JMB 245 PARK AVENUE ASSOCIATES LTD, 10-Q, 1995-11-14

JMB 245 PARK AVENUE ASSOCIATES LTD
10-Q, 1995-11-14
LAND SUBDIVIDERS & DEVELOPERS (NO CEMETERIES)

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

Quarterly Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the quarter ended September 30, 1995 Commission file #0-13545

JMB/245 PARK AVENUE ASSOCIATES, LTD.
(Exact name of registrant as specified in its charter)

Illinois 36-3265541
(State of organization)(I.R.S. Employer Identification No.)

900 N. Michigan Ave., Chicago, Illinois 60611
(Address of principal executive office) (Zip Code)

Registrant's telephone number, including area code 312-915-1960

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION

Item 1. Financial Statements. . . . . . . . . . . . . . 3

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . 15

PART II OTHER INFORMATION

Item 3. Defaults on Senior Securities . . . . . . . . . 19

Item 5. Other Information . . . . . . . . . . . . . . . 20

Item 6. Exhibits and Reports on Form 8-K. . . . . . . . 21

<TABLE>
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

BALANCE SHEETS

SEPTEMBER 30, 1995 AND DECEMBER 31, 1994

(UNAUDITED)

ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- ------------
<S> <C> <C>
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . . . $ -- --
------------ ------------

$ -- --
============ ============

JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

BALANCE SHEETS - CONTINUED

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
------------------------------------------------------

SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- ------------
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,134 17,105
Accounts payable to affiliates (note 4). . . . . . . . . . . . . . 50,593 33,879
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . 1,337,019 789,655
Accrued interest payable to affiliate. . . . . . . . . . . . . . . 1,384,857 574,761
Demand note payable to affiliate (note 3). . . . . . . . . . . . . 11,968,592 8,182,092
Bank obligations payable - current (note 3). . . . . . . . . . . . -- 5,624,000
------------ ------------
Total current liabilities. . . . . . . . . . . . . . . . . 14,751,195 15,221,492
Bank obligations payable - long-term (note 3). . . . . . . . . . . . 43,236,631 40,319,631
------------ ------------
Commitments and contingencies (notes 1, 2 and 3)

Total liabilities. . . . . . . . . . . . . . . . . . . . . 57,987,826 55,541,123

Investment in unconsolidated venture, at equity
(notes 2 and 5). . . . . . . . . . . . . . . . . . . . . . . . . . 75,034,385 71,973,130
Partners' capital accounts (deficits):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative cash distributions. . . . . . . . . . . . . . . . . . (480,000) (480,000)
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . (12,990,375) (12,659,898)
------------ ------------
(13,469,375) (13,138,898)
------------ ------------
Limited partners (1,000 interests):
Capital contributions, net of offering costs (note 1). . . . . . 113,057,394 113,057,394
Cumulative cash distributions. . . . . . . . . . . . . . . . . . (7,520,000) (7,520,000)
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . (225,090,230) (219,912,749)
------------ ------------
(119,552,836) (114,375,355)
------------ ------------
Total partners' capital accounts (deficits). . . . . . . . (133,022,211) (127,514,253)
------------ ------------
$ -- --
============ ============
<FN>
See accompanying notes to financial statements.
</TABLE>

<TABLE>
JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

STATEMENTS OF OPERATIONS

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994

(UNAUDITED)

<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1995 1994 1995 1994
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Interest income. . . . . . . . . . . . . . . $ -- -- -- --
----------- ---------- ----------- ----------
Expenses:
Interest . . . . . . . . . . . . . . . . . . 804,647 651,303 2,370,251 2,284,982
Professional services. . . . . . . . . . . . 7,545 427 35,745 143,417
General and administrative . . . . . . . . . 11,159 1,729 40,707 24,772
----------- ---------- ----------- ----------

823,351 653,459 2,446,703 2,453,171
----------- ---------- ----------- ----------

Operating loss . . . . . . . . . . . 823,351 653,459 2,446,703 2,453,171

Partnership's share of loss
from operations of
unconsolidated venture . . . . . . . . . . . 1,498,095 7,104,161 3,061,255 2,020,320
----------- ---------- ----------- ----------

Net loss . . . . . . . . . . . . . . $ 2,321,446 7,757,620 5,507,958 4,473,491
=========== ========== =========== ==========

Net loss per limited
partnership interest . . . . . . . $ 2,182 7,292 5,177 4,205
=========== ========== =========== ==========

Cash distributions per
limited partnership
interest . . . . . . . . . . . . . $ -- -- -- --
=========== ========== =========== ==========

<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994

(UNAUDITED)

<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(5,507,958) (4,473,491)
Items not requiring (providing) cash or cash equivalents:
Partnership's share of loss from operations of
unconsolidated venture . . . . . . . . . . . . . . . . . . . . . . 3,061,255 2,020,320
Changes in:
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . -- 385,869
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . 4,241 90,251
Accounts payable to affiliates . . . . . . . . . . . . . . . . . . . 16,714 --
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . 1,357,460 794,473
------------ -----------
Net cash used in operating activities. . . . . . . . . . . . . (1,068,288) (1,182,578)
------------ -----------

Cash flows from financing activities:
Bank overdrafts. . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,212) 523,661
Principal payments on bank obligations payable . . . . . . . . . . . . (2,707,000) (1,251,000)
Funding of demand note payable . . . . . . . . . . . . . . . . . . . . 3,786,500 1,874,975
------------ -----------
Net cash provided by financing activities. . . . . . . . . . . 1,068,288 1,147,636
------------ -----------
Net decrease in cash and cash equivalents. . . . . . . . . . . $ -- (34,942)
============ ===========

Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . . . . $ 1,012,791 1,490,509
============ ===========
Non-cash investing and financing activities. . . . . . . . . . . . . . $ -- --
============ ===========

<FN>
See accompanying notes to financial statements.
</TABLE>

JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 1995 AND 1994

(UNAUDITED)

Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1994,
which are included in the Partnership's 1994 Annual Report, as certain
footnote disclosures which would substantially duplicate those contained in
such audited financial statements have been omitted from this report.

(1) BASIS OF ACCOUNTING

The equity method of accounting has been applied in the accompanying
financial statements with respect to the Partnership's interest in 245 Park
Avenue Company (the "joint venture" or "245 Park"). Accordingly, the
financial statements do not include the accounts of 245 Park.

The Partnership's records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying financial statements have been prepared from such records
after making appropriate adjustments to reflect the Partnership's accounts
in accordance with generally accepted accounting principles ("GAAP"). Such
adjustments are not recorded on the records of the Partnership. The net
effect of these items is summarized as follows for the nine months ended
September 30:

1995 1994
------------------------- ------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
---------- --------- ---------- ---------

Net loss . . . $5,507,958 5,398,957 4,473,491 3,455,897
Net loss
per limited
partnership
interest. . . $ 5,177 5,075 4,205 3,249
========== ========== ========= ==========

The net loss per limited partnership interest is based upon the number
of limited partnership interests outstanding at the end of the period
(1,000). Deficit capital accounts will result, through the duration of the
Partnership, in net gain for financial reporting and Federal income tax
purposes.

Partnership distributions from the unconsolidated joint venture are
considered cash flow from operating activities only to the extent of the
Partnership's cumulative share of net earnings.

Certain amounts in the 1994 financial statements have been
reclassified to conform with the 1995 presentation.

(2) INVESTMENT IN UNCONSOLIDATED VENTURE - 245 PARK

The Partnership acquired an interest in 245 Park, which owns an
existing 46-story office building located at 245 Park Avenue, New York, New
York. The Partnership acquired its approximate 48.25% ownership interest
in 245 Park for approximately $63,927,000 from an affiliate of the joint
venture partners. In addition to the Partnership, the other partners (the
"O&Y partners") of 245 Park include Olympia & York 245 Park Avenue Holding

JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Company, L.P., O&Y Equity Company, L.P., and O&Y 245 Corp., all of which
are affiliates of Olympia & York Developments, Limited ("O&Y"). There are
certain risks and uncertainties associated with the Partnership's
investment made through the joint venture, including the possibility that
the O&Y partners might become unable or unwilling to fulfill their
financial or other obligations, or that the O&Y partners may have economic
or business interests or goals that are inconsistent with those of the
Partnership.

The O&Y partners granted security interests in their interests in 245
Park to a syndicate of banks in order to secure certain loan obligations of
certain O&Y affiliates. In August, 1992, the Partnership received notice
from the lead bank of the syndicate alleging that such O&Y affiliates were
in default under these loan obligations and directing that all payments and
distributions due to the O&Y partners from 245 Park be delivered to the
lead bank. According to published reports, an investor group purchased
participations in these obligations from the original syndicate of banks.
In September 1995, the holder of the loan obligations issued a notice of
sale of, among other things, the interests of the O&Y partners in 245 Park
in an effort to realize upon the collateral for the loan obligations. In
October 1995, each of the O&Y partners, as well as other O&Y affiliates,
filed for protection from creditors under Chapter 11 of the United States
Bankruptcy Code. As a result of these bankruptcy filings, the attempted
sale of the O&Y partners' interests in 245 Park was stayed.

The O&Y partners and certain other O&Y affiliates are preparing a plan
to restructure their ownership interests in various office buildings,
including the 245 Park Avenue office building, which could take the form of
one or more real estate investment trusts. Any such restructuring would be
subject to the approval of the various creditors of the O&Y partners and
other O&Y affiliates as well as the bankruptcy court, and would likely
result in such creditors collectively obtaining control of such ownership
interests. Although the Partnership has had discussions with the O&Y
partners and certain of the creditors concerning possible restructuring
proposals, because of the preliminary status and the complexity of the
proposals, as well as the current divergence in the interests of certain of
the creditors, the Partnership does not know at this time how a
restructuring, if effected, would affect 245 Park and/or the O&Y partners'
and the Partnership's respective interests therein.

Pursuant to the 245 Park venture agreement, the Partnership has made
capital contributions aggregating $18,100,000. To the extent such
contributions were not sufficient to fund operating deficits, debt service,
reserve requirements and certain capital expenditures, the O&Y partners
were obligated and did contribute the amount of such deficiencies through
May 1989. Commencing in June 1989 through the earlier of December 1993 or
the date on which the annual net cash flow (as defined) of the joint
venture is at least $16,500,000, the O&Y partners were obligated to loan
certain amounts (in the maximum amount of $72,500,000 at a prime rate of
interest, 8.75% at September 30, 1995) to 245 Park sufficient to cover
operating deficits, reserve requirements and certain capital expenditures
of the joint venture and to pay the Partnership and the O&Y partners their
"minimum return" (as defined). The O&Y partners have loaned 245 Park
amounts aggregating $80,213,000 (net of repayments) on a cumulative basis
as of September 30, 1995, which amount includes $2,636,000 (net of
repayments) loaned for the nine months ended September 30, 1995 for
interest accruing on these advances. The loans from the O&Y partners
currently exceed the maximum amount required under the terms of the joint
venture agreement. Under the terms of the joint venture agreement, the
Partnership is obligated to contribute to 245 Park its share (approximately
48.25%) of any operating expenses, reserve requirements and capital
expenditures, including interest on the O&Y partners' loans, to the extent

JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

not covered by cash flow from the property or any additional loans from the
O&Y partners. The principal and any unpaid interest on the O&Y partner
loans will be due and payable on June 1, 2004, subject to earlier repayment
out of available net cash flow or the net proceeds of a refinancing, sale
or other disposition of the property as described below.

Pursuant to the joint venture agreement, the first $16,500,000 of
annual net cash flow (after payment of the current year's interest on the
O&Y partners' loans and the current return on their priority distributions)
is distributable approximately 48.25% to the Partnership and 51.75% to the
O&Y partners (defined as "ownership ratios"). Additional annual net cash
flow (as defined) will be utilized to pay outstanding loans and accrued and
deferred interest to the O&Y partners. Any remaining annual net cash flow
is distributable approximately 48.25% to the Partnership and 51.75% to the
O&Y partners. Operating profits and losses generally are allocated
approximately 48.25% to the Partnership and 51.75% to the O&Y partners.

Net sale or refinancing proceeds (after repayment of any loans and the
priority distributions and accrued interest to the O&Y partners as
described below) are generally allocable or distributable, as the case may
be, to the Partnership and the O&Y partners in their respective ownership
ratios. In general, profits from the sale or other disposition of the
office property will be allocated first to the venture partners with any
negative balances in their capital accounts up to the amount of such
negative balances and then in accordance with the respective ownership
ratios of the venture partners. Losses from the sale or other disposition
of the office property will generally be allocated first to the venture
partners with any positive balances in their capital accounts up to the
amount of such positive balances and then in accordance with the respective
ownership ratios of the venture partners. Losses attributable to the New
York State Gains Tax payable as a result of sale or other transfer of the
office property are allocable among the venture partners in the same
proportion as their contributions for payment of the tax. In general, the
Partnership will only contribute for the payment of such tax with respect
to proceeds from the sale or other transfer of the office property in
excess of $500,000,000 plus the value of certain improvements.

The office building is being managed by an affiliate of the O&Y
partners for a management fee equal to 1% of gross receipts. In addition,
certain repairs and maintenance and tenant improvement work is performed by
an affiliate of the O&Y partners.

On September 7, 1989, 245 Park refinanced the $20,000,000 second
mortgage note. The remaining first mortgage note continues in place. The
third mortgage note was also refinanced by a financial institution in the
same principal amount as the original note ($147,500,000). Also on
September 7, 1989, 245 Park obtained an additional loan in the maximum
principal amount of $29,000,000. $17,000,000 of this loan was advanced at
closing with an additional $4,000,000 advanced in June 1990 and June 1991
for a total of $25,000,000 principal outstanding as of September 30, 1995.
The final potential $4,000,000 funding under the fourth mortgage loan due
from the financial institution on June 30, 1992 was not received. The
lender refused to provide the final funding under the fourth mortgage loan
due to a failure by the O&Y partners to satisfy certain reporting
requirements of 245 Park under the second, third and fourth mortgage loan
agreements, which constitutes a non-monetary default under such agreements.

The proceeds of this loan have been used to pay down a loan from an
affiliate of the O&Y partners and to reimburse the affiliate for annual
advances made to 245 Park for the Partnership's share of the economic
benefits of the Bear Stearns lease as further discussed below. In the
fourth quarter of 1994, 245 Park began recording the accrual of interest on
these junior mortgage loans at default rates (ranging from 11.8% to 14% per
annum) due to the maturity of these junior mortgage loans.

JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

The Partnership was previously notified that the junior mortgage
loans, secured by the investment property as described below, were in
default due to non-compliance with certain lender financial reporting
requirements, and the loans subsequently matured in October 1994 without
repayment. However, 245 Park has continued to make and the lender has
continued to accept monthly payments of interest in the same amounts that
were payable prior to October 1994. As of the date of this report, the
holder of the junior mortgage loans has not, to the knowledge of the
Partnership, attempted to exercise its remedies against the joint venture's
property.

In March 1987, 245 Park and 245 Lease Co. entered into a lease with a
new tenant, Bear Stearns Companies, Inc., for the 538,000 square feet of
space in the building which had been vacated in 1986. The new lease
commenced in May 1987 and has an initial term extending until December
2002, with five renewal options for up to a total of 25 additional years.
Annual base rent, which commenced in January 1988 concurrent with tenant
occupancy, is payable at the rates of $35 per square foot through 1992, $51
per square foot through 1997 and $56 per square foot through 2002. Annual
base rent payable for each of the option periods will be the greater of the
then existing annual base rent or 85% of the market rate then in effect.
During the entire lease term, the tenant is also obligated to pay certain
electricity charges and its proportionate share of increases in the
operating costs of the building (including real estate taxes) over those
generally incurred in 1987.

In connection with the execution of this lease, the Partnership and
the O&Y partners agreed upon the division of the economic benefits and
costs of this lease among the Partnership and the O&Y partners. The
Partnership was entitled to participate in the economic benefits of this
lease by receiving distributions from 245 Park of $4,000,000 per year
through June 30, 1992 as its share of the remaining incremental net rents
from the lease after payment of the interest expense referred to below.
Subsequent to June 1992, cash flow from net rents and related income under
the lease are allocable to the Partnership and the O&Y partners in
accordance with the terms of the existing joint venture agreement.

The Partnership participates in a portion of the costs of this lease
as the costs have been financed by 245 Park. Such costs include costs
associated with re-leasing the tenant space (including tenant improvement
costs) and expenses related to termination of the prior tenant's lease and
the new tenant's vacating its space in another building. A portion of
these costs have been financed by the O&Y partners through their deferral
of their prorata distributions from 245 Park through June 30, 1992, for
which they are entitled to a priority distribution estimated to be
approximately $31,500,000 (including accrued interest, at 9% per annum
through September 1995, on the deferred amounts) from net annual cash flow
or sale or refinancing proceeds, as described above. In addition, as of
September 30, 1995, approximately $9,690,000 of these costs had been
financed by a non-recourse loan from an affiliate of the O&Y partners at an
interest rate not to exceed 9% per annum and $25,000,000 of the costs had
been financed by a third party lender at an interest rate of 9% per annum
pursuant to the fourth mortgage loan described above. Through September
1995, interest on amounts deferred by the O&Y partners and on the non-
recourse loan from their affiliate has accrued and has been added to
principal. Payments on the fourth mortgage loan were interest only until
maturity in October 1994 when the entire principal balance was due and
payable. However, the lender has refrained from taking any actions or
exercising any of its remedies as a result of the loan maturing in October
1994. Payments on the loan from an affiliate of the O&Y partners are
interest only (unless accrued as described above) until the earlier of a
sale or refinancing of the property, if proceeds are available for
repayment of the loan, or December 31, 2002, at which time the outstanding

JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

balance, including any accrued interest added to principal, becomes
payable.

The holder of the first mortgage loan secured by 245 Park's property
agreed to extend the originally scheduled maturity date of the loan from
October 1, 1993 until January 1, 1994. 245 Park entered into an agreement
with the lender to further modify and extend the loan for the amount of the
current outstanding principal balance plus accrued and unpaid interest at a
default rate of 18% per annum from October 1, 1993 through the loan closing
date, with a new interest rate from the loan closing date for a five year
term. This agreement provided that the new interest rate would be based on
the mortgage equivalent of U.S. Treasury securities maturing on or about
five years from the date of closing plus 3% per annum. Monthly payments of
principal and interest were to be required during the loan extension period
based upon a 30-year amortization schedule. Under the terms of the
agreement, 245 Park also was to make certain lump sum and monthly deposits
of specified amounts in escrow for real estate taxes and leasing and other
capital and operating costs. 245 Park paid $8 million to the lender to be
applied to accrued interest on the loan and has paid approximately $17.1
million into the real estate tax escrow ($9.4 million scheduled payment
made in July 1995). In addition, 245 Park was to pay the lender an
extension fee of $2 million upon closing of the transaction. Subject to
certain conditions, the lender had agreed to waive payment of a portion of
the interest that accrues on the loan at the default rate prior to closing
the transaction. Completion of the modification and extension of the first
mortgage loan in accordance with the agreement was subject to the
satisfaction of various conditions, certain of which were not satisfied,
and the agreement has expired by its terms. However, 245 Park and the
lender continue to discuss a modification and extension of the first
mortgage loan generally on terms similar to those discussed above. The
financial difficulties of the O&Y partners and their affiliates, the need
to restructure their ownership interests in various properties and the
pledge by the O&Y partners of their interests in 245 Park have delayed and
may continue to delay obtaining modification and extension of 245 Park's
mortgage loans.

245 Park has continued to make, and the first mortgage lender has
continued to accept, monthly payments of principal and interest in the same
amount that were payable prior to October 1, 1993, and the lender has
refrained from taking any actions or exercising any of its remedies as a
result of the loan maturing on January 1, 1994. If 245 Park is successful
in obtaining the modification and an extension of the first mortgage loan,
it also expects to seek a similar extension of the October, 1994 maturity
dates of the junior mortgage loans. If 245 Park is able to obtain
modifications and extensions of each mortgage loan, it is expected that the
interest rates applicable to the loans during the extension period would be
no greater than that in effect for the modified first mortgage loan. There
can be no assurance that 245 Park will be able to reach a final agreement
for any such modifications and extensions of any of its mortgage
indebtedness. Although the property has significant reserves at September
30, 1995, due to property cash needs and venture partner priority claims,
it is not expected that any of these reserves would be distributable to the
Partnership.

If 245 Park's efforts to extend any of its existing mortgage loans,
with an aggregate principal balance of approximately $384,874,000 at
September 30, 1995, are unsuccessful, there is the possibility that 245
Park would no longer be able to maintain an ownership interest in the
property, as the mortgage lenders may seek to acquire title to the
property. This would result in the recognition of a substantial net gain
to the Limited Partners for Federal income tax purposes, without any
corresponding cash distribution. In such event, the Partnership would then
proceed to terminate its affairs.

JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

(3) BANK OBLIGATIONS AND DEMAND NOTES PAYABLE

(a) Bank obligations and demand note payable consist of the following
at September 30, 1995 and December 31, 1994:

SEPTEMBER 30,DECEMBER 31,
1995 1994
--------------------------
Bank note payable (term loan) bearing
interest at a variable rate related
to LIBOR (8.5% per annum at
September 30, 1995); secured by
the Partnership's interest in
245 Park; interest payable
monthly until December 1998
(principal in the amount of
$2,500,000 and $2,707,000 paid
in 1994 and 1995, respectively)
when the remaining amount is
due; obtained in 1993 (see
note 3(b)). . . . . . . . . . . . . . . .$16,042,000 18,749,000

Bank note payable (term loan)
bearing interest at 2% per annum;
secured by the Partnership's interest
in 245 Park; no payments until
December 1998 when the entire
principal amount and accrued
compounded interest are due;
obtained in 1993 (see note 3(b)). . . . . 25,000,000 25,000,000

Bank note payable (term loan) bearing
interest at 2% per annum; secured by
the Partnership's interest in 245 Park;
no payments until December 1998 when
the entire principal amount and accrued
compounded interest are due; obtained
in 1993 (see note 3(b)) . . . . . . . . . 2,194,631 2,194,631

Demand note payable bearing
interest at prime plus 1%
(9.75% per annum at September 30,
1995); advanced by JMB;
maximum principal sum of a
specified amount; secured by
Partnership's interest in
245 Park (see note 3(b)) . . . . . . . . 11,968,592 8,182,092
----------- ----------

$55,205,223 54,125,723
=========== ==========

(b) Debt Refinancing

The Partnership and its lenders reached a modification and extension
agreement regarding the former $50,000,000 term loans that matured in
October 1993. The current term loans (note 3(a)) are secured by the
Partnership's interest in 245 Park, and $25,000,000 ($16,042,000 at
September 30, 1995) of the term loans requires interest to be paid
currently. The terms of the modification and extension generally provide
for (i) an extension period through December 1998; (ii) one-half of the
original principal amount of the term loans requires interest to be paid
currently at a rate related to the London Interbank Offer Rate (LIBOR)

JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

while interest on the balance of the term loans accrues at an annual rate
of 2%; (iii) one-half of the original principal amount of the term loans
bearing interest at a rate related to LIBOR (the "LIBOR Note") was subject
to periodic amortization; and (iv) the past due lump sum interest swap
payment in the amount of $2,194,631 has been converted to a note payable
due December 1998 with interest accruing at an annual rate of 2%. In
December 1993, approximately $5,647,000 was paid to the lenders under the
term loans (all of which was advanced on behalf of the Partnership by JMB)
which included a $5,000,000 principal paydown of the LIBOR Note and the
interest payable currently for the period September through December 1993.
Any payments of principal and interest made by JMB under its guaranty of
the portion of the Partnership's term loans were treated as advances to the
Partnership. Interest accrues on these advances at the annual rate of
prime plus 1% (9.75% at September 30, 1995). As of September 30, 1995, JMB
has advanced approximately $11,969,000 evidenced by a demand note, which
includes the principal and interest payments made through July, 1995 (the
date of JMB's purchase of the term loans). The demand note payable to JMB,
which allows a maximum principal sum of a specified amount, had been
subordinated to payment of the LIBOR Note, but is no longer subordinated
and is secured by the Partnership's interest in 245 Park.

In July 1995, JMB purchased from the lenders the term loans and their
security interests in the related collateral, which included the
Partnership's interest in 245 Park Co. and the JMB guarantee, which has
been terminated. JMB will continue to hold the notes for these loans
generally under the same terms and conditions as were in effect prior to
the purchase. However, no scheduled principal payments are required prior
to maturity on the LIBOR Note. Interest on the LIBOR Note accrues and is
payable monthly at a floating rate which, at the option of the Partnership,
is related to either LIBOR or the prime rate of Bank of America Illinois.
These loans and the demand note payable to JMB are secured by the
Partnership's interest in the joint venture and are subject to mandatory
prepayment of principal and interest out of any distributions received by
the Partnership from 245 Park.

(4) TRANSACTIONS WITH AFFILIATES

The General Partners or their affiliates may be reimbursed for their
direct expenses and out-of-pocket expenses relating to the administration
of the Partnership and operation of the Partnership's real property
investment. Additionally, the General Partners and their affiliates are
also entitled to reimbursements for legal, accounting and certain other
services.

Fees and reimbursable expenses paid or payable by the Partnership to
the General Partners and their affiliates as of September 30, 1995 and for
the nine months ended September 30, 1995 and 1994 are as follows:

Unpaid at
September 30,
1995 1994 1995
------- ----- -------------

Reimbursement (at cost)
for legal services. . . . . . $ 9,687 -- 13,394
Reimbursement (at cost)
for accounting
services. . . . . . . . . . . 29,245 -- 37,081
Reimbursement (at cost)
for out-of-pocket
expenses. . . . . . . . . . . 43 89 118
------- --- ------
$38,975 89 50,593
======= === ======

JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS - CONCLUDED

All above reimbursable amounts currently payable to the General
Partners and their affiliates do not bear interest.

The Corporate General Partner of the Partnership has determined to use
independent third parties to perform certain of these administrative
services beginning in the fourth quarter of 1995. Use of such third
parties, rather than reimbursement to the Corporate General Partners and
their affiliates, is not expected to have a material effect on the
operations of the Partnership.

(5) UNCONSOLIDATED VENTURE - SUMMARY INFORMATION

Summary income statement information for 245 Park for the nine months
ended September 30, 1995 and 1994 is as follows:

1995 1994
----------- ----------

Total income . . . . . $74,754,909 78,624,863
=========== ==========

Operating loss . . . . $(6,344,571) (4,187,192)
=========== ==========

Partnership's share of
loss . . . . . . . . $(3,061,255) (2,020,320)
=========== ==========

(6) ADJUSTMENTS

In the opinion of the Corporate General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation (assuming the Partnership continues as a going concern, see
note 2) have been made to the accompanying figures as of September 30, 1995
and for the three and nine months ended September 30, 1995 and 1994.

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

All references to "Notes" are to Notes to Financial Statements
contained in this report. Certain parties given abbreviated names or
references below are identified in the Notes.

The mortgage loans secured by the 245 Park Avenue building have
matured without repayment. Although 245 Park entered into an agreement
with the first mortgage lender to modify and extend the first mortgage
loan, the agreement is subject to certain conditions and there can be no
assurance that 245 Park will be able to reach a final agreement to modify
and extend this loan or the other mortgage loans. If 245 Park's efforts to
extend any of its mortgage loans are unsuccessful, 245 Park may not be able
to maintain an ownership interest in the property, as the mortgage lenders
may seek to acquire title to the property. In such event, the Partnership
would proceed to terminate its affairs. Accordingly, there exists
substantial doubt as to the Partnership's ability to continue as a going
concern.

At September 30, 1995, the Partnership had no cash or cash
equivalents. Therefore, subsequent to September 30, JMB advanced $20,000
to the Partnership, as evidenced by its demand note, to fund Partnership
operations.

Commencing in June 1989 through the earlier of December 1993 or the
date on which the annual net cash flow (as defined) of 245 Park is at least
$16,500,000, the O&Y partners were obligated to loan certain amounts (in
the maximum amount of $72,500,000 at a prime rate of interest) to 245 Park
sufficient to cover operating deficits, reserve requirements and certain
capital expenditures of 245 Park and to pay the Partnership and the O&Y
partners their "minimum return" (as defined). The O&Y partners have loaned
245 Park amounts aggregating $80,213,000 (net of repayments) as of
September 30, 1995, which amount includes $2,636,000 (net of repayments)
loaned for the nine months ended September 30, 1995 for interest accruing
on the advances. Under the terms of the joint venture agreement, the
Partnership is obligated to contribute to 245 Park its share
(approximately 48.25%) of any operating expenses, reserve requirements and
capital expenditures, including interest on the O&Y partners' loans, to the
extent not covered by cash flow from the property or additional loans from
the O&Y partners. The principal and any unpaid interest on the O&Y partner
loans will be due and payable on June 1, 2004, subject to earlier repayment
out of available net cash flow or the net proceeds of a refinancing, sale
or other disposition of the property as described in Note 2.

Since the Partnership has not been receiving operating cash flow
distributions from the property, the Partnership initially utilized its
cash reserves to make the payments on the Partnership's bank obligations.
Effective with the first quarter of 1990, the Partnership elected to
suspend cash distributions to the Partners and retain funds for the cash
requirements and capital expenditures for the property (if not funded by
O&Y partners' loans). These reserves have been exhausted, and
consequently, the Partnership was not able to pay the interest payment due
on the bank obligations for September 1993 in the approximate amount of
$223,000. In addition, the Partnership did not have adequate reserves to
pay a lump sum interest swap payment due February 1, 1994 in the amount of
$2,194,631. In this regard, the Partnership and its bank lender reached a
modification and extension agreement for the $50,000,000 term loans that
matured in October 1993. These term loans are secured by the Partnership's
interest in 245 Park, and $25,000,000 ($16,042,000 at September 30, 1995)
of the term loans was guaranteed by JMB. The terms of the modification and
extension generally provide for (i) an extension period through December
1998; (ii) one-half of the original principal amount of the term loans
requires interest to be paid currently at a rate related to the London
Interbank Offer Rate (LIBOR) while interest on the balance of the term
loans accrues at an annual rate of 2%; (iii) one-half of the original
principal amount of the term loans bearing interest at a rate related to
LIBOR (the "LIBOR Note") was subject to periodic amortization through
payment of quarterly installments of principal and interest (principal in
the amount of $2,500,000 in 1994 and $2,707,000 in 1995); and (iv) the past
due lump sum interest swap payment in the amount of $2,194,631 has been
converted to a note payable due December 1998 with interest accruing at an
annual rate of 2%. In December 1993, approximately $5,647,000 was paid to
the lenders under the term loans (all of which was advanced on behalf of
the Partnership by JMB), which included a $5,000,000 principal paydown of
the LIBOR Note and the interest payable currently for the period September
through December 1993. During the year ended December 31, 1994, an
additional amount of approximately $2,479,000 was paid to the lenders under
the term loans which included a $1,251,000 principal paydown of the LIBOR
Note and the interest payable currently for the period January through
December 1994. An additional payment of $1,249,000 and two payments of
$729,000 each were paid in January through June, 1995, respectively. Any
payments of principal and interest made by JMB under its guaranty of the
portion of the Partnership's term loans have been treated as advances to
the Partnership. As of September 30, 1995, JMB has advanced approximately
$11,969,000 evidenced by a demand note, which includes the principal and
interest payments made related to the loan modification discussed above and
advances to pay operating costs of the Partnership. Interest accrues on
these advances at the annual rate of prime (8.75% at September 30, 1995)
plus 1%. The demand note payable to JMB allows a maximum principal sum of
a specified amount. Reference is made to Note 3(b).

245 Park continues to seek an extension and modification of the
mortgage loans secured by the property in the aggregate principal amount of
approximately $384,874,000 at September 30, 1995. The holder of the first
mortgage loan secured by 245 Park's property, which has a current
outstanding principal balance of approximately $192,374,000 at September
30, 1995, agreed to extend the originally scheduled maturity date of the
loan from October 1, 1993 until January 1, 1994. 245 Park entered into an
agreement with the lender to further modify and extend the loan for the
amount of the current outstanding principal balance plus accrued and unpaid
interest at a default rate of 18% per annum from October 1, 1993 through
the loan closing date, with a new interest rate from the loan closing date
for a five year term. This agreement provided that the new interest rate
would be based on the mortgage equivalent of U.S. Treasury securities
maturing on or about five years from the date of closing plus 3% per annum.

Monthly payments of principal and interest were to be required during the
loan extension period based upon a 30-year amortization schedule. Under
the terms of the agreement, 245 Park also was to make certain lump sum and
monthly deposits of specified amounts in escrow for real estate taxes and
leasing and other capital and operating costs. 245 Park paid $8 million to
the lender to be applied to accrued interest on the loan and has paid
approximately $17.1 million into the real estate tax escrow ($9.4 million
scheduled payment made in July 1995). In addition, 245 Park was to pay the
lender an extension fee of $2 million upon closing of the transaction.
Subject to certain conditions, the lender had agreed to waive payment of a
portion of the interest that accrues on the loan at the default rate prior
to closing the transaction. Completion of the modification and extension
of the first mortgage loan in accordance with the agreement was subject to
the satisfaction of various conditions, certain of which were not
satisfied, and the agreement has expired by its terms. However, 245 Park
and the lender continue to discuss a modification and extension of the
first mortgage loan generally on terms similar to those discussed above.
The financial difficulties of the O&Y partners and their affiliates, the
need to restructure their ownership interests in various properties and the
pledge by the O&Y partners of their interests in 245 Park have delayed and
may continue to delay obtaining modification and extension of 245 Park's
mortgage loans.

If 245 Park is successful in obtaining an extension of the first
mortgage loan modification, it also expects to seek a similar extension of
the maturity dates of the junior mortgage loans, which have a current
aggregate principal balance of $192,500,000 and matured on October 1, 1994.

As of the date of this Report, the holder of the junior mortgage loans has
not, to the knowledge of the Partnership, attempted to exercise its
remedies against 245 Park's property. Interest is currently accruing at
default rates ranging from 11.88% to 18% per annum. 245 Park has continued
to make and the holder of the junior loans has continued to accept monthly
payments of interest in the same amount that were payable prior to October
1994, the maturity date for the junior mortgage loans. If 245 Park is able
to obtain modifications and extensions of each mortgage loan, it is
expected that the interest rates applicable to the loans during the
extension period would be no greater than that in effect for the modified
first mortgage loan. However, there can be no assurance that 245 Park will
be able to reach a final agreement for any such modifications and
extensions of any of its mortgage indebtedness.

If 245 Park's efforts to extend its mortgage loans are unsuccessful,
245 Park may not be able to maintain ownership of the property as the
lenders may seek to acquire title to the property. This would result in
the recognition of substantial net gain to the Limited Partners for
financial reporting and Federal income tax purposes without any
corresponding cash distribution. In such event, the Partnership would then
proceed to terminate its affairs.

Even if 245 Park is successful in obtaining extensions and
modifications of its mortgage loans, due to the competitive market
conditions affecting the 245 Park Avenue building, it currently appears
that the Partnership's goal of capital appreciation will not be achieved.
If the 245 Park Avenue building is sold and a distribution of net proceeds
is made to the Partnership after repayment of the mortgage loans and
amounts owed to the O&Y partners and their affiliates, the term loans and
the demand note payable to JMB plus all related accrued interest must be
satisfied before remaining proceeds, if any, would be distributed to the
Limited Partners. Without a dramatic improvement in market conditions, the
Limited Partners will not receive a substantial portion of their original
investment.

Assuming, among other things, an extension of the existing mortgage
loans, the investment property is expected to have nominal cash flow during
1995 after mortgage debt service and estimated releasing and capital
improvement costs. The Partnership's short-term liquidity is dependent
upon additional advances from JMB under the demand note discussed above.
The ultimate source of the Partnership's liquidity is dependent upon a
refinancing and/or eventual sale of the Partnership's investment property.
Although 245 Park has significant reserves ($44 million which includes $7.7
million in real estate tax escrows at September 30, 1995), due to property
cash needs and the O & Y partners' claims, it is not expected that any such
reserves would be distributable to the Partnership.

The competitive market conditions in New York City have had a
significant adverse impact on the effective rental rates achieved on new
leases, which has in turn impacted the operating performance of 245 Park.
These conditions have resulted from new office building development since
the Partnership's acquisition of its interest in the building, as well as
from increased vacancy due to the severe downsizing of most of the major
financial services companies which dominate the New York office markets.
Although it appears that rental rates may have stabilized in the Midtown
market somewhat in 1994, no rental rate decreases are expected in the near
term. Despite re-leasing a substantial amount of space during the past few
years, the net operating income from the building reflects the reduced
effective rental rates on such new leases as compared to the effective
rental rates for the leases that have expired or otherwise terminated.
This decrease has partially offset the increase in annual base rent for a
majority of the Bear Stearns space. In addition, there have been higher
costs on a cumulative basis than originally anticipated associated with re-
leasing most of this space, primarily because of the costs incurred (which
are currently approximately $18 per square foot) to remove asbestos-
containing materials to comply with current New York City code requirements
adopted after the Partnership acquired its interest in the building. A
substantial portion of the asbestos removal work has been completed.

An existing tenant, Rabobank Nederland, has renewed its lease of the
36th floor (scheduled to expire in September 1998) and has become a direct
tenant on the 37th and 38th floors (currently sublet from National
Commercial Bank and Bear Stearns, respectively) in its new lease (102,000
square feet) which expires in 2011.

After taking into account this new lease, there still remain tenant
leases of approximately 307,000 and 180,000 square feet in the building
which are scheduled to expire in 1996 and 1997, respectively. The
Partnership currently anticipates that several of these tenants will vacate
their space upon their lease expiration, and that the releasing costs for
this space, including the downtime to locate replacement tenants, will be
significant.

There are certain risks and uncertainties associated with the
Partnership's investment made through the joint venture, including the
possibility that the O&Y partners might become unable or unwilling to
fulfill their financial or other obligations, or that the O&Y partners may
have economic or business interests or goals that are inconsistent with
those of the Partnership.

The O&Y partners granted security interests in their interests in 245
Park to a syndicate of banks in order to secure certain loan obligations of
certain O&Y affiliates. In August 1992, the Partnership received notice
from the lead bank of the syndicate alleging that such O&Y affiliates were
in default under these loan obligations and directing that all payments and
distributions due to the O&Y partners from 245 Park be delivered to the
lead bank. According to published reports, an investor group purchased
participations in these obligations from the original syndicate of banks.
In September 1995, the holder of the loan obligations issued a notice of
sale of, among other things, the interests of the O&Y partners in 245 Park
in an effort to realize upon the collateral for the loan obligations. In
October 1995, each of the O&Y partners, as well as other O&Y affiliates,
filed for protection from creditors under Chapter 11 of the United States
Bankruptcy Code. As a result of these bankruptcy filings, the attempted
sale of the O&Y partners' interests in 245 Park was stayed.

RESULTS OF OPERATIONS

The results of operations for the three and nine months ended
September 30, 1995 as compared to the three and nine months ended September
30, 1994 are primarily attributable to the operations of the real property
owned by the Partnership through the joint venture as described in Note 2.

The increase in accounts payable to affiliates as of September 30,
1995 as compared to December 31, 1994 is primarily due to continued
deferral of expense reimbursements for legal and accounting services and
out-of-pocket costs owed to affiliates of the General Partners.

The increases in accrued interest, demand note payable, accrued
interest payable to affiliate and the decrease in bank obligations payable
as of September 30, 1995 as compared to December 31, 1994 are due to the
interest accruals on certain of the term loans discussed above, payment of
principal and interest due on the LIBOR Note through July 1995 out of
advances under the demand note payable to JMB and interest accruals on such
advances as discussed above.

The decrease in the Partnership's share of loss from operations of
unconsolidated venture for the three months ended September 30, 1995 as
compared to the three months ended September 30, 1994 is primarily due to
the accrual in September 1994 of default interest by 245 Park for the
period October 1, 1993 through September 30, 1994 on the first mortgage
loan at 18% per annum (of which the Partnership's share is approximately
$4,700,000) and for the period August 12, 1992 through September 30, 1994
on the second and fourth mortgage loans at 14% per annum (of which the
Partnership's share is approximately $2,300,000). The increase in the
Partnership's share of loss from operations of unconsolidated venture for
the nine months ended September 30, 1995 as compared to its share of loss
from operations of unconsolidated ventures for the nine months ended
September 30, 1994 is primarily due to revenue of approximately $4,650,000
recognized by 245 Park in the first quarter of 1994 due to a lease
termination fee paid by National Commerce Bank, partially offset by the
accrual of the cumulative default interest in 1994.

PART II. OTHER INFORMATION

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

245 Park's first mortgage loan in the approximate principal amount of
$194,000,000 had an extended maturity date of January 1, 1994. 245 Park
did not repay the principal and accrued interest on the loan, but is
currently seeking a modification and extension of the loan. 245 Park has
continued to make, and the lender has continued to accept, monthly payments
of principal and interest in the same amount that were payable prior to its
original maturity date, October 31, 1993 as well as payment of a portion of
the default interest. Accrued default interest is approximately
$18,722,000 at September 30, 1995. 245 Park continues to negotiate a
further modification and extension of its first mortgage loan. Reference is
made to Note 2 and to Liquidity and Capital Resources contained in the
Management's Discussion and Analysis of Financial Condition and Results of
Operations section of this report for a discussion of the first mortgage
loan and 245 Park's efforts to obtain a modification and extension.

The Partnership was previously notified that the junior mortgage loans
in the aggregate principal amount of approximately $192,500,000, secured by
the 245 Park Avenue office building were in default due to non-compliance
with certain lender financial reporting requirements, and the loans
subsequently matured in October 1994. However, 245 Park has continued to
make, and the lender has continued to accept, monthly payments of interest
in the same amounts that were payable prior to October 1994 without
repayment. As of the date of this Report, the holder of the junior
mortgage loans has not, to the knowledge of the Partnership, attempted to
exercise its remedies against the property. The ability of 245 Park to
obtain a modification and extension of the junior mortgage loans will
depend upon, among other things, its obtaining a modification and extension
of the first mortgage loan.

Interest on the Partnership's term loan in the principal amount of
$16,042,000 is payable monthly. The Partnership has not made its monthly
interest payments on this loan since August 1995. The amount of interest
in arrears as of the date of this report is $252,049. The holder of the
term loan has not given notice of default or sought to exercise any
remedies arising out of the non-payment of monthly interest.

<TABLE>
PART II. OTHER INFORMATION

ITEM 5. OTHER INFORMATION

OCCUPANCY

The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
property:

245 Park Avenue
New York, New York . . . . 95% 95% 95% 95% 95% 96% 96%

</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits.

3-A. Amended and Restated Agreement of Limited Partnership of
the Partnership is hereby incorporated by reference to Exhibit 3 to the
Partnership's Form 10-K Report for December 31, 1992 (File No. 0-13545)
filed on March 19, 1993.

3-B. Amendment to the Amended and Restated Agreement of
Limited Partnership of JMB/245 Park Avenue Associates, Ltd. by and between
JMB Park Avenue, Inc. and Park Associates, L.P. dated January 1, 1994 is
hereby incorporated by reference to Exhibit 3-B to the Partnership's Form
10-Q Report for March 31, 1995 (File No. 0-13545) filed on May 11, 1995.

4-A. Second Mortgage Note and related agreements between
Canadian Imperial Bank of Commerce and 245 Park Avenue Company is hereby
incorporated by reference to Exhibit 4-A to the Partnership's Registration
Statement on Form 10 (as amended) of the Securities Exchange Act of 1934
(File No. 0-13545) filed on April 29, 1985.

4-B. Loan agreement dated June 27, 1984 between JMB/245 Park
Avenue Associates and Continental Illinois National Bank and Trust Company
of Chicago is hereby incorporated by reference to Exhibit 4-B to the
Partnership's Registration Statement on Form 10 (as amended) of the
Securities Exchange Act of 1934 (File No. 0-13545) filed on April 29, 1985.

4-C. Promissory Notes dated December 30, 1983 between JMB/245
Park Avenue Associates and Continental Illinois National Bank and Trust
Company of Chicago is hereby incorporated by reference to Exhibit 4-C to
the Partnership's Registration Statement on Form 10 (as amended) of the
Securities Exchange Act of 1934 (File No. 0-13545) filed on April 29, 1985.

4-D. $173,196,124.20 Mortgage Note dated September 28, 1983
between Aetna Life Insurance Company and O&Y Equity Corporation is hereby
incorporated by reference to Exhibit 4-D to the Partnership's Registration
Statement on Form 10 (as amended) of the Securities Exchange Act of 1934
(File No. 0-13545) filed on April 29, 1985.

4-E. $20,000,000 Mortgage Note dated September 28, 1983
between Aetna Life Insurance Company and O&Y Equity Corporation is hereby
incorporated by reference to Exhibit 4-E to the Partnership's Registration
Statement on Form 10 (as amended) of the Securities Exchange Act of 1934
(File No. 0-13545) filed on April 29, 1985.

4-F. Consolidation and Extension Agreement dated September
28, 1983 between Olympia and York Estates Company, O&Y Equity Corporation
and Aetna Life Insurance Company is hereby incorporated by reference to
Exhibit 4-F to the Partnership's Registration Statement on Form 10 (as
amended) of the Securities Exchange Act of 1934 (File No. 0-13545) filed on
April 29, 1985.

4-G. $20,000,000 refinanced Mortgage Note and Agreement dated
September 7, 1989 between Dai-Ichi Kangyo Bank and 245 Park Avenue Company
is hereby incorporated by reference to Exhibit 4-G to the Partnership's
Form 10-K Report for December 31, 1989 (File No. 0-13545) filed on March
28, 1990.

4-H. $17,000,000 Mortgage Note dated September 7, 1989
between Dai-Ichi Kangyo Bank and 245 Park Avenue Company is hereby
incorporated by reference to Exhibit 4-H to the Partnership's Form 10-K
Report for December 31, 1989 (File No. 0-13545) filed on March 28, 1990.

4-I. $4,000,000 Mortgage Note representing the $4,000,000
draw made in June 1990 is hereby incorporated by reference to Exhibit 4-I
to the Partnership's Form 10-K Report for December 31, 1989 (File No. 0-
13545) filed on March 28, 1990.

4-J. $4,000,000 Mortgage Note representing the $4,000,000
draw made in June 1991 is hereby incorporated by reference to Exhibit 4-J
to the Partnership's Form 10-K Report for December 31, 1991 (File No. 0-
13545) filed on March 27, 1992.

4-K. $17,000,000 Loan Agreement dated September 7, 1989
between 245 Park Avenue Company and Dai-Ichi Kangyo Bank is hereby
incorporated by reference to Exhibit 4-K to the Partnership's Form 10-K
Report for December 31, 1992 (File No. 0-13545) filed on March 19, 1993.

4-L. $4,000,000 Loan Agreement dated July 3, 1990 between 245
Park Avenue Company and Dai-Ichi Kangyo Bank is hereby incorporated by
reference to Exhibit 4-L to the Partnership's Form 10-K Report for December
31, 1992 (File No. 0-13545) filed on March 19, 1993.

4-M. Assignment of $147,500,000 mortgage dated September 7,
1989 between Canadian Imperial Bank of Commerce and Dai-Ichi Kangyo Bank,
Ltd. is hereby incorporated by reference to Exhibit 4-M to the
Partnership's Form 10-K Report for December 31, 1992 (File No. 0-13545)
filed on March 19, 1993.

4-N. Amended guaranty agreement dated April 15, 1991 between
JMB/245 Park Avenue Associates and Continental Bank N.A. (formerly,
Continental Illinois National Bank and Trust Company of Chicago) is hereby
incorporated by reference to Exhibit 4-N to the Partnership's Form 10-K
Report for December 31, 1992 (File No. 0-13545) filed on March 19, 1993.

4-O. $25,000,000 Guaranteed Promissory Note and related
documents dated December 31, 1993 between JMB/245 Park Avenue Associates
and Continental Bank are hereby incorporated by reference to Exhibit 4-O to
the Partnership's Form 10-K report for December 31, 1993 (File No. 0-13545)
filed on March 25, 1994.

4-P. $25,000,000 Fixed Rate Promissory Note and related
documents dated December 31, 1993 between JMB/245 Park Avenue Associates
and Continental Bank are hereby incorporated by reference to Exhibit 4-P to
the Partnership's Form 10-K report for December 31, 1993 (File No. 0-13545)
filed on March 25, 1994.

4-Q. $2,194,631.25 Interest Exchange Agreement Promissory
Note and related documents dated December 31, 1993 between JMB/245 Park
Avenue Associates and Continental Bank are hereby incorporated by reference
to Exhibit 4-Q to the Partnership's Form 10-K report for December 31, 1993
(File No. 0-13545) filed on March 25, 1994.

4-R. Subordinated Demand Note dated December 31, 1993 between
JMB/245 Park Avenue and JMB Realty Corporation is hereby incorporated by
reference to Exhibit 4-R to the Partnership's Form 10-K report for December
31, 1993 (File No. 0-13545) filed on March 25, 1994.

4-S. Letter of Commitment dated August 3, 1994 from Aetna and
245 Park Company detailing proposed terms to refinance the first mortgage
loan hereby incorporated by reference to Exhibit 4-S to the Partnership's
Form 10-K report for December 31, 1994 (File No. 0-13545) filed on March
27, 1995.

4-T. Letter Agreement dated April 6, 1995 from Aetna to 245
Park Avenue Company detailing proposed terms to refinance the first
mortgage loan is hereby incorporated by reference to the Partnership's 10-Q
Report for March 31, 1995 (File No. 0-13545) filed on May 11, 1995.

4-U. $16,042,000 Second Amended and Restated Promissory Note
and related documents dated August 1, 1995 between JMB/245 Park Avenue
Associates and JMB Realty Corporation, a copy of which is filed herewith.

4-V. $25,000,000 Second Amended and Restated Promissory Note
and related documents dated August 1, 1995 between JMB/245 Park Avenue
Associates and JMB Realty Corporation, a copy of which is filed herewith.

4-W. $2,194,631.25 Amended and Restated Promissory Note and
related documents dated August 1, 1995 between JMB/245 Park Avenue
Associates and JMB Realty Corporation, a copy of which is filed herewith.

4-X. Amended and Restated Demand Note dated August 1, 1995
between JMB/245 Park Avenue Associates and JMB Realty Corporation, a copy
of which is filed herewith.

4-Y. Fourth Amendment to Loan Documents dated August 1, 1995
between JMB/245 Park Avenue Associates, Ltd. and JMB Realty Corporation
detailing amendments to the term loans, a copy of which is filed herewith.

4-Z. Consent Agreement dated December 29, 1983 from JMB/245
Park Avenue Associates to Continental Illinois Bank of Chicago
(Continental) detailing the transactions for which the Partnership would
obtain Continental's consent, a copy of which is filed herewith.

4-AA. Third Amended and Restated Security Agreement dated
August 1, 1995 between JMB/245 Park Avenue Associates, Ltd. and JMB Realty
Corporation, a copy of which is filed herewith.

10-A. Acquisition documents dated December 29, 1983 relating
to the purchase by the Partnership of an interest in the American Brands
Building in New York, New York is hereby incorporated by reference to
Exhibit 10-A to the Partnership's Registration Statement on Form 10 (as
amended) of the Securities Exchange Act of 1934 (File No. 0-13545) filed on
April 29, 1985.

10-B. Agreement dated December 29, 1983 between 245 Park
Avenue Company and O&Y Management Corporation relating to the management of
the American Brands Building in New York, New York is hereby incorporated
by reference to Exhibit 10-B to the Partnership's Registration Statement on
Form 10 (as amended) of the Securities Exchange Act of 1934 (File No. 0-
13545) filed on April 29, 1985.

10-C. Lease Agreement between Olympia and York 245 Lease
Company and 245 Park Avenue Company and Bear Stearns Companies, Inc. dated
March 6, 1987 is hereby incorporated by reference to Exhibit 10-E to the
Partnership's Form 10-K Report for December 31, 1988 (File No. 0-13545)
filed on March 27, 1989.

10-D. Side letter agreement dated March 6, 1987 between
Olympia & York 245 Lease Company, 245 Park Avenue Company and JMB/245 Park
Avenue Associates, Ltd. relating to the division of economic benefits and
costs of the Bear Stearns Companies, Inc. lease is hereby incorporated by
reference to Exhibit 10-F to the Partnership's Form 10-K Report for
December 31, 1992 (File No. 0-13545) filed on March 19, 1993.

10-E. Amendment to Partnership Agreement, 245 Park Avenue
Company dated August 11, 1995 between JMB/245 Park Avenue Associates, Ltd.,
O&Y Equity Company, L.P., O&Y 245 Corp., Olympia & York 245 Park Avenue
Holding Company, L.P. and 245 Corp., a copy of which is filed herewith.

27. Financial Data Schedule

(b) No reports on Form 8-K have been filed for the quarter
covered by this report.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

JMB/245 PARK AVENUE ASSOCIATES, LTD.

BY: JMB Park Avenue, Inc.
Corporate General Partner

By: GAILEN J. HULL
Gailen J. Hull, Vice President
Date:November 9, 1995

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.

GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date:November 9, 1995

AMENDED AND RESTATED DEMAND NOTE

$40,000,000.00 Chicago, Illinois
Dated as of August 1, 1995

RECITALS

WHEREAS, the undersigned, JMB/245 PARK AVENUE ASSOCIATES, LTD.
("Borrower"), a limited partnership organized and existing under the
laws of the State of Illinois, has heretofore, for good and valuable
consideration, made in favor of JMB REALTY CORPORATION ("JMB"), a Delaware
corporation, that certain Subordinated Demand Note dated December 31, 1993,
in the maximum principal amount of $40,000,000 (the "Original Note"); and

WHEREAS, Borrower and JMB desire to amend and restate the Original Note
in its entirety as set forth herein;

NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower hereby promises to pay to
the order of JMB on demand at 900 North Michigan Avenue, Chicago, Illinois
60611 (or at such other place as may be designated by JMB from time to time),
in lawful money of the United States of America and in immediately available
funds, the principal sum of up to FORTY MILLION AND NO/100 DOLLARS
($40,000,000.00), or, if less, the aggregate unpaid principal balance hereof
which is outstanding on the date of such demand which JMB may, in its sole
and absolute discretion, advance to the Borrower from time to time, together
with interest on any and all principal amounts hereunder from time to time
outstanding from and including the date on which the initial advance
hereunder is made to the Business Day (as defined below) on which said
principal amounts are paid in full, at a fluctuating interest rate per
annum equal at all times to one percent (1%) over the Reference Rate (as
defined below), payable on the date of such demand. All computations of
interest shall be made by JMB on the basis of a year of 360 days, in each
case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest is payable.

1. As used in this Note, the following terms shall have the
following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):

(a) "Reference Rate" means the rate of interest announced publicly
by Bank of America Illinois in Chicago, Illinois from time to time, as its
reference rate.

<PAGE>
(b) "Business Day" means a day of the year on which banks are not
required or authorized to close in Chicago, Illinois.

(c) "Restated Promissory Note I" means that certain Second Amended and
Restated Promissory Note dated as of August 1, 1995, in the original principal
amount of $16,042,000 made by Borrower payable to JMB, as amended or restated
from time to time.

(d) "Restated Promissory Note II" means that certain Second Amended
and Restated Promissory Note dated as of August 1, 1995, in the original
principal amount of $25,000,000 made by Borrower payable to JMB, as amended
or restated from time to time.

(e) "Restated Promissory Note III" means that certain Amended and
Restated Promissory Note dated as of August 1, 1995, in the original principal
amount of $2,194,631.25 made by Borrower payable to JMB, as amended or
restated from time to time.

(f) "Restated Promissory Notes" mean collectively, the Restated
Promissory Note I, the Restated Promissory Note II and the Restated Promissory
Note III.

(g) "Third Amended and Restated Security Agreement" means that
certain Third Amended and Restated Security Agreement dated as of August 1,
1995, executed and delivered by Borrower to JMB encumbering Borrower's
48.2467039% interest in 245 Park Avenue Company, a New York general
partnership ("245"), and certain other collateral set forth therein, which
secures the Restated Promissory Notes and this Note, as the same may be
amended or restated from time to time.

2. In no event shall the amount paid or agreed to be paid hereunder
(including all interest and the aggregate of any other amounts taken,
reserved or charged pursuant to this Note or any other document evidencing or
securing the loan hereunder, which under applicable law is deemed to
constitute interest on the indebtedness evidenced by this Note, exceed the
highest lawful rate permissible under applicable law; and if under any
circumstance whatsoever, fulfillment of any provision of this Note, at the
time performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by applicable law, then, ipso
facto, the obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any circumstance the holder of this Note should receive
as interest an amount which would exceed the highest lawful rate allowable
under law, such amount which would be excessive interest shall be applied to
the reduction of the unpaid principal balance due under this Note and not to
the payment of interest, or if such excess interest exceeds
the unpaid balance of principal, the excess shall be refunded to Borrower.

3. Borrower shall repay amounts due under this Note upon receipt,
and to the extent, of any net proceeds received upon the sale, refinancing,
or other disposition of, or any distributions made with respect to, the
Collateral (as defined in the Third Amended and Restated Security Agreement)
in accordance with the following sentence. JMB shall apply any amounts
received from Borrower as repayments as provided in the preceding sentence to
reduce Borrower's outstanding indebtedness under this Note, the Restated
Promissory Note I, the Restated Promissory Note II or the Restated Promissory
Note III, in such order as JMB, in its sole discretion, shall elect.

4. This Note is secured by the Third Amended and Restated Security
Agreement. Reference is made to the Third Amended and Restated Security
Agreement for a description of the property encumbered, the nature and extent
of the security, and the rights of the holder hereof in respect to such
security. The provisions of the Third Amended and Restated Security
Agreement shall be deemed to be incorporated by reference herein as though
set out herein in their entirety.

5. Borrower represents and agrees that the amounts outstanding and
to be outstanding under this Note have been and will be used for purposes
specified in 815 ILCS 205/4(1)(c), and that the indebtedness evidenced hereby
constitutes a business loan which comes within the purview of said 815 ILCS
205/4(1)(c) and is not usurious.

6. The Borrower hereby waives presentment for payment, demand,
notice of dishonor and protest of this Note and further agrees that this Note
shall be deemed to have been made under and shall be governed by the laws of
the State of Illinois in all respects, including matters of construction,
validity and performance, and that none of its terms or provisions may be
waived, altered, modified or amended except as JMB may consent thereto in
writing duly signed for and on its behalf.

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

JMB/245 PARK AVENUE ASSOCIATES, LTD.

By: JMB Park Avenue, Inc., general partner

By:________________________________

Title:_______________________________

AMENDED AND RESTATED PROMISSORY NOTE

Dated: as of
$2,194,631.25 Chicago, Illinois August 1, 1995

R E C I T A L S

WHEREAS, the undersigned JMB/245 PARK AVENUE ASSOCIATES, LTD.
("Maker"), a limited partnership organized and existing under the laws of
the State of Illinois, has heretofore, for good and valuable consideration,
made in favor of Bank of America Illinois (successor in interest to
CONTINENTAL BANK N.A. and formerly known as Continental Illinois National
Bank and Trust Company of Chicago) ("Original Payee") that certain Interest
Exchange Agreement Promissory Note dated as of December 31, 1993 in the
original principal amount of $2,194,631.25 (the "Original Note"); and

WHEREAS, on July 31, 1995 the Original Payee and JMB Realty
Corporation ("JMB") entered into a letter agreement ("Letter Agreement")
pursuant to which the Original Payee has sold, and JMB has purchased, all
of the Original Payee's right, title and interest in the Original Note and
other notes and agreements referenced therein;

WHEREAS, the Maker and JMB desire to amend and restate the
Original Note in its entirety as set forth herein;

NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned Maker hereby
promises to pay to the order of JMB, at 900 North Michigan Avenue, Chicago,
Illinois 60611 or such other place as the holder hereof may from time to
time designate in writing, in lawful money of the United States of America,
the principal sum of TWO MILLION ONE HUNDRED NINETY-FOUR THOUSAND SIX
HUNDRED THIRTY-ONE and 25/100 DOLLARS ($2,194,631.25) (the "Loan Amount")
together with interest on the unpaid principal amount hereof from time to
time outstanding from the date of the Original Note until the Loan Amount
is repaid in full, at the rate provided for in Section 2 below.

1. Unless a contrary intention is apparent from the context, the
following terms have the indicated meanings when used herein:

"Business Day" shall mean a day on which national banks are open in
Chicago for the transaction of business.

"Dollars" and "$" shall mean lawful currency of the United States of
America and immediately available funds.

"JMB Note" shall mean that certain Amended and Restated Demand Note
dated as of August 1, 1995, made payable by the Maker to JMB, providing for
a maximum principal amount outstanding of $40,000,000, as amended or
restated from time to time.

"Restated Promissory Note I" shall mean that certain Second Amended
and Restated Promissory Note of even date herewith in the original
principal amount of $16,042,000 made by Maker payable to JMB, as amended or
restated from time to time.

"Restated Promissory Note II" shall mean that certain Second Amended
and Restated Promissory Note of even date herewith in the original
principal amount of $25,000,000 made by Maker payable to JMB, as amended or
restated from time to time.

"Restated Promissory Note III" shall mean this Amended and Restated
Promissory Note, as the same may be amended or restated from time to time.

"Restated Promissory Notes" shall mean collectively, the Restated
Promissory Note I, the Restated Promissory Note II and this Restated
Promissory Note III.

"Loan" shall mean the indebtedness evidenced hereby.

"Maturity Date" shall have the meaning assigned to that term in
Section 5 hereof.

"Reference Rate" shall mean, at any time, the per annum rate of
interest then most recently announced by the Original Payee at Chicago,
Illinois, as its reference rate. If at any one time there shall be more
than one reference rate announced by the Original Payee, the Reference Rate
hereunder shall be the lowest of the reference rates announced.

"Third Amended and Restated Security Agreement" shall mean that
certain Third Amended and Restated Security Agreement of even date herewith
executed and delivered by Maker to JMB encumbering Maker's 48.2467039%
interest in 245 Park Avenue Company, a New York general partnership
("245"), and certain other collateral set forth therein, which secures the
Restated Promissory Notes and the JMB Note, as the same may be amended or
restated from time to time.

2. Interest Rates. Until an event of default occurs hereunder and
after such event of default shall have been cured, the rate of interest in
effect under this Restated Promissory Note III shall be two percent (2%)
per annum compounded annually and payable on the Maturity Date.

From the Maturity Date until the time this Restated Promissory
Note III is paid in full, or after an event of default until such event of
default is cured, this Restated Promissory Note III shall bear interest on
the unpaid principal amount hereof from time to time outstanding at the
floating rate (the "Default Rate") which is equal to the sum of three
percent (3%) per annum plus the Reference Rate from time to time in effect
and changing automatically and simultaneously with each change in the
Reference Rate. Such interest shall be paid on demand.

3. Interest Payment Dates; Basis of Calculation. All interest
shall be computed for the actual number of days elapsed on the basis of a
year consisting of three hundred sixty (360) days. On the Maturity Date,
all accrued and unpaid interest hereunder shall be due and payable.

4. Maximum Interest Rate. In no event shall the amount paid or
agreed to be paid hereunder (including all interest and the aggregate of
any other amounts taken, reserved or charged pursuant to this Restated
Promissory Note III or any other document evidencing or securing the Loan,
which under applicable law is deemed to constitute interest on the
indebtedness evidenced by this Restated Promissory Note III) exceed the
highest lawful rate permissible under applicable law; and if under any
circumstance whatsoever, fulfillment of any provision of this Restated
Promissory Note III, at the time performance of such provision shall be
due, shall involve transcending the limit of validity prescribed by
applicable law, then, ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity, and if from any circumstance the
holder of this Restated Promissory Note III should receive as interest an
amount which would exceed the highest lawful rate allowable under law, such
amount which would be excessive interest shall be applied to the reduction
of the unpaid principal balance due under this Restated Promissory Note III
and not to the payment of interest, or if such excess interest exceeds the
unpaid balance or of principal, the excess shall be refunded to Maker.

5. Repayment of Principal. The entire unpaid principal amount of
this Restated Promissory Note III shall be due and payable in full on
December 31, 1998 or earlier upon acceleration as hereinafter provided (the
"Maturity Date"). Notwithstanding the foregoing, Maker shall prepay the
Loan upon receipt, and to the extent, of any net proceeds received upon the
sale, refinancing, or other disposition of, or any distributions made with
respect to, the Collateral (as defined in the Third Amended and Restated
Security Agreement) in accordance with Section 6 hereof.

6. Application of Payments. JMB shall apply any amounts received
from Maker as prepayments in accordance with Section 5 above to reduce
Maker's outstanding indebtedness under the JMB Note the Restated Promissory
Note I, the Restated Promissory Note II or this Restated Promissory Note
III, in such order as JMB, in its sole discretion, shall elect.

7. Prepayment. Subject to Sections 6 and 18(a) hereof, Maker
reserves the privilege to prepay this Restated Promissory Note III in full
or in part without premium or penalty.

8. Acknowledgement of Debt. Maker acknowledges that it received
full consideration for the amounts due hereunder and disclaims any and all
defenses to payment or other claims of any kind or nature in connection
with the Original Note or the agreements or transactions contemplated
therein.

9. Security. This Restated Promissory Note III is secured by the
Third Amended and Restated Security Agreement. Reference is made to the
Third Amended and Restated Security Agreement for a description of the
property encumbered, the nature and extent of the security, and the rights
of the holder hereof in respect to such security. The provisions of the
Third Amended and Restated Security Agreement shall be deemed to be
incorporated by reference herein as though set out herein in their
entirety.

10. Events of Default and Remedies. Any one of the following
occurrences shall constitute an "event of default" under this Restated
Promissory Note III:

(a) The failure by Maker to make any payment of principal or
interest upon this Restated Promissory Note III as and when the same
becomes due and payable in accordance with the terms hereof, and the
continuation of such failure for five (5) days after written notice thereof
to Maker from JMB;

(b) The occurrence of any default under this Restated
Promissory Note III other than as described in the preceding clause (a),
and the continuation of such failure for thirty (30) days after written
notice thereof to Maker from JMB; provided that if at the end of such 30
day period Maker, in JMB's sole judgment, is proceeding with due diligence
to cure such default, then there shall not be an event of default for an
additional period of the shorter of 60 days or the period during which, in
JMB's sole judgment, Maker continues to proceed with due diligence to cure
such default;

(c) The occurrence of any Default (as defined in the Third
and Restated Security Agreement) under the Third Amended and Restated
Security Agreement;

(d) The occurrence of any default under that certain Consent
Agreement between Maker and Original Payee dated as of December 29, 1983,
as amended by that certain Fourth Amendment to Loan Documents between Maker
and JMB dated as of August 1, 1995, and as it may be further amended,
supplemented or modified from time to time (the "Consent Agreement");

(e) The occurrence of any event of default (as defined
therein) under the Restated Promissory Note I;

(f) The occurrence of any event of default (as defined
therein) under the Restated Promissory Note II;

(g) The occurrence of any default under the JMB Note;

(h) Maker, any general partner of Maker (or any constituent
general partner thereof), or 245 becomes insolvent or generally fails to
pay, or admits in writing its inability to pay, debts as they become due;
or Maker, any general partner of Maker (or any constituent general partner
thereof), or 245 applies for, consents to, or acquiesces in the appointment
of, a trustee, receiver of other custodian for itself or of any of its
property, or makes a general assignment for the benefit of creditors; or,
in the absence of such application, consent or acquiescence, a trustee,
receiver or other custodian is appointed for Maker, any general partner of
Maker (or any constituent general partner thereof), or 245, or for a
substantial part of the property of any of them, and is not discharged
within 30 days; or other case or proceeding under any bankruptcy or
insolvency law, or any dissolution or liquidation proceeding is commenced
in respect of Maker, any general partner of Maker (or any constituent
general partner thereof), or 245, and if such case or proceeding is not
commenced by Maker, any general partner of Maker (or any constituent
general partner thereof), or 245, it is consented to or acquiesced in by
Maker, any general partner of Maker (or any constituent general partner
thereof), or 245, or remains for 60 days undismissed; or Maker, any general
partner of Maker (or any constituent general partner thereof), or 245,
takes any action to authorize, or in furtherance of, any of the foregoing;
or

(i) Any representation, warranty or certification made by
Maker to JMB or any holder hereof in connection with the Loan, this
Restated Promissory Note III, the Third Amended and Restated Security
Agreement, the Consent Agreement or any other document executed in
connection herewith proves to be or to have been false in any material
respect at any time.

For purposes of the foregoing clauses (c), (d), (e), (f), (g) and (i)
of this Section 10, with respect to any event or occurrence which
constitutes an event of default hereunder solely by reason of its
constituting a default (as distinguished from an "event of default") under
a document or instrument other than this Restated Promissory Note III, to
the extent (if any) that such other document or instrument provides a grace
or cure period with respect to such default, the same grace or cure period,
and only such period, shall apply with respect to this Restated Promissory
Note III.

Upon the occurrence of any event of default hereunder: (i) the
entire unpaid principal balance of, and any unpaid interest then accrued
on, and any other amounts owing under or evidenced by this Restated
Promissory Note III shall, at the option of the holder hereof and without
notice or demand of any kind to Maker or any other person, immediately
become due and payable; and (ii) the holder hereof shall have and may
exercise any and all rights and remedies available at law or in equity and
also any and all rights and remedies provided in the Third Amended and
Restated Security Agreement or in any other instrument securing this
Restated Promissory Note III.

The remedies of the holder hereof, as provided herein or in the Third
Amended and Restated Security Agreement or any other instrument securing
this Restated Promissory Note III, shall be cumulative and concurrent, and
may be pursued singularly, successively or together, at the sole discretion
of the holder hereof, and may be exercised as often as occasion therefor
shall arise. No action of omission or commission of the holder, including
specifically any failure to exercise any right, remedy or recourse, shall
be deemed to be a waiver or release of the same, such waiver or release to
be effected only through a written document executed by the holder and then
only to the extent specifically recited therein. A waiver or release with
reference to any one event shall not be construed as continuing, as a bar
to, or as a waiver or release of, any subsequent right, remedy or recourse
as to a subsequent event.

11. Attorneys' Fees and Costs. In the event one or more events of
default shall occur, Maker promises to pay all costs of collection of every
kind, including but not limited to all reasonable attorneys' fees, court
costs, and expenses of every kind incurred by the holder hereof in
connection with such collection or the protection or enforcement of any or
all of the security for this Restated Promissory Note III, whether or not
any lawsuit is ever filed with respect thereto.

12. Notices. All notices or other communications hereunder to
either party shall be (a) in writing and, if mailed, shall be deemed to be
given on the second Business Day after the date when deposited in the
United States mail, by registered or certified mail, postage prepaid,
addressed as provided hereinafter, and (b) addressed:

If to Maker: JMB/245 Park Avenue Associates, Ltd.
900 North Michigan Avenue, Suite 1900
Chicago, Illinois 60611
Attention: Stuart Nathan

If to JMB: JMB Realty Corporation
900 North Michigan Avenue, Suite 1900
Chicago, Illinois 60611
Attention: H. Rigel Barber

or to either party at such other addresses as such party may designate in a
written notice to the other party.
13. Business Purpose. The Maker represents and agrees that the
amounts outstanding under this Restated Promissory Note III have been used
for purposes specified in 815 ILCS 205/4(1)(c), and that the indebtedness
evidenced hereby constitutes a business loan which comes within the purview
of said 815 ILCS 205/4(1)(c) and is not usurious.

14. Headings. The headings of the paragraphs of this Restated
Promissory Note III are inserted for convenience only and shall not be
deemed to constitute a part hereof.

15. Waiver. Maker, for itself and for its successors, transferees
and assigns and all guarantors, endorsers and signers, hereby waives all
valuation and appraisement privileges, presentment and demand for payment,
protest, notice of protest and nonpayment, dishonor and notice of dishonor,
bringing of suit, lack of diligence or delays in collection or enforcement
of this Restated Promissory Note III and notice of the intention to
accelerate, the release of any party liable, the release of any security
for the debt, the taking of any additional security and any other
indulgence or forbearance, and all of the foregoing persons are and shall
be jointly and severally, directly and primarily, liable for the amount of
all sums owing and to be owed hereon, and agrees that this Restated
Promissory Note III and any or all payments coming due hereunder may be
extended or renewed from time to time without in any way affecting or
diminishing their liability hereunder.

16. Severability. If any of this Restated Promissory Note III or
any payments pursuant to the terms hereof shall be invalid or unenforceable
to any extent, the remainder of this Restated Promissory Note III and any
other payments hereunder shall not be affected thereby and shall be
enforceable to the greatest extent permitted by law.

17. Exculpation. Notwithstanding anything herein contained to the
contrary, JMB agrees (for itself and any subsequent holder of this Restated
Promissory Note III) that (1) all liability with respect to the debt
evidenced by this Restated Promissory Note III, or any of the other
documents executed and delivered by Maker in connection herewith, shall be
satisfied only out of the assets of Maker and that no present or future
constituent partner (i.e., person holding an equity interest) in or agent
of the Maker, nor any officer, shareholder, director, employee, trustee,
beneficiary or agent of any corporation or trust that is or becomes a
constituent partner in Maker (including, but not limited to, persons
executing documents or certificates on behalf of Maker) shall have personal
liability (either directly or indirectly), all such personal liability
being expressly waived by JMB and (2) in no event shall a negative capital
account or any other funding obligations of any constituent partner in
Maker be deemed to be an asset or the property of Maker and neither JMB nor
any subsequent holder of this Restated Promissory Note III shall have any
right to collect, enforce or proceed against or with respect to any such
negative capital account or partner's obligations.

18. Miscellaneous.

(a) Whenever any payment to be made under this Restated Promissory
Note III would be due on a date which is not a Business Day, the due date
therefor shall be extended to the next succeeding Business Day and interest
shall be payable at the applicable rate during such extension. Each
payment (including prepayments) of principal of, or interest on, the
Restated Promissory Note III shall be made in Dollars by the Maker to JMB
at its office in Chicago, not later than noon, Chicago time, on the date
due therefor; and funds received after that hour shall be deemed to have
been received by JMB on the next following Business Day. All payments
(whether of principal, interest or other amounts) which are applied at any
time by the holder hereof to indebtedness evidenced by this Restated
Promissory Note III, prior to an event of default, shall be allocated by
the holder first to expenses or other similar items, next to accrued
interest, and then to principal, and, after an event of default, may be
allocated by the holder to principal, interest or other amounts as the
holder may determine in the holder's sole discretion.

(b) In the event of any inconsistency between the provisions of
this Restated Promissory Note III and the provisions of the Third Amended
and Restated Security Agreement, JMB may elect which of the inconsistent
provisions shall govern and control. A copy of the Third Amended and
Restated Security Agreement is available for inspection at the offices of
JMB during normal business hours.

(c) This Restated Promissory Note III shall be governed by and
construed in accordance with the laws of the State of Illinois.

(d) This Restated Promissory Note III has been made and delivered
at Chicago, Illinois, and all funds disbursed to or for the benefit of
Maker have been disbursed in Chicago, Illinois.

(e) This Restated Promissory Note III shall be binding upon Maker
and its respective successors and assigns; provided, however, that Maker
may not assign its rights hereunder or in connection herewith, and this
Restated Promissory Note III shall inure to the benefit of JMB and its
successors and assigns, including any participants of JMB. Maker agrees
that JMB may further assign or sell participation interests in the loan
evidenced by this Restated Promissory Note III to one or more other persons
without notice to or consent of Maker.

IN WITNESS WHEREOF, the undersigned has executed and delivered this
Restated Promissory Note III at Chicago, Illinois as of the date and year
first above written, pursuant to proper authority duly granted.

JMB/245 PARK AVENUE ASSOCIATES, LTD., an
Illinois limited partnership

By: JMB Park Avenue, Inc.
Its corporate general partner

By:
----------------------------------
Its:
---------------------------------

122779.03

SECOND
AMENDED AND RESTATED PROMISSORY NOTE

Dated: as of
$25,000,000.00 Chicago, Illinois August 1, 1995

R E C I T A L S

WHEREAS the undersigned, JMB/245 PARK AVENUE ASSOCIATES, LTD.
("Maker"), a limited partnership organized and existing under the laws of
the State of Illinois, has heretofore, for good and valuable consideration,
made in favor of Bank of America Illinois (successor in interest to
CONTINENTAL BANK N.A. and formerly known as "CONTINENTAL ILLINOIS NATIONAL
BANK AND TRUST COMPANY OF CHICAGO") ("Original Payee") certain promissory
notes in the amounts of $15,000,000 and $35,000,000 respectively, each
dated as of December 29, 1983 (herein, said notes are called, respectively,
the "$15,000,000 Note" and the "$35,000,000 Note," and collectively, the
"Original Notes"); and

WHEREAS, Original Payee has previously advanced the full amount under
the Original Notes pursuant to certain terms evidenced by the Original
Notes; and

WHEREAS, the Maker and the Original Payee agreed to amend and restate
the Original Notes to provide for two Amended and Restated Promissory
Notes, each in the principal amount of $25,000,000 dated as of December 31,
1993, each according to such terms as set forth in each such Amended and
Restated Promissory Note (collectively, the "Existing Notes"); and

WHEREAS, one of the Existing Notes is designated the "Fixed Rate
Amended and Restated Promissory Note" (such Existing Note hereinafter
referred to as the "Fixed Rate Note"); and

WHEREAS, on July 31, 1995, the Original Payee, Mellon Bank, N.A.
("Mellon") and JMB Realty Corporation ("JMB") entered into a letter
agreement (the "Letter Agreement") pursuant to which the Original Payee and
Mellon have sold, and JMB has purchased, all of the Original Payee's and
Mellon's respective right, title and interest in the Fixed Rate Note and
other notes and agreements referenced therein; and

WHEREAS, JMB and the Maker desire to amend and restate the Fixed Rate
Note in its entirety as set forth herein.

NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned Maker, hereby
promises to pay to the order of JMB, at 900 North Michigan Avenue, Chicago,
Illinois 60611 or such other place as the holder hereof may from time to
time designate in writing, in lawful money of the United States of America,
the principal sum of TWENTY-FIVE MILLION DOLLARS ($25,000,000.00) (the
"Loan Amount"), which Maker acknowledges has previously been disbursed in
full, together with interest on the unpaid principal amount hereof from
time to time outstanding from the date of the Fixed Rate Note until the
Loan Amount is repaid in full, at the rate provided for in Section 2 below.

1. Unless a contrary intention is apparent from the context, the
following terms have the indicated meanings when used herein:

"Business Day" shall mean a day on which national banks are open in
Chicago for the transaction of business.

"Dollars" and "$" shall mean lawful currency of the United States of
America and immediately available funds.

"JMB Note" shall mean that certain Amended and Restated Demand Note
dated as of August 1, 1995, made payable by Maker to JMB, providing for a
maximum principal amount outstanding of $40,000,000, as the same may be
amended or restated from time to time.

"Loan" shall mean the indebtedness evidenced hereby.

"Maturity Date" shall have the meaning assigned to that term in
Section 5 hereof.

"Restated Promissory Note II" shall mean this Second Amended and
Restated Promissory Note, as the same may be amended or restated from time
to time.

"Restated Promissory Note I" shall mean that certain Second Amended
and Restated Promissory Note in the original principal amount of
$16,042,000 made by Maker payable to JMB, as the same may be amended or
restated from time to time.

"Restated Promissory Note III" shall mean that certain Amended and
Restated Promissory Note of even date herewith in the original principal
amount of $2,194,631.25 made payable by Maker to JMB, as the same may be
amended or restated from time to time.

"Restated Promissory Notes" shall mean collectively, the Restated
Promissory Note I, this Restated Promissory Note II and the Restated
Promissory Note III.

"Third Amended and Restated Security Agreement" shall mean that
certain Third Amended and Restated Security Agreement dated of even date
herewith executed and delivered by Maker to JMB, encumbering Maker's
48.2467039% interest in 245 Park Avenue Company, a New York general
partnership ("245"), and certain other collateral set forth therein (the
"Collateral"), which secures all of the Restated Promissory Notes and the
JMB Note, as the same may be amended or restated from time to time.

2. Interest Rates. Until an event of default occurs hereunder and
after an event of default if such default has been cured, the rate of
interest in effect under this Restated Promissory Note II shall be two
percent (2%) per annum compounded annually and payable on the Maturity
Date.

From the Maturity Date until the time this Restated Promissory Note
II is paid in full, or after an event of default until such event of
default is cured, this Restated Promissory Note II shall bear interest on
the unpaid principal amount hereof from time to time outstanding at the
floating rate (the "Default Rate") which is equal to the sum of three
percent (3%) per annum plus the Reference Rate from time to time in effect
and changing automatically and simultaneously with each change in the
Reference Rate. Such interest shall be paid on demand.

3. Interest - Basis of Calculation. All interest shall be
computed for the actual number of days elapsed on the basis of a year
consisting of three hundred sixty (360) days. On the Maturity Date, all
accrued and unpaid interest hereunder shall be due and payable.

4. Maximum Interest Rate. In no event shall the amount paid or
agreed to be paid hereunder (including all interest and the aggregate of
any other amounts taken, reserved or charged pursuant to this Restated
Promissory Note II or any other document evidencing or securing the Loan,
which under applicable law is deemed to constitute interest on the
indebtedness evidenced by this Restated Promissory Note II) exceed the
highest lawful rate permissible under applicable law; and if under any
circumstance whatsoever, fulfillment of any provision of this Restated
Promissory Note II, at the time performance of such provision shall be due,
shall involve transcending the limit of validity prescribed by applicable
law, then, ipso facto, the obligation to be fulfilled shall be reduced to
the limit of such validity, and if from any circumstance the holder of this
Restated Promissory Note II should receive as interest an amount which
would exceed the highest lawful rate allowable under law, such amount which
would be excessive interest shall be applied to the reduction of the unpaid
principal balance due under this Restated Promissory Note II and not to the
payment of interest, or if such excess interest exceeds the unpaid balance
of principal, the excess shall be refunded to Maker.

5. Repayment of Principal. The entire unpaid principal amount of
this Restated Promissory Note II shall be due and payable in full on
December 31, 1998 or earlier upon acceleration as hereinafter provided (the
"Maturity Date"). Notwithstanding the foregoing, Maker shall prepay the
Loan upon receipt, and to the extent of, any net proceeds received upon the
sale, refinancing or other disposition of, or any distribution made with
respect to, the Collateral (as defined in the Third Amended and Restated
Security Agreement) in accordance with Section 6 hereof.

6. Application of Payments. JMB shall apply any amounts received
from Maker as a prepayment under Section 5 above to reduce Maker's
outstanding indebtedness under the Restated Promissory Note I, this
Restated Promissory Note II, the Restated Promissory Note III or the JMB
Note, in such order, as JMB, in its sole discretion, shall elect.

7. Prepayment. Subject to Sections 6 and 17(a) hereof, Maker
reserves the privilege to prepay this Restated Promissory Note II in full
or in part without premium or penalty.

8. Security. This Restated Promissory Note II is secured by the
Third Amended and Restated Security Agreement. Reference is made to the
Third Amended and Restated Security Agreement for a description of the
property encumbered, the nature and extent of the security, and the rights
of the holder hereof in respect to such security. The provisions of the
Third Amended and Restated Security Agreement shall be deemed to be
incorporated by reference herein as though set out herein in their
entirety.

9. Events of Default and Remedies. Any one of the following
occurrences shall constitute an "event of default" under this Restated
Promissory Note II:

(a) The failure by Maker to make any payment of principal or interest
upon this Restated Promissory Note II as and when the same becomes due and
payable in accordance with the terms hereof, and the continuation of such
failure for five (5) days after written notice thereof to Maker from JMB;

(b) The occurrence of any default under this Restated Promissory
Note II other than as described in the preceding clause (a), and the
continuance of such failure for thirty (30) days after written notice
thereof to Maker from JMB; provided that if at the end of such 30 day
period Maker, in JMB's sole judgement, is proceeding with due diligence to
cure such default, then there shall not be an event of default for an
additional period of the shorter of 60 days or the period during which, in
JMB's sole judgment, Maker continues to proceed with due diligence to cure
such default;

(c) The occurrence of any Default (as defined in the Third Amended
and Restated Security Agreement) under the Third Amended and Restated
Security Agreement;

(d) The occurrence of any event of default (as defined therein)
under the Restated Promissory Note I;

(e) The occurrence of any event of default (as defined
therein) under the Restated Promissory Note III;

(f) The occurrence of any default under the JMB Note;

(g) The occurrence of any default under that certain Consent
Agreement between Maker and Original Payee dated as of December 29, 1983,
as amended by that certain Fourth Amendment to Loan Documents between Maker
and JMB dated as of August 1, 1995, and as it may be further amended,
supplemented or modified from time to time (the "Consent Agreement");

(h) Maker, any general partner of Maker (or any constituent general
partner thereof), or 245 becomes insolvent or generally fails to pay, or
admits in writing its inability to pay, debts as they become due; or Maker,
any general partner of Maker (or any constituent general partner thereof),
or 245 applies for, consents to, or acquiesces in the appointment of, a
trustee, receiver or other custodian for itself or of any of its property,
or makes a general assignment for the benefit of creditors; or, in the
absence of such application, consent or acquiescence, a trustee, receiver
or other custodian is appointed for Maker, any general partner of Maker (or
any constituent general partner thereof), or 245, or for a substantial part
of the property of any of them and is not discharged within 30 days; or
other case or proceeding under any bankruptcy or insolvency law, or any
dissolution or liquidation proceeding is commenced in respect of Maker, any
general partner of Maker (or any constituent general partner thereof), or
245, and if such case or proceeding is not commenced by Maker, any general
partner of Maker (or any constituent general partner thereof), or 245, it
is consented to or acquiesced in by Maker, any general partner of Maker (or
any constituent general partner thereof), or 245, or remains for 60 days
undismissed; or Maker, any general partner of Maker (or any constituent
general partner thereof), or 245, takes any action to authorize, or in
furtherance of, any of the foregoing; or

(i) Any representation, warranty or certification made by Maker to
JMB or any subsequent holder hereof in connection with the Loan, this
Restated Promissory Note II, the Third Amended and Restated Security
Agreement, the Consent Agreement, or any other document executed in
connection herewith proves to be or to have been false in any material
respect at any time.

For purposes of the foregoing clauses (c), (d), (e), (f), (g) and (i)
of this Section 9, with respect to any event or occurrence which
constitutes an event of default hereunder solely by reason of its
constituting a default (as distinguished from an "event of default") under
a document or instrument other than this Restated Promissory Note II, to
the extent (if any) that such other document or instrument provides a grace
or cure period with respect to such default, the same grace or cure period,
and only such period, shall apply with respect to this Restated Promissory
Note II.

Upon the occurrence of any event of default hereunder: (i) the
entire unpaid principal balance of, and any unpaid interest then accrued
on, and any other amounts owing under or evidenced by this Restated
Promissory Note II shall, at the option of the holder hereof and without
notice or demand of any kind to Maker or any other person, immediately
become due and payable; and (ii) the holder hereof shall have and may
exercise any and all rights and remedies available at law or in equity and
also any and all rights and remedies provided in the Third Amended and
Restated Security Agreement or in any other instrument securing this
Restated Promissory Note II.

The remedies of the holder hereof, as provided herein or in the Third
Amended and Restated Security Agreement or any other instrument securing
this Restated Promissory Note II, shall be cumulative and concurrent, and
may be pursued singularly, successively or together, at the sole discretion
of the holder hereof, and may be exercised as often as occasion therefor
shall arise. No act of omission or commission of the holder, including
specifically any failure to exercise any right, remedy or recourse, shall
be deemed to be a waiver or release of the same, such waiver or release to
be effected only through a written document executed by the holder and then
only to the extent specifically recited therein. A waiver or release with
reference to any one event shall not be construed as continuing, as a bar
to, or as a waiver or release of, any subsequent right, remedy or recourse
as to a subsequent event.

10. Attorneys' Fees and Costs. In the event one or more events of
default shall occur, Maker promises to pay all costs of collection of every
kind, including but not limited to all reasonable attorneys' fees, court
costs, and expenses of every kind incurred by the holder hereof in
connection with such collection or the protection or enforcement of any or
all of the security for this Restated Promissory Note II, whether or not
any lawsuit is ever filed with respect thereto.

11. Notices. All notices or other communications hereunder to
either party shall be (a) in writing and, if mailed, shall be deemed to be
given on the second Business Day after the date when deposited in the
United States mail, by registered or certified mail, postage prepaid,
addressed as provided hereinafter, and (b) addressed:

If to Maker: JMB/245 Park Avenue Associates, Ltd.
900 North Michigan Avenue, Suite 1900
Chicago, Illinois 60611
Attention: Stuart Nathan

If to JMB: JMB Realty Corporation
900 North Michigan Avenue, Suite 1900
Chicago, Illinois 60611
Attention: H. Rigel Barber

or to either party at such other addresses as such party may designate in a
written notice to the other party.

12. Business Purpose. The Maker represents and agrees that the
proceeds of the Loan evidenced by this Restated Promissory Note II have
been used for purposes specified in 815 ILCS 205/4(1)(c), and that the
indebtedness evidenced hereby constitutes a business loan which comes
within the purview of said 815 ILCS 205/4(1)(c) and is not usurious.

13. Headings. The headings of the paragraphs of this Restated
Promissory Note II are inserted for convenience only and shall not be
deemed to constitute a part hereof.

14. Waiver. Maker, for itself and for its successors, transferees
and assigns and all guarantors, endorsers and signers, hereby waives all
valuation and appraisement privileges, presentment and demand for payment,
protest, notice of protest and nonpayment, dishonor and notice of dishonor,
bringing of suit, lack of diligence or delays in collection or enforcement
of this Restated Promissory Note II and notice of the intention to
accelerate, the release of any party liable, the release of any security
for the debt, the taking of any additional security and any other
indulgence or forbearance, and all of the foregoing persons are and shall
be jointly and severally, directly and primarily, liable for the amount of
all sums owing and to be owed hereon, and agrees that this Restated
Promissory Note II and any or all payments coming due hereunder may be
extended or renewed from time to time without in any way affecting or
diminishing their liability hereunder.

15. Severability. If any provision of this Restated Promissory
Note II or any payments pursuant to the terms hereof shall be invalid or
unenforceable to any extent, the remainder of this Restated Promissory Note
II and any other payments hereunder shall not be affected thereby and shall
be enforceable to the greatest extent permitted by law.

16. Exculpation. Notwithstanding anything herein contained to the
contrary, JMB agrees (for itself and any subsequent holder of this Restated
Promissory Note II) that (1) all liability with respect to the debt
evidenced by this Restated Promissory Note II, or any of the other
documents executed and delivered by Maker in connection herewith, shall be
satisfied only out of the assets of Maker and that no present or future
constituent partner (i.e., person holding any equity interest) in or agent
of the Maker, nor any officer, shareholder, director, employee, trustee,
beneficiary or agent of any corporation or trust that is or becomes a
constituent partner in Maker (including, but not limited to, persons
executing documents or certificates on behalf of Maker) shall have personal
liability (either directly or indirectly), all such personal liability
being expressly waived by JMB and (2) in no event shall a negative capital
account or any other funding obligations of any constituent partner in
Maker be deemed to be an asset or the property of Maker and neither JMB nor
any subsequent holder of this Restated Promissory Note II shall have any
right to collect, enforce or proceed against or with respect to any such
negative capital account or partner's obligations.

17. Miscellaneous.

(a) Whenever any payment to be made under this Restated Promissory
Note II would be due on a date which is not a Business Day, the due date
therefor shall be extended to the next succeeding Business Day and interest
shall be payable at the applicable rate during such extension. Each
payment (including prepayments) of principal of, or interest on, this
Restated Promissory Note II shall be made in Dollars by the Maker to JMB at
its office in Chicago, not later than noon, Chicago time, on the date due
therefor; and funds received after that hour shall be deemed to have been
received by JMB on the next following Business Day. All payments (whether
of principal, interest or other amounts) which are applied at any time by
the holder hereof to indebtedness evidenced by this Restated Promissory
Note II, prior to an event of default, shall be allocated by the holder
first to expenses or other similar items, next to accrued interest, and
then to principal, and, after an event of default, may be allocated by the
holder to principal, interest or other amounts as the holder may determine
in the holder's sole discretion.

(b) In the event of any inconsistency between the provisions of
this Restated Promissory Note II and the provisions of the Third Amended
and Restated Security Agreement, JMB may elect which of the inconsistent
provisions shall govern and control. A copy of the Third Amended and
Restated Security Agreement is available for inspection at the offices of
JMB during normal business hours.

(c) This Restated Promissory Note II shall be governed by and
construed in accordance with the laws of the State of Illinois.

(d) This Restated Promissory Note II has been made and delivered at
Chicago, Illinois, and all funds disbursed to or for the benefit of Maker
have been disbursed in Chicago, Illinois.

(e) This Restated Promissory Note II shall be binding upon Maker
and its respective successors and assigns; provided, however, that Maker
may not assign its rights hereunder or in connection herewith, and this
Restated Promissory Note II shall inure to the benefit of JMB and its
successors and assigns, including any participants of JMB. Maker agrees
that JMB may assign its interest hereunder and sell participation interests
in the loan evidenced by this Restated Promissory Note II to one or more
other persons without notice to or consent of Maker.

IN WITNESS WHEREOF, the undersigned has executed and delivered this
Restated Promissory Note II at Chicago, Illinois as of the date and year
first above written, pursuant to proper authority duly granted.

JMB/245 PARK AVENUE ASSOCIATES, LTD.,
an Illinois limited partnership

By: JMB Park Avenue, Inc.
Its corporate general partner

By:__________________________________
Its: _____________________________

1193417.03

SECOND
AMENDED AND RESTATED PROMISSORY NOTE

Dated: as of
$16,042,000.00 Chicago, Illinois August 1, 1995

R E C I T A L S

WHEREAS the undersigned, JMB/245 PARK AVENUE ASSOCIATES, LTD.
("Maker"), a limited partnership organized and existing under the laws of
the State of Illinois, has heretofore, for good and valuable consideration,
made in favor of BANK OF AMERICA ILLINOIS (successor in interest to
CONTINENTAL BANK N.A. and formerly known as "CONTINENTAL ILLINOIS NATIONAL
BANK AND TRUST COMPANY OF CHICAGO") ("Original Payee") certain promissory
notes in the amounts of $15,000,000 and $35,000,000, respectively, each
dated as of December 29, 1983 (herein, said notes, are called,
respectively, the "$15,000,000 Note" and the "$35,000,000 Note", and
collectively, the "Original Notes"); and

WHEREAS, Original Payee has previously advanced the full amount under
the Original Notes pursuant to certain terms evidenced by the Original
Notes; and

WHEREAS, the Maker and Original Payee agreed to amend and restate the
Original Notes to provide for two Amended and Restated Promissory Notes,
each in the original principal amount of $25,000,000 dated as of December
31, 1993, each according to such terms as set forth in each such Amended
and Restated Promissory Note (collectively, the "Existing Notes"); and

WHEREAS, one of the Existing Notes is designated the "Guaranteed
Amended and Restated Promissory Note" and provides for quarterly principal
payments and payment thereunder is guaranteed by JMB Realty Corporation
("JMB") (such Existing Note hereinafter referred to as the "Guaranteed
Note"); and

WHEREAS, on July 31, 1995, the Original Payee, Mellon Bank, N.A.
("Mellon") and JMB entered into a letter agreement (the "Letter Agreement")
pursuant to which the Original Payee and Mellon have sold, and JMB has
purchased, all of the Original Payee's and Mellon's respective right, title
and interest in the Guaranteed Note and other notes and agreements
referenced therein; and

WHEREAS, JMB and the Maker desire to amend and restate the Guaranteed
Note in its entirety as set forth herein.

NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned Maker, hereby
promises to pay to the order of JMB, at 900 North Michigan Avenue, Chicago,
Illinois 60611 or such other place as the holder hereof may from time to
time designate in writing, in lawful money of the United States of America,
the principal sum of SIXTEEN MILLION FORTY - TWO THOUSAND AND NO/100
DOLLARS ($16,042,000) (the "Loan Amount"), which Maker acknowledges has
previously been disbursed in full, together with interest on the unpaid
principal amount hereof from time to time outstanding, at the rate provided
for in Section 2 below.

1. Unless a contrary intention is apparent from the context, the
following terms have the indicated meanings when used herein:

"Business Day" shall mean a day on which national banks and foreign
exchange markets are open in London and Chicago for the transaction of
business.

"Dollars" and "$" shall mean lawful currency of the United States of
America and immediately available funds.

"Eurodollar Period" shall mean the period commencing on (and
including) the day after the last day of the immediately succeeding
Eurodollar Period (or any other date on which the holder hereof agrees to
fix a Eurodollar Rate) and ending on (and including) the earliest to occur
of (i) at the election of the Maker, the day which is one, two, three or
six months thereafter and (ii) the Maturity Date provided, however, that
any such Eurodollar Period which would otherwise end on a day not a
Business Day shall end on the Business Day next following such day (unless
such next following Business Day is the first Business Day of a calendar
month, in which case such Eurodollar Period shall end on the Business Day
next preceding such day).

"Eurodollar Rate" shall mean, with respect to any Eurodollar Period,
the percentage rate which is determined pursuant to the following formula:

LIBOR+ 2.625
1-ERP

(The fraction being rounded upwards, if necessary, to the nearest
1/100 of 1%).

"ERP" (Eurocurrency Reserve Percentage) shall mean, with respect to
each Eurodollar Period, a percentage (expressed as a decimal) equal to the
daily average during such Eurodollar Period of the percentages in effect on
each day of such Eurodollar Period, as prescribed by the Board of Governors
of the Federal Reserve System (or any successor), for determining reserve
requirements applicable to "Eurocurrency Liabilities" pursuant to
Regulation D or any other then applicable regulation of the Board of
Governors which prescribes the reserve requirements applicable to
"Eurocurrency Liabilities" as presently defined in Regulation D.

"LIBOR" means, with respect to each Eurodollar Period, the rate per
annum at which Dollar deposits in immediately available funds are offered
to the Original Payee at 11:00 a.m., London time, two Business Days prior
to the beginning of such Eurodollar Period by major banks in the interbank
eurodollar market, for delivery on the first day of such Eurodollar Period,
for the number of days comprised therein and in an amount equal to the
principal amount of this Restated Promissory Note I which shall be
outstanding during such Eurodollar Period.

"JMB Note" shall mean that certain Amended and Restated Demand Note
dated as of August 1, 1995, made payable by the Maker to JMB providing for
a maximum outstanding principal amount of $40,000,000, as the same may be
amended or restated from time to time.

"Loan" shall mean the indebtedness evidenced hereby.

"Maturity Date" shall have the meaning assigned to that term in
Section 5 hereof.

"Restated Promissory Note I" shall mean this Second Amended and
Restated Promissory Note, as the same may be amended or restated from time
to time.

"Restated Promissory Note II" shall mean that certain Second Amended
and Restated Promissory Note of even date herewith in the original
principal amount of $25,000,000 and bearing interest at a rate of two
percent (2%) per annum compounded annually, made by Maker payable to JMB,
as the same may be amended or restated from time to time.

"Restated Promissory Note III" shall mean that certain Amended and
Restated Promissory Note of even date herewith in the original principal
amount of $2,194,631.25 and bearing interest at a rate of two percent (2%)
per annum compounded annually, made by Maker payable to JMB, as the same
may be amended or restated from time to time.

"Secured Notes" shall mean collectively, the Restated Promissory Note
I, the Restated Promissory Note II, the Restated Promissory Note III and
the JMB Note.

"Third Amended and Restated Security Agreement" shall mean that
certain Third Amended and Restated Security Agreement dated of even date
herewith executed and delivered by Maker to JMB, encumbering Maker's
48.2467039% interest in 245 Park Avenue Company, a New York general
partnership ("245"), and certain other collateral set forth therein, which
secures the Secured Notes, as the same may be amended or restated from time
to time.

2. Interest Rates. Prior to the Maturity Date, Maker may by
delivering written notice to the holder hereof on or before 10:00 a.m.,
Chicago time, on a Business Day, irrevocably elect, by not less than three
nor more than five Business Days' notice, that all or any portion (subject
to an aggregate minimum amount of $100,000.00) of the Loan be, in the case
of amounts then bearing interest at the Reference Rate, converted into a
tranche bearing interest at the Eurodollar Rate for a specified Eurodollar
Period or, in the case of a tranche already bearing interest at the
Eurodollar Rate (of which up to three may exist at any time), converted
into a tranche bearing interest at the Reference Rate or continued as a
tranche bearing interest at the Eurodollar Rate for a new specified
Eurodollar Period. In the absence of the timely delivery of such a notice,
a tranche bearing interest at the Eurodollar Rate shall, on the last day of
any Eurodollar Period, automatically convert to a tranche bearing interest
at the Reference Rate. No portion of the outstanding principal amount of
the Loan may be continued as, or be converted into, a tranche bearing
interest at the Eurodollar Rate when any event of default has occurred and
is continuing in connection herewith.

During each Eurodollar Period, until an event of default described in
Section 11(a) occurs hereunder and after such an event of default if such
default has been cured, the rate of interest in effect under this Restated
Promissory Note I shall be the Eurodollar Rate for such Eurodollar Period.

If no Eurodollar Period is in effect, subject to the next paragraph,
the rate of interest in effect under this Restated Promissory Note I shall
be the Reference Rate plus five-eighths percent (0.625%).

From the Maturity Date until the time this Restated Promissory Note I
is paid in full, or after an event of default described in Section 11(a)
hereof shall occur until such event of default is cured, this Restated
Promissory Note I shall bear interest on the unpaid principal amount hereof
from time to time outstanding at the floating rate (the "Default Rate")
which is equal to the sum of three percent (3%) per annum plus the
Reference Rate from time to time in effect and changing automatically and
simultaneously with each change in the Reference Rate. Such interest shall
be paid on demand.

3. Bases for Determining Eurodollar Rate Inadequate or Unfair. If
with respect to any Eurodollar Period during which the rate of interest
hereunder is the Eurodollar Rate:

(i) if the holder hereof determines (which determination shall
be binding and conclusive on Maker) that by reason of circumstances
affecting the London interbank market adequate and reasonable means do not
exist for ascertaining the applicable Eurodollar Rate; or

(ii) the holder hereof determines that the Eurodollar Rate
will not adequately and fairly reflect the cost to the holder hereof of
maintaining or funding the Loan for such Eurodollar Period, or that the
making or funding of the Loan at the Eurodollar Rate has become
impracticable as a result of an event occurring after the date hereof
which, in the opinion of the holder hereof, materially affects the Loan,

then the holder hereof shall promptly notify Maker thereof in writing, and
Maker shall, on the last day of the then current Eurodollar Period, either
convert the affected portion of the Loan to the Reference Rate plus five-
eighths of one percent (0.625%), or prepay the Loan to the holder hereof in
full without any penalty whatsoever but with accrued and unpaid interest
thereon.

4. Changes in Law Rendering Certain Rates Unlawful. If at any
time due to any new law, rule, regulation or requirement, or any
interpretation thereof by any governmental or other regulatory authority
charged with the administration thereof, or for any other reason arising
subsequent to the date hereof, it shall become unlawful for the holder
hereof to continue the Loan using the Eurodollar Rate, the holder hereof
shall, upon the happening of such event, notify Maker thereof in writing
stating the reasons therefor, and Maker shall, on the earlier of (i) the
last day of the then current Eurodollar Period, or (ii) if required by such
law, regulation or interpretation, on such date as shall be specified in
such notice, at its option, either convert such unlawful portion of the
Loan to the Reference Rate plus five-eighths of one percent (0.625%), or
prepay the Loan (including all accrued and unpaid interest) to the holder
hereof in full without any penalty whatsoever.

5. Interest Payment Dates; Basis of Calculation. In all cases,
interest shall be paid on the first day of each month commencing with the
first day of the first month following the date hereof. All interest shall
be computed for the actual number of days elapsed on the basis of a year
consisting of three hundred sixty (360) days. On the Maturity Date, all
accrued and unpaid interest hereunder shall be due and payable.

6. Maximum Interest Rate. In no event shall the amount paid or
agreed to be paid hereunder (including all interest and the aggregate of
any other amounts taken, reserved or charged pursuant to this Restated
Promissory Note I or any other document evidencing or securing the Loan,
which under applicable law is deemed to constitute interest on the
indebtedness evidenced by this Restated Promissory Note I) exceed the
highest lawful rate permissible under applicable law; and if under any
circumstance whatsoever, fulfillment of any provision of this Restated
Promissory Note I, at the time performance of such provision shall be due,
shall involve transcending the limit of validity prescribed by applicable
law, then, ipso facto, the obligation to be fulfilled shall be reduced to
the limit of such validity, and if from any circumstance the holder of this
Restated Promissory Note I should receive as interest an amount which would
exceed the highest lawful rate allowable under law, such amount which would
be excessive interest shall be applied to the reduction of the unpaid
principal balance due under this Restated Promissory Note I and not to the
payment of interest, or if such excess interest exceeds the unpaid balance
of principal, the excess shall be refunded to Maker.

7. Repayment of Principal. The entire unpaid principal amount of
this Restated Promissory Note I shall be due and payable in full on
December 31, 1998 or earlier upon acceleration as hereinafter provided (the
"Maturity Date"). Notwithstanding the aforesaid in this paragraph, Maker
shall prepay the Loan upon receipt, and to the extent, of any net proceeds
received upon the sale, refinancing or other disposition of, or any
distributions made with respect to, the Collateral (as defined in the Third
Amended and Restated Security Agreement) in accordance with Section 8
hereof.

8. Application of Payments. JMB shall apply any amounts received
from Maker as prepayments in accordance with Section 7 above to reduce
Maker's outstanding indebtedness under the JMB Note, this Restated
Promissory Note I, the Restated Promissory Note II or the Restated
Promissory Note III, in such order as JMB, in its sole discretion, shall
elect.

9. Prepayment. Subject to Sections 8 and 19(a) hereof, Maker
reserves the privilege to prepay this Restated Promissory Note I in full or
in part without premium or penalty.

10. Security. This Restated Promissory Note I is secured by the
Third Amended and Restated Security Agreement dated of even date herewith
executed and delivered by Maker to JMB, encumbering Maker's 48.2467039%
interest in 245 and certain other collateral set forth therein. Reference
is made to the Third Amended and Restated Security Agreement for a
description of the property encumbered, the nature and extent of the
security, and the rights of the holder hereof in respect to such security.
The provisions of the Third Amended and Restated Security Agreement shall
be deemed to be incorporated by reference herein as though set out herein
in their entirety.

11. Events of Default and Remedies. Any one of the following
occurrences shall constitute an "event of default" under this Restated
Promissory Note I:

(a) The failure by Maker to make any payment of principal or
interest upon this Restated Promissory Note I as and when the same becomes
due and payable in accordance with the terms hereof, and the continuation
of such failure for five (5) days after written notice thereof to Maker
from JMB;

(b) The occurrence of any default under this Restated Promissory
Note I other than as described in the preceding clause (a), and the
continuance of such failure for thirty (30) days after written notice
thereof to Maker from JMB; provided that if at the end of such 30 day
period Maker, in JMB's sole judgment, is proceeding with due diligence to
cure such default, then there shall not be an event of default for an
additional period of the shorter of 60 days or the period during which, in
JMB's sole judgment, Maker continues to proceed with due diligence to cure
such default;

(c) The occurrence of any Default (as defined in the Third Amended
and Restated Security Agreement) under the Third Amended and Restated
Security Agreement;

(d) The occurrence of any event of default (as defined therein)
under the Restated Promissory Note II;

(e) The occurrence of any event of default (as defined therein)
under the Restated Promissory Note III;

(f) The occurrence of any default under the JMB Note;

(h) Maker, any general partner of Maker (or any constituent general
partner thereof), or 245 becomes insolvent or generally fails to pay, or
admits in writing its inability to pay, debts as they become due; or Maker,
any general partner of Maker (or any constituent general partner thereof),
or 245 applies for, consents to, or acquiesces in the appointment of, a
trustee, receiver or other custodian for itself or of any of its property,
or makes a general assignment for the benefit of creditors; or, in the
absence of such application, consent or acquiescence, a trustee, receiver
or other custodian is appointed for Maker, any general partner of Maker (or
any constituent general partner thereof) or 245, or for a substantial part
of the property of any of them, and is not discharged within 30 days; or
other case or proceeding under any bankruptcy or insolvency law, or any
dissolution or liquidation proceeding is commenced in respect of Maker, any
general partner of Maker (or any constituent general partner thereof) or
245, and if such case or proceeding is not commenced by Maker, any general
partner of Maker (or any constituent general partner thereof), or 245, it
is consented to or acquiesced in by Maker, any general partner of Maker (or
any constituent general partner thereof) or 245, or remains for 60 days
undismissed; or Maker, any general partner of Maker (or any constituent
general partner thereof) or 245, takes any action to authorize, or in
furtherance of, any of the foregoing; or

(i) Any representation, warranty or certification made by Maker to
JMB or any holder hereof in connection with the Loan, this Restated
Promissory Note I, the Third Amended and Restated Security Agreement, the
Consent Agreement or any other document executed in connection herewith
proves to be or to have been false in any material respect at any time.

For purposes of the foregoing clauses (c), (d), (e), (f), (g) and (i)
of this Section 11, with respect to any event or occurrence which
constitutes an event of default hereunder solely by reason of its
constituting a default (as distinguished from an "event of default") under
a document or instrument other than this Restated Promissory Note I, to the
extent (if any) that such other document or instrument provides a grace or
cure period with respect to such default, the same grace or cure period,
and only such period, shall apply with respect to this Restated Promissory
Note I.

Upon the occurrence of any event of default hereunder: (i) the
entire unpaid principal balance of, and any unpaid interest then accrued
on, and any other amounts owing under or evidenced by this Restated
Promissory Note I shall, at the option of the holder hereof and without
notice or demand of any kind to Maker or any other person, immediately
become due and payable; and (ii) the holder hereof shall have and may
exercise any and all rights and remedies available at law or in equity and
also any and all rights and remedies provided in the Third Amended and
Restated Security Agreement or in any other instrument securing this
Restated Promissory Note I.

The remedies of the holder hereof, as provided herein or in the Third
Amended and Restated Security Agreement or any other instrument securing
this Restated Promissory Note I, shall be cumulative and concurrent, and
may be pursued singularly, successively or together, at the sole discretion
of the holder hereof, and may be exercised as often as occasion therefor
shall arise. No act of omission or commission of the holder, including
specifically any failure to exercise any right, remedy or recourse, shall
be deemed to be a waiver or release of the same, such waiver or release to
be effected only through a written document executed by the holder and then
only to the extent specifically recited therein. A waiver or release with
reference to any one event shall not be construed as continuing, as a bar
to, or as a waiver or release of, any subsequent right, remedy or recourse
as to a subsequent event.

12. Attorneys' Fees and Costs. In the event one or more events of
default shall occur, Maker promises to pay all costs of collection of every
kind, including but not limited to all reasonable attorneys' fees, court
costs, and expenses of every kind incurred by the holder hereof in
connection with such collection or the protection or enforcement of any or
all of the security for this Restated Promissory Note I, whether or not any
lawsuit is ever filed with respect thereto.

13. Notices. All notices or other communications hereunder to
either party shall be (a) in writing and, if mailed shall be deemed to be
given on the second Business Day after the date when deposited in the
United States mail, by registered or certified mail, postage prepaid,
addressed as provided hereinafter, and (b) addressed:

If to Maker: JMB/245 Park Avenue Associates, Ltd.
900 North Michigan Avenue, Suite 1900
Chicago, Illinois 60611
Attention: Stuart Nathan

If to JMB:JMB Realty Corporation
900 North Michigan Avenue, Suite 1900
Chicago, Illinois 60611
Attention: H. Rigel Barber

or to either party at such other addresses as such party may designate in a
written notice to the other party.

14. Business Purpose. The Maker represents and agrees that the
proceeds of the Loan evidenced by this Restated Promissory Note I have been
used for purposes specified in 815 ILCS 205/4(1)(c), and that the
indebtedness evidenced hereby constitutes a business loan which comes
within the purview of said 815 ILCS 205/4(1)(c) and is not usurious.

15. Headings. The headings of the paragraphs of this Restated
Promissory Note I are inserted for convenience only and shall not be deemed
to constitute a part hereof.

16. Waiver. Maker, for itself and for its successors, transferees
and assigns and all guarantors, endorsers and signers, hereby waives all
valuation and appraisement privileges, presentment and demand for payment,
protest, notice of protest and nonpayment, dishonor and notice of dishonor,
bringing of suit, lack of diligence or delays in collection or enforcement
of this Restated Promissory Note I and notice of the intention to
accelerate, the release of any party liable, the release of any security
for the debt, the taking of any additional security and any other
indulgence or forbearance, and all of the foregoing persons are and shall
be jointly and severally, directly and primarily, liable for the amount of
all sums owing and to be owed hereon, and agrees that this Restated
Promissory Note I and any or all payments coming due hereunder may be
extended or renewed from time to time without in any way affecting or
diminishing their liability hereunder.

17. Severability. If any provision of this Restated Promissory
Note I or any payments pursuant to the terms hereof shall be invalid or
unenforceable to any extent, the remainder of this Restated Promissory Note
I and any other payments hereunder shall not be affected thereby and shall
be enforceable to the greatest extent permitted by law.

18. Exculpation. Notwithstanding anything herein contained to the
contrary, JMB agrees (for itself and any subsequent holder of this Restated
Promissory Note I) that (1) all liability with respect to the debt
evidenced by this Restated Promissory Note I, or any of the other documents
executed and delivered by Maker in connection herewith shall be satisfied
only out of the assets of Maker and that no present or future constituent
partner (i.e., person holding an equity interest) in or agent of the Maker,
nor any officer, shareholder, director, employee, trustee, beneficiary or
agent of any corporation or trust that is or becomes a constituent partner
in Maker (including, but not limited to, persons executing documents or
certificates on behalf of Maker) shall have personal liability (either
directly or indirectly), all such personal liability being expressly waived
by JMB and (2) in no event shall a negative capital account or any other
funding obligations of any constituent partner in Maker be deemed to be an
asset or the property of Maker and neither JMB nor any subsequent holder of
this Restated Promissory Note I shall have any right to collect, enforce or
proceed against or with respect to any such negative capital account or
partner's obligations.

19. Miscellaneous.

(a) Whenever any payment to be made under this Restated Promissory
Note I would be due on a date which is not a Business Day, the due date
therefor shall be extended to the next succeeding Business Day, and
interest shall be payable at the applicable rate during such extension.
Each payment (including prepayments) of principal of, or interest on, the
Restated Promissory Note I shall be made in Dollars by the Maker to JMB at
its office in Chicago, not later than noon, Chicago time, on the date due
therefor; and funds received after that hour shall be deemed to have been
received by JMB on the next following Business Day. All payments (whether
of principal, interest or other amounts) which are applied at any time by
the holder hereof to indebtedness evidenced by this Restated Promissory
Note I, prior to an event of default, shall be allocated by the holder
first to expenses or other similar items, next to accrued interest, and
then to principal, and, after an event of default, may be allocated by the
holder to principal, interest or other amounts as the holder may determine
in the holder's sole discretion.

(b) In the event of any inconsistency between the provisions of
this Restated Promissory Note I and the provisions of the Third Amended and
Restated Security Agreement, JMB may elect which of the inconsistent
provisions shall govern and control. A copy of the Third Amended and
Restated Security Agreement is available for inspection at the offices of
JMB during normal business hours.

(c) This Restated Promissory Note I shall be governed by and
construed in accordance with the laws of the State of Illinois.

(d) This Restated Promissory Note I has been made and delivered at
Chicago, Illinois, and all funds disbursed to or for the benefit of Maker
have been disbursed in Chicago, Illinois.

(e) This Restated Promissory Note I shall be binding upon Maker and
its respective successors and assigns; provided, however, that Maker may
not assign its rights hereunder or in connection herewith, and this
Restated Promissory Note I shall inure to the benefit of JMB and its
successors and assigns, including any participants of JMB. Maker agrees
that JMB may assign its interest and sell participation interests in the
loan evidenced by this Restated Promissory Note I to one or more other
persons without notice to or consent of Maker.

IN WITNESS WHEREOF, the undersigned has executed and delivered this
Restated Promissory Note I at Chicago, Illinois as of the date and year
first above written, pursuant to proper authority duly granted.

JMB/245 PARK AVENUE ASSOCIATES, LTD.,
an Illinois limited partnership

By: JMB Park Avenue, Inc.,
Its corporate general partner

By: ___________________________________

Its: ___________________________________

122622.05

FOURTH AMENDMENT TO LOAN DOCUMENTS

THIS FOURTH AMENDMENT TO LOAN DOCUMENTS (the "Fourth Amendment") is
entered into as of the 1st day of August, 1995, by and between JMB/245 PARK
AVENUE ASSOCIATES, LTD., an Illinois limited partnership (formerly known as
JMB/245 Park Avenue Associates) (the "Borrower") and JMB REALTY
CORPORATION, a Delaware corporation ("JMB").

R E C I T A L S

A. Bank of America Illinois ( successor to Continental Bank N.A.
and formerly known as Continental Illinois National Bank and Trust Company
of Chicago) (the "Bank") has heretofore made to Borrower two loans (the
"Term Loans") in the amounts of Fifteen Million and No/100 Dollars
("$15,000,000 Term Loan") and Thirty-Five Million and No/100 Dollars (the
"$35,000,000 Term Loan"), respectively, which Term Loans were evidenced by:
(i) a certain Promissory Note dated as of December 29, 1983 in the original
principal amount of Fifteen Million and No/100 Dollars ($15,000,000)
(herein, said Promissory Note, as amended, is called the "$15,000,000
Note") and (ii) a certain Promissory Note dated as of December 39, 1983 in
the original principal amount of Thirty-Five Million and No/100 Dollars
($35,000,000) (herein, said Promissory Note, as amended, is called the
"$35,000,000 Note").

B. The $15,000,000 Note was secured by a certain Security
Agreement between Borrower and the Bank, dated as of December 29, 1983,
relating to the $15,000,000 Note (herein, said Security Agreement is called
the "$15,000,000 Security Agreement"). The $35,000,000 Note was secured by
a certain Security Agreement between Borrower and the Bank, dated as of
December 29, 1983, relating to the $35,000,000 Note (herein, said Security
Agreement is called the "$35,000,000 Security Agreement"). The Borrower
and the Bank have heretofore entered into separate First Amended and
Restated Security Agreements dated as of December 29, 1983, which amend and
restate, respectively, the $15,000,000 Security Agreement and the
$35,000,000 Security Agreement, (herein, said First Amended and Restated
Security Agreements are collectively called the "First Restated Security
Agreements").

C. To secure the $15,000,000 Note, JMB, Judd D. Malkin, Neil G.
Bluhm, and the 1975 Judd D. Malkin Life Insurance Trust (collectively, the
"Previous Guarantors") executed and delivered to the Bank a certain
Guaranty of Payment, dated as of December 29, 1983, relating to the
$15,000,000 Note (herein, said Guaranty, as heretofore amended, is called
the "$15,000,000 Guaranty"). To secure the $35,000,000 Note, the Previous
Guarantors executed and delivered to the Bank (i) a certain Guaranty of
Payment relating to the $35,000,000 Note, and (ii) a certain Guaranty of
Interest relating to the $35,000,000 Note, which Guaranty of Interest was
supplemented by a certain letter agreement between the Bank and Previous
Guarantors (respecting net cash flow), all dated as of December 29, 1983
(herein the Guaranties described in the preceding sentence of this
paragraph, as heretofore amended, are collectively called the "$35,000,000
Guaranties"). In addition to the $35,000,000 Guaranties, Borrower
heretofore executed and delivered to the Bank a letter agreement dated as
of April 15, 1991 and JMB heretofore executed and delivered to the Bank an
additional Guaranty of Payment, dated as of April 15, 1991, relating to the
$35,000,000 Note (herein, the "$10,000,000 Guaranty" and, herein, said
letter agreement is called the "Original Letter Agreement") (herein, said
$15,000,000 Guaranty, said $35,000,000 Guaranties, and the $10,000,000
Guaranty are collectively called the "Pre-Existing Guaranties").

D. The Bank and Borrower also entered into a certain Consent
Agreement dated as of December 29, 1983, relating to the Term Loans
(herein, such Consent Agreement, as heretofore amended, is called the
"Consent Agreement").

E. The Bank and Borrower have heretofore entered into a certain
First Amendment to Notes, Loan Documents and Guaranties (herein, the "First
Amendment") relating to the $15,000,000 Note, the $35,000,000 Note, the
Original Letter Agreement, the $15,000,000 Guaranty, the $35,000,000
Guaranties, the $15,000,000 Security Agreement and the $35,000,000 Security
Agreement.

F. The Bank and Borrower heretofore entered into a Second
Amendment to the $15,000,000 Loan Documents and $35,000,000 Loan Documents
dated as of July 10, 1984 to reflect changes in the Borrower's name and
general partner and to make certain amendments to such documents as of that
date (herein, the "Second Amendment").

G. The Bank and Borrower have heretofore entered into a certain
Interest Exchange Agreement dated February 1, 1984 (herein, as amended, the
"Interest Exchange Agreement").

H. The $15,000,000 Note, the $15,000,000 Guaranty, and any other
documents or instruments evidencing, securing, or related to the
$15,000,000 Term Loan (except the $15,000,000 Security Agreement and the
First Restated Security Agreement relating thereto), as heretofore amended,
are herein collectively called the "$15,000,000 Term Loan Documents". The
$35,000,000 Note, the $35,000,000 Guaranties, the Original Letter
Agreement, and any other documents or instruments evidencing, securing or
related to the $35,000,000 Term Loan (except the $35,000,000 Security
Agreement and the First Restated Security Agreement relating thereto), as
heretofore amended, are herein collectively called the "$35,000,000 Term
Loan Documents" and together with the $15,000,000 Term Loan Documents, the
$35,000,000 Term Loan Documents, the Consent Agreement, the First Amendment
and the Second Amendment are herein collectively called the "Pre-Existing
Loan Documents."

J. The Bank, the Borrower and JMB entered into that certain Third
Amendment to Loan Documents dated as of December 31, 1993 pursuant to which
(i) the $15,000,000 Note and the $35,000,000 Note were amended and restated
to provide for two Amended and Restated Promissory Notes, each in the
principal amount of $25,000,000, and referred to as the Guaranteed Amended
and Restated Promissory Note (the "Guaranteed Note") and the Fixed Rate
Amended and Restated Promissory Note (the "Fixed Rate Note"), respectively,
(ii) the First Restated Security Agreements were amended and restated
pursuant to Second Amended and Restated Security Agreements, (iii) the
Borrower executed and delivered to the Bank an Interest Exchange Agreement
Promissory Note in the original principal amount of $2,194,631.25 to
evidence the indebtedness of Borrower to the Bank under the Interest
Exchange Agreement (the "Interest Exchange Agreement Note") and an Interest
Exchange Agreement Note Security Agreement to secure such Interest Exchange
Agreement Note, and (iv) JMB executed and delivered to the Bank an Amended
and Restated Guaranty of Payment (the "JMB Guaranty") consolidating and
superseding the $15,000,000 Guaranty and the $10,000,000 Guaranty.

K. JMB has from time to time made advances to the Borrower to
enable the Borrower to pay interest and principal under the Guaranteed Note
and certain other expenses and expects to make additional advances to pay
other expenses, and the obligation of the Borrower to repay such advances
is evidenced by that certain Subordinated Demand Note dated December 31,
1993 made payable by the Borrower in favor of JMB, providing for the
maximum outstanding principal amount of $40,000,000 (the "JMB Note").

L. On July 31, 1995, the Bank, Mellon Bank, N.A. ("Mellon") and
JMB entered into a letter agreement ("Letter Agreement") pursuant to which
the Bank and Mellon have sold, and JMB has purchased, all of the Bank's and
Mellon's respective right, title and interest in the Guaranteed Note, the
Fixed Rate Note and the Interest Exchange Agreement Note (collectively, the
"Notes") and the Second Amended and Restated Security Agreements and the
Interest Exchange Agreement Note Security Agreement (collectively, the
"Security Agreements") and the JMB Guaranty and other Related Agreements
defined in the Letter Agreement (the Notes, the Security Agreements, the
JMB Guaranty and the other Related Agreements collectively, the "Loan
Documents").

M. The parties desire to enter into this amendment to amend and
restate in part and otherwise reaffirm, to the extent set forth herein, the
Loan Documents.

NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, and in consideration of the various agreements set out
herein, the parties do hereby agree as follows:

1. The foregoing Recitals are hereby incorporated into this Fourth
Amendment as though set out in their entirety in the body hereof.

2. As a condition precedent to the effectiveness of this Fourth
Amendment, Borrower shall execute and deliver in a form acceptable to JMB
the following:

a. A Second Amended And Restated Promissory Note (the
"Restated Promissory Note I") in the principal amount of $16,042,000; and

b. A Second Amended and Restated Promissory Note (the
"Restated Promissory Note II") in the principal amount of $25,000,000; and

c. An Amended and Restated Promissory Note (the "Restated
Promissory Note III") in the principal amount of $2,194,631.25; and

d. An Amended and Restated Demand Note (the "Restated JMB
Note") in the maximum principal amount of $40,000,000; and

e. A Third Amended and Restated Security Agreement (the
"Third Amended and Restated Security Agreement") to secure the payment and
performance of the Restated Promissory Note I, the Restated Promissory Note
II, the Restated Promissory Note III and the Restated JMB Note; and

f. Supporting documentation deemed reasonably necessary by
JMB; and

g. Payment of all costs and expenses of JMB in connection
with this Fourth Amendment and the transactions and documentation
contemplated herein.

3. All references in the Loan Documents to documents amended in
connection herewith shall henceforth refer to such documents as amended to
date and as amended, modified or restated from time to time. Except as
amended hereby or by the documents executed and delivered by Borrower to
JMB pursuant to paragraph 2 of this Fourth Amendment, all of the terms,
conditions, provisions, and agreements set forth in the Loan Documents,
excluding the Original Letter Agreement and the JMB Guaranty, are hereby
reaffirmed, ratified, and confirmed in their entirety.

4. Each of the Original Letter Agreement and the JMB Guaranty is
hereby terminated and released and shall be of no further force and effect.

5. JMB shall be deemed to be substituted as a party to the Consent
Agreement in place of the Bank. All duties and responsibilities of
Borrower owed to the Bank, and all rights and remedies of the Bank with
respect to Borrower, under the Consent Agreement shall henceforth be given
to, or may be exercised by, JMB (as the case may be) under the Consent
Agreement. The references in the first paragraph on page 3 of the Consent
Agreement to the "Notes" are hereby changed to mean collectively the
Restated Promissory Note I, the Restated Promissory Note II, the Restated
Promissory Note III and the Restated JMB Note, and the references in such
paragraph of the Consent Agreement to clause (iii) of Section 8 of each of
the Security Agreements are hereby changed to refer to clause (ii) of
Section 8 of the Third Amended and Restated Security Agreement. The third
paragraph on page 3 of the Consent Agreement is hereby deleted in its
entirety, and there is substituted in its place the following:

"All notices and consents under this Consent Agreement shall be
in writing and shall have been deemed to have been given when delivered
personally or on the second business day following the day when deposited
in the United States mail, postage prepaid, addressed to JMB at 900 North
Michigan Avenue, Suite 1900, Chicago, Illinois 60611, to the attention of
H. Rigel Barber, and addressed to the Borrower at 900 North Michigan
Avenue, Suite 1900, Chicago, Illinois 60611, to the attention of Stuart C.
Nathan."

6. Borrower acknowledges JMB's right to obtain a new appraisal (or
update of an existing appraisal) of the real estate at any time while the
loan or any portion thereof remains outstanding, (a) when, in JMB's
reasonable judgment, such an appraisal is warranted as a result of JMB's
internal evaluation of the subject loan, and/or (b) to comply with
statutes, rules, regulations, or directives of governmental agencies having
jurisdiction over JMB. Borrower hereby agrees to pay, upon demand, all
appraisers' fees and related expenses incurred by JMB from time to time in
obtaining appraisal reports.

7. To induce JMB to enter into this Fourth Amendment, Borrower
warrants to JMB that:

(i) Authorization: No Conflict. The execution and delivery
of this Fourth Amendment, and the performance by the Borrower of its
obligations under this Fourth Amendment, are within Borrower's partnership
powers, have been duly authorized by all necessary partnership, corporate,
or other action, have received all necessary governmental approval (if any
shall be required) and do not and will not contravene or conflict with any
provisions of law or the partnership agreement of Borrower or of any
agreement binding upon Borrower.

(ii) Validity and Binding Nature. This Fourth Amendment is
the legal, valid and binding obligation of Borrower enforceable against
Borrower in accordance with its terms.

8. This Fourth Amendment shall be governed by and construed under
the laws of the State of Illinois.

9. Notwithstanding anything herein contained to the contrary, JMB
agrees (for itself and its successors and assigns) that (1) all liability
hereunder or with respect to the debt evidenced or secured by the documents
executed and delivered by Borrower in connection herewith shall be
satisfied only out of the assets of Borrower and that no present or future
constituent partner (i.e., person holding an equity interest) in or any
agent of the Borrower, nor any officer, shareholder, director, employee,
trustee, beneficiary or agent of any corporation or trust that is or
becomes a constituent partner in Borrower (including, but not limited to,
persons executing documents or certificates on behalf of Borrower) shall
have personal liability (directly or indirectly), all such personal
liability being expressly waived by JMB, and (2) in no event shall a
negative capital account or any other funding obligations of any
constituent partner in Borrower be deemed to be an asset or the property of
Borrower and neither JMB nor any subsequent holder of this document shall
have any right to collect, enforce or proceed against or with respect to
any such negative capital account or partner's obligation.

IN WITNESS WHEREOF, the parties have executed this Fourth Amendment
at Chicago, Illinois as of the day and year above written.

BORROWER

900 North Michigan Avenue JMB/245 Park Avenue Associates,
Suite 1900 Ltd., an Illinois limited
Chicago, Illinois 60611 partnership
By: JMB Park Avenue, Inc.
Its Corporate General Partner

By: ___________________________

Name:___________________________

Title:__________________________

JMB

900 North Michigan Avenue JMB REALTY CORPORATION
Suite 1900
Chicago, Illinois 60611 By: ___________________________

Name:___________________________

Title:__________________________

122615.04

CONSENT AGREEMENT

December 29, 1983

Continental Illinois National Bank
and Trust Company of Chicago
231 South LaSalle Street
Chicago, Illinois 60697

Dear Sirs:

In order to induce you (the "Bank") to make those certain loans of
$35,000,000, $15,000,000 and $13,000,000 to the undersigned (the
"Borrower"), evidenced by promissory notes in the respective amounts of
$35,000,000 (the "$35,000,000 Note"), $15,000,000 and $13,000,000
(collectively, the "Notes"), each secured pursuant to a Security Agreement
by an assignment of the partnership interest held by the undersigned in the
New York general partnership known as 245 Park Avenue Company (the
"Partnership"), the undersigned hereby agrees, for so long as any of such
Security Agreements shall remain in effect.

1) whenever Borrower's consent is requested by either of the other
partners under the following sections of the Partnership Agreement
establishing 245 Park Avenue Company (the "Agreement"), to notify Bank as
soon as Borrower is notified of such request and, subject to the following
paragraphs of this Consent Agreement, not to grant such consent without the
Bank's prior written consent: (Section 2.3 Distributions of Capital,
(provided that Bank's consent shall not be required if such capital
distributions are made either on the basis of the Distributive Percentages
of the partners as defined in the Agreement or on a basis more favorable to
Borrower, and if such distribution is disbursed into the assignee deposit
account required under Section 5 of the aforesaid Security Agreement),
Section 2.4 Additional Capital Contributions, Section 2.7 B Loans by
Partners/Additional Loans (provided that in the case of either an
additional capital contribution under Section 2.4 or a loan by a partner or
an additional loan under Section 2.7, the Bank's consent shall not be
required if such additional capital, loan by a partner or additional loan
is in each case subordinated to the Bank's loan evidenced by the Notes, and
may not be either partially or wholly repaid until the Notes have been
repaid in full); Section 6.2 D(3) (respecting a sale of less than all of
the 245 Properties or a sale and leaseback thereof); Section 6.2 E
(respecting financing and refinancing other than as permitted by Section 6.2
F) (provided that in the case of either a sale under Section 6.2 D(3) or a
financing or refinancing under Section 6.2 E, the Bank's consent shall not be
required if the proceeds from such sale, financing or refinancing are
sufficient to pay in full to the Bank at the initial closing thereunder the
outstanding balance of the Notes); and Section 7.1 Transfer of Partnership
Interests/In General; and

2) not to enter into any modification, amendment or supplement to
the Agreement, or otherwise engage in any action, or consent to or permit
any action by any other partner in the Partnership, which would result in
the creation of any interest prior in any respect to the interest of the
Bank under the Security Agreements, including without limitation any
distribution of capital to any of the partners in the Partnership, any
additional capital contributions or loans or advances by any of the
partners or any third party to the Partnership, or any sale of all or any
part of the 245 Properties (as defined in the Agreement), or any partial or
complete financing or refinancing with respect thereto, or any transfer of
partnership interest by a partner other than Borrower, except as
specifically permitted by the Agreement as of the date hereof, or except as
allowed in the case of a distribution of capital, sale, financing or
refinancing which does not require the Bank's consent under Section 1
hereof.

By executing in the apace provided below, the Bank agrees that
whenever its consent shall be required under Section 1 above, such consent
shall not be withheld unreasonably, considered by the Bank from the point
of view of its economic best interest as the holder of a collateral
assignment of a partnership interest in a general partnership, taking into
account the portion of the indebtedness evidenced by the Notes which is
then guaranteed (including whether or not the Guaranty of Interest relating
to the $35,000,000 Note has been released).

Notwithstanding the provisions of Section 1 above, if the Bank
withholds its consent under this Consent Agreement, even if such consent is
withheld reasonably from the Bank's point of view as described above, but
the Borrower nonetheless reasonably concludes, after consultation with the
Bank on the matter, but without any requirement of an opinion of counsel,
that the Borrower is legally obligated under the Agreement to issue its
consent to such other partner, then the Bank's consent hereunder shall not
be required.
<PAGE>
Any default under this Consent Agreement (a "Consent Default") shall
at the election of the Bank upon notice to Borrower constitute a default
under each of the Notes and the Bank shall have all the remedies provided
under each of the Notes. In addition, a Consent Default shall have the
same effect as a "Default in the nature of the failure to perform a
monetary obligation" under clause (iii) of Section 8 of each of the
Security Agreements securing the Notes for all purposes of such clause
(iii).

This Consent Agreement shall be a contract made under and governed by
the laws of the State of Illinois.

All notices and consents under this Consent Agreement shall be in
writing and shall have been deemed to have been given when delivered
personally or on the second business day following the day when deposited
in the United States mail, postage prepaid, addressed to the Bank at its
address set forth above, to the attention of Reinhard Schneider and Jean
Callahan, and, addressed to the Borrower at 875 North Michigan Avenue,
Suite 3900, Chicago, Illinois 60611, to the attention of Stuart C. Nathan.

This Consent Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns and,
without limiting the foregoing, all rights and powers hereunder or with
respect hereto of Bank, or any agent or representative of Bank, may be
exercised by any successor or assignee of Bank, including any patty to whom
the Bank sells a participation interest herein, or any agent or
representative or such successor or assignee.

JMB/245 PARK AVENUE ASSOCIATES,
an Illinois limited partnership

[Corporate Seal] By Its General Partner

ATTEST: JMB Mangers-II, Inc.
an Illinois corporation
JOAN R. TREND
- -----------------------------

Its Asst. Secretary
--------------------- By: H. RIGEL BARBER
----------------------

Name: H. RIGEL BARBER
----------------------
Title:Vice President
----------------------
ACKNOWLEDGED AND AGREED TO:
CONTINENTAL ILLINOIS NATIONAL BANK
AND TRUST COMPANY OF CHICAGO

ATTEST: By: REINHARD SCHNEIDER
------------------------------
- ----------------------------- Name: Reinhard J. Schneider
Its ----------------------
--------------------- Title: Vice President
----------------------

THIRD AMENDED AND RESTATED SECURITY AGREEMENT

This THIRD AMENDED AND RESTATED SECURITY AGREEMENT (this
"Assignment") dated as of the 1st day of August, 1995, between JMB/245 PARK
AVENUE ASSOCIATES, LTD., an Illinois limited partnership (herein, together
with its successors and assigns, the "Borrower"), having its address at 900
North Michigan Avenue, Suite 1500, Chicago, Illinois 60611, and JMB REALTY
CORPORATION (herein, together with its successors and assigns, "JMB"),
having its office at 900 North Michigan Avenue, Suite 1900, Chicago,
Illinois 60611.

W I T N E S S E T H:

WHEREAS, Borrower has heretofore made in favor of Bank of America
Illinois (successor in interest to Continental Bank, N.A. and formerly
known as Continental Illinois National Bank and Trust Company of Chicago)
(the "Bank") certain promissory notes in the amounts of $15,000,000 and
$35,000,000, each dated as of December 29, 1983 (herein, said notes, as
amended, are called, respectively, the "$15,000,000 Note" and the
"$35,000,000 Note", and collectively, the "Original Notes"); and

WHEREAS, the Borrower executed and delivered to the Bank, and the
Bank accepted, those certain Security Agreements each dated as of December
29, 1983 (the "Original Security Agreements") securing the $15,000,000 Note
and the $35,000,000 Note respectively; and

WHEREAS, the Borrower and the Bank heretofore determined that the
original intention of the parties with respect to certain matters set out
in the Original Security Agreements would be more accurately expressed if
the Original Security Agreements were modified in certain respects, and
that the most appropriate way in which to accomplish that result was to
amend and restate the Original Security Agreements as First Amended And
Restated Security Agreements each dated as of December 29, 1983 between the
Borrower and the Bank (the "First Amended and Restated Security
Agreements"); and

WHEREAS, Bank has previously advanced the full amount under the
Original Notes pursuant to certain term loans evidenced by the Original
Notes; and

WHEREAS, the Borrower and Bank amended and restated the Original
Notes to provide for two Amended and Restated Promissory Notes dated as of
December 31, 1993, each in the principal amount of $25,000,000, and each
according to such other terms as set forth in each such Amended and
Restated Promissory Note (collectively, the "Existing Notes") and;

WHEREAS, the Borrower has executed and delivered to the Bank those
certain Second Amended and Restated Security Agreements each dated as of
December 31, 1993, pursuant to which the Borrower and the Bank agreed to
amend and restate the First Amended and Restated Security Agreements to
secure each of the Existing Notes (collectively, the "Second Amended and
Restated Security Agreements") and;

WHEREAS, the Borrower executed and delivered to the Bank that certain
Promissory Note dated as of December 31, 1993 in the original principal
amount of $2,194,631.25 ("Interest Exchange Note") in payment of the
Borrower's outstanding indebtedness to the Bank under that certain Interest
Exchange Agreement dated as of February 1, 1984; and

WHEREAS, in order to secure the Borrower's indebtedness to the Bank
under the Interest Exchange Note, the Borrower executed and delivered to
the Bank that certain Security Agreement dated as of December 31, 1993 (the
"Interest Exchange Note Security Agreement"); and

WHEREAS, JMB has from time to time made advances to the Borrower to
enable the Borrower to pay interest and principal under one of the Existing
Notes and certain other expenses and expects to make additional advances to
pay other expenses, and the obligation of the Borrower to repay such
advances is evidenced by that certain Subordinated Demand Note dated
December 31, 1993 made payable by the Borrower in favor of JMB, providing
for the maximum outstanding principal amount of $40,000,000 (as amended or
restated from time to time, the "Existing JMB Note").

WHEREAS, pursuant to that certain letter agreement dated as of July
31, 1995, the Bank and Mellon Bank, N.A. ("Mellon") agreed to sell, and JMB
agreed to purchase, all of the Bank's and Mellon's respective right, title
and interest in and to the Existing Notes, the Interest Exchange Note, the
Second Amended and Restated Security Agreements, the Interest Exchange Note
Security Agreement and other agreements referenced therein (collectively,
the "Existing Documentation").

WHEREAS, JMB and the Borrower have agreed to amend and restate the
Existing Documentation and the Existing JMB Note pursuant to that certain
Fourth Amendment to Loan Documents dated as of August 1, 1995 pursuant to
which the Borrower has executed and delivered to JMB (a) that certain
Second Amended and Restated Promissory Note dated August 1, 1995 in the
original principal amount of $16,042,000, made payable to JMB (as amended
or restated from time to time, the "Restated Promissory Note I"), (b) that
certain Second Amended and Restated Promissory Note dated August 1, 1995 in
the original principal amount of $25,000,000, made payable to JMB (as
amended or restated from time to time, the "Restated Promissory Note II"),
(c) that certain Amended and Restated Promissory Note dated August 1, 1995
in the original principal amount of $2,194,631.25, made payable to JMB (as
amended or restated from time to time, the "Restated Promissory Note III",
the Restated Promissory Note I, the Restated Promissory Note II and the
Restated Promissory Note III collectively referred to herein as the
"Restated Promissory Notes") and (d) that certain Amended and Restated
Demand Note dated August 1, 1995 in the maximum principal amount of
$40,000,000 made payable by the Borrower to JMB (as the same may be amended
or restated from time to time, the "JMB Note").

WHEREAS, the Borrower and JMB desire to amend and restate the Second
Amended and Restated Security Agreements and the Interest Exchange Note
Security Agreement to, among other things, provide for one agreement that
secures all of the Restated Promissory Notes and the JMB Note;

NOW THEREFORE, in consideration of the reciprocal undertakings set
out herein and for other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged by the Borrower and JMB, THE
SECOND AMENDED AND RESTATED SECURITY AGREEMENTS AND THE INTEREST EXCHANGE
NOTE SECURITY AGREEMENT ARE HEREBY AMENDED AND RESTATED TO READ IN THEIR
ENTIRETY AS FOLLOWS:

1. Definitions. When used herein, the following terms shall have
the following meanings:

"Acquisition Agreement" shall mean that certain Agreement dated as of
the 29th day of December, 1983, by and among Olympia & York Holdings
Corporation, an Ontario, Canada corporation, O & Y Equity Corp., a New York
corporation (together with any successor or assign of its interest in 245
(hereinafter defined), "O & Y Equity"), Fame Associates, a New York general
partnership ("Fame"), and Borrower, respecting the acquisition by Borrower
of an interest in 245.

"Agreement" shall mean that certain First Amended and Restated
Agreement of General Partnership of 245 Park Avenue Company, dated December
29, 1983, by and between O & Y Equity Corp., Fame and Borrower, amending
and restating a New York general partnership known as 245 Park Avenue
Company, as subsequently amended by that certain First Amendment dated
December 29, 1986, that certain letter agreement dated March 6, 1987 and
that certain Amended Business Certificate for Partners (which among other
things reflects the sale of Fame's partnership interest to an affiliate of
O & Y Equity) dated June 30, 1988, as such Agreement may be further
amended, supplemented or modified.

"Collateral" shall mean individually and collectively all property or
rights in which a security interest is granted hereunder.

"Consent Agreement" shall mean that certain Consent Agreement dated
as of December 29, 1983 between the Bank and the Borrower as amended by
that certain Fouth Amendment to Loan Documents dated as of August 1, 1995
between Borrower and JMB and as may be further amended, supplemented or
modified.

"Default" shall mean any of the following: (a) Borrower shall default
in the performance of any of Borrower's obligations or covenants under this
Assignment, and such default shall continue uncured for a period of thirty
(30) days after notice thereof from JMB to Borrower; (b) any representation
or warranty contained herein is not true in any material respect, and
remains untrue in any material respect for a period of thirty (30) days
after notice thereof from JMB to Borrower; (c) Borrower shall default (and
after any applicable grace period for cure) in the performance of any of
its obligations under the Agreement and any party exercises its remedies
against Borrower in respect of such default; (d) any event of default under
any of the Restated Promissory Notes or the JMB Note (i.e. after any
applicable grace period), or any default (and after any applicable grace
period for cure) under any of the other Loan Documents; (e) 245 shall
default (and after any applicable grace period for cure) under obligations
that give rise to liens or encumbrances on its property and as a result any
party accelerates such obligations or exercises remedies in connection
therewith.

"Liabilities" shall mean all obligations of Borrower, or its
successors or assigns, to JMB under the Restated Promissory Notes, the JMB
Note, this Assignment, and all other Loan Documents, howsoever created,
arising, or evidenced, whether direct or indirect, absolute or contingent,
"recourse" or "non-recourse", now or hereafter existing, or due or to
become due; including, without limitation, advances made by JMB pursuant to
this Assignment to protect JMB's interest in the Collateral and all costs
and expenses of collection under and enforcement of this Assignment and the
other Loan Documents.

"Loan Documents" shall mean the Restated Promissory Notes, the
Consent Agreement, the JMB Note and this Assignment, as each of them may be
contemporaneously herewith or hereinafter further amended, restated or
supplemented.

"O & Y Guaranty" shall mean that certain Guaranty made as of the 29th
day of December, 1983, by O & Y Equity in favor of Borrower and 245.

"Permitted Amount" shall mean $100,000,000 on the date hereof, or
such other amount as the parties shall hereafter agree to in writing in
their sole discretion.

"Permitted Liens" shall mean, collectively, such security interests
as are permitted under Sections 2.2 and 2.7 of the Agreement to secure
amounts up to the Permitted Amount, security interests relating to certain
existing additional indebtedness certified by Borrower to the Bank as of
January 1, 1994, and the security interests created or continued under this
Assignment.

"245" shall mean 245 Park Avenue Company (formerly Olympia & York
Estates Company), a New York general partnership. "245 Properties" shall
mean all properties and rights owned by 245, including, without limitation,
the real property commonly known as 245 Park Avenue, New York, New York.

2. Grant of Security Interest. As security for payment of all
Liabilities, the Borrower hereby mortgages, sells, assigns, transfers, and
sets over to JMB and grants to JMB a security interest in and to the
following, whether now owned or hereafter acquired: (a) all right, title,
and interest of the Borrower in and to 245 (currently amounting to a
48.2467039% general partnership interest therein), whether as a result of
direct investments or contributions, or otherwise; (b) all right, title and
interest of Borrower in and to the 245 Properties; (c) all right, title,
and interest of Borrower in and to the Agreement, as may be amended or
restated from time to time, and all proceeds, payments, profits, and
distributions under the Agreement of every kind and character whatsoever
including, without limitation, current distributions, income, return of
capital, loan repayment, reimbursements, rents, profits, surpluses,
compensation (for services or otherwise), or distributions from sale,
financing, refinancing, redemption, or repurchase, or as a result of
liquidation or dissolution, or otherwise; (d) all right, title, and
interest of Borrower in and to the Acquisition Agreement (including,
without limitation, all of Borrower's rights under any representations or
warranties or covenants or indemnities contained therein); (e) all right,
title, and interest of Borrower in and to the O & Y Guaranty, including,
without limitation, the right to sue thereunder and otherwise enforce
Borrower's rights thereunder; (f) all right, title and interest of Borrower
in and to any title, casualty, liability, workmen's compensation, or other
insurance policies relating to 245 Properties; and (g) the proceeds and
products of and from any and all of the foregoing.

3. Warranties Respecting the Collateral and Other Matters. The
Borrower represents and warrants that (a) the Borrower is the owner of all
Collateral free and clear of any lien, security interest, encumbrance or
any other right or interest of any other person except the Permitted Liens;
(b) to the best of the Borrower's knowledge, there is no assignment or
financing statement now on file or of record in any public office covering
any of the Collateral except in connection with the Permitted Liens; (c)
the Borrower has full power and authority to subject the Collateral to the
security interest herein granted; (d) the Borrower has furnished JMB with a
true and correct copy of the Agreement and the Acquisition Agreement, with
all amendments to any of them to date, and, to the best of the Borrower's
knowledge, the Borrower has fully performed all of its obligations and
satisfied all liabilities in the Acquisition Agreement and the Agreement;
(e) 245 is a general partnership duly organized and validly existing and in
good standing under the laws of New York and is authorized to do business
in each jurisdiction where its business or properties requires such an
authorization; (f) Borrower, and each general partner of Borrower, is duly
organized and validly existing and in good standing under the laws of
Illinois and is or will be qualified to do business in each jurisdiction
where its business or properties may require such qualification and the
failure to do so might result in material adverse consequences to such
entity; (g) Borrower, and each general partner of Borrower, has full power
and due authority to execute, deliver and perform this Assignment, the
Restated Promissory Notes, the JMB Note and the other Loan Documents, in
accordance with their terms. Such execution, delivery and performance has
been duly authorized by all necessary corporate or partnership action and
approved by each required governmental authority or other party, and the
obligations of Borrower and every other party thereto under each are the
legal, valid and binding obligations of each, enforceable by JMB in
accordance with their terms subject to the potential effect of bankruptcy
laws and other applicable laws affecting the rights of creditors generally;
(h) the Borrower is the owner of a 48.2467039% general partnership interest
in 245, (i) the execution, delivery and performance of this Assignment, the
Restated Promissory Notes, the JMB Note or any other Loan Documents, does
not conflict with any provision of law (including, without limitation, any
usury or federal or state securities law) or of the Agreement or the O & Y
Guaranty or any other agreement binding upon Borrower or 245; (j) except as
set forth in writing from the Borrower to JMB, neither Borrower, nor, to
the best of the Borrower's knowledge, any general partner of Borrower or
any entity constituting Borrower, nor 245, is a party to any litigation
regarding the subject matter of any of the foregoing representations and
(k) all information with respect to the Collateral as set forth in any
writing furnished at any time heretofore or hereafter to JMB does not
contain, at the time furnished and to the best of the Borrower's knowledge,
any misleading or untrue statement of fact material to this Assignment, the
Restated Promissory Notes, the JMB Note, or any of the other Loan
Documents.

4. Agreements Respecting the Collateral and Other Matters. The
Borrower will (a) not sell, pledge, mortgage, assign, transfer or otherwise
dispose of, or create or suffer to be created any lien, levy, security
interest, or encumbrance on, any of the Collateral, except for the
Permitted Liens, and will pay or cause to be paid when due all taxes,
assessments, charges, and liens lawfully imposed, assessed, or levied on
any of the Collateral; (b) defend the Collateral against all claims and
demands of all persons at any time claiming the same or any interest
therein adverse to JMB except for the Permitted Liens; (c) from time to
time execute such financing statements and other documents and will do and
perform all such other acts and things, all as JMB may request, to
establish and maintain a valid security interest in the Collateral (free of
all other claims whatsoever except for the Permitted Liens) to secure the
payment of the Liabilities; (d) keep, at its address shown above, or at the
office of the building manager of 245 Park Avenue, New York, New York (or
such other place or places in Chicago, Illinois or New York, New York, as
Borrower may from time to time designate to JMB in writing) all its records
concerning the Collateral, which records will be of such character as will
enable JMB or its designees to determine at any time the status thereof;
(e) furnish JMB such information concerning the Collateral as JMB may from
time to time reasonably request, and will permit JMB and its designees,
from time to time, to inspect, audit and make copies of and extracts from
all records and all other papers in the possession of the Borrower which
pertain to the Collateral, and will, upon request of JMB, deliver to JMB
all of such records and papers; (f) not enter into any modification,
amendment or supplement to, or permit the termination of, or execute any
waiver or release of, any term or provision of, or rights under, the
Agreement or the O & Y Guaranty without the prior written approval of JMB
thereto except as otherwise agreed in writing by JMB; (g) not cause or
permit 245 to be dissolved or terminated, or its business affairs wound up,
or any person or entity to be added or subtracted as a partner in 245
without the prior written approval of JMB; (h) perform, or cause to be
performed, all of Borrower's obligations under the Agreement and all other
Collateral, so Borrower's rights in and to the Collateral shall not be
impaired or jeopardized in any manner whatsoever; (i) notify JMB in writing
promptly of any material default by Borrower under the Agreement or any
notice to Borrower of any default under the Agreement; and (j) notify JMB
in writing of any material default by O & Y Equity under the Agreement,
and, in any case, furnish JMB with a copy of any notice of default given by
Borrower to any party under the Agreement simultaneously with the giving of
such notice to the defaulting party.

5. Payment of Amounts Due Borrower under the Agreement.
A. Prior to notice by JMB to Borrower, 245 and O & Y Equity of an event
which is a Default, or which, but for the passage of any applicable grace
period, would be a Default, by Borrower hereunder, Borrower agrees to pay
immediately and in full to JMB (to reduce the indebtedness on the Restated
Promissory Notes and the JMB Note), and after such notice, the Borrower
hereby irrevocably authorizes and directs 245, to pay all proceeds now due
or hereafter to become due to the Borrower in respect of 245 and/or the 245
Properties, whether derived from any financing or refinancing of the 245
Properties prior to the maturity date of the Restated Promissory Notes and
the JMB Note, or from any distributions to the partners under the Agreement
either of capital or cash flow, or otherwise, into an account which JMB
shall designate for the benefit of JMB only. If Borrower cures a default
of which JMB has given Borrower notice before such default constitutes a
Default hereunder, then Borrower's authorization and direction to 245, to
make payments directly to JMB shall lapse and be of no further force and
effect with respect to such default; provided, however, that 245 may
continue to make payments directly to JMB until JMB shall have given 245
and O & Y Equity further notice hereunder (JMB agreeing promptly to notify
245 and O & Y Equity in the event that 245 shall no longer be required to
make payments directly to JMB hereunder). All such amounts received by
JMB, either from the Borrower or 245, shall be applied to the Liabilities
in the manner set forth in the Restated Promissory Notes and the JMB Note.

B. For so long as Borrower is making such payments, the proceeds
now due or hereafter to become due to the Borrower in respect of 245 and/or
245 Properties may be net of normal operating costs of Borrower, including
attorney's fees and accountant's fees and reimbursements for other services
rendered to the Borrower by third parties.

6. Indemnification. The Borrower will indemnify and save harmless
JMB from and against all claims, liabilities and expenses on account of any
liability, adverse claim, loss or expense asserted against JMB under or by
reason of this Assignment or as a result of any payments received by JMB
from any obligor on any Collateral or otherwise as proceeds of any
Collateral, except for matters resulting from a) the gross negligence or
intentional misconduct of JMB in exercising any of its remedies hereunder
or in performing any of its duties and obligations hereunder, or b) matters
relating to any period after such time as JMB (or any third party acquiring
the Collateral pursuant to JMB's exercise of its remedies) may have fully
succeeded to all of Borrower's right, title and interest in and to the
Collateral as a result of its exercise of its remedies hereunder or
otherwise. Such obligation of the Borrower shall continue in effect after
and notwithstanding the discharge of the Liabilities and the release hereof
or the succession by JMB (or any third party acquiring the Collateral
pursuant to JMB's exercise of its remedies) to Borrower's right, title and
interest in and to the Collateral.

7. Default. Whenever a Default shall be existing, JMB may
exercise any rights and remedies available to it under the Restated
Promissory Notes or any other Loan Document (including, without limitation,
acceleration of the Liabilities), or under applicable law. In addition,
JMB shall have all rights and remedies of a secured party under the Uniform
Commercial Code of Illinois (regardless of whether such law or a similar
law is in effect in the jurisdiction where such rights and remedies are
asserted). Without limiting the foregoing, upon Default JMB may, to the
fullest extent permitted by applicable law, without notice, advertisement,
hearing or process of law of any kind, sell any or all of the Collateral,
free of all rights and claims of the Borrower therein and thereto, at any
public or private sale, and bid for and purchase any or all of the
Collateral at any such sale. In connection with any sale of the Collateral
made by JMB or any other party pursuant to or in accordance with or by
reason of this Assignment, JMB or said other party shall have the right,
free of any right of redemption of the Borrower (which Borrower hereby
waives), to execute and deliver an assignment of the Collateral to any
purchaser at such sale. The Borrower hereby expressly waives, to the
fullest extent permitted by applicable law, any and all notices,
advertisements, hearings or process of law in connection with the exercise
by JMB of any of its rights and remedies upon Default. If any notification
of intended disposition of any of the Collateral is required by law, such
notification, if mailed, shall be deemed reasonably and properly given if
mailed at least thirty (30) days before such disposition, postage prepaid,
addressed to the Borrower either at the address shown above, or such other
address of the Borrower within the State of Illinois as the Borrower may
indicate to JMB by a written notice complying with Section 10 hereof. All
costs and expenses of any kind whatsoever, of collection and enforcement of
the Liabilities or any rights or remedies hereunder (including, without
limitation, all costs of disposing of the Collateral, together with court
costs and reasonable attorneys' fees), or incurred in realizing upon the
Collateral or in enforcing this Assignment, shall be paid by the Borrower,
shall be deemed to be additional Liabilities secured hereby. Any proceeds
of any of the Collateral may be applied by JMB to the payment of expenses
in connection with the Collateral, including reasonable attorneys' fees and
legal expenses, and any balance of such proceeds shall be applied by JMB
toward the payment of such of the Liabilities (including the Restated
Promissory Notes and the JMB Note), and in such order of application, as
JMB may from time to time elect, with the excess, if any, to be paid to
Borrower.

8. Performance by JMB of Borrower's Obligations. After a Default
hereunder, or an event which, but for the passage of any applicable grace
period, would be a Default hereunder, JMB may, from time to time, perform
any obligation to be performed by the Borrower (a) hereunder or (b) under
the Restated Promissory Notes or the JMB Note or any of the Loan Documents,
any other instrument or document evidencing or securing any of the
Liabilities, or (c) under the Collateral (including, without limitation,
the Agreement), which the Borrower shall fail to perform, and JMB may take
any other action which JMB deems necessary for the maintenance or
preservation of any of the Collateral or its security interest in the
Collateral, with the following limitations: (i) if Borrower's obligation to
be performed by JMB is a non-monetary obligation and does not relate to the
giving of a consent or approval, then JMB may render such performance only
after JMB has given Borrower notice of an event which is a Default, or
which, but for the passage of any applicable grace period, would be a
Default hereunder (provided that JMB's power to perform such obligation
shall cease if and at such time as Borrower cures an event which is not yet
a Default within any applicable cure period); and (ii) if the Borrower's
obligation to be performed by JMB relates to the giving of a consent or
approval, JMB may render such performance only if a Default in the nature
of the failure to perform a monetary obligation has occurred, JMB has
accelerated the Liabilities, and JMB has initiated the process of
foreclosing on the Collateral, and either (a) JMB deems such action
necessary for the maintenance or preservation of any of the Collateral or
its security interest in the Collateral, or (b) in JMB's opinion, without
any requirement of an opinion of counsel, the Borrower is legally obligated
under the Agreement to issue such consent or approval. All moneys advanced
by JMB in connection with the foregoing, together with interest at the rate
provided for after a default in the Restated Promissory Notes shall be
repaid by the Borrower to JMB, upon the latter's demand, or at such earlier
time as the Borrower may elect, and shall be secured hereby as part of the
Liabilities prior to any other obligation secured hereby, but the making of
any such advance by JMB shall not relieve the Borrower of any Default
hereunder. Notwithstanding the foregoing, in all of their dealings with
the Borrower in connection with any consents, approvals or other
obligations which are the subject of the foregoing provisions of this
Section 8, Olympia & York 245 Park Avenue Holding Company, L.P. and O & Y
Equity Company, L.P. (collectively with their respective successors and
assigns, the "O & Y Partners") and 245 shall be entitled to rely on the
directions of the managing general partner of Borrower until they shall
have each received notice from JMB to the contrary and, following their
receipt of such notice from JMB, the O & Y Partners and 245 shall be
entitled to rely only on JMB's directions until such time as the O & Y
Partners (or any of them) and 245 shall have received further notice from
JMB that they may once again rely on the directions of the managing general
partner of the Borrower (JMB agreeing promptly to notify 245 and the O & Y
Partners in the event that they may once again rely on the directions of
the managing general partner of Borrower pursuant to the terms of this
Section 8).

9. No Liability on JMB. Anything herein contained to the contrary
notwithstanding, this Assignment is given as collateral security only, (i)
the Borrower shall remain liable under the Agreement to perform all of its
obligations thereunder, (ii) JMB shall have no obligation or liability by
reason of or arising out of this Assignment (including actions by JMB
pursuant to Section 8 hereof), except matters resulting from JMB's gross
negligence or intentional misconduct, and (iii) until such time, if any, as
JMB (or a third party ["Third Party"] acquiring the Collateral pursuant to
JMB's exercise of its remedies hereunder or under any other of the Loan
Documents) succeeds to the Borrower's interest in the Collateral, JMB shall
have no obligation or liability under the Agreement (and then JMB or such
Third Party, as the case may be, only as to obligations and liabilities
accruing from and after such time). In addition, unless and until JMB (or
any such Third Party) succeeds to Borrower's interest in the Collateral,
neither JMB nor such Third Party shall have any obligation to make any
payment or to make any inquiry as to the nature or the sufficiency of any
payment received by it, to present or file any claim, or to take any action
to collect or enforce the payment of any amounts which have been assigned
to it or to which it may be entitled at any time or times. Under no
circumstances whatsoever will JMB (or any such Third Party) be deemed a
partner or member in 245 until such time, if any, as JMB (or such Third
Party) acquires Borrower's interest in the Collateral.

10. Miscellaneous. No remedy herein conferred is intended to be
exclusive of any other remedy, but every such remedy shall be cumulative
and shall be in addition to every other remedy herein conferred, or
conferred upon JMB by any other agreement or instrument or security, or now
or hereafter existing at law or in equity or by statute.

No failure or delay on the part of JMB in the exercise of any right
or remedy hereunder or under any other instrument or otherwise shall
operate as a waiver thereof, nor shall any single or partial exercise of
any such right or remedy preclude other or further exercise thereof or the
exercise of any other right or remedy.

The satisfaction or discharge of any part of the Liabilities shall
not in any way satisfy or discharge this Assignment, but this Assignment
shall remain in full force and effect as long as any amount remains unpaid
or any monetary obligation remains unperformed on or with respect to any
such Liabilities.

Wherever possible, each provision of this Assignment shall be
interpreted in such manner as to be effective and valid under applicable
law, but if, for any reason whatsoever, any one or more of the provisions
of this Assignment shall be held or deemed to be inoperative, unenforceable
or invalid as applied to any particular case or cases in any particular
jurisdiction or jurisdictions or in all jurisdictions or in all cases, such
circumstances shall not have the effect of rendering such provision
inoperative, unenforceable or invalid in any other jurisdiction or in any
other case or of rendering any of the other provisions of this Assignment
inoperative, unenforceable or invalid.

This Assignment shall be a contract made under and governed by the
laws of the State of Illinois.

All notices under this Assignment shall be in writing and shall have
been deemed to have been given when delivered personally or on the third
Business Day following the day when deposited in the United States mail,
postage prepaid, addressed to either party at its address set forth above,
to the attention of, in the case of JMB, H. Rigel Barber and, in the case
of Borrower, Stuart Nathan.

This Assignment shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns and, without
limiting the foregoing, all rights and powers hereunder or with respect
hereto of JMB, or any agent or representative of JMB, may be exercised by
any successor or assignee of JMB, including any party to whom JMB sells a
participation interest herein, or any agent or representative of such
successor or assignee; provided, however, that all notices and directions
to 245 or any of the O & Y Partners hereunder shall be made only by JMB and
not by any holder of a participation interest in the loans referenced
herein.

This Assignment may be executed in any number of counterparts, each
of which shall be deemed to be an original, and all of which shall together
constitute but one and the same instrument.

11. Exculpation. Notwithstanding anything herein contained to the
contrary, JMB agrees (for itself and any subsequent holder of this
Assignment) that (1) all liability with respect to the debt secured by this
Assignment, or any of the other documents executed and delivered by
Borrower in connection herewith shall be satisfied only out of the assets
of Borrower and that no present or future constituent partner (i.e. person
holding an equity interest) in or any agent of the Borrower, nor any
officer, shareholder, director, employee, trustee, beneficiary or agent of
any corporation or trust that is or becomes a constituent partner in
Borrower (including, but not limited to, persons executing documents or
certificates on behalf of Borrower) shall have personal liability (either
directly or indirectly), all such personal liability being expressly waived
by JMB and (2) in no event shall a negative capital account or any other
funding obligations of any constituent partner in Borrower be deemed to be
an asset or the property of Borrower and neither JMB nor any subsequent
holder of this document shall have any right to collect, enforce or proceed
against or with respect to any such negative capital account or partner's
obligations.

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

JMB/245 PARK AVENUE ASSOCIATES, LTD.,
an Illinois limited partnership

By: JMB Park Avenue, Inc.,
Its corporate general partner

By: _________________________________

Name:_________________________________

Title:________________________________

JMB REALTY CORPORATION

By: _________________________________

Name:_________________________________

Title:________________________________

122618.05

AMENDATORY AGREEMENT
(245 PARK AVENUE COMPANY)
-------------------------

AGREEMENT dated October 11, 1995, by and among JMB/245 Park
Avenue Associates, Ltd. ("JMB"), O&Y Equity Company L.P. ("Equity"), O&Y
245 Corp. ("245 Corp."), Olympia & York 245 Park Avenue Holding Company,
L.P. ("Holding" and, together with Equity and 245 Corp., the "O&Y U.S.
Parties").

WHEREAS, JMB and the O&Y U.S. Parties currently are the general
partners of 245 Park Avenue Company, a New York general partnership (the
"Partnership") pursuant to that certain agreement captioned "FIRST AMENDED
AND RESTATED AGREEMENT OF GENERAL PARTNERSHIP OF 245 PARK AVENUE COMPANY"
dated as of December 29, 1983, by and among JMB, formerly know as JMB/245
Park Avenue Associates, O&Y Equity Corp. ("Equity Corp.") and FAME
Associates ("FAME") as amended and supplemented by:

1. that certain agreement captioned "FIRST AMENDMENT TO FIRST
AMENDED AND RESTATED AGREEMENT OF GENERAL PARTNERSHIP OF 245 PARK AVENUE
COMPANY" dated as of December 29, 1986, by and among JMB, Equity Corp.,
FAME and O&Y Interests Corp. ("Interests Corp.")(Interests Corp.'s interest
in the Partnership is as the successor in interest to FAME and Equity
Corp., as a partner of the Partnership),
2. that certain letter agreement dated March 6, 1987 dated March
6, 1987 (the "Bear Stearns Agreement"), by and among Equity, Olympia & York
245 Lease Company ("Leasco"), JMB and the Partnership,
3. that certain instrument captioned "AMENDED BUSINESS CERTIFICATE
FOR PARTNERS" dated as of June 30, 1988, by and among Equity Holding, JMB
and Interests Corp., reflecting the succession by Holding to
Interests Corp.'s interest in the Partnership,
4. the letter agreement dated September 7, 1989 (the "DKB Letter
Agreement"), by and between Equity and JMB,
5. the Consent and Agreement dated June 21, 1991, by and among
JMB, Morgan Guaranty Trust Company of New York, Equity, Holding, O&Y Equity
General Partner Corp., Leasco and O&Y Management Corp., and
6. the Assignment and Assumption Agreement dated as of January 29,
1992, by and between Holding and 245 Corp.,
(the agreements and instruments referred to in this paragraph being herein
collectively referred to as the "Partnership Agreement", the current
partners of the Partnership being JMB, Equity, Holding and 245 Corp.); and
WHEREAS, the O&Y U.S. Parties have advised JMB that within days
each of the O&Y U.S. Parties will commence a case under Chapter 11 of Title
11 of the U.S. Code)("Chapter 11") seeking reorganization under Chapter 11
(the "Chapter 11 Cases") in connection with an overall restructuring of the
O&Y U.S. Parties and the group of affiliated companies known generally as
the "Olympia & York Companies (U.S.A.)" and
WHEREAS, JMB and the O&Y U.S. Parties desire to make certain
provisions with respect to the ongoing conduct of the Partnership's
business, notwithstanding the imminent Chapter 11 Cases of the O&Y U.S.
Parties;

NOW, THEREFORE, in consideration of the mutual covenants of the
parties and for other good and sufficient consideration, the adequacy of
which is hereby acknowledged, the parties hereby agree as follows:
1. Notwithstanding the commencement and prosecution of the
Chapter 11 Cases by the O&Y U.S. Parties, any contrary provisions of the
Partnership Agreement or any provision of law which, absent this agreement,
would be to the contrary, the commencement and prosecution of the Chapter
11 Cases by the O&Y U.S. Companies shall not cause a dissolution of the
Partnership, and the parties agree to the continuation of the Partnership
on the terms and conditions of the Partnership Agreement, as the same are
modified herein, subject to the conditions stated in paragraph 2 of this
agreement.
2. Termination Events:
a. In the event that the Bankruptcy Court:
i. directs the appointment of a Chapter 11 trustee in
any of the Chapter 11 Cases.
ii. enters an order for relief under Chapter 7 of Title
11 of the U.S. Code in any of the Chapter 11 Cases, or
iii. dismisses any of the Chapter 11 Cases,
then this agreement shall be null and void each time that one of the
aforementioned termination events takes place, unless waived, at JMB's
exclusive option, by written notice by JMB to the O&Y U.S. Parties within
thirty days after the aforementioned termination event. JMB's waiver of
any termination event does not constitute a waiver of any subsequent
termination event.
b. In the event that the O&Y U.S. Parties do not commence
the Chapter 11 Cases on or before 5:00 p.m. E.D.T. October 16, 1995, then
this agreement shall be null and void.
In the event that this agreement shall become null and void, the parties
hereto shall retain any rights, duties, defenses and privileges that they
would have had under the Partnership Agreement absent the modifications
made in this agreement, and unless all of the partes hereto agree
otherwise, there shall exist a dissolution event under paragraph 8.1.A of
the Partnership Agreement as of the Date that this agreement becomes null
and void.
3. Consistent with paragraph 1 and subject to the provisions
of paragraph 2 hereof, Section 8.1.A of the Partnership Agreement is
amended to exclude from the meaning of the term "bankruptcy" as used
therein, and Section 8.3 of the Partnership Agreement is amended to exclude
from the definition of "bankruptcy" contained therein, the commencement of
the Chapter 11 Cases for so long as this agreement remains in effect.
4. Except as herein modified, the Partnership Agreement
shall remain in full force and effect and is hereby confirmed, and no party
hereto has waived or altered any of its rights thereunder. Nothing in this
agreement shall constitute an admission, waiver or estoppel by any party
hereto that JMB's consent was required to any of the modifications or
amendments described in clause six of the first recital, or that JMB in
fact consented, if such consent was required, to the modifications or
amendments described in clause six of the first recital.
5. This agreement may be executed and delivered in two or
more counterparts, regardless of whether any party has executed more than
one counterpart of the number of parties executing any counterpart, but all
such counterparts together shall be one and the same agreement. The parties
may execute and deliver counterparts of this agreement by facsimile
transmission.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first herein written.

JMB/245 PARK AVENUE ASSOCIATES, LTD.
by JMB Park Avenue Inc., its general partner

By: STUART C. NATHAN
-------------------------------
Stuart C. Nathan
President

O&Y EQUITY COMPANY, L.P.
by O&Y Equity General Partner Corp.,
its general partner

By: DAVID G. KING, JR.
-------------------------------
David G. King, Jr.
Senior Vice President-Finance

O&Y 245 CORP.

By: DAVID G. KING, JR.
-------------------------------
David G. King, Jr.
Senior Vice President-Finance

OLYMPIA & YORK 245 PARK AVENUE HOLDING
COMPANY, L.P.
by O&Y Equity Company, L.P., its general partner
by O&Y Equity General Partner Corp.,
its general Partner

By: DAVID G. KING, JR.
-------------------------------
David G. King, Jr.
Senior Vice President-Finance

<ARTICLE> 5

<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>

<CIK> 0000747159
<NAME> JMB/245 PARK AVENUE ASSOCIATES, LTD.

<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995

<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 14,751,195
<BONDS> 43,236,631
<COMMON> 0
0
0
<OTHER-SE> (133,022,211)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 76,451
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,370,251
<INCOME-PRETAX> (2,446,702)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,507,958)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,507,958)
<EPS-PRIMARY> (5,177)
<EPS-DILUTED> (5,177)

</TABLE>