<Page>
Exhibit 10.7
AMENDMENT NO.1 TO LOAN AGREEMENT
THIS AMENDMENT NO.1 TO LOAN AGREEMENT (this "AMENDMENT") is entered into
as of June 28,2002 by and between GOLDMAN SACHS MORTAGE COMPANY, a New York
limited partnership (as successor in interest to Archon Financial, L.P. the
"LENDER") and GRAND CANAL SHOPS II, LLC (the "BORROWER") and amends that
certain Loan Agreement dated as of June 4, 2002 (as amended by this Amendment
and as the same may be further amended, restated supplemented or otherwise
modified and in effect from time to time the "LOAN AGREEMENT"). Capitalized
terms used herein and not otherwise defined shall have the meanings given
such terms in the Loan agreement.
For good and valuables consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS.
(a) The following definitions in the Loan Agreement are hereby amended
by substituting in their entirety the following definitions for the
definitions of such terms:
"INDEBTNESS" means the Principal Indebtness, together with interest and
all other obligations and liabilities of Borrower to Lender under the Loan
Documents, including all Transaction Costs, any Event of default Yield
Maintenance Premium, any Make-Whole Payment, any Prepayment Fees and other
amounts due or to become due to Lender pursuant hereto, under the Note or in
accordance with any of the Loan Documents, and all other amounts, sums and
expenses reimbursable by Borrower to Lender hereunder or pursuant to the Note
or any of the other Loan Documents.
"LOAN AMOUNT" means $120,000,000.
"MAKE-WHOLE PAYMENT" means, in connection with the application of Loss
Proceeds to prepay the Loan during the Lockout period in accordance with
SECTION 5.16(d) hereof, the amount of interest rate equal to the Spread
(which, with respect to a prepayment in accordance with SECTION 5.16 (d)
during the Interest Accrual Period in which the Initial Payment Date falls,
will be deemed to be 1.8259%) had such principal amount been outstanding
through the end of the Lockout Period.
"SPREAD" means
(i) Initially, 1.875% ; and
(ii) Following the bifurcation of the Note into multiple Note
Components pursuant to SECTION 1.3(c), the weighted average of the
Component Spreads at the time determination, weighted on the basis of
corresponding Component Balances.
(b) The following definitions are hereby added to the Loan Agreement:
<Page>
"PREPAYMENT FEE" means, with respect to any prepayment of the Principal
Indebtedness permitted pursuant to Section 2.1 herein,
(i) on any date on which prepayment is permitted pursuant to
SECTION 2.1 prior to the Payment Date in January 2004, 1.00% of the
amount prepaid; and
(ii) at any time thereafter, zero.
(c) The definition of "Lockout Reduction Fee" is hereby deleted in its
entirety from the Loan Agreement.
2. INTEREST AND PRINCIPAL. SECTION 1.3(a) of the Loan Agreement is
hereby deleted in its entirety and replaced by the following:
"(a) Commencing with the Initial Payment Date and on each and every
Payment Date thereafter, Borrower shall pay interest on the Principal
Indebtedness for the Interest Accrual Period in which such Payment Date falls
at a rate per annum equal to the sum of LIBOR, determined as of the Interest
Determination Date immediately preceding such Interest Accrual Period, PLUS
the Spread (except that interest shall be payable on the Indebtedness,
including due and unpaid interest, at the Default Rate with respect to any
portion of such Interest Accrual Period falling during the continuance of an
Event of Default), except that with respect to the Interest Accrual Period in
which the Initial Payment Date Falls, (i) in lieu of the interest on the
Principal Indebtedness calculated as provided in this SECTION 1.3(a),
Borrower shall pay interest on the Principal Indebtedness in the amount of
$325,695.83 on the Initial Payment Date, and (ii) for purposes of calculating
the Default Rate, to the extent applicable, the interest rate otherwise
applicable to such Note shall be deemed to be 2.3571%. Interest accruing for
the first Interest Accrual Period was paid in full on the Closing Date from
the Loan proceeds disbursed to Borrower at Closing. Interest payable
hereunder shall be computed on the basis of a 360-day year and the actual
number of days elapsed. All payments made by Borrower hereunder or under the
other Loan Documents shall be made irrespective of, and without any deduction
for, any setoffs or counterclaims."
3. Voluntary Prepayment. SECTIONS 2.1 (a) AND (b) of the Loan Agreement
are hereby deleted in their entirety and replaced by the following:
(a) Borrower shall be prohibited from prepaying the Loan, in whole
or in part, until the first Payment Date following the first anniversary
of the Closing Date (the "LOCKOUT PERIOD").
(b) After the expiration of the Lockout Period, provided no Event
of Default is continuing, Borrower may voluntarily prepay the Loan in
whole or in part on any Business Day, except that no prepayments shall be
permitted on the last two Business Days in any Interest Accrual Period.
Each such prepayment shall be accompanied by (i) the amount of interest
theretofore accrued but unpaid in respect of the principal amount so
prepaid, plus (ii) the amount of interest which would have accrued on the
principal amount so prepaid had it remained outstanding through the end
of the Interest Accrual Period in which such prepayment is made, plus
(iii) the applicable Prepayment Fee, if any. If the Loan has been
bifurcated into Note Components pursuant to SECTION 1.3(c),
2
<Page>
all prepayments of the Loan made by Borrower in accordance with this
SECTION 2.1 shall be applied to the Note Components in ascending order of
interest rate (I.E.. first to the Note Component with the lowest
Component Spread until its outstanding principal balance has been reduced
to zero, then to the Note Component with the second lowest Component
Spread until its outstanding principal balance has been reduced to zero,
and so on). Following any such prepayment, Borrower may release or
transfer, free and clear of the Lien of the Loan Documents, a portion of
the notional amount of the Interest Rate Cap Agreement equal to the
amount of such prepayment.
4. CONTINUED FORCE AND EFFECT. All of the terms and conditions of the
Loan Agreement and the other Loan Documents and the collateral security
provided thereby, including those terms and conditions modified by this
Amendment, are hereby ratified and confirmed in all respects and shall remain
in full force and effect in accordance with their terms. This Amendment is
not intended to, and shall not be construed to, effect a novation. In the
event of any conflict between the terms of this Amendment and the terms of
any of the Loan Documents, the terms of this Amendment shall control.
5. REFERENCES TO LOAN AGREEMENT. All references to the Loan Agreement in
any Loan Document shall, from and after the execution and delivery of this
Amendment, be deemed a reference to the Loan Agreement as amended hereby and
as hereafter amended, modified or extended from time to time.
6. GOVERNING LAW. This Amendment shall be governed by and construed and
interpreted in accordance with the laws of the State of New York, without
reference to conflicts of law principles.
7. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument.
8. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon the
Borrower and its successors and assign, and shall be binding upon and inure
to the benefit of the Lender and its successors and assigns, including any
subsequent holder of all or any portion of the Note.
3
<Page>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered in their names as of the date first above written.
LENDER:
GOLDMAN SACHS MORTGAGE COMPANY
By: Goldman Sachs Real Estate Funding Corp.,
its general partner
By: /s/ Daniel Sparks
-----------------------------
Name: DANIEL SPARKS
Title: VICE PRESIDENT
BORROWER:
GRAND CANAL SHOPS II, LLC,
a Delaware limited liability company
By: Grand Canal Shops Mall MM Subsidiary, Inc.,
its managing member
By: /s/ Harry Miltenberger
---------------------------------------
Name: Harry Miltenberger
Title: Chief Financial Officer