Document:

GUARANTY

TO:  GENERAL ELECTRIC CAPITAL CORPORATION

     THIS  GUARANTY  ("GUARANTY"),  dated as of June 25, 2001 is made by WWG 401
NORTH WASHINGTON LLC, a Delaware limited  liability  company  ("GUARANTOR"),  in
favor  of  GENERAL  ELECTRIC  CAPITAL   CORPORATION,   a  New  York  corporation
("LENDER"),  and is executed pursuant to that certain Loan Agreement dated as of
even date herewith between Lender and  Wellsford/Whitehall  Holdings,  L.L.C., a
Delaware limited  liability  company (the "BORROWER") (such Loan Agreement as it
may from time to time be supplemented,  modified and amended,  being referred to
in this Guaranty as the  "AGREEMENT"),  the provisions of which are incorporated
in this Guaranty by reference.  Capitalized  terms used in this Guaranty and not
otherwise defined are used with the meanings set forth in the Agreement.

     As more particularly set forth in the Agreement,  Lender has made a loan to
the  Borrower  in the amount of up to  $352,600,000.00  (the  "LOAN") to provide
certain financing for the Properties,  including the Property owned by Guarantor
(the "GATEWAY TOWER PROPERTY").  As a condition of Lender's agreement to allow a
portion  of the  Loan to be used to  finance  or  refinance  the  Gateway  Tower
Property, and to pay Capital Expenditures,  Tenant Improvement costs and Leasing
Costs  incurred  in  connection  with the  Gateway  Tower  Property,  Lender has
required that Guarantor  provide this Guaranty of the Loan,  which Guaranty will
be secured by Liens on the Gateway Tower Property and Guarantor's  other assets.
Guarantor is a wholly-owned subsidiary of the Borrower.

     To induce Lender to make the Loan, and in  consideration of Lender allowing
a portion of the Loan proceeds to be used to directly benefit  Guarantor and the
Gateway Tower Property,  and for other valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged, the Guarantor agrees as follows:

     1. GUARANTEED OBLIGATIONS.  Subject to the limitations set forth below, the
Guarantor  absolutely and  unconditionally  guarantees the punctual and complete
payment when due (whether at the stated maturity,  by acceleration or otherwise)
of the following (the "GUARANTEED OBLIGATIONS"):

(1)  all present and future indebtedness  evidenced by the Promissory Note dated
     as of even  date  herewith  in the  principal  amount  of  $352,600,000.00,
     executed by the Borrower in favor of Lender, including principal,  interest
     and all other amounts  payable under the terms of the Note, upon Borrower's
     default in the performance of the same; and

(2)  all other  present and future  obligations  of the Borrower to Lender under
     the Loan Documents, upon Borrower's default in the performance of the same;
     in each case as such  indebtedness  and other  obligations may from time to
     time be  supplemented,  modified,  amended,  renewed and extended,  whether
     evidenced by new or  additional  instruments,  documents or  agreements  or
     resulting  in a  change  in  the  interest  rate  on  any  indebtedness  or
     otherwise.  Upon the  occurrence  of any Event of Default,  all  Guaranteed
     Obligations  shall,  at the  option of Lender,  immediately  become due and
     payable by the Guarantor without protest, presentment,  notice of dishonor,
     demand or further notice of any kind, all of which are expressly  waived by
     the Guarantor,  and irrespective of whether any Guaranteed Obligations have
     then become due and payable by the  Borrower  or any other  Borrower  Party
     (each of the Borrower and any other party  obligated under the Agreement or
     Note other than the  Guarantor  and the Lender  being  referred  to in this
     Guaranty as an "OTHER BORROWER PARTY").

     The foregoing notwithstanding,  Guarantor's total aggregate liability under
this  Guaranty for the  Guaranteed  Obligations  shall not exceed the sum of the
following amounts (without duplication or overlap):

(1)  an amount equal to  Guarantor's  net worth as of the Closing Date (such net
     worth to be calculated without regard to Guarantor's obligations under this
     Guaranty); plus

(2)  an amount equal to (A) the fair market value of the Gateway Tower  Property
     as of the Applicable Determination Date, minus (B) the fair market value of
     the  Gateway  Tower  Property  as of the  Closing  Date,  but  only  if the
     difference is a positive number.

Guarantor   acknowledges  that,  for  purposes  of  the  foregoing  calculation,
Guarantor and Lender have agreed that the fair market value of the Gateway Tower
Property as of the Closing Date is $36,859,000,  and that Guarantor's  aggregate
total  liabilities  as of the Closing Date  (including  secured,  unsecured  and
contingent liabilities but excluding Guarantor's obligations under this Guaranty
and  excluding  the debt of Guarantor  which is being repaid on the Closing Date
with  Loan  proceeds)  are  not  in  excess  of  $2,500,000.  Guarantor  further
acknowledges  that, in calculating  Guarantor's  net worth,  Guarantor's  assets
shall include the positive  value of any and all  subrogation,  contribution  or
similar  rights or claims held by Guarantor by virtue of this Guaranty  (whether
arising  by  operation  of law  or by  contract).  As  used  above,  "APPLICABLE
DETERMINATION  DATE"  shall  mean,  in each  instance in which such term is used
(i.e., such date need not be the same date in each instance where used),  either
one of the following  two dates,  as selected by Lender in its sole and absolute
discretion:  (x) the date of any demand made on Guarantor under this Guaranty or
(y) if any action is commenced by Lender to enforce  this  Guaranty,  the date a
judgment is entered against Guarantor in such action.

2. NATURE OF GUARANTY.  This  Guaranty is a guaranty of payment and  performance
and not of  collection,  is continuing  in nature and applies to all  Guaranteed
Obligations,  whether existing now or in the future,  including (a) interest and
other Guaranteed  Obligations  arising or accruing after bankruptcy of any other
Borrower  Party  or any  sale or  other  disposition  of any  security  for this
Guaranty or for the  obligations  of any other Borrower Party (any such security
being  referred to in this Guaranty as the  "SECURITY"),  and (b) any Guaranteed
Obligations  that survive  repayment of the Loan. This Guaranty and any Security
for this Guaranty shall  continue to be effective or be reinstated,  as the case
may be, if at any time any payment or performance of any Guaranteed  Obligations
is  rescinded  or must  otherwise be returned by Lender or any other Person upon
the  bankruptcy,  insolvency or  reorganization  of any other  Borrower Party or
otherwise,  all as though such  payment or  performance  had not  occurred.  The
Guarantor  shall have no  authority  to revoke  this  Guaranty,  but if any such
revocation  shall be deemed to have  occurred by operation of law or  otherwise,
the  provisions of this Guaranty shall  continue to apply  notwithstanding  such
revocation.

3. OBLIGATIONS INDEPENDENT. The obligations of the Guarantor under this Guaranty
are independent of Guarantor's  obligations under any other guaranty executed by
Guarantor in connection with any or all of the Guaranteed  Obligations,  and are
independent  of the  obligations  of any  other  Borrower  Party  under the Loan
Documents  (such other  obligations  of Guarantor,  and such  obligations of any
other Borrower  Party,  including the  Borrower's  obligations in respect of the
Guaranteed  Obligations,  being  referred  to in  this  Guaranty  as the  "OTHER
OBLIGATIONS"), and any Security, and the enforceability of any Security for this
Guaranty is likewise  independent  of any such Other  Obligations  and any other
Security.  Lender may bring action  against the Guarantor and otherwise  enforce
this Guaranty or apply or proceed against any Security for this Guaranty without
bringing  action  against any other Borrower Party or joining any other Borrower
Party in any action against the Guarantor,  and otherwise  independently  of any
other right,  power or remedy (each, a "REMEDY") that may be available to Lender
at any time with respect to any Other  Obligations  or Security.  The  Guarantor
waives any right to  require  Lender at any time to  proceed  against  any other
Borrower  Party,  apply any Security or otherwise  enforce,  proceed  against or
exhaust any Other Obligations or Security or pursue any other Remedy in Lender's
power.

4.  ACTION  WITH  RESPECT  TO  OTHER  OBLIGATIONS  OR  SECURITY.  The  Guarantor
authorizes Lender,  without notice or demand and without affecting its liability
under or the  enforceability  or priority of this  Guaranty or any  Security for
this Guaranty from time to time to:

(1)  supplement,  modify,  amend,  renew,  extend,  accept  partial  payments or
     performance on or otherwise change the time,  manner or place of payment or
     performance  or the  interest  rate or other  terms or the  amount  of,  or
     release,  reconvey,  terminate,  waive,  abandon,  subordinate,   exchange,
     substitute,  transfer  or consent to the  transfer of or enter into or give
     any other  agreement,  approval,  waiver or consent  with  respect to or in
     exchange  for  any  Other  Obligations  or  Security  or any  of  the  Loan
     Documents;

(2)  receive and hold additional Security or guaranties;

(3)  release any other Borrower  Party from any personal  liability with respect
     to  any  Other   Obligations   and   participate   in  any   bankruptcy  or
     reorganization  of any other  Borrower  Party in such  manner as Lender may
     determine; and

(4)  accelerate,  settle,  compromise,  compound,  sue for, collect or otherwise
     liquidate,   enforce  or  deal  with  any  Other  Obligations  or  Security
     (including  judicial  or  non-judicial  sale or  other  disposition  of any
     Security),  bid and  purchase  at any  sale  or  other  disposition  of any
     Security and apply any Security and any proceeds or other payments received
     by Lender, in each case in such order and manner as Lender may determine.

Guarantor  acknowledges that the Agreement sets forth certain provisions for the
release of the Security for this Guaranty,  which  provisions  are  incorporated
herein by this  reference.  Guarantor  hereby  acknowledges  its  consent to and
agreement  with such  provisions,  and  further  agrees  that any release of the
Security for this  Guaranty  shall be effected  solely in  accordance  with such
provisions.

5. WAIVER OF DEFENSES.  The Guarantor  waives any defense to the  enforcement of
this Guaranty or any Security for this Guaranty arising by reason of:

(1)  any present or future  federal,  state or local laws,  rules,  regulations,
     ordinances or codes (all such laws, rules, regulations, ordinances or codes
     being hereinafter  referred to collectively as "LAWS"), or orders affecting
     the terms of, or Lender's  Remedies with respect to, any Other  Obligations
     or Security;

(2)  the absence or cessation of personal  liability of any other Borrower Party
     with respect to any Other Obligations;

(3)  the  failure of any other  Person to  execute  this  Guaranty  or any other
     guaranty or agreement;

(4)  the  failure  of any other  Borrower  Party to  properly  execute  any Loan
     Document or otherwise comply with applicable legal formalities;

(5)  the  unenforceability or invalidity of any Other Obligations or Security or
     the  lack of  perfection  or  failure  of  priority  or any  other  loss or
     impairment of any Security;

(6)  any  discharge  or  release  of any  other  Borrower  Party  or  any  Other
     Obligations  or Security or any impairment or suspension of any Remedies of
     Lender,  whether  resulting from any act or omission of Lender or any other
     Person or by operation of law or otherwise;

(7)  any bankruptcy, insolvency or reorganization of any other Borrower Party or
     any disability or other defense of any other Borrower Party with respect to
     any Other Obligations or Security;

(8)  any failure of Lender to disclose to the Guarantor any information relating
     to the  financial  condition,  operations,  properties  or prospects of any
     other  Borrower  Party now or in the future known to Lender (the  Guarantor
     waiving any duty on the part of Lender to disclose such information);

(9)  any  failure  of Lender to  monitor  proper  application  of loan  funds or
     compliance with the Loan Documents,  or to preserve,  insure or protect any
     Security or any subrogation,  contribution or  reimbursement  rights of the
     Guarantor;

(10) any  application of proceeds or payments  received by Lender to obligations
     other than the Guaranteed Obligations; or

(11) any  other  action  by  Lender  taken in  pursuit  of any  Remedy,  whether
     authorized  by Section 4 or otherwise,  or failure of Lender to pursue,  or
     any delay in pursuing, any other Remedy in Lender's power.

     The  Guarantor  further  waives:  (i) any defense to the recovery by Lender
against the Guarantor of any deficiency or otherwise to the  enforcement of this
Guaranty or any Security for this Guaranty  based upon Lender's  election of any
remedy  against  Guarantor or any other Borrower Party (even if that election of
remedies,  such as a non-judicial  foreclosure  with respect to security for any
Other   Obligation,   destroys  the   Guarantor's   rights  of  subrogation  and
reimbursement  against the  Borrower),  including any defense to  enforcement of
this Guaranty  which,  absent this waiver,  Guarantor might have by virtue of an
election  by  Lender  to  conduct a  non-judicial  foreclosure  sale of any real
property Security for any Other  Obligations;  (ii) any defense or benefits that
may be derived  from any  anti-deficiency,  one form of action  and/or  security
first defenses (if any) under applicable Laws; (iii) any right to a "fair value"
hearing or other  hearing,  to determine the size of any  deficiency  owing (for
which Guarantor would be liable hereunder) following a non-judicial  foreclosure
sale; (iv) all benefits of any statute of limitations  affecting the Guarantor's
liability under or the enforcement of this Guaranty or any Other  Obligations or
Security;  (v) promptness,  diligence,  presentment,  demand for performance and
protest;  (vi)  notice of  nonperformance,  default,  acceleration,  protest  or
dishonor; (vii) except for any notice otherwise required by applicable Laws that
may not be  effectively  waived  by the  Guarantor,  notice  of  sale  or  other
disposition  of any  Security;  and (viii) notice of acceptance of this Guaranty
and of the  existence,  creation or  incurring of new or  additional  Guaranteed
Obligations,  and all  other  notices  of any kind  with  respect  to any  Other
Obligations.  Without limiting the foregoing, or anything else contained in this
Guaranty,  Guarantor  waives all rights and defenses that the Guarantor may have
because the Other  Obligations are secured by real property.  This means,  among
other things:

(1)  The Lender may collect from the Guarantor  without first foreclosing on any
     real or personal property collateral pledged by the Borrower; and

(2)  If the Lender  forecloses  on any real property  collateral  pledged by the
     Borrower:  (x) the amount of the Other  Obligations  may be reduced only by
     the price for which that collateral is sold at the  foreclosure  sale, even
     if the collateral is worth more than the sale price; and (y) the Lender may
     collect from the Guarantor  even if the Lender,  by foreclosing on the real
     property  collateral,  has  destroyed  any right the  Guarantor may have to
     collect from the Borrower.

This is an unconditional  and irrevocable  waiver of any rights and defenses the
Guarantor may have because the Other  Obligations  are secured by real property.
Notwithstanding  anything to the contrary  herein,  Guarantor does not waive the
defense  of  payment or any right or  defense  based on  willful  misconduct  of
Lender.

6. SUBROGATION.  Notwithstanding  anything to the contrary  elsewhere  contained
herein or in any other document to which Guarantor is a party,  Guarantor hereby
expressly  agrees  that,  until  payment  and  performance  in full of all Other
Obligations,  Guarantor  shall not  assert,  with  respect to  Borrower  and its
successors and assigns  (including any surety) and any other Person, any and all
rights at law or in equity to subrogation, to reimbursement,  to exoneration, to
contribution,  to setoff or to any other  rights  that could  accrue to a surety
against  a  principal,  to a  guarantor  against  a  maker  or  obligor,  to  an
accommodation party against the party accommodated, or to a holder or transferee
against a maker,  and which  Guarantor  may have or  hereafter  acquire  against
Borrower or any other Person in  connection  with or as a result of  Guarantor's
execution,  delivery  and/or  performance  of this  Guaranty any other  document
relating to the Guaranteed  Obligations to which Guarantor is a party. Guarantor
agrees that, until payment and performance in full of all Other Obligations,  it
shall not have or assert any such rights against  Borrower or its successors and
assigns or any other Person  (including  any surety),  either  directly or as an
attempted  setoff to any action  commenced  against  Guarantor  by Borrower  (as
borrower or in any other capacity), Lender or any other Person. Guarantor hereby
acknowledges  and agrees that this waiver is  intended to benefit  Borrower  and
Lender and shall not limit or otherwise affect Guarantor's  liability hereunder,
under any other document to which  Guarantor is a party,  or the  enforceability
hereof or thereof. If the Guarantor  nevertheless receives payment of any amount
on account of any such  subrogation,  contribution,  indemnity or  reimbursement
rights or otherwise in respect of any payment or performance by the Guarantor of
any Guaranteed Obligations prior to payment and performance in full of all Other
Obligations,  such  amount  shall be held in trust for the benefit of Lender and
immediately  paid to Lender for  application  to the Other  Obligations  in such
order and manner as Lender may determine.

7.  REPRESENTATIONS OF THE GUARANTOR.  The Guarantor  represents and warrants to
Lender that:

(1)  this Guaranty is executed at the request of the Borrower;

(2)  the Guarantor has  established  adequate  means of obtaining from any other
     Borrower  Parties on a continuing basis  information  pertaining to, and is
     now  and on a  continuing  basis  will be  completely  familiar  with,  the
     financial  condition,  operations,  properties  and prospects of such other
     Borrower Parties;

(3)  the  Guarantor  has received and read (with the  assistance of its counsel)
     copies of all of the other Loan Documents;

(4)  no oral promises, assurances,  representations or warranties have been made
     by or on behalf of Lender to induce the  Guarantor  to execute  and deliver
     this Guaranty;

(5)  the execution, delivery and performance by Guarantor of the Loan Documents,
     Ancillary Agreements and all other instruments and documents to be executed
     and  delivered by  Guarantor  and by its  partners,  to the extent they are
     parties  thereto,  and the  creation of all Liens  provided  for herein and
     therein:  (i) are within  Guarantor's and its partners'  partnership and/or
     corporate power;  (ii) have been duly authorized by all necessary or proper
     partnership and/or corporate action;  (iii) are not in contravention of any
     provision of Guarantor's or its partners' respective  partnership agreement
     and/or certificate, or bylaws and/or articles of incorporation; (iv) do not
     violate  any Law,  or any  order or  decree  of any  court or  Governmental
     Authority;  (v) do not conflict with or result in the breach or termination
     of,  constitute a default under or accelerate any performance  required by,
     any  indenture,   mortgage,  deed  of  trust,  lease,  agreement  or  other
     instrument  to which  Guarantor  and/or its partners is a party or by which
     Guarantor  and/or its partners or any of their  property is bound;  (vi) do
     not  result  in the  creation  or  imposition  of any Lien  upon any of the
     property  of  Guarantor  and/or its  partners  other than those in favor of
     Lender,  all pursuant to the Loan  Documents;  and (vii) do not require the
     consent or  approval of any  Governmental  Authority  or any other  Person,
     other than such consents and approvals as have been duly obtained,  made or
     complied with on or prior to the Closing Date.  Each of the Loan  Documents
     to which  Guarantor  and/or  any of its  partners  is a party has been duly
     executed  and  delivered by or for the benefit of or on behalf of Guarantor
     and/or  its  partners,  and each  constitutes  a legal,  valid and  binding
     obligation of Guarantor  and, to the extent they are parties  thereto,  its
     partners,  enforceable  against each of them in accordance  with its terms;
     and

(6)  Guarantor owns good and marketable title to the Security for this Guaranty;
     none of the  Security  for this  Guaranty  is subject to any Liens,  except
     Permitted  Encumbrances;   and  Guarantor  has  received  all  assignments,
     waivers,  consents and other  documents,  and duly effected all recordings,
     filings  and other  actions  necessary  to  establish,  protect and perfect
     Guarantor's  right,  title and  interest  in and to the  Security  for this
     Guaranty.

8.  INCORPORATION  OF COVENANTS,  INDEMNITIES  AND  AGREEMENTS.  All  covenants,
agreements,  indemnities  and other  obligations of Borrower under the Agreement
regarding the Borrower  Properties shall be deemed to be incorporated  herein by
this  reference,  and  shall be  deemed  to be  ongoing  covenants,  agreements,
indemnities and obligations of Guarantor under this Guaranty with respect to the
Security for this Guaranty.

9.  RELEASES  OF  SECURITY.  Guarantor  hereby  acknowledges  and  agrees to the
provisions  set forth in the  Agreement  regarding  releases of the Security for
this  Guaranty.  Guarantor  agrees that all Security for this Guaranty  shall be
released solely in accordance with such provisions.

10. WAIVERS AND AMENDMENTS.  No supplement to,  modification or amendment of, or
waiver,  consent or approval  under,  any  provision of this  Guaranty  shall be
effective  unless in writing and signed by Lender,  and any  waiver,  consent or
approval shall be effective  only in the specific  instance and for the specific
purpose for which given.

11. REMEDIES.  Each of the Remedies  provided in this Guaranty is cumulative and
not exclusive  of, and shall not  prejudice,  any other Remedy  provided in this
Guaranty or by applicable Laws or under any other Loan Document. Each Remedy may
be exercised  from time to time as often as deemed  necessary by Lender,  and in
such order and manner as Lender may  determine.  No failure or delay on the part
of Lender in exercising any Remedy shall operate as a waiver of such Remedy; nor
shall any single or partial exercise of any Remedy preclude any other or further
exercise of such Remedy or of any other Remedy.

12. COSTS AND EXPENSES.  The Guarantor  shall pay to Lender on demand all costs,
expenses and charges of Lender in  connection  with the  enforcement  of, or the
exercise  of any  Remedy  or any  other  action  taken  by  Lender  under  or in
connection  with,  this Guaranty or any  Guaranteed  Obligations,  including the
reasonable  fees  and   disbursements   of  Lender's  legal  counsel  and  other
out-of-pocket  expenses,  and the reasonable  charges of Lender's internal legal
counsel.

13.  NOTICES.  Any notice  required or permitted to be given under this Guaranty
shall be in  writing  and  either  shall be mailed by  certified  mail,  postage
prepaid,  return receipt requested, or sent by overnight air courier service, or
personally  delivered to a  representative  of the receiving  party,  or sent by
telecopy. All such communications shall be mailed, sent or delivered,  addressed
to the party for whom it is intended at its address set forth below.

   If to Guarantor:   WWG 401 North Washington LLC
                      c/o WP Commercial, L.L.C.
                      26 Main Street
                      Chatham, New Jersey  07928
                      Attention:  Mr. Richard Previdi and Steven Jason, Esq.
                      Telecopy Number:  (973) 701-1115

   With a copy to:    Whitehall Street Real Estate Limited Partnership XI
                      85 Broad Street, 10th Floor
                      New York, New York  10004
                      Attention:  Chief Financial Officer
                      Telecopy Number:  (212) 357-5505

   and to:            Sullivan & Cromwell

                      125 Broad Street
                      New York, New York  10004
                      Attention:  Anthony J. Colletta, Esq.
                      Telecopy Number:  (212) 558-3588

   If to Lender:      General Electric Capital Corporation
                      c/o GE Capital Realty Group, Inc.
                      16479 Dallas Parkway, Suite 600
                      Addison, Texas  75001-2512
                      Attention:  Asset Manager
                      Telecopy Number:  (972) 447-2667

  With a copy to:    General Electric Capital Corporation
                     292 Long Ridge Road
                     Stamford, Connecticut 06927
                     Attention: Department Counsel/Commercial
                     Real Estate Legal Operations
                     Telecopy Number:  (203) 357-6768

Any  communication  so  addressed  and mailed shall be deemed to be given on the
earliest of (1) when  actually  delivered,  (2) on the first  Business Day after
deposit with an overnight air courier service,  or (3) on the third Business Day
after deposit in the United States mail,  postage  prepaid,  in each case to the
address of the intended addressee,  and any communication so delivered in person
shall be deemed to be given  when  receipted  for by, or  actually  received  by
Lender or Guarantor, as the case may be. If given by telecopy, a notice shall be
deemed  given and  received  when the  telecopy  is  transmitted  to the party's
telecopy number specified above and confirmation of complete receipt is received
by the  transmitting  party during normal business hours or on the next Business
Day if not confirmed during normal business hours.  Either party may designate a
change of  address  by  written  notice to the other by giving at least ten (10)
days prior written notice of such change of address.

14.  BINDING  AGREEMENT.  This  Guaranty  shall be  binding  on and inure to the
benefit of the Guarantor and Lender and their respective successors and assigns,
except that the Guarantor  shall have no right to assign any interest under this
Guaranty  without the prior written  consent of Lender.  Lender may from time to
time assign its interest  under this Guaranty in connection  with any assignment
of the Loan Documents in accordance with Section 11.1 of the Agreement.

15.  MULTIPLE  GUARANTORS.  If more  than one  Person  signs  this  Guaranty  as
Guarantor,  (a) the term  "Guarantor"  shall  mean  each  such  Person,  (b) the
obligations of each Guarantor shall be joint,  several and independent,  and (c)
this Guaranty shall be construed and enforced as though each Guarantor  executed
a separate guaranty on the terms set forth in this Guaranty.

16.  GOVERNING  LAW.  This  Guaranty  shall be governed  by, and  construed  and
enforced in accordance with, the Laws of New York.

17. CONSTRUCTION.  Whenever the context requires, all words used in the singular
will be  construed  to have been used in the plural,  and vice  versa,  and each
gender will  including  any other  gender.  The captions of the sections of this
Guaranty  are for  convenience  only and do not  define  or limit  any  terms or
provisions.  The word "include(s)" means "include(s),  without  limitation," and
the word  "including"  means  "including,  but not  limited  to." No  listing of
specific  instances,  items or matters in any way limits the scope or generality
of any language of this Guaranty.  Time is of the essence in the  performance of
this Guaranty by Guarantor.

18.  ENFORCEABILITY.  Guarantor  hereby  acknowledges  that: (a) the obligations
undertaken by Guarantor in this Guaranty are complex in nature, and (b) numerous
possible defenses to the enforceability of these obligations may presently exist
and/or may arise hereafter, and (c) as part of Lender's consideration for making
the Loan, Lender has specifically bargained for the waiver and relinquishment by
Guarantor of all such  defenses,  and (d) Guarantor has had the  opportunity  to
seek  and  receive  legal  advice  from  skilled  legal  counsel  in the area of
financial  transactions of the type contemplated herein. Given all of the above,
Guarantor  does hereby  represent and confirm to Lender that  Guarantor is fully
informed  regarding,  and that Guarantor  does  thoroughly  understand:  (i) the
nature of all such possible  defenses,  and (ii) the  circumstances  under which
such defenses may arise, and (iii) the benefits which such defenses might confer
upon  Guarantor,  and (iv) the legal  consequences  to Guarantor of waiving such
defenses.  Guarantor  acknowledges  that Guarantor  makes this Guaranty with the
intent that this Guaranty and all of the informed  waivers herein shall each and
all be fully enforceable by Lender,  and that Lender is induced to make the Loan
in material reliance upon the presumed full enforceability thereof.

19. WAIVER OF JURY TRIAL.  EACH OF LENDER AND THE GUARANTOR  WAIVE TRIAL BY JURY
IN ANY ACTION OR OTHER PROCEEDING (INCLUDING  COUNTERCLAIMS),  WHETHER AT LAW OR
EQUITY,  BROUGHT BY LENDER OR THE GUARANTOR AGAINST THE OTHER ON MATTERS ARISING
OUT OF OR IN ANY WAY RELATED TO OR CONNECTED WITH THIS GUARANTY,  THE OTHER LOAN
DOCUMENTS,  THE LOAN OR ANY  TRANSACTION  CONTEMPLATED  BY, OR THE  RELATIONSHIP
BETWEEN  LENDER AND THE GUARANTOR OR ANY OTHER  BORROWER  PARTY OR ANY ACTION OR
INACTION BY ANY PARTY UNDER, ANY OF THE LOAN DOCUMENTS.

20.  LOAN  AGREEMENT  SECTION  12.1  NOT  APPLICABLE.  Notwithstanding  anything
contained in the  Agreement to the  contrary,  the terms and  conditions of this
Guaranty and all of Guarantor's  obligations  hereunder  shall not in any way be
limited by the  limitation of liability  provisions set forth in Section 12.1 of
the Agreement or in the Joinder to the Agreement.

21. DEBT  REMAINING  OUTSTANDING  AFTER  PAYMENTS AND  LIQUIDATION OF COLLATERAL
SHALL BE THAT GUARANTEED  HEREBY.  Guarantor agrees that any indebtedness  which
remains  owing  under the Loan  Documents  after  the  application  of  payments
received from Borrower or any other Borrower Party (or from Guarantor  under any
separate guaranty) and the application of proceeds received from the foreclosure
of the  Collateral  Documents  (or after  application  of the credit bids of the
Lender at the foreclosure sales), and other liquidation of the Collateral, shall
be deemed to be indebtedness  guaranteed  hereby; and Guarantor may not claim or
contend so long as any such indebtedness  remains  outstanding that any payments
received by Lender from Borrower or otherwise, or proceeds received by Lender on
the liquidation of the Collateral,  shall have reduced or discharged Guarantor's
liability or obligations  hereunder.  Nothing contained in this Section shall be
deemed to: (a) limit or  otherwise  impair any of the waivers or  agreements  of
Guarantor  contained in the  preceding  sections of this  Guaranty,  (b) require
Lender to proceed against Borrower or any Collateral before  proceeding  against
Guarantor (any such requirement having been specifically  waived),  or (c) limit
or otherwise impair any rights Lender would have in the absence of this Section.

22.  LIMITATION  ON  LIABILITY.  Except as otherwise  provided  below,  Lender's
recourse  hereunder  shall be limited to the Security  for this  Guaranty and no
members of Guarantor or any of their Affiliates or their  affiliated  companies,
officers,  directors,  shareholders,  members or any other Person,  disclosed or
undisclosed,  shall  be  personally  liable  for  the  repayment  of  any of the
Guaranteed  Obligations,  except that Guarantor and the Borrower Parties (to the
extent  provided  in, and subject to the terms of, the  Joinder  attached to the
Agreement) (but not The Goldman Sachs Group, Inc. and not any direct or indirect
general or limited partners or  shareholders,  members,  officers,  directors or
employees  of the general or limited  partners  in, or members of, the  Borrower
Parties which are not themselves  Borrower  Parties) shall be personally  liable
(1) for the portion of the outstanding  principal  balance of the Loan allocable
to the Nomura  Properties,  as  evidenced  by the  Adjusted  Loan Basis for such
Properties, and all accrued and unpaid interest, fees and other sums owing under
the Loan Documents which are  attributable to, or otherwise fairly allocable to,
such principal balance, (2) for the Guarantor's fraud (but only to the extent of
actual damages suffered by Lender caused by such fraud), (3) whether prior to or
after  an  Event  of  Default  for  the  Guarantor's   misappropriation   (I.E.,
application  in  violation  of  the  terms  of the  Agreement  which  have  been
incorporated  herein by reference) of insurance proceeds,  condemnation  awards,
Operating Cash Flow, Net Capital Proceeds, Lease Buy Out Consideration, Security
Deposits  and any other  amounts  required  to be held by  Borrower in escrow or
segregated  accounts pursuant to the terms of the Agreement and any other escrow
deposits,  but only to the extent of the amounts so  misapplied  and received by
such Borrower  Party,  (4) for all  Environmental  Liabilities  and Costs to the
extent  indemnifiable  under  Article  4 of the  Agreement  hereof  or under the
Hazardous  Substances  Indemnity  Agreement,  (5) for  failure to  maintain  any
insurance coverage required under the Agreement or any other Loan Document,  and
(6) a breach of the  representations and warranties set forth in Section 6.18 of
the Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

     IN WITNESS WHEREOF, Guarantor has duly executed this Guaranty as of the day
and year first above written.

GUARANTOR:

WWG 401 NORTH WASHINGTON LLC, a Delaware limited liability company

By:   Wellsford/Whitehall Holdings, L.L.C., a Delaware limited liability
      company

      By:  Wellsford/Whitehall Properties II, L.L.C., a Delaware limited
           liability company, its managing member

           By:  Wellsford/Whitehall Group, L.L.C., a Delaware limited
                liability company, its sole member

                By:   WP Commercial, L.L.C., a Delaware limited
                      liability company, its manager

                        By:      /s/ Alan Kava
                                 -------------
                        Name:   Alan Kava
                        Title:  Authorized SignatoryHAZARDOUS SUBSTANCES INDEMNITY AGREEMENT

THIS HAZARDOUS  SUBSTANCES  INDEMNITY AGREEMENT (this  "AGREEMENT"),  made as of
June 25,  2001 by  WELLSFORD/WHITEHALL  HOLDINGS,  L.L.C.,  a  Delaware  limited
liability company ("BORROWER"),  having an office at c/o WP Commercial,  L.L.C.,
26 Main Street,  Chatham,  New Jersey 07928l,  WWG 401 NORTH  WASHINGTON  LLC, a
Delaware  limited  liability  company  ("WWG  401"),  having an office at c/o WP
Commercial,    L.L.C.,   26   Main   Street,    Chatham,   New   Jersey   07928,
WELLSFORD/WHITEHALL GROUP, L.L.C., a Delaware limited liability company ("WWG"),
and  WELLSFORD/WHITEHALL  PROPERTIES II, L.L.C.,  a Delaware  limited  liability
company (collectively with WWG, "WELLSFORD/WHITEHALL"),  having an office at c/o
Wellsford Real Properties,  Inc., 535 Madison Avenue,  26th Floor, New York, New
York 10022, for the benefit of GENERAL ELECTRIC CAPITAL CORPORATION,  a New York
corporation  ("LENDER"),  having  an office at 292 Long  Ridge  Road,  Stamford,
Connecticut 06927. Borrower and Wellsford/Whitehall are collectively referred to
herein as "INDEMNITORS".

                              W I T N E S S E T H:
                              -------------------

WHEREAS,  contemporaneously  with the execution of this Agreement,  Borrower, as
maker, has executed and delivered to Lender,  as payee, a promissory note in the
original principal amount of up to  $352,600,000.00  (the "NOTE") in evidence of
the loan made by Lender to Borrower in such amount (the "LOAN") pursuant to that
certain Loan Agreement, dated as of the date hereof, between Borrower and Lender
(the "LOAN AGREEMENT"); and

WHEREAS,  the Loan is secured in part by the direct and  indirect  interests  of
Borrower and WWG 401 in and to the Properties (as defined in the Loan Agreement)
(collectively, the "PREMISES"); and

WHEREAS,  Lender  has  required,  as a  condition  of  funding  the  Loan,  that
Indemnitors  indemnify  and  hold  Lender  harmless  against  and  from  certain
obligations  for which Lender may incur  liability with respect to the Premises,
by reason of the threat or  presence  of any  Hazardous  Materials  (hereinafter
defined) at or near any of the Premises.

NOW THEREFORE, in consideration of the foregoing premises, Ten Dollars ($10.00),
and other  good and  valuable  consideration  from  Lender to  Indemnitors,  the
receipt and sufficiency of which are hereby acknowledged, Indemnitors, intending
to be legally bound, hereby agree as follows:

11 Recitals. The foregoing recitals are incorporated into this Agreement by this
reference.

12 Definitions.

(0) "ENVIRONMENTAL LAWS" means all Laws, now or hereafter in effect, and in each
case as  amended  or  supplemented  from  time to  time,  and  any  judicial  or
administrative  interpretation  thereof,  including any  applicable  judicial or
administrative  order,  consent  decree or judgment,  relative to the applicable
Premises,  relating to the  regulation  and  protection of the  environment  and
natural resources (including ambient air, surface water, groundwater,  wetlands,
land surface or subsurface  strata,  wildlife,  aquatic species and vegetation).
"Environmental  Laws"  shall  include  Comprehensive   Environmental   Response,
Compensation,  and Liability Act of 1980, as amended (42 U.S.C.ss. 9601 et seq.)
("CERCLA");  the Hazardous  Material  Transportation  ------ Act, as amended (49
U.S.C.ss.  1801 et seq.); the Federal  Insecticide,  Fungicide,  and Rodenticide
Act, as amended ------ (7 U.S.C.ss.  136 et seq.); the Resource Conservation and
Recovery Act, as amended (42 U.S.C.ss. 6901 et seq.) ------ ------ ("RCRA"); the
Toxic Substance  Control Act, as amended (15 U.S.C.ss.  2601 et seq.); the Clean
Air Act,  as amended  ------  (42  U.S.C.ss.  740 et seq.);  the  Federal  Water
Pollution  Control  Act, as amended (33  U.S.C.ss.  1251 et seq.);  those ------
------  portions  of the  Occupational  Safety and Health  Act,  as amended  (29
U.S.C.ss.  651 et seq.) ("OSHA") concerning ------ Hazardous Materials;  and the
Safe Drinking Water Act, as amended (42 U.S.C.ss. 300f et seq.), and any and all
------  regulations  promulgated  thereunder,  and all analogous state and local
counterparts  or  equivalents  and  any  environmental   transfer  of  ownership
notification  or  approval  statutes  such as the  New  Jersey  Industrial  Site
Recovery Act (N.J. Stat. Ann.ss. 13:1K-6 et seq.) ("ISRA"). ------

(1)  "ENVIRONMENTAL  LIABILITIES  AND  COSTS"  means,  as  to  any  Person,  all
liabilities, obligations,  responsibilities,  Remedial Actions, losses, damages,
punitive  damages,  consequential  damages,  treble damages,  costs and expenses
(including  all  fees,  disbursements  and  expenses  of  counsel,  experts  and
consultants  and  costs  of  investigation  and  feasibility  studies),   fines,
penalties,  sanctions  and interest  incurred as a result of any claim or demand
pending or  threatened by any other  Person,  whether  based in contract,  tort,
implied or express  warranty,  strict  liability,  criminal or civil  statute or
common law (including any thereof arising under any  Environmental  Law, permit,
order or agreement  with any  Governmental  Authority or other Person) and which
relate to any environmental  condition  regulated under any Environmental Law or
in  connection  with any other  environmental  matter or a Release or threatened
Release in connection with any of the Premises.

(2) "GATEWAY TOWER PREMISES" means the Gateway Tower Property, as defined in the
Loan Agreement.

(3) "HAZARDOUS  MATERIALS" means (a) petroleum or chemical products,  whether in
liquid,  solid,  or gaseous  form, or any fraction or  by-product  thereof,  (b)
asbestos or asbestos-containing materials, (c) polychlorinated biphenyls (pcbs),
(d) radon gas, (e) underground  storage tanks,  (f) any explosive or radioactive
substances, (g) lead or lead-based paint, or (h) any other substance,  material,
waste or mixture which is or shall be listed,  defined, or otherwise  determined
by any  Governmental  Authority to be hazardous,  toxic,  dangerous or otherwise
regulated, controlled or giving rise to liability under any Environmental Laws.

(4) "RELEASE" means, as to any Person, any release,  spill,  emission,  leaking,
pumping,  injection,  deposit,  disposal,  discharge,   dispersal,  leaching  or
migration of any Hazardous  Materials in violation of Environmental Law into the
indoor  or  outdoor  environment  or into or out of any  property  owned by such
Person,   including  the  movement  of  Hazardous   Materials  in  violation  of
Environmental  Law through or in the air, soil,  surface water,  ground water or
property, any disposal, any discharge,  spillage,  uncontrolled loss, seepage or
filtration of any Hazardous Materials in violation of Environmental Law.

(5) "REMEDIAL  ACTION" means all actions  required by  Environmental  Law to (i)
clean up, remove,  treat or in any other way address Hazardous  Materials in the
indoor or outdoor environment,  (ii) prevent the Release or threat of Release or
minimize the further  Release of  Hazardous  Materials so they do not migrate or
endanger  or  threaten  to  endanger  public  health or welfare or the indoor or
outdoor  environment,  or (iii) perform  pre-remedial studies and investigations
and post-remedial monitoring and care.

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

13 Representations  and Warranties.  As of the Closing Date, except as disclosed
in the reports listed on Schedule 4.2 of the Loan  Agreement,  to Borrower's and
WWG 401's  knowledge,  (1) no Hazardous  Material is now or was  formerly  used,
stored, generated, manufactured,  installed, disposed of or otherwise present at
or about any of the  Premises or any  property  adjacent to any of the  Premises
(except for cleaning and other products  currently  used in connection  with the
routine  maintenance  or  repair  of  such  Premises  in  full  compliance  with
Environmental Laws), (2) all permits,  licenses,  approvals and filings required
by Environmental  Laws have been obtained,  and the use, operation and condition
of the Premises  does not,  and did not  previously,  violate any  Environmental
Laws, and (3) no civil, criminal or administrative action, suit, claim, hearing,
investigation  or proceeding has been brought or been  threatened,  nor have any
settlements  been  reached  by or with  any  parties  or any  liens  imposed  in
connection  with  any  of  the  Premises   concerning   Hazardous  Materials  or
Environmental Laws, nor have any written notices concerning  Hazardous Materials
or  Environmental  Laws been  received  from any Person in  connection  with any
assets or activities of Borrower,  WWG 401 or the Nomura  Borrower or any of the
Premises.  Borrower further  represents and warrants that (i) neither  Borrower,
WWG 401, the Nomura Borrower nor, to its knowledge, any other party has been, is
or  will  be  involved  in  operations  at or  near  any of the  Premises  which
operations could lead to (A) the imposition of liability on Borrower, WWG 401 or
the  Nomura  Borrower,  or on  any  subsequent  or  former  owner  of any of the
Premises,  or (B)  the  creation  of a lien  on any of the  Premises  under  the
Environmental Laws or under any similar laws or regulations,  and (ii) Borrower,
WWG 401 have not permitted,  and will not permit,  any tenant or occupant of any
of the Premises to engage in any activity that could impose  liability under the
Environmental  Laws on Borrower or the Nomura Borrower or any other owner of any
of the Premises.

14       Covenants.

(0)  Borrower  and WWG 401 shall,  and shall  cause the Nomura  Borrower  to (i)
comply strictly and in all respects with the  requirements of the  Environmental
Laws and shall notify Lender within 10 days of  Borrower's,  WWG 401's or Nomura
Borrower's  obtaining  knowledge in the event of (A) any Release at, upon, under
or within any of the Premises,  or (B) discovery of any Hazardous  Materials at,
upon,  under or within  any of the  Premises  where  such  discovered  Hazardous
Materials  may result in  Environmental  Liabilities  and Costs and (ii) forward
promptly to Lender  copies of all orders,  notices,  permits,  applications  and
other  communications  and  reports  Borrower,  WWG 401 or the  Nomura  Borrower
receives  in  connection  with any  Release  or the  presence  of any  Hazardous
Materials or any other matters relating to the Environmental Laws, as all of the
above may affect any of the Premises or any other  properties owned by Borrower,
WWG 401 or the Nomura Borrower.

(1) To the extent that Lender reasonably  believes that circumstances exist that
require additional environmental testing to be performed on any of the Premises,
promptly upon the written request of Lender from time to time,  Borrower and WWG
401  shall  provide  Lender,  at  Borrower's  and  WWG  401's  expense,  with an
environmental  site  assessment  or  environmental  audit report  prepared by an
environmental  engineering firm mutually  acceptable to Lender and Borrower,  to
assess with a  reasonable  degree of  certainty  the  presence or absence of any
Hazardous  Materials and the potential  costs in connection with Remedial Action
of any Hazardous Materials found on, under, at or within such Premises.

15       Indemnity.

(0)  Indemnitors  shall at all times  indemnify and hold harmless Lender against
and from any and all Environmental  Liabilities and Costs,  including reasonable
attorneys'  fees,  litigation  costs and any costs of  settlement,  suffered  or
incurred by Lender, including those with respect to:

(1)  any  Release,  the threat of a Release  or the  presence  of any  Hazardous
     Materials affecting any of the Premises, whether or not the same originates
     or emanates from the Premises or any contiguous  real  property,  including
     any  loss  of  value  of any  of the  Premises  as a  result  of any of the
     foregoing;

(2)  any costs of Remedial  Action  incurred by the United States  Government or
     any  costs  incurred  by any  other  Person  or  damages  from  injury  to,
     destruction of, or loss of natural resources, including reasonable costs of
     assessing  such  injury,  destruction  or  loss  incurred  pursuant  to any
     Environmental Laws; and/or

(3)  liability  for  personal  injury  or  property  damage  arising  under  any
     statutory or common law tort  theory,  including  damages  assessed for the
     maintenance  of a public or private  nuisance or for the  carrying on of an
     abnormally dangerous activity at or near any of the Premises.

Notwithstanding  anything to the contrary  contained  herein,  Lender's recourse
hereunder shall be limited to the Collateral and the assets of Indemnitors  (but
not The Goldman Sachs Group, Inc., the Whitehall Parties,  Wellsford,  Wellsford
Commercial  Properties  Trust  or any  members  in,  or  members,  shareholders,
officers,   directors  or  employees   of,  WWG  or  any  members  in  WWG)  and
Wellsford/Whitehall's  liability hereunder shall be limited to the extent and in
the manner set forth in the Joinder to the Loan Agreement. Lender agrees to look
first to the assets of Borrower and WWG 401 in connection with the  satisfaction
of any claim or liability arising from this Agreement, but Lender shall have the
right to proceed against Wellsford/Whitehall and any of Borrower's other members
as stated above with respect to the liabilities  referenced  herein in the event
Borrower  disputes or denies such  liability or  otherwise  fails to hold Lender
harmless in accordance with the terms hereof. All  representations,  warranties,
indemnities  and  other  agreements  made  herein  by WWG 401  shall  be  deemed
applicable only with respect to the Gateway Tower Premises, since WWG 401 has no
ownership interest in the other Premises.

The  provisions of this Agreement  shall apply whether or not the  Environmental
Protection   Agency,  or  any  other  federal  agency  or  any  state  or  local
environmental  agency, has taken or threatened any action in connection with the
presence of any Hazardous  Materials.  Notwithstanding the foregoing or anything
else to the  contrary  in the  Loan  Documents,  in no event  shall  Indemnitors
indemnify  Lender  for any  Environmental  Liabilities  and Costs  caused by (i)
actions  taken solely and  negligently  by Lender,  its  successors  and assigns
(including  any  purchaser  at a  foreclosure  sale),  or (ii) the  presence  of
Hazardous  Materials  on any of the  Premises  which is brought on the  Premises
during the time that Lender or its successors or assigns  (including a purchaser
at a  foreclosure  sale) takes actual  physical  possession  and control of such
Premises (except to the extent caused by Indemnitors).

(1) In the event of any Release, the threat of a Release, or the presence of any
Hazardous  Materials,  where such may result in  Environmental  Liabilities  and
Costs,  affecting  any of the  Borrower  Properties,  whether  or not  the  same
originates  or emanates from any of the Borrower  Properties  or any  contiguous
real  property,  or if  Borrower or WWG 401 shall fail to comply with any of the
requirements of the Environmental Laws, Lender may at its election,  but without
the  obligation  so to do,  give  such  notices  and/or  cause  such  work to be
performed  and/or take any and all other actions as Lender shall reasonably deem
necessary in order to abate such Release,  remove the Hazardous Materials to the
extent  required  by the  Environmental  Laws,  cure  Borrower's  or  WWG  401's
noncompliance  with  Environmental Laws or take such steps as it deems necessary
to remove any lien imposed by federal or state authorities  under  Environmental
Laws.

16  Attorney's  Fees.  If Lender,  or someone on  Lender's  behalf,  retains the
services of any attorney in  connection  with the subject of  indemnity  herein,
Indemnitors  shall pay Lender's  reasonable  out-of-pocket  costs and reasonable
attorney's fees thereby incurred.  Lender may employ an attorney of Lender's own
choice.

17 Interest. In the event that Lender incurs any obligations,  costs or expenses
under this Agreement,  Indemnitors shall pay such obligations, costs or expenses
to Lender immediately on demand with interest thereon from the date of demand at
the Default Rate, until such amount, plus interest, is paid in full.

18 Joint and Several Liability.  If more than one Person executes this Agreement
as an Indemnitor, each such Person's obligations hereunder are joint and several
with each other and any other  Person now or hereafter  obligated in  connection
with  Indemnitors'  obligations  under the Loan Documents.  A separate action or
actions may be brought and prosecuted  against each  Indemnitor,  whether or not
action  is  brought  against  any other  Person,  and  whether  or not any other
Indemnitor or any other Person is joined in such action or actions.

19 Consent to  Jurisdiction.  Indemnitors  consent to the  exercise  of personal
jurisdiction  over Indemnitors by any federal or state court in the State of New
York, and waives any and all personal rights under the law of any other state to
object to  jurisdiction  within the State of New York for purposes of litigation
to enforce Indemnitors' obligations under this Agreement.

110 Notices. Except as otherwise provided herein, whenever it is provided herein
that any  notice,  demand,  request,  consent,  approval,  declaration  or other
communication  shall or may be given to or  served  upon any of the  parties  by
another,  or whenever  any of the parties  desires to give or serve upon another
any  communication  with respect to this  Agreement,  each such notice,  demand,
request,  consent,  approval,  declaration  or other  communication  shall be in
writing and either shall be delivered in person with receipt acknowledged,  by a
nationally  recognized overnight delivery service (such as Federal Express),  or
by registered or certified mail, return receipt requested,  postage prepaid,  or
telecopied and confirmed by telecopy answerback, addressed as follows:

If to Lender, at:        General Electric Capital Corporation
                         c/o GE Capital Realty Group, Inc.
                         16479 Dallas Parkway, Suite 600
                         Addison, Texas  75001-2512
                         Attn:    Asset Manager (Whitehall/Wellsford)
                         Telecopy Number:  (972) 447-2667

      with a copy to:    General Electric Capital Corporation
                         292 Long Ridge Road
                         Stamford, Connecticut  06927
                         Attn:    Kevin L. Korsh, Esq. (Whitehall/Wellsford)
                         Telecopy Number:  (203) 357-6768

If to Borrower, at:      Wellsford/Whitehall Holdings, L.L.C.
                         c/o WP Commercial, L.L.C.
                         26 Main Street
                         Chatham, New Jersey  07928
                         Attn:    Mr. Richard Previdi and Steven Jason, Esq.
                         Telecopy Number:  (973) 701-1115

      with a copies to:  Whitehall Street Real Estate Limited Partnership XI
                         85 Broad Street, 10th Floor
                         New York, New York  10004
                         Attn:    Chief Financial Officer
                         Telecopy Number:  (212) 357-5505

      and to:

                         Sullivan & Cromwell
                         125 Broad Street
                         New York, new York  10004
                         Attn:    Anthony Colletta, Esquire
                         Telecopy Number:  (212) 558-3588

If to WWG 401, at:       WWG 401 North Washington, L.L.C.
                         c/o WP Commercial, L.L.C.
                         26 Main Street
                         Chatham, New Jersey  07928
                         Attn:    Mr. Richard Previdi and Steven Jason, Esq.
                         Telecopy Number:  (973) 701-1115

      with a copies to:  Whitehall Street Real Estate Limited Partnership XI
                         85 Broad Street, 10th Floor
                         New York, New York  10004
                         Attn:    Chief Financial Officer
                         Telecopy Number:  (212) 357-5505

                         and to:

                         Sullivan & Cromwell
                         125 Broad Street
                         New York, New York  10004
                         Attn:    Anthony Colletta, Esquire
                         Telecopy Number:  (212) 558-3588

If to Wellsford/Whitehall, at:  c/o WP Commercial, L.L.C.
                         26 Main Street
                         Chatham, New Jersey  07928
                         Attn:    Mr. Richard Previdi and Steven Jason, Esq.
                         Telecopy Number:  (973) 701-1115

or at such  other  address  as may be  substituted  by  notice  given as  herein
provided.  The giving of any notice required  hereunder may be waived in writing
by the party  entitled to receive such notice.  Every notice,  demand,  request,
consent, approval,  declaration or other communication hereunder shall be deemed
to have been duly  given or  served on the date on which  personally  delivered,
with receipt acknowledged,  telecopied and confirmed by telecopy answerback,  or
the next Business Day if sent by a nationally  recognized  courier  service,  or
three (3) Business  Days after the same shall have been  deposited in the United
States  mail.  Failure  or delay in  delivering  copies of any  notice,  demand,
request,  consent,  approval,  declaration or other communication to the persons
designated  above  to  receive  copies  shall  in no way  adversely  affect  the
effectiveness of such notice, demand, request, consent, approval, declaration or
other communication.

111 Waivers.  Indemnitors waive trial by jury in any action brought on, under or
by virtue of this Agreement and waive any right to require Lender at any time to
pursue any remedy in Lender's power whatsoever.  The failure of Lender to insist
upon strict  compliance  with any of the terms hereof shall not be considered to
be a waiver of any such terms,  nor shall it prevent  Lender from insisting upon
strict  compliance  with this  Agreement or any other Loan Documents at any time
thereafter.

112 Severability.  If any clause or provision herein contained operates or would
prospectively  operate to invalidate  this  Agreement in whole or in part,  then
such  clause or  provision  shall be held for  naught as  though  not  contained
herein,  and the remainder of this Agreement shall remain  operative and in full
force and effect.

113  Inconsistencies  Among  the Loan  Documents.  Nothing  contained  herein is
intended to modify in any way the obligations of Indemnitors under the Note, any
Deed of Trust or any other Loan Documents.  Any  inconsistencies  among the Loan
Documents shall be construed,  interpreted and resolved so as to benefit Lender,
and Lender's  election of which  interpretation  or construction is for Lender's
benefit shall govern.

114  Successors  and  Assigns.   This  Agreement  shall  be  binding  upon  each
Indemnitor's  successors  and assigns,  and shall inure to the benefit of Lender
and its successors and assigns.

115 Capitalized  Terms. All capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Loan Agreement.

116  Controlling  Laws.  This  Agreement  shall be governed by, and construed in
accordance with, the laws of the State of New York.

117  Counterparts.  This Agreement may be executed in two or more  counterparts,
each of which  shall be  deemed  an  original  and all of which  together  shall
constitute a single instrument.

118 Incorporation of Suretyship Provisions. Wellsford/Whitehall hereby makes, in
favor of Lender, the waivers,  agreements and understandings as are set forth in
the Joinder to the Loan Agreement, and WWG 401 hereby makes, in favor of Lender,
the waivers, agreements and understandings as are set forth in the Gateway Tower
Guaranty, which waivers,  agreements and understandings are incorporated in this
Section 18 by this reference as though set forth in full herein.

119 Incorporation of Section 2.8. Section 2.8 of the Loan Agreement,  regarding,
the  representations,  warranties,  covenants or agreements in any Loan Document
regarding the Nomura Loan, the Nomura Properties, the Nomura Borrower and/or the
Nomura Loan  Documents,  is  incorporated  herein by this  reference,  and shall
supersede any conflicting provisions contained herein.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

     IN  WITNESS   WHEREOF,   Indemnitors  have  duly  executed  this  Hazardous
Substances Indemnity Agreement as of the day and year first above written.

     "BORROWER":

     WELLSFORD/WHITEHALL HOLDINGS, L.L.C., a Delaware limited liability
     company

     By:    Wellsford/Whitehall Properties II, L.L.C., a Delaware
            limited liability company, its managing member

            By:      Wellsford/Whitehall Group, L.L.C., a Delaware
                     limited liability company, its sole member

                     By:      WP Commercial, L.L.C., a Delaware limited
                              liability company, its manager

                              By:      /s/ Alan Kava
                                       -------------
                                       Name:   Alan Kava
                                       Title:  Authorized Signatory

     "WELLSFORD/WHITEHALL":

                    WELLSFORD/WHITEHALL   GROUP,   L.L.C.,  a  Delaware  limited
                    liability company

                    By:  WP Commercial,  L.L.C.,  a Delaware  limited  liability
                         company, its manager

                              By:      /s/ Alan Kava
                                       -------------
                                       Name:   Alan Kava
                                       Title:  Authorized Signatory

WELLSFORD/WHITEHALL PROPERTIES II, L.L.C., a Delaware limited liability company

     By:  Wellsford/Whitehall   Group,  L.L.C.,  a  Delaware  limited  liability
          company, its sole member

     By:  WP Commercial,  L.L.C.,  a Delaware  limited  liability  company,  its
          manager

                              By:      /s/ Alan Kava
                                       -------------
                                       Name:   Alan Kava
                                       Title:  Authorized Signatory

"WWG 401":

WWG 401 NORTH WASHINGTON, L.L.C., a Delaware limited liability company

     By:  Wellsford/Whitehall  Holdings,  L.L.C., a Delaware  limited  liability
          company

          By:  Wellsford/Whitehall  Properties  II, L.L.C.,  a Delaware  limited
               liability company, its managing member

               By:  Wellsford/Whitehall   Group,   L.L.C.,  a  Delaware  limited
                    liability company, its sole member

                    By:  WP Commercial,  L.L.C.,  a Delaware  limited  liability
                         company, its manager

                              By:      /s/ Alan Kava
                                       -------------
                                       Name:   Alan Kava
                                       Title:  Authorized Signatory

"LENDER":

GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation

By:   /s/ Paul St. Arnauld
      --------------------
      Paul St. Arnauld, Authorized Signatory

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