SECOND AMENDMENT OF AGREEMENT OF SALE

            THIS SECOND AMENDMENT OF AGREEMENT OF SALE (this "Second Amendment")
is made as of September 22, 2006, by and between DVL, INC, a Delaware
corporation, having an address at 70 East 55th Street, 7th Floor, New York, New
York 10022 (the "Seller"), and 354 BROADWAY ASSOCIATES, LLC., a New York limited
liability company, having an address at 13 Notre Dame Street, Ft. Edward, New
York 12828 (the "Buyer").

      WHEREAS, Seller and Buyer entered into an Agreement of Sale dated April
27, 2006, (the "Agreement") for the purchase and sale of certain real property
located in the Town of Ft. Edward, County of Washington, State of New York, as
such Property is more fully described in the Agreement (the "Property");

      WHEREAS, on June 28, 2006, Seller and Buyer entered into a First Amendment
to Agreement of Sale (the "First Amendment"), pursuant to which Seller agreed to
undertake certain soil sampling in the parking area of the Property (the
"Environmental Testing");

      WHEREAS, Seller has completed the Environmental Testing, the results of
which indicate the presence of polychlorinated biphenyls at certain locations in
the parking area of the Property (the "Parking Area Contamination"); and

      WHEREAS, Buyer has requested and Seller has agreed to remediate the
Parking Area Contamination (the "Parking Area Remediation") in accordance with
the supplemental work plan prepared by Malcolm Pirnie, Inc. dated August 1, 2006
(the "Supplemental Work Plan"), a copy of which is attached hereto.

      NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the mutual receipt
and legal sufficiency of which is hereby acknowledged, Buyer and Seller hereby
covenant and agree as follows:

      1.    All capitalized terms not otherwise defined herein shall have the
            meanings ascribed to them in the Agreement.

      2.    Seller, at its own expense, shall remediate the Parking Area
            Contamination in accordance with the Supplemental Work Plan. Upon
            completion of the Parking Area Remediation, Seller's environmental
            consultant shall submit a closure report for the Parking Area
            Remediation to the NYDEC. Based upon its review and approval of the
            closure report, the NYDEC shall issue a closure or "no further
            action" letter with respect to the Parking Area Contamination. Buyer
            acknowledges that Seller shall not be obligated to repave any
            portion of the Property after it completes the Parking Area
            Remediation; however, Buyer shall be entitled to a credit against
            the Purchase Price at Closing in the amount

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            of Thirty-Five Thousand and 00/100 Dollars ($35,000.00), which sum
            represents the estimate cost of repaving that portion of the parking
            area in which the Parking Area Remediation will occur.

      3.    Contemporaneously with the execution of this Second Amendment, Buyer
            shall pay to Seller $3,537.50, which sum represents one-half (1/2)
            of the costs of the Environmental Testing in the parking area of the
            Property.

      4.    Buyer acknowledges that the Environmental Work Plan for the Property
            and the Supplemental Work Plan have been approved by the NYDEC and
            are acceptable to Buyer in all respects.

      5.    Buyer hereby waives any rights that it may have under Sections
            3.02(d) or 3.02(e) of the Agreement to terminate the Agreement based
            upon its environmental investigation of the Property or the failure
            of the NYDEC to approve the Environmental Work Plan or the
            Supplemental Work Plan for the Property.

      6.    Contemporaneously with the execution of this Second Amendment, Buyer
            shall pay to Escrow Agent the Additional Deposit in the amount of
            $11,875.00.

      7.    Subject to the provisions of this Second Amendment, all of the
            terms, covenants, and conditions of the Agreement, as amended by the
            First Amendment, are reconfirmed and shall remain in full force and
            effect and binding upon the parties hereto, their successors and
            assigns.

      8.    In the event of a conflict between any of the terms and provisions
            of this Second Amendment and the terms and provisions of the
            Agreement, as amended by the First Amendment, the terms and
            provisions of this Second Amendment shall be controlling.

      9.    This Second Amendment may be executed in separate counterparts. It
            shall be fully executed when Seller and Buyer have each signed at
            least one counterpart even though no one counterpart contains the
            signature of both parties.

                     [signatures appear on following page]

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      IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
as of the day and year first written above.

                                   SELLER:

                                   DVL, INC.

                                   By /s/ Charles D. Carames
                                      ------------------------
                                      Name: Charles D. Carames
                                      Title: Vice President

                                   Date: 9/25/06
                                         ---------------------


                                   BUYER:

                                   354 BROADWAY ASSOCIATES, LLC

                                   By /s/ S. Paul Miller
                                      ------------------------
                                      Name: S. Paul Miller
                                      Title: Member

                                   Date: 9/22/06
                                         ---------------------