AMENDED AND RESTATED MORTGAGE NOTE

$376,627.13

December 15, 2005

Claverack Housing Ventures, LLC
c/o Wellsford Real Properties
535 Madison Avenue, 26th Floor
New York, New York 10022
(Individually and collectively “Borrower”)

Wachovia Bank, National Association
12 East 49th Street
42nd Floor
New York, New York 10017
(Hereinafter referred to as “Bank”)

Borrower promises to pay to the order of Bank, in lawful money of the United
States of America, at its office indicated above or wherever else Bank may
specify, the sum of Three Hundred Seventy-Six Thousand Six Hundred Twenty Seven
and 13/100 Dollars $376,627.13) or such sum as may be advanced and outstanding
from time to time, with interest on the unpaid principal balance at the rate and
on the terms provided in this Amended and Restated Mortgage Note (including all
renewals, extensions or modifications hereof, this “Note”).

AMENDMENT AND RESTATEMENT. This Note amends and restates in its entirety the
note dated as of March 10, 2003 given by Millbrook Road, LLC to The Arnold
Family Limited Partnership in the original principal sum of $594,000 as reduced
to $376,627.13, which note and the mortgage securing such note have been
assigned this date to the Bank.

USE OF PROCEEDS. Borrower shall use the proceeds of the loan evidenced by this
Note for the commercial purposes of Borrower, as follows: to refinance existing
indebtedness incurred in connection with the acquisition of the real property
described in the mortgage securing this Note.

SECURITY.  Borrower has granted Bank a security interest in the collateral
described in the Loan Documents, including, but not limited to, real and
personal property collateral described in that certain security instrument of
even date herewith.

INTEREST RATE. Interest shall accrue on the unpaid principal balance of this
Note during each Interest Period from the date hereof at a rate per annum equal
to the LIBOR Market Index Rate plus 220 basis points (“Interest Rate”). “LIBOR
Market Index Rate” means for any day the rate for U.S. dollar deposits for a
period of one month, as reported on Telerate page 3750 as of 11:00 a.m., London
time, on the date on which such rate would be in effect, or if such day is not a
business day, then the immediately preceding business day (or if not so
reported, then as determined by the Bank from another recognized source or
interbank quotation).

DEFAULT RATE. In addition to all other rights contained in this Note, if a
Default (as defined herein) occurs and as long as a Default continues, all
outstanding Obligations, other than Obligations under any swap agreements (as
defined in 11 U.S.C. § 101, as in effect from time to time) between Borrower and
Bank or its affiliates, shall bear interest at the Interest Rate plus 3%
(“Default Rate”). The Default Rate shall also apply from acceleration until the
Obligations or any judgment thereon is paid in full.

INTEREST AND FEE(S) COMPUTATION (ACTUAL/360). Interest and fees, if any, shall
be computed on the basis of a 360-day year for the actual number of days in the
applicable period (“Actual/360 Computation”). The Actual/360 Computation
determines the annual effective yield by taking the stated

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(nominal) rate for a year’s period and then dividing said rate by 360 to
determine the daily periodic rate to be applied for each day in the applicable
period. Application of the Actual/360 Computation produces an annualized
effective interest rate exceeding the nominal rate.

REPAYMENT TERMS; EXTENSION OF MATURITY. This Note shall be due and payable in
consecutive monthly payments of accrued interest only, commencing on January 2,
2006, and continuing on the same day of each month thereafter until fully paid.
In any event, all principal and accrued interest shall be due and payable on
December 15, 2006 (the “Maturity Date”); subject to the extension as set forth
in the next paragraph.

The Maturity Date may be extended at Borrower’s option to June 15, 2007,
provided:

(i) Borrower on or before October 15, 2006 gives Bank written notice of its
intention to extend the Maturity Date;

(ii) No Default exists;

(iii) Borrower has completed the construction lien free of one Home, and a
temporary or permanent certificate of occupancy has been issues for such Home;
and

(iv) Borrower has obtained approval from all required Governmental Authorities
for the subdivision and development of the West Side Parcel (as defined in the
Building Loan Agreement) into not less than 48 buildable lots in accordance with
the proposed subdivision plan approved by the Bank.

APPLICATION OF PAYMENTS. Monies received by Bank from any source for application
toward payment of the Obligations shall be applied to accrued interest and then
to principal. If a Default occurs, monies may be applied to the Obligations in
any manner or order deemed appropriate by Bank.

If any payment received by Bank under this Note or other Loan Documents is
rescinded, avoided or for any reason returned by Bank because of any adverse
claim or threatened action, the returned payment shall remain payable as an
obligation of all persons liable under this Note or other Loan Documents as
though such payment had not been made.

DEFINITIONS. Loan Documents. The term “Loan Documents”, as used in this Note and
the other Loan Documents, refers to all documents executed in connection with or
related to the loan evidenced by this Note and any prior notes which evidence
all or any portion of the loan evidenced by this Note, and any letters of credit
issued pursuant to any loan agreement to which this Note is subject, any
applications for such letters of credit and any other documents executed in
connection therewith or related thereto, and may include, without limitation,
the Building Loan Agreement dated as of the date hereof between Borrower and the
Bank (the “Building Loan Agreement”), the mortgage securing the Borrower’s
obligations under the Building Loan Agreement (the “Building Loan Mortgage”),
this Note, the note secured by the Building Loan Mortgage, guaranty agreements,
security agreements, security instruments, financing statements, mortgage
instruments, any renewals or modifications, whenever any of the foregoing are
executed, but does not include swap agreements (as defined in 11 U.S.C. § 101,
as in effect from time to time). Obligations. The term “Obligations”, as used in
this Note and the other Loan Documents, refers to any and all indebtedness and
other obligations under this Note, all other obligations under any other Loan
Document(s), and all obligations under any swap agreements (as defined in 11
U.S.C. § 101, as in effect from time to time) between Borrower and Bank, or its
affiliates, whenever executed. Certain Other Terms. All terms that are used but
not otherwise defined in any of the Loan Documents shall have the definitions
provided in the Uniform Commercial Code.

LATE CHARGE. If any payments are not timely made, Borrower shall also pay to
Bank a late charge equal to 5% of each payment past due for 10 or more days.
This late charge shall not apply to payments due at maturity or by acceleration
hereof, unless such late payment is in an amount not greater than the highest
periodic payment due hereunder.

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Acceptance by Bank of any late payment without an accompanying late charge shall
not be deemed a waiver of Bank’s right to collect such late charge or to collect
a late charge for any subsequent late payment received.

If this Note is secured by owner-occupied residential real property located
outside the state in which the office of Bank first shown above is located, the
late charge laws of the state where the real property is located shall apply to
this Note and the late charge shall be the highest amount allowable under such
laws. If no amount is stated thereunder, the late charge shall be 5% of each
payment past due for 10 or more days.

ATTORNEYS’ FEES AND OTHER COLLECTION COSTS. Borrower shall pay all of Bank’s
reasonable expenses incurred to enforce or collect any of the Obligations
including, without limitation, reasonable arbitration, paralegals’, attorneys’
and experts’ fees and expenses, whether incurred without the commencement of a
suit, in any trial, arbitration, or administrative proceeding, or in any
appellate or bankruptcy proceeding.

USURY. If at any time the effective interest rate under this Note would, but for
this paragraph, exceed the maximum lawful rate, the effective interest rate
under this Note shall be the maximum lawful rate, and any amount received by
Bank in excess of such rate shall be applied to principal and then to fees and
expenses, or, if no such amounts are owing, returned to Borrower.

DEFAULT. If any of the following occurs, a default (“Default”) under this Note
shall exist: Nonpayment; Nonperformance. The failure of timely payment or
performance of the Obligations or Default under this Note or any other Loan
Documents. False Warranty. A warranty or representation made or deemed made in
the Loan Documents or furnished Bank in connection with the loan evidenced by
this Note proves materially false, or if of a continuing nature, becomes
materially false. Cross Default. At Bank’s option, any default in payment or
performance beyond any applicable notice, grace and/or cure periods of any
obligation under any other loans, contracts or agreements of Borrower.
Cessation; Bankruptcy. The death of, appointment of a guardian for, dissolution
of, termination of existence of, loss of good standing status by, appointment of
a receiver for, assignment for the benefit of creditors of, or commencement of
any bankruptcy or insolvency proceeding by or against Borrower, or any party to
the Loan Documents. Material Capital Structure or Business Alteration. Without
prior written consent of Bank, (i) a material alteration in the kind or type of
Borrower’s business; (ii) the sale of substantially all of the business or
assets of Borrower, or a material portion (10% or more) of such business or
assets if such a sale is outside the ordinary course of business of Borrower, or
more than 50% of the outstanding membership interests of Borrower in a single
transaction or a series of transactions, in each case other than pursuant to the
buy/sell provisions of the LLC Agreement of Borrower (provided that notice
thereof shall be given to the Bank); (iii) the acquisition of substantially all
of the business or assets or more than 50% of the outstanding stock or voting
power of any other entity; or (iv) should any Borrower or any of Borrower’s
Subsidiaries or Affiliates enter into any merger or consolidation; provided,
however, that nothing contained in the foregoing clauses (I) through (iv) shall
be construed as to restrict (a) a transfer of a non-controlling interest in the
Borrower and (b) a transfer of any of the stock of the managing member of the
Borrower so long as Jeffrey Lynford continues to either be the Chief Executive
Officer of the managing member of the Borrower or hold a senior position in the
managing member of the Borrower holding decision making authority with respect
to the Project, and no such transfer described in the foregoing clauses (a) or
(b) shall constitute a default hereunder. Notwithstanding any other provision of
this Note, any Default by Borrower of an obligation to make a payment under this
Note (a “Payment Default”) shall be subject to a ten (10) day cure period
(without requiring written notice) and any Default of any other obligation of
Borrower shall be subject to a cure period of thirty (30) days after written
notice of such default. Furthermore, in the event that any Default that is not a
Payment Default cannot reasonably be cured within such thirty (30) day cure
period, such cure period shall be extended so long as (v) such Default is bonded
over by Borrower, (w) Borrower has commenced such cure within the initial thirty
(30) day cure period, (x) Borrower diligently pursues such cure to completion,
(y) such default is resolved within ninety (90) days from the initial occurrence
thereof, and (z) such delay in the cure does not materially injure Bank.
Material Adverse Change. Bank determines in good faith, in its sole

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discretion, that the prospects for payment or performance of the Obligations are
impaired or there has occurred a material adverse change in the business or
prospects of Borrower, financial or otherwise.

REMEDIES UPON DEFAULT. If a Default occurs beyond applicable notice, grace
and/or cure periods under this Note or any Loan Documents, Bank may at any time
thereafter, take the following actions:  Bank Lien. Foreclose its security
interest or lien against Borrower’s accounts without notice. Acceleration Upon
Default. Accelerate the maturity of this Note and, at Bank’s option, any or all
other Obligations, other than Obligations under any swap agreements (as defined
in 11 U.S.C. § 101, as in effect from time to time) between Borrower and Bank,
or its affiliates, which shall be due in accordance with and governed by the
provisions of said swap agreements; whereupon this Note and the accelerated
Obligations shall be immediately due and payable; provided, however, if the
Default is based upon a bankruptcy or insolvency proceeding commenced by or
against Borrower or any guarantor or endorser of this Note and if such
bankruptcy or insolvency proceeding is involuntary, such has not been dismissed
within 90 days of the commencement thereof, all Obligations (other than
Obligations under any swap agreement as referenced above) shall automatically
and immediately be due and payable. Cumulative. Exercise any rights and remedies
as provided under the Note and other Loan Documents, or as provided by law or
equity.

WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note and
other Loan Documents shall be valid unless in writing and signed by an officer
of Bank. No waiver by Bank of any Default shall operate as a waiver of any other
Default or the same Default on a future occasion. Neither the failure nor any
delay on the part of Bank in exercising any right, power, or remedy under this
Note and other Loan Documents shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. Except to the
extent otherwise provided by the Loan Documents or prohibited by law, Borrower
and any other person liable under this Note waives presentment, protest, notice
of dishonor, demand for payment, notice of intention to accelerate maturity,
notice of acceleration of maturity, notice of sale and all other notices of any
kind. Further, each agrees that Bank may (i) extend, modify or renew this Note
or make a novation of the loan evidenced by this Note, and/or (ii) grant
releases, compromises or indulgences with respect to any collateral securing
this Note, or with respect to Borrower or other person liable under this Note or
any other Loan Documents, all without notice to or consent of Borrower and other
such person, and without affecting the liability of Borrower and other such
person; provided, Bank may not extend, modify or renew this Note or make a
novation of the loan evidenced by this Note without the consent of Borrower.

MISCELLANEOUS PROVISIONS. Assignment. This Note and the other Loan Documents
shall inure to the benefit of and be binding upon the parties and their
respective heirs, legal representatives, successors and assigns. Bank’s
interests in and rights under this Note and the other Loan Documents are freely
assignable, in whole or in part, by Bank. In addition, nothing in this Note or
any of the other Loan Documents shall prohibit Bank from pledging or assigning
this Note or any of the other Loan Documents or any interest therein to any
Federal Reserve Bank. Borrower shall not assign its rights and interest
hereunder without the prior written consent of Bank, and any attempt by Borrower
to assign without Bank’s prior written consent is null and void. Any assignment
shall not release Borrower from the Obligations. Applicable Law; Conflict
Between Documents. This Note and, unless otherwise provided in any other Loan
Document, the other Loan Documents shall be governed by and construed under the
laws of the state named in Bank’s address on the first page hereof without
regard to that state’s conflict of laws principles. If the terms of this Note
should conflict with the terms of any loan agreement or any commitment letter
that survives closing, the terms of this Note shall control. Borrower’s
Accounts. Except as prohibited by law, Borrower grants Bank a security interest
in all of Borrower’s accounts with Bank and any of its affiliates. Swap
Agreements. All swap agreements (as defined in 11 U.S.C. § 101, as in effect
from time to time), if any, between Borrower and Bank or its affiliates are
independent agreements governed by the written provisions of said swap
agreements, which will remain in full force and effect, unaffected by any
repayment, prepayment, acceleration, reduction, increase or change in the terms
of this Note, except as otherwise expressly provided in said written swap
agreements, and any

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payoff statement from Bank relating to this Note shall not apply to said swap
agreements unless expressly referred to in such payoff statement. Jurisdiction.
Borrower irrevocably agrees to non-exclusive personal jurisdiction in the state
named in Bank’s address on the first page hereof. Severability. If any provision
of this Note or of the other Loan Documents shall be prohibited or invalid under
applicable law, such provision shall be ineffective but only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Note or other such document.
Notices. Any notices to Borrower shall be sufficiently given, if in writing and
mailed or delivered to the Borrower’s address shown above or such other address
as provided hereunder, and to Bank, if in writing and mailed or delivered to
Wachovia Bank, National Association, 12 East 49th Street, 42nd Floor, New York,
New York 10017 or such other address as Bank may specify in writing from time to
time. Notices to Bank must include the mail code. In the event that Borrower
changes Borrower’s address at any time prior to the date the Obligations are
paid in full, Borrower agrees to promptly give written notice of said change of
address by registered or certified mail, return receipt requested, all charges
prepaid. Plural; Captions. All references in the Loan Documents to Borrower,
guarantor, person, document or other nouns of reference mean both the singular
and plural form, as the case may be, and the term “person” shall mean any
individual, person or entity. The captions contained in the Loan Documents are
inserted for convenience only and shall not affect the meaning or interpretation
of the Loan Documents. Advances. Bank may, in its sole discretion, make other
advances which shall be deemed to be advances under this Note, even though the
stated principal amount of this Note may be exceeded as a result thereof.
Posting of Payments. All payments received during normal banking hours after
2:00 p.m. local time at the office of Bank first shown above shall be deemed
received at the opening of the next banking day. Joint and Several Obligations.
If there is more than one Borrower, each is jointly and severally obligated.
Fees and Taxes. Borrower shall promptly pay all documentary, intangible
recordation and/or similar taxes on this transaction whether assessed at closing
or arising from time to time. LIMITATION ON LIABILITY; WAIVER OF PUNITIVE
DAMAGES. EACH OF THE PARTIES HERETO, INCLUDING BANK BY ACCEPTANCE HEREOF, AGREES
THAT IN ANY JUDICIAL, MEDIATION OR ARBITRATION PROCEEDING OR ANY CLAIM OR
CONTROVERSY BETWEEN OR AMONG THEM THAT MAY ARISE OUT OF OR BE IN ANY WAY
CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY OTHER AGREEMENT OR
DOCUMENT BETWEEN OR AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED
HERETO, IN NO EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER
FOR, (1) INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR (2) PUNITIVE OR EXEMPLARY
DAMAGES. EACH OF THE PARTIES HEREBY EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO
PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY ARISE IN THE FUTURE IN
CONNECTION WITH ANY SUCH PROCEEDING, CLAIM OR CONTROVERSY, WHETHER THE SAME IS
RESOLVED BY ARBITRATION, MEDIATION, JUDICIALLY OR OTHERWISE. Patriot Act Notice.
To help fight the funding of terrorism and money laundering activities, Federal
law requires all financial institutions to obtain, verify, and record
information that identifies each person who opens an account. For purposes of
this section, account shall be understood to include loan accounts. FINAL
AGREEMENT. This Note and the other Loan Documents represent the final agreement
between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties. There are no
unwritten oral agreements between the parties.

WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
BORROWER BY EXECUTION HEREOF AND BANK BY ACCEPTANCE HEREOF, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS NOTE, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED
IN CONNECTION WITH THIS NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT
HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO BANK TO ACCEPT THIS NOTE.
EACH OF THE PARTIES AGREES THAT THE TERMS HEREOF SHALL SUPERSEDE AND REPLACE ANY
PRIOR AGREEMENT RELATED TO ARBITRATION OF DISPUTES BETWEEN THE PARTIES CONTAINED
IN ANY LOAN DOCUMENT OR ANY OTHER DOCUMENT OR AGREEMENT HERETOFORE EXECUTED IN
CONNECTION WITH, RELATED TO OR BEING REPLACED, SUPPLEMENTED, EXTENDED OR
MODIFIED BY, THIS NOTE.

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IN WITNESS WHEREOF, Borrower, on the day and year first above written, has
caused this Note to be executed under seal.

  CLAVERACK HOUSING VENTURES, LLC

  By:

Wellsford Real Properties, Inc.
Managing Member

    By: /s/ William H. Darrow

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  Name:    William H. Darrow II
Title:    Vice President

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