FIRST AMENDMENT TO OPERATING AGREEMENT
                            OF PARK AT HIGHLANDS LLC

     THIS FIRST AMENDMENT TO OPERATING  AGREEMENT OF PARK AT HIGHLANDS LLC (this
"First Amendment") is made as of the 29th day of December,  1995, by and between
AL FELD, an individual  ("Feld") and WELLSFORD PARK HIGHLANDS  CORP., a Colorado
corporation ("WPHC").

                                    RECITALS

     A.  Feld  and  WPHC  constitute  all  of  the  members  (collectively,  the
"Members") of Park at Highlands LLC, a Colorado limited  liability  company (the
"Company"),  which is governed by that  certain  Operating  Agreement of Park at
Highlands LLC (the "Operating Agreement") dated as of April 27, 1995.

     B. The Members  now desire to amend the  Operating  Agreement  as set forth
herein.

     C.  Capitalized   terms  not  otherwise   defined  herein  shall  have  the
definitions set forth in the Operating Agreement.


     NOW,  THEREFORE,  for and in  consideration of the above recitals and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged,  Feld and WPHC hereby  agree to amend the  Operating  Agreement as
follows:

     1.  Construction  Loan Outside Date. The Construction  Loan Outside Date as
defined in Section  5.2.4 of the  Operating  Agreement  is hereby  postponed  to
January 5, 1996

     2. Cost  Savings Fee.  The first  sentence of Section 7.4 of the  Operating
Agreement is hereby  deleted in its entirety  and the  following is  substituted
therefor:




<PAGE>



     "The  Company  shall pay Feld at Final  Closing a cost savings fee equal to
     twenty-five percent (25%) of cost savings, if any."

     3. Attorneys Fees. The following paragraph is hereby added to the Operating
Agreement as new Section 19.17 thereof:

     19.17 ATTORNEYS FEES. Should any party hereto institute any legal action or
     proceeding  to enforce any  provision  of the  Operating  Agreement  or for
     damages by reason of any alleged  breach of any  provision of the Operating
     Agreement or for any other judicial  remedy,  the prevailing party shall be
     entitled to receive from the non-prevailing party all reasonable attorneys'
     fees and all court costs in connection  with said action or proceeding,  in
     addition to any other award.

     4.  Exhibits to  Operating  Agreement.  The Members  hereby  agree that the
exhibits  listed  below,  a copy  of  each  of  which  is  attached  hereto  and
incorporated  herein,  are hereby  attached to and made a part of the  Operating
Agreement  to the  same  effect  as if each  had  been  fully  set  forth in the
Operating  Agreement at the date it was executed by the Members and that each of
the  exhibits  attached to this First  Amendment is hereby  substituted  for and
shall supersede the corresponding  exhibit attached to the Operating  Agreement,
if any:

     Exhibit C         Deposit and Contract Administration Agreement
     Exhibit E         Description of Infrastructure
     Exhibit F         Description of Infrastructure Land
     Exhibit J         Property Management Agreement
     Exhibit L         Pledge and Security Agreement--Feld to WPHC
     Exhibit M         Pledge and Security Agreement--WPHC to Feld
     Exhibit N         Description of Plans and Specifications
     Exhibit O         Final Project Budget
     Exhibit U         Substitution Agreement



<PAGE>




     5. Full Force and Effect. The Operating Agreement,  as specifically amended
herein,  is hereby  ratified by the  Members and shall  remain in full force and
effect.


     6.  Counterparts.   This  Amendment  may  be  executed  in  any  number  of
counterparts,  each of which shall be deemed to be an original and all of which,
when taken  together,  shall  constitute  one  agreement  binding on the parties
hereto,  notwithstanding  that  all the  parties  may not have  signed  the same
counterpart. Signature pages from one counterpart may be removed and attached to
another counterpart to create one fully-executed document.

                            [SIGNATURE PAGE FOLLOWS]


                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]




<PAGE>




     IN WITNESS  WHEREOF,  the parties  hereto,  being all of the Members of the
Company, have executed this Amendment as of the date first written above.

By:      /s/ Al Feld
         --------------------
         Al Feld

WELLSFORD PARK HIGHLANDS CORP.,
a Colorado corporation

By:      /s/ Donald D. MacKenzie
         -----------------------
         Donald D. MacKenzie, Vice President



<PAGE>



                                    EXHIBIT J

                          PROPERTY MANAGEMENT AGREEMENT

        (Has been prepared by David Strong, but I do not yet have a copy)



<PAGE>



                                    EXHIBIT L

                   PLEDGE AND SECURITY AGREEMENT--FELD TO WPHC

     THIS PLEDGE AND SECURITY  AGREEMENT  (THIS  "AGREEMENT")  is made as of the
27th day of April,  1995, by AL FELD, an  individual,  having an address of 4600
South Ulster Street,  Suite 350,  Denver,  Colorado 80237  ("PLEDGOR"),  for the
benefit of WELLSFORD PARK HIGHLANDS  CORP.,  a Colorado  corporation,  having an
office  at  370  Seventeenth   Street,   Suite  3100,  Denver,   Colorado  80202
("PLEDGEE").

                                    RECITALS

     A. Pledgor is the Manager and a Member of Park at Highlands LLC, a Colorado
limited  liability  company (THE  "LIMITED  LIABILITY  COMPANY"),  which Limited
Liability  Company is governed by its Operating  Agreement dated as of April 27,
1995 (THE "OPERATING AGREEMENT"), by and between Pledgee and Pledgor.

     B. Pledgee is also a Member in the Limited Liability Company.

     C. In order to secure the full payment and performance by Pledgor of all of
Pledgor's obligations under the Operating Agreement, as such Operating Agreement
may be now or hereafter  amended,  modified or restated (said  obligations under
the  Operating  Agreement  are  hereinafter  referred to as the  "OBLIGATIONS"),
Pledgor is entering into this Agreement for the benefit of Pledgee.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the recitals,  covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereby  agree as
follows:

     1. Definitions.

     a. "Collateral" shall mean:

     (i) All of Pledgor's right,  title and interest in the ownership  interests
of  Pledgor  in  Limited  Liability  Company,  whether  now  owned or  hereafter
acquired,  including,  without  limitation,  its  Interest  (as  defined  in the
Operating  Agreement) in the Limited Liability Company, the right of Pledgor, if
any, to any benefits to which Pledgor may be entitled  pursuant to the Operating
Agreement or the Colorado  Limited  Liability  Company Act, Colo. Rev.  Statutes
Sections  7-80-101 to 7-80-913,  as amended  from time to time (the "Act"),  and
Pledgor's right to receive payments,  fees,  distributions and allocations under
or in connection with the Operating Agreement (whether as Member or as Manager),
as such Operating


<PAGE>



     Agreement may be modified or extended from time to time with the consent of
     the Pledgee; and

     (ii) All proceeds,  whether cash proceeds or noncash proceeds, and products
of any and all of the foregoing.

     b. "Event of Default" shall mean an event of default described in Section 8
herein.

     2. Pledge of Collateral and Grant of Security Interest. Pledgor does hereby
unconditionally and irrevocably assign, pledge, convey,  transfer,  deliver, set
over and grant unto  Pledgee,  its  successors  and  assigns,  as  security  for
Pledgor's  complete and timely  payment and  performance of the  Obligations,  a
continuing first lien security interest under the Uniform Commercial Code of the
State of Colorado in the  Collateral.  Pledgor  hereby further grants to Pledgee
all  rights  in the  Collateral  as are  available  to a  secured  party of such
collateral under the Uniform Commercial Code of the State of Colorado (being the
principal place of business of Pledgor and the location of Pledgor's  residence)
and,  concurrently  herewith,  shall  deliver to  Pledgee  duly  executed  UCC-1
financing  statements  suitable for filing in the State of Colorado with respect
to the Collateral.

     3. Delivery to Pledgee.

     a. Pledgor agrees to execute and to use its best efforts to cause all other
necessary  parties,  and any  successors  and  assigns  thereof,  to execute and
deliver to Pledgee  such other  agreements,  instruments  and  documentation  as
Pledgee  may  reasonably  request  from time to time to effect  the  conveyance,
transfer,  and grant to Pledgee of Pledgor's right, title and interest in and to
the Collateral as security for the Obligations.

     b.  Concurrently  with the execution of this Agreement,  Pledgor has caused
each of the Members of the Limited  Liability  Company,  other than Pledgee,  to
execute the Consent to Security  Interest  and  Agreement  in the form  attached
hereto as Schedule A (THE  "CONSENT")  evidencing  the consent of the Members to
the  assignment  of Pledgor's  Limited  Liability  Company  interests  and their
agreement to be bound by Section 4 of this Agreement,  and Pledgor  covenants to
execute, if required by Pledgee, an amendment to the Operating Agreement in such
form as Pledgee may reasonably require to reflect the substitution of Pledgee in
place of Pledgor as Manager of the Limited Liability Company upon the occurrence
of an Event of Default. Pledgor further agrees to execute and to cause the other
Members of the Limited  Liability  Company to execute and deliver to the Pledgee
such other  agreements,  instruments and documentation as Pledgee may reasonably
request from time to time to effectuate the conveyance, transfer, assignment and
grant to Pledgee of all of  Pledgor's  right,  title and  interest in and to the
Collateral and to evidence the  substitution  of the Pledgee in place of Pledgor
as Manager in the Limited Liability Company.


<PAGE>



     4. Proceeds and Products of the Collateral.

     a.  Notwithstanding any of the foregoing,  unless and until there occurs an
Event of Default, Pledgee agrees to forbear from exercising its right to receive
all benefits  pertaining to the Collateral (except as otherwise  permitted under
the Operating Agreement),  and Pledgor shall be permitted to exercise all rights
and to receive all benefits of the Collateral,  including,  without  limitation,
the right to exercise  all  voting,  approval,  consent  and  similar  rights of
Pledgor pertaining to the Collateral, payments due under, proceeds, whether cash
proceeds or noncash  proceeds,  and products of the Collateral and to retain and
enjoy the same.

     b.  Pledgor  acknowledges  and agrees with  Pledgee,  that  unless  Pledgee
otherwise consents, in Pledgee's sole discretion, Pledgor shall not exercise any
voting, approval,  consent or other rights with respect to the Collateral at any
time after (i) the  occurrence of an Event of Default and (ii) receipt of notice
from Pledgee  instructing  Pledgor not to exercise  any such  voting,  approval,
consent or other rights with respect to the Collateral,  provided, however, that
Pledgor  shall  exercise  any  such  right  it may  have  under  the  agreements
comprising  the Collateral  with respect to the business  affairs of the Limited
Liability  Company as is  reasonably  necessary  to  protect  and  preserve  the
Collateral.

     c.  Upon or at any time  after  the  occurrence  of an  Event  of  Default,
Pledgee, at its option, to be exercised in its sole discretion by written notice
to Pledgor,  may exercise all rights and remedies  granted under this Agreement,
including,  without  limitation,  the right to require  the  obligors  under the
Collateral to make all payments due under and to pay all proceeds,  whether cash
proceeds or noncash  proceeds,  and products of the Collateral to Pledgee.  Upon
the giving of any such notice, the security  constituted by this Agreement shall
become  immediately  enforceable by Pledgee,  without any  presentment,  further
demand,  protest or other notice of any kind, all of which are hereby  expressly
and irrevocably  waived by Pledgor.  Pledgor hereby  authorizes and directs each
respective obligor under the agreements  constituting the Collateral,  that upon
receipt  of  written  notice  from  Pledgee  of an Event of  Default  by Pledgor
hereunder,  to assign, set over, transfer,  distribute,  pay and deliver any and
all  Collateral  or said  payments,  proceeds or products of the  Collateral  to
Pledgee,  at such address as Pledgee may direct, at such time and in such manner
as Collateral and such payments,  proceeds and products of the Collateral  would
otherwise  be  distributed,  transferred,  paid or  delivered  to  Pledgor.  The
respective  obligors under the agreements  constituting  the Collateral shall be
entitled to conclusively  rely on such notice and make all such  assignments and
transfers of the Collateral and all such payments with respect to the Collateral
and pay all such  proceeds and products of the  Collateral  to Pledgee and shall
have no liability to Pledgor for any loss or damage  Pledgor may incur by reason
of said reliance.

     5. No Assumption.  Notwithstanding any of the foregoing,  whether or not an
Event of Default  shall have  occurred,  and  whether or not  Pledgee  elects to
foreclose  on its  security  interest  in the  Collateral  as set forth  herein,
neither the execution of this Agreement,  receipt by Pledgee of any of Pledgor's
right,  title and interest in and to the Collateral  and the payments,  proceeds
and products of the Collateral, now or hereafter due to Pledgor from any obligor
of the  Collateral,  nor Pledgee's  foreclosure of its security  interest in the
Collateral, shall in any


<PAGE>



way be deemed to obligate Pledgee to assume any of Pledgor's obligations, duties
or  liabilities  under  the  Collateral  or  any  agreements   constituting  the
Collateral,  as presently existing or as hereafter amended, or under any and all
other  agreements now existing or hereafter  drafted or executed  (collectively,
the "PLEDGOR'S  LIABILITIES"),  unless Pledgee otherwise agrees to assume any or
all of Pledgor's  Liabilities in writing. In the event of foreclosure by Pledgee
of its  security  interest in the  Collateral,  Pledgor  shall  remain bound and
obligated to perform the Pledgor's  Liabilities to the extent required under the
Operating Agreement,  and Pledgee shall not be deemed to have assumed any of the
Pledgor's  Liabilities,  except as provided in the  preceding  sentence.  In the
event the entity or person acquiring the Collateral at a foreclosure sale elects
to assume the Pledgor's  Liabilities,  such assignee  shall agree to be bound by
the terms and provisions of the applicable agreement.

     6.  Indemnification.  Pledgor  hereby agrees to indemnify,  defend and hold
Pledgee,  its  successors  and  assigns  harmless  from and  against any and all
damages,  losses,  claims,  costs or  expenses  (including  without  limitation,
reasonable attorneys' fees) and any other liabilities whatsoever that Pledgee or
its  successors  or assigns may incur by reason of  Pledgor's  failure to comply
with the terms and conditions of this Agreement or by reason of any  unpermitted
assignment  of Pledgor's  right,  title and interest in and to any or all of the
Collateral.

     7.   Representations,   Warranties  and  Covenants.   In  addition  to  the
representations  made by Pledgor in the Operating  Agreement,  Pledgor makes the
following  representations  and warranties,  and Pledgor covenants and agrees to
provide  written  notices to Pledgee within ten (10) days after Pledgor  becomes
aware that any of the  following  is no longer  true and  correct and to perform
diligently  all acts  reasonably  necessary to maintain or restore the truth and
correctness, in all material respects, of the following:

     a.  Pledgor  acknowledges  that  the  Operating  Agreement  and  any  other
agreements  constituting the Collateral,  currently are in full force and effect
and have not been amended or modified, except by Pledgor and Pledgee in writing.

     b. Pledgor has the full right and title to its  interest in the  Collateral
and has the full power,  legal right and authority to pledge,  convey,  transfer
and assign such  interest.  None of the  Collateral  is subject to any  existing
assignment,  claim,  lien,  pledge,  transfer or other security  interest of any
character, or to any attachment,  levy, garnishment or other judicial process or
to any claim for set-off,  counterclaim,  deduction or discount.  Pledgor  shall
not, without the prior written consent of Pledgee,  which consent may be granted
or denied in Pledgee's sole discretion,  further convey,  transfer,  set over or
pledge to any party any of its interests in the  Collateral.  Pledgor  agrees to
(i) warrant and defend its title to the  Collateral  and the  security  interest
created by this Agreement  against all claims of all persons,  and (ii) maintain
and preserve the Collateral and such security interests.

     c. The pledge of the Collateral  pursuant to this Agreement creates a valid
first priority security interest in the Collateral,  securing the performance of
the


<PAGE>



Obligations,  which security  interest shall be perfected upon the filing of the
UCC-1 Financing Statements referred to in Paragraph 2 of this Agreement.

     d.  Pledgor's  Social  Security  Number  is:  ###-##-####,   and  Pledgor's
principal residence is located at One Dexter Street, Denver, Colorado 80220.

     e.  Pledgor  agrees that it shall not,  without at least  thirty (30) days'
prior written  notification  to Pledgee,  move or otherwise  change its place of
residence.

     f. To the best knowledge of Pledgor,  neither the execution and delivery of
this  Agreement  by Pledgor  nor the  consummation  of the  transactions  herein
contemplated  nor the  fulfillment  of the terms hereof (i) violate the terms of
any agreement,  indenture,  mortgage, deed of trust, equipment lease, instrument
or other  document to which  Pledgor is a party,  or (ii) conflict with any law,
order, rule or regulation  applicable to Pledgor or any court or any government,
regulatory  body or  administrative  agency or other  governmental  body  having
jurisdiction  over Pledgor or its properties,  or (iii) result in or require the
creation  or  imposition  of any lien  (other  than the first  priority  lien of
Pledgee in the Collateral contemplated hereby).

     g. No consent or  approval  which has not been  obtained  prior to the date
hereof of any other  person or entity and no  authorization,  approval  or other
action by, and no notice to or filing  with any  governmental  body,  regulatory
authority  or  securities  exchange,  was or is  necessary as a condition to the
validity of the pledge  hereunder of the Collateral and such pledge is effective
to vest in the  Pledgee  the rights of Pledgee  in the  Collateral  as set forth
herein.

     h. Pledgor shall comply in all material  respects with all  requirements of
law applicable to the Collateral or any part thereof.

     i. Pledgor shall pay and discharge all taxes,  assessments and governmental
charges or levies against any Collateral prior to delinquency  thereof and shall
keep all Collateral free of all unpaid charges whatsoever.

     8. Event of Default.  Each of the  following  shall  constitute an Event of
Default hereunder:

     a. A breach of any  representation,  warranty,  covenant or  obligation  of
Pledgor shall have occurred under the Operating  Agreement and such breach shall
not have been cured within any applicable grace period provided therein; or

     b.  Any  warranty,  representation  or  statement  of the  Pledgor  in this
Agreement  proves  to have  been  false in any  material  respect  when  made or
furnished; or



<PAGE>



     c. There occurs the issuance of a writ,  order of attachment or garnishment
with respect to any of the  Collateral  and such writ,  order of  attachment  or
garnishment is not dismissed and removed within thirty (30) days thereafter; or

     d. A material  breach or violation  of any covenant or agreement  contained
herein shall have  occurred,  which is not cured  within  thirty (30) days after
notice has been given to Pledgor by Pledgee.

     Any Event of Default under this  Agreement  shall be an event of default by
Pledgor under the Operating Agreement.

     9. Remedies.

     a. Upon the occurrence of an Event of Default, Pledgee may by giving notice
of such Event of Default, at its option, do any one or more of the following:

     (i) Take control of the Collateral  and thereafter  exercise all rights and
powers of Pledgor with respect to the Collateral; and

     (ii) Without  notice to or demand upon  Pledgor,  make such payments and do
such acts as Pledgee may deem necessary to protect its security  interest in the
Collateral,  including,  without limitation,  paying, purchasing,  contesting or
compromising  any  encumbrance,  charge or lien which is prior to or superior to
the security  interest granted  hereunder,  and in exercising any such powers or
authority to pay all expenses incurred in connection therewith; and

     (iii)  Require  Pledgor  to take all  actions  necessary  to  deliver  such
Collateral to Pledgee, or an agent or representative designated by Pledgee; and

     (iv)  Foreclose   upon  this  Agreement  as  herein   provided  or  in  any
commercially reasonable manner permitted by law, and exercise any and all of the
rights and remedies conferred upon Pledgee by the Operating Agreement, or in any
other document  executed by Pledgor in connection with the  Obligations  secured
hereby;  and sell or cause to be sold the Collateral,  without  affecting in any
way the rights or remedies to which Pledgee may be entitled under the other such
instruments; and

     (v) Sell or otherwise  dispose of the  Collateral  at public sale,  without
having the Collateral at the place of sale, and upon terms and in such manner as
is  commercially  reasonable,  may determine.  Pledgee may be a purchaser at any
sale; and

     (vi) Exercise any remedies of a secured party under the Uniform  Commercial
Code of the State of Colorado or any other applicable law; and


<PAGE>



     (vii)  Exercise  any  remedies  available  to Pledgee  under the  Operating
Agreement,  including,  but not  limited  to, the  removal of the Pledgor as the
Manager and a Member of the Limited Liability Company and exercise of any rights
of  offset  in favor of  Pledgee  as the  Manager  and a Member  of the  Limited
Liability Company; and

     (viii)   Notwithstanding   anything  to  the  contrary  contained  in  this
Agreement,  at any time after an Event of Default  Pledgee  may,  by  delivering
written notice to the Limited Liability Company and to the Pledgor,  succeed, or
designate its nominee or designee to succeed,  to all right,  title and interest
of Pledgor (including, without limitation, the right, if any, to vote on or take
any action with respect to the matters of the Limited Liability  Company) as the
Manager  and/or a Member of the  Limited  Liability  Company  in  respect of the
Collateral.  Pledgor  hereby  irrevocably  authorizes  and  directs  the Limited
Liability Company on receipt of any such notice (a) to deem and treat Pledgee or
such nominee or designee in all respects as the Manager and/or a Member (and not
merely an  assignee of the Manager  and/or a Member) of such  Limited  Liability
Company,  entitled to exercise all the rights,  powers and privileges (including
the  right to vote on or take any  action  with  respect  to  Limited  Liability
Company   matters   pursuant  to  the  Operating   Agreement,   to  receive  all
distributions,  to be credited  with the  capital  account and to have all other
rights,  powers and privileges  appertaining  to the Collateral to which Pledgor
would have been entitled had the Collateral  not been  transferred to Pledgee or
such nominee or designee),  and (b) to file amended Articles of Organization for
such Limited Liability Company,  if required,  admitting Pledgee or such nominee
or designee as the Manager and/or a Member of the Limited  Liability  Company in
place of Pledgor; and

     (ix) The rights  granted to Pledgee under this  Agreement are of a special,
unique,  unusual  and  extraordinary  character.  The loss of any of such rights
cannot be reasonably or adequately  compensated  by way of damages in any action
at law,  and any  material  breach by  Pledgor  of any of  Pledgor's  covenants,
agreements,  obligations representations or warranties under this Agreement will
cause Pledgee  irreparable  injury and damage.  In the event of any such breach,
Pledgee shall be entitled,  as a matter of right, to injunctive  relief or other
equitable relief in any court of competent jurisdiction to prevent the violation
or  contravention  of any of the  provisions  of  this  Agreement  or to  compel
compliance  with the terms of this  Agreement by Pledgor.  Pledgee is absolutely
and  irrevocably   authorized  and  empowered  by  Pledgor  to  demand  specific
performance of each of the covenants, agreements, representations and warranties
of Pledgor in this  Agreement.  Pledgor  hereby  irrevocably  waives any defense
based on the adequacy of any remedy at law which might  otherwise be asserted by
Pledgor as a bar to the remedy of specific  performance in any action brought by
Pledgee against Pledgor to enforce any of the covenants or agreements of Pledgor
in this Agreement.


<PAGE>



     b. Unless the Collateral is perishable or threatens to decline  speedily in
value or is of a type  customarily  sold on a recognized  market,  Pledgee shall
give Pledgor at least ten (10) days' prior written  notice of the time and place
of any public sale of the Collateral subject to this Agreement or other intended
disposition thereof to be made. Such notice shall be conclusively deemed to have
been  delivered to Pledgor at the address set forth in  subsection  7(d) of this
Agreement,  unless  Pledgor shall notify Pledgee in writing of any change of its
place of  residence  and  provide  Pledgee  with the address of its new place of
residence.

     c. The proceeds of any sale under Subsections  9(a)(iv) and (v) above shall
be applied as follows:

     (i) To the  repayment  of all  reasonable  costs and  expenses of retaking,
holding and preparing for the sale and the selling of the Collateral  (including
actual  reasonable  legal expenses and attorneys' fees) and the discharge of all
assessments,  encumbrances, charges or liens, if any, on the Collateral prior to
the lien hereof (except any taxes, assessments,  encumbrances,  charges or liens
subject to which such sale shall have been made);

     (ii) To the payment of the whole amount, if any, of the Obligations, as and
when the same become due; and

     (iii) The  aggregate  surplus,  if any,  shall be paid to Pledgor in a lump
sum,  without recourse to Pledgee,  or as a court of competent  jurisdiction may
direct.

     d. Pledgee shall have the right to enforce one or more remedies  under this
Agreement and under the Operating Agreement,  successively or concurrently,  and
such action  shall not operate to estop or prevent  Pledgee  from  pursuing  any
further  remedy which it may have, and any  repossession  or retaking or sale of
the Collateral pursuant to the terms hereof shall not operate to release Pledgor
until full payment of any deficiency has been made in cash.

     e. PLEDGOR  ACKNOWLEDGES THAT PLEDGEE MAY BE UNABLE TO EFFECT A PUBLIC SALE
OF ALL OR ANY PART OF THE  COLLATERAL  AND MAY BE  COMPELLED TO RESORT TO ONE OR
MORE PRIVATE SALES TO A RESTRICTED  GROUP OF PURCHASERS WHO WILL BE OBLIGATED TO
AGREE,  AMONG OTHER THINGS,  TO ACQUIRE THE COLLATERAL FOR ITS OWN ACCOUNT,  FOR
INVESTMENT AND NOT WITH A VIEW TO THE  DISTRIBUTION OR RESALE  THEREOF.  PLEDGOR
FURTHER  ACKNOWLEDGES  THAT ANY SUCH PRIVATE SALES MAY BE AT PRICES AND ON TERMS
LESS FAVORABLE THAN THOSE OF PUBLIC SALES, AND AGREES THAT PROVIDED SUCH PRIVATE
SALES  ARE MADE IN A  COMMERCIALLY  REASONABLE  MANNER,  PLEDGEE  SHALL  HAVE NO
OBLIGATION  TO DELAY SALE OF ANY  COLLATERAL  TO PERMIT  THE  ISSUER  THEREOF TO
REGISTER IT FOR PUBLIC SALE UNDER THE  SECURITIES  ACT OF 1933.  PLEDGOR  AGREES
THAT PLEDGEE SHALL BE PERMITTED TO TAKE SUCH ACTIONS AS PLEDGEE DEEMS REASONABLY
NECESSARY  IN  DISPOSING  OF  THE  COLLATERAL  TO  AVOID   CONDUCTING  A  PUBLIC
DISTRIBUTION OF SECURITIES IN VIOLATION OF THE


<PAGE>



SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AS NOW ENACTED OR AS
THE SAME MAY IN THE FUTURE BE AMENDED,  PROVIDED  THAT ANY SUCH ACTIONS SHALL BE
COMMERCIALLY  REASONABLE.  IN ADDITION,  PLEDGOR AGREES TO EXECUTE, FROM TIME TO
TIME,  ANY  AMENDMENT  TO THIS  AGREEMENT  OR  OTHER  DOCUMENT  AS  PLEDGEE  MAY
REASONABLY REQUIRE TO EVIDENCE THE  ACKNOWLEDGEMENTS AND CONSENTS OF PLEDGOR SET
FORTH IN THIS SECTION.

     10.  Attorneys  Fees.  Pledgor  agrees to pay to Pledgee,  without  demand,
reasonable  attorneys'  fees  and all  reasonable  costs  and  other  reasonable
expenses which Pledgee  expends or incurs in collecting  any amounts  payable by
Pledgor  with respect to an Event of Default,  hereunder  or in  enforcing  this
Agreement against Pledgor whether or not suit is filed.

     11. Further  Documentation.  Pledgor hereby agrees to execute, from time to
time,  one or more  financing  statements  and such other  instruments as may be
required  to  perfect  the  security  interest  created  hereby,  including  any
continuation  or amendments of such  financing  statements,  and pay the cost of
filing or recording the same in the public records specified by Pledgee.

     12.  Waiver and  Estoppel.  Pledgor  represents  and  acknowledges  that it
knowingly waives each and every one of the following rights,  and agrees that it
will be estopped from asserting any argument to the contrary: (a) any promptness
in making  any  claim or demand  hereunder;  (b) any  defense  that may arise by
reason of the incapacity, lack of authority, death or disability of Pledgor; (c)
any defense  based upon an election  of  remedies by Pledgee  which  destroys or
otherwise  impairs  any or all of the  Collateral;  (d) the right of  Pledgor to
proceed against Pledgee or any other person, for reimbursement; and (e) all duty
or obligation of the Pledgee to perfect, protect, retain or enforce any security
for the payment of amounts payable by Pledgor hereunder.

TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY TO THIS AGREEMENT  SEVERALLY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY
JURY IN ANY ACTION, SUIT OR COUNTERCLAIM  BROUGHT BY ANY PARTY TO THIS AGREEMENT
ARISING IN CONNECTION WITH, OUT OF OR OTHERWISE RELATING TO THIS AGREEMENT.

     No delay or failure on the part of Pledgee in the  exercise of any right or
remedy  against  Pledgor or any other party  against  whom  Pledgee may have any
rights,  shall  operate as a waiver of any  agreement  or  obligation  contained
herein,  and no single or partial  exercise by Pledgee of any rights or remedies
hereunder shall preclude other or further  exercise thereof or other exercise of
any other right or remedy  whether  contained in this Agreement or in any of the
other documents  regarding the  Obligations,  including  without  limitation the
Operating  Agreement.  No  waiver  of the  rights  of  Pledgee  hereunder  or in
connection herewith and no release of Pledgor shall be effective unless executed
in writing by  Pledgee.  No actions of Pledgee  permitted  under this  Agreement
shall in any way  impair  or  affect  the  enforceability  of any  agreement  or
obligation contained herein.


<PAGE>



     13. Independent Obligations.  The obligations of Pledgor are independent of
the  obligations  of any  other  party  which  may  be  initially  or  otherwise
responsible for performance or payment of the Obligations, and a separate action
or actions for payment,  damages or performance may be brought and prosecuted by
Pledgee against  Pledgor,  individually,  for the full amount of the Obligations
then due and  payable,  whether  or not an action is brought  against  any other
party,  whether or not Pledgee is involved in any proceedings and whether or not
Pledgee or Pledgor or other person is joined in any action or proceedings.

     14. No Offset Rights of Pledgor. No lawful act of commission or omission of
any kind or at any time  upon the part of  Pledgee  shall in any way  affect  or
impair the rights of Pledgee to enforce any right,  power or benefit  under this
Agreement, and no set-off, recoupment, reduction or diminution of any obligation
which  Pledgor has or may have against  Pledgee or against any other party shall
be available against Pledgee in any suit or action brought by Pledgee to enforce
any right, power or benefit under this Agreement.

     15.   Power  of  Attorney.   Pledgor   hereby   appoints   Pledgee  as  his
attorney-in-fact to execute and file,  effective upon the occurrence of an Event
of Default, on his behalf any financing statements,  continuation  statements or
other  documentation  required  to perfect or  continue  the  security  interest
created hereby. This power, being coupled with an interest, shall be irrevocable
until all amounts  secured  hereby have been paid,  satisfied and  discharged in
full. Pledgor acknowledges and agrees that the exercise by Pledgee of its rights
under this  Section 15 will not be deemed a  satisfaction  of the  amounts  owed
Pledgee unless Pledgee so elects in writing.

     16.  GOVERNING LAW. THE PARTIES  HERETO AGREE THAT THIS AGREEMENT  SHALL BE
GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF COLORADO
WITHOUT  REGARD TO PRINCIPLES  OF CONFLICTS OF LAW.  SUCH PARTIES  FURTHER AGREE
THAT IN THE EVENT OF DEFAULT,  THIS  AGREEMENT  MAY BE ENFORCED IN THE  DISTRICT
COURT IN AND FOR THE CITY AND COUNTY OF DENVER,  STATE OF  COLORADO  AND THEY DO
HEREBY SUBMIT TO THE JURISDICTION OF SUCH COURT REGARDLESS OF THEIR RESIDENCE OR
WHERE THIS AGREEMENT MAY BE EXECUTED.

     17.  Successors  and Assigns.  All  agreements,  covenants,  conditions and
provisions of this  Agreement  shall inure to the benefit of and be binding upon
the respective  heirs,  personal  representatives  successors and assigns of the
parties hereto.

     18. Notices.  Whenever any party hereto shall desire to, or be required to,
give or serve any notice, demand, request or other communication with respect to
this Agreement,  each such notice,  demand, request or communication shall be in
writing and shall be effective only if the same is delivered by personal service
(including,  without limitation, courier or express service) or mailed certified
or registered  mail,  postage  prepaid,  return  receipt  requested,  or sent by
telegram to the parties at the addresses shown throughout this Agreement or such
other  addresses  which the parties  may  provide to one  another in  accordance
herewith.  If notice is sent to  Pledgee,  a copy of such  notice  shall also be
given to Wayne H. Hykan, Esq.,  Brownstein Hyatt Farber & Strickland,  P.C., 410
17th Street, Suite 2222, Denver, Colorado 80202. If notice is sent to Pledgor, a
copy of such


<PAGE>



notice shall also be given to Alan B. Lottner,  Esq., Haligman & Lottner,  First
Interstate Tower North, 633 Seventeenth  Street,  Suite 2700,  Denver,  Colorado
80202-3635.  Notices delivered  personally will be effective upon delivery to an
authorized  representative of the party at the designated address;  notices sent
by mail in accordance  with the above paragraph will be effective upon execution
of the Return Receipt Requested.

     19. Consent of Pledgor.  Pledgor consents to the exercise by Pledgee of any
rights of Pledgor in accordance with the provisions of this Agreement.

     20.  Severability.  Every  provision  of this  Agreement  is intended to be
severable.  In the event any term or provision  hereof is declared by a court of
competent jurisdiction to be illegal or invalid for any reason whatsoever,  such
illegality  or  invalidity  shall not affect the  legality  or  validity  of the
balance of the terms and provisions  hereof,  which terms and  provisions  shall
remain binding and enforceable.

     21.  Amendment.  This  Agreement  may be  modified or  rescinded  only by a
writing expressly relating to this Agreement and signed by all of the parties.

     22. Termination. This Agreement shall terminate, and shall be of no further
force or effect,  upon the earlier to occur of the  following:  (i) full payment
and performance of the Obligations of the Pledgor,  (ii)  acquisition by Pledgor
or an affiliate of Pledgor of 100% ownership  interest in the Limited  Liability
Company, or (iii) upon the mutual consent of Pledgor and Pledgee.

     23. Certain Matters with respect to Wellsford  Residential  Property Trust.
This Agreement and all documents,  agreements,  understandings  and arrangements
relating to this  transaction have been executed by the undersigned on behalf of
Pledgee  in his/her  capacity  as an officer or  director  of  Pledgee,  and not
individually,  and neither the directors,  officers or  shareholders  of Pledgee
shall be bound by or have any personal  liability  hereunder or thereunder.  The
parties  to this  Agreement  shall  look  solely to the  assets of  Pledgee  for
satisfaction  of any  liability of Pledgee in respect of this  Agreement and all
documents,   agreements,   understandings  and  arrangements  relating  to  this
transaction and will not seek recourse or commence any action against any of the
directors,  officers or  shareholders of Pledgee or any of their personal assets
for the  performance or payment of any obligation  hereunder or thereunder.  The
foregoing  shall  also  apply  to all  and  any  future  documents,  agreements,
understandings,  arrangements and  transactions  between the parties hereto with
respect to the Collateral or this Agreement.

                            [SIGNATURE PAGE FOLLOWS]


<PAGE>



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

                           PLEDGOR:
                                        Al Feld

                           PLEDGEE:     WELLSFORD PARK HIGHLANDS CORP., a
                                        Colorado corporation

                                        By:
                                                 Name:
                                                 Title:

STATE OF ____________               )
                                    ) ss.
COUNTY OF ___________               )

         The  foregoing  instrument  was  acknowledged  before me this __ day of
__________________, 1995, by Al Feld.

         WITNESS my hand and official seal.

         My commission expires:  ______________________________________.
         Address:


                               --------------------------------
         (SEAL)                Notary Public

STATE OF ____________               )
                                    ) ss.
COUNTY OF ___________               )

     The  foregoing  instrument  was  acknowledged  before me this  _____ day of
__________,  199__, by _________________________ as _______________ of Wellsford
Park Highlands Corp., a Colorado corporation.

         WITNESS my hand and official seal.

         My commission expires:  _____________________________________.
         Address:

                               --------------------------------
         (SEAL)                Notary Public


<PAGE>



                                    EXHIBIT A

                   CONSENT TO SECURITY INTEREST AND AGREEMENT
                                 OF THE MEMBERS
                            OF PARK AT HIGHLANDS LLC,
                      a Colorado Limited Liability Company

     The undersigned, being all the members of PARK AT HIGHLANDS LLC, a Colorado
limited liability company (the "Limited Liability Company") hereby represent and
certify to Wellsford Park Highlands Corp., a Colorado  corporation (the "Secured
Party") as follows:

     1. The Limited Liability Company has received notice from the Secured Party
that the  Secured  Party has a security  interest  in the  following  collateral
("Collateral") registered to Al Feld (the "Debtor"):

     (i) All of the  right,  title and  interest  of the  Debtor in the  Limited
Liability Company, whether now owned or hereafter acquired,  including,  without
limitation, the Debtor's Interest (as defined in the Operating Agreement) in the
Limited Liability Company and its right to receive payments, fees, distributions
and allocations under or in connection with the Operating  Agreement (whether as
Member or as Manager),  as such Operating  Agreement may be modified or extended
from time to time with the consent of the Secured Parties; and

     (ii) All proceeds,  whether cash proceeds or noncash proceeds, and products
of any and all of the foregoing.

     2. Other than the notice from the  Secured  Party  referred  to above,  the
Limited  Liability Company has not received any notice from any entity or person
claiming  an  adverse  claim  against,  lien  on or  security  interest  in  the
Collateral.

     3. The security  interest of the Secured  Party  referred to above was duly
registered in the books and records of the Limited  Liability  Company effective
April 27, 1995.

     4.  Interests  in the Limited  Liability  Company,  whether as Member or as
Manager,  are not represented in any  certificate,  instrument or document,  and
such  interest  may be  assigned,  transferred  or  pledged  without  the  party
receiving such assignment,  transfer or pledge taking physical possession of any
certificate, instrument or document.

     The Members  hereby consent to the execution and delivery of the Pledge and
Security  Agreement  by the  Debtor  and agree  hereby to be bound by  Section 4
thereof  to  assign,  set  over,  transfer,  distribute,  pay  and  deliver  the
Collateral  and any and all  payments,  proceeds or products due to Debtor under
the Collateral to the Secured Party.

     The Members  hereby  consent to the  admission of the Secured Party (or its
nominee,  designee or any person  acquiring  its  interest  under the Pledge and
Security Agreement),  as a Manager of the Limited Liability Company upon receipt
of notice by the Secured Party of an Event


<PAGE>



of Default by the Debtor  thereunder,  and (ii) that the  Secured  Party or such
nominees, designees or persons acquiring the Secured Party's interest thereunder
shall not be deemed to have assumed any of Debtor's  liability by virtue of such
admission as the Manager of the Limited Liability Company.

     This  Agreement  and  all   documents,   agreements,   understandings   and
arrangements  relating to this transaction have been executed by the undersigned
on behalf of the Secured  Party in his/her  capacity as an officer or trustee of
the Secured Party, and not individually,  and neither the directors, officers or
shareholders  of the  Secured  Party  shall be  bound  by or have  any  personal
liability  hereunder or  thereunder.  The parties to this  Agreement  shall look
solely to the assets of the Secured Party for  satisfaction  of any liability of
the Secured Party in respect of this  Agreement and all  documents,  agreements,
understandings  and arrangements  relating to this transaction and will not seek
recourse  or  commence  any action  against  any of the  directors,  officers or
shareholders  of the  Secured  Party or any of  their  personal  assets  for the
performance or payment of any obligation hereunder or thereunder.  The foregoing
shall also apply to all and any future  documents,  agreements,  understandings,
arrangements  and  transactions  between the parties  hereto with respect to the
Collateral or this Agreement.

         EXECUTED as of the date set forth above.

                  MEMBERS:      WELLSFORD PARK HIGHLANDS CORP., a
                                Colorado corporation

                                By:
                                         Name:
                                         Title:




                                AL FELD, an individual


AGREED TO AND CONCURRED:

SOLE MANAGER


-------------------------------
AL FELD


<PAGE>



                                    EXHIBIT M

                   PLEDGE AND SECURITY AGREEMENT--WPHC TO FELD

                               (Prepared by BHFS)



<PAGE>



                                    EXHIBIT U

                             SUBSTITUTION AGREEMENT

     THIS SUBSTITUTION  AGREEMENT (this "Agreement") is made and entered into as
of the ____ day of December 1995, by and among Al Feld, an individual  ("Feld"),
Wellsford Park Highlands Corp., a Colorado  corporation  ("WPHC"),  and The Feld
Company, a Colorado corporation (the "Company").

                                    RECITALS

     A. WPHC is a Member of Park at Highlands LLC, a Colorado limited  liability
company (the "LLC"),  which LLC is governed by its Operating  Agreement dated as
of April 27, 1995 (the "Operating Agreement") by and between WPHC and Feld.

     B. Feld is also a  Member,  as well as the  Manager,  in the LLC and is the
principal officer and shareholder of the Company.

     C. In order to facilitate WPHC's appointment of the Company as a substitute
Member  and the  Manager  of the LLC upon the  death  or  disability  of Feld in
accordance with Section 12.13 of the Operating Agreement and to bind the Company
to the agreements set forth in said Section 12.13, the parties hereto now desire
to enter into this Agreement.

                                    AGREEMENT

     NOW,  THEREFORE,  in  consideration  of  the  execution  of  the  Operating
Agreement and of the recitals,  covenants and agreements  set forth herein,  and
for other good and valuable consideration,  the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

     5.  Request for  Substitute  Manager.  In the event that Feld should die or
WPHC shall elect to remove Feld as manager due to  disability  (such an event is
hereinafter referred to as a "Triggering Event"),  WPHC shall have the right, at
its sole option,  to request in writing that: (a) the Company shall acquire from
Feld (or from his estate,  if Feld is deceased)  the entire  interest of Feld in
the  LLC;  (b)  the  Company  shall  be  admitted  as a  Member  of the  LLC and
substituted  for Feld as Member and Manager under the Operating  Agreement;  and
(c) the Company shall assume, in writing,  all of the obligations of the Manager
and of a Member under the Operating  Agreement,  as the same may be amended from
time to time.  The  foregoing  actions  under  items  (a),  (b) and (c) shall be
effective upon the next business day after WPHC delivers its written  request to
the Company and Feld.  Notwithstanding anything to the contrary contained herein
or in the  Operating  Agreement,  if the  Company is  substituted  for Feld as a
Member and Manager,  then Feld (or his estate if Feld is deceased)  shall remain
liable for the performance of the obligations of the Manager under the Operating
Agreement, in accordance with Section 12.12.3.2 thereof.


<PAGE>



     6. Failure to Request a Substitute  Manager.  If WPHC fails to exercise its
option under  Section 12.13 of the  Operating  Agreement  and this  Agreement to
cause the Company to be  substituted  for Feld as the Manager within ninety (90)
days after the date of a Triggering Event,  then such right shall  automatically
terminate and Feld (and his estate) shall be released from all  responsibilities
and  obligations  as Manager  under the  Operating  Agreement  arising after the
effective  date of Feld's  withdrawal or Removal (as said term is defined in the
Operating Agreement,) from the LLC in connection with the Triggering Event.

     7. Attorneys  Fees. In the event any litigation or other legal  proceedings
or alternative dispute resolution proceedings are brought for the enforcement of
or arise out of this  Agreement,  the  prevailing  party  shall be  entitled  to
recover from the non-prevailing  party all reasonable  attorneys' fees and costs
and all other  reasonable  expenses,  in addition to any other relief or damages
obtained.

     8. Further Documentation. The parties hereby agree to execute, from time to
time,  such other  documents as may be reasonably  necessary to  effectuate  the
intent of this Agreement and Section 12.13 of the Operating Agreement.

     9. GOVERNING  LAW. THE PARTIES  HERETO AGREE THAT THIS  AGREEMENT  SHALL BE
GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF COLORADO
WITHOUT  REGARD TO PRINCIPLES  OF CONFLICTS OF LAW.  SUCH PARTIES  FURTHER AGREE
THAT THIS  AGREEMENT  MAY BE ENFORCED IN THE DISTRICT  COURT IN AND FOR THE CITY
AND  COUNTY  OF  DENVER,  STATE OF  COLORADO  AND THEY DO  HEREBY  SUBMIT TO THE
JURISDICTION OF SUCH COURT REGARDLESS OF THEIR RESIDENCE OR WHERE THIS AGREEMENT
MAY BE EXECUTED.

     10.  Successors  and Assigns.  All  agreements,  covenants,  conditions and
provisions of this  Agreement  shall inure to the benefit of and be binding upon
the respective heirs,  personal  representatives,  successors and assigns of the
parties hereto.

     11. Notices.  Whenever any party hereto shall desire to, or be required to,
give or serve any notice, demand, request or other communication with respect to
this Agreement,  each such notice,  demand, request or communication shall be in
writing and shall be effective only if the same is delivered by personal service
(including,  without limitation, courier or express service) or mailed certified
or registered  mail,  postage  prepaid,  return  receipt  requested,  or sent by
telegram to the parties at the  addresses  shown in the  Operating  Agreement or
such other  addresses which the parties may provide to one another in accordance
therewith.  The notice  address for the Company  shall be the same as the notice
address for Feld. If notice is sent to WPHC, a copy of such notice shall also be
given to Wayne H. Hykan, Esq.,  Brownstein Hyatt Farber & Strickland,  P.C., 410
17th Street,  Suite 2222,  Denver,  Colorado 80202. If notice is sent to Feld or
the Company,  a copy of such notice shall also be given to Alan  Lottner,  Esq.,
Haligman and Lottner,  First  Interstate  Tower North,  633 Seventeenth  Street,
Suite 2700, Denver,  Colorado  80202-3635.  Notices delivered personally will be
effective  upon  delivery to an  authorized  representative  of the party at the
designated address; notices sent by mail in


<PAGE>



accordance  with the above  paragraph  will be effective  upon  execution of the
Return Receipt Requested.

     12.  Severability.  Every  provision  of this  Agreement  is intended to be
severable.  In the event any term or provision  hereof is declared by a court of
competent jurisdiction to be illegal or invalid for any reason whatsoever,  such
illegality  or  invalidity  shall not affect the  legality  or  validity  of the
balance of the terms and provisions  hereof,  which terms and  provisions  shall
remain binding and enforceable.

     13.  Capitalized  Terms. All capitalized terms not otherwise defined herein
shall have the meanings set forth in the Operating Agreement.

     14.  Amendment.  This  Agreement  may be  modified or  rescinded  only by a
writing expressly relating to this Agreement and signed by all of the parties.

                            [SIGNATURE PAGE FOLLOWS]


<PAGE>




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


AL FELD, individually


WELLSFORD PARK HIGHLANDS CORP., a
Colorado corporation

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


THE FELD COMPANY, a Colorado corporation


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



<PAGE>