 1999 Credit Agreement Modification is hereby deleted in its entirety and replaced by the following new Section 2.03:

"The Loan may be prepaid, in whole but not in part, on the last day of a 2000 Modification Interest Period, upon at least thirty (30) days' notice to the Lender, provided that (i) Borrower pays Lender in connection therewith the Indemnified Loss or Expense (as hereinafter defined), if any, (ii) any prepayment will not affect the Borrower's obligations under any swap agreements (as defined in 11 U.S.C. Section 101) with Lender or an affiliate of Lender, including without limitation, all obligations to continue making payments thereunder, which swap agreements shall remain in full force and effect notwithstanding such prepayment and (iii)

Lender shall not be obligated to deliver any satisfaction of mortgage or other release of collateral for the Loan unless all requirements and procedures for early termination of any such swap agreements as set forth therein or in any related document shall be fully complied with by Borrower. Any prepayment shall include accrued and unpaid interest to the date of prepayment on the principal amount prepaid and all other sums due and payable hereunder and under all other Loan Documents. If Lender shall elect, in its sole discretion, to accept a partial prepayment, all payments received may be applied in such order as Lender in its sole discretion shall determine."

b. Borrower shall indemnify Lender against Lender's loss or expense in employing deposits as a consequence of (i) the undersigned's failure to make any payment when due hereunder, or (ii) any prepayment of the Loan on a date other than the last day of a 2000 Modification Interest Period
(collectively, the "Indemnified Loss or Expense"). The amount of such (i) Indemnified Loss or Expense shall be determined, in Lender's sole discretion, based upon the assumption that Lender funded 100% of that portion of the Loan to which the 2000 Modification LIBOR-Based Rate applies in the applicable London interbank market.

c. In connection with the payment in full of the Loan, in lieu of delivery of satisfaction(s) of mortgages or releases of mortgage, Borrower may request that Lender deliver an assignment of mortgage with respect to one of the mortgaged premises (and releases of mortgages with respect to the other mortgaged premises) and Lender shall comply with such request provided that each of the following conditions shall be satisfied to the satisfaction of Lender:

i. all conditions for the delivery of satisfactions of mortgage as set forth in the Loan Documents shall be fully satisfied;

ii. all requirements and procedures for early termination of any swap agreements as set forth therein or in any related document are fully complied with by Borrower and all requirements for prepayment as set forth in Paragraph 4.a. above shall be fully satisfied;

iii. the assignment of mortgage shall expressly state that it is made without recourse, representation or warranty of any kind or nature; and

iv. the Section 275 Affidavit shall be executed and delivered by a principal of Borrower; and

v. Borrower shall pay all reasonable attorneys fees incurred by Lender in connection with the foregoing.

5. CONDITIONAL CONSENT TO CONVEYANCE OF AIR PARCEL WITH RESPECT TO 59TH STREET PROPERTY.

a. Subject to the prior satisfaction of each of the Transfer Conditions as hereinafter set forth, Lender hereby consents to:

(1) the sale, assignment, transfer and/or conveyance (collectively, "TRANSFER") of one or more air parcels with respect to the 59th

Street Property of such dimensions as Borrower may determine together with all or a portion of such Transferrable Development Rights (as defined in the Transferrable Development Rights Security Agreement) as Borrower may reasonably determine to be consistent with the size of such air parcel (such air parcel and Transferrable Development Rights, collectively, the "59TH STREET AIR PARCEL") by the 59th Street Owner to one or more affiliates (based upon either control or economic interest) of Borrower and from one or more of such affiliates to other affiliate(s) of Borrower as Borrower may determine (all of such grantees, transferees and assignees, collectively, the "59TH STREET TRANSFEREES" and, individually, a "59TH STREET TRANSFEREE"), up to a total of four separate Transfers, but, in each case, expressly subject to (i) the lien and terms of the 59th Street Mortgage as theretofore modified (including, without limitation, as modified by the Mortgage Modification and Extension Agreement dated the date hereof) and
(ii) the security interest granted to Lender (the "TRANSFERRABLE DEVELOPMENT RIGHTS LIEN") pursuant to that certain Pledge and Security Agreement For Transferrable Development Rights by and among 59th Street Owner, Borrower and Lender (the "TRANSFERRABLE
DEVELOPMENT RIGHTS SECURITY AGREEMENT"); and

(2) in connection with a Transfer, seller financing by the 59th Street Owner to a 59th Street Transferee receiving a Transfer from such 59th Street Owner and/or by a 59th Street Transferee which is Transferring to another 59th Street Transferee (each, a "SELLER FINANCING MORTGAGOR"), which financing may be secured by one or more subordinate mortgages on the 59th Street Air Parcel and one or more security agreements granting subordinate security interests in the Transferrable Development Rights, provided that:
(i) each such mortgage and security agreement (collectively, a "SELLER FINANCING MORTGAGE") and each UCC-1 Financing Statement with respect thereto shall expressly state that it and the lien thereof are subject and subordinate to the 59th Street Mortgage and the Transferrable Development Rights Security Agreement as theretofore modified and as thereafter may be modified, extended or increased,
(ii) each mortgagee, secured party or pledgee under a Seller Financing Mortgage ("SELLER FINANCING MORTGAGEE") shall, simultaneously with the execution and delivery of such Seller Financing Mortgage, execute and deliver a subordination agreement in form and substance satisfactory to Lender which shall, among other things, confirm the subordination and other provisions of clause "(i)" above and contain the other provisions as set forth below ("59TH STREET SUBORDINATION AGREEMENT"), (iii) no Seller Financing Mortgage may be recorded without the prior written consent of Lender and (iv) the Banker's Agent (as defined in the Transferrable Development Rights Security Agreement)

shall confirm to Lender in writing that Banker's Agent continues to hold the Custodial Documents (as defined in the Transferrable Development Rights Security Agreement) as agent for Lender and reconfirms its obligations to Lender under the Transferrable Development Rights Security Agreement.

Each 59th Street Subordination Agreement shall also provide as follows:

A. Until the earlier of the repayment in full of the Loan and the release and discharge of the 59th Street Mortgage, the Seller Financing Mortgagee shall not, without the prior written consent of Lender, which may be withheld in Lender's sole and absolute discretion, exercise (x) any of its rights or remedies under or with respect to the Seller Financing Mortgage or any related loan documents (collectively, the "59th Street Seller Financing Loan Documents") against the Seller Financing Mortgagor, any portion of the 59th Street Air Parcel and/or any other assets of the Seller Financing Mortgagor, including, without limitation, the commencement of any judicial or non-judicial action or proceeding (i) to collect the rents with respect to the 59th Street Air Parcel, (ii) to have a receiver appointed to collect such rents or otherwise to enforce any lease with respect to the 59th Street Air Parcel, (iii) to foreclose the Seller Financing Mortgage or (iv) to enforce Seller Financing Mortgagor's obligations under any other 59th Street Seller Financing Loan Documents;

B. Seller Financing Mortgagee will not, without the prior written consent of Lender, file or join in the filing of an involuntary bankruptcy petition against any Seller Financing Mortgagor or vote in favor of any plan of reorganization of Seller Financing Mortgagor; and

C. Notwithstanding any provision of the Seller Financing Mortgage or other 59th Street Seller Financing Loan Document(s) to the contrary, any insurance proceeds or condemnation proceeds shall be paid or delivered to Lender in accordance with the Loan Documents and shall be applied, in accordance with the Loan Documents and to the extent provided therein, to the restoration of the improvements upon the 59th Street Air Parcel or to payment of the Loan (or as Lender may otherwise agree with Borrower or Seller Financing Mortgagor) and Seller Financing Mortgagee shall in all events cooperate fully with Lender in the collection and application of insurance proceeds and condemnation proceeds; and

D. Until the earlier of the repayment in full of the Loan and the release and discharge of the 59th Street Mortgage, any action brought by the Seller Financing Mortgagee to foreclose or otherwise enforce the Seller Financing Mortgage (which action shall not be brought without the prior written consent of Lender as provided above) shall not name as a defendant in said action any tenant of the 59th Street Property (including, without limitation, the 59th Street Air Parcel) and Seller Financing Mortgagee shall not otherwise take any action to terminate any leases covering any portion of the 59th Street Property (including, without

limitation, the 59th Street Air Parcel), in each case without the prior written consent of Lender.

b. The foregoing consent as set forth in subparagraph 5.a. above shall not be deemed given and shall be of no force or effect unless and until each of the following conditions (collectively, the "Transfer Conditions") shall first have been satisfied to the satisfaction of Lender or waived in writing by Lender:

(1) Immediately upon the consummation of such Transfer the Bank shall receive notice thereof together with copies of all deeds and other documents evidencing or effectuating a Transfer (collectively, the "TRANSFER DOCUMENTS", and, individually, a "TRANSFER DOCUMENT"), together with copies of all documents pertaining thereto, including, without limitation, the contract of sale covering such transaction and all amendments to the foregoing;

(2) simultaneously with the delivery of any deed or other Transfer Document, each of the 59th Street Transferees shall execute and deliver to Lender (A) an agreement in form and substance satisfactory to Lender whereby (i) they shall acknowledge that the conveyance set forth in such deed and the Transfer set forth in any other Transfer Document are all subject to the lien and terms of the 59th Street Mortgage, the Transferrable Development Rights Lien, the Transferrable Development Rights Security Agreement and the terms of the other Loan Documents and (ii) they shall assume all of the obligations of 59th Street Owner under the 59th Street Mortgage and under the Transferrable Development Rights Security Agreement, (B) a guaranty of the Loan substantially in the form annexed hereto as Exhibit A (a "59TH STREET TRANSFEREE GUARANTY"), (C) the Transferee Interests Security Agreement (as hereinafter defined) as required below, (D) UCC-1 Financing Statements in favor of Lender as Secured Party covering the Transferrable Development Rights transferred to such 59th Street Transferree and (E) Undated Endorsements in Blank (as defined in the Transferrable Development Rights Security Agreement);

(3) simultaneously with the delivery of any deed or other Transfer Document, all of the legal and beneficial ownership interests (collectively, "TRANSFEREE EQUITY INTERESTS") in each 59th Street Transferee shall be pledged ("TRANSFEREE INTERESTS PLEDGE") to Lender pursuant to a Pledge and Security Agreement substantially in the form annexed hereto as Exhibit B ("TRANSFEREE INTERESTS SECURITY AGREEMENT") so that Lender receives a first priority and perfected security interest and pledge of one hundred percent (100.0%) of the Transferee Equity Interests and Lender shall receive such UCC-1 Financing Statements and possession of all

original stock certificates and other original documentation as counsel to Lender may reasonably determine is necessary or advisable so as to perfect Lender's security interest in the Transferee Equity Interests and maintain Lender's lien in the Transferable Equity Interests as a first priority perfected security interest; and

(4) the legal fees incurred by the Lender with respect to the Transfer, the delivery of any and all Seller Financing Mortgages and all related transactions shall be paid.

c. Provided that no Event of Default shall then exist, upon execution and delivery of a 59th Street Transferee Guaranty by a 59th Street Transferee and satisfaction in full of all of the Transfer Conditions as pertaining to the Transfer to such 59th Street Transferee, Lender shall (i) return the 59th Street Transferee Guaranty and any Undated Endorsements in Blank executed and delivered by the transferor to such 59th Street Transferee ("59TH STREET TRANSFEROR") , whereupon such Guaranty and Undated Endorsements in Blank shall be deemed terminated, and release Lender's security interests under the Transferee Interests Security Agreement with respect to interests in the 59th Street Transferor, by delivery of appropriate UCC-3 Termination Statements.

d. In the event that not more than ten percent (10.0%) of the Transferee Equity Interests with respect to a 59th Street Transferee shall be held by individuals, the applicable Transferee Interests Security Agreement shall state that such individuals shall have no personal liability under such Agreement, provided that such agreement shall be executed by all other holders of Transferee Equity Interests in such 59th Street Transferee (collectively, "NON-INDIVIDUAL HOLDERS") and such other holders shall (i) guarantee in such agreement, in a manner satisfactory to Lender, all of the representations and obligations of such individuals executing such agreement, (ii) be responsible for all costs and expenses of Lender in enforcing its rights and remedies under the applicable Transferee Interests Security Agreement and (iii) confirm that there is no restriction on the liability of the Non-Individual Holders under the Transferee Interests Security Agreement and no non- recourse or exculpation provisions shall be applicable to the Non-Individual Holders.

e. Borrower shall not permit any Transfer to take place except upon satisfaction, to the reasonable satisfaction of Lender, of each of the Transfer Conditions.

6. LOAN FEE FOR EXTENSION AND MODIFICATION OF LOAN. Simultaneously with the execution and delivery of this Agreement, Borrower shall pay to the Lender, in consideration for Lender agreeing to extend and modify the Loan in accordance with the terms of this Agreement, a fee equal to $60,000.00.

7. RELEASE OF PART OF MORTGAGED PREMISES.

a. Paramus Release. Subparagraph 9(a) of the 1999 Credit Agreement Modification is hereby deleted in its entirety and shall be of no further forth or effect and Lender shall have no obligation to deliver a release of the Paramus Property except as expressly set forth

in this Paragraph 7 and subject to the terms and conditions set forth in this Paragraph 7. Lender shall release (the "PARAMUS RELEASE") the Paramus Property
(as so identified in item 9 of Schedule IX of the Original Credit Agreement)
from the lien of its mortgage on such premises, provided that each of the following conditions are complied with: (i) Borrower shall request such release in writing ("Paramus Release Request") not less than ten business days prior to the date for delivery of the release, (ii) there shall be no outstanding Events of Default at any time during the period from the date of the Paramus Release Request through actual delivery of the Paramus Release, (iii) Borrower shall, in connection with the delivery of the Paramus Release, make a payment in reduction of the principal balance of the Loan in the amount of $10,000,000.00 (the "Paramus Release Price") together with all interest accrued and unpaid on the entire amount of the Loan through the date of payment of such Paramus Release Price and (iv) in connection with the Paramus Release, Borrower shall pay Lender all reasonable attorneys fees incurred by Lender in connection with the Paramus Release. The Paramus Release Price and such accrued and unpaid interest shall be paid in immediately available lawful money of the United States of America.

b. Lender shall have no obligation to deliver a release of the 59TH Street Property except as expressly set forth in this Paragraph 7 and subject to the terms and conditions set forth in this Paragraph 7. Lender shall release (the "59TH STREET RELEASE") the 59th Street Property (as so identified in item 3 of Schedule IX of the Original Credit Agreement) from the lien of its mortgage on such premises, provided that each of the following conditions are complied with: (i) Borrower shall request such release in writing ("59th Street Release Request") not less than ten business days prior to the date for delivery of the release, (ii) there shall be no outstanding Events of Default at any time during the period from the date of the 59th Street Release Request through actual delivery of the 59th Street Release, (iii) Borrower shall, in connection with the delivery of the 59th Street Release, make a payment in reduction of the principal balance of the Loan in the amount of $10,000,000.00 (the "59th Street Release Price") together with all interest accrued and unpaid on the entire amount of the Loan through the date of payment of such 59th Street Release Price and (iv) in connection with the 59th Street Release, Borrower shall pay Lender all reasonable attorneys fees incurred by Lender in connection with the 59th Street Release. The 59th Street Release Price and such accrued and unpaid interest shall be paid in immediately available lawful money of the United States of America.

8. REAFFIRMATION OF GUARANTY. By signing below under the words "CONFIRMED AND AGREED TO", each of the Guarantors:

a. agrees that the term "Loan Documents" as used in the Guaranty shall henceforth mean (i) all of the "Loan Documents", as defined in the Original Credit Agreement (as such documents may have heretofore been modified),
(ii) the Note (as heretofore modified and as modified by the Note Modification and Extension Agreement of even date herewith) (iii) the Mortgages (as heretofore modified and as modified by the Mortgage Modification and Extension Agreement of even date herewith), (iv) the Assignments of Lease and Rents (as modified by amendment of even date herewith), (v) the Credit Agreement as modified by this Agreement, (vi) the Transferrable Development Rights Security Agreement (as hereinafter defined), (vii) all other agreements modifying, extending or reaffirming the Loan Documents, including, without limitation, those documents being executed in connection with the execution and delivery of this Agreement and (viii) all other documents and agreements executed or

delivered in connection with any of the foregoing documents and pertaining to the Loan or collateral therefor (all of the foregoing, collectively referred to herein as the "LOAN DOCUMENTS");

b. acknowledges the continuing validity of the Guaranty to Lender and represents, warrants and confirms the non-existence of any offsets, defenses or counterclaims to any of its obligations thereunder, and waives any right to assert any set-off, counterclaim or cross claim of any nature whatsoever in any litigation relating to the Loan or any of the Loan Documents, the Guaranty or otherwise with respect to the Loan;

c. acknowledges that its execution of this Agreement constitutes a reaffirmation of its liability under the Guaranty for the performance of (x) all of Borrower's obligations to Lender under the Loan Documents, (y) all of the obligations of Borrower and the other mortgagors under the Mortgages and (z) and any and all obligations of Borrower of any kind and description, whether now existing or hereafter arising, under or in connection with swap agreements (as defined in 11 U.S.C. Section 101) between Borrower and Lender (or an affiliate of Lender);

d. represents to Lender that all corporate action necessary to authorize the execution and delivery of this Agreement by such Guarantor has been duly and properly taken;

e. represents to Lender that such Guarantor is in good standing under the laws of the state of its incorporation;

f. irrevocably and unconditionally waives any and all rights to trial by jury in any action, suit or counterclaim arising in connection with, out of or otherwise relating to this Agreement, the Guaranty or any other Loan Document; and

g. represents and warrants to Lender that such Guarantor owns the fee estate with respect to the respective premises set forth opposite the name of such Guarantor on Schedule B annexed hereto (as such premises are so identified on Schedule IX of the Original Credit Agreement) and hereby assumes all of the obligations of the mortgagor(s) under the Mortgage covering such premises (if such Guarantor did not originally execute such Mortgage as mortgagor).

9. REAFFIRMATION OF PLEDGE AGREEMENT.

a. Borrower and Alex-Lex hereby represent and warrant to Lender as follows:

i. Borrower owns a 1.0% interest (843.50 Units) as a limited partner in 59th Street Owner (the "ALEX LIMITED PARTNER INTEREST").

ii. Alex-Lex owns a 49.0% interest (41,331.50 Units) as a general partner in 59th Street Owner (the "ALEX-LEX GENERAL PARTNER INTEREST") and a 50.0% interest (42,175 Units) as a limited partner in 59th Street Owner (the "ALEX-LEX LIMITED PARTNER INTEREST").

iii. The Alex Limited Partner Interest, the Alex-Lex General Partner Interest and the Alex-Lex Limited Partner Interest constitute in the aggregate one hundred percent (100%) of the partnership and equity interests in 59th Street Owner, including, without limitation, all of the interest of the general partners and limited partners in 59th Street Owner.

iv. Borrower continues to own all of the issued and outstanding capital stock of the Guarantors and Lender has a first priority and perfected security interest therein.

b. Borrower and Alex-Lex further agree as follows:

i. agree that the term "Loan Documents" as used in the Pledge Agreement shall henceforth mean the "Loan Documents" as such term is defined in this Agreement.

ii. acknowledges the continuing validity of the Pledge Agreement and represent, warrant and confirm the non-existence of any offsets, defenses or counterclaims to any of its obligations thereunder, and waives any right to assert any set-off, counterclaim or cross claim of any nature whatsoever in any litigation relating to the Loan or any of the Loan Documents, the Pledge Agreement or otherwise with respect to the Loan;

iii. acknowledge that their execution of this Agreement constitutes a reaffirmation of their obligations under the Pledge Agreement and that the pledge and security interest granted by Borrower (including, without limitation, the "Shares", as defined in the Pledge Agreement, and the Alex Limited Partner Interest) and by Alex-Lex (including, without limitation, the Alex-Lex General Partner Interest and the Alex-Lex Limited Partner Interest) shall secure, without limitation, the performance of (x) all of Borrower's obligations to Lender under the Loan Documents, (y) all of the obligations of Borrower and the other mortgagors under the Mortgages and (z) and any and all obligations of Borrower of any kind and description, whether now existing or hereafter arising, under or in connection with swap agreements (as defined in 11 U.S.C. Section 101) between Borrower and Lender (or an affiliate of Lender).

c. Alex-Lex represents to Lender (i) that all corporate action necessary to authorize the execution and delivery of this Agreement by Alex-Lex has been duly and properly taken and Alex-Lex is in good standing under the laws of the state of its incorporation; and

d. Borrower and Alex-Lex irrevocably and unconditionally waive any and all rights to trial by jury in any action, suit or counterclaim arising in connection with, out of or otherwise relating to this Agreement, the Pledge Agreement or any other Loan Document.

10. PAYMENT OF ACCRUED INTEREST AND CLOSING EXPENSES.

a. Simultaneously with the execution and delivery of this Agreement, Borrower shall pay, in addition to the Accrued Interest, all of the costs, fees and expenses incurred by the Lender in connection with this Agreement and the transactions described herein or contemplated hereby, including, without limitation, (a) all fees and charges incurred or to be incurred in connection with the recording and/or filing of the documents executed in connection with the execution of this Agreement and the loan modification and extension which is the subject of this Agreement and all fees for the examination of title and updated title searches,

Uniform Commercial Code searches, related charges and all other charges of TitleServ Agency of New York City, Inc. (collectively, "TITLE EXPENSES") and (b) the fees and disbursements of Lender's counsel, Herrick, Feinstein LLP, incurred in connection with this transaction ("LENDER'S LEGAL FEES").

b. Notwithstanding anything to the contrary, expressed or implied, contained in this Agreement or any prior or contemporaneous correspondence or other communications between Borrower and Lender, at the option of Lender the extension of the loan contained in this Agreement shall not be or become effective until Borrower has paid the Accrued Interest, the Title Expenses and the Lender's Legal Fees.

11. REAFFIRMATION OF REPRESENTATIONS. Except with respect to Sections 4.01(g) and 4.01(h) of the Original Credit Agreement, Borrower hereby reaffirms and makes again to Lender, as of the date hereof, all of the representations and warranties contained in the Credit Agreement and hereby further represents and warrants to Lender as follows:

a. Borrower is a corporation duly organized and validly existing under the laws of the State of Delaware and has full power and authority to execute, deliver and perform its obligations under this Agreement and any other documents and instruments executed by Borrower in connection with this Agreement;

b. All corporate action necessary to authorize the execution, delivery and performance of this Agreement, and any other documents and instruments executed by Borrower and each Guarantor in connection with this Agreement, have been duly and properly taken; and

c. Borrower is in good standing under the laws of the State of Delaware.

12. BORROWER'S RELEASE OF LENDER. Borrower hereby release all claims, demands, and causes of action of any kind or nature against the Lender which Borrower now has or may have by reason of any matter, cause or thing relating to or arising out of the Loan or the Loan Documents, to the date of this Agreement.

13. FORDHAM ROAD. Lender consents to the conveyance of the Fordham Road Property (as so identified in item 1 of Schedule IX of the Original Credit Agreement) to the holder of the First Mortgage on such property or its designee (and to any consensual foreclosure of such mortgage) and in connection with such conveyance Lender shall release its mortgage lien on the Fordham Road Property. The parties hereto hereby further consent and agree that to the extent that a default or an event of default under the Greyrock Loan (as hereinafter defined) constitutes an Event of Default under the Credit Agreement or any other Loan Document, such default or event of default shall henceforth no longer constitute an Event of Default under the Credit Agreement or under any other Loan Document; provided that the foregoing shall not be construed so as to eliminate any other Event of Default or to affect the interpretation of any other default provision contained in the Credit Agreement or any other Loan Document. As used herein, the term "Greyrock Loan" shall mean the first mortgage loan on the Fordham Property in the original principal amount of $25,000,000.00 made by Greyrock Capital Group, Inc. (now known as Bac of America Commercial Finance Corporation).

14. MISCELLANEOUS.

a. Terms not otherwise defined in this Agreement shall be deemed to have the meanings ascribed to them in the Credit Agreement.

b. This Agreement may be executed in any number of counterparts, each of which shall constitute an original, and all of which together shall constitute one and the same instrument and agreement.

c. Except as herein amended, the terms and provisions of the Credit Agreement shall, in all other respects, remain unmodified, are hereby ratified and reaffirmed, and shall remain in full force and effect.

d. This Agreement shall be binding upon and shall inure to the benefit of Borrower, Lender and their respective successors and assigns. This Agreement shall be governed by the law of the State of New York. This Agreement may not be modified orally, but only by a writing executed by Borrower and Lender.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.

FIRST UNION NATIONAL BANK

By: /s/   WILLIAM H. BIRMINGHAM
    ------------------------------------------
    Name: William H. Birmingham
    Its:  V.P.

ALEXANDER'S, INC.

By: /s/   IRWIN GOLDBERG
    ------------------------------------------
    Name: Irwin Goldberg
    Its:  Secretary

CONFIRMED AND AGREED TO:

ALEXANDER'S OF FORDHAM ROAD, INC.

By: /s/   IRWIN GOLDBERG
    ------------------------------------------
    Name: Irwin Goldberg
    Its:  Secretary

ALEXANDER'S OF REGO PARK II, INC.

By: /s/   IRWIN GOLDBERG
    ------------------------------------------
    Name: Irwin Goldberg
    Its:  Secretary

ALEXANDER'S OF REGO PARK III, INC.

By: /s/   IRWIN GOLDBERG
    ------------------------------------------
    Name: Irwin Goldberg
    Its:  Secretary

ALEXANDER'S OF THIRD AVENUE, INC.

By: /s/   IRWIN GOLDBERG
    ------------------------------------------
    Name: Irwin Goldberg
    Its:  Secretary

ALEXANDER'S OF FLUSHING, INC.

By: /s/   IRWIN GOLDBERG
    ------------------------------------------
    Name: Irwin Goldberg
    Its:  Secretary

ALEXANDER'S DEPARTMENT STORES
OF NEW JERSEY, INC.

By: /s/   IRWIN GOLDBERG
    ------------------------------------------
    Name: Irwin Goldberg
    Its:  Secretary

ALEXANDER'S DEPARTMENT STORES OF
LEXINGTON AVENUE, INC.

By: /s/   IRWIN GOLDBERG
    ------------------------------------------
    Name: Irwin Goldberg
    Its:  Secretary

SEVEN THIRTY ONE LIMITED PARTNERSHIP
By: Alexander's Department Stores of Lexington Avenue, Inc., General Partner

By: /s/   IRWIN GOLDBERG
    ------------------------------------------
    Name: Irwin Goldberg
    Its:  Secretary

STATE OF          )
                  )  ss.:
COUNTY OF         )

On the ______ day of _____________ in the year 2000, before me, the undersigned, a Notary Public in and for said State, personally appeared ____________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

                                 -----------------------------------------------
                                                Notary Public

STATE OF          )
                  )  ss.:
COUNTY OF         )

On the ______ day of _____________ in the year 2000, before me, the undersigned, a Notary Public in and for said State, personally appeared ___________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

STATE OF          )
                  )  ss.:
COUNTY OF         )

On the ______ day of _____________ in the year 2000, before me, the undersigned, a Notary Public in and for said State, personally appeared ____________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

                                 -----------------------------------------------
                                                Notary Public

STATE OF          )
                  )  ss.:
COUNTY OF         )

On the ______ day of _____________ in the year 2000, before me, the undersigned, a Notary Public in and for said State, personally appeared ___________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

STATE OF          )
                  )  ss.:
COUNTY OF         )

On the ______ day of _____________ in the year 2000, before me, the undersigned, a Notary Public in and for said State, personally appeared ____________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

                                 -----------------------------------------------
                                                Notary Public

STATE OF          )
                  )  ss.:
COUNTY OF         )

On the ______ day of _____________ in the year 2000, before me, the undersigned, a Notary Public in and for said State, personally appeared ___________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

STATE OF          )
                  )  ss.:
COUNTY OF         )

On the ______ day of _____________ in the year 2000, before me, the undersigned, a Notary Public in and for said State, personally appeared ____________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

                                 -----------------------------------------------
                                                Notary Public

STATE OF          )
                  )  ss.:
COUNTY OF         )

On the ______ day of _____________ in the year 2000, before me, the undersigned, a Notary Public in and for said State, personally appeared ___________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

STATE OF          )
                  )  ss.:
COUNTY OF         )

On the ______ day of _____________ in the year 2000, before me, the undersigned, a Notary Public in and for said State, personally appeared ___________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

SCHEDULE A

ASSIGNMENTS OF LEASES AND RENTS

1. Assignment of leases and rents made by ALEXANDER'S OF FORDHAM ROAD, INC., as assignor, dated as of March 15, 1995 in favor of FIRST FIDELITY BANK, NATIONAL ASSOCIATION, as assignee, recorded March 22, 1995 in Reel 1310, Page 114 in the New York City Register's Office, Bronx County, as modified by the Modification of Assignment of Leases and Rents, dated June 18, 1998, recorded on September 16, 1998, at Reel 1576, Page 2088 in the New York City Register's Office, Bronx County, as amended by Modification of Assignment of Leases and Rents dated as of March 29, 1999 .

2. Assignment of leases and rents made by ALEXANDER'S, INC., as assignor, dated as of March 15, 1995 in favor of FIRST FIDELITY BANK, NATIONAL ASSOCIATION, as assignee, recorded March 22, 1995 in Reel 1310, Page 48 in the New York City Register's Office, Bronx County, as modified by the Modification of Assignment of Leases and Rents, dated June 18, 1998, recorded on September 16, 1998, at Reel 1576, Page 2079 in the New York City Register's Office, Bronx County, as amended by Modification of Assignment of Leases and Rents dated as of March 29, 1999.

3. Assignment of leases and rents made by SEVEN THIRTY ONE LIMITED PARTNERSHIP, as assignor, and ALEXANDER'S DEPARTMENT STORES OF LEXINGTON AVENUE, INC., as general partner, dated as of March 15, 1995 in favor of FIRST FIDELITY BANK, NATIONAL ASSOCIATION, as assignee, recorded March 20, 1995 in Reel 2192, Page 1334 in the New York City Register's Office, New York County, as modified by the Modification of Assignment of Leases and Rents, dated June 18, 1998, recorded on September 10, 1998, in Reel 2703, Page 1753 in the New York City Register's Office, New York County, as amended by Modification of Assignment of Leases and Rents dated as of March 29, 1999.

4. Assignment of leases and rents made by ALEXANDER'S, INC., as assignor, dated as of March 15, 1995 in favor of FIRST FIDELITY BANK, NATIONAL ASSOCIATION, as assignee, recorded March 17, 1995 in Reel 4088, Page 705 in the New York City Register's Office, Queens County, as modified by the Modification of Assignment of Leases and Rents, dated June 18, 1998, recorded on July 21, 1998, at Reel 4920, Page 1699 in the New York City Register's Office, Queens County and also recorded on July 21, 1998 at page 1690 and 1708 in Queens County, as amended by Modification of Assignment of Leases and Rents dated as of March 29, 1999.

5. Assignment of leases and rents made by ALEXANDER'S DEPARTMENT STORES OF NEW JERSEY, INC., as assignor, dated as of March 15, 1995 in favor of FIRST FIDELITY BANK, NATIONAL ASSOCIATION, as assignee, recorded March 17, 1995 in Mortgage Book 8953 Page 849 in the Office of the County Clerk, Bergen County, as amended by Modification of Assignment of Leases and Rents dated as of March 29, 1999.

         NAME OF GUARANTOR                          PROPERTY OWNED
         -----------------                          --------------
Alexander's of Rego Park II, Inc.        Rego Park II Property

Alexander's of Rego Park III, Inc.       Rego Park III  Property

Alexander's of Third Avenue, Inc.        Third Avenue Property

Alexander's of Fordham Road, Inc.        Fordham Road Property

Alexander's of Flushing, Inc.            ground lease position with respect to
                                         136-20 through 136-30 Roosevelt Avenue,
                                         Flushing, New York (Block 5019, Lot 5)

Alexander's Department Stores of New     Paramus Property
       Jersey, Inc.

Alexander's Department Stores of                     N/A
       Lexington Avenue, Inc.

Seven Thirty One Limited Partnership     59th Street Property

EXHIBIT A

FORM OF 59TH STREET TRANSFEREE GUARANTY

EXHIBIT B

FORM OF TRANSFEREE INTERESTS SECURITY AGREEMENT

Exhibit 10(i)(D)(2)

PLEDGE AND SECURITY AGREEMENT FOR TRANSFERRABLE
DEVELOPMENT RIGHTS

AGREEMENT made as of this 14 day of April, 2000, by and among SEVEN THIRTY ONE LIMITED PARTNERSHIP, a New York limited partnership, having an address at c/o Vornado Realty Trust, Park 80 West, Plaza II, Saddle Brook, New Jersey 07663 ("Assignor"), ALEXANDER'S, INC., a Delaware corporation, having an address at c/o Vornado Realty Trust, Park 80 West, Plaza II, Saddle Brook, New Jersey 07663 ("Borrower")and FIRST UNION NATIONAL BANK (formerly known as First Fidelity Bank, National Association), having an address at 550 Broad Street, Newark, New Jersey 07102 ("Secured Party").

R E C I T A L S

A. Borrower entered into that certain Credit Agreement between Borrower and Secured Party dated March 15, 1995 (such Credit Agreement, as amended by letter agreement dated March 29, 1995 between Borrower and Secured Party, as further amended by two letter agreements between Borrower and Secured Party, each dated March 24, 1997, as modified by that certain Modification and Extension of Credit Agreement dated as of March 15, 1998 between Borrower and Secured Party, as further modified by that certain Modification of Credit Agreement dated as of June 18, 1998 between Borrower and Secured Party, as further modified and extended by that certain Modification and Extension of Credit Agreement dated March 29, 1999 between Borrower and Secured Party and as further modified and extended by that certain Modification and Extension of Credit Agreement of even date herewith (the "2000 Credit Agreement Modification") between Borrower and Secured Party (such Credit Agreement as so modified, being hereinafter referred to as the "Credit Agreement").

B. Secured Party is the current holder of that certain Promissory Note dated March 15, 1995 in the original principal amount of $20,000,000.00 made by Borrower to Secured Party

(as modified by Note Modification and Extension Agreement dated March 29, 1999 between Borrower and Secured Party and as further modified by Note Modification and Extension Agreement of even date herewith between Borrower and Secured Party (the "Note"), which was executed and delivered in substitution for the Promissory Note dated March 15, 1995 in the original principal amount of $30,000,000.00, pursuant to the Note and Mortgage Modification and Severance Agreement dated June 18, 1998 by and among Alexander's of Fordham Road, Inc., Alexander's, Inc., Alexander's of Third Avenue, Inc., Alexander's Rego Park Center, Inc., Alexander's of Rego Park II, Inc., Alexander's of Rego Park III, Inc., Seven Thirty One Limited Partnership, Alexander's Department Stores of Lexington Avenue, Inc., Alexander's of Brooklyn, Inc., Alexander's Department Stores of New Jersey, Inc. and First Union National Bank.

C. Assignor executed and delivered a Guaranty dated March 29, 1999 of the loan (the "Loan") which is the subject of the Credit Agreement in connection with a prior extension of the Loan and Assignor is the mortgagor under that certain mortgage held by Secured Party covering premises referred to in the Credit Agreement as the 59th Street Property (such premises shall also be referred to herein as the "59th Street Property").

D. t is a condition precedent to the execution and delivery by Secured Party of the 2000 Credit Agreement Modification and its agreement to extend and modify the Loan as set forth therein, that Assignor and Borrower shall have executed and delivered this Pledge Agreement, granting to the Secured Party, a security interest in certain collateral as hereinafter set forth upon and subject to the terms and conditions hereinafter set forth.

E. Capitalized terms used herein and not otherwise defined herein shall have the meaning ascribed thereto in the Credit Agreement.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and to secure the payment of the "Obligations" (as hereinafter defined), it is hereby agreed as follows:

ARTICLE I
DEFINITIONS AND INTERPRETATIONS

Section 1.1. Definitions. The following words and terms shall have the meanings set forth below.

"Collateral" means all of the rights and property described in Schedule A annexed hereto and made a part hereof, all proceeds of the foregoing, all additions to the foregoing and all substitutions and replacements for the foregoing.

"Collateral Documents" means all agreements and documents evidencing or pertaining to the Collateral or the rights of Assignor with respect thereto and any limitations thereon, including without limitation, the documents set forth or described on Schedule A annexed hereto and made a part hereof and all amendments thereto, true copies of which are annexed hereto as Exhibit A.

"Guarantors" shall have the meaning given such term in the 2000 Credit Agreement Modification. The Guarantors shall be referred to individually as a "Guarantor."

"Loan Documents" shall have the meaning given such term in the 2000 Credit Agreement Modification.

"Obligations" means all obligations of the Borrower under the Loan Documents.

"Security Agreement" means this Pledge and Security Agreement as the same may be amended or supplemented from time to time in accordance with the terms hereof.

"UCC" means the Uniform Commercial Code as adopted in either the State of New York or the State of New Jersey (at the sole option and election of Secured Party) as of the date of this Security Agreement.

The provisions of Schedule A which contain additional defined terms used in this Security Agreement are hereby incorporated by this reference.

Section 1.2. Interpretation. In this "Security Agreement", unless the context otherwise requires:

(A) Words of the masculine gender mean and include correlative words of the feminine and neuter genders and words importing the singular number mean and include the plural number and vice-versa.

(B) Any date specified in this Security Agreement which falls on a Saturday, Sunday or legal holiday shall automatically be extended until the first regular business day after such date.

(C) All capitalized terms used in this Security Agreement that are defined in any of the paragraphs hereof, will have the meanings ascribed to them in such paragraphs unless the context otherwise requires.

(D) The term "herein," "hereof" or "hereunder" or similar terms used in this Security Agreement refer to this entire agreement and not to the particular provision in which the term is used. Unless otherwise stated, all references herein to paragraphs, subparagraphs or other provisions are references to paragraphs, subparagraphs or other provisions of this Security Agreement.

(E) Any headings preceding the texts of the several Articles and Sections of this Security Agreement, shall be solely for convenience of reference and shall not constitute a part of this Security Agreement, nor shall they affect its meaning, construction or effect.

(F) This Security Agreement shall be governed by and construed in accordance with the applicable laws of the State of New York or the State of New Jersey (at the sole option and election of Secured Party) governing agreements made and executed within the State of New York, or, at the option of Secured Party, in accordance with the applicable laws of

the state in which the Collateral is located, in either case, without regard to conflict of laws principles.

(G) If any provision of this Security Agreement or its application to any person or circumstances is invalid or unenforceable to any extent, the remainder of this Security Agreement, or the applicability of such provision to other persons or circumstances, shall not be affected thereby. Each provision of this Security Agreement shall be valid and enforceable to the fullest extent permitted by law and shall be deemed to be separate from such invalid or unenforceable provisions and shall continue in full force and effect.

ARTICLE II
SECURITY INTEREST

Section 2.1. Security Interest. As security for the prompt and unconditional payment and performance of the Obligations, Assignor does hereby assign, pledge and grant to the Secured Party a first priority and perfected security interest in and to the Collateral. Such assignment and grant shall be fully operative without any further action on the part of Assignor or Secured Party. Simultaneously with execution and delivery of this Agreement, Assignor shall execute and deliver UCC-1 Financing Statements in favor of Secured Party covering the Collateral for filing in (i) the office of the New York State Department of State, (ii) the New York County Clerk's office (one to be filed in the real estate records and a separate one to be filed with such clerk but not in the real estate records), (iii) the office of the New Jersey Secretary of State and (iv) the Bergen County (New Jersey) Clerk's office.

Section 2.2. Closing Deliveries. Simultaneously with the execution and delivery of this Agreement, Assignor shall execute (except for the Davis & Partners Certificates of Eligibility and Davis and Partners HPD to Buildings Department Letters, which are already executed) and deliver the following:

(A) the original (with raised seal) Davis & Partners Certificates of Eligibility (to be held by the Bank's Agent subject to the terms hereinafter provided);

(B) the original Davis & Partners HPD to Buildings Department Letters (to be held by the Bank's Agent subject to the terms hereinafter set forth);

(C) separate undated endorsements and assignments in blank sufficient to transfer the Transferrable Development Rights and related rights under each of the respective Davis & Partners Certificates of Eligibility (collectively, the "Undated Endorsements in Blank" and, individually a "Undated Endorsement in Blank");

Section 2.3. Use of Undated Endorsements in Blank. Following the later of an Event of Default and five business days notice to Assignor, Secured Party shall have the right to date, complete, execute and deliver the Undated Endorsements in Blank and to do all other things as may be required to transfer the Transferrable Development Rights (or any portion thereof as determined by Secured Party) to, at Secured Party's election, Secured Party, any purchaser at any sale of the Collateral (or portion thereof) pursuant to this Agreement or the Uniform Commercial Code and/or to any purchaser at a foreclosure sale with respect to the 59th Street Property.

Section 2.4. Future Deliveries. From and after the delivery by the seller under the BFC Zoning Bonus Purchase Agreement of the original BFC Certificates of Eligibility for Zoning Bonus and/or the original BFC HPD to Buildings Department Letter(s), Assignor shall cause such documents to be delivered to Bank's Agent to be held as agent for Secured Party as hereinafter provided.

Section 2.5. Bank's Agent. By signing this Agreement, Alexander's, Inc. ("Bank's Agent") hereby acknowledges and agrees as follows:

(A) It acknowledges receipt as agent of Secured Party of the of the following original documents:

(i) original (with raised seal) Davis & Partners Certificates of Eligibility for Zoning Bonus; and

(ii) original Davis & Partners HPD to Buildings Department Letters.

(B) Bank's Agent shall accept delivery, when issued and available, of the original BFC Certificates of Eligibility for Zoning Bonus and the BFC HPD to Buildings Department Letter (such original documents, together with the documents referred to in clause "(A)" above, collectively, the "Custodial Documents"). Assignor shall cause such documents when issued and available to it to be immediately delivered to Bank's Agent to be held as herein provided.

(C) Bank Agent's shall hold possession of the Custodial Documents solely as agent for Secured Party (and not as agent for Assignor, itself or any other party). Its duties hereunder are intended to be solely ministerial in nature. Bank's Agent shall follow all directions of Secured Party with respect to the Custodial Documents and the disposition thereof. Any directions that Bank's Agent may receive from any other party (other than a court of competent jurisdiction) with respect to the disposition of the Custodial Documents, including, without limitation, from Assignor, or any of its representatives, shall not be followed unless first consented to in writing by Secured Party. Neither the fact that Bank's Agent is also the borrower under the Loan, nor the fact that Bank's Agent is affiliated with Assignor shall be construed or interpreted in any manner whatsoever so as to imply the granting by Secured Party of any dominion, control or possession of the Custodial Documents to Assignor or to Bank's Agent in its capacity as borrower under the Loan, it being the intent of the parties hereto to grant

Secured Party a perfected first priority security interest in the Collateral and the Custodial Documents.

(D) Bank's Agent shall not charge Secured Party any fee or any other charge for holding the Custodial Documents or performing its duties under this Section 2.5, all of which shall be paid by Assignor and Borrower (as a joint and several obligation of Assigner and Borrower) and Assignor and Borrower hereby jointly and severally agree to indemnify and hold Secured Party harmless from and against any claim, cost, expense or liability (including reasonable attorneys fees) arising from any claim asserted by Bank's Agent in connection with its duties under this Section 2.5.

(E) Provided that there shall be no Event of Default hereunder or under the Credit Agreement, at such time as Secured Party shall be required to release the 59th Street Property from the lien of its mortgage in accordance with the provisions of the 2000 Credit Agreement Modification, it shall execute such UCC-1 Termination Statements and such other documents as Assignor may reasonably require (without incurring any liability) to release Secured Party's security interest in the Collateral or to re-assign the Collateral (provided that any assignment or release, as the case may be, shall be without recourse, representation or warranty of any kind or nature against Secured Party) and shall, contemporaneously therewith, direct Bank's Agent to release the Custodial Documents to Assignor.

Section 2.6. Power of Attorney. Assignor hereby designates Secured Party or any designee of Secured Party as Assignor's attorney-in-fact for the sole purpose of exercising Secured Party's rights under this Agreement and authorizes Secured Party or such designee (a) after request to Assignor, if Assignor fails to comply within 10 days of such request, execute in the name and on behalf of Assignor one or more UCC financing statements or amendments with

respect to the Collateral naming Assignor as debtor and Secured Party as secured party and indicating and describing the types and the items of the Collateral, and (b) from and after an Event of Default under this Security Agreement, in the name and on behalf of Assignor, (i) to take any action and execute any instrument which Secured Party may deem necessary or advisable to carry out and enforce or to accomplish the purposes of this Security Agreement or to exercise Secured Party's rights hereunder, (ii) after five business days notice to Assignor, to date, complete , execute and deliver the Undated Endorsements in Blank and to do all other things as may be required to transfer the Transferrable Development Rights (or any portion thereof as determined by Secured Party) to, at Secured Party's election, Secured Party, any purchaser at a sale of the Collateral (or portion thereof) pursuant to this Agreement and/or to any purchaser at a foreclosure sale with respect to the 59th Street Property,
(ii) after five business days notice to the Assignor, to sell, transfer, pledge, make any agreement with respect to, or otherwise deal, with the Collateral as fully and completely as though Secured Party was the absolute owner thereof for all purposes, and to do, at Secured Party's option and at the expense of Assignor, at any time or from time to time, all acts and things which Secured Party deems necessary or desirable to protect, preserve or realize upon the Collateral in order to effect the intent of this Security Agreement, all as fully and effectively as Assignor might do. The foregoing power-of-attorney is irrevocable and coupled with an interest. Assignor releases Secured Party, and all subsidiaries, nominees, designees and affiliates thereof and all of its and their directors, officers, shareholders, employees, agents and representatives from any liability arising from any act or acts under and within the limits of such power-of-attorney or otherwise, in connection with this Security Agreement and the Loan Documents or in furtherance thereof, whether by omission or commission, and whether based upon any error of judgment or mistake of law or fact.

Section 2.7. Subordinate Pledge to Vornado. Secured Party hereby consents to Assignor granting a subordinate security interest in the Collateral in favor of Vornado Lending L.L.C. ("Vornado"), provided that (i) the agreement(s) evidencing the granting of such security interest (the "Subordinate Pledge Agreement") to Vornado expressly states that the security interest and lien in the Collateral granted to Vornado is fully subject and subordinate to the security interest granted pursuant to this Agreement, (ii) Vornado shall not file any UCC-1 Financing Statements with respect to the Collateral until the UCC-1 Financing Statements in favor of Secured Party shall first be filed, (iii) any UCC-1 Financing Statement in favor of Vornado shall expressly state that the security interest granted to Vornado is fully subject and subordinate to the security interest of Secured Party and (iv) a true and correct copy of each of the Subordinate Pledge Agreement, all documents evidencing the obligations secured by such Subordinate Pledge Agreement and all related loan documents shall be promptly delivered to Secured Party.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

Section 3.1.Representations and Warranties. Assignor represents and warrants that:

(A) Except for items 5, 6, 7 and 8 as set forth on Schedule A (to the extent not heretofore acquired by Assignor), Assignor is the sole and lawful owner of, and has good title to all the Collateral, including without limitation all of the rights and property listed or described on Schedule A annexed hereto, free and clear of all claims, liens, security interests, charges, taxes, assessments, pledges, defenses, rights of offset, encumbrances, escrows, rights of first refusal, mortgages, indentures, security agreements and other agreements, arrangements, contracts, commitments, understandings or other obligations, whether written or oral, other than the security interest created by this Security Agreement.

(B) Assignor is the Purchaser under the BFC Zoning Purchase Agreement by assignment from VRT Development Rights LLC, has not assigned, pledged, mortgaged or hypothecated any interest or right under such agreement and, except to the extent permitted under the 2000 Credit Agreement Modification or otherwise permitted under this Agreement, covenants not to assign, pledge, grant a security interest, mortgage or hypothecate any interest or right under such agreement except for the pledge and grant of security interest contained in this Agreement.

(C) Assignor has the full power, right and authority to enter into this Security Agreement, to grant the security interest granted herein to Secured Party and to carry out the transactions contemplated by this Security Agreement.

(D) The execution, delivery, and performance of this Security Agreement is not in contravention of any indenture, agreement, undertaking, license, judgment, decree, order, law, statute, ordinance or other governmental rule or regulation applicable to Assignor or by which Assignor is bound. This Security Agreement constitutes the legal, valid and binding obligation of Assignor enforceable in accordance with its terms.

(E) Assignor shall not enter into or permit any affiliate, designee or nominee to enter into any agreement modifying any of the terms and provisions of the Collateral Documents, or relating to or which may affect Assignor's rights thereunder or hereunder, or waive, consent, settle, release, or otherwise compromise any of the rights of Assignor under any of the Collateral Documents or hereunder; provided that Assignor may enter into one or more modifications of the BFC Zoning Bonus Purchase Agreement so long as such modification(s) shall not have a material adverse effect on Secured Party's security and interests herein.

(F) The Collateral Documents furnished to the Secured Party herewith are true and complete and have not been modified (true and complete copies of which are annexed hereto as Exhibit A ); to Assignor's knowledge, such documents and agreements are in full force and effect in accordance with their respective terms;

(G) To Assignor's knowledge, the BFC Zoning Bonus Purchase Agreement is in full force and effect and has not been terminated.

ARTICLE IV
COVENANTS

Section 4.1. Maintenance of Collateral. Assignor, at its own expense, shall at all times undertake all reasonable efforts, to the extent permissible under applicable law, to maintain in full force and effect the Certificates of Eligibility of Zoning Bonus now, heretofore or hereafter issued to Assignor (including, without limitation the Davis & Partners Certificates of Eligibility for Zoning Bonus and the BFC Certificates of Eligibility for Zoning Bonus) and shall not transfer, assign, use (or take any action looking to any transfer, assignment or use, including, without limitation, the entering into of any agreement of sale or otherwise contemplating same) any of the zoning bonus or Transferrable Development Rights evidenced by such certificates, to or for any premises other than the 59th Street Property, which 59th Street Property shall at all times remain the "Compensated Development" with respect to the zoning bonus represented by all such Certificates of Eligibility of Zoning Bonus now, heretofore or hereafter issued.

(A) Simultaneously with the execution and delivery of this Agreement, deliver, to the Bank's Agent, to be held such firm as the agent of the Bank in accordance with Section 2.5 hereof (i) all original (with raised seal) Davis & Partners Certificates of Eligibility for Zoning Bonus and (ii) all Davis & Partners HPD to Buildings Department Letters.

(B) Deliver or cause to be delivered, immediately after receipt by Assignor, Borrower, any Guarantor or any attorneys or agent for any of the foregoing, to the Bank's Agent, to be held by such firm as the agent of the Bank in accordance with Section 2.5 hereof (i) all original (with raised seal) BFC Certificates of Eligibility for Zoning Bonus and (ii) all letters of the Department of Housing Preservation and Development to the Building Department relating or pertaining to such BFC Certificates of Eligibility for Zoning Bonus, including, without limitation of the nature of the Davis & Partners HPD to Buildings Department Letters.

(C) Keeping the Collateral free of all claims, liens, security interests, charges, taxes, assessments and encumbrances, except the security interests granted hereunder, and not sell, contract to sell, exchange, transfer, assign, hypothecate, alienate, further encumber or permit the further encumbrance or otherwise dispose of the Collateral or any interest therein, without the prior written consent of Secured Party.

Section 4.2. Assignor's Obligations. Assignor will pay to the Secured Party, all costs and expenses incurred and sums paid by the Secured Party (including without limitation attorneys' fees, costs and disbursements, insurance premiums and sales commissions) in connection with the enforcement of any of the Secured Party's rights under this Security Agreement or the negotiation or settlement of any default or dispute under this Security Agreement, all of which sums shall be secured by the Collateral. Assignor agrees that Assignor shall be exclusively responsible for the performance of all of the terms, covenants and conditions of the Collateral Documents as they relate to the owner of the Collateral, and that Secured Party, its successors or assigns shall have no responsibility or liability whatsoever under the Collateral Documents and shall under no circumstances be deemed to have any liability under such documents and agreements for any purpose whatsoever.

ARTICLE V
EVENTS OF DEFAULT: REMEDIES

Section 5.1. Events of Default. Any one or more of the following events shall constitute an "Event of Default" hereunder:

(A) The occurrence of an "Event of Default", as defined in the Credit Agreement. The Credit Agreement is hereby modified to add as an "Event of Default" thereunder, the occurrence of any Event of Default as such term is defined in this Agreement.

(B) Except as may be expressly permitted under and subject to all of the terms and conditions of this Agreement or the 2000 Credit Agreement Modification, the transfer, assignment, use (or the taking of any action looking to any transfer, assignment or use, including, without limitation, the entering into of any agreement of sale or otherwise contemplating same), without Secured Party's consent, of any of the zoning bonus or Transferrable Development Rights evidenced by Certificates of Eligibility for Zoning Bonus, to or for the use of any premises other than the 59th Street Property or if at any time the 59th Street Property, shall not be the "Compensated Development" with respect to the zoning bonus represented by all Certificates of Eligibility of Zoning Bonus now, heretofore or hereafter issued;

(C) If any of the representations, warranties or statements made by Assignor herein, or made by Assignor, Borrower, or any Guarantor in any of the Loan Documents or any other document or instrument executed in connection with this Security Agreement, or in any certificate, financial statement or other instrument heretofore or hereafter delivered by any of them to Secured Party or its representatives, are untrue, incorrect or misleading in any material respect, as of the date when made;

(D) Any failure of Assignor or Borrower to comply with, or any breach by either of them of, any of the other terms, covenants or conditions of this Security Agreement

which default is not cured within thirty (30) days of notice thereof except that if such default is not reasonably capable of cure within such 30-day period, Assignor shall have such extended period as may reasonably be required provided Assignor commences such cure within 30 days and thereafter diligently pursues such cure.

(E) If title to or possession of any Collateral is transferred, by pledge, assignment or otherwise, to any person or entity other than Secured Party or if Assignor grants, suffers or permits any further pledge, mortgage or encumbrance of or any further lien upon or further security interest in any of the Collateral or enters in any agreement to do any of the foregoing.

(F) If Assignor, without Secured Party's consent, enters into any modification, termination or cancellation of any of the Collateral Documents, which in any way materially reduces or impairs the interest of the Assignor in the Collateral or its value to Secured Party.

Section 5.2. Remedies on Default. If any Event of Default referred to in
Section 5.1 hereof shall have occurred, Secured Party shall have the following rights and remedies in addition to any other remedy it may have under the UCC, any other law, under this Security Agreement or any of the other Loan Documents:

(A) Secured Party may declare the entire indebtedness evidenced by the Loan Documents and all of the other Obligations to be immediately due and payable by giving written notice thereof to the Borrower and, upon giving such Notice, such indebtedness and all other Obligations shall be immediately due and payable in full to the Secured Party; and

(B) Secured Party may, at its sole option and discretion, sell, assign or otherwise dispose of the Collateral in whole or in part at public or private sale for cash, upon

credit with or without advertisement of the time, place or terms of sale, except that if the sale be a private sale, ten (10) days' notice in writing from Secured Party of the time and place of sale and the terms of sale shall be given to Assignor, which notice shall be deemed reasonable. The Secured Party may divide the Collateral in any manner it shall choose and may sell, assign or dispose of all portions or any portions of the Collateral. In case of any sale on credit, the Collateral sold may be retained by Secured Party until the sale price is paid, but Secured Party shall incur no liability if the purchaser fails to perform its obligations. At any sale, Secured Party, or such individual or individuals as may be designated by Secured Party, may purchase the security sold, free from all further right of redemption of Assignor, which is hereby waived and released. In case of any sale, Secured Party may first deduct all expenses of collection, sale and delivery of the Collateral sold and any expenses incidental thereto, including, but not limited to, taxes and reasonable attorneys', accountants' and auctioneers' fees and disbursements, and then apply the remaining proceeds to the satisfaction of the Obligations. In the event such remaining proceeds are insufficient to satisfy all of the Obligations, Secured Party shall have the right to determine in its sole discretion the particular Obligations against which the proceeds shall be applied, and Borrower and Assignor shall remain liable for and shall pay to Secured Party on demand the remaining deficiency. In the event such remaining proceeds are sufficient to pay the Obligations, any surplus shall be delivered to Assignor, provided that Secured Party agrees to abide by an unconditional and irrevocable written direction from Assignor (stating that it may not be revoked without the prior written consent of Vornado) to pay such remaining proceeds to Vornado instead of to Assignor, provided that such direction is received by Secured Party and sent in the manner provided herein for the sending of notices to Secured Party.

Any sale conducted upon the foregoing terms or by any other method of sale (if conducted in conformity with practices of any banks in New York State or New Jersey disposing of similar security) shall be deemed commercially reasonable. Assignor agrees that Secured Party shall have the right to continue to retain the Collateral until such time as Secured Party, in its sole discretion, believes that an advantageous price can be obtained for the Collateral and Secured Party shall not be liable to Assignor for any loss in the value of the Collateral by reason of any such retention of the Collateral by Secured Party.

Secured Party, at its sole option and election, may proceed against the Collateral either before, after or at the same time as a mortgage foreclosure, deed in lieu of mortgage foreclosure or other enforcement of its rights with respect to its mortgage encumbering the 59th Street Property. Secured Party shall have the right, at its sole option and election, to proceed against the Collateral pursuant to or in connection with a mortgage foreclosure action with respect to the 59th Street Property and/or pursuant to the rights granted to Secured Party under this Agreement.

Section 5.3. Waivers.

(A) Assignor waives presentment, demand, notice (except to the extent otherwise provided herein), protest, notice of acceptance of this Security Agreement, notice of loans made, credit extended, collateral received or delivered or other action taken in reliance hereon and all other demands and notices of any description. With respect to the Obligations, the Loan Documents and the Collateral, Assignor assents to any extension or postponement of the time of payment or any other indulgence, to any substitution, exchange or release of the Collateral, to the addition or release of any party or person primarily or secondarily liable, to the acceptance of partial payments therefrom and the settlement, compromising or adjusting of any thereof, all in such manner and at such time or times as Secured Party may deem advisable.

Secured Party shall have no duty as to the collection or protection of the Collateral or any income thereon, nor as to the preservation of rights against prior parties, nor as to the preservation of any rights pertaining thereto.

(B) Secured Party shall not, under any circumstances or in any event whatsoever, have any liability for any error or omission or delay of any kind occurring in the liquidation or any realization upon any of the Collateral, if undertaken in accordance with this Agreement, including any instrument received in payment thereof, or any damage resulting therefrom unless caused by the gross negligence or wilful misconduct on the part of Secured Party. Assignor shall indemnify and hold harmless Secured Party against any claim, loss or damage (including attorney's fees, costs and disbursements of Secured Party) arising out of the liquidation of or realization upon any of the Collateral, including any instrument received in payment thereof unless caused by the gross negligence or wilful misconduct on the part of the Secured Party.

Section 5.4. Remedies Cumulative.

(A) No remedy conferred upon or reserved to Secured Party hereunder is or shall be deemed to be exclusive of any other available remedy or remedies. Each such remedy shall be distinct, separate and cumulative, shall not be deemed to be inconsistent with or in exclusion of any other available remedy, may be exercised in the sole discretion of Secured Party at any time, in any manner, and in any order, and shall be in addition to and separate and distinct from every other remedy given Secured Party under the Loan Documents, any other security interest given to Secured Party by Assignor with respect to the Collateral or any other mortgage or security agreement securing any of the other Obligations, now or hereafter existing in favor of Secured Party at law or in equity or by statute. Without limiting the generality of the foregoing,

Secured Party shall have the right to exercise any available remedy to recover any amount due and payable with respect to the Obligations without regard to whether any other amount is due and payable, and without prejudice to Secured Party to exercise any available remedy for other events of default existing at the time the earlier action was commenced.

(B) Any delay, omission or failure by Secured Party to insist upon the strict performance by Assignor or Borrower of any of the covenants, conditions and agreements herein set forth or to exercise any right or remedy available to it upon the occurrence of an Event of Default hereunder shall not impair any such right or remedy or be considered or taken to constitute an estoppel against, or be a waiver or relinquishment of, the future right of Secured Party to insist upon and to enforce, by injunction or other appropriate legal or equitable remedy, strict compliance by Assignor and Borrower with all of the covenants, conditions and agreements herein, or under any of the other Loan Documents or of the right to exercise any such rights or remedies if such default by Assignor be continued or repeated. Regardless of consideration and without notice to or the consent of any of the holders of any subordinate lien on the Collateral, Secured Party may (i) release any part of the security described herein or any other security for the Obligations, (ii) release the obligations of any person primarily or contingently liable for the debts secured hereby or (iii) extend the time for payment or otherwise modify the terms of any of the other Obligations. No such release, extension or modification shall impair or affect the lien of this Security Agreement or its priority over any subordinate lien. Neither Assignor nor any other person primarily or contingently liable for the payment of the debts secured hereby shall be relieved of any liability by reason of (i) any such release, extension or modification, (ii) the failure of Secured Party to comply with any request of Assignor or any such person to foreclose this Security Agreement, or (iii) any agreement or stipulation between any subsequent owner of

the Collateral and Secured Party extending the time of payment or modifying the terms of this Security Agreement.

ARTICLE VI
GENERAL

Section 6.1. Consents, Approvals and Waivers to Be in Writing. No consent, approval or waiver of Secured Party hereunder shall be effective unless in writing and signed by an officer, employee or other person authorized to execute such consent, approval or waiver. Assignor and Borrower hereby acknowledge that, in executing this Security Agreement and the documents being executed simultaneously or in connection with this Security Agreement, neither Assignor nor Borrower has relied on any representation, warranty, promise, statement, covenant or agreement, express or implied, direct or indirect, given or made by or on behalf of Secured Party or otherwise, except as expressly set forth herein.

Section 6.2. Entire Agreement. This Security Agreement, together with all the documents delivered and executed in connection herewith, constitutes the entire agreement among the parties with respect to the subject matter hereof. The Assignor hereby acknowledges that, in executing and delivering this Security Agreement, it has not relied on any oral or written representation, warranty, promise, statement, covenant or agreement, express or implied, direct or indirect, given or made by or on behalf of Secured Party or its agents or representatives or otherwise, except as expressly set forth herein.

Section 6.3. Successors and Assigns. This Security Agreement, and the documents referred to herein, shall be binding upon and inure to the benefit of, and be enforceable by, Secured Party and Assignor, and each of their respective heirs, administrators, legal representatives, successors, subsidiaries, affiliates, nominees and assigns; except that Assignor

has no right to assign its rights hereunder or any interest herein without the prior written consent of Secured Party.

Section 6.4. Jurisdiction. With respect to any claim or cause of action in connection with the execution or performance of or arising under this Security Agreement or the Loan Documents or any of the other instruments described in and executed and/or delivered in connection herewith, the Assignor (i) irrevocably submits to the nonexclusive personal jurisdiction of both the courts of the State of New York and New Jersey, (ii) irrevocably waives any objection which all or any one of them may have to the laying on of venue of any suit, action or proceeding arising out of or relating to this Security Agreement or said documents brought in any such court, (iii) irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum, (iv) irrevocably waives the right to object, with respect to such court, that such court does not have jurisdiction over such party, (v) IRREVOCABLY WAIVES ANY RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING WITH RESPECT TO SUCH CLAIM, SUIT, ACTION OR PROCEEDING, (vi) irrevocably waives any defense other than payment, (vii) agrees to sue Secured Party only in New York City.

Section 6.5. Construction. This Security Agreement shall be construed without regard to or aid of any presumption, rule or canon requiring construction against Secured Party or party drawing this Security Agreement.

Section 6.6. Severability. If any provision of this Security Agreement shall be unenforceable or invalid, the same shall not affect the remaining provisions of this Security Agreement and to this end the provisions of this Security Agreement are intended to be and shall be severable with respect to each of the parties hereto.

Section 6.7. Further Assurances. The Assignor and Borrower shall from time to time execute, acknowledge and deliver such further instruments and perform such additional acts as Secured Party may reasonably request to effectuate the intent of this Security Agreement or any of the other Loan Documents.

Section 6.8. Notices. Any notice or other communication to be given hereunder shall be in writing and shall be either delivered or sent by first-class registered or certified mail, return receipt requested postage prepaid, addressed (a) if to Assignor or Borrower to Assignor's address and Borrower's address, respectively, as set forth on the first page hereof (and in the case of Borrower, to the attention of: Chief Financial Officer), and with a copy sent in like manner to Whitman Breed Abbot & Morgan LLP, 200 Park Avenue, New York, New York 10166, Attention: Neil Underberg, Esq. and with a copy in like manner to the additional addresses set forth on Schedule B annexed hereto; or (b) if to the Secured Party, at Secured Party's address set forth above, Attention: Mr. William Bermingham, with a copy sent in like manner to Herrick, Feinstein LLP, 2 Park Avenue, New York, New York 10016, Attention: Jeffrey H. Kaufman, Esq., or (c) as to any party, at such changed address as shall be designated by such party by notice to the other party given in the manner set forth in this Section 6.9. The failure to notify counsel shall not invalidate an otherwise valid notice. Each such notice shall be effective (i) if delivered, at the time of delivery to the address specified in this paragraph or (ii) if given by mail, on the second business day following the time of mailing in the manner aforesaid, provided that notices to the Secured Party shall not be effective until received. Notwithstanding the foregoing, as of July 1, 2000, the Saddle Brook New Jersey address listed for Alexander's Inc. and Vornado Realty Trust shall be changed to the following address: 210 Route 4 East, Paramus, New Jersey 07652.

Section 6.9. Secured Party's Additional Rights Relating to the Collateral. Without limiting any rights of Secured Party as provided herein, the right is granted to the Secured Party, in its discretion, at any time after the occurrence and during the continuance of an Event of Default (as defined in
Section 5.1 hereof) (i) to transfer to or register in the name of itself or any of its nominees any of the Collateral, (ii) in any bankruptcy or similar proceeding to file a proof of claim for the full amount of the Collateral and to vote such claim for or against any arrangement or with respect to any other matter; (iii) in its own name or in the name of Assignor or any other appropriate person, to demand, sue for, collect or receive any money or property at any time payable or receivable on account of or in exchange for, or make any compromise or settlement it may deem desirable with respect to, any of the Collateral, (v) to extend the time of payment, arrange for payment in installments, or otherwise modify the terms of, or release, any of the Collateral; (vi) to contest, pay and/or discharge all liens, encumbrances, taxes or assessments on, or claims, actions or demands against, any of the Collateral and to take all actions and proceedings in the Secured Party's own name or in the name of the Assignor or any other appropriate person in order to remove or contest such liens, encumbrances, taxes, assessments, claims, actions or demands; or to refrain from doing any of the foregoing, all without affecting the Obligations and without notice or liability to or the consent of the Assignor except to account for property actually received by the Secured Party.

Section 6.10. No Subrogation or Contribution, etc. If any of the Collateral is applied on account of any of the Obligations, Assignor shall not have any right of subrogation to the Secured Party's right in any other Collateral held by the Secured Party with respect to the Obligations or any right of contribution from the Secured Party by reason thereof for so long as any Obligation remains outstanding.

Section 6.11. Indemnification. In any suit, proceeding or action brought by Secured Party or under any of the Collateral Documents, for any sum owing hereunder or thereunder, or to enforce any provisions of the Collateral Documents, for any sum owing hereunder or thereunder, or to enforce any provisions of the Collateral Documents or this Security Agreement, Assignor and Borrower shall save, indemnify and keep Secured Party harmless from and against all expenses, losses or damages, including attorneys fees, costs and expenses, suffered by reason of any defense, set-off, counterclaim, recoupment or reduction of liability whatsoever of the party against whom such suit, proceeding or action is brought, arising out of a breach by Assignor or Borrower of any obligation hereunder or thereunder or arising out of a breach of any other agreement, indebtedness or liability at any time owing to or in favor of such obligee or its successors from Assignor, and all such obligations of Assignor shall be and remain enforceable against and only against Assignor and shall not be enforceable against Secured Party. Assignor shall save, indemnify and keep Secured Party harmless from and against all claims, demands and liabilities with respect to any New York City or New York State real property transfer taxes arising from any transfer or disposition of the Collateral or any portion thereof by Assignor or by Secured Party through the exercise of the rights and remedies provided for herein or otherwise available to it at law or in equity. The indebtedness and obligations of Assignor under this Section shall constitute part of the Obligations secured hereby.

Section 6.12. Schedules and Recitals. Each of the Recitals and the exhibits and schedules referred to herein and attached hereto is incorporated herein by this reference.

REMAINDER OF PAGE LEFT BLANK INTENTIONALLY

IN WITNESS WHEREOF, the Assignor, Borrower and Secured Party have executed this Pledge and Security Agreement as of the date first above written.

ASSIGNOR:

SEVEN THIRTY ONE LIMITED PARTNERSHIP
By: Alexander's Department Stores of Lexington Avenue, Inc., General Partner

By: /s/ Irwin Goldberg
    ------------------------------------------
    Name: Irwin Goldberg
    Its: Secretary

BORROWER:

ALEXANDER'S, INC.

By: /s/ Irwin Goldberg
   ------------------------------------------
   Name: Irwin Goldberg
   Its: Secretary

SECURED PARTY:

FIRST UNION NATIONAL BANK

By: /s/ William H. Bermingham
   ------------------------------------------
   Name: William H. Bermingham
   Its: Vice President

STATE OF          )
                  )  ss.:
COUNTY OF         )

On the ______ day of _____________ in the year 2000, before me, the undersigned, a Notary Public in and for said State, personally appeared ____________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/ her capacity, and that by his/her signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

STATE OF          )
                  )  ss.:
COUNTY OF         )

On the ______ day of _____________ in the year 2000, before me, the undersigned, a Notary Public in and for said State, personally appeared ____________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/ her capacity, and that by his/her signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

STATE OF          )
                  )  ss.:
COUNTY OF         )

On the ______ day of _____________ in the year 2000, before me, the undersigned, a Notary Public in and for said State, personally appeared ____________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/ her capacity, and that by his/her signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

STATE OF          )
                  )  ss.:
COUNTY OF         )

On the ______ day of _____________ in the year 2000, before me, the undersigned, a Notary Public in and for said State, personally appeared ____________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

SCHEDULE A

COLLATERAL

All right, title, and interest of Assignor, direct or indirect (i.e. beneficial), now existing or hereafter acquired under or by reason of the entering into or issuance of, as the case may be:

1. that certain original Certificate of Eligibility for Zoning Bonus dated December 6, 1999 issued by The City of New York Department of Housing Preservation and Development under Docket Number LIH # 66, in favor of Seven Thirty One Limited Partnership, evidencing a zoning bonus of 78,024 square feet (site of affordable units: 351-353 East 61st Street, New York, New York); and

2. that certain original Certificate of Eligibility for Zoning Bonus dated December 9, 1999 issued by The City of New York Department of Housing Preservation and Development under Docket Number LIH # 66, in favor of Seven Thirty One Limited Partnership, evidencing a zoning bonus of 19,348 square feet, which is in addition to and not in lieu of any portion of the 78,024 square foot zoning bonus referred to above (site of affordable units: 351-353 East 61st Street, New York, New York) (the Certificate of Eligibility described in this item number 2, together with the Certificate of Eligibility described in item number 1 above, are herein referred to collectively as the "Davis & Partners Certificates of Eligibility for Zoning Bonus"; and

3. all rights evidenced by the Davis & Partners Certificates of Eligibility for Zoning Bonus, including, without limitation, the right to build more square footage of development than would otherwise be permitted by the Zoning Resolution of the City of New York or by other applicable law (referred to herein, as the "Davis & Partners Transferrable Development Rights"); and

4. the letters dated December 6, 1999 and December 9, 1999, respectively, from the Department of Housing Preservation and Development of the City of New York to the City of New York Department of Buildings certifying that a Certificate of Completion of Affordable Units has been issued for the completion of low income housing at the Inclusionary Housing Site (351-353 East 61st Street; Block 1436, Lot 122, Community District 8) and that applicant has sold 78,024 square feet and 19,348 square feet, respectively, of Floor Area Development rights to Assignor ("Davis & Partners HPD to Buildings Department Letters"); and

5. all transferrable development rights, zoning bonus rights or similar rights (including, without limitation, the right to build more square footage of development than would otherwise be permitted by the Zoning Resolution of the City of New York or by other applicable law) acquired by Assignor or any affiliate of Assignor (including, without limitation 59th Street Corporation) pursuant to the Inclusionary Air Rights Purchase Agreement dated October 15, 1999 between BFC 31 Street LLC, as seller, and VRT Development Rights LLC, as purchaser, as assigned by VRT Development Rights LLC

to Seven Thirty One Limited Partnership or any replacement or substitute agreement (collectively, the "BFC Zoning Bonus Purchase Agreement")

6. all Certificates of Eligibility for Zoning Bonus now or hereafter issued pursuant to the BFC Zoning Bonus Purchase Agreement (collectively, the "BFC Certificates of Eligibility for Zoning Bonus and, together with the Davis & Partners Certificates of Eligibility for Zoning Bonus, collectively, the "Certificates of Eligibility for Zoning Bonus"); and

7. all rights evidenced by the BFC Certificates of Eligibility for Zoning Bonus, when issued (or any substitute certificate(s)), including, without limitation, the right to build more square footage of development than would otherwise be permitted by the Zoning Resolution of the City of New York or at law (referred to herein, as the "BFC Transferrable Development Rights" and, together with the Davis & Partners Transferrable Development Rights, collectively, the "Transferrable Development Rights"); and

8. all letters from the Department of Housing Preservation and Development of the City of New York to the City of New York Department of Buildings pertaining to the BFC Certificate(s) of Eligibility for Zoning Bonus, including, without limitation, all letters similar to the Davis & Partners HPD to Buildings Department Letters (collectively, the "BFC HPD to Buildings Department Letters"); and

9. all rights appurtenant to the foregoing; and

10. all proceeds of the foregoing, all additions to the foregoing and all substitutions and replacements for the foregoing,

SCHEDULE B

Vornado Realty Trust
Park 80 West
Plaza II
Saddle Brook, New Jersey 07663
Attn: Vice-President for Finance
Telephone: 201-587-1000
Telecopier: 201-587-0600

and to:

Vornado Realty Trust
Park 80 West
Plaza II
Saddle Brook, New Jersey 07663
Attn: Vice President for Real Estate
Telephone: 201-587-1000
Telecopier: 201-587-0600

EXHIBIT A

COPIES OF COLLATERAL DOCUMENTS

Exhibit 10(i)(J)(1)

FIRST AMENDMENT TO MORTGAGE AND SECURITY AGREEMENT

This First Amendment (this "Amendment") dated as of February 24, 2000 between ALEXANDER'S OF FORDHAM ROAD, INC., a Delaware corporation, having an office at Park 80 West, Plaza II, Saddle Brook, New Jersey 07663 ("MORTGAGOR") and BANC OF AMERICA COMMERCIAL FINANCE CORPORATION (formerly known as Greyrock Capital Group Inc.), having an office at 187 Danbury Road, Wilton, Connecticut ("MORTGAGEE").

R E C I T A L S:

A. Lender is the holder of that certain Mortgage and Security Agreement dated as of February 24, 1995 made by Alexander's Inc. ("Alexander's") to Mortgagee and recorded on February 27, 1995 in the office of the City Register, Bronx County, New York in Reel 1303, Page 457 (the "MORTGAGE"), which Mortgage encumbers the land described in Exhibit A hereto, the improvements thereon and other property more particularly described in the Mortgage, and which Mortgage was assumed by Mortgagor.

B. The Mortgage secures that certain Promissory Note (Secured) dated February 24, 1995 in the original principal amount of $25,000,000 made by Alexander's to Mortgagee (the "ORIGINAL NOTE"), which Original Note was assumed by Mortgagor.

C. Simultaneously with the execution and delivery hereof, Mortgagor and Mortgagee are executing and delivering an amendment and restatement of the Original Note (the "RESTATED NOTE"), which Restated Note, among other things, extends the term of the loan secured by the Mortgage and provides for the accrual of part of the interest on the Loan.

D. Mortgagor and Mortgagee desire to amend the Mortgage so as to, among other things, confirm that it will secure the Restated Note.

NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by all of the parties hereto, and to induce Mortgagee to accept the Restated Note, the parties hereto agree as follows:

1. DEFINITIONS. All capitalized terms used and not defined herein shall have the respective meanings given such terms in the Mortgage.

2. NOTE. All references in the Mortgage to "Note" shall be deemed to refer to the Restated Note, as the same may hereafter from time to time be amended, extended, consolidated, replaced, supplemented, substituted for, restated, severed or otherwise modified.

3. LEASES.

(a) Mortgagor shall not enter into any lease, occupancy agreement or license agreement with respect to the Mortgaged Property or any part thereof, or any other agreement with respect to the Mortgaged Property or any part thereof (other than a service contract that can be terminated without penalty or premium on not more than 30 days notice to the other party to such service contract) without the prior written consent of Mortgagee in each instance; provided,

however, that Lender shall not unreasonably withhold, delay or condition its consent to any lease. Mortgagee shall enter into a subordination, nondisturbance and attornment agreement ("SNDA") in the form attached hereto as Exhibit B with any tenant under a lease that has been approved or been deemed approved by Mortgagee in accordance with this Paragraph 3, and Mortgagee shall in good faith consider requests made by any such tenant to make changes to such form (although Mortgagee shall not be obligated to make such changes). In addition, in the case of a Credit Lease (as hereinafter defined) only, the form of SNDA shall be modified to give the tenant a right (so long as the tenant is not in default under the lease beyond any applicable grace period) to offset against rent (i) the amount of any contribution for tenant improvements which the landlord under the lease is obligated to pay but does not pay when due and/or (ii) the reasonable cost of any tenant improvements that the landlord under the lease is obligated to perform that were performed by tenant after the landlord failed to perform same when required under the lease and the expiration of any grace period available to the landlord. Notwithstanding anything to the contrary contained in the foregoing, Lender shall not be obligated to approve any lease or negotiate or enter into any SNDA at any time that an Event of Default is continuing or after Mortgagor has given a Borrower Notice (as such term is defined in that certain Trigger Agreement dated the date hereof between Guarantor and Lender). "Credit Lease" means a lease with an investment grade rated tenant on market terms for a term of at least five years.

(b) The following procedure shall be followed regarding lease approvals. Mortgagor may but shall not be required to submit to Mortgagee and Mortgagee's Counsel (as hereinafter defined) a term sheet summarizing the principal terms of the lease (together with, at Mortgagor's option, a draft of the proposed lease), accompanied by a request (the "First Request") for approval thereof and also accompanied by, to the extent that Mortgagor was able to obtain them after having used reasonable efforts to do so, the respective current financial statements of the lessee under such proposed lease and the guarantor(s), if any, of such lessee's obligations thereunder. If Mortgagee does not notify Mortgagor of its approval or disapproval of the term sheet (and, if applicable, lease draft) within five Business Days after the term sheet (and, if applicable, lease draft) and accompanying materials are received by Mortgagee and Mortgagee's Counsel, Borrower may submit a second request (the "Second Request") to Mortgagee and Mortgagee's Counsel which shall be identical to the First Request. If Mortgagee does not notify Mortgagor of Mortgagee's approval or disapproval of the term sheet (and, if applicable, lease draft) within two Business Days after the Second Request is received by Mortgagee and Mortgagee's Counsel, the term sheet (and, if applicable, the lease draft) shall be deemed approved, provided the First Request and the Second Request each contained the legend set forth in the last sentence of this Section. Mortgagor shall also submit to Mortgagee and Mortgagee's' Counsel a request (also, a "First Request") for approval of the lease itself, accompanied by (1) a copy of the proposed lease, executed by the tenant, (2) any guaranty(ies) of said lease, and (3) if the lease is based on Mortgagor's standard form, a copy of the lease marked to show changes from the approved standard lease form, or, if a draft has previously been submitted, a copy of the lease marked to show changes from such draft. If Mortgagee does not notify Mortgagor of Mortgagee's approval or disapproval of the lease within five Business Days after the lease and accompanying materials are received by Mortgagee and Mortgagee's Counsel, Mortgagor may submit a second request (also, a "Second Request") to Mortgagee and its counsel which shall be identical to the First Request. If Mortgagee does not notify Mortgagor of Mortgagee's approval or disapproval of the lease within two Business Days after the Second

Request is received by Mortgagee and Mortgagee's Counsel, the lease shall be deemed approved, provided the First Request and the Second Request each contained the legend set forth in the last sentence of this Section. Mortgagee may not object to any lease term that was in a term sheet or draft lease that was previously approved (or deemed approved) by Mortgagee. To the extent plans (or schematic plans) are included in the documents constituting a lease, Mortgagee and its construction consultant shall have the right to review the same (at Mortgagor's expense) as part of the lease approval process and, if such plans call for structural work, Landlord shall have an additional two (2) Business Days to notify Tenant of its approval or disapproval thereof. All requests made pursuant to this Paragraph 3 shall be made in accordance with the notice provisions set forth in the Restated Note, with an additional copy to Kaye, Scholer, Fierman, Hays & Handler, LLP, 425 Park Avenue, New York, New York 10022, Attention Louis J. Hait, Esq. ("Mortgagee's Counsel"). Each request for approval of a lease, lease draft or term sheet pursuant to this Section shall make specific reference to the provisions of this Section and shall expressly state, in all capital letters on the first page thereof: "YOU ARE HEREBY REMINDED THAT YOUR FAILURE TO PROVIDE NOTIFICATION OF APPROVAL OR DISAPPROVAL
NOT LATER THAN [for First Request: FIVE (5) BUSINESS DAYS][for Second Request:
TWO (2) BUSINESS DAYS or, in the case of a lease including structural plans, FOUR (4) BUSINESS DAYS] AFTER YOUR RECEIPT OF THIS REQUEST, SHALL BE DEEMED TO CONSTITUTE YOUR APPROVAL HEREOF."

(c) Notwithstanding anything to the contrary contained in this Paragraph 3, (i) in no event shall Mortgagee have any obligation to approve or consent to, and in no event shall Mortgagee be deemed to have approved or consented to, any Lease that contains a purchase option, or a right of first refusal or right of first offer, with respect to a sale of the Mortgaged Property or any part thereof or interest therein, and (ii) in no event shall a lease be deemed approved if the term sheet or draft lease with respect thereto was disapproved and, notwithstanding anything to the contrary contained in this Section, no lease or term sheet shall be deemed approved during the existence of an Event of Default.

4. CASH MANAGEMENT. Prior to entering into any lease, occupancy agreement or license agreement with respect to the Mortgaged Property or any part thereof, Mortgagor (i) shall open a trust account (the "CLEARING ACCOUNT ") at a bank selected by Mortgagor and reasonably acceptable to Mortgagee (the "CLEARING BANK ") and (ii) shall execute and deliver to Mortgagee, and shall cause the Clearing Bank and any manager of the Mortgaged Property to execute and deliver to Mortgagee, an agreement in the form of Exhibit C hereto (the "CLEARING ACCOUNT AGREEMENT"). Mortgagor shall cause all Property Income to be transmitted directly by all tenants, occupants and licensees of the Mortgaged Property into the Clearing Account as more fully described in the Clearing Account Agreement. Without in any way limiting the foregoing, all Property Income received by Mortgagor or any manager of the Mortgaged Property shall be deposited into the Clearing Account within one Business Day of receipt. Funds deposited into the Clearing Account shall be swept by the Clearing Bank on a daily basis into Mortgagor's operating account at the Clearing Bank, unless an Event of Default is continuing, in which event such funds shall be swept on a daily basis to a bank account designated and controlled by Mortgagee (the "DEPOSIT ACCOUNT ") and applied to the Loan and/or Operating Expenses in such order and manner as Mortgagee may elect in its sole and absolute discretion, subject, however, to the provisions of Paragraph 2(d) of the Trigger Agreement. The Deposit Account will be under

the sole control and dominion of Mortgagee, and Mortgagor shall have no right of withdrawal therefrom. Mortgagor shall pay for all expenses of opening and maintaining all of the above accounts.

5. PRINCIPAL AMOUNT. As of the date hereof, the outstanding principal amount secured by the Mortgage as amended hereby is $21,262,848.54. The Mortgage as amended hereby does not secure any new or further principal indebtedness other than the principal indebtedness secured by the Mortgage.

6. CONFLICTS. In the event of any conflict between the terms of this Amendment and the terms of the Mortgage, the terms of this Amendment shall control.

7. FULL FORCE AND EFFECT. As amended hereby the Mortgage remains in full force and effect. Mortgagor has no offsets, defenses or counterclaims with respect to any of its obligations under the Mortgage as amended hereby, the Restated Note or any of the other Loan Documents (including, without limitation, the Assignment and the Assignment of Licenses, Permits and Approvals and Contracts and Agreements and Equipment Leases).

8. NOTICES. All notices given under this Amendment or the Mortgage shall be given in accordance with Section 9 of the Restated Note.

IN WITNESS WHEREOF, each of the undersigned has duly executed or caused this Agreement to be duly executed as of the day and year first above written.

ALEXANDER'S OF FORDHAM ROAD, INC.

By: /s/ Irwin Goldberg
    ----------------------------

BANC OF AMERICA COMMERCIAL FINANCE
CORPORATION

By: /s/ Leslie S. Brown
    ----------------------------
Name: Leslie S. Brown
Title: Vice President

STATE OF NEW YORK       )
                        )  ss.:
COUNTY OF NEW YORK      )

On the ____ day of April, in the year 2000, before me, the undersigned, personally appeared _________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

STATE OF NEW YORK       )
                        )  ss.:
COUNTY OF NEW YORK      )

On the ____ day of April, in the year 2000, before me, the undersigned, personally appeared _________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

Exhibit A

Legal Description

Exhibit B

CLEARING ACCOUNT AGREEMENT

CLEARING ACCOUNT AGREEMENT (the "AGREEMENT") dated as of ________, 1999 among ______________, having an address at ___________________ (the "CLEARING BANK"), ALEXANDER'S OF FORDHAM ROAD INC., a Delaware corporation, having an office at Park 80 West, Plaza II, Saddle Brook, New Jersey 07663 ("BORROWER") and BANC OF AMERICA COMMERCIAL FINANCE CORPORATION, having an address at 187 Danbury Road, Wilton Connecticut 06897 (together with its successors and assigns, "LENDER").

W I T N E S S E T H:

RECITALS:

a) Pursuant to certain loan documents (collectively, the "LOAN DOCUMENTS"), between Lender and Borrower, Lender has made a loan to Borrower secured by a mortgage (the "MORTGAGE"), on certain real property owned by Borrower and known as 2501-2511 Grand Concourse and 2519-2525 Creston Avenue in Bronx, New York
(the "PROPERTY"); b)
c) [Borrower and _________________ (the "MANAGER") are parties to a management agreement with respect to the Property pursuant to which the Manager has agreed to manage the Property;] d)
e) The Loan Documents provide that all Rents (as defined in Section 13) shall be sent directly to a financial institution reasonably acceptable to Lender for deposit into an account designated and established by Lender or its designee; and f)
g) Lender and Borrower desire to retain the Clearing Bank to provide the services described herein. h)
i) NOW THEREFORE, in consideration of the mutual promises contained herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
j)

2. DUTIES OF THE CLEARING BANK.

a. The Clearing Bank shall receive and process any deposits presented by Borrower, the Manager or any of their respective agents pursuant to Section 4 in accordance with the terms of this Agreement. The Clearing Bank shall also receive and process all Rents sent directly to the Clearing Bank by tenants at the Property. The receipts described in this paragraph (a) are collectively referred to herein as the "RECEIPTS." The Clearing Bank shall establish and maintain a collection account for the Property (the "CLEARING ACCOUNT"), into which the

Clearing Bank shall deposit all Receipts received by it with respect to the Property. The Clearing Account shall be entitled as follows:

Name:                  Banc of America Commercial Finance Corporation,
                       as mortgagee of Alexander's of Fordham Road, Inc.

                       ----------------------
Account No.:
                       ----------------------
ABA No.:
                       ----------------------

The Clearing Bank shall maintain a microfilm or other record of each Receipt which is processed by the Clearing Bank for a period of one year from the date of processing.

a. Items deposited with the Clearing Bank which are returned for insufficient or uncollected funds will be re-deposited the first time. Items returned unpaid the second time for whatever reason shall be debited to the Clearing Account under advice and returned to Borrower. Borrower shall be liable to the Clearing Bank for the amount of any exchange or collection charges incurred by the Clearing Bank. Return item fees will be charged directly to the Clearing Account. The Clearing Bank shall send a monthly report to Borrower and Lender, which monthly report shall specify the amount deposited into the Clearing Account with respect to the Property for the previous month.

a. During any period other than a Cash Management Period (as defined in Section 13), the Clearing Bank shall, on a daily basis, transfer funds from time to time on deposit in the Clearing Account to the operating account of Borrower at the Clearing Bank (Account No. _____) or as Borrower may otherwise direct by written notice to the Clearing Bank.

a. During a Cash Management Period, however, the Clearing Bank shall disburse all amounts that are then in the Clearing Account by wire transfer (or transfer via the ACH system) of immediately available funds on a daily basis to the Deposit Account at the Deposit Bank (as defined in
Section 13). Borrower hereby irrevocably instructs and authorizes the Clearing Bank to make transfers into the Deposit Account in accordance with this Section 1(d). The foregoing instructions are irrevocable and not subject to modification in any manner, except that Lender, its designee or its successor as servicer may, by written notice to the Clearing Bank amend or rescind such instructions. Simultaneously with any transfer to the Deposit Bank pursuant to this Section 1(d), the Clearing Bank shall send to the Deposit Bank, Lender and Borrower, via telecopy, a notice of wire transfer or ACH system advice setting forth the amount transferred.

1. FEES. To compensate the Clearing Bank for performing the herein-described services, Borrower agrees to pay the fees owed to the Clearing Bank. The Clearing Bank shall debit the Clearing Account under advice on a monthly basis or shall include its fees in an account analysis statement, in accordance with the particular arrangements between the Clearing Bank and Borrower.

1. TERMINATION.

a. The Clearing Bank may resign from obligations under this Agreement at any time after 30 days' prior written notice to the other parties hereto, but in no event shall the Clearing Bank be released of its obligations hereunder unless and until a substitute bank has been designated and assumed its respective obligations hereunder. With respect to the appointment of a successor to the Clearing Bank, Borrower and Lender shall use reasonable efforts to designate such a bank promptly after receipt of notice of resignation by the Clearing Bank and shall take all reasonable actions necessary to cause such designated successor promptly to assume the obligations of the Clearing Bank hereunder.

a. Lender may terminate this Agreement at any time upon 30 days' prior written notice to the other parties hereto.

a. Borrower may not unilaterally terminate this Agreement or close the Clearing Account established hereunder and the Clearing Bank shall not comply with any request from Borrower to close the Clearing Account.

1. MATTERS CONCERNING BORROWER AND MANAGER. Borrower and the Manager hereby agree to deposit with the Clearing Bank within one Business Day of receipt, all Rents received by Borrower or the Manager, respectively, with respect to the Property. Concurrently with the execution and delivery hereof, Borrower shall deliver a notice in the form of Exhibit A to each existing tenant at the Property directing them to remit their rent checks directly to the Clearing Bank, and shall also deliver such a notice to each future tenant at the Property.

1. INDEMNIFICATION. The Clearing Bank shall not be liable for any claims, suits, actions, costs, damages, liabilities or expenses or for any interruption of services, or incidental, consequential, special or punitive damages ("LIABILITIES") in connection with the subject matter of this Agreement other than Liabilities caused by the negligence or willful misconduct of the Clearing Bank, and Borrower hereby agrees to indemnify and hold harmless the Clearing Bank and the directors, officers, employees and agents of the Clearing Bank and the successors and assigns of the Clearing Bank from and against any and all Liabilities arising from or in connection with any acts or omissions taken by the Clearing Bank or any director, officer, employee or agent of any of them, as applicable, in connection with this Agreement, other than those Liabilities caused by the negligence or willful misconduct of the Clearing Bank.

1. LENDER'S RIGHTS IN CLEARING ACCOUNT.

a. Borrower hereby pledges, transfers and assigns to Lender, and grants to Lender, as additional security for Borrower's obligations under the Loan Documents, a continuing perfected security interest in and to, and a general first lien upon, all of Borrower's right, title and interest in and to (i) the Clearing

Account and all cash, property or rights transferred to or deposited in the Clearing Account from time to time, (ii) all earnings, investments and securities held in the Clearing Account, and (iii) any and all proceeds of the foregoing. Borrower further agrees to execute, acknowledge, deliver, file or do, at its sole cost and expense, all other acts, assignments, notices, agreements or other instruments as Lender may reasonably require in order to effectuate, assure, secure, assign, transfer and convey unto Lender any of the rights granted by this Section.

a. Borrower and Lender hereby notify the Clearing Bank of the grant by Borrower to Lender of a security interest in the Clearing Account and all of the Borrower's right, title and interest in and to all cash, property and rights transferred or deposited in the Clearing Account. In addition, the Clearing Bank and Borrower each acknowledge and agree that the Clearing Account maintained hereunder is subject to the sole dominion, control and discretion of Lender and its authorized agents or designees, and Borrower shall have no right to close any such account or right of withdrawal with respect to any such account, except as expressly permitted under the Loan Documents, except with the prior written consent of Lender. Borrower shall be entitled to request and receive any information about the Clearing Account that it shall reasonably request from time to time. The Clearing Bank waives any right to offset any claim against Borrower which it might have against the Clearing Account maintained hereunder; provided, however, that the Clearing Bank retains the right to charge the Clearing Account for (i) any of the Clearing Bank's charges, fees and expenses provided for herein for which Borrower is responsible and (ii) all items deposited in and credited to such account and subsequently returned unpaid or with respect to which the Clearing Bank fails to receive final settlement.

1. SUCCESSORS AND ASSIGNS; ASSIGNMENTS. This Agreement shall bind and inure to the benefit of and be enforceable by the Clearing Bank, Borrower and Lender and their respective successors and assigns. Lender shall have the right to assign or transfer its rights under this Agreement without limitation. Any assignee or transferee shall be entitled to all the benefits afforded Lender under this Agreement; provided, however, that such assignee or transferee shall have delivered to the other parties hereto written confirmation that such assignee or transferee agrees to be bound by the terms of this Agreement and is also the assignee or transferee (or agent thereof) of the note secured by the Mortgage.

1. AMENDMENTS; OTHER AGREEMENTS. This Agreement may be further amended from time to time in writing by all parties hereto. This Agreement is supplemented by the terms of the Clearing Bank's deposit account agreement with Borrower, and to the extent the terms of such agreement conflict with this Agreement, the specific terms of this Agreement shall control.

1. NOTICES. Notices to the Clearing Bank should be sent to the address first above written or by telecopy to ___________, Attention:
_______________; notices to Borrower should be sent to the address first above written or by telecopy to ________________, Attention:

_____________; and notices to Lender should be sent to the address first above written or by telecopy to (203) 423-4003, Attention: Real Estate Administration (Attn: James Kaufman); or, in each case, to such other address as shall be designated in writing by the respective party to the other parties hereto. Unless otherwise expressly provided herein, all such notices, to be effective, shall be in writing (including by facsimile), and shall be deemed to have been duly given or made (a) when delivered by hand or by nationally recognized overnight carrier, (b) upon receipt after being deposited in the mail, certified mail and postage prepaid or (c) in the case of facsimile notice, when sent and electronically confirmed, addressed as set forth above.

1. GOVERNING LAW AND VENUE. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York (without regard to conflicts of laws principles applied in New York). Borrower hereby submits to the nonexclusive jurisdiction of the state and federal courts of the State of New York for the purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. Borrower irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.

1. CERTAIN MATTERS AFFECTING THE CLEARING BANK. The Clearing Bank may rely and shall be protected in acting or refraining from acting upon any notice (including but not limited to electronically confirmed facsimiles of such notice) believed by it to be genuine and to have been signed or presented by the proper party or parties. The duties and obligations of the Clearing Bank set forth in this Agreement shall be determined solely by the express provisions of this Agreement, the Clearing Bank shall not be liable except for the performance of such party's duties and obligations as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Clearing Bank.

1. INTERPLEADER. If at any time the Clearing Bank, in good faith, is in doubt as to the action it should take under this Agreement, the Clearing Bank shall have the right to commence an interpleader action in the United States District Court for the State of New York and to take no further action except in accordance with joint instructions from Lender and Borrower or in accordance with the final order of the court in such action.

1. DEFINED TERMS. As used herein the following capitalized terms shall have the respective meanings set forth below:

a. "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or any day on which commercial banks in New York, New York are authorized or required to close.

a. "CASH MANAGEMENT PERIOD" shall mean each period commencing upon the giving by Lender or its designee to the Clearing Bank of a notice stating either that an "Event of Default exists under the Loan Documents" or that "Borrower

has delivered a Borrower Notice" and terminating upon the giving by Lender or its designee to the Clearing Bank of a notice stating that the Cash Management Period has ended. The Clearing Bank shall have no duty, obligation or right to inquire into the truth or accuracy of any such notice from Lender and Borrower hereby irrevocably directs and authorizes Clearing Bank to comply with any notice received from Lender.

a. "DEPOSIT ACCOUNT" shall mean the bank account as shall have

at the time in question most recently been designated as such in a written notice from Lender to the Clearing Bank.

a. "DEPOSIT BANK" shall mean the bank at which the Deposit Account is located.

a. "RENTS" shall mean all rents, rent equivalents, moneys payable as damages (including payments by reason of a rejection of a lease in a bankruptcy proceeding) or in lieu of rent or rent equivalents, royalties (including, without limitation, all oil and gas or other mineral royalties and bonuses), income, fees, receivables, receipts, revenues, deposits (including, without limitation, security, utility and other deposits), accounts, cash, issues, profits, charges for services rendered, and other payment and consideration of whatever form or nature received by or paid to or for the account of or benefit of Borrower, Manager or its agents or employees from any and all sources arising from or attributable to the Property and the improvements thereon, including, without limitation, all receivables, customer obligations, installment payment obligations and other obligations now existing or hereafter arising or created out of the sale, lease, sublease, license, concession or other grant of the right of the use and occupancy of the Property or rendering of services by Borrower, Manager or any of their agents or employees and proceeds, if any, from business interruption or other loss of income insurance.

[The rest of this page is left blank intentionally]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in several counterparts (each of which shall be deemed an original) as from the date first above written.

[CLEARING BANK]

Title:

ALEXANDER'S OF FORDHAM ROAD, INC.

BANC OF AMERICA COMMERCIAL
FINANCE CORPORATION

Title:

The Manager hereby agrees to the
provisions of Section 4 hereof

EXHIBIT A

FORM OF NOTICE TO TENANTS

[BORROWER'S NAME AND ADDRESS]

Re:         Lease of Space at
                              -------------------------
                      ,               (the "Building")
             -----------------------------------------

Ladies and Gentlemen:

The undersigned is the owner of the Building and the landlord under your lease of space in the Building (your "Lease").

By this letter, you are hereby directed (1) to make all checks, in payment of rent and other sums due to the landlord under your Lease, payable to the order of "Alexander's of Fordham Road, Inc. for the benefit of Banc of America Commercial Finance Corporation, as mortgagee, Account No. ____________" , and (2) to deliver such checks or otherwise make such payments to the following address:

[Name and Address of Clearing Bank]

The foregoing direction is irrevocable, except with the written consent of our mortgagee, Banc of America Commercial Finance Corporation (or its successors or assigns), notwithstanding any future contrary request or direction from the undersigned or any other person (other than Banc of America Commercial Finance Corporation (or its successors or assigns)). Thank you for your cooperation.

Very truly yours,

[BORROWER]

Title:

Exhibit 10(i)(J)(2)

AMENDED AND RESTATED PROMISSORY NOTE (SECURED)

$21,262,848.54 As of February 24, 2000

FOR VALUE RECEIVED, the undersigned, ALEXANDER'S OF FORDHAM ROAD, INC., a Delaware Corporation, with an office at Park 80 West, Plaza II, Saddle Brook, New Jersey 07663 ("Borrower"), promises to pay to the order of BANC OF AMERICA COMMERCIAL FINANCE CORPORATION, a Delaware corporation with a principal place of business at 187 Danbury Road, Wilton, Connecticut 06897 ("Lender"), to the account set forth in Section 2.e below, or at such other place as Lender may from time to time direct, the principal sum of TWENTY-ONE MILLION TWO HUNDRED SIXTY TWO THOUSAND EIGHT HUNDRED FORTY EIGHT AND 54/100 DOLLARS ($21,262,848.54), on or before the Maturity Date (as hereinafter defined), together with interest thereon, all as hereinafter provided. Interest shall be computed and accrue on the principal amount hereof from time to time outstanding from the date hereof through and including the Maturity Date at a rate per annum equal to the Interest Rate (as hereinafter defined).

1. Definitions. In addition to terms defined elsewhere in this Note, the following terms shall have the following definitions:
2.
3. "Accrued Interest" shall have the meaning given such term in
Section 2(b) of this Note. 4.
5. "Advance" shall have the meaning given such term in the Mortgage. 6.
7. "Base Rate" shall mean the LIBOR Rate plus the Spread. or, if the LIBOR Rate is not available to the Lender, the Substitute Rate. 8.
9. "Business Day" shall mean any day other than a Saturday, Sunday or legal holiday on which commercial banks are authorized or required to be closed in Illinois, New York or Connecticut. 10.
11. "Commercial Paper Rate" shall mean, for each Loan Month, the highest discount rate reported as having been the rate in effect for "high-grade unsecured notes" having thirty (30) day maturities "sold through dealers by major corporations in multiples of $1,000" (whether or not such notes have actually been sold by such dealers at such rates) in the "Money Rates" column of The Wall Street Journal (the "Published Rate") published on the first day of the applicable Loan Month, or, if the Published Rate is not published on the first day of the applicable Loan Month, on the immediately preceding Publication Date. If The Wall Street Journal (i) publishes more than one Published Rate on any Publication Date, the higher of such rates shall apply, or (ii) publishes a retraction or correction of any Published Rate, the corrected rate reported in such retraction or correction shall apply. If the Published Rate is no longer published at least monthly, the Base Rate shall be deemed to be the Substitute Rate. 12.

13. "Conditional Payment Guaranty" means that certain Conditional Payment Guaranty made by Guarantor to Greyrock Capital Group Inc. (Lender's former name) as amended by that certain Ratification of and Amendment to Conditional Payment Guaranty dated as of February 24, 2000. 14.
15. "Cumulative Net Cash Flow Amount" shall mean, as of the close of any Loan Month, the amount, which may be a positive or a negative number, by which (i) the sum of the Monthly Cash Flow Amount for such Loan Month and for all prior Loan Months occurring since the date hereof, exceeds (ii) all Net Cash Flow Payments made to Lender with respect to prior Loan Months since the date hereof. Notwithstanding the foregoing, for purposes of this definition, the calendar year for 2000 shall be deemed to commence on April 1, 2000 (such that Monthly Cash Flow Amounts for the first three months of 2000 shall be ignored). A hypothetical example of the calculation of Cumulative Net Cash Flow Amount is set forth on Exhibit A hereto. 16.
17. "Default Rate" shall mean a rate per annum equal to the lesser of (i) five percent (5%) per annum plus the Base Rate, and (ii) the Maximum Rate. 18.
19. "Dollars" and the symbol "$" shall mean lawful money of the United States of America. 20.
21. "Environmental Indemnity" means that certain Hazardous Materials Indemnity Agreement dated as of February 24, 1995 made by Borrower and Guarantor to Greyrock Capital Group Inc. (Lender's former name) as amended by that certain Ratification of and Amendment to Hazardous Materials Indemnity Agreement dated as of February 24, 2000. 22.
23. "Event of Default" shall have the meaning given such term in the Mortgage. 24.
25. "Gross Revenues" for any Loan Month shall mean all rents, revenues and other payments actually received by or for the benefit of Borrower during such Loan Month in cash, current funds or other consideration from any source whatsoever in connection with the Mortgaged Property and/or Borrower's ownership, operation or management thereof, including, without limitation, all payments made by tenants or other occupants of the Mortgaged Property during such Loan Month. 26.
27. "Incipient Default" shall mean any event or condition which with the giving of notice or passage of time, or both, would constitute an Event of Default. 28.
29. "Interest Rate" shall mean the lesser of (i) the Maximum Rate, and (ii) the Base Rate or the Default Rate, as applicable, from time to time in effect hereunder. 30.
31. "LIBOR Rate" shall mean, for each Loan Month, the 30-day London Interbank Offered Rate (LIBOR) published in The Wall Street Journal (the "Reported Rate") on the first day of the applicable Loan Month or, if the Reported Rate is not published on the first

day of the applicable Loan Month, on the immediately preceding Publication Date. If The Wall Street Journal (i) publishes more than one Reported Rate on any Publication Date, the higher or highest of such rates shall apply, or (ii) publishes a retraction or correction of any Reported Rate, the corrected rate reported in such retraction or correction shall apply. If the Reported Rate is no longer published at least monthly, the Base Rate shall be deemed to be the Substitute Rate.
32.
33. "Limited Guaranty" means that certain Guaranty and Indemnity Agreement made by Guarantor to Greyrock Capital Group Inc. (Lender's former name) as amended by that certain Ratification of and Amendment to Limited Guaranty dated as of February 24, 2000. 34. 35.
36. "Loan" shall mean the loan from Lender to Borrower evidenced by this Note. 37.
38. "Loan Documents" shall have the meaning given such term in the Mortgage. 39.
40. "Loan Month" shall mean February 2000 and each full or partial calendar month thereafter occurring during the term of this Note. 41.
42. "Maturity Date" shall mean the earlier to occur of: (i) the third anniversary of the Restructure Date; or (ii) the date on which the entire principal amount evidenced by this Note and all accrued and unpaid interest thereon shall be paid or be required to be paid in full, whether by prepayment, acceleration or otherwise in accordance with the terms of this Note or any of the Loan Documents. 43.
44. "Maximum Rate" shall mean the maximum interest rate allowed by applicable law in effect with respect to the Loan on the date for which a determination of interest accrued hereunder is made and after taking into account all fees, payments and other charges which are, under applicable law, characterized as interest. 45.
46. "Minimum Pay Rate" shall mean the LIBOR Rate or, if the LIBOR Rate is not available to Lender, the Commercial Paper Rate or, if neither the LIBOR Rate nor the Commercial Paper Rate is available to Lender, the Prime Rate less one and seventy-five hundredths of one percent (1.75%). 47.
48. "Monthly Cash Flow Amount" shall mean, for any Loan Month, the result obtained (which result may be a negative or a positive number) by subtracting the Operating Expenses for such Loan Month from the Gross Revenue for such Loan Month. 49.
50. "Mortgage" shall mean that certain Mortgage and Security Agreement dated as of February 24, 1995 made by Alexander's, Inc. to Lender (and assumed by Borrower pursuant to that certain Assignment, Assumption and Release Agreement dated as of February 24, 1995 among Borrower, Alexander's, Inc. and Lender), as amended and restated by that

certain First Amendment of Mortgage and Security Agreement dated as of the date hereof between Borrower and Lender.
51.
52. "Mortgaged Property" shall have the meaning set forth in Article I of the Mortgage. 53.
54. "Net Cash Flow Payment" shall mean, with respect to any Loan Month, 100% of the positive Cumulative Net Cash Flow Amount as of the close of such Loan Month. Net Cash Flow Payments for each Loan Month shall be calculated by Lender based upon Lender's review of Borrower's monthly financial statements provided to Lender pursuant to Section 2.16 of the Mortgage, together with such other information as Lender may reasonably request 55. "Operating Expenses" shall mean the reasonably necessary and customary costs and expenses incurred and actually paid by Borrower in connection with its ownership, operation and management of the Mortgaged Property, specifically including in Operating Expenses (i) all customary maintenance and upkeep expenses, leasing expenses, real estate taxes and legal fees, (ii) payments actually made by Borrower to fund reasonable reserves for operating expenses payable on other than a monthly basis (e.g., a reasonable reserve for real estate taxes where Lender is not requiring an escrow), and (ii) all principal, interest and all other payments made under the Loan Documents and actually received by Lender (excluding payments made pursuant to Section 4 of this Note); specifically excluding from Operating Expenses, however (x) all income and franchise taxes payable by Borrower, (y) all capital expenditures incurred by Borrower (other than capital expenditures that are required to be incurred pursuant to leases that have been approved in writing by Lender or that have been specifically approved in writing or deemed approved by Lender, and Lender agrees to approve any capital expenditures required in order for Borrower not to be in default under the Loan Documents), and (z) depreciation and all other non-cash expenses of the Mortgaged Property.

"Publication Date" shall mean any date on which the Commercial Paper Rate and/or the LIBOR Rate, as applicable, is published in The Wall Street Journal.

"Prepayment Notice" shall have the meaning given such term in
Section 6 of this Note.

"Prime Rate" shall mean the rate per annum announced by Citibank, N.A. as its prime or base rate from time to time and in effect on the first day of each Loan Month or, if such rate is not available, such other rate announced by a New York City based money center bank selected by Lender as its prime or base rate.

"Property Income" shall have the meaning set forth in Article I of the Mortgage.

"Restructure Date" is defined in Section 8(d) below.

"Spread" shall mean (i) from the Restructure Date to and including the day immediately preceding the second anniversary of the Restructure Date: one and fifty one hundredths percent (1.50%) per annum; and
(ii) from and after the second anniversary of the Restructure Date: one and seventy-five one hundredths percent (1.75%) per annum.

"Substitute Rate" shall mean the Commercial Paper Rate plus the Spread; provided, however, if the Commercial Paper Rate is not available to Lender, the Substitute Rate shall be deemed to be (i) from the Restructure Date to and including the day immediately preceding the second anniversary of the Restructure Date: the Prime Rate less twenty-five one hundredths percent (0.25%) per annum; and (ii) from and after the second anniversary of the Restructure Date: the Prime Rate.

"Trigger Agreement" means that certain Trigger Agreement dated as of February 24, 2000 between Guarantor and Lender.

1. Interest; Payment of Interest and Principal. 2.
(a) Interest shall accrue on the outstanding principal amount of this Note at the Interest Rate.
(b)
(c) Commencing on the fifth day of the second Loan Month and on the fifth day of each Loan Month thereafter, Borrower shall pay to Lender interest at the Minimum Pay Rate, on the principal amount hereof then outstanding, through the last day of the immediately preceding Loan Month. All interest accruing in respect of the principal amount of this Note pursuant to Section 2(a) above (i.e., at the Interest Rate) in excess of the Minimum Pay Rate ("Accrued Interest") shall, to the extent not paid, be deferred and shall be due and payable on the Maturity Date. Borrower acknowledges that the payment of monthly installments of interest at the Minimum Pay Rate will not be sufficient to pay all interest accruing on this Note on a current basis and that, as a result, each month a portion of the interest accruing on the principal balance of this Note will not be paid, and the amount required to be paid by Borrower on the Maturity Date in order to pay the Loan in full will be substantially greater than the principal amount of this Note.

(e) In addition to the payments required under Subsection 2(b) above, on the fifth day of each Loan Month, Borrower shall pay the Net Cash Flow Payments to Lender in accordance with Section 4 below.
(f)
(g) The entire outstanding principal amount of the Loan, and all accrued and unpaid interest thereon (including all Accrued Interest and interest accrued thereon), shall be due and payable on the Maturity Date.
(h)

(i) All payments hereunder shall be made by wire transfer of immediately available federal funds without set-off or counterclaim and shall be made to the following account of Lender prior to 1:30 p.m., Eastern Standard Time, on the date due:
(j)
(k) BANC ONE
(l) CHICAGO, ILLINOIS
(m) ABA #071000013
(n) ACCOUNT NUMBER: #52-56933
(o) ACCOUNT NAME: BANC OF AMERICA COMMERCIAL FINANCE CORPORATION
(p) REFERENCE: ALEXANDER'S
(q)
(r)Whenever any payment to be made hereunder shall be stated to be due on a date other than a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall be included in the calculation of interest on such principal. Any payments received after 1:30 p.m., Eastern Standard Time shall be deemed received on the next Business Day and shall include interest to such next Business Day.
(s)
(t) All interest required to be paid by Borrower hereunder shall be calculated on the basis of a year consisting of 360 days and shall be paid in arrears for the actual number of days elapsed, calculated as to each Advance from and including the date the applicable period commences to, and including, the date such period ends.
(u)
(v) If any regular monthly installment of interest shall not be paid at the place required under this Note on or before the fifth (5th) day following the due date thereof, Borrower shall pay to Lender a late charge (the "Late Charge") of five cents ($0.05) for each Dollar so overdue in order to compensate Lender for its frustration in the meeting of its financial and loan commitments and to defray part of Lender's expenses incident to handling such delinquent payments. This charge shall be in addition to any other remedy Lender may have and is in addition to Lender's right to collect reasonable fees and charges of any agents or attorneys which Lender employs in connection with any Event of Default. To the extent that any Late Charge shall constitute interest under applicable law, the amount thereof, together with all other interest hereunder and under the Loan Documents, shall be expressly limited to the Maximum Rate. Nothing herein contained shall be deemed to constitute a waiver or modification of the due date for such installments or for any deposits required to be made hereunder or under any of the Loan Documents or the requirement that Borrower make all payments of installments and deposits as and when the same are due and payable. Borrower shall pay to Lender interest at the Default Rate on (i) any regular monthly installment of interest and/or any payment required to be made under Subsection 2(c) of this Note which is not paid on or before the fifth (5th) day following the due date thereof, and (ii) any other amounts owed or payable to Lender hereunder or under any Loan Document which are not paid on or before the tenth
(10th) day following the due date thereof; such interest at the Default Rate shall be calculated from the date the payment in question became due to the date such payment was made.
(w)
(x) If at any time the Base Rate exceeds the Maximum Rate and the Interest Rate is reduced to the Maximum Rate, any subsequent reductions in the Base Rate to a level which is

less than the Maximum Rate shall not reduce the Interest Rate below the Maximum Rate unless and until the total amount of the interest accrued and actually paid on this Note equals the amount of interest which would have been paid or accrued if the Interest Rate had at all times been equal to the Base Rate.
(y)
(z) All agreements between Borrower and Lender, whether now existing or hereafter arising and whether written or oral, are hereby expressly limited so that in no contingency or event, whether by reason of acceleration of the maturity of this Note or otherwise, shall the amount paid or agreed to be paid to Lender for the use, forbearance, or detention of the money loaned under this Note or otherwise or for the payment or performance of any covenant or obligation contained herein or in any other document evidencing, securing or pertaining to the Loan, to the extent any of the foregoing payments are characterized or deemed to be of the nature of "interest" under applicable law, exceed the Maximum Rate. If from any circumstances whatsoever fulfillment of any provision hereof or any of such other agreements shall cause such amount paid to exceed the Maximum Rate, then ipso facto, the amount paid to Lender shall be reduced to the Maximum Rate, and if from any such circumstances Lender shall ever receive interest which exceeds the Maximum Rate, such amount which would be excessive interest shall be applied to the reduction of the principal of this Note and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal of this Note, such excess shall be refunded to Borrower. All sums paid or agreed to be paid to Lender for the use, forbearance or detention of the indebtedness of Borrower to Lender shall, to the extent permitted by applicable law, (i) be amortized, prorated, allocated and spread throughout the full term of such indebtedness until payment in full, so that the actual rate of interest on account of such indebtedness does not exceed the Maximum Rate throughout the term thereof; (ii) be characterized as a fee, expense, charge or damage other than interest; and (iii) be computed without regard to the effects of any voluntary prepayments. The terms and provisions of this Subsection 2(i) shall control and supersede every other provision of all agreements between Lender and Borrower.
(aa)
(bb) Except as otherwise expressly provided in this Note or in the Mortgage, each payment received by Lender shall be applied by Lender to amounts outstanding under the Loan Documents in such order and priority as Lender may elect in its sole and absolute discretion; provided, however, that if at the time of any payment there is due and payable any portion of the principal balance of this Note and sums not constituting repayment of principal, then such payment shall first be allocated to sums not constituting repayment of principal (in such order of priority as among the various obligations constituting such sums as Lender may elect in its sole and absolute discretion) before Lender applies such payments to reduction of the outstanding principal balance of this Note.

3. Loan Proceeds. The proceeds of the Loan have been advanced in full to Borrower prior to the date hereof. 4.
5. Net Cash Flow Payments.

(a) On the fifth day of each Loan Month (each such date, an "NCF Payment Date"), Borrower shall pay to Lender the Net Cash Flow Payment with respect to the immediately preceding Loan Month. On each NCF Payment Date Borrower shall make its required Net Cash Flow Payment simultaneously with the payment of interest due on such NCF Payment Date pursuant to Subsection 2(b) of this Note. So long as no Event of Default exists, Lender shall apply all Net Cash Flow Payments received by Lender first to pay any unpaid Accrued Interest and then to reduce the outstanding principal balance of the Loan. Upon the occurrence and during the continuation of an Event of Default, Lender may apply the Net Cash Flow Payments in accordance with Subsection 2(j) of this Note. In no event shall Lender be obligated to return any Net Cash Flow Payment to Borrower (even if, following the making of any Net Cash Flow Payment, the Cumulative Net Cash Flow Amount becomes negative).
(b)
(c) For purposes of calculating and making the Net Cash Flow Payment due on the fifth day of a Loan Month, Borrower shall base such calculation upon Borrower's unaudited, internally generated financial statements, which Borrower hereby covenants will be substantially true, correct and accurate at the time delivered to Lender. Following Lender's receipt of Borrower's audited financial statements (as required under Section 2.16 of the Mortgage), Lender shall recalculate the Net Cash Flow Payments based upon said audited financial statements. Any shortage in the aggregate Net Cash Flow Payments shall be paid to Lender by Borrower within five (5) days after written demand therefor from Lender to Borrower. Any overage in the aggregate Net Cash Flow Payments shall be credited by Lender to the Net Cash Flow Payment next coming due.

2. [Intentionally Left Blank]. 3.
4. Prepayment. The Loan may be prepaid, in whole or in part, at any time during the term hereof, without penalty or premium, provided that Borrower has given Lender ten (10) days' prior written notice of the proposed prepayment (the "Prepayment Notice"). 5.
6. Default. In the event Borrower fails to pay when due any installment of interest under this Note or any payment required to be made under Subsection 2(c) of this Note and such failure continues for five (5) days following the giving of notice by Lender to Borrower of such failure, or upon the occurrence and during the continuation of any other Event of Default (as defined in the Mortgage or any other Loan Document), the principal amount of the Loan, together with all accrued interest thereon (including all Accrued Interest and all interest accrued thereon) and all amounts due and payable hereunder shall immediately become due and payable upon written demand therefor. If this Note, or any part hereof, is not paid when due, whether by acceleration or otherwise, Borrower promises to pay all costs of collection, including, but not limited to, reasonable attorneys' fees and disbursements, incurred by the holder hereof on account of such collection, whether or not suit is filed hereon. Additionally, after the Maturity Date, the Interest Rate shall without notice immediately become the Default Rate. 7.
8. Indebtedness; Security. 9.

(a) This Note evidences the principal indebtedness heretofore evidenced by that certain Promissory Note (Secured) dated February 24, 1995 in the principal sum of $25,000,000 (the "Original Note") made by Alexander's, Inc. to Lender and assumed by Borrower pursuant to that certain Assignment, Assumption and Release Agreement dated as of February 24, 1995 among Borrower, Alexander's, Inc. and Lender. As of immediately prior to the execution and delivery of this Note, the outstanding principal balance of the Original Note was $21,262,848.54.
(b)
(c) The terms of this Note amend, restate and supersede the terms of the Original Note in their entirety. This Note has been executed and delivered to, and accepted by, Lender in substitution for the Original Note but not in payment, satisfaction or cancellation of the outstanding indebtedness evidenced by the Original Note. This Note does not secure any new or additional principal indebtedness other than the principal indebtedness evidenced by the Original Note.

(e) This Note is secured by, among other things, the Mortgage, all of the terms of which are incorporated herein by this reference.
(f)
(g) (d) Notwithstanding that this Note is dated as of February 24, 2000, Borrower and Lender agree that this Note shall not be effective until April 17, 2000 (the "Restructure Date"), which is the date of the actual execution and delivery of this Note, and that for the period from February 24, 2000 to and including the day before the Restructure Date, Borrower's obligations in respect of principal and interest shall be governed by the Original Note (subject, however, to paragraph 5 of that certain forbearance letter agreement among Borrower, Lender and Guarantor dated as of February 24, 2000 as amended by letter agreement dated as of March 23, 2000). Accordingly, the interest payment due on May 5, 2000 shall be calculated based on the Original Note with respect to the period from April 1, 2000 to and including the day before the Restructure Date, and shall be calculated based on this Note for the period from the Restructure Date to and including April 30, 2000.
(h)
10. Notices. All notices, demands and requests required or desired to be given hereunder shall be in writing and shall be delivered (i) in person, (ii) by United States registered or certified mail, return receipt requested, postage prepaid, (iii) by overnight courier or (iv) by telecopier, followed by a hard copy delivered pursuant to clause (i), (ii) or (iii) above, addressed in each case as follows:
11.
12. To Borrower:
13.
Alexander's, Inc.
Park 80 West
Plaza II
Saddle Brook, New Jersey 07663 Attn: Chief Financial Officer Telephone: 201/587-1000 Telecopier: 201/587-0600

with a copy to:

Whitman Breed Abbott & Morgan LLP 200 Park Avenue
New York, New York 10166
Attn: Neil Underberg
Telephone: 212/351-3488 Telecopier: 212/351-3131

and to:

Vornado Realty Trust
Park 80 West
Plaza II
Saddle Brook, New Jersey 07663 Attn: Vice President for Real Estate Telephone: 201/587-1000 Telecopier: 201/587-0600

and to:

Vornado Realty Trust
Park 80 West
Plaza II
Saddle Brook, New Jersey 07663 Attn: Chief Financial Officer Telephone: 201/587-1000 Telecopier: 201/587-0600

and to:

Vornado Realty Trust
Park 80 West
Plaza II
Saddle Brook, New Jersey 07663 Attn: Steven Roth
Telephone: 201/587-1000 Telecopier: 201/587-0600

NOTWITHSTANDING THE FOREGOING, AS OF JULY 1, 2000, THE SADDLE BROOK ADDRESS LISTED FOR ALEXANDER'S, INC. AND VORNADO REALTY TRUST SHALL BE CHANGED TO THE FOLLOWING ADDRESS:

210 ROUTE 4 EAST
PARAMUS, NEW JERSEY 07652

To Lender:

Banc of America Commercial Finance Corporation 187 Danbury Road
Wilton, Connecticut 06897 Attn: Vice President, Commercial Real Estate Telephone: (203) 423-4000 Telecopier: (203) 423-4003

with a copy to:

Banc of America Commercial Finance Corporation 187 Danbury Road
Wilton, Connecticut 06897 Attn: Vice President, Commercial Real Estate Telephone: (203) 423-4000 Telecopier: (203) 423-4003

or at such other addresses or to the attention of such other persons as may from time to time be designated by the party to be addressed by written notice to the other in the manner herein provided. Notices, demands and requests given in the manner aforesaid shall be deemed

sufficiently served or given for all purposes hereunder when received or when delivery is refused or when the same are returned to sender for failure to be called for.

1. Governing Law. In all respects, including, without limitation, matters of construction and performance of this Note and the obligations arising hereunder, this Note shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts and obligations made and to be performed in such state and any applicable laws of the United States of America. 2.
3. Waiver. Borrower hereby (a) waives demand, presentment for payment, notice of nonpayment, notice of intent to accelerate, notice of acceleration, protest, notice of protest and all other notice (except notice specifically provided for herein or in the other Loan Documents), filing of suit and diligence in collecting this Note or enforcing any of the security for this Note, (b) agrees to any substitution, exchange or release of any party primarily or secondarily liable hereon and/or of any collateral for the debt evidenced or secured by any of the Loan Documents, (c) agrees that Lender or any other holder hereof shall not be required first to institute suit or exhaust its remedies hereon or to enforce its rights under any Loan Document in order to enforce payment of this Note, (d) consents to any extension or postponement of time of payment of this Note and to any other indulgence with respect hereto without notice thereof to Borrower, and (e) agrees that the failure to exercise any option or election herein provided upon the occurrence of any default in respect hereto shall not be construed as a waiver of the right to exercise such option or election at any later date or upon the occurrence of a subsequent default in respect hereto. 4.
5. Business Purpose. Borrower represents and warrants that the proceeds of this Note will be used for business purposes and not for personal, family or household purposes. 6.
7. Severability. If any provision of this Note or any payments pursuant to this Note shall be invalid or unenforceable to any extent, the remainder of this Note and any other payments hereunder shall not be affected thereby and shall be enforceable to the greatest extent permitted by applicable law. 8.
9. Miscellaneous. 10.
(a) BORROWER HEREBY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS NOTE. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY BORROWER, AND BORROWER ACKNOWLEDGES THAT LENDER HAS NOT MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. BORROWER FURTHER ACKNOWLEDGES THAT BORROWER HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED BY BORROWER, AND THAT BORROWER HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

(b)
(c) Borrower hereby submits to personal jurisdiction in the State of New York for the enforcement of the provisions of this Note and irrevocably waives any and all rights to object to such jurisdiction for the purposes of litigation to enforce any provision of this Note. Borrower hereby consents to the jurisdiction of the Supreme Court of the State of New York, the United States District Court for the Southern District of New York, in any action, suit, or proceeding which Borrower or Lender may at any time wish to file in connection with this Note or any related matter. Borrower hereby agrees that any action, suit or proceeding to enforce this Note may be brought in any state or federal court in the State of New York, and hereby irrevocably waives any objection which Borrower may have to the laying of the venue of any such action, suit, or proceeding in any such court and hereby further irrevocably waives any claim that any such action, suit or proceeding brought in such a court has been brought in an inconvenient forum. Borrower hereby consents that service of process in any action, suit or proceeding may be made by personal service upon Borrower, or by delivery in accordance with the notice requirements of Section 9 of this Note; provided, however, that the provisions of this Section 14 shall not affect the right of Lender to serve legal process in any other manner permitted by law.

(e) This Note shall be binding upon Borrower and its representatives, successors and assigns and shall inure to the benefit of Lender and its successors and assigns.
(f)
(g) This Note may not be changed orally, but only by an agreement in writing signed by the party against whom enforcement of such change is sought.
(h)
(i) The headings used in this Note are for ease of reference only and shall not be used to construe or interpret this Note.
(j)
(k) Borrower agrees that the terms and conditions of this Note are the result of negotiations between Borrower and Lender and that this Note shall not be construed in favor of or against any party by reason of the extent to which any party or its professionals participated in the preparation of this Note.

11. Limitation on Liability. 12.
(a) Borrower (subject to the limitations and exceptions contained in subsections (b), (c) and (d) below) shall have no personal liability under this Note, and no deficiency judgment shall be sought or enforced against Borrower. Lender's recourse shall, subject to the limitations and exceptions contained in subsections (b), (c) and (d) below, be limited to the collateral and security provided under the Loan Documents.

(a) A judgment may be sought, obtained, entered and enforced against Borrower to the extent necessary to preserve or enforce the rights and remedies of Lender in, to or against the collateral and other security provided under the Loan Documents, and nothing contained in this Section 15 shall be construed to limit, prejudice or impair the rights of Lender to enforce its rights and remedies against any real or personal property mortgaged, pledged, encumbered,

assigned or granted to secure payment or performance under this Note and the Loan Documents. In addition to all of the other rights and remedies provided herein, in the other Loan Documents, or by law, Lender shall, to the fullest extent permitted by law, be entitled to injunctive relief and specific performance.
(b)
(c) Anything herein contained to the contrary notwithstanding, Borrower shall be liable to Lender, without limitation, for Lender's harm, loss (including, without limitation, any lost interest on and principal of the Loan), damage, costs and expenses (including Lender's reasonable attorneys' fees and collection costs) arising out of any of the following circumstances:

(i) the distribution by Borrower (by payments of dividends or otherwise) of any Property Income to any of its shareholders or otherwise in violation of Section 2.28 of the Mortgage;

(ii) the collection of rents or other income from the Mortgaged Property or other collateral or security provided under the Loan Documents more than thirty (30) days in advance or otherwise in violation of the terms and provisions of the Loan Documents; or the failure to account for security deposits of tenants or other occupants at the Mortgaged Property, if any, not turned over to Lender immediately after Lender's written demand following the occurrence and during the continuation of an Event of Default;

(iii) fraud in connection with the Loan or any Loan Document;

(iv) any material breach of any representation or warranty made by any person or entity under any Loan Document or otherwise in connection with the Loan, excluding, however any representation, warranty or covenant contained in the Letter Agreement dated February 24, 1995 among Lender, Borrower and Alexander's, Inc. (which Letter Agreement contains eight numbered paragraphs);

(v) any material misrepresentation or inaccuracy contained in any financial statement or other document provided to Lender pursuant to
Section 2.16 of the Mortgage;

(vi) waste with respect to the Mortgaged Property or other collateral or security provided under the Loan Documents (including nonpayment of insurance premiums and taxes to the extent there is sufficient Property Income to make such payments but Borrower fails to pay such premiums or taxes, but otherwise excluding nonpayment of taxes and insurance premiums and other non-physical waste);

(vii) the misappropriation or misapplication of insurance proceeds or condemnation awards relating to the Mortgaged Property or other collateral or security provided under the Loan Documents;

(viii) any breach of any of the terms and provisions of the Environmental Indemnity;

(ix) the occurrence of a transfer of the Mortgaged Property or any portion thereof or interest therein in violation of the Loan Documents; and

(x) the occurrence of a transfer of any direct or indirect interest in Borrower or any Special Entity (as defined in the Mortgage) in violation of the Loan Documents.

(a) Nothing contained in this Section 15 shall be construed to release Borrower or any other person or entity from their respective obligations under the Limited Guaranty, the Conditional Payment Guaranty, the Environmental Indemnity or the Trigger Agreement or under any other guaranty delivered by Borrower or such other person or entity to Lender. Lender hereby releases Borrower from all liability under the Letter Agreement.
(b)
(c) IN WITNESS WHEREOF, the undersigned has caused this Note to be executed by its duly authorized representative as of the date and year first above written.

(e)

(f)
(g)                                       ALEXANDER'S OF FORDHAM ROAD, INC.,
                                       a Delaware Corporation
(h)
(i)
(j)                                       By: /s/ Irwin Goldberg
                                              -------------------------------
(k)                                           Name: Irwin Goldberg
(l)                                           Title: Secretary
(m)
(n)                                       Borrower's Taxpayer Identification
(o)                                       Number:
(p)
(q)                                       BANC OF AMERICA COMMERCIAL
                                       FINANCE CORPORATION
(r)
(s)
(t)                                       By: /s/ Leslie S. Brown
                                              -------------------------------
(u)                                           Name: Leslie S. Brown
(v)                                           Title: Vice President
(w)
(x)
(y)

                         JAN.    FEB.   MARCH   APRIL    MAY   JUNE   JULY  AUGUST   SEPT.    OCT.    NOV.    DEC.    JAN.
                                                                                                                      2002
---------------------------------------------------------------------------------------------------------------------------
Gross Revenue              0       0      50     250     250    250    250    250     250     250     250     250     300
---------------------------------------------------------------------------------------------------------------------------
Operating Expenses        50      50      50     200     200    200    200    300     300     250     250     250     250
---------------------------------------------------------------------------------------------------------------------------
Monthly Net Cash Flow
Amount                   (50)    (50)      0      50      50     50     50    (50)    (50)      0       0       0      50
---------------------------------------------------------------------------------------------------------------------------
Cumulative Net Cash
Flow Amount              (50)   (100)   (100)    (50)      0     50    100    (50)   (100)   (100)   (100)   (100)    (50)
---------------------------------------------------------------------------------------------------------------------------
Net Cash Flow Payment      0       0       0       0       0     50     50      0       0       0       0       0       0
---------------------------------------------------------------------------------------------------------------------------

By: /s/ Irwin Goldberg
    ----------------------------
    Name: Irwin Goldberg
    Title: Secretary

By: /s/ Leslie S. Brown
    ---------------------------
    Name: Leslie S. Brown
    Title: Vice President

                                                                                 PAGE
                                                                                 ----
1.     Definitions                                                                 2

2.     The Closing                                                                 6
       (a)  Time and Place of Closing                                              6
       (b)  Events to Occur At Closing                                             6
       (c)  Conveyance of Rights in Streets                                        7

3.     Consideration; Absolute Conveyance                                          8

4.     (a)  Representations and Warranties of Borrower                             8
                (i)     Corporate Existence and Good Standing                      8
                (ii)    Corporate Power and Authority                              8
                (iii)   No Violation                                               8
                (iv)    Approvals                                                  9
                (v)     Litigation; Claims                                         9
                (vi)    Compliance with Law                                        9
                (vii)   Leases                                                     9
                (viii)  Other Agreements                                          10
                (ix)    Security Deposits                                         10
                (x)     Tax Refunds                                               10
                (xi)    Bankruptcy                                                10
                (xii)   Brokerage Arrangements                                    10
                (xiii)  Application of Cash                                       10
                (xiv)   [INTENTIONALLY LEFT BLANK]                                11
                (xv)    No Employees                                              11
                (xvi)   No Duress                                                 11
                (xvii)  [INTENTIONALLY LEFT BLANK]                                11
                (xviii) Cash and Securities                                       11

       (b)      Representations and Warranties of Guarantor                       11
                (i)     Corporate Existence and Good Standing                     11
                (ii)    Corporate Power and Authority                             11
                (iii)   No Violation                                              11
                (iv)    Approvals                                                 12
                (v)     Bankruptcy                                                12

5.     Covenants                                                                  12
       (a)      Covenants of Borrower in Favor of Lender and Grantee              12
                (i)     No Waiver                                                 12

                                                                                           Page
                                                                                           ----
                          (ii)    Payment of Obligations                                    12
                          (iii)   Other Documents                                           13
                          (iv)    Insurance Policies                                        13
                          (v)     Post Closing Rent Schedule                                13

                 (b)      Indemnity by Guarantor                                            13
                          (i)     Breach or Inaccuracy                                      13
                          (ii)    Excluded Liabilites                                       14

6.               Conditions Precedent to the Closing                                        14

7.               Assumption of Certain Liabilities Only                                     15

8.               Release of Lender Parties                                                  15

9.               Covenant Not to Sue                                                        15

10.              Release of Guarantor                                                       16

11.              Waiver of Subrogation                                                      17

12.              No Merger                                                                  17

13.              Negation of Partnership                                                    17

14.              Cooperation                                                                18

15.              Transfer Taxes                                                             18

16.              Confidentiality                                                            18

17.              Survival                                                                   18

18.              Miscellaneous.                                                             18
                 (a)  Notices                                                               18
                 (b)  Successors and Assigns                                                20
                 (c)  Applicable Law                                                        20
                 (d)  Severability                                                          20
                 (e)  Headings                                                              20
                 (f)  Entire Agreement                                                      20
                 (g)  Amendment                                                             20
                 (h)  Waiver of Compliance; Consents                                        21
                 (i)  Submission to Jurisdiction; Waiver of Venue and Jury Trial            21
                 (j)  Counterparts                                                          21
                 (k)  Execution and Delivery Required                                       21

Schedule 1  -    Description of Land
Schedule 2  -    Leases
Schedule 3  -    Litigation Schedule
Schedule 4  -    [Intentionally Left Blank]
Schedule 5  -    Creditors of Borrower and Payables
Schedule 6  -    Permitted Encumbrances
Schedule 7  -    [Intentionally Left Blank]
Schedule 8  -    Other Agreements
Schedule 9  -    Insurance Policies
Schedule 10 -    Security Deposits
Schedule 11 -    Certain Violations
Schedule 12 -    Tax Refunds

                                  EXHIBITS
                                  --------

Exhibit A -      Form of Deed
Exhibit B -      Form of Assignment of Leases
Exhibit C -      Form of Bill of Sale
Exhibit D -      Form of Tenant Estoppel Certificate
Exhibit E -      Form of FIRPTA Certification
Exhibit F -      Form of Letter to Tenants

To Lender:

         Banc of America Commercial Finance Corporation
         187 Danbury Road
         Wilton, Connecticut  06897
                 Attn:  Vice President, Commercial Real Estate
                 Telephone:   (203) 423-4000
                 Telecopier:  (203) 423-4003

         Banc of America Commercial Finance Corporation
         187 Danbury Road
         Wilton, Connecticut  06897
                 Attn: General Counsel
                 Telephone:   (203) 423-4000
                 Telecopier:  (203) 423-4163

To Grantee:

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

(i)
(j)                                          By:
                                                ----------------------------

                                                                            Page


                                   SCHEDULE 6

1.       Liens for Real Estate Taxes not due and payable as of Closing Date
         (and liens for Real Estate Taxes for which Lender is responsible under
         section 2 of the Trigger Agreement).

2.       All matters set forth in Schedule B to the title insurance policy

                                                                        Page
17.
18.
Dated:                                             By:
       ---------------                                ------------------------
                                                      President