UNCONDITIONAL GUARANTY OF PAYMENT AND PERFORMANCE
                -------------------------------------------------

     FOR AND IN  CONSIDERATION OF the sum of Ten and No/100 Dollars ($10.00) and
other good and  valuable  consideration  paid or  delivered  to the  undersigned
WELLSFORD  REAL  PROPERTIES,  INC., a Maryland  corporation  ("Guarantor"),  the
receipt and sufficiency whereof is hereby acknowledged by Guarantor, and for the
purpose of seeking to induce FLEET  NATIONAL  BANK  ("Lender",  which term shall
also include  each other  Lender which may now or hereafter  become party to the
"Credit  Agreement"  (as  hereinafter  defined)  and shall also include any such
individual  Lender acting as agent for all of the Lenders),  to extend credit or
otherwise provide financial accommodations to WELLSFORD FINANCE, LLC, a Delaware
limited  liability  company  (hereinafter  referred  to  as  "Borrower"),  which
extension of credit and  provision of  financial  accommodations  will be to the
direct  interest,  advantage  and benefit of  Guarantor,  Guarantor  does hereby
absolutely and irrevocably guarantee to Lender:

     (a) the full and  prompt  payment  when due,  whether  by  acceleration  or
otherwise,  either before or after maturity thereof,  of that certain Note dated
of even date  herewith  made by  Borrower  to the order of Fleet  National  Bank
("Fleet")  in the  principal  face amount of Twenty  Million and No/100  Dollars
($20,000,000.00)  (hereinafter  referred to as the "Fleet Note"),  together with
interest  as  provided  in the  Fleet  Note,  together  with  any  replacements,
supplements,   renewals,   modifications,   consolidations,   restatements   and
extensions thereof; and

     (b) the full and  prompt  payment  when due,  whether  by  acceleration  or
otherwise, either before or after maturity thereof, of each other note as may be
issued under that certain Amended and Restated  Revolving Credit Agreement dated
of even date herewith among Borrower,  Fleet,  for itself and as agent,  and the
other lenders now or hereafter a party thereto  (hereinafter  referred to as the
"Credit  Agreement"),  together  with  interest  as  provided in each such note,
together   with  any   replacements,   supplements,   renewals,   modifications,
consolidations,  restatements and extensions thereof (the Fleet Note and each of
the  notes  described  in  this  subparagraph  (b) is  hereinafter  referred  to
collectively as the "Note"); and

     (c) the full and prompt payment and performance of all other obligations of
Borrower to Lender under the terms of the Credit  Agreement,  together  with any
replacements, supplements, renewals, modifications, consolidations, restatements
and extensions thereof; and

     (d) the  full and  prompt  payment  and  performance  of any and all  other
obligations  of Borrower to Lender under the Security  Documents,  together with
any  replacements,   supplements,   renewals,   modifications,   consolidations,
restatements and extensions thereof; and

     (e) the  full and  prompt  payment  and  performance  of any and all  other
obligations  of  Borrower to Lender  under any other  agreements,  documents  or
instruments now or hereafter  evidencing,  securing or otherwise relating to the
indebtedness  evidenced  by the Note or the  Credit  Agreement  (the  Note,  the
Security  Documents,  the Credit Agreement and said other agreements,  documents
and  instruments,   are  hereinafter  collectively  referred  to  as  the  "Loan
Documents" and individually referred to as a "Loan Document").

<PAGE>

All terms used herein and not otherwise  defined  herein shall have the meanings
set forth in the Credit Agreement.

     1. Agreement to Pay and Perform; Costs of Collection. Guarantor does hereby
agree  that if the Note is not paid by  Borrower  in  accordance  with its terms
(including all applicable  grace periods),  or if any and all sums which are now
or may hereafter become due from Borrower to Lender under the Loan Documents are
not paid by Borrower in  accordance  with their  terms,  or if any and all other
Obligations  are not  performed  by  Borrower  in  accordance  with their  terms
(including all applicable  grace periods),  Guarantor will immediately make such
payments and perform such Obligations. Guarantor further agrees to pay Lender on
demand all reasonable  costs and expenses  (including court costs and reasonable
attorneys' fees and disbursements)  paid or incurred by Lender in endeavoring to
collect  the  Obligations,  to enforce  any of the  Obligations,  or any portion
thereof, or to enforce this Guaranty,  and until paid to Lender, such sums shall
bear  interest  at the  default  rate set forth in the Credit  Agreement  unless
collection  from  Guarantor  of  interest  at such  rate  would be  contrary  to
applicable law, in which event such sums shall bear interest at the highest rate
which may be collected from Guarantor under applicable law.

     2. Reinstatement of Refunded  Payments.  If, for any reason, any payment to
Lender  of any of the  Obligations  is  required  to be  refunded  by  Lender to
Borrower,  or paid or turned  over by Lender  to any  other  person,  including,
without  limitation,  by reason of the operation of bankruptcy,  reorganization,
receivership or insolvency laws or similar laws of general application  relating
to creditors' rights and remedies now or hereafter enacted,  Guarantor agrees to
pay to the  Lender on demand an amount  equal to the  amount so  required  to be
refunded,  paid  or  turned  over  (hereinafter  referred  to as  the  "Turnover
Payment"),  the  obligations  of  Guarantor  shall not be treated as having been
discharged  by the  original  payment  to  Lender  giving  rise to the  Turnover
Payment, and this Guaranty shall be treated as having remained in full force and
effect  for any such  Turnover  Payment  so made by  Lender,  as well as for any
amounts not theretofore paid to Lender on account of such obligations,  but only
to the extent that Guarantor otherwise would have been liable for the payment of
the same hereunder.

<PAGE>

     3. Rights of Lender to Deal with  Collateral,  Borrower and Other  Persons.
Guarantor  hereby consents and agrees that Lender may at any time, and from time
to time,  without thereby releasing  Guarantor from any liability  hereunder and
without  notice to or further  consent  from  Guarantor,  either with or without
consideration:  release or surrender  any lien or other  security of any kind or
nature whatsoever held by it or by any person, firm or corporation on its behalf
or for  its  account,  securing  any  of the  Obligations;  substitute  for  any
collateral so held by it, other collateral of like kind, or of any kind;  modify
the  terms of the Note or the Loan  Documents;  extend or renew the Note for any
period; grant releases,  compromises and indulgences with respect to the Note or
the Loan  Documents  and to any  persons or  entities  now or  hereafter  liable
thereunder  or  hereunder;  release  any other  Guarantor,  surety,  endorser or
accommodation  party of the Note,  the  Security  Documents  or any  other  Loan
Documents;  or take or fail to take any action of any type  whatsoever.  No such
action which Lender  shall take or fail to take in  connection  with the Note or
the Loan  Documents,  or any of them,  or any  security  for the  payment of the
indebtedness  of  Borrower  to  Lender  or  for  the  performance  of any of the
Obligations or other obligations or undertakings of Borrower,  nor any course of
dealing with Borrower or any other person, shall release Guarantor's obligations
hereunder,  affect this  Guaranty in any way or afford  Guarantor  any  recourse
against  Lender.  The provisions of this Guaranty shall extend and be applicable
to   all   replacements,    supplements,   renewals,   amendments,   extensions,
consolidations,  restatements  and  modifications  of  the  Note  and  the  Loan
Documents,  and any and all references herein to the Note and the Loan Documents
shall be  deemed  to  include  any  such  replacements,  supplements,  renewals,
extensions, amendments,  consolidations,  restatements or modifications thereof.
Without  limiting the generality of the foregoing,  Guarantor  acknowledges  the
terms of Section  18.3 of the Credit  Agreement  and agrees  that this  Guaranty
shall extend and be  applicable  to each new or  replacement  note  delivered by
Borrower pursuant thereto.

     4. No Contest with Lender; Subordination. So long as any Obligation remains
unpaid or  undischarged,  Guarantor  will not,  by  paying  any sum  recoverable
hereunder  (whether  or not  demanded by Lender) or by any means or on any other
ground,  claim any set-off or  counterclaim  against  Borrower in respect of any
liability of Guarantor to Borrower or, in proceedings  under federal  bankruptcy
law or insolvency proceedings of any nature, prove in competition with Lender in
respect of any  payment  hereunder  or be  entitled  to have the  benefit of any
counterclaim  or proof of  claim or  dividend  or  payment  by or on  behalf  of
Borrower or the benefit of any other security for any Obligation  which,  now or
hereafter,  Lender may hold or in which it may have any share.  Guarantor hereby
expressly waives any right of contribution  from or indemnity  against Borrower,
whether  at law or in  equity,  arising  from  any  payments  made by  Guarantor
pursuant  to the  terms  of  this  Guaranty,  and  Guarantor  acknowledges  that
Guarantor has no right whatsoever to proceed against Borrower for  reimbursement
of any such  payments.  In connection  with the foregoing,  Guarantor  expressly
waives  any and all  rights of  subrogation  to  Lender  against  Borrower,  and
Guarantor  hereby  waives any rights to enforce any remedy which Lender may have
against  Borrower and any rights to participate in any collateral for Borrower's
obligations under the Loan Documents.  Guarantor hereby subordinates any and all
indebtedness  of  Borrower  now or  hereafter  owed to  Guarantor  to all of the
Obligations and any other  indebtedness  of Borrower to Lender,  and agrees with
Lender that (a)  Guarantor  shall not demand or accept any payment from Borrower
on account of such indebtedness, (b) Guarantor shall not

<PAGE>

claim any offset or other reduction of Guarantor's obligations hereunder because
of any such indebtedness,  and (c) Guarantor shall not take any action to obtain
any interest in any of the  security  described  in and  encumbered  by the Loan
Documents because of any such indebtedness;  provided,  however, that, if Lender
so requests,  such  indebtedness  shall be  collected,  enforced and received by
Guarantor  as  trustee  for  Lender and be paid over to Lender on account of the
indebtedness  of Borrower to Lender,  but without  reducing or  affecting in any
manner the  liability of Guarantor  under the other  provisions of this Guaranty
except to the extent the principal amount of such outstanding indebtedness shall
have been reduced by such payment.

     5.  Waiver  of  Defenses.  Guarantor  hereby  agrees  that its  obligations
hereunder shall not be affected or impaired by, and hereby waives and agrees not
to assert or take advantage of any defense based on:

     (1) the  incapacity or lack of authority of Borrower or any other person or
entity,  the death or disability of Borrower or Guarantor or any other person or
entity,  or the failure of Lender to file or enforce a claim  against the estate
(either in administration, bankruptcy or in any other proceeding) of Borrower or
Guarantor or any other person or entity;

     (2) the  dissolution  or  termination of existence of Borrower or any other
Person;

     (3) the voluntary or involuntary liquidation,  sale or other disposition of
all or substantially all of the assets of Borrower or any other Person;

     (4) the  voluntary or  involuntary  receivership,  insolvency,  bankruptcy,
assignment   for  the   benefit  of   creditors,   reorganization,   assignment,
composition, or readjustment of, or any similar proceeding affecting Borrower or
Guarantor, or any of Borrower's or Guarantor's properties or assets;

     (5) the damage, destruction,  condemnation, foreclosure or surrender of all
or any part of the Collateral;

     (6) the  failure of Lender to give  notice of the  existence,  creation  or
incurring of any new or additional  indebtedness  or obligation or of any action
or nonaction on the part of any other person  whomsoever in connection  with any
obligation hereby guaranteed;

     (7) any failure or delay of Lender to commence an action  against  Borrower
or any other Person,  to assert or enforce any remedies  against  Borrower under
the Note or the Loan Documents, or to realize upon any security;

     (8) any failure of any duty on the part of Lender to disclose to  Guarantor
any facts it may now or hereafter know regarding  Borrower,  any other Person or
the Collateral,  whether such facts materially increase the risk to Guarantor or
not;

     (9)  failure to accept or give  notice of  acceptance  of this  Guaranty by
Lender;

<PAGE>

     (10) failure to make or give notice of  presentment  and demand for payment
of any of the indebtedness or performance of any of the Obligations;

     (11)  failure to make or give  protest and notice of dishonor or of default
to Guarantor or to any other party with respect to any of the Obligations;

     (12)  any and  all  other  notices  whatsoever  to  which  Guarantor  might
otherwise be entitled;

     (13)  any  lack  of  diligence  by  Lender  in  collection,  protection  or
realization  upon any  collateral  securing  the payment or  performance  of the
Obligations;

     (14)  the  invalidity  or  unenforceability  of the Note or any of the Loan
Documents;

     (15) the  compromise,  settlement,  release or termination of any or all of
the Obligations;

     (16) any transfer by Borrower or any other Person of all or any part of the
Collateral;

     (17) the  failure of Lender to perfect  any  security or to extend or renew
the perfection of any security; or

     (18) to the fullest extent permitted by law, any other legal,  equitable or
surety defenses  whatsoever to which  Guarantor might otherwise be entitled,  it
being the intention that the  obligations  of Guarantor  hereunder are absolute,
unconditional and irrevocable.

     6. Guaranty of Payment and  Performance  and Not of  Collection.  This is a
Guaranty of payment and  performance  and not of  collection.  The  liability of
Guarantor  under this  Guaranty  shall be primary,  direct and immediate and not
conditional or contingent upon the pursuit of any remedies  against  Borrower or
any other  person,  nor against  securities  or liens  available to Lender,  its
successors,  successors in title, endorsees or assigns.  Guarantor hereby waives
any right to require  that an action be brought  against  Borrower  or any other
person or to require that resort be had to any security or to any balance of any
deposit  account  or credit on the books of Lender in favor of  Borrower  or any
other person.

     7. Rights and Remedies of Lender. In the event of an Event of Default under
the Note or the Loan Documents,  or any of them,  Lender shall have the right to
enforce its rights,  powers and  remedies  thereunder  or hereunder or under any
other agreement, document or instrument now or hereafter evidencing, securing or
otherwise relating to the Obligations,  in any order, and all rights, powers and
remedies  available to Lender in such event shall be nonexclusive and cumulative
of all other rights,  powers and remedies provided thereunder or hereunder or by
law or in equity. Accordingly, Guarantor hereby authorizes and empowers

<PAGE>

Lender upon the  occurrence  of any Event of Default  under the Note or the Loan
Documents, at its sole discretion,  and without notice to Guarantor, to exercise
any right or remedy  which  Lender  may have,  including,  but not  limited  to,
judicial foreclosure,  exercise of rights of power of sale, acceptance of a deed
or an assignment in lieu of  foreclosure,  appointment  of a receiver to collect
rents  and  profits,   exercise  of  remedies  against  personal  property,   or
enforcement  of any  assignment  of leases,  as to any  security,  whether real,
personal  or  intangible.  At any  public or  private  sale of any  security  or
collateral  for any of the  Obligations,  whether by  foreclosure  or otherwise,
Lender  may, in its  discretion,  purchase  all or any part of such  security or
collateral so sold or offered for sale for its own account and may apply against
the amount bid  therefor  all or any part of the  balance due it pursuant to the
terms of the Note or  Security  Documents  or any other  Loan  Document  without
prejudice to Lender's remedies hereunder against Guarantor for deficiencies.  If
the Obligations are partially paid by reason of the election of Lender to pursue
any of the remedies  available to Lender,  or if such  Obligations are otherwise
partially  paid,  this  Guaranty  shall  nevertheless  remain in full  force and
effect,  and  Guarantor  shall  remain  liable  for the  entire  balance  of the
Obligations even though any rights which Guarantor may have against Borrower may
be destroyed or diminished by the exercise of any such remedy.

     8. Application of Payments.  Guarantor hereby  authorizes  Lender,  without
notice to Guarantor, to apply all payments and credits received from Borrower or
from Guarantor or realized from any security in such manner and in such priority
as set forth in the Credit Agreement.

     9. Business Failure, Bankruptcy or Insolvency. In the event of the business
failure of Guarantor or if there shall be pending any  bankruptcy  or insolvency
case or proceeding with respect to Guarantor under federal bankruptcy law or any
other applicable law or in connection with the insolvency of Guarantor,  or if a
liquidator,  receiver,  or trustee  shall have been  appointed  for Guarantor or
Guarantor's properties or assets, Lender may file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of  Lender  allowed  in  any  proceedings  relative  to  Guarantor,  or  any  of
Guarantor's  properties or assets, and,  irrespective of whether the Obligations
shall then be due and payable,  by  declaration  or  otherwise,  Lender shall be
entitled and empowered to file and prove a claim for the whole amount of any sum
or sums owing with  respect to the  Obligations,  and to collect and receive any
moneys or other property  payable or  deliverable  on any such claim.  Guarantor
covenants and agrees that upon the  commencement  of a voluntary or  involuntary
bankruptcy  proceeding  by or  against  Borrower,  Guarantor  shall  not  seek a
supplemental  stay or  otherwise  pursuant  to 11  U.S.C.  ss.105  or any  other
provision of the Bankruptcy Reform Act of 1978, as amended,  or any other debtor
relief law  (whether  statutory,  common  law,  case law, or  otherwise)  of any
jurisdiction  whatsoever,  now or  hereafter  in effect,  which may be or become
applicable,  to stay,  interdict,  condition,  reduce or inhibit  the ability of
Lender to  enforce  any  rights of Lender  against  Guarantor  by virtue of this
Guaranty or otherwise.

     10. Financial Statements and Other Information. Guarantor hereby represents
and  warrants to Lender  that all  financial  statements  of  Guarantor  and its
Subsidiaries  heretofore  delivered  by it to Lender are true and correct in all
material  respects,  have been prepared in accordance  with  generally  accepted
accounting principles consistently applied, and fairly present

<PAGE>

the  financial  condition  of  Guarantor  and its  Subsidiaries  as of the  date
thereof; that no material adverse change has occurred in the assets or financial
condition of Guarantor and its Subsidiaries as reflected  therein since the date
thereof;  and that Guarantor and its  Subsidiaries  have no liabilities or known
contingent  liabilities  involving  material  amounts which are not reflected in
such  financial  statements  or  referred  to in the notes  thereto  other  than
Guarantor's  obligations  under this Guaranty.  Guarantor  agrees that until all
Obligations  have been  completely paid and performed and the obligations of the
Lenders  under the Credit  Agreement  have  terminated,  it will deliver to each
Lender:

     (1) as soon as  practicable,  but in any event not later than 90 days after
the end of each fiscal year of Guarantor, the audited consolidated balance sheet
of  Guarantor  and its  Subsidiaries  at the end of such year,  and the  related
audited consolidated  statements of income,  changes in shareholders' equity and
cash  flows  and  Consolidated  EBITDA  for such  year,  each  setting  forth in
comparative  form  the  figures  for the  previous  fiscal  year  and  all  such
statements to be in reasonable  detail,  prepared in accordance  with  generally
accepted accounting principles,  and accompanied by an auditor's report prepared
without  qualification  by Ernst & Young LLP or by another "Big Five" accounting
firm, the Form 10-K of Guarantor filed with the SEC (unless the SEC has approved
an extension, in which event Guarantor will deliver to Lender such copies of the
Form 10-K simultaneously with the delivery to the SEC);

     (2) as soon as  practicable,  but in any event not later than 45 days after
the end of each of the first three fiscal  quarters of Guarantor,  copies of the
unaudited consolidated balance sheet of Guarantor and its Subsidiaries as at the
end of such  quarter,  and the  related  unaudited  consolidated  statements  of
income,  changes  in  shareholders'  equity  and cash  flows for the  portion of
Guarantor's  fiscal year then elapsed,  all in reasonable detail and prepared in
accordance with generally accepted accounting  principles (which may be provided
by inclusion in the Form 10-Q of Guarantor for such period provided  pursuant to
subsection (c) below),  together with a certification  by the chief financial or
accounting officer of Guarantor that the information contained in such financial
statements  fairly  presents  the  financial   position  of  Guarantor  and  its
Subsidiaries on the date thereof (subject to year-end adjustments);

     (3) as soon as  practicable,  but in any event not later than 45 days after
the end of each of the first three  fiscal  quarters of  Guarantor in each year,
copies of Form 10-Q of Guarantor filed with the SEC (unless the SEC has approved
an extension in which event  Guarantor will deliver such copies of the Form 10-Q
to the Lender simultaneously with delivery to the SEC);

     (4) as soon as  practicable,  but in any event not later than 45 days after
the end of each of the first three  fiscal  quarters of  Guarantor,  copies of a
consolidated  statement of EBITDA for such fiscal  quarter for Guarantor and its
Subsidiaries  and  prepared in a manner  reasonable  satisfactory  to the Agent,
together with a certification by Guarantor's chief financial or chief accounting
officer that the  information  contained in such statement  fairly  presents the
EBITDA of Guarantor and its Subsidiaries for such period;

<PAGE>

     (5) simultaneously  with the delivery of the financial  statements referred
to in subsections  (a) and (b) above,  a statement (a "Compliance  Certificate")
certified by the chief financial or accounting  officer of Guarantor in the form
of Exhibit A hereto setting forth in reasonable detail  computations  evidencing
compliance  with the  covenants  contained in  Paragraph 11 and (if  applicable)
reconciliations to reflect changes in generally accepted  accounting  principles
since the Guarantor Balance Sheet Date;

     (6) concurrently with the delivery of the financial statements described in
subsections  (b) and (c) above,  a certificate  signed by the  President,  Chief
Financial  Officer or Chief Accounting  Officer of Guarantor to the effect that,
having  read  this  Guaranty,  and based  upon an  examination  which  they deem
sufficient  to enable them to make an informed  statement,  there does not exist
any  Default or Event of  Default,  or if such  Default or Event of Default  has
occurred, specifying the facts with respect thereto;

     (7) contemporaneously with the filing, mailing or releasing thereof, copies
of all press releases and all material of a financial  nature filed with the SEC
or sent to all of the stockholders of Guarantor;

     (8) promptly after they are filed with the Internal Revenue Service, copies
of all annual federal income tax returns and amendments thereto of Guarantor;

     (9) promptly upon becoming aware thereof,  written notice from Guarantor of
any event or  condition  which  might  have an adverse  effect on the  business,
operations, assets, condition (financial or otherwise) or prospects of Guarantor
or the ability of Guarantor to perform  under this Guaranty  (including  but not
limited to,  litigation  commenced or threatened in writing  against  Guarantor,
judgments  rendered  against  Guarantor,  liens filed  against  any  property of
Guarantor,  defaults  claimed under  indebtedness  for borrowed  money for which
Guarantor is primarily or  secondarily  liable,  or  bankruptcy,  insolvency  or
trustee or receivership proceedings commenced against Guarantor), such notice to
specify the nature and the period of existence of such event or  condition,  the
anticipated  effect thereof,  and what action Guarantor is taking or proposes to
take with respect thereto; and

     (10) with  reasonable  promptness,  such other  information  respecting the
business,  operations,  assets, liabilities and financial condition of Guarantor
and its Subsidiaries as Lender may from time to time reasonably request.

Guarantor  will permit any  representative  designated by Agent,  at Guarantor's
expense,  to visit  and  inspect  any of the  properties  of  Guarantor  and its
Subsidiaries,  to examine the records and books of account of Guarantor  and its
Subsidiaries (and to make copies thereof and extracts  therefrom) and to discuss
the affairs, finances and accounts of Guarantor and its Subsidiaries,  with, and
to be advised as to the same by, its officers,  all at such reasonable times and
intervals as the Lender may reasonably request.

     The financial  statements  and other reports and  information  delivered by
Guarantor to Lender  hereunder will be treated as  confidential  by each Lender,
and each assignee and

<PAGE>

participant hereunder and each potential assignee or participant hereunder,  and
such  parties for  themselves  agree not to  disclose  such  information  to any
Person,  provided that such information may be disclosed to any of the following
in connection with their  participation in the transactions  contemplated by the
Loan Documents: directors, officers, employees, representatives,  legal counsel,
accountants  and  prospective  investors  of  any  of  such  Persons,  it  being
understood  that such Persons  shall be informed of the  confidential  nature of
such  information  and shall  agree to treat  such  information  confidentially.
Notwithstanding the foregoing,  such Persons shall be permitted to disclose such
information  (a) to  the  extent  required  by  law,  (b)  to  the  extent  such
confidential  information  becomes publicly  available other than as a result of
the  breach  of  this  Guaranty,  (c) to the  extent  such  information  becomes
available  to any of such  Persons on a  non-confidential  basis,  or (d) to the
extent  necessary to enforce the Loan Documents  (provided that Lender shall use
reasonable efforts to cause such financial  statements,  reports and information
to remain confidential).

     11.  Covenants of  Guarantor.  Guarantor  hereby  covenants and agrees with
Lender that until all  Obligations  have been  completely paid and performed and
the obligations of Lender under the Credit Agreement have terminated:

     (1) Guarantor  will, and will cause its  Subsidiaries  to, cause to be done
all things  necessary  to  preserve  and keep in full force and effect its legal
existence,  rights and franchises,  to effect and maintain all required  foreign
qualifications,  licensing, domestication or authorization, and to comply in all
material  respects with all applicable laws and regulations  with respect to the
foregoing.  Guarantor  shall  not,  without  the prior  written  consent  of the
Majority Lenders, make any material changes to the accounting principles used by
such Person in preparing the financial statements heretofore delivered to Lender
or change its fiscal year;

     (2) Guarantor  will,  and will cause its  Subsidiaries  to, keep  complete,
proper and accurate records and books of account in which full, true and correct
entries will be made in accordance with generally accepted accounting principles
consistent with the preparation of the financial statements heretofore delivered
to  Lender  and will  maintain  adequate  accounts  and  reserves  for all taxes
(including  income taxes),  all depreciation and amortization of its properties,
all other  contingencies,  and all other proper reserves in the same manner, and
to the same extent,  that it has, to the extent applicable,  kept and maintained
it records and books and maintained accounts and reserves for the foregoing;

     (3)  Guarantor  will  continue to engage  primarily in the  businesses  now
conducted by it;

     (4)  Guarantor  will,  and will  cause its  Subsidiaries  to,  duly pay and
discharge,  before the same shall become in arrears, all taxes,  assessments and
other  governmental  charges  imposed  upon  it and  its  properties,  sales  or
activities,  or upon the  income or  profits  therefrom,  as well as claims  for
labor,  material,  or supplies  which if unpaid might become a lien or charge on
any of its  property;  provided that any such tax,  assessment,  charge or claim
need not be paid if the validity or amount thereof shall  currently be contested
in good faith by appropriate  proceedings  and if Guarantor shall have set aside
on its books adequate  reserves with respect thereto;  and provided further that
Guarantor shall pay all such taxes, assessments, charges and

<PAGE>

claims forthwith upon the commencement of proceedings to foreclose any lien that
may have attached as security therefor; (1)

     (5) Guarantor will, and will cause its  Subsidiaries  to, maintain and keep
the properties used or deemed by it to be useful in its business in good repair,
working  order and  condition,  and make or cause to be made all  necessary  and
proper repairs thereto and replacements thereof;

     (6)  Guarantor  will,  and will cause its  Subsidiaries  to,  maintain with
financially  sound  and  reputable  insurers,  insurance  with  respect  to  its
properties and business  against such casualties and  contingencies  and in such
types and amounts as shall be in accordance  with sound  business  practices for
companies in similar business similarly situated;

     (7) it will not make or  permit to be made,  by  voluntary  or  involuntary
means, any transfer,  dilution or encumbrance of its direct or indirect interest
in Borrower;

     (8) it will  abide by each and  every  one of the  covenants  contained  in
Articles 7 and 8 of the Credit  Agreement  that are applicable to a "Guarantor",
as such term is defined in the Credit Agreement;

     (9)  Guarantor  will not, and will not permit any of its  Subsidiaries  to,
become a party to any merger,  consolidation or other business  combination,  or
agree to effect any asset  acquisition,  stock  acquisition or other acquisition
(other  than the  acquisition  of assets  in the  ordinary  course  of  business
consistent  with past  practices)  without  the  prior  written  consent  of the
Majority  Lenders  except  (i)  the  merger  or  consolidation  of one  or  more
Subsidiaries  of  Guarantor  with and into  Guarantor  and  (ii) the  merger  or
consolidation of two or more Subsidiaries of Guarantor;

     (10)  Guarantor will not, and will not permit any of its  Subsidiaries  to,
become a party to or agree to or affect any  disposition  of assets,  other than
the  disposition of assets in the ordinary  course of business,  consistent with
past practices;

     (11) INTENTIONALLY OMITTED;

     (12) Guarantor will not, at the end of any fiscal quarter, permit the ratio
of Consolidated  Total Liabilities of Guarantor to Consolidated  Total Assets of
Guarantor to exceed 0.55 to 1;

     (13)  Guarantor  will not,  at the end of any  fiscal  quarter,  permit its
Consolidated  EBITDA for any period of four consecutive fiscal quarters (treated
as  a  single  accounting  period)  (the  "Test  Period"),   minus  the  Capital
Improvement  Reserve  for the Test  Period to be less  than 1.35  times the Debt
Service for the Test Period.  In the event that Guarantor  shall not have any of
the foregoing  components for four (4) consecutive  fiscal  quarters,  then such
components shall be annualized in a manner reasonably satisfactory to the Agent;

<PAGE>

     (14)  Guarantor  will not,  at the end of any  fiscal  quarter,  permit the
Shareholders' Equity to be less than $200,000,000.00 (the "Shareholders'  Equity
Threshold");  provided,  however the  Shareholders'  Equity  Threshold  shall be
reduced  by the  aggregate  cost of the  shares  of  common  stock of  Guarantor
repurchased by Guarantor  after the date hereof,  provided in no event shall the
Shareholders' Equity Threshold be reduced to less than $180,000,000.00; and

     (15) Guarantor  will not permit the present value of all employee  benefits
vested in all Employee Benefit Plans, Multiemployer Plans and Guaranteed Pension
Plans  maintained  by Guarantor  and any ERISA  Affiliate  thereof to exceed the
present  value of the assets  allocable  to such  vested  benefits  by an amount
greater than  $250,000.00  in the  aggregate.  Neither  Guarantor  nor any ERISA
Affiliate  thereof  will at any time  permit any such Plan  maintained  by it to
engage in any  "prohibited  transaction" as such term is defined in Section 4975
of the Code or Section 406 of ERISA, incur any "accumulated  funding deficiency"
as such term is defined  in Section  302 of ERISA,  whether  or not  waived,  or
terminate any such Plan in any manner which could result in the  imposition of a
lien on the property of Guarantor or Borrower pursuant to Section 4068 of ERISA.

     12.  Representations and Warranties of Guarantor.  Guarantor represents and
warrants as follows:

     (1)  Guarantor  and each ERISA  Affiliate are in compliance in all material
respects  with ERISA.  There has been no  Reportable  Event with  respect to any
Employee Benefit Plan,  Multiemployer Plan or Guaranteed Pension Plan. There has
been no institution of proceedings or any other action by PBGC, the Guarantor or
any ERISA Affiliate to terminate or withdraw or partially withdraw from any such
Plan under any  circumstances  which could lead to material  liabilities to PBGC
or, with respect to a Multiemployer  Plan, the  "Reorganization" or "Insolvency"
(as each such term is  defined  in ERISA) of any such  Plan.  To the best of the
Guarantor's  knowledge,  no  "prohibited  transaction"  (within  the  meaning of
Section 406 of ERISA or Section 4975 of the Code) has  occurred  with respect to
any such Plan, and neither the consummation of the transactions  provided for in
this Agreement and  compliance by the Guarantor  with the provisions  hereof and
the other Loan Documents will involve any prohibited transaction;

     (2) neither the Guarantor nor any ERISA Affiliate  thereof is currently and
the Guarantor has no reason to believe that the Guarantor or any ERISA Affiliate
thereof will become  subject to any  liability  (other than routine  expenses or
contributions  relating to the Plans set forth on  Schedule 1, if timely  paid),
tax or penalty  whatsoever to any person  whomsoever,  which  liability,  tax or
penalty is directly or  indirectly  related to any Plans set forth on Schedule 1
including, but not limited to, any penalty or liability arising under Title I or
Title IV of ERISA,  any tax or penalty  resulting from a loss of deduction under
Sections 404 and 419 of the Code,  or any tax or penalty under Chapter 43 of the
Code,  except such  liabilities,  taxes or penalties  (when taken as a whole) as
will not have a material  adverse  effect on the Guarantor or upon its financial
condition, assets, business, operations, liabilities or prospects; and

<PAGE>

     (3) Guarantor and each ERISA  Affiliate has made full and timely payment of
all amounts  (i)  required  to be  contributed  under the terms of each Plan set
forth on Schedule 1 and  applicable law and (ii) required to be paid as expenses
of each Plan set forth on Schedule 1. No Plan set forth on Schedule 1 would have
an "amount of unfunded benefit  liabilities" (as defined in Section  4001(a)(18)
of  ERISA)  if  such  Plan  were  terminated  as  of  the  date  on  which  this
representation and warranty is made.

     13. Security and Rights of Set-off.  Guarantor hereby grants to Lender,  as
security  for the  full  and  prompt  payment  and  performance  of  Guarantor's
obligations hereunder, a continuing lien on and security interest in any and all
securities or other  property  belonging to Guarantor  now or hereafter  held by
Lender  and in any  and all  deposits  (general  or  specific,  time or  demand,
provisional or final, regardless of currency,  maturity, or the branch of Lender
where the  deposits  are held) now or  hereafter  held by Lender  and other sums
credited  by or due from  Lender  to  Guarantor  or  subject  to  withdrawal  by
Guarantor;  and  regardless of the adequacy of any  collateral or other means of
obtaining repayment of such obligations,  during the continuance of any Event of
Default under the Note or the Loan Documents, Lender may at any time and without
notice to  Guarantor  set-off  and apply the whole or any portion or portions of
any or all such  deposits  and other sums  against  amounts  payable  under this
Guaranty,  whether or not any other person or persons could also withdraw  money
therefrom.  Any security now or hereafter  held by or for Guarantor and provided
by Borrower,  or by anyone on Borrower's  behalf,  in respect of  liabilities of
Guarantor  hereunder  shall be held in trust  for  Lender  as  security  for the
liabilities of Guarantor hereunder.

     14.  Changes in Writing;  No  Revocation.  This Guaranty may not be changed
orally,  and no  obligation  of  Guarantor  can be  released or waived by Lender
except by a writing signed by a duly authorized officer of Lender. This Guaranty
shall be  irrevocable  by  Guarantor  until  all of the  Obligations  have  been
completely  paid and  performed  and the Lenders have no further  obligation  to
advance Loans to Borrower.

     15. Notices. All notices,  demands or requests provided for or permitted to
be given pursuant to this Guaranty (hereinafter in this paragraph referred to as
"Notice")  must be in writing and shall be deemed to have been properly given or
served by  personal  delivery  or by  sending  same by  overnight  courier or by
depositing  the same in the United  States  Mail,  postpaid  and  registered  or
certified,  return  receipt  requested,  at the addresses set forth below.  Each
Notice shall be effective upon being delivered  personally or upon being sent by
overnight  courier  or  upon  being  deposited  in the  United  States  Mail  as
aforesaid.  The time period in which a response to any such Notice must be given
or any action taken with respect  thereto,  however,  shall commence to run from
the date of receipt if personally  delivered or sent by overnight courier or, if
so deposited in the United  States Mail,  the earlier of three (3) business days
following  such  deposit  and the date of  receipt  as  disclosed  on the return
receipt.  Rejection  or other  refusal  to accept or the  inability  to  deliver
because  of changed  address of which no Notice was given  shall be deemed to be
receipt of the Notice  sent.  By giving at least  fifteen (15) days prior Notice
thereof,  Guarantor  or Lender shall have the right from time to time and at any
time during the term of this Guaranty to change their  respective  addresses and
each shall have the right to specify as its address any other address within the
United States of America. For the purposes of this Guaranty:

<PAGE>

         The Address of Lender is:

                  Fleet National Bank
                  100 Federal Street
                  Boston, Massachusetts 02110
                  Attention:  Real Estate Division

         with a copy to:

                  Fleet National Bank
                  115 Perimeter Center Place, N.E.
                  Suite 500
                  Atlanta, Georgia 30346
                  Attention:  Jay Johns

         and a copy to each other  Lender  which may now or  hereafter  become a
         party to the Credit  Agreement at such address as may be  designated by
         such Lender.

         The Address of Guarantor is:

                  Wellsford Real Properties, Inc.
                  535 Madison Avenue, 26th Floor
                  New York, New York 10022
                  Attention:  James J. Burns

                  with a copy to:

                  Robinson Silverman Pearce Aronsohn & Berman, LLP
                  1290 Avenue of the Americas
                  New York, New York  10104
                  Attention:  Alan S. Pearce, Esq.

     16. Governing Law. Guarantor acknowledges and agrees that this Guaranty and
the obligations of Guarantor  hereunder shall be governed by and interpreted and
determined  in  accordance  with  the  internal  laws of the  State  of New York
(excluding the laws applicable to conflicts or choice of law).

     17. CONSENT TO  JURISDICTION;  WAIVERS.  GUARANTOR  HEREBY  IRREVOCABLY AND
UNCONDITIONALLY  (A) SUBMITS TO PERSONAL  JURISDICTION  IN THE STATE OF NEW YORK
OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY,
AND (B) WAIVES ANY AND ALL  PERSONAL  RIGHTS  UNDER THE LAWS OF ANY STATE (I) TO
THE RIGHT, IF ANY, TO TRIAL BY JURY, AND (II) TO OBJECT TO  JURISDICTION  WITHIN
THE STATE OF NEW YORK OR VENUE IN ANY  PARTICULAR  FORUM WITHIN THE STATE OF NEW
YORK. NOTHING CONTAINED HEREIN, HOWEVER,

<PAGE>

SHALL PREVENT LENDER FROM BRINGING ANY SUIT,  ACTION OR PROCEEDING OR EXERCISING
ANY RIGHTS AGAINST ANY SECURITY AND AGAINST  GUARANTOR  PERSONALLY,  AND AGAINST
ANY PROPERTY OF GUARANTOR,  WITHIN ANY OTHER STATE. INITIATING SUCH SUIT, ACTION
OR PROCEEDING OR TAKING SUCH ACTION IN ANY STATE SHALL IN NO EVENT  CONSTITUTE A
WAIVER OF THE AGREEMENT  CONTAINED HEREIN THAT THE LAWS OF THE STATE OF NEW YORK
SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF GUARANTOR AND LENDER  HEREUNDER OR OF
THE  SUBMISSION  HEREIN MADE BY  GUARANTOR TO PERSONAL  JURISDICTION  WITHIN THE
STATE OF NEW YORK.

     18.  Successors  and Assigns.  The  provisions  of this  Guaranty  shall be
binding upon  Guarantor and its heirs,  successors,  successors in title,  legal
representatives,  executors,  estate and assigns, and shall inure to the benefit
of Lender,  its  successors,  successors  in title,  legal  representatives  and
assigns. Guarantor shall not assign or transfer any of its rights or obligations
under this Guaranty without the prior written consent of Lender.

     19. Assignment by Lender. This Guaranty is assignable by Lender in whole or
in part in conjunction with any assignment of the Note or portions thereof,  and
any such assignment hereof or any transfer or assignment of the Note or portions
thereof  by Lender  shall  operate to vest in any such  assignee  the rights and
powers,  in whole or in part, as appropriate,  herein conferred upon and granted
to Lender.

     20.  Severability.  If any  term or  provision  of this  Guaranty  shall be
determined to be illegal or unenforceable, all other terms and provisions hereof
shall nevertheless  remain effective and shall be enforced to the fullest extent
permitted by law.

     21.  Disclosure.  Guarantor  agrees that in addition to disclosures made in
accordance with standard banking practices,  any Lender may disclose information
obtained by such Lender  pursuant to this Guaranty to assignees or  participants
and  potential  assignees  or  participants  hereunder,  subject to the terms of
Paragraph 10 above.

     22. No Unwritten  Agreements.  THIS GUARANTY REPRESENTS 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.

     23. Time of the  Essence.  Time is of the essence  with respect to each and
every covenant, agreement and obligation of Guarantor under this Guaranty. 1.

     24. Statement of Discharge. Upon the payment and performance in full of the
Obligations and upon the termination of Lender's obligations to advance Loans to
Borrower,  the  Lender  shall,  upon the  written  request of  Guarantor  or the
Borrower,  deliver a statement to the Guarantor that the Guarantor's obligations
under this Guaranty have been discharged and satisfied and that this Guaranty is
terminated (subject to reinstatement as provided herein).

<PAGE>

     25. Additional Definitions. The following terms shall have the meanings set
forth in this Paragraph 25 below:

     Capital  Improvement  Reserve.  For any period  for the  purpose of testing
compliance  with the  Consolidated  EBITDA  ratio set forth in  Paragraph  11(m)
hereof,  an amount equal to fifteen  cents  ($0.15)  multiplied  by the weighted
average of rentable  square  footage of Real Estate owned by  Guarantor  and its
Subsidiaries during such period.

     Consolidated or combined.  With reference to any term defined herein,  that
term as applied to the accounts of Guarantor and its Subsidiaries,  consolidated
or combined in accordance with generally accepted accounting principles.

     Consolidated  EBITDA.  With respect to any Test Period,  an amount equal to
the EBITDA of Guarantor and its  Subsidiaries  for such period  consolidated  in
accordance with generally accepted accounting principles.

     Consolidated  Total Assets.  All assets of Guarantor  and its  Subsidiaries
determined  on a  consolidated  basis  in  accordance  with  generally  accepted
accounting principles.  All Real Estate shall be valued on an undepreciated cost
basis.

     Consolidated  Total  Liabilities.  All  liabilities  of  Guarantor  and its
Subsidiaries  determined on a  consolidated  basis in accordance  with generally
accepted  accounting  principles  and  all  Indebtedness  of  Guarantor  and its
Subsidiaries,  whether or not so classified,  excluding those certain contingent
liabilities  of  Guarantor  and its  Subsidiaries  pursuant to (i) that  certain
Indemnity and Guaranty Agreement  ($300,000,000 Loan) dated as of July 16, 1998,
from  Wellsford  Commercial  Properties  Trust  ("WCPT")  and WHWEL Real  Estate
Limited Partnership ("WHWEL") in favor of Fleet National Bank (f/k/a BankBoston,
N.A.),  individually and as Agent, and certain other lenders,  (ii) that certain
Conditional  Guaranty of Payment  ($300,000,000 Loan) dated as of July 16, 1998,
from Guarantor,  WCPT, WHWEL, Whitehall Street Real Estate Limited Partnership V
("Whitehall V"), Whitehall Street Real Estate Limited Partnership VI ("Whitehall
VI"),  Whitehall Street Real Estate Limited  Partnership VII ("Whitehall  VII"),
and Whitehall Street Real Estate Limited  Partnership VIII ("Whitehall VIII") in
favor of Fleet  National  Bank (f/k/a  BankBoston,  N.A.),  individually  and as
Agent,  and certain  other  lenders,  (iii) that certain  Indemnity and Guaranty
Agreement  ($75,000,000  Loan) dated as of July 16, 1998, from WCPT and WHWEL in
favor of Fleet  National  Bank (f/k/a  BankBoston,  N.A.),  individually  and as
Agent,  and certain  other  lenders,  (iv) that  certain  Mezzanine  Conditional
Guaranty  of  Payment  ($75,000,000  Loan)  dated  as of  July  16,  1998,  from
Guarantor,  WCPT, WHWEL, Whitehall V, Whitehall VI, Whitehall VII, and Whitehall
VIII in favor of Fleet National Bank (f/k/a BankBoston,  N.A.), individually and
as Agent,  and certain other lenders,  and (v) that certain  Nomura  Conditional
Guaranty of Payment  ($75,000,000 Loan - Nomura Properties) dated as of July 16,
1998, from Guarantor, WCPT, WHWEL, Whitehall V, Whitehall VI, Whitehall VII, and
Whitehall  VIII in  favor of  Fleet  National  Bank  (f/k/a  BankBoston,  N.A.),
individually and as Agent,  and certain other lenders,  as the same have been or
may  hereafter  be  modified  or amended  from time to time  (collectively,  the
"Contingent Obligations");  provided,  however, it being acknowledged and agreed
that  any  Contingent  Obligation  that  becomes  liquidated  or  is  no  longer
contingent shall no longer be considered a

<PAGE>

Contingent  Obligation  and shall no longer be excluded from the  calculation of
Consolidated Total Liabilities.

     Debt Service.  For any period of four consecutive fiscal quarters,  the sum
of actual interest expense and mandatory or scheduled principal payments due and
payable during such period with respect to the Indebtedness of Guarantor and its
Subsidiaries  consolidated  in accordance  with  generally  accepted  accounting
principles,  consistently  applied,  excluding  any  balloon  payments  due upon
maturity of any Indebtedness,  amortized loan fees,  capitalized  interest,  any
interest  charge  incurred  by  any  entity  in  which  Guarantor  or any of its
Subsidiaries has an interest of less than 50%, or over which Guarantor or any of
its Subsidiaries does not exercise voting control,  and the capitalized interest
expense and principal payments due with respect to the construction loans on the
Palomino Park Project,  and further  excluding any interest payable by Guarantor
to WRP  Convertible  Trust I, a Delaware  business  trust with  respect to those
certain 8.25% convertible  junior  subordinate  debentures issued pursuant to an
Indenture  dated as of May 5,  2000,  between  Guarantor  and  Wilmington  Trust
Company.

     EBITDA.  With  respect to any Person (or any asset of any  Person)  for any
period,  an amount  equal to the sum of (a) the Net  Income of such  Person  (or
attributable  to such asset) for such period  plus (b) Taxes,  depreciation  and
amortization,  interest expense,  and any extraordinary or non-recurring  losses
deducted  in  calculating  such  Net  Income  minus  (c)  any  extraordinary  or
nonrecurring gains included in calculating such Net Income,  provided,  however,
that for purposes of this  calculation,  proceeds from the sale of  condominiums
will not be considered as extraordinary or non-recurring gains.

     Employee  Benefit  Plan.  Any  employee  benefit plan within the meaning of
ss.3(3)  of  ERISA  maintained  or  contributed  to by  Guarantor  or any  ERISA
Affiliate, other than a Multiemployer Plan.

     ERISA. The Employee  Retirement Income Security Act of 1974, as amended and
in effect from time to time.

     ERISA  Affiliate.  Any Person  which is treated as a single  employer  with
Guarantor under ss.414 of the Code.

     ERISA  Reportable  Event.  A reportable  event with respect to a Guaranteed
Pension  Plan  within  the  meaning  of  ss.4043  of ERISA  and the  regulations
promulgated  thereunder  as to which  the  requirement  of  notice  has not been
waived.

     Equity  Offering.  The  issuance and sale by Guarantor of any of its equity
securities.

     Guaranteed  Pension  Plan.  Any  employee  pension  benefit plan within the
meaning of ss.3(2) of ERISA  maintained  or  contributed  to by Guarantor or any
ERISA  Affiliate the benefits of which are  guaranteed on termination in full or
in part by the PBGC  pursuant to Title IV of ERISA,  other than a  Multiemployer
Plan.

<PAGE>

     Guarantor Balance Sheet Date. March 31, 2000.

     Multiemployer Plan. Any multiemployer plan within the meaning ofss.3(37) of
ERISA maintained or contributed to by Guarantor or any ERISA Affiliate.

     Net Income (or  Deficit).  With  respect to any Person (or any asset of any
Person) for any fiscal  period,  the net income (or  deficit) of such Person (or
attributable to such asset),  after  deduction of all expenses,  taxes and other
proper  charges,  determined in accordance  with generally  accepted  accounting
principles.

     PBGC. The Pension Benefit Guaranty  Corporation  created byss.4002 of ERISA
and any successor entity or entities having similar responsibilities.

     Real  Estate.  All real  property at any time owned or leased (as lessee or
sublessee) by Guarantor or any of its Subsidiaries.

     Shareholders'  Equity.  At any date, the total  consolidated  shareholders'
equity of Guarantor and its Subsidiaries determined in accordance with generally
accepted accounting principles.

     Taxes. All taxes, however denominated,  including any interest,  penalties,
or other  additions  to tax that may become  due or payable in respect  thereof,
imposed by any federal, territorial,  state, local, or foreign government or any
agency or  political  subdivision  of any such  government,  which  taxes  shall
include, without limiting the generality of the foregoing, all income or profits
taxes  (including,  but not limited to,  federal  income  taxes and state income
taxes), payroll and employee withholding taxes,  unemployment insurance,  social
security taxes, sales and use taxes, ad valorem taxes,  excise taxes,  franchise
taxes, gross receipts taxes, business license taxes,  occupation taxes, real and
personal  property  taxes,  stamp taxes,  environmental  taxes,  transfer taxes,
workers'  compensation,  Pension Benefit Guaranty Corporation premiums and other
governmental  charges,  and other obligations of the same or of a similar nature
to any of the  foregoing,  which the  Guarantor  is  assessed,  required to pay,
withhold, or collect for any period.

     25. Ratification.  Guarantor does hereby restate,  reaffirm and ratify each
and every warranty and  representation  regarding  Guarantor or its Subsidiaries
set forth in the  Credit  Agreement  as if the same  were  more  fully set forth
herein.

                      [SIGNATURES BEGIN ON FOLLOWING PAGE]

<PAGE>

     IN WITNESS  WHEREOF,  Guarantor has executed this Guaranty under seal as of
the 28th day of June, 2000.

               WELLSFORD REAL PROPERTIES, INC., a Maryland corporation

                By: /s/ James J. Burns
                ----------------------
                   Name: James J. Burns
                   Title: Senior Vice President

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

<PAGE>

     Lender  joins in the  execution  of this  Guaranty for the sole and limited
purpose  of  evidencing  its  agreement  to waiver of the right to trial by jury
contained in Section 17(b)(i) hereof and Section 25 of the Credit Agreement.

               FLEET NATIONAL BANK,
               As Agent for Lender

               By: /s/ Jay G. Johns
               --------------------
                  Name: Jay G. Johns
                  Title: Vice President

<PAGE>

                                    EXHIBIT A
                                    ---------
                                     FORM OF
                             COMPLIANCE CERTIFICATE

Fleet National Bank,
for itself and as Agent
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attention:  Mr. Jay Johns


Ladies and Gentlemen:

     Reference is made to the Unconditional  Guaranty of Payment and Performance
dated as of June 28, 2000 (the  "Guaranty") by Wellsford Real  Properties,  Inc.
("Guarantor")  for the benefit of Fleet  National  Bank,  the other Lenders from
time to time party to the "Credit Agreement" (as defined therein) and any Lender
acting as Agent for all of the  Lenders.  Terms  defined in the Guaranty and not
otherwise defined herein are used herein as defined in the Guaranty.

     Pursuant to the  Guaranty,  Guarantor is furnishing to you herewith (or has
most recently  furnished to you) the  financial  statements of Guarantor and its
Subsidiaries  for the fiscal period ended  _______________  (the "Balance  Sheet
Date").  Such  financial  statements  have  been  prepared  in  accordance  with
generally  accepted  accounting  principles  and  present  fairly the  financial
position of Guarantor and the  Subsidiaries  covered thereby at the date thereof
and the results of their operations for the periods covered thereby,  subject in
the case of interim statements only to normal year-end audit adjustments.

     This certificate is submitted in compliance with  requirements of Paragraph
10 of the Guaranty.  The undersigned officer of Guarantor is its chief financial
or chief accounting officer.

     The  undersigned  officer has caused the  provisions  of the Guaranty to be
reviewed and has no knowledge of any Default or Event of Default.  (Note: If the
signer  does have  knowledge  of any  Default or Event of  Default,  the form of
certificate  should be revised to specify the  Default or Event of Default,  the
nature  thereof  and the actions  taken,  being taken or proposed to be taken by
Guarantor with respect thereto.)

     Guarantor is providing the following information to demonstrate  compliance
as of the date hereof with the following covenants:

<PAGE>

I.     P. 10(l). Liabilities to Assets Ratio.
       --------  ---------------------------

         A.       Consolidated Total Liabilities
                  per balance sheet                                $____________

         B.       Consolidated Total Assets per
                  balance sheet                                    $____________

         Ratio of A to B may not exceed 0.55 to 1.

II.    P. 10(m). Consolidated EBITDA Coverage.
       --------  ----------------------------

         A.       Consolidated EBITDA  =

                  Consolidated Net Income for
                  most recent quarter                              $____________
                  Plus depreciation and amortization               $____________

                  Plus interest expense                            $____________

                  Plus Taxes                                       $____________

                  Plus extraordinary or non-recurring
                  losses                                           $____________

                  Minus extraordinary or non-
                  recurring gains (other than condominium sales)   ($__________)

                  Subtotal for most recent quarter                  $___________

                  Consolidated EBITDA for three prior quarters:

                  Quarter ended __________                          $___________

                  Quarter ended __________                          $___________

                  Quarter ended __________                          $___________

                  Total                                             $___________

<PAGE>

                  Minus Capital Improvement Reserve for four
                  prior quarters                                   ($__________)

                  Total                                             $ __________

         B.       Debt Service for four prior
                  quarters                                          $___________

         A must equal or exceed 135% of B.

III.     P. 10(n). Minimum Shareholders' Equity

         A.       Shareholders' Equity                               $ _________

         B.       $200,000,000.00

                  Minus,  the  aggregate  cost  of  common  stock  of  Guarantor
                  repurchased  by  Guarantor  after June ____,  2000  (provided,
                  however, in no event may the Shareholders' Equity Threshold be
                  reduced as a result of such stock
                  repurchases to less than $180,000,000.00)          $ _________

                  Total                                              $ _________

                  A must equal or exceed B

<PAGE>

                                   SCHEDULE 1
                                   ----------

                                      NONE
<PAGE>