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                    PREFERRED SECURITIES GUARANTEE AGREEMENT


                             WRP CONVERTIBLE TRUST I



                             Dated as of May 5, 2000

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                                TABLE OF CONTENTS

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ARTICLE I     DEFINITIONS AND INTERPRETATION.................................2
SECTION 1.1.  Definitions and Interpretation.................................2

ARTICLE II    TRUST INDENTURE ACT............................................4
SECTION 2.1.  Trust Indenture Act; Application...............................4
SECTION 2.2.  Lists of Holders...............................................4
SECTION 2.3.  Reports by the Preferred Guarantee Trustee.....................5
SECTION 2.4.  Periodic Reports to Preferred Guarantee Trustee................5
SECTION 2.5.  Evidence of Compliance with Conditions Precedent...............5
SECTION 2.6.  Events of Default; Waiver......................................6
SECTION 2.7.  Event of Default; Notice.......................................6
SECTION 2.8.  Conflicting Interests..........................................6

ARTICLE III   POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE.......6
SECTION 3.1.  Powers and Duties of the Preferred Guarantee Trustee...........6
SECTION 3.2.  Certain Rights of Preferred Guarantee Trustee..................8
SECTION 3.3.  Not Responsible for Recitals or Issuance of Preferred
                                        Securities Guarantee................11

ARTICLE IV    PREFERRED GUARANTEE TRUSTEE...................................11
SECTION 4.1.  Preferred Guarantee Trustee: Eligibility. ....................11
SECTION 4.2.  Appointment, Removal and Resignation of Preferred
                                   Guarantee Trustee........................12

ARTICLE V     GUARANTEE.....................................................12
SECTION 5.1.  Guarantee.....................................................12
SECTION 5.2.  Waiver of Notice and Demand...................................13
SECTION 5.3.  Obligations Not Affected......................................13
SECTION 5.4.  Rights of Holders.............................................14
SECTION 5.5.  Guarantee of Payment..........................................15
SECTION 5.6.  Subrogation...................................................15
SECTION 5.7.  Independent Obligations.......................................15

ARTICLE VI    LIMITATION OF TRANSACTIONS; SUBORDINATION ....................15
SECTION 6.1.  Limitation of Transactions....................................15
SECTION 6.2.  Subordination.................................................16

ARTICLE VII   TERMINATION...................................................16
SECTION 7.1.  Termination...................................................16

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ARTICLE VIII  INDEMNIFICATION...............................................17
SECTION 8.1.  Exculpation...................................................17
SECTION 8.2.  Indemnification...............................................17

ARTICLE IX    MISCELLANEOUS.................................................18
SECTION 9.1.  Successors and Assigns........................................18
SECTION 9.2.  Guarantor May Consolidate, etc., on Certain Terms.............18
SECTION 9.3.  Amendments....................................................18
SECTION 9.4.  Notices.......................................................19
SECTION 9.5.  Counterparts..................................................19
SECTION 9.6.  Benefit.......................................................20
SECTION 9.7.  Governing Law.................................................20

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     PRIOR TO THE  TRANSFER  RESTRICTION  TERMINATION  DATE (AS  DEFINED  IN THE
DECLARATION),  ANY CERTIFICATE  EVIDENCING THIS PREFERRED  SECURITIES  GUARANTEE
SHALL BEAR A LEGEND IN SUBSTANTIALLY THE FOLLOWING FORM, UNLESS OTHERWISE AGREED
BY THE REGULAR  TRUSTEES  (WITH  WRITTEN  NOTICE TO THE  INSTITUTIONAL  TRUSTEE)
PURSUANT TO SECTION 9.1(D) OF THE DECLARATION:

     THE  SECURITY  REPRESENTED  HEREBY HAS NOT BEEN  REGISTERED  UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD  WITHIN  THE UNITED  STATES OR TO, OR FOR THE  ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING  SENTENCE.  BY ITS
ACQUISITION  HEREOF,  THE  HOLDER  (1)  REPRESENTS  THAT (A) IT IS A  "QUALIFIED
INSTITUTIONAL  BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES  ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT)  ("INSTITUTIONAL  ACCREDITED  INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY  REPRESENTED HEREBY IN
AN OFFSHORE TRANSACTION,  (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF
THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY  REPRESENTED HEREBY UNDER
RULE 144(K) UNDER THE  SECURITIES  ACT (OR ANY  SUCCESSOR  PROVISION)  RESELL OR
OTHERWISE TRANSFER THE SECURITY REPRESENTED HEREBY OR THE COMMON SHARES ISSUABLE
UPON  CONVERSION  OR  EXCHANGE OF THIS  SECURITY  EXCEPT (A) TO  WELLSFORD  REAL
PROPERTIES,  INC. (THE "COMPANY") OR ANY SUBSIDIARY THEREOF,  (B) PURSUANT TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE SECURITIES ACT, (C) TO A QUALIFIED
INSTITUTIONAL  BUYER IN COMPLIANCE  WITH RULE 144A UNDER THE SECURITIES ACT, (D)
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,  FURNISHES
TO THE WILMINGTON TRUST COMPANY, AS TRUSTEE (OR, IF THIS CERTIFICATE  REPRESENTS
COMMON  SHARES,  THE  TRANSFER  AGENT FOR THE COMMON  SHARES),  A SIGNED  LETTER
CONTAINING CERTAIN  REPRESENTATIONS  AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER OF THIS SECURITY REPRESENTED HEREBY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM SUCH TRUSTEE OR TRANSFER AGENT),  (E) OUTSIDE THE UNITED STATES IN
COMPLIANCE  WITH  RULE 904  UNDER  THE  SECURITIES  ACT OR (F)  PURSUANT  TO THE
EXEMPTION  FROM  REGISTRATION  PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE),  AND (3)  AGREES  THAT IT WILL  DELIVER  TO EACH  PERSON TO WHOM THE
SECURITY  REPRESENTED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND.  IN  CONNECTION  WITH ANY  TRANSFER OF THE SECURITY  REPRESENTED
HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD  APPLICABLE TO SALES OF THE
SECURITY  REPRESENTED  HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), THE HOLDER MUST CHECK

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THE  APPROPRIATE  BOX SET FORTH ON THE REVERSE HEREOF  RELATING TO THE MANNER OF
SUCH TRANSFER AND SUBMIT THIS  CERTIFICATE TO THE WILMINGTON  TRUST COMPANY,  AS
TRUSTEE (OR, IF THIS  CERTIFICATE  REPRESENTS  COMMON  SHARES,  SUCH HOLDER MUST
FURNISH TO THE  TRANSFER  AGENT SUCH  CERTIFICATIONS,  LEGAL  OPINIONS  OR OTHER
INFORMATION  AS THE  COMPANY  OR WRP  CONVERTIBLE  TRUST  I  (THE  "TRUST")  MAY
REASONABLY  REQUIRE TO CONFIRM THAT SUCH  TRANSFER IS BEING MADE  PURSUANT TO AN
EXEMPTION  FROM,  OR  IN  A  TRANSACTION   NOT  SUBJECT  TO,  THE   REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT). IF THIS  CERTIFICATE  DOES NOT REPRESENT
COMMON  SHARES AND IF THE PROPOSED  TRANSFEREE  IS AN  INSTITUTIONAL  ACCREDITED
INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER,   FURNISH  TO  THE  WILMINGTON   TRUST  COMPANY,   AS  TRUSTEE,   SUCH
CERTIFICATIONS,  LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY OR THE TRUST
MAY  REASONABLY  REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN  EXEMPTION  FROM,  OR IN A  TRANSACTION  NOT  SUBJECT  TO,  THE  REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT.  THIS  LEGEND  WILL BE REMOVED  AFTER THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY REPRESENTED
HEREBY UNDER RULE 144(K)  UNDER THE  SECURITIES  ACT. AS USED HEREIN,  THE TERMS
"OFFSHORE  TRANSACTION,"  "UNITED  STATES" AND "U.S.  PERSON"  HAVE THE MEANINGS
GIVEN TO THEM BY REGULATIONS UNDER THE SECURITIES ACT.

<PAGE>

                    PREFERRED SECURITIES GUARANTEE AGREEMENT

     This GUARANTEE AGREEMENT (the "Preferred Securities  Guarantee"),  dated as
of May 5, 2000, is executed and delivered by Wellsford Real Properties,  Inc., a
Maryland  corporation ("WRP" or the "Guarantor"),  and Wilmington Trust Company,
as trustee (the "Preferred Guarantee  Trustee"),  for the benefit of the Holders
(as defined  herein) from time to time of the Preferred  Securities  (as defined
herein) of WRP  Convertible  Trust I, a Delaware  statutory  business trust (the
"Issuer").

     WHEREAS,  pursuant to a Declaration of Trust (the "Declaration"),  dated as
of May 5, 2000, among the trustees of the Issuer named therein, WRP, as sponsor,
and the  holders  from time to time of  undivided  beneficial  interests  in the
assets  of the  Issuer,  the  Issuer is  issuing  on the date  hereof  1,000,000
preferred securities (the "Preferred  Securities"),  having a liquidation amount
of $25 per Preferred Security,  designated the 8.25% Convertible Trust Preferred
Securities.

     WHEREAS,   as  incentives   for  the  Holders  to  purchase  the  Preferred
Securities,  the Guarantor desires  irrevocably and unconditionally to agree, to
the  extent  set forth in this  Preferred  Securities  Guarantee,  to pay to the
Holders of the Preferred  Securities the Guarantee  Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein.

     WHEREAS,  as of the  date  hereof,  the  Guarantor  is also  executing  and
delivering  a  guarantee  agreement  (the  "Common  Securities   Guarantee")  in
substantially  identical  terms to this Preferred  Securities  Guarantee for the
benefit of the holders of the Common Securities (as defined herein), except that
if an Event of  Default  (as  defined in the  Indenture),  has  occurred  and is
continuing,  the rights of holders of the Common Securities to receive Guarantee
Payments under the Common Securities Guarantee are subordinated to the rights of
Holders  of  Preferred  Securities  to  receive  Guarantee  Payments  under this
Preferred Securities Guarantee.

     NOW,  THEREFORE,  in  consideration  of the  purchase  by  each  Holder  of
Preferred  Securities,  which purchase the Guarantor hereby agrees shall benefit
the Guarantor,  the Guarantor  executes and delivers this  Preferred  Securities
Guarantee for the benefit of the Holders.

                                    ARTICLE I

                         DEFINITIONS AND INTERPRETATION

     SECTION I.1. Definitions and Interpretation.

     In this  Preferred  Securities  Guarantee,  unless  the  context  otherwise
requires:

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     (a) capitalized terms used in this Preferred  Securities  Guarantee but not
defined in the preamble above have the respective  meanings  assigned to them in
this Section 1.1;

     (b) terms  defined in the  Declaration  as at the date of execution of this
Preferred Securities Guarantee have the same meaning when used in this Preferred
Securities  Guarantee  unless  otherwise  defined in this  Preferred  Securities
Guarantee;

     (c) a term defined anywhere in this Preferred  Securities Guarantee has the
same meaning throughout;

     (d) all  references  to  "the  Preferred  Securities  Guarantee"  or  "this
Preferred  Securities  Guarantee" are to this Preferred  Securities Guarantee as
modified, supplemented or amended from time to time;

     (e) all references in this Preferred  Securities  Guarantee to Articles and
Sections are to Articles and Sections of this  Preferred  Securities  Guarantee,
unless  otherwise  specified;  a term defined in the Trust Indenture Act has the
same meaning when used in this Preferred Securities Guarantee,  unless otherwise
defined in this Preferred  Securities  Guarantee or unless the context otherwise
requires; and

     (f) a reference to the singular includes the plural and vice versa.

     "Authorized  Officer" of a Person  means any Person that is  authorized  to
legally bind such Person, provided, however, that the Authorized Officer signing
an  Officers'  Certificate  given  pursuant  to Section  314(a)(4)  of the Trust
Indenture Act shall be the principal executive,  financial or accounting officer
of such Person.

     "Common  Securities"  means the securities  representing  common  undivided
beneficial interests in the assets of the Issuer.

     "Corporate  Trust  Office"  means  the  office of the  Preferred  Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered,  which office at the
date of execution of this Agreement is located at 1100 North Market Street,  9th
Floor,   Wilmington,    Delaware   19890-0001,    Attention:   Corporate   Trust
Administration.

     "Covered  Person"  means  any  Holder  or  beneficial  owner  of  Preferred
Securities.

     "Event of Default"  means (a) a failure by the  Guarantor to perform any of
its payment or other obligations under Section 5.1 of this Preferred  Securities
Guarantee or (b) if applicable, the failure by WRP to deliver Common Shares upon
an  appropriate  election  by a Holder of  Preferred  Securities  to convert the
Preferred Securities into Common Shares.

     "Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by the Issuer:

(i) any accrued and unpaid  Distributions  (as defined in the Declaration)  that
are required to be paid on such  Preferred  Securities in cash to the extent the
Issuer  shall have funds  available  therefor or which have not been paid by the
issuance by the Issuer of additional  Preferred Securities pursuant to the terms
of the Declaration, (ii) the redemption price (the "Redemption Price") specified
in the  Indenture,  and all  accrued  and  unpaid  Distributions  to the date of
redemption,  to the extent the Issuer has funds available therefor, with respect
to any Preferred  Securities called for redemption by the Issuer, and (iii) upon
a voluntary or involuntary dissolution,  winding-up or termination of the Issuer
(other than in connection with the redemption of all of the Preferred Securities
or the  distribution  of  Debentures  to the Holders in exchange  for  Preferred
Securities as provided in the  Declaration),  the  aggregate of the  liquidation
amount and all accrued and unpaid  Distributions on the Preferred  Securities to
the date of  payment,  to the  extent the  Issuer  shall  have  funds  available
therefor (the "Liquidation Distribution"). If an Event of Default (as defined in
the  Indenture)  has  occurred and is  continuing,  the rights of holders of the
Common  Securities to receive  payments  under the Common  Securities  Guarantee
Agreement are  subordinated to the rights of Holders of Preferred  Securities to
receive Guarantee Payments.

     "Holder"  shall mean any holder,  as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that, in determining
whether the holders of the  requisite  percentage of Preferred  Securities  have
given any  request,  notice,  consent or waiver  hereunder,  "Holder"  shall not
include the Guarantor or any of its Affiliates.

     "Indemnified  Person" means the Preferred Guarantee Trustee,  any Affiliate
of the Preferred  Guarantee Trustee, or any officers,  directors,  shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Preferred Guarantee Trustee.

     "Indenture" means the Indenture,  dated as of May 5, 2000,  between the WRP
(the "Debenture Issuer") and Wilmington Trust Company, as trustee.

     "Majority in liquidation amount of the Preferred  Securities" means, except
as provided in the terms of the  Preferred  Securities  or except as provided by
the Trust Indenture Act, a vote by Holder(s),  voting  separately as a class, of
more than 50% of the liquidation  amount (including the stated amount that would
be paid on  redemption,  liquidation  or  otherwise,  plus  accrued  and  unpaid
Distributions  to the date upon which the voting  percentages are determined) of
all Preferred Securities.

     "Preferred  Guarantee  Trustee" means  Wilmington  Trust  Company,  until a
Successor  Preferred  Guarantee Trustee has been appointed and has accepted such
appointment  pursuant to the terms of this  Preferred  Securities  Guarantee and
thereafter means each such Successor Preferred Guarantee Trustee.

     "Responsible  Officer"  means,  with  respect  to the  Preferred  Guarantee
Trustee,  any  officer  within  the  Corporate  Trust  Office  of the  Preferred
Guarantee Trustee,  including any vice president,  any assistant vice president,
secretary,  any assistant secretary,  the treasurer,  any assistant treasurer or
other officer of the Corporate Trust Office of the Preferred Guarantee

<PAGE>

Trustee  customarily  performing  functions similar to those performed by any of
the above  designated  officers,  and also means,  with  respect to a particular
corporate  trust  matter,  any other  officer  to whom such  matter is  referred
because of that  officer's  knowledge  of and  familiarity  with the  particular
subject.

     "Successor   Preferred  Guarantee  Trustee"  means  a  successor  Preferred
Guarantee Trustee  possessing the  qualifications to act as Preferred  Guarantee
Trustee under Section 4.1.

     "Trust   Securities"   means  the  Common   Securities  and  the  Preferred
Securities.

     "WRP" shall mean Wellsford Real Properties, Inc., a Maryland corporation.

                                   ARTICLE II

                               TRUST INDENTURE ACT

     SECTION II.1. Trust Indenture Act; Application.

     (a)  This  Preferred  Securities  Guarantee  shall  not be  subject  to the
provisions of the Trust Indenture Act unless and until the securities  hereunder
are  registered  pursuant to a  registration  statement  filed with and declared
effective by the Securities and Exchange Commission.  Thereafter, this Preferred
Securities  Guarantee  shall be subject to the provisions of the Trust Indenture
Act that are  required to be part of this  Preferred  Securities  Guarantee  and
shall, to the extent applicable, be governed by such provisions. Notwithstanding
the foregoing,  the obligations under Sections 2.2(b),  2.3 and 4.1 shall at all
times be governed by the Trust  Indenture  Act as if this  Preferred  Securities
Guarantee and been issued pursuant to an effective registration statement; and

     (b) Subject to the provisions of Section 2.1(a),  if and to the extent that
any  provision  of this  Preferred  Securities  Guarantee  limits,  qualifies or
conflicts  with the duties  imposed by Sections  310 to 317,  inclusive,  of the
Trust Indenture Act, such imposed duties shall control.

     SECTION II.2. Lists of Holders.

     (a) WRP shall provide the Preferred  Guarantee Trustee with a list, in such
form as the Preferred Guarantee Trustee may reasonably require, of the names and
addresses of the Holders ("List of Holders") (i) within 7 days after each record
date for payment of Distributions, as of such record date, and (ii) at any other
time,  within  30 days of  receipt  by WRP of a  written  request  for a List of
Holders as of a date no more than 14 days  before  such List of Holders is given
to the Preferred Guarantee Trustee,  provided that WRP shall not be obligated to
provide  such List of Holders  at any time the List of  Holders  does not differ
from the most recent List of Holders given to the Preferred Guarantee Trustee by
WRP. The Preferred  Guarantee

<PAGE>

Trustee may destroy any List of Holders  previously  given to it on receipt of a
new List of Holders.

     (b) The Preferred Guarantee Trustee shall comply with its obligations under
Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.

     SECTION II.3. Reports by the Preferred Guarantee Trustee.

     Within 60 days after  December  31 of each year,  the  Preferred  Guarantee
Trustee shall provide to the Holders such reports as are required by Section 313
of the Trust  Indenture  Act, if any, in the form and in the manner  provided by
Section 313 of the Trust  Indenture Act. The Preferred  Guarantee  Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.

     SECTION II.4. Periodic Reports to Preferred Guarantee Trustee.

     The  Guarantor  shall  provide  to the  Preferred  Guarantee  Trustee  such
documents,  reports and  information (if any) as are required by Section 314 and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form,  the manner  and at the times  required  by  Section  314 of the Trust
Indenture Act.

     Delivery  of such  reports,  information  and  documents  to the  Preferred
Guarantee Trustee is for informational purposes only and the Preferred Guarantee
Trustee's receipt of such material shall not constitute  constructive  notice of
any information contained therein, including the Guarantor's compliance with any
of their  covenants  hereunder (as to which the Preferred  Guarantee  Trustee is
entitled to rely exclusively on Officers' Certificates).

     SECTION II.5. Evidence of Compliance with Conditions Precedent.

     The  Guarantor  shall  provide  to the  Preferred  Guarantee  Trustee  such
evidence of compliance with any conditions  precedent,  if any,  provided for in
this Preferred  Securities Guarantee that relate to any of the matters set forth
in  Section  314(c) of the Trust  Indenture  Act.  Any  certificate  or  opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officer's Certificate.

     SECTION II.6. Events of Default; Waiver.

     The Holders of a Majority in  liquidation  amount of  Preferred  Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such Event
of Default  shall  cease to exist,  and any Event of Default  arising  therefrom
shall be  deemed  to have  been  cured,  for  every  purpose  of this  Preferred
Securities Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.

<PAGE>

     SECTION II.7. Event of Default; Notice.

     (a) The  Preferred  Guarantee  Trustee  shall,  within  30 days  after  the
occurrence of an Event of Default actually known to a Responsible Officer of the
Preferred  Guarantee Trustee,  transmit by mail, first class postage prepaid, to
the Holders,  notices of all such Events of Default  unless such  defaults  have
been  cured  before  the  giving of such  notice,  provided  that the  Preferred
Guarantee  Trustee shall be protected in withholding  such notice if and so long
as a  Responsible  Officer  of the  Preferred  Guarantee  Trustee  in good faith
determines  that the  withholding  of such  notice  is in the  interests  of the
Holders  except in the case of a default in the  Guarantor's  obligation to make
Guarantee Payments.

     (b) The Preferred  Guarantee  Trustee shall not be deemed to have knowledge
of any Event of  Default  unless  the  Preferred  Guarantee  Trustee  shall have
received  written  notice  thereof,  or a  Responsible  Officer of the Preferred
Guarantee Trustee charged with the  administration of this Preferred  Securities
Guarantee shall have obtained actual knowledge thereof.

          SECTION II.8. Conflicting Interests.

          The Declaration  shall be deemed to be specifically  described in this
     Preferred  Securities Guarantee for the purposes of clause (i) of the first
     proviso contained in Section 310(b) of the Trust Indenture Act.

                                   ARTICLE III

            POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE

     SECTION III.1. Powers and Duties of the Preferred Guarantee Trustee.

     (a) This  Preferred  Securities  Guarantee  shall be held by the  Preferred
Guarantee  Trustee for the benefit of the  Holders and the  Preferred  Guarantee
Trustee shall not transfer  this  Preferred  Securities  Guarantee to any Person
except a Holder  exercising his or her rights pursuant to Section 5.4(b) or to a
Successor  Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee  Trustee of its  appointment to act as Successor  Preferred  Guarantee
Trustee.  The right, title and interest of the Preferred Guarantee Trustee shall
automatically  vest in any  Successor  Preferred  Guarantee  Trustee,  and  such
vesting and succession of title shall be effective  whether or not  conveyancing
documents have been executed and delivered  pursuant to the  appointment of such
Successor Preferred Guarantee Trustee.

     (b) If an Event of Default  actually known to a Responsible  Officer of the
Preferred  Guarantee  Trustee has  occurred  and is  continuing,  the  Preferred
Guarantee  Trustee shall  enforce this  Preferred  Securities  Guarantee for the
benefit of the Holders.

<PAGE>

     (c) The Preferred Guarantee Trustee,  before the occurrence of any Event of
Default  and after the curing of all Events of Default  that may have  occurred,
shall  undertake  to perform only such duties as are  specifically  set forth in
this Preferred Securities Guarantee, and no implied covenants shall be read into
this Preferred  Securities Guarantee against the Preferred Guarantee Trustee. In
case an Event of  Default  has  occurred  (that  has not  been  cured or  waived
pursuant to Section 2.6) and is actually  known to a Responsible  Officer of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall exercise such
of the rights and powers vested in it by this  Preferred  Securities  Guarantee,
and shall use the same  degree of care and skill in its  exercise  thereof  as a
prudent person would exercise or use under the  circumstances  in the conduct of
his or her own affairs.

     (d) No provision of this Preferred  Securities Guarantee shall be construed
to relieve the Preferred  Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,  except
that:

          (i)  prior to the  occurrence  of any Event of  Default  and after the
               curing or  waiving of all such  Events of  Default  that may have
               occurred:

                    (A) the duties and  obligations  of the Preferred  Guarantee
               Trustee shall be determined  solely by the express  provisions of
               this Preferred Securities Guarantee,  and the Preferred Guarantee
               Trustee  shall not be liable except for the  performance  of such
               duties  and  obligations  as are  specifically  set forth in this
               Preferred  Securities  Guarantee,  and no  implied  covenants  or
               obligations   shall  be  read  into  this  Preferred   Securities
               Guarantee against the Preferred Guarantee Trustee; and

                    (B) in the absence of bad faith on the part of the Preferred
               Guarantee   Trustee,   the   Preferred   Guarantee   Trustee  may
               conclusively  rely,  as to the  truth of the  statements  and the
               correctness  of  the  opinions   expressed   therein,   upon  any
               certificates  or opinions  furnished to the  Preferred  Guarantee
               Trustee and  conforming  to the  requirements  of this  Preferred
               Securities Guarantee; but in the case of any such certificates or
               opinions that by any provision hereof are  specifically  required
               to be furnished to the Preferred Guarantee Trustee, the Preferred
               Guarantee  Trustee  shall be under a duty to examine  the same to
               determine whether or not they conform to the requirements of this
               Preferred Securities Guarantee;

          (ii) the Preferred Guarantee Trustee shall not be liable for any error
               of judgment  made in good faith by a  Responsible  Officer of the
               Preferred  Guarantee Trustee,  unless it shall be proved that the
               Preferred  Guarantee  Trustee was negligent in  ascertaining  the
               pertinent facts upon which such judgment was made;

<PAGE>

          (iii)the Preferred  Guarantee Trustee shall not be liable with respect
               to any action taken or omitted to be taken by it in good faith in
               accordance  with the  direction of the Holders of not less than a
               Majority  in  liquidation  amount  of  the  Preferred  Securities
               relating  to  the  time,  method  and  place  of  conducting  any
               proceeding  for any remedy  available to the Preferred  Guarantee
               Trustee,  or  exercising  any trust or power  conferred  upon the
               Preferred  Guarantee  Trustee  under  this  Preferred  Securities
               Guarantee; and

          (iv) no provision of this Preferred Securities Guarantee shall require
               the Preferred  Guarantee  Trustee to expend or risk its own funds
               or  otherwise   incur   personal   financial   liability  in  the
               performance of any of its duties or in the exercise of any of its
               rights or powers,  if the Preferred  Guarantee Trustee shall have
               reasonable grounds for believing that the repayment of such funds
               or liability is not  reasonably  assured to it under the terms of
               this  Preferred  Securities  Guarantee or  indemnity,  reasonably
               satisfactory  to the Preferred  Guarantee  Trustee,  against such
               risk or liability is not reasonably satisfactory to the Preferred
               Guarantee  Trustee,   against  such  risk  or  liability  is  not
               reasonably assured to it.

     SECTION III.2. Certain Rights of Preferred Guarantee Trustee.

     (a) Subject to the provisions of Section 3.1:

               (i)  The Preferred  Guarantee Trustee may conclusively  rely, and
                    shall be fully protected in acting or refraining from acting
                    upon, any resolution,  certificate,  statement,  instrument,
                    opinion, report, notice, request, direction, consent, order,
                    bond,  debenture,  note,  other evidence of  indebtedness or
                    other paper or document  believed by it to be genuine and to
                    have been  signed,  sent or presented by the proper party or
                    parties.

               (ii) Any direction or act of the Guarantor  contemplated  by this
                    Preferred   Securities   Guarantee   shall  be  sufficiently
                    evidenced by an Officer's Certificate.

               (iii)Whenever,   in  the   administration   of   this   Preferred
                    Securities Guarantee,  the Preferred Guarantee Trustee shall
                    deem it  desirable  that a matter be  proved or  established
                    before taking,  suffering or omitting any action  hereunder,
                    the Preferred  Guarantee  Trustee  (unless other evidence is
                    herein  specifically  prescribed) may, in the absence of bad
                    faith on its part,  request  and  conclusively  rely upon

<PAGE>

                    an  Officer's   Certificate  which,  upon  receipt  of  such
                    request, shall be promptly delivered by the Guarantor.

               (iv) The Preferred Guarantee Trustee shall have no duty to see to
                    any recording,  filing or registration of any instrument (or
                    any rerecording, refiling or re-registration thereof).

               (v)  The Preferred  Guarantee Trustee may consult with counsel of
                    its  selection,  and the advice or  opinion of such  counsel
                    with  respect to legal  matters  shall be full and  complete
                    authorization and protection in respect of any action taken,
                    suffered  or  omitted by it  hereunder  in good faith and in
                    accordance with such advice or opinion.  Such counsel may be
                    counsel to the  Guarantor or any of its  Affiliates  and may
                    include  any  of  its  employees.  The  Preferred  Guarantee
                    Trustee   shall   have  the   right  at  any  time  to  seek
                    instructions concerning the administration of this Preferred
                    Securities   Guarantee   from   any   court   of   competent
                    jurisdiction.

               (vi) The Preferred Guarantee Trustee shall be under no obligation
                    to exercise any of the rights or powers vested in it by this
                    Preferred  Securities  Guarantee at the request or direction
                    of any Holder, unless such Holder shall have provided to the
                    Preferred  Guarantee  Trustee such  security and  indemnity,
                    reasonably  satisfactory to the Preferred Guarantee Trustee,
                    against the costs,  expenses (including  attorneys' fees and
                    expenses  and  the  expenses  of  the  Preferred   Guarantee
                    Trustee's  agents,  nominees or custodians)  and liabilities
                    that might be incurred by it in complying  with such request
                    or direction,  including such reasonable  advances as may be
                    requested by the Preferred Guarantee Trustee;  provided that
                    nothing contained in this Section  3.2(a)(vi) shall be taken
                    to  relieve  the  Preferred  Guarantee  Trustee,   upon  the
                    occurrence  of an Event of  Default,  of its  obligation  to
                    exercise  the  rights  and  powers  vested  in  it  by  this
                    Preferred Securities Guarantee.

               (vii)The Preferred  Guarantee  Trustee shall not be bound to make
                    any  investigation  into the facts or matters  stated in any
                    resolution,  certificate,  statement,  instrument,  opinion,
                    report, notice,  request,  direction,  consent, order, bond,
                    debenture,  note,  other evidence of  indebtedness  or other
                    paper or document,  but the Preferred  Guarantee Trustee, in
                    its   discretion,   may  make  such   further   inquiry   or
                    investigation into such facts or matters as it may see fit.

               (viii) The  Preferred  Guarantee  Trustee  may execute any of the
                    trusts or powers  hereunder or perform any duties  hereunder
                    either   directly  or  by  or  through   agents,   nominees,
                    custodians or attorneys, and the

<PAGE>

                    Preferred Guarantee Trustee shall not be responsible for any
                    misconduct  or  negligence  on  the  part  of any  agent  or
                    attorney appointed with due care by it hereunder.

               (ix) Any action taken by the Preferred  Guarantee  Trustee or its
                    agents hereunder shall bind the Holders and the signature of
                    the Preferred Guarantee Trustee or its agents alone shall be
                    sufficient  and  effective  to perform any such  action.  No
                    third party shall be required to inquire as to the authority
                    of the  Preferred  Guarantee  Trustee to so act or as to its
                    compliance  with any of the  terms  and  provisions  of this
                    Preferred  Securities  Guarantee,  both of  which  shall  be
                    conclusively  evidenced by the Preferred Guarantee Trustee's
                    or its agent's taking such action.

               (x)  Whenever in the administration of this Preferred  Securities
                    Guarantee  the  Preferred  Guarantee  Trustee  shall deem it
                    desirable to receive  instructions with respect to enforcing
                    any  remedy or right or taking any other  action  hereunder,
                    the Preferred Guarantee Trustee (i) may request instructions
                    from the Holders of a Majority in liquidation  amount of the
                    Preferred  Securities,  (ii) may refrain from enforcing such
                    remedy or right or  taking  such  other  action  until  such
                    instructions  are received,  and (iii) shall be protected in
                    conclusively  relying on or acting in  accordance  with such
                    instructions.

               (xi) The Preferred Securities Trustee shall not be liable for any
                    action taken, suffered, or omitted to be taken by it in good
                    faith and  reasonably  believed  by it to be  authorized  or
                    within the discretion or rights or powers  conferred upon it
                    by this Preferred Securities Guarantee.

     (b) No provision of this Preferred  Securities Guarantee shall be deemed to
impose any duty or obligation on the Preferred  Guarantee Trustee to perform any
act or acts or  exercise  any right,  power,  duty or  obligation  conferred  or
imposed on it in any jurisdiction in which it shall be illegal,  or in which the
Preferred  Guarantee  Trustee shall be  unqualified or incompetent in accordance
with  applicable  law, to perform  any such act or acts or to exercise  any such
right, power, duty or obligation.  No permissive power or authority available to
the Preferred Guarantee Trustee shall be construed to be a duty.

     SECTION  III.3.  Not  Responsible  for  Recitals or  Issuance of  Preferred
Securities Guarantee.

     The recitals  contained in this  Preferred  Securities  Guarantee  shall be
taken as the statements of the Guarantor,  and the Preferred  Guarantee  Trustee
does  not  assume  any  responsibility  for  their  correctness.  The  Preferred
Guarantee  Trustee makes no  representation as to the validity or sufficiency of
this Preferred Securities Guarantee.

<PAGE>

                                   ARTICLE IV
                           PREFERRED GUARANTEE TRUSTEE

     SECTION IV.1. Preferred Guarantee Trustee: Eligibility.

     (a) There shall at all times be a Preferred Guarantee Trustee which shall:

               (i)  not be an Affiliate of the Guarantor; and

               (ii) be a corporation organized and doing business under the laws
                    of the United  States of  America or any State or  Territory
                    thereof or of the District of Columbia,  or a corporation or
                    Person  permitted by the Securities and Exchange  Commission
                    to act as an institutional trustee under the Trust Indenture
                    Act,  authorized under such laws to exercise corporate trust
                    powers, having a combined capital and surplus of at least 50
                    million   U.S.   dollars   ($50,000,000),   and  subject  to
                    supervision or examination by federal, state, territorial or
                    District  of  Columbia   authority.   If  such   corporation
                    publishes  reports of condition at least annually,  pursuant
                    to  law  or  to  the  requirements  of  the  supervising  or
                    examining   authority  referred  to  above,  then,  for  the
                    purposes of this Section  4.1(a)(ii),  the combined  capital
                    and  surplus of such  corporation  shall be deemed to be its
                    combined capital and surplus as set forth in its most recent
                    report of condition so published.

     (b) If at any  time  the  Preferred  Guarantee  Trustee  shall  cease to be
eligible to so act under Section 4.1(a),  the Preferred  Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).

     (c)  If  the  Preferred   Guarantee   Trustee  has  or  shall  acquire  any
"conflicting  interest"  within  the  meaning  of  Section  310(b)  of the Trust
Indenture  Act,  the  Preferred  Guarantee  Trustee and  Guarantor  shall in all
respects  comply with the  provisions of Section  310(b) of the Trust  Indenture
Act.

     SECTION IV.2.  Appointment,  Removal and Resignation of Preferred Guarantee
Trustee.

     (a)  Subject to Section  4.2(b),  the  Preferred  Guarantee  Trustee may be
appointed or removed without cause at any time by the Guarantor.

     (b) The Preferred Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) until a Successor  Preferred Guarantee Trustee has been appointed
and has

<PAGE>

accepted  such  appointment  by written  instrument  executed by such  Successor
Preferred Guarantee Trustee and delivered to the Guarantor.

     (c) The Preferred  Guarantee  Trustee appointed to office shall hold office
until a Successor Preferred Guarantee Trustee shall have been appointed or until
its removal or  resignation.  The  Preferred  Guarantee  Trustee may resign from
office  (without  need for prior or subsequent  accounting)  by an instrument in
writing  executed  by the  Preferred  Guarantee  Trustee  and  delivered  to the
Guarantor,  which resignation shall not take effect until a Successor  Preferred
Guarantee  Trustee has been  appointed  and has  accepted  such  appointment  by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.

     (d) If no Successor  Preferred  Guarantee Trustee shall have been appointed
and  accepted  appointment  as provided in this Section 4.2 within 60 days after
delivery of an instrument of  resignation  or removal,  the Preferred  Guarantee
Trustee  resigning  or  being  removed  may  petition  any  court  of  competent
jurisdiction for appointment of a Successor  Preferred  Guarantee Trustee.  Such
court may  thereupon,  after  prescribing  such  notice,  if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.

     (e) No  Preferred  Guarantee  Trustee  shall  be  liable  for  the  acts or
omissions to act of any Successor Preferred Guarantee Trustee.

     (f) Upon termination of this Preferred  Securities  Guarantee or removal or
resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2, the
Guarantor,  jointly and severally,  shall pay to the Preferred Guarantee Trustee
all amounts accrued to the date of such termination, removal or resignation.

                                    ARTICLE V

                                    GUARANTEE

     SECTION V.1. Guarantee.

     (a) The Guarantor irrevocably and unconditionally  agrees to pay in full to
the Holders the Guarantee Payments (without  duplication of amounts  theretofore
paid by the  Issuer),  as and when  due,  regardless  of any  defense,  right of
set-off or  counterclaim  that the Issuer  may have or assert.  The  Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such  amounts to the  Holders.  WRP will honor all  obligations  relating to the
conversion  of the  Preferred  Securities  into the Common  Shares of WRP as set
forth in the Declaration and the Indenture.

     (b) The Guarantor  irrevocably and unconditionally  agrees, in the event of
any distribution of Debentures,  whether it be pursuant to Section 4(c) of Annex
I to the Declaration,

<PAGE>

pursuant  to a  conversion  under  Section  5 of  Annex  I to  the  Declaration,
dissolution or liquidation of the Issuer or otherwise (a  "Distribution  Event")
to the holders of Trust  Securities  pursuant to which the Holders of  Preferred
Securities receive an aggregate principal amount of Debentures that is less than
the aggregate  principal  amount of  Debentures  that such Holder is entitled to
receive in connection with such Distribution  Event,  which amount of Debentures
shall be equal to the aggregate  liquidation amount of the Preferred  Securities
being  liquidated  as a result  of such  Distribution  Event  (the  "Entitlement
Amount"),  then the Guarantor shall issue additional  Debentures pursuant to the
Indenture,  in replacement of the initially issued Debentures not distributed to
Holders of Preferred  Securities,  to such Holders of Preferred Securities equal
to the  amount  by which  the  aggregate  amount  of the  Entitlement  Amount of
Debentures exceeds the aggregate amount of Debentures actually distributed.

     SECTION V.2. Waiver of Notice and Demand.

     The  Guarantor  hereby  waives  notice  of  acceptance  of  this  Preferred
Securities  Guarantee  and of any  liability  to which it  applies or may apply,
presentment,  demand for  payment,  any right or remedy to require a  proceeding
first against the Issuer or any other Person before proceeding  directly against
the  Guarantor,  protest,  notice of nonpayment,  notice of dishonor,  notice of
redemption and all other notices and demands.

     SECTION V.3. Obligations Not Affected.

     The  obligations,  covenants,  agreements and duties of the Guarantor under
this Preferred  Securities  Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:

     (a) the  release  or  waiver,  by  operation  of law or  otherwise,  of the
performance  or  observance  by the Issuer of any express or implied  agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;

     (b) the  extension  of time for the  payment  by the  Issuer  of all or any
portion of the  Distributions,  Redemption Price or Liquidation  Distribution or
any  other  sums  payable  under the terms of the  Preferred  Securities  or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Preferred  Securities (other than an extension of
time for payment of Distributions,  Redemption Price or Liquidation Distribution
or other sum payable  that results  from the  extension of any interest  payment
period on the Debentures);

     (c) any  failure,  omission,  delay or lack of diligence on the part of the
Holders to enforce,  assert or exercise  any right,  privilege,  power or remedy
conferred on the Holders pursuant to the terms of the Preferred  Securities,  or
any action on the part of the Issuer  granting  indulgence  or  extension of any
kind;

     (d) the  voluntary or  involuntary  liquidation,  dissolution,  sale of any
collateral, receivership,  insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization,

<PAGE>

arrangement,   composition  or   readjustment  of  debt  of,  or  other  similar
proceedings affecting, the Issuer or any of the assets of the Issuer;

     (e)  any   invalidity  of,  or  defect  or  deficiency  in,  the  Preferred
Securities;

     (f) the  settlement or compromise of any  obligation  guaranteed  hereby or
hereby incurred; or

     (g) any other  circumstance  whatsoever that might  otherwise  constitute a
legal or equitable discharge or defense of the Guarantor, it being the intent of
this  Section  5.3 that the  obligations  of the  Guarantor  hereunder  shall be
absolute and unconditional under any and all circumstances.

     There  shall be no  obligation  of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.

     SECTION V.4. Rights of Holders.

     (a) The  Holders  of a  Majority  in  liquidation  amount of the  Preferred
Securities then outstanding have the right to direct the time,  method and place
of conducting any proceeding for any remedy available to the Preferred Guarantee
Trustee in  respect  of this  Preferred  Securities  Guarantee  or to direct the
exercise of any trust or power  conferred upon the Preferred  Guarantee  Trustee
under this Preferred Securities Guarantee.

     (b) If in the  opinion  of any  Holder  of  any  Preferred  Securities  the
Preferred  Guarantee  Trustee has failed to enforce  this  Preferred  Securities
Guarantee,  such Holder of Preferred Securities may institute a legal proceeding
directly  against the  Guarantor to enforce the  Preferred  Guarantee  Trustee's
rights under this Preferred  Securities  Guarantee,  without first instituting a
legal  proceeding  against the Issuer,  the Preferred  Guarantee  Trustee or any
other person or entity. The Guarantor waives any right or remedy to require that
any action be brought  first  against  the Issuer or any other  person or entity
before proceeding directly against the Guarantor. Notwithstanding the foregoing,
if the Guarantor has failed to make a guarantee  payment,  a Holder of Preferred
Securities  may  directly  institute  a  proceeding  against the  Guarantor  for
enforcement of this Preferred Securities Guarantee for such payment.

     SECTION V.5. Guarantee of Payment.

     This Preferred  Securities Guarantee creates a guarantee of payment and not
of collection.

     SECTION V.6. Subrogation.

     The Guarantor  shall be subrogated to all (if any) rights of the Holders of
Preferred  Securities  against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Preferred  Securities  Guarantee;  provided,
however, that the Guarantor shall not

<PAGE>

(except to the extent  required by mandatory  provisions  of law) be entitled to
enforce or exercise any right that it may acquire by way of  subrogation  or any
indemnity, reimbursement or other agreement, in all cases as a result of payment
under this Preferred Securities Guarantee,  if, at the time of any such payment,
any amounts are due and unpaid under this Preferred Securities Guarantee. If any
amount shall be paid to the  Guarantor in violation of the  preceding  sentence,
the  Guarantor  agrees to hold such  amount in trust for the  Holders and to pay
over such amount to the Holders.

     SECTION V.7. Independent Obligations.

     The Guarantor  acknowledges that its obligations  hereunder are independent
of the obligations of the Issuer with respect to the Preferred  Securities,  and
that the  Guarantor  shall be liable as principals  and as debtors  hereunder to
make  Guarantee  Payments  pursuant  to the terms of this  Preferred  Securities
Guarantee notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.

<PAGE>

                                   ARTICLE VI

                    LIMITATION OF TRANSACTIONS; SUBORDINATION

     SECTION VI.1. Limitation of Transactions.

     So long as any Preferred Securities remain outstanding, if (i)
the  Guarantor  shall  be in  default  with  respect  to its  payment  or  other
obligations  under Section 5.1 of this  Preferred  Securities  Guarantee or (ii)
there  shall have  occurred  and be  continuing  an Event of  Default  under the
Declaration  or any event  that,  with the  giving of notice or lapse of time or
both,  would  constitute  an Event of  Default  under the  Declaration  then the
Guarantor  shall not (a) declare or pay any dividend on, make any  distributions
with respect to, or redeem,  purchase,  acquire, or make any liquidation payment
with  respect to, any of its Capital  Stock or (b) make any payment of interest,
principal  or  premium,  if any,  on or repay,  repurchase  or  redeem  any debt
securities  of Guarantor  that rank pari passu with or junior in interest to the
Debentures  or make any  guarantee  payment  with  respect to any  guarantee  by
Guarantor  of the  debt  securities  of any  subsidiary  of  Guarantor  if  such
guarantee  ranks  pari  passu  with  or  junior  in  interest  to the  Preferred
Securities  Guarantee (other than (i) as a result of a  reclassification  of the
Capital  Stock of the  Guarantor or the exchange or  conversion  of one class or
series of the Capital  Stock of the Guarantor for another class or series of the
Capital Stock of the  Guarantor,  (ii) the purchase of  fractional  interests in
shares of the  Capital  Stock of the  Guarantor  pursuant to the  conversion  or
exchange  provisions of such Capital Stock or the security being  converted into
or exchanged for such Capital Stock,  (iii) dividends or distributions in Common
Shares of the Guarantor,  (iv) any  declaration of a dividend in connection with
the  implementation  of a  stockholders'  rights plan, or the issuance of shares
under any such plan in the future,  or the  redemption or repurchase of any such
rights pursuant thereto,  (v) payments under the Guarantee and Common Securities
Guarantee,  (vi)  purchases  of Common  Shares of the  Guarantor  related to the
issuance  of  Common  Shares of WRP's or  rights  under  any of the  Guarantor's
benefit plans for its  directors,  officers or employees  and (vii)  obligations
under any dividend  reinvestment  and stock purchase plans to issue shares other
than as a result of the  payment of a  dividend),  in each case unless and until
such default or Event of Default shall have been cured.

     SECTION VI.2. Subordination.

     This Preferred Securities Guarantee will constitute an unsecured obligation
of the Guarantor and will rank (i) subordinate and junior in right of payment to
all other  liabilities of the Guarantor (except any liabilities that may be pari
passu expressly by their terms),  (ii) pari passu with the most senior preferred
or  preference  shares now or  hereafter  issued by the  Guarantor  and with any
guaranty  now or  hereafter  entered  into by the  Guarantor  in  respect of any
preferred or preference stock of any Affiliate of the Guarantor and (iii) senior
to Guarantor's Common Shares.

<PAGE>

                                   ARTICLE VII

                                   TERMINATION

     SECTION VII.1. Termination.

     This Preferred  Securities Guarantee shall terminate as to each Holder upon
(i) full payment of the  Redemption  Price and accrued and unpaid  distributions
with respect to all Preferred  Securities,  (ii) the  distribution of the Common
Shares to such Holder upon the conversion of such Holder's Preferred  Securities
into the Common Shares,  (iii) the distribution of the Debentures to the Holders
of the  Preferred  Securities  or (iv) full  payment of the  amounts  payable in
accordance with the Declaration upon  liquidation of the Issuer.  This Preferred
Securities Guarantee shall terminate completely upon full payment of the amounts
payable in accordance with the Declaration.  Notwithstanding the foregoing, this
Preferred  Securities  Guarantee  will  continue  to be  effective  or  will  be
reinstated,  as the case may be, if at any time any Holder must restore  payment
of any  sum  paid  under  the  Preferred  Securities  or  under  this  Preferred
Securities Guarantee.

                                  ARTICLE VIII

                                 INDEMNIFICATION

     SECTION VIII.1. Exculpation.

     (a) No  Indemnified  Person shall be liable,  responsible or accountable in
damages  or  otherwise  to the  Guarantor  or any  Covered  Person for any loss,
damage,  liability,  expense or claim  incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance with
this Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably  believed to be within the scope of the  authority  conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except that
an  Indemnified  Person  shall be  liable  for any such  loss,  damage  or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.

     (b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Guarantor and upon such information,  opinions,  reports
or  statements  presented  to the  Guarantor  by any  Person as to  matters  the
Indemnified   Person   reasonably   believes  are  within  such  other  Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor,  including information,  opinions,  reports or
statements  as to the value  and  amount of the  assets,  liabilities,  profits,
losses or any

<PAGE>

other  facts  pertinent  to the  existence  and  amount  of  assets  from  which
Distributions to Holders might properly be paid.

     SECTION VIII.2. Indemnification.

     The Guarantor agrees to indemnify each Indemnified  Person for, and to hold
each  Indemnified  Person  harmless  against,  any loss,  liability  or  expense
incurred  without  negligence  or bad  faith on its part,  arising  out of or in
connection  with  the  acceptance  or  administration  of the  trust  or  trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating,  any claim or liability
in connection  with the exercise or  performance  of any of its powers or duties
hereunder.  The provisions of this Section 8.2 shall survive the  termination of
this  Preferred  Securities  Guarantee  or the  resignation  or  removal  of the
Preferred Guarantee Trustee.

     When the Preferred Guarantee Trustee incurs expenses or renders services in
connection  with an Event of  Default  specified  in  Section  5.1(d) or Section
5.1(e) of the Indenture,  the expenses  (including  the  reasonable  charges and
expenses of its  counsel)  and the  compensation  for  services  are intended to
constitute  expenses of  administration  under any  applicable  federal or state
bankruptcy, insolvency or other similar law.

                                   ARTICLE IX

                                  MISCELLANEOUS

     SECTION IX.1. Successors and Assigns.

     All  guarantees  and  agreements  contained  in this  Preferred  Securities
Guarantee  shall  bind  the  successors,   assigns,   receivers,   trustees  and
representatives  of the  Guarantor and shall inure to the benefit of the Holders
of the Preferred  Securities  then  outstanding.  Except in connection  with any
merger or  consolidation  of the Guarantor with or into another entity permitted
by  Section  9.1  of the  Indenture  or  any  sale,  transfer  or  lease  of the
Guarantor's  assets to another entity permitted by Section 9.1 of the Indenture,
the Guarantor may not assign its rights or delegate its  obligations  under this
Preferred  Securities  Guarantee without the prior approval of the holders of at
least  a  Majority  in  liquidation  amount  of the  Preferred  Securities  then
outstanding.

     SECTION IX.2. Guarantor May Consolidate, etc., on Certain Terms.

     (a)  Guarantor  may  sell,  transfer,  lease  or  otherwise  convey  all or
substantially  all of its  assets on a  consolidated  basis to any  Persons,  or
consolidate or merge with or into,  any other Person,  provided that in any such
case, (a) either (i) Guarantor shall be the continuing  corporation,  or (ii) if
Guarantor is not the continuing corporation, the successor corporation or

<PAGE>

Person  which  acquires  by sale,  transfer,  lease or other  conveyance  all or
substantially all of the assets of Guarantor,  shall be a corporation  organized
and validly existing under the laws of the United States of America or any state
thereof or the  District  of  Columbia  and shall  expressly  assume the due and
punctual  payment and  performance  by Guarantor of its  obligations  under this
Preferred   Securities   Guarantee,   (b)  immediately   after  such  merger  or
consolidation,  or such sale, transfer,  lease or other conveyance,  no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be continuing,  and (c) the Company
has delivered to the Trustee an Officer's Certificate and an opinion of counsel,
each stating that the requirements of this Section have been complied with.

     (b)  In  case  of  any  such  consolidation,  merger,  sale,  transfer,  or
          conveyance (but not in the case of any such lease), and following such
          an assumption by the successor  corporation such successor corporation
          shall  succeed  to and be  substituted  for  Guarantor,  with the same
          effect  as if it  had  been  named  herein,  and  Guarantor  shall  be
          discharged  from all  obligations  and covenants  under this Preferred
          Securities Guarantee and may be liquidated and dissolved

     SECTION IX.3. Amendments.

     Except with respect to any changes that do not adversely  affect the rights
of  Holders  (in which  case no  consent  of  Holders  will be  required),  this
Preferred  Securities  Guarantee may only be amended with the prior  approval of
the Holders of at least a Majority in liquidation  amount  (including the stated
amount that would be paid on redemption,  liquidation or otherwise, plus accrued
and  unpaid  Distributions  to the date upon which the  voting  percentages  are
determined)  of the Preferred  Securities  then  outstanding.  The provisions of
Section 12.2 of the Declaration with respect to meetings of Holders apply to the
giving of such approval.

     SECTION IX.4. Notices.

     All notices provided for in this Preferred Securities Guarantee shall be in
writing,  duly signed by the party giving such notice,  and shall be  delivered,
telecopied or mailed by first class mail, as follows:

     (a) If given to the Preferred Guarantee Trustee, at the Preferred Guarantee
Trustee's  mailing  address  set  forth  below  (or such  other  address  as the
Preferred  Guarantee  Trustee may give notice of to the Holders of the Preferred
Securities):

               Wilmington Trust Company
               1100 North Market Street,
               9th Floor
               Wilmington, Delaware 19890-0001
               Attention: Corporate Trust Administration

<PAGE>

     (b) If given to the Guarantor, at the Guarantor's mailing address set forth
below (or such other  address as the Guarantor may give notice of to the Holders
of the Preferred Securities):

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

     (c) If given to any Holder of  Preferred  Securities,  at the  address  set
forth on the books and records of the Issuer.

     All such  notices  shall be deemed  to have been  given  when  received  in
person,  telecopied  with  receipt  confirmed,  or mailed by first  class  mail,
postage  prepaid,  except that if a notice or other document is refused delivery
or cannot be  delivered  because  of a changed  address  of which no notice  was
given,  such notice or other  document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.

     SECTION IX.5. Counterparts.

     This  Preferred  Securities  Guarantee  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.

     SECTION IX.6. Benefit.

     This  Preferred  Securities  Guarantee  is solely  for the  benefit  of the
Holders of the  Preferred  Securities  and,  subject to Section  3.1(a),  is not
separately transferable from the Preferred Securities.

     SECTION IX.7. Governing Law.

     THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED  IN  ACCORDANCE  WITH,  THE LAWS OF THE STATE OF  DELAWARE,  WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

<PAGE>

     THIS  PREFERRED  SECURITIES  GUARANTEE  is  executed as of the day and year
first above written.

                              WELLSFORD REAL PROPERTIES, INC., as Guarantor

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



                              WILMINGTON TRUST COMPANY,
                              as Preferred Guarantee Trustee

                              By: /s/ Jennifer Matz
                              --------------------------------
                              Name: Jennifer Matz
                              Title: Assistant Vice President

<PAGE>