PREFERRED SECURITIES PURCHASE AGREEMENT

                                      among

                        WELLSFORD REAL PROPERTIES, INC.,


                             WRP CONVERTIBLE TRUST I

                                       and

                        ERP OPERATING LIMITED PARTNERSHIP

                                   MAY 5, 2000

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                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

SECTION  1.         PURCHASE AND SALE OF SECURITIES...........................2

SECTION  2.         REPRESENTATIONS AND WARRANTIES OF THE OFFERORS............2
         2.1        Organization; Powers......................................2
         2.2        Authorizations............................................3
         2.3        The Capital Stock.........................................5
         2.4        Company SEC Reports and Filings...........................5
         2.5        Company Financial Statements; Material Changes............6
         2.6        Absence of Defaults, Conflicts, etc.......................7
         2.7        Pending Actions...........................................7
         2.8        Private Offering; Integration.............................7
         2.9        Brokerage.................................................8
         2.10       Subordination.............................................8
         2.11       No Material Misstatements.................................8
         2.12       Tax Matters...............................................8
         2.13       Reservation and Valid Issuance of Shares..................8
         2.14       Preferred Securities Guarantee............................9

SECTION  3.         REPRESENTATIONS AND WARRANTIES OF THE INVESTOR............9
         3.1        Certain Representations and Warranties....................9
         3.2        Additional Representations and Warranties................10

SECTION  4.         COVENANTS................................................10
         4.1        Tax Matters..............................................10

SECTION  5.         OFFERORS' CLOSING CONDITIONS.............................12
         5.1        Compliance with Agreement................................12
         5.2        Investor to Close........................................12
         5.3        Representations and Warranties...........................12

SECTION  6.         INVESTOR'S CLOSING CONDITIONS............................12
         6.1        No Material Adverse Effect...............................12
         6.2        Representations and Warranties...........................13
         6.3        Compliance with Agreement and Purchase Agreement.........13
         6.4        Approval of Proceedings..................................13
         6.5        Injunction...............................................14
         6.6        Additional Agreements....................................14
         6.7        Opinions.................................................14

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SECTION  7.         INDEMNIFICATION..........................................15
         7.1        Indemnification Generally................................15
         7.2        Indemnification Procedures for Third Party Claims........15

SECTION  8.         INTERPRETATION OF THIS AGREEMENT.........................16
         8.1        Terms Defined............................................16
         8.2        Governing Law............................................18
         8.3        Paragraph and Section Headings...........................19

SECTION  9.         MISCELLANEOUS............................................19
         9.1        Expenses.................................................19
         9.2        Notices..................................................19
         9.3        Survival.................................................20
         9.4        Entire Agreement; Amendment and Waiver...................21
         9.5        Counterparts.............................................21
         9.6        Successors and Assigns...................................21
         9.7        Severability.............................................21
         9.8        Jurisdiction; Consent to Service of Process..............21
         9.9        Trustee Exculpation......................................22

SCHEDULES

Schedule 2.3(a) Options, Warrants, Etc.
Schedule 2.5(b) Material Adverse Change
Schedule 6.2 Representations and Warranties

EXHIBITS

Exhibit A Form of Amendment to Registration Rights Agreement
Exhibit B Opinion of Ballard Spahr Andrews & Ingersoll, LLP
Exhibit C Opinion of Richards, Layton & Finger, P.A.
Exhibit D Opinion of Robinson Silverman Pearce Aronsohn & Berman LLP

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                     PREFERRED SECURITIES PURCHASE AGREEMENT

     This PREFERRED  SECURITIES PURCHASE AGREEMENT (this "Agreement") is made as
of May 5, 2000 among  Wellsford Real  Properties,  Inc., a Maryland  corporation
(the "Company"),  WRP Convertible Trust I, a Delaware  statutory  business trust
(the "Trust" and together with the Company, the "Offerors"),  as issuer, and ERP
Operating Limited Partnership, an Illinois limited partnership (the "Investor"),
as purchaser.

                              PRELIMINARY STATEMENT

     The Trust is a statutory  business trust organized under the Business Trust
Act (the "Delaware Act") of the State of Delaware  (Chapter 38, Title 12, of the
Delaware Code, 12 Del. C. Sections 3801 et seq.) pursuant to the  Declaration of
Trust,  dated and  effective as of May 5, 2000, by the Company and the Trustees,
as defined therein, and the holders,  from time to time, of undivided beneficial
interests in the assets of the Trust (the  "Declaration").  The Offerors confirm
their  agreement  with the  Investor,  with respect to the offer and sale by the
Trust and the purchase by the Investor of $25,000,000  in aggregate  liquidation
amount of 8.25% Convertible Trust Preferred  Securities  (Liquidation Amount $25
per Security) representing  undivided  preferential  beneficial interests in the
assets of the Trust (the  "Preferred  Securities").  The  definitions of certain
capitalized  terms used herein are set forth in Section 8.1.  Capitalized  terms
used herein and not otherwise  defined  herein shall have the meanings  assigned
such terms in the Declaration.

     The Preferred  Securities will be guaranteed by the Company with respect to
distributions  and amounts payable upon  liquidation or redemption and otherwise
pursuant to the Preferred  Securities  Guarantee  Agreement,  dated as of May 5,
2000, of the Company (the "Preferred Securities Guarantee").

     The  entire  proceeds  from the sale of the  Preferred  Securities  will be
combined  with the entire  proceeds from the sale by the Trust to the Company of
$775,000 in aggregate  liquidation amount of its securities  representing common
beneficial  interests in the assets of the Trust (the "Common  Securities")  and
will be used by the Trust to purchase  $25,775,000 in aggregate principal amount
of  8.25%  Convertible  Junior  Subordinated  Debentures  due May 4,  2022  (the
"Subordinated Debentures") issued by the Company pursuant to an Indenture, dated
and  effective as of May 5, 2000,  by the Company and  Wilmington  Trust Company
(the  "Trustee")  (the  "Indenture").  The Preferred  Securities  and the Common
Securities will be issued pursuant to the Declaration.

     The  Preferred  Securities,  the  Preferred  Securities  Guarantee  and the
Subordinated  Debentures are  collectively  referred to herein as the "Preferred
Instruments."  The  Declaration,   the  Indenture,   the  Preferred   Securities
Guarantee,   and  the  Common  Securities   Guarantee  and  this  Agreement  are
hereinafter referred to collectively as the "Operative Documents."

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     The  Preferred  Securities  are  offered and sold to the  Investor  without
registration  under the  Securities  Act of 1933,  as amended  (the  "Securities
Act"),  in reliance upon exemptions  therefrom,  and Investor may only resell or
otherwise  transfer such Preferred  Securities if such Preferred  Securities are
hereafter  registered  under  the  Securities  Act or if an  exemption  from the
registration requirements of the Securities Act is available.

     The parties hereto desire that the foregoing  transaction be subject to the
terms and  conditions  set  forth  herein.  Accordingly,  the  parties  agree as
follows:

SECTION 1. PURCHASE AND SALE OF SECURITIES

     (a) Subject to the terms and  conditions set forth in this Agreement and in
reliance upon  representations and warranties  contained in this Agreement,  the
Trust agrees to sell to the Investor,  and the Investor  agrees to purchase from
the  Trust,  at a  purchase  price  of $25  per  Preferred  Security,  1,000,000
Preferred Securities.

     (b) Such  sale and  purchase  shall be  effected  at the  Closing  Time (as
defined  below)  when  delivery  of the  certificates,  duly  registered  in the
Investor's name evidencing the Preferred Securities being purchased by it, shall
be made against delivery by the Investor to the Trust of the aggregate  purchase
price  therefor  by wire  transfer(s)  of  immediately  available  funds to such
account as the Trust shall designate prior to the Closing Time.

     (c) The closing (the  "Closing") of such sale and purchase shall take place
at 11:00  A.M.,  New York City time,  on May 5, 2000,  or at such other time not
later than five  business  days after such date as the Investor and the Offerors
agree  to in  writing  (such  time  and  date  of  payment  and  delivery  being
hereinafter  referred  to as the  "Closing  Time"),  at the  offices of Robinson
Silverman  Pearce Aronsohn & Berman LLP, 1290 Avenue of the Americas,  New York,
New York 10104, or at such other location as the Investor and the Offerors shall
select and agree to.

SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE OFFERORS

     The Offerors, jointly and severally,  represent and warrant to the Investor
as of the date hereof and as of the Closing Time  referred to in Section  (1)(c)
hereof, and agree with the Investor as follows:

     2.1 Organization; Powers

     (a)  The  Company  and  each  of its  Subsidiaries  (a) is an  entity  duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of its
respective  jurisdiction  of its

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organization,  (b) has all requisite power and authority to own its property and
assets and to carry on its  business  as now  conducted  and as  proposed  to be
conducted,  (c) is  qualified  to do business in every  jurisdiction  where such
qualification  is  required,  except  where the failure so to qualify  would not
result in a Company Material Adverse Effect,  as defined in Section 2.5(b),  and
(d) in the  case of the  Company,  has the  corporate  power  and  authority  to
execute, deliver and perform its obligations under this Agreement.

     (b) The Trust has been duly  created  and is validly  existing  and in good
standing  as a business  trust under the  Delaware  Act with the trust power and
authority  to own its  properties  and to conduct its business and to enter into
and perform its  obligations  under this  Agreement,  the  Preferred  Securities
Guarantee,  the Common Securities Guarantee,  and the Declaration.  The Trust is
duly qualified to transact business and is in good standing in each jurisdiction
in which such qualification is necessary,  except to the extent that the failure
to so qualify or be in good  standing  would not have a Trust  Material  Adverse
Effect, as defined in Section 2.5(b) hereof; and except as set forth on Schedule
2.5(a),  the Trust is not a party to or otherwise  bound by any agreement  other
than documents  referred to in this Agreement or entered into in connection with
the transactions referred to in this Agreement.  The Trust is and will be, under
current  law,  classified  for United  States  federal  income tax purposes as a
grantor  trust and not as an  association  taxable as a  corporation.  As of the
Closing  Time,  the Trust is and will be treated as a subsidiary  of the Company
pursuant to GAAP.

     2.2 Authorizations

     (a)  The  execution,  delivery  and  performance  by the  Company  of  this
Agreement and the transactions contemplated hereby (a) have been duly authorized
by all  requisite  corporate  action,  and  (b)  will  not (i)  violate  (A) any
provision of law,  statute,  rule or regulation to which the Company is subject,
or of the  certificate  or  articles  of  incorporation,  or other  constitutive
documents or bylaws of the Company,  or any subsidiary  thereof, as the case may
be, (B) any order of any  Governmental  Authority (as defined  below) or (C) any
provision of any  indenture or other  material  agreement or instrument to which
the Company,  or its  Subsidiaries  is a party or by which any of them or any of
their property is or may be bound,  (ii) be in conflict with, result in a breach
of or constitute (alone or with notice or lapse of time or both) a default under
any such  indenture,  agreement  or other  instrument  or  (iii)  result  in the
creation  or  imposition  of any  security  interest,  mortgage,  pledge,  lien,
encumbrance,  claim or  equitable  right upon or with respect to any property or
assets  now  owned  or  hereafter  acquired  by  the  Company,  or  any  of  its
Subsidiaries (a "Lien").

     (b) The execution,  delivery and performance by the Trust of this Agreement
and the  transactions  contemplated  hereby (a) have been duly authorized by all
requisite  trust action,  and (b) will not (i) violate (A) any provision of law,
statute, rule or regulation to which the Trust is subject, or of the certificate
of trust of the Trust,  (B) any order of any  Governmental  Authority or (C) any
provision of any  indenture or other  material  agreement or instrument to

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which  the Trust is a party or by which it or any of its  property  is or may be
bound,  (ii) be in conflict with,  result in a breach of or constitute (alone or
with  notice  or lapse  of time or both) a  default  under  any such  indenture,
agreement or other  instrument  or (iii) result in the creation or imposition of
any Lien.

     (c)  This  Agreement  is a valid  and  legally  binding  obligation  of the
Offerors,  enforceable  against the Offerors in accordance with its terms except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium,  fraudulent  conveyance or other similar laws  affecting  creditors'
rights generally or by general  principles of equity,  including but not limited
to,   principles   governing  the  availability  of  the  remedies  of  specific
performance  and  requisite  relief   (regardless  of  whether   enforcement  is
considered in a proceeding at law or in equity) (the "Bankruptcy Exceptions").

     (d) The  Declaration  and the  Indenture  have been duly  authorized by the
Company and, to the Company's knowledge,  have been duly authorized by the other
parties  thereto,  and, at the Closing  Time,  will have been duly  executed and
delivered by the Company and, to the Company's  knowledge,  by the other parties
thereto,  and each agreement will be a valid and legally  binding  obligation of
the Company,  and to the  Company's  knowledge,  of the other  parties  thereto,
enforceable  against the parties thereto in accordance with its terms, except to
the extent that enforcement thereof may be limited by Bankruptcy Exceptions.

     (e) The  Registration  Rights  Agreement  has been duly  authorized  by the
Company and, at the Closing Time,  will have been duly executed and delivered by
the Company and assuming the due  authorization,  execution  and delivery by the
Investor,  the  Registration  Rights  Agreement  will, at the Closing Time, be a
valid and legally  binding  obligation of the Company,  enforceable  against the
Company in  accordance  with its terms,  except to the extent  that  enforcement
thereof  may be  limited  by (i)  Bankruptcy  Exceptions  or (ii) the  effect of
applicable  public  policy  on the  enforceability  of  provisions  relating  to
indemnification and contribution.

     (f) The Preferred  Securities  have been duly authorized by the Declaration
and,  when issued and  delivered by the Trust to the  Investor  pursuant to this
Agreement  against payment therefor as provided  herein,  will be validly issued
and fully paid and non-assessable undivided preferential beneficial interests in
the assets of the Trust. The issuance of the Preferred Securities is not subject
to  preemptive  or  other  similar  rights;  and  (subject  to the  terms of the
Declaration)  holders  of  Preferred  Securities  will be  entitled  to the same
limitation  of  personal   liability   extended  to   stockholders   of  private
corporations for profit incorporated under the laws of the State of Delaware.

     (g) The Common Securities have been duly authorized by the Declaration and,
when issued and delivered by the Trust to the Company against payment  therefor,
will be validly issued and will represent undivided common beneficial  interests
in the assets of the Trust.

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The  issuance of the Common  Securities  is not subject to  preemptive  or other
similar  rights;  and, at the Closing  Time,  all of the issued and  outstanding
Common  Securities  of the Trust will be  directly  or  indirectly  owned by the
Company, free and clear of any Lien.

     (h) The  Preferred  Securities  Guarantee  has been duly  authorized by the
Company and, at the Closing Time, the Preferred  Securities  Guarantee will have
been duly executed and delivered by the Company and will  constitute a valid and
legally  binding  obligation of the Company,  enforceable in accordance with its
terms,  except to the  extent  that  enforcement  thereof  may be limited by the
Bankruptcy Exceptions.

     (i) The  Subordinated  Debentures  have been duly authorized by the Company
and,  at the  Closing  Time,  the  Subordinated  Debentures  will have been duly
executed,  authenticated,  issued and  delivered and will  constitute  valid and
legally binding  obligations of the Company entitled to the benefits provided by
the Indenture,  enforceable in accordance with their terms, except to the extent
that enforcement thereof may be limited by the Bankruptcy Exceptions.

     2.3 The Capital Stock

     (a) Pursuant to the Articles of Amendment  and  Restatement,  dated May 30,
1997,  the Company is  authorized to issue  199,650,000  shares of Common Stock,
16,636,955  of which  are  issued  and  outstanding.  Pursuant  to the  Articles
Supplementary  of the Company,  dated May 30, 1997, the Company is authorized to
issue 2,000,000 shares of Preferred Stock,  none of which have been issued as of
the date hereof and 350,000 shares of Class A Common Stock, 339,806 of which are
issued  and  outstanding  as of  the  date  hereof.  Upon  consummation  of  the
transactions contemplated by the Operative Documents: (i) no shares of the Class
A  Common  Stock  will be  issued  and  outstanding,  (ii) the  Company  will be
authorized  to issue  350,000  shares of Class A-1 Common  Stock,  and (iii) the
Company will have issued  339,806  shares of Class A-1 Common  Stock.  Except as
disclosed  on  Schedule  2.3(a)  hereto and in a letter  agreement  of even date
herewith  relating to the  issuance by the Company of shares of Class A-1 Common
Stock of the Company executed by the Company and the Investor,  and as issued or
entered  into  with  current  or former  directors  or  employees,  there are no
existing options,  warrants,  calls,  subscriptions,  convertible securities, or
other rights,  agreements or  commitments  which  obligate the Company to issue,
transfer or sell any shares of stock or equity interest of the Company.

     (b) As of the date hereof,  there are no issued and outstanding  beneficial
interests in the Trust. Upon consummation of the transaction contemplated by the
Operative Documents and a Subscription  Agreement of even date herewith executed
by the  Company,  the Trust will have  issued  and  outstanding  $25,000,000  of
Preferred  Securities and $775,000 of Common Securities.  Except as provided for
in the Operative  Documents,  there are no existing  options,  warrants,  calls,
subscriptions,   convertible   securities,   or  other  rights,   agreements  or

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commitments  which obligate the Trust to issue,  transfer or sell any beneficial
interests in the Trust.

     2.4 Company SEC Reports and Filings

     (a) The Company has caused to be delivered  to the  Investor  copies of the
following documents,  without exhibits thereto  (collectively,  the "SEC Reports
and Filings"):

     (i) The  Company's  Annual  Report on Form 10-K for the  fiscal  year ended
December 31, 1999 (File No.  001-12917),  as filed with the  Commission on March
29, 2000;

     (ii) The Company's  Proxy  Statement for the June 9, 2000 annual meeting of
shareholders, as filed with the Commission; and

     (iii) The Company's  registration  statement on Form S-3,  Registration No.
33356763,  as filed with the Commission on June 12, 1998, and declared effective
on June 29, 1998.

     (b) The SEC  Reports and  Filings,  when  filed,  complied in all  material
respects  with  all  applicable  requirements  of the  Securities  Act  and  the
Securities  Exchange Act of 1934 and the rules and regulations of the Commission
promulgated  thereunder.  None of the SEC  Reports and  Filings,  at the time of
filing  contained any untrue  statement of a material fact or omitted to state a
material  fact  required to be stated  therein or necessary in order to make the
statements  therein not misleading in light of the  circumstances  in which they
were made.

     2.5 Company Financial Statements; Material Changes

     (a) The audited  consolidated  balance  sheet of the Company as at December
31, 1999 included in the SEC Reports and Filings fairly presents in all material
respects the consolidated financial position of the Company and its Subsidiaries
at the date thereof,  and the related  consolidated  statements  of  operations,
equity and cash flows for the year ended  December 31, 1999  included in the SEC
Reports and  Filings  fairly  present in all  material  respects  the results of
operations and other information therein of the Company and its Subsidiaries for
the respective periods indicated (collectively, the "Financial Statements"). All
such  Financial  Statements,  including the schedules  and notes  thereto,  were
prepared in accordance with generally accepted  accounting  principles  ("GAAP")
applied consistently throughout the periods involved.

     (b) Since  December 31, 1999 with respect to the Company and since the date
of its  formation  with  respect  to the Trust,  (A) there has been no  material
adverse  change in or  affecting  the  management,  assets,  business,  business
prospects, earnings or condition (financial

<PAGE>

or otherwise) of the Trust (a "Trust  Material  Adverse  Effect") or the Company
and its Subsidiaries  considered as one enterprise (a "Company  Material Adverse
Effect,"  together with a Trust Material  Adverse  Effect,  a "Material  Adverse
Effect"),  whether or not arising in the ordinary course of business,  (B) there
have been no transactions entered into by the Trust or the Company or any of its
Subsidiaries which are material with respect to the Trust or the Company and its
Subsidiaries  considered  as one  enterprise,  other than those in the  ordinary
course of business,  (C) except as set forth in Schedule  2.5(b),  there has not
been any material  change in the total  assets,  except  assets  acquired in the
ordinary  course of  business,  or long term debt of the Company and (D) neither
the Trust nor the Company nor any of its Subsidiaries has sustained any material
loss or  interference  with its business  from fire,  explosion,  flood or other
calamity,  whether or not  covered by  insurance,  or from any labor  dispute or
court or governmental action, order or decree.

     2.6 Absence of Defaults, Conflicts, etc.

     The execution and delivery of the Operative  Documents and the Registration
Rights Agreement,  the issuance,  sale and delivery of the Preferred Instruments
and the consummation of the transactions  contemplated herein and therein do not
and will not  conflict  with,  or result in a breach or  violation of any of the
terms, conditions or provisions of, or constitute a default under, or permit the
acceleration  of rights under or  termination  of, any of the Key Agreements and
Instruments of the Company, or any of its Subsidiaries or the Trust or result in
the creation or imposition of any Lien,  charge or encumbrance upon any property
or assets of the Company or any of its  Subsidiaries or the Trust,  and will not
result in any violation of the Organizational Documents of the Company or any of
its Subsidiaries or the Trust, or any existing Requirements of Law applicable to
the Company, or any of its Subsidiaries or the Trust.

     2.7 Pending Actions

     There is no action,  suit,  investigation or proceeding  pending or, to the
Company's  knowledge,  threatened or contemplated  against the Company or any of
its  properties  or  assets  by or  before  any  Governmental  Authority,  which
questions the validity of the Operative  Documents,  the issuance or validity of
the Preferred  Securities or any action taken or to be taken pursuant  hereto or
thereto, or which could reasonably be expected  individually or in the aggregate
to result in any Material Adverse Effect.

     2.8 Private Offering; Integration

     (a) None of the Offerors, their affiliates (as such term is defined in Rule
501(b) under the Securities Act for any person or entity) ("Affiliates"), or any
person acting on their or any of their Affiliates'  behalf has engaged,  or will
engage,  in  connection  with the offering of the Preferred  Securities,  in any
communication  or other form of  general  solicitation  or  general  advertising
within the  meaning of Rule  502(c)  under the  Securities  Act.  Based upon the

<PAGE>

representations of the Investor set forth in Section 3, the offer,  issuance and
sale of the Preferred  Securities in the manner  contemplated  by this Agreement
are exempt from the  registration  and prospectus  delivery  requirements of the
Securities  Act,  and have been  registered  or  qualified  (or are exempt  from
registration and qualification) under the registration,  permit or qualification
requirements of all applicable state securities laws.

     (b) The Offerors have not,  directly or indirectly,  solicited any offer to
buy or offered to sell, and will not, directly or indirectly,  solicit any offer
to buy or offer to sell, in the United States or to any United States citizen or
resident,  any  security  which is or would be  integrated  with the sale of the
Preferred  Securities in a manner that would require the Preferred Securities to
be registered under the Securities Act.

     2.9 Brokerage

     There are no claims for brokerage  commissions  or finder's fees or similar
compensation in connection with the transactions  contemplated by this Agreement
based on any  arrangement  made by or on behalf of the Company or the Trust with
any other person.

     2.10 Subordination

         The  Subordinated  Debentures,  upon issuance,  will be subordinate and
junior  in right of  payment  to all  Senior  Indebtedness  (as  defined  in the
Indenture) of the Company.

     2.11 No Material Misstatements

     No  representation  or warranty herein or in any Exhibit or Schedule hereto
contains any material  misstatement  of fact or omits to state any material fact
necessary  to make the  statements  therein,  in the light of the  circumstances
under which they are made not misleading.

     2.12 Tax Matters

     (a) The Company is taxed under  Subchapter  C of the Code as a  corporation
for United States federal income tax purposes.

     (b) The Trust,  at the Closing Time,  will be classified  for United States
federal income tax purposes as a grantor trust and not as an association taxable
as a corporation.

     (c) The  Subordinated  Debentures,  at the Closing Time, will be classified
for United States federal income tax purposes as indebtedness of the Company.

     2.13 Reservation and Valid Issuance of Shares

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     The Common Shares issuable upon conversion of the  Subordinated  Debentures
and the Preferred  Securities  have been duly and validly  reserved for issuance
and,  upon  issuance  in  accordance  with the  terms of the  Indenture  and the
Declaration,  will be duly and validly issued, fully paid and non-assessable and
free of restrictions  on transfer other than  restrictions on transfer under the
Indenture and under applicable  federal and state  securities  laws.  Holders of
Common Shares shall not be personally liable as such for any liabilities,  debts
or obligations  of, or claims  against,  the Company,  whether arising before or
after such holder became the owner or holder of the Common Shares.

     2.14 Preferred Securities Guarantee

     The Preferred Securities Guarantee,  when taken together with the Company's
obligations  under  the  Subordinated   Debentures,   the  Declaration  and  the
Indenture,  including its  obligations to pay costs,  expenses,  debts and other
obligations  of the Trust,  provides  a full and  unconditional  guarantee  on a
subordinated basis by the Company of amounts due on the Preferred Securities and
the Subordinated Debentures.  The obligations of the Company under the Preferred
Securities Guarantee and under the Subordinated  Debentures,  upon execution and
delivery  thereof,  will be  subordinate  and  junior in right of payment to all
present and future  Senior  Indebtedness  (as defined in the  Indenture)  of the
Company.

SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR

     3.1 Certain Representations and Warranties

     The Investor represents and warrants to the Offerors as follows:

     (a) It is  acquiring  the  Preferred  Securities  for its own  account  for
investment  and not with a view  towards  the resale,  transfer or  distribution
thereof,   nor  with  any  present   intention  of  distributing  the  Preferred
Securities,  but  subject,  nevertheless,  to any  requirement  of law  that the
disposition  of the  Investor's  property  shall  at all  times  be  within  the
Investor's  control,  and without prejudice to the Investor's right at all times
to sell or  otherwise  dispose  of all or any  part of such  securities  under a
registration   under  the  Securities  Act  or  under  an  exemption  from  said
registration available under the Securities Act.

     (b) It has full power and legal right to execute and deliver this Agreement
and to perform its obligations hereunder.

     (c) It has taken all action  necessary  for the  authorization,  execution,
delivery, and performance of this Agreement and its obligations hereunder,  and,
upon execution and delivery by the Company,  this Agreement shall constitute the
valid and binding obligations of

<PAGE>

the Investor,  enforceable  against the Investor in  accordance  with its terms,
except as such enforcement may be limited by Bankruptcy Exceptions.

     (d) There are no claims  for  brokerage  commissions  or  finder's  fees or
similar  compensation in connection with the  transactions  contemplated by this
Agreement based on any arrangement made by or on behalf of the Investor.

     (e) It has such knowledge and experience in financial and business  matters
that it is capable of evaluating  the merits and risks of its  investment in the
Trust and the Company as contemplated by this Agreement, and is able to bear the
economic risk of such  investment for an indefinite  period of time. It has been
furnished  access to such  information and documents as it has requested and has
been  afforded an  opportunity  to ask  questions  of and receive  answers  from
representatives of the Company and the Trust concerning the terms and conditions
of this  Agreement  and the purchase of the  Preferred  Securities  contemplated
hereby and the business and financial condition of the Company and the Trust.

     (f) It is an  "accredited  investor"  as such term is  defined  in Rule 501
under the Securities Act.

     (g) It acknowledges that the Preferred  Securities have not been registered
under the  Securities  Act and may not be  offered  or sold  within  the  United
States, except pursuant to an exemption from, or in a transaction not subject to
or pursuant to, the registration  requirements of the Securities Act. It has not
offered or sold, and will not offer or sell, the Preferred Securities within the
United States,  except  pursuant to an exemption  from, or in a transaction  not
subject to or pursuant to, the registration requirements of the Securities Act.

     3.2 Additional Representations and Warranties

     The Investor  represents  and warrants to the Offerors that it is a limited
partnership,  duly  authorized  and  existing  under  the  laws of the  State of
Illinois and has the  requisite  power and authority to carry on its business as
now being conducted.

SECTION 4. COVENANTS

     4.1 Tax Matters.

     (a) The Company shall not cause itself to be taxable for federal income tax
purposes as (i) a  partnership,  or (ii) a  "publicly  traded  partnership"  (as
defined in Section 7704(b) of the Code).

<PAGE>

     (b) The Company and the Trust shall treat the  Subordinated  Debentures  as
indebtedness  for United States  federal  income tax purposes  unless  otherwise
required by a determination made by the Internal Revenue Service or the Investor
receives  an opinion of counsel  in a form  which is  reasonably  acceptable  to
Investor that as a result of a change in law or applicable legal authority,  the
Subordinated  Debentures  are  required  to be treated  for  federal  income tax
purposes as something other than indebtedness.

     (c) The  Company (or any  successor  thereto)  will file a joint  election,
together  with Equity  Residential  Properties  Trust  ("EQR") (or any successor
thereto),  a Maryland real estate  investment  trust and the general  partner of
Investor,  to be treated as a taxable  REIT  subsidiary  (as  defined in Section
856(l)  of  the  Code)  of  EQR  to be  effective  beginning  January  1,  2001.
Thereafter,  except  as  provided  in  section  10.2  (e) of the  Indenture,  if
requested by any party,  any  successor  to the Company  shall make such a joint
election with EQR (or any successor thereto) and any successor to EQR shall make
such a joint  election  with the Company (or any  successor  thereto).  From and
after January 1, 2001,  unless  Investor has received an opinion of counsel in a
form which is reasonably  acceptable to Investor that the Company qualifies as a
REIT under Section 856(a) of the Code or the provisions of Section 10.2(e)(2) of
the Indenture apply, (a) the Company shall not take any of the actions listed in
Section  856(l)(3)(A)  or (B) or any other  action  that  would  cause it to not
constitute  a taxable REIT  subsidiary  under Code  Section  856(l)(1),  and (b)
within five (5) days prior to the close of each quarter of each of EQR's taxable
years which begins after  December 31, 2000,  the Company  shall  deliver to EQR
written  certification  in a form reasonably  acceptable to EQR that the Company
qualifies as a taxable REIT subsidiary under Code Section 856(l)(1).

     (d) In the following  circumstances,  EQR shall,  upon receipt of a written
request of the  Company,  revoke its  election to treat the Company as a taxable
REIT  subsidiary  or, if such an election  has not already  been made,  waive in
writing  all  future  obligations  of the  Company  to  become  a  taxable  REIT
subsidiary or a REIT or to deliver any opinions to that effect:

     (i) that (A) the  total  value of the  Preferred  Securities,  Subordinated
Debentures and Common Shares into which any Preferred Securities or Subordinated
Debentures  have been  converted  that are owned by EQR or any of its Affiliates
constitute  1% or less of the total value of the  outstanding  securities of the
Company and (B) the total amount of the Preferred  Securities  and  Subordinated
Debentures  on an as converted  basis and Common Shares into which any Preferred
Securities or  Subordinated  Debentures have been converted then owned by EQR or
any of its  Affiliates  would  constitute  1% or less of the  total  outstanding
voting securities of the Company; or

     (ii) that the  events  described  in  Sections  10.2(e)(1),  10.2(e)(2)  or
10.2(e)(3) of the  Indenture  have occurred and the Company has satisfied all of
its obligations under such Sections 10.2(e)(1), 10.2(e)(2) or 10.2(e)(3), as the
case may be.

<PAGE>

     (1) The Company  shall file all  applicable  tax  returns  and  information
reports  required  to be filed in  order  for the  Company  to  qualify  for any
exemption from any federal, state or local withholding taxes.

     (2) To the extent not terminated in accordance with their terms, all of the
covenants  set  forth  in  this  Agreement  shall  terminate  when  none  of the
Subordinated  Debentures  or Preferred  Securities  are  outstanding;  provided,
however,  if EQR or any of its  Affiliates  has  acquired  any Common  Shares in
conversion of the  Subordinated  Debentures or the  Preferred  Securities,  then
before the Company shall cease to comply with any of such covenants, the Company
shall give EQR at least  ninety (90) days prior  written  notice  following  the
declaration  by  the   Securities  and  Exchange   Commission  of  an  effective
registration  statement with respect to all such Common Shares, so EQR or any of
its  Affiliates  can  dispose of such Common  Shares,  as  contemplated  by that
Registration Rights Agreement.

SECTION 5. OFFERORS' CLOSING CONDITIONS

     The  obligation  of the Offerors to sell the  Preferred  Securities  at the
Closing Time, as provided in Section 1 hereof shall be subject to:

     5.1 Compliance with Agreement

     The  Investor  shall  have  performed  and  complied  with in all  material
respects all of its obligations and conditions contained in this Agreement which
are required to be performed or complied with by the Investor prior to or at the
Closing Time.

     5.2 Investor to Close

         The Investor shall have purchased and paid for the Preferred Securities
at the Closing Time pursuant to Section 1 hereof.

     5.3 Representations and Warranties

     The  representations  and  warranties  of the  Investor  contained  in this
Agreement  shall be true and correct in all  material  respects at and as of the
Closing Time as though such  representations  and  warranties  were made at such
time (unless any such  representation and warranty is made as of a specific date
and then it shall be true and correct as of such date).

SECTION 6. INVESTOR'S CLOSING CONDITIONS

<PAGE>

     The  obligation  of the  Investor  to  purchase  and pay for the  Preferred
Securities  at the  Closing  Time,  as  provided  in Section 1 hereof,  shall be
subject,  in its discretion,  to the performance by the Offerors of all of their
agreements theretofore to be performed hereunder and to the satisfaction,  prior
thereto or concurrently therewith, of the following further conditions:

     6.1 No Material Adverse Effect

     At the Closing Time,  there shall not have  occurred  since the date of the
Common Stock and Preferred  Stock Purchase  Agreement dated May 30, 1997 between
ERP Operating  Limited  Partnership  and Wellsford  Real  Properties,  Inc. (the
"Purchase  Agreement")  any change which has resulted in or could be expected to
result in a Company  Material  Adverse  Effect  other than an event which can be
completely  cured by  applying  the  proceeds  of the  sale of the  Subordinated
Debentures, in which case the Company covenants and agrees to apply the proceeds
of the sale of the Subordinated Debentures to the extent required to effect such
cure.  On or after the date  hereof  there  shall not have  occurred  any of the
following:  (i) a suspension  or material  limitation  in trading in  securities
generally  on the New York Stock  Exchange,  the American  Stock  Exchange or on
Nasdaq;  (ii) a suspension  or material  limitation  in trading in the Company's
securities  on the  American  Stock  Exchange;  (iii) a  general  moratorium  on
commercial  banking activities  declared by federal,  Illinois or New York State
authorities;  or (iv) the outbreak or  escalation of  hostilities  involving the
United States or the declaration by the United States of a national emergency or
war.

     6.2 Representations and Warranties

     (a) The  representations  and warranties of the Offerors  contained in this
Agreement  shall be true and correct in all  material  respects at and as of the
Closing Time as though such  representations  and  warranties  were made at such
time (unless any such  representation and warranty is made as of a specific date
and then it shall be true and correct as of such date).

     (b) The  representations  and  warranties  contained  in  Article  3 of the
Purchase  Agreement,  are true and correct in all material  respects,  except as
otherwise disclosed in this Agreement or any Schedule hereto.

     6.3 Compliance with Agreement and Purchase Agreement

     (a) The Offerors shall have performed and complied in all material respects
with all of their  obligations and conditions  contained in this Agreement which
are required to be performed or complied with by the Offerors prior to or at the
Closing Time.

<PAGE>

     (b) The Company shall be in  compliance  in all material  respects with all
the terms and  provisions  on its part to be  observed  or  performed  under the
Purchase  Agreement,  and at the  time of and as a  result  of the  Closing,  no
Company  Material  Adverse Effect shall have occurred and be  continuing,  other
than an event which can be completely cured by applying the proceeds of the sale
of the Subordinated  Debentures,  in which case the Company covenants and agrees
to apply the proceeds of the sale of the  Subordinated  Debentures to the extent
required  to effect such cure and shall  provide  notice to Investor of any such
use of proceeds.

     6.4 Approval of Proceedings

     All   proceedings  to  be  taken  in  connection   with  the   transactions
contemplated by the Operative  Documents and the  Registration  Rights Agreement
and the other Preferred Instruments and all documents incident thereto, shall be
reasonably  satisfactory  in form and substance to the Investor and its counsel;
and the Investor  shall have received  copies of all documents or other evidence
which it and such  counsel  may  reasonably  request  in  connection  with  such
transactions and of all records of corporate proceedings in connection therewith
in form and substance reasonably satisfactory to the Investor and its counsel.

     6.5 Injunction

     There shall be no effective injunction, writ, preliminary restraining order
or any order of any nature issued by a court of competent jurisdiction directing
that the transactions provided for herein or in the other Operative Documents or
any of them not be consummated as herein or therein provided.

     6.6 Additional Agreements.

     The Company and the Investor shall have entered into this Agreement and the
Registration Rights Agreement,  as required thereby.  The Company and Wilmington
Trust  Company  shall have entered into the  Indenture,  and the Company and the
trustees shall have entered into the Declaration. The Company shall have entered
into the Preferred Securities Guarantee.

     6.7 Opinions

     (a) The Investor shall have received an opinion of counsel, dated as of the
Closing Time,  of Ballard Spahr Andrews & Ingersoll,  LLP, in the form set forth
in Exhibit B hereto.

     In rendering  such opinion,  such counsel may rely as to matters  involving
the application of laws other than the laws of Maryland, to the extent they deem
proper and  specified in such  opinion,  upon the opinion of Richards,  Layton &
Finger, P.A.

<PAGE>

     (b) The Investor shall have received an opinion of counsel, dated as of the
Closing  Time,  of  Richards,  Layton &  Finger,  P.A.  in the form set forth in
Exhibit C hereto.

     In rendering  such opinion,  such counsel may rely as to matters  involving
the  application  of laws other than the laws of Delaware and federal law of the
United  States,  to the extent they deem proper and  specified in such  opinion,
upon the opinion of Ballard Spahr Andrews & Ingersoll, LLP.

     (c) The  Investor  shall  receive an opinion of Robinson  Silverman  Pearce
Aronsohn & Berman  LLP,  special tax  counsel to the  Offerors,  in the form set
forth in Exhibit D hereto.

     Such opinion may be  conditioned  on, among other  things,  the initial and
continuing accuracy of the facts, financial and other information, covenants and
representations  set forth in  certificates  of  officers of the Company and the
Trust and other documents deemed necessary for such opinion.

SECTION 7. INDEMNIFICATION

     7.1 Indemnification Generally

     The  Offerors  and the  Investor  (each  an  "Indemnifying  Party"),  shall
indemnify the other from and against any and all losses,  damages,  liabilities,
claims, charges, actions, proceedings,  demands, judgments, settlement costs and
expenses of any nature whatsoever  (including,  without  limitation,  attorneys'
fees  and   expenses)   or   deficiencies   resulting   from  any  breach  of  a
representation,  warranty or covenant by the Indemnifying  Party and all claims,
charges,  actions or  proceedings  incident to or arising out of the  foregoing.
Except with respect to third party claims being defended in good faith or claims
for indemnification with respect to which there exists a good faith dispute, the
Indemnifying  Party shall satisfy its obligations  hereunder  within thirty (30)
days of receipt of a notice of claim under this Section 6.1.

<PAGE>

     7.2 Indemnification Procedures for Third Party Claims

     If a  claim  by a  third  party  is  made  against  a  Person  entitled  to
indemnification under this Section (an "Indemnified Party") and such Indemnified
Party  intends to seek  indemnity  with respect  thereto  from any  Indemnifying
Party,  such  Indemnified  Party  shall give  notice in writing as  promptly  as
reasonably  practicable to each such Indemnifying  Party of any action commenced
against or by it in  respect of which  indemnity  may be sought  hereunder,  but
failure to so notify an  Indemnified  Party shall not relieve such  Indemnifying
Party  from any  liability  that it may have  otherwise  than on account of this
indemnity agreement so long as such failure shall not have materially prejudiced
the position of the Indemnifying Party. Upon such notification, the Indemnifying
Party  shall  assume the defense of such action  brought by a third  party,  and
after  such  assumption  the   Indemnified   Party  shall  not  be  entitled  to
reimbursement  of any  expenses  incurred by it in  connection  with such action
except as described below. In any such action,  any Indemnified Party shall have
the right to retain its own  counsel,  but the fees and expenses of such counsel
shall be at the expense of such  Indemnified  Party unless (i) the  Indemnifying
Party  shall have  failed to  promptly  assume and  thereafter  with  reasonable
diligence conduct such defense,  (ii) the Indemnifying Party and the Indemnified
Party shall have  mutually  agreed to the contrary or (iii) the named parties in
any such action (including any impleaded  parties) include both the Indemnifying
Party and the Indemnified  Party and  representation of both parties by the same
counsel  would  be  inappropriate  due  to  actual  or  potential  differing  or
conflicting  interests between them. No Indemnifying  Party, in the defense of a
third party claim  shall,  except  with the  consent of the  Indemnified  Party,
consent to entry of any  judgment  or enter into any  settlement  which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such  Indemnified  Party of a release  from all  liability in respect of such
claim.  The  Indemnifying  Party shall not be liable for any  settlement  of any
proceeding  effected without its written consent which shall not be unreasonably
withheld or delayed by such Indemnifying Party, but if settled with such consent
or if there be final judgment for the plaintiff,  the  Indemnifying  Party shall
indemnify the Indemnified  Party from and against any loss,  damage or liability
by reason of such settlement or judgment.


<PAGE>


SECTION 8. INTERPRETATION OF THIS AGREEMENT

     8.1 Terms Defined

     As used in this Agreement, the following terms have the respective meanings
set forth below or set forth in the Section hereof following such term:

     Affiliates: shall have the meaning set forth in Section 2.8(a).

     Bankruptcy Exceptions: shall have the meaning set forth in Section 2.2(b).

<PAGE>

     Business Day:  shall mean a day other than a Saturday,  Sunday or other day
on which banking institutions in New York, New York are permitted or required by
any applicable law to close.

     Certificate of Trust: shall mean the  organizational  document filed on May
5, 2000 in Delaware with respect to the Trust.

     Code:  shall mean the Internal  Revenue Code of 1986,  as amended,  and the
rules and regulations promulgated thereunder.

     Closing:  shall  mean  the  consummation  of the  purchase  and sale of the
Preferred Securities described in Section 1(c).

     Closing Time: shall have the meaning set forth in Section 1(c).

     Commission: shall mean the Securities and Exchange Commission.

     Common  Securities:  shall have the  meaning  set forth in the  preliminary
statement hereof.

     Common  Shares:  shall mean the shares of common stock of the Company,  par
value $.01 per share.

     Company: shall have the meaning set forth in the preamble hereof.

     Company  Material  Adverse  Effect:  shall  have the  meaning  set forth in
Section 2.5(b).

     Controlled: shall mean the possession,  direct or indirect, of the power to
direct  or cause the  direction  of the  management  and  policies  of a Person,
whether through the ownership of voting securities, by contract or otherwise.

     Declaration:  shall have the meaning set forth in the preliminary statement
hereof.

     Delaware Act: shall have the meaning set forth in the preliminary statement
hereof.

     Financial Statements: shall have the meaning set forth in Section 2.5(a).

     GAAP: shall have the meaning set forth in Section 2.5(a).

     Governmental Authority:  shall mean any nation or government,  any state or
other   political    subdivision   thereof,   and   any   department,    agency,
instrumentality,  bureau, entity or official exercising executive,  legislative,
judicial, regulatory or administrative functions of or pertaining to government.

<PAGE>

     Indemnified Party: shall have the meaning set forth in Section 7.2.

     Indemnifying Party: shall have the meaning set forth in Section 7.1.

     Indenture:  shall have the meaning set forth in the  preliminary  statement
hereof.

     Investor: shall have the meaning set forth in the preamble hereof.

     Key Agreements and Instruments:  shall mean as to any Person any indenture,
mortgage,  declaration,  deed of trust, credit agreement, note or other evidence
of indebtedness,  or other material agreement or instrument to which such Person
is a party or by which it is bound or, to which any of its property or assets is
subject.

     Lien: shall have the meaning set forth in Section 2.2(a).

     Material  Adverse  Effect:  shall  have the  meaning  set forth in  Section
2.5(b).

     Offerors: shall have the meaning set forth in the preamble hereof.

     Operative  Documents:  shall have the meaning set forth in the  preliminary
statement hereof.

     Organizational  Documents:  shall  mean as to any Person  the  articles  or
certificate  of  incorporation,   declaration  of  trust,  bylaws,   partnership
agreement or other organizational or governing documents of such Person.

     Person:  shall  mean an  individual,  partnership,  corporation,  trust  or
unincorporated  organization,  limited  liability  company  or other  entity,  a
government or agency or political subdivision thereof.

     Preferred Instruments:  shall have the meaning set forth in the preliminary
statement hereof.

     Preferred  Securities:  shall have the meaning set forth in the preliminary
statement hereof.

     Preferred  Securities  Guarantee:  shall have the  meaning set forth in the
preliminary statement hereof.

     Purchase Agreement: Shall have the meaning set forth in Section 6.1.

     Registration  Rights  Agreement:  shall mean the Amendment to  Registration
Rights Agreement in the form attached hereto as Exhibit A.

<PAGE>

     Requirements  of Law:  means as to any Person,  any domestic or foreign and
federal, state or local law, rule, regulation, statute or ordinance or judgment,
order,   decree  or  determination  of  any  arbitrator  or  a  court  or  other
Governmental  Authority,  in each case applicable to or binding upon such Person
or any of its  properties  or to which  such  Person or any of its  property  is
subject.

     SEC  Reports  and  Filings:  shall  have the  meaning  set forth in Section
2.4(a).

     Securities  Act:  shall  have the  meaning  set  forth  in the  preliminary
statement.

     Share: shall mean a share of common stock, $.01 par value per share, of the
Company.

     Subordinated   Debentures:   shall  have  the  meaning  set  forth  in  the
preliminary statement hereof.

     Subsidiary:  shall mean, with respect to any Person (herein  referred to as
the  "Parent"),  any  corporation,  partnership,  association  or other business
entity (a) of which securities or other ownership  interests  representing  more
than 50% of the  equity or more than 50% of the  ordinary  voting  power or more
than 50% of the general partnership interests are, at the time any determination
is being  made,  owned,  Controlled  or held,  or (b)  which is, at the time any
determination  is  made,  otherwise  Controlled,  by the  Parent  or one or more
subsidiaries of the Parent or by the Parent and one or more  subsidiaries of the
Parent.

     Trust: shall have the meaning set forth in the preamble hereof.

     Trust Material Adverse Effect:  shall have the meaning set forth in Section
2.5(b).

     8.2 Governing Law

     This  Agreement  shall be governed by and construed in accordance  with the
laws of the State of Delaware  without  regard to its principles of conflicts of
law.

     8.3 Paragraph and Section Headings

     The headings of the sections and subsections of this Agreement are inserted
for convenience only and shall not be deemed to constitute a part thereof.

SECTION  9.       MISCELLANEOUS

     9.1 Expenses

<PAGE>

     Each  party to this  Agreement  shall  bear its own  respective  costs  and
expenses incurred in connection with the preparation,  execution and delivery of
this Agreement and the agreements and  transactions  contemplated  hereby except
that the Company  agrees to reimburse the Investor for that portion of its legal
fees attributable  solely to the review of the Key Agreements and Instruments in
connection  with the  transactions  referred to in this  Agreement  by paying an
amount equal to $ 110,000  directly to Piper Marbury Rudnick & Wolfe on the date
of the Closing.

     9.2 Notices.

     All  notices  or  other   communications  under  this  Agreement  shall  be
sufficient  if in writing and  delivered by hand or sent by  telecopy,  or sent,
postage  prepaid by  registered,  certified or express  mail,  or by  recognized
overnight  air courier  service and shall be deemed  given when so  delivered by
hand or telecopied,  or if mailed or sent by overnight  courier service,  on the
third (3rd)  Business Day after mailing (one Business Day in the case of express
mail or overnight courier service) to the parties at the following addresses:

               (a)  if to the Investor, to:

                    ERP Operating  Limited  Partnership
                    c/o Equity  Residential Properties Trust
                    Two North Riverside Plaza, Suite 400
                    Chicago, IL  60606
                    Attention:  Bruce Strohm

                    with a copy to:

                    Piper Marbury Rudnick & Wolfe
                    203 North Lasalle Street, Suite 1800
                    Chicago, IL  60601-1293
                    Attention:  Errol Halperin

               (b)  if to the Company, to:

                    Wellsford Real Properties, Inc.
                    535 Madison Avenue, 26th floor
                    New York, New York 10022
                    Attention: Jeffrey H. Lynford

<PAGE>

                    with a copy to:

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

               (c)  if to the Trust, to:

                    WRP Convertible Trust I
                    c/o Wellsford Real Properties, Inc.
                    535 Madison Avenue, 26th floor
                    New York, New York 10022
                    Attention: Jeffrey H. Lynford

                    with a copy to:

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

or at such other address as the  addressee may have  furnished in writing to the
sender as provided herein.

     9.3 Survival

     All warranties, representations, and covenants made by the Investor and the
Offerors  herein or in any  certificate  or other  instrument  delivered  by the
Investor or the Offerors under this  Agreement  shall be considered to have been
relied  upon by the  Offerors  or the  Investor,  as the case may be,  and shall
survive for a period of one year from the closing of the sale to the Investor of
the  Preferred  Securities,  or  payment  by the  Investor  for  such  Preferred
Securities,  regardless  of  any  investigation  made  by  the  Offerors  or the
Investor,  as the case may be, or on the Offerors' or the Investor's behalf. All
statements  in  any  such  certificate  or  other  instrument  shall  constitute
warranties and representations by the Offerors or the Investor,  as the case may
be, hereunder.

         9.4      Entire Agreement; Amendment and Waiver

<PAGE>

     This Agreement  shall inure to the benefit of and shall be binding upon the
successors and assigns of each of the parties. This Agreement and the agreements
attached as Exhibits hereto constitute the entire  understandings of the parties
hereto and supersede all prior agreements or understandings  with respect to the
subject matter hereof between such parties.  This Agreement may be amended,  and
the observance of any term of this Agreement may be waived, with (and only with)
the written consent of the Offerors and the Investor.

     9.5 Counterparts

     This  Agreement may be executed in one or more  counterparts  with the same
effect as if the  parties  executing  the  counterparts  had each  executed  one
instrument as of the day and year first above written.

     9.6 Successors and Assigns

     This  Agreement  and all of the  provisions  hereof,  including  all of the
rights of the  Investor  hereunder,  shall  inure to the  benefit of the parties
hereto and their respective successors and assigns.

     9.7 Severability

     In the event any one or more of the provisions  contained in this Agreement
should be held invalid,  illegal or unenforceable in any respect,  the validity,
legality and  enforceability  of the remaining  provisions  contained herein and
therein shall not in any way be affected or impaired thereby.

     9.8 Jurisdiction; Consent to Service of Process

     (a)  Each  of  the  Investor  and  the  Company  hereby   irrevocably   and
unconditionally  submits,  for  itself  and its  property,  to the  nonexclusive
jurisdiction of any Delaware,  Illinois or New York State court or Federal court
of the United States of America  sitting in the City of  Wilmington,  Chicago or
New York, and any appellate court from any thereof,  in any action or proceeding
arising out of or relating to this Agreement,  or for recognition or enforcement
of any  judgment,  and  each  of  the  parties  hereto  hereby  irrevocably  and
unconditionally  agrees  that  all  claims  in  respect  of any such  action  or
proceeding may be heard and  determined in such  Delaware,  Illinois or New York
State or, to the extent  permitted  by law, in such Federal  court.  Each of the
parties  hereto  agrees that a final  judgment in any such action or  proceeding
shall be conclusive  and may be enforced in other  jurisdictions  by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any

<PAGE>

right  that any  party may  otherwise  have to bring  any  action or  proceeding
relating to this Agreement in the courts of any jurisdiction.

     (b)  Each  of  the  Purchaser  and  the  Company  hereby   irrevocably  and
unconditionally  waives, to the fullest extent it may legally and effectively do
so, any objection  which it may now or hereafter  have to the laying of venue of
any suit,  action or proceeding  arising out of or relating to this Agreement in
any Delaware,  Illinois or New York State or Federal court.  Each of the parties
hereto hereby  irrevocably  waives,  to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.

     9.9 Trustee Exculpation

     This  Agreement  and  all   documents,   agreements,   understandings   and
arrangements  relating  hereto  and to the  transactions  contemplated  by  this
Agreement  have been  executed or entered  into by a trustee of the Trust in his
capacity  as a trustee of the Trust  which has been  formed as a Delaware  trust
pursuant to a Certificate of Trust dated as of May 5, 2000, as amended,  and not
individually,  and the  trustees  of the  Trust  shall  not be bound or have any
personal liability  hereunder or thereunder.  All persons dealing with the Trust
shall look solely to the assets of the Trust for  satisfaction  of any liability
of the  Trust  in  respect  of this  Agreement  and all  documents,  agreements,
understandings  and  arrangements   relating  hereto  and  to  the  transactions
contemplated by this Agreement and will not seek recourse or commence any action
against any of the trustees of the Trust or any of their personal assets for the
performance or payment of any obligation hereunder or thereunder.  The foregoing
shall  also  apply  to  any  future   documents,   agreements,   understandings,
arrangements and transactions between the parties hereto.

<PAGE>

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

                                OFFERORS:

                                WELLSFORD REAL PROPERTIES, INC.


                                By: /s/ Edward Lowenthal
                                   -----------------------------------
                                      Name: Edward Lowenthal
                                      Title: President


                                WRP CONVERTIBLE TRUST I


                                By: /s/ James J. Burns
                                   -----------------------------------
                                      Name: James J. Burns
                                      Title: Regular Trustee


                                INVESTOR:

                                ERP OPERATING LIMITED PARTNERSHIP


                                By: Equity Residential Properties Trust,
                                      as its general partner


                                By: /s/ Bruce C. Strohm
                                   -----------------------------------
                                           Name: Bruce C. Strohm
                                           Title: Executive Vice President


                                EQUITY RESIDENTIAL PROPERTIES TRUST



                                By: /s/ Bruce C. Strohm
                                   -----------------------------------
                                      Name: Bruce C. Strohm
                                      Title: Executive Vice President

<PAGE>

                                 SCHEDULE 2.3(A)

                             OPTIONS, WARRANTS, ETC.

Warrant  Agreement,  dated as of August 28, 1997, by and between  Wellsford Real
Properties, Inc. ("Wellsford"),  and the United States Trust Company of New York
("U.S.  Trust")(the "Warrant Agreement"),  pursuant to which Wellsford issued to
WHWEL Real Estate Limited  Partnership  warrants to purchase 4,132,230 shares of
Wellsford's  common stock,  as amended by Amendment No. 1 to Warrant  Agreement,
dated July 16, 1998,  and  Amendment No. 2 to Warrant  Agreement,  dated May 28,
1999.

Warrant  Agreement,  dated as of May 28, 1999, by and between Wellsford and U.S.
Trust, pursuant to which Wellsford issued to W/W Group Holdings, L.L.C. warrants
to purchase 123,967 shares of Wellsford's common stock.

Letter Agreement  between  Wellsford and WHWEL Real Estate Limited  Partnership,
dated May 28, 1999, pursuant to which Wellsford agrees to exchange shares of its
common  stock for Excess  Membership  Units (as  defined  therein)  issued  with
respect   to   Capital    Contributions    (as   defined    therein)   made   to
Wellsford/Whitehall  Properties Group, L.L.C. in excess of $50,000,000 and up to
$75,000,000.

Warrant  Agreement,  dated  January 20, 1998,  by and between  Michael J. Vitale
("Vitale") and Wellsford, pursuant to which Wellsford issued a warrant to Vitale
to purchase up to 74,000  shares of  Wellsford's  common  stock,  at an exercise
price of $15.1750.

Warrant Agreement,  dated January 20, 1998, by and between Frank G. Creamer, Jr.
("Creamer")  and  Wellsford,  pursuant  to which  Wellsford  issued a warrant to
Creamer to purchase  up to 74,000  shares of  Wellsford's  common  stock,  at an
exercise price of $15.1750.

<PAGE>

                                 SCHEDULE 2.5(B)

                                 MATERIAL CHANGE

     On February  25,  2000,  the Company  repurchased  2,573,632  shares of its
outstanding  common  stock  from an  institutional  investor  for  approximately
$20,589,000.
<PAGE>

                                                                       EXHIBIT A

               FORM OF AMENDMENT TO REGISTRATION RIGHTS AGREEMENT

                   AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
                   ------------------------------------------

                  Agreement  dated as of May 5,  2000 by and  between  Wellsford
Real Properties,  Inc. a Maryland corporation (the "Company"), and ERP Operating
Limited Partnership, an Illinois limited partnership ("ERPOLP")

                               W I T N E S S E T H

     WHEREAS,  the  Company  and  ERPOLP  entered  into  a  Registration  Rights
Agreement dated as of May 30, 1997 (the "RR Agreement");

     WHEREAS, the Company does not intend to issue and ERPOLP does not intend to
acquire, the Preferred Stock, as defined in the RR Agreement;

     WHEREAS, pursuant to a Declaration of Trust of WRP Convertible Trust I (the
"Trust"), dated May 5, 2000, the Trust intends to issue to ERPOLP $25,000,000 of
8.25% Preferred  Securities (as defined below) which are convertible into Common
Stock as defined in the RR Agreement; and

     WHEREAS, the parties hereto wish to amend the RR Agreement to eliminate the
registration  rights granted therein to ERPOLP to have  registered  Common Stock
issuable  upon  conversion  of  Preferred  Stock  and to  grant  to  ERPOLP  the
registration  rights  previously  granted with respect to Common Stock  issuable
upon the  conversion  of the Preferred  Stock to the Common Stock  issuable upon
conversion of the Securities.

     WHEREAS,  all of the  Company's  shares  of Class A Common  Stock are being
exchanged for an equal number of shares of the Company's Class A-1 Common Stock.

     NOW THEREFORE,  in  consideration  of the mutual covenants and undertakings
contained herein, and for other good and valuable consideration, the receipt and
sufficiency  of which are hereby  acknowledged,  and subject to and on the terms
and conditions herein set forth, the parties hereto agree as follows:

               1.   The  definition  of  Shares  in the RR  Agreement  is hereby
                    deleted and a new definition of shares to read as follows is
                    hereby inserted in lieu thereof:

<PAGE>

                    "Shares  shall mean  Common  Stock  issuable  or issued upon
                    conversion of all or any portion of the Preferred Securities
                    or Class A-1 common stock,  par value $.01 per share, of the
                    Company of May 5, 2000".

               2.   The  definition of "Preferred  Stock" in the RR Agreement is
                    hereby deleted.  A new definition of "Preferred  Securities"
                    to read as follows is hereby inserted:

                    "Preferred  Securities"  shall  mean the  8.25%  Convertible
                    Trust Preferred  Securities  issued by WRP Convertible Trust
                    I.

               3.   Section 7 of the RR  Agreement  is amended to state that the
                    address  of the  Company  to which  notice  shall be sent is
                    Wellsford Real  Properties,  Inc. 535 Madison  Avenue,  26th
                    Floor, New York, New York 10022,  Attention:  Chairman;  Fax
                    No. (212) 421-7244.

               4.   The RR  Agreement  shall  remain in full force and effect as
                    hereby modified.

     This  Agreement may be executed in one or more  counterparts  with the same
effect as if the  parties  executing  the  counterparts  had each  executed  one
instrument as of the day and year first above written.

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


     ERP OPERATING LIMITED PARTNERSHIP           WELLSFORD REAL PROPERTIES, INC.

By: Equity Residential Properties Trust,         By:
      its general partner                            ---------------------------
                                                     Name:
                                                     Title:
By:
   ---------------------------
    Name:
    Title:

                                                                       EXHIBIT B

                OPINION OF BALLARD SPAHR ANDREWS & INGERSOLL, LLP

<PAGE>

                                                                       EXHIBIT C

                   OPINION OF RICHARDS, LAYTON & FINGER, P.A.

<PAGE>

                                                                       EXHIBIT D

           OPINION OF ROBINSON SILVERMAN PEARCE ARONSOHN & BERMAN LLP
<PAGE>