Document:

OPERATING AGREEMENT

                                       OF

                             PARK AT HIGHLANDS LLC,
                      A COLORADO LIMITED LIABILITY COMPANY

                              AS OF APRIL 27, 1995

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                                TABLE OF CONTENTS
                                -----------------

                                                                            Page
                                                                            ----

ARTICLE 1 - DEFINITIONS.....................................................  1

ARTICLE 2 - FORMATION OF COMPANY............................................ 14
         2.1           Formation............................................ 14
         2.2           Name................................................. 14
         2.3           Principal Place of Business.......................... 14
         2.4           Registered Office and Registered Agent............... 14
         2.5           Articles of Organization............................. 15
         2.6           Term................................................. 15

ARTICLE 3 - BUSINESS OF COMPANY............................................. 15
         3.1           Permitted Businesses................................. 15
         3.2           Other Activity or Business........................... 15

ARTICLE 4 - CAPITAL CONTRIBUTIONS, CAPITAL ACCOUNTS AND LOANS TO
         THE COMPANY........................................................ 15
         4.1           Capital Contributions................................ 15
         4.2           Withdrawal or Reduction of Members'
                       Contributions to Capital............................. 16
         4.3           Development Deficit Payments......................... 16
         4.4           Operating Deficit Payments........................... 16
         4.5           Additional Capital Contributions..................... 16
         4.6           Miscellaneous........................................ 16

ARTICLE 5 - INITIAL CLOSING; INFRASTRUCTURE LAND CLOSING;
         CONSTRUCTION LOAN CLOSING.......................................... 17
         5.1           Initial Closing...................................... 17
         5.2           Construction ........................................ 18
         5.3           Infrastructure Land Closing and Bond Financing
                       of Infrastructure.................................... 21
         5.4           Failure of Initial Closing or Construction Loan
                       Closing to Occur..................................... 22

ARTICLE 6 - DEVELOPMENT OF PROJECT; OPERATIONS PRIOR TO THE FINAL
         CLOSING DATE....................................................... 22
         6.1           Duties of Feld....................................... 22
         6.2           Construction Completion.............................. 24
         6.3           Development Deficit Guaranty......................... 24
         6.4           Operating Deficit Guaranty........................... 25
         6.5           Liabilities of the Company........................... 25
         6.6           Construction Contracts............................... 25
         6.7           Administration of the Construction Loan.............. 25
         6.8           Change Orders........................................ 26
         6.9           Retainage............................................ 26
         6.10          Agreements with Affiliates........................... 26
         6.11          Warranty by Feld..................................... 27
         6.12          Insurance............................................ 27
         6.13          Personal Obligation.................................. 29

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         6.14          Force Majeure........................................ 29
         6.15          Limitations of Feld's Authority...................... 29
         6.16          Pre-Existing Environmental Condition................. 29

ARTICLE 7 - COMPENSATION TO FELD............................................ 30
         7.1           Development Management Fee........................... 30
         7.2           Construction Management Fee.......................... 30
         7.3           Construction Loan Guarantee Fee...................... 30
         7.4           Cost Savings Fee..................................... 30
         7.5           Incentive Fee........................................ 30
         7.6           Conditions to Payment of Fees; Right of Offset....... 30

ARTICLE 8 - FINAL CLOSING................................................... 31
         8.1           Conditions to Final Closing.......................... 31
         8.2           Initiation of Final Closing.......................... 31
         8.3           Actions at the Final Closing......................... 31
         8.4           Certain Rights of Feld Upon Satisfaction of
                       Final Closing Funding Conditions..................... 32

ARTICLE 9 - ALLOCATIONS..................................................... 33
         9.1           Profits and Losses................................... 33
         9.2           General Provisions................................... 33
         9.3           Special Provisions................................... 33
         9.4           Code Section 704(c) Allocations...................... 35
         9.5           Allocations Relating to Taxable Issuance of
                       Interest............................................. 35

ARTICLE 10 - DISTRIBUTIONS.................................................. 35
         10.1          Cash Flow............................................ 36
         10.2          Division Among Members............................... 36
         10.3          Special Distributions to WPHC........................ 36

ARTICLE 11 - BOOKS, RECORDS, AND ACCOUNTING................................. 36
         11.1          Books and Records.................................... 36
         11.2          Reports.............................................. 36
         11.3          Tax Returns.......................................... 37
         11.4          Special Basis Adjustment............................. 37
         11.5          Tax Matters Partner.................................. 37
         11.6          Bank Accounts........................................ 38

ARTICLE 12 - MANAGEMENT..................................................... 38
         12.1          Management........................................... 38
         12.2          Number, Tenure and Qualifications.................... 38
         12.3          Appointment of Feld as Manager....................... 38
         12.4          Certain Powers of Managers........................... 38
         12.5          Member Approval of Certain Acts...................... 39
         12.6          Liability for Certain Acts........................... 40
         12.7          Indemnity of the Members and the Managers............ 40
         12.8          Manner of Acting..................................... 40
         12.9          Informal Act by Managers............................. 40
         12.10         Participation by Electronic Means.................... 41
         12.11         Resignation.......................................... 41

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         12.12         Removal.............................................. 41
         12.13         Death or Disability of Feld.......................... 43
         12.14         Vacancies............................................ 43
         12.15         Prohibition Against Publicly Traded Partnership
                        .................................................... 43

ARTICLE 13 - REPRESENTATIONS, WARRANTIES AND COVENANTS...................... 43
         13.1          Representations and Warranties of Each Member........ 43
         13.2          Representations, Warranties and Covenants of
                       Feld................................................. 44
         13.3          General Representation............................... 47
         13.4          Survival; Indemnity.................................. 47

ARTICLE 14 - RIGHTS AND OBLIGATIONS OF MEMBERS.............................. 48
         14.1          Limitation of Liability.............................. 48
         14.2          Company Debt Liability............................... 49
         14.3          List of Members...................................... 49
         14.4          Company Books........................................ 49
         14.5          Priority and Return of Capital....................... 49
         14.6          Outside Activity..................................... 49

ARTICLE 15 - MEETINGS OF MEMBERS............................................ 50
         15.1          Annual Meeting....................................... 50
         15.2          Special Meetings..................................... 50
         15.3          Place of Meetings.................................... 50
         15.4          Notice of Meetings................................... 50
         15.5          Meeting of all Members............................... 50
         15.6          Record Date.......................................... 51
         15.7          Quorum............................................... 51
         15.8          Manner of Acting..................................... 51
         15.9          Proxies.............................................. 51
         15.10         Action by Members Without a Meeting.................. 51
         15.11         Voting by Ballot..................................... 52
         15.12         Waiver of Notice..................................... 52

ARTICLE 16 - TRANSFERABILITY; PUT-CALL PROVISIONS........................... 52
         16.1          Restrictions on Transferability...................... 52
         16.2          Put-Call Rights...................................... 52
         16.3          Calculation of Option Price.......................... 53
         16.4          Right of Offset...................................... 54
         16.5          Restrictions on Resignation.......................... 54
         16.6          Permitted WPHC Transfer.............................. 54

ARTICLE 17 - ADMISSION OF ADDITIONAL MEMBERS................................ 54

ARTICLE 18 - DISSOLUTION AND TERMINATION.................................... 55
         18.1          Dissolution.......................................... 55
         18.2          Effect of Filing of Dissolving Statement............. 55
         18.3          Distribution of Assets Upon Dissolution.............. 55
         18.4          Articles of Dissolution.............................. 56
         18.5          Filing of Articles of Dissolution.................... 56
         18.6          Winding Up........................................... 56

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         18.7          No Restoration of Deficit Capital Accounts........... 56
         18.8          Deemed Liquidation................................... 57
         18.9          Permitted Withdrawal by Feld......................... 57

ARTICLE 19 - MISCELLANEOUS PROVISIONS....................................... 57
         19.1          Statement of Intent of Parties....................... 57
         19.2          Notices.............................................. 58
         19.3          Application of Colorado Law.......................... 59
         19.4          Waiver of Action for Partition....................... 59
         19.5          Amendments........................................... 59
         19.6          Construction......................................... 59
         19.7          Headings............................................. 59
         19.8          Waivers.............................................. 59
         19.9          Time of the Essence.................................. 59
         19.10         Remedies for Default................................. 59
         19.11         Rights and Remedies Cumulative....................... 59
         19.12         Severability......................................... 60
         19.13         Heirs, Successors and Assigns........................ 60
         19.14         Counterparts......................................... 60
         19.15         Further Assurances................................... 60
         19.16         Entire Agreement..................................... 60

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THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN ACQUIRED FOR
INVESTMENT  AND HAVE NOT BEEN  REGISTERED  UNDER THE  SECURITIES ACT OF 1933, AS
AMENDED,  OR THE SECURITIES LAWS OF ANY STATE.  WITHOUT SUCH REGISTRATION,  SUCH
SECURITIES  MAY NOT BE SOLD OR OTHERWISE  TRANSFERRED  AT ANY TIME,  EXCEPT UPON
DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE MANAGERS OF
THE  COMPANY  THAT  REGISTRATION  IS  NOT  REQUIRED  FOR  SUCH  TRANSFER  OR THE
SUBMISSION  TO THE  MANAGERS  OF THE  COMPANY OF SUCH OTHER  EVIDENCE  AS MAY BE
SATISFACTORY  TO THE MANAGERS TO THE EFFECT THAT ANY SUCH  TRANSFER OR SALE WILL
NOT BE IN VIOLATION OF THE  SECURITIES  ACT OF 1933,  AS AMENDED,  OR APPLICABLE
STATE SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.

                             OPERATING AGREEMENT OF
                             PARK AT HIGHLANDS LLC,
                      A COLORADO LIMITED LIABILITY COMPANY

     THIS OPERATING  AGREEMENT is made as of the 27th day of April,  1995 by and
among AL FELD, an individual  ("Feld"),  and WELLSFORD PARK  HIGHLANDS  CORP., a
Colorado  corporation  ("WPHC"),  as the  members  of PARK AT  HIGHLANDS  LLC, a
Colorado limited liability company (the "Company").

     NOW  THEREFORE,  pursuant to the Act, the following  shall  constitute  the
Operating  Agreement  of PARK AT  HIGHLANDS  LLC, a Colorado  limited  liability
company.

                                    ARTICLE 1

                                   DEFINITIONS

     The  following  terms  used in this  Operating  Agreement  shall  have  the
following meanings (unless otherwise expressly provided herein):

     (a) "Accountants"  means Ernst & Young or such other accountant  engaged by
the Company with the unanimous consent of the Members.

     (b) "Act" means the version of the Colorado Limited  Liability  Company Act
adopted by the State of Colorado,  Colo. Rev. Stat.  ss.ss.7-80-101 to 7-80-913,
as amended from time to time.

     (c) "Adjusted Capital Account Deficit" with respect to any Member means the
deficit  balance,  if any, in such Member's Capital Account as of the end of any
Fiscal Year after giving effect to the following adjustments: (i) credit to such
Capital  Account  the sum of (A) any amount  which such Member is  obligated  to
restore to such Capital  Account  pursuant to any  provision of this  Agreement,
plus

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(B) an  amount  equal to such  Member's  share of  Partnership  Minimum  Gain as
determined under  Regulation  Section  1.704-2(g)(1)  and such Member's share of
Partner  Nonrecourse Debt Minimum Gain as determined  under  Regulation  Section
1.704-2(i)(5),  plus (C) any amounts which such Member is deemed to be obligated
to restore pursuant to Regulation Section  1.704-1(b)(2)(ii)(c);  and (ii) debit
to  such   Capital   Account  the  items   described  in   Regulation   Sections
1.704-1(b)(2)(ii)(d)(4), (5) and (6).

     (d)  "Affiliate"  means  any  Person  controlling  the  outstanding  equity
interests or profits interests of any other Person, any Person whose outstanding
equity interests are controlled by any other Person, or any Person  controlling,
controlled by, or under common control with any other Person.

     (e) "Agreement" shall mean this Operating  Agreement as originally executed
and as it may be amended from time to time.

     (f)  "Approved  Affiliate  Agreements"  shall have the meaning set forth in
Section 5.2.6 hereof.

         (g)  "Architect's  Agreement"  means the  agreement  to be entered into
between the Company and Feld Design, Inc.  ("Architect"),  an Affiliate of Feld,
at or prior to the Construction Loan Closing.

     (h) "Asset Value" with respect to any Company asset means:

     (i) The fair market value,  when  contributed,  of any asset contributed to
the Company by any Member;

     (ii)  The  fair  market  value on the  date of  distribution  of any  asset
distributed by the Company to any Member as consideration for an Interest in the
Company;

     (iii)The  fair market value of all Property at the time of the happening of
any of the following  events:  (A) the admission of a Member to, or the increase
of an Interest of an existing  Member in, the Company in exchange  for a Capital
Contribution;  or (B) the  liquidation of the Company under  Regulation  Section
1.704-1(b)(2)(ii)(g); or

     (iv) The Basis of the asset in all other circumstances.

     (i) "Bankruptcy  Event" with respect to the Company or any Member means any
one of:

     (A) Filing a voluntary  petition in bankruptcy or for reorganization or for
adoption of an arrangement under the Bankruptcy Code;

     (B) Making a general assignment for the benefit of creditors;

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     (C) The  appointment  by a court of a receiver  for all or a portion of the
property of the Company or for all or a portion of a Member's property having an
aggregate value in excess of $500,000;

     (D) The entry of an order for relief in the case of an involuntary petition
in bankruptcy; or

     (E) The  assumption  of custody or  sequestration  by a court of  competent
jurisdiction  of all or  substantially  all of the  Company's  or such  Member's
property, as appropriate.

     (j) "Basis" with respect to an asset means the adjusted  basis from time to
time of such asset for federal income tax purposes.

     (k) "Call  Option"  means  the call  option  of WPHC  with  respect  to the
Interest of Feld as described in Section 16.2.1 hereof.

     (l)  "Capital  Account"  means an  account  maintained  for each  Member in
accordance  with  Regulation  Sections  1.704-1(b)  and 1.704-2 and to which the
following provisions apply to the extent not inconsistent with such Regulations:

     (i) There  shall be  credited  to each  Member's  Capital  Account (A) such
Member's Capital Contributions; (B) such Member's distributive share of Profits;
(C) any items of income or gain specially allocated to such Member under Section
9.3 of this Agreement; and (D) the amount of any Company liabilities (determined
as provided in Code Section 752(c) and the  Regulations  thereunder)  assumed by
such Member or to which Property distributed to such Member is subject;

     (ii) There shall be debited to each Member's Capital Account (A) the amount
of money and the Asset Value of any Property distributed to such Member pursuant
to this Agreement; (B) such Member's distributive share of Losses; (C) any items
of expense or loss which are  specially  allocated to such Member under  Section
9.3 of this Agreement, and (D) the amount of liabilities (determined as provided
in Code Section 752(c) and the Regulations thereunder) of such Member assumed by
the Company or to which  Property  contributed  to the Company by such Member is
subject; and

     (iii) The  Capital  Account of any  transferee  Member  shall  include  the
appropriate  portion  of  the  Capital  Account  of the  Member  from  whom  the
transferee Member's Interest was obtained.

     (m) "Capital Contribution" means the amount of money and the Asset Value of
any  property  other  than money  contributed  to the  Company by a Member  with
respect to such Member's Interest in the Company.

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     (n)  "Capital  Contribution  Balance"  means with respect to any Member the
aggregate   Capital   Contributions   made  by  such  Member,   plus  an  amount
corresponding to interest thereon at an annual rate of twelve percent (12%) from
the date(s) such Capital  Contributions  are made until the Option Closing Date.
The parties acknowledge that the definition of Capital  Contribution  Balance is
only used in connection  with the  determination  of Fair Market Value of Feld's
Interest.

     (o) "Cash Flow" means the Operating Cash Flow and Sales or Refinancing Cash
Flow for any given period.

     (p)  "Code"  means  the  Internal  Revenue  Code of 1986,  as  amended,  or
corresponding provisions of subsequent superseding federal revenue laws.

     (q) "Company"  means PARK AT HIGHLANDS  LLC, a Colorado  limited  liability
company.

     (r) "Construction Consultant" means the Construction Consultant selected by
WPHC to monitor  construction on behalf of WPHC, or such other consultant as may
be selected by WPHC.

     (s) "Construction  Lender" means the maker of the Construction Loan, or its
successor and assigns in such capacity.

     (t)  "Construction  Loan" means the  Construction  Loan in the  anticipated
principal  amount of $35,000,000  to be made to the Company by the  Construction
Lender at the Construction Loan Closing.

     (u)  "Construction  Loan  Closing"  means the  closing of the  transactions
described in Section 5.2 hereof.

     (v)  "Construction   Loan  Closing  Date"  means  the  date  on  which  the
Construction Loan Closing occurs.

     (w) "Construction Loan Outside Date" has the definition given it in Section
5.2.4 hereof.

     (x) "Construction Procedures" means the requirements regarding construction
procedures set forth on Exhibit B attached hereto.

     (y) "Conversion  Date" means the later of (A) the date on which Substantial
Completion  has  occurred,  or  (B)  the  date  which  is  the  earlier  of  (i)
twenty-eight  (28) months from the  Construction  Loan Closing Date, or (ii) the
date upon which the construction period interest line item in the budget for the
Construction Loan has been exhausted.

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     (y) "Control" means the direct or indirect ownership of at least 50% of the
equity interests or profits interests of any other Person.

     (z) "Cost  Savings" means the positive  amount,  if any, by which the Total
Budgeted  Development Costs exceed the actual Development Costs incurred through
the Final Closing Date.

     (aa)  "Deposit  Agreement"  means the Deposit and  Contract  Administration
Agreement between WPHC and The Feld Company  regarding the Land Contract,  which
Deposit and Contract Administration Agreement is attached hereto as Exhibit C.

     (ab)  "Depreciation"  for any Fiscal  Year or other  period  means the cost
recovery  deduction  with  respect to an asset for such year or other  period as
determined for federal income tax purposes,  provided that if the Asset Value of
such asset differs from its Basis at the beginning of such year or other period,
depreciation   shall  be   determined   as   provided  in   Regulation   Section
1.704-1(b)(2)(iv)(g)(3).

     (ac) "Development Costs" means the direct or indirect costs paid or accrued
by the  Company  related  to  the  acquisition  of  the  Project  Land  and  the
development  of the  Project,  including  without  limitation:  (i) all costs of
construction  and  development  of the  Project;  (ii) all costs of causing  the
Project and its  operations  to comply with laws prior to the  Conversion  Date;
(iii) all real estate taxes, assessments and personal property taxes relating to
the period prior to the Conversion Date; (iv) all costs of insurance incurred by
or charged to the Company  relating to the period prior to the Conversion  Date;
(v) all fees paid to Feld or its Affiliates  (excluding the property  management
fee paid to The Feld Company  after the  Conversion  Date);  (vi) all  financing
costs relating to the period prior to the Conversion Date, including origination
fees,  reimbursement of expenses of the Construction Lender and interest;  (vii)
all costs of administration of the Company,  including legal and accounting fees
prior to or on the Final Closing Date;  (viii) all Operating  Expenses  incurred
prior to the  Conversion  Date; and (ix) costs of title  insurance  endorsements
deleting  the  mechanic's  lien  exception  from the  owner's  title  policy and
bringing the date of the owner's title policy down to the date of Final Closing.

     (ad) "Development Deficits" means the positive amount, if any, by which (a)
Development Costs exceed (b) the sum of the Capital Contributions of the Members
required  to  be  made  at  the  Initial  Closing,  the  Final  Closing  Capital
Contribution and the Net Operating Income for the period prior to the Conversion
Date.

     (ae)  "Development  Deficit  Payments" shall mean the  Development  Deficit
Payments to be paid by Feld pursuant to Section 6.3 of this Agreement.

<PAGE>

     (af) "Entity" means any general partnership,  limited partnership,  limited
liability  company,   corporation,   joint  venture,   trust,   business  trust,
cooperative or association,  or any governmental or quasi-governmental agency or
body.

     (ag) "Environmental Laws" means the Comprehensive  Environmental  Response,
Compensation  and  Liability  Act, 42  U.S.C.A.  Section  9601,  et.  seq.;  the
Hazardous Materials  Transportation Act, 49 U.S.C.A. Section 1801, et. seq.; the
Resource Conversation and Recovery Act, 42 U.S.C.A.  Section 6901, et. seq.; the
Toxic  Substances  Control Act, 15 U.S.C.A.  Section 2601, et. seq.; the Federal
Water  Pollution  Control Act, 33 U.S.C.A.  Section 1251, et. seq.; any Colorado
environmental  laws; or any successor to such laws (in existence on the date any
relevant  representation  is made or updated),  or any other  federal,  state or
local  environmental,   health  or  safety  statute,   ordinance,   code,  rule,
regulation,  order or decree  regulating,  relating to or imposing  liability or
standards   concerning  or  in  connection   with  hazardous  or  toxic  wastes,
substances,  material,  smoke,  gas or particulate  matter as now or at any time
hereafter  in  effect,  or any common law  theory  based on  nuisance  or strict
liability.

     (ah)  "Environmental  Reports"  means  the  Environmental  Site  Assessment
prepared by ATEC Associates dated March 16, 1994, concerning the Land.

     (ai) "Fair Market Value of Feld's Interest" means the following:

     (i) one percent (1.0%) of the  following:  (A) the fair market value of the
Partnership's  assets as  determined by the  Accountants  based on the books and
records of the Company and on a current appraisal of the Project,  minus (B) the
amount of the Company's debts and liabilities, including without limitation, any
debt encumbering the Project,  trade payables,  accrued expenses and adjustments
for any  reasonably  foreseeable  contingent  liabilities  as  determined by the
Accountants and accrued but unpaid  Incentive Fees and any other fees payable to
Feld,  minus (C) the  Infrastructure  Cost  allocable to the Project made on the
same basis that such  allocation  of  Infrastructure  Cost is made in connection
with the calculation of the Incentive Fee; minus

     (ii) the amount  determined as of the Option  Closing Date by which (A) one
percent (1.0%) of the aggregate Capital  Contribution  Balances of Feld and WPHC
exceeds (B) the Capital Contribution Balance of Feld.

     (aj) "Final  Closing"  means the closing of the  transactions  described in
Article 8 hereof.

     (ak) "Final Closing Date" means the date on which the Final Closing occurs.

<PAGE>

     (al) "Final Closing Capital Contribution" means the Capital Contribution to
be made by WPHC pursuant to Section 4.1.2(b) hereof, when, as and if required by
this Agreement.

     (am)  "Final  Closing  Funding  Conditions"  means  the  conditions  to the
obligations  of WPHC to make  the  Final  Closing  Capital  Contribution,  which
conditions are set forth on Exhibit D attached hereto.

     (an) "Final  Completion" means the lien-free  completion of construction of
the improvements in accordance with the Plans and  Specifications  (subject only
to minor and  inconsequential  field changes and other  changes  consented to by
WPHC),  including without limitation,  completion or correction of all punchlist
items and seasonal items such as landscaping to the reasonable  satisfaction  of
WPHC, payment and release of all liens of subcontractors, materialmen, and other
providers of labor, equipment,  material and/or services to the Property and the
Project as evidenced by the receipt of all unconditional  lien releases from all
such  subcontractors,  materialmen and all other providers of labor,  equipment,
material and/or services to the Property and the Project, or in the event a lien
is being  contested,  the  posting by Feld of  collateral  in an amount and form
reasonably  satisfactory to WPHC,  which may include  providing a surety bond to
which the lien is transferred  and providing title  insurance  coverage  against
such liens.

     (ao) "Fiscal Year" means the taxable year of the Company for federal income
tax  purposes  as  determined   under  Code  Section  706  and  the  Regulations
thereunder.

     (ap) "Force  Majeure"  means acts of God,  strikes,  shortages  of labor or
materials,  weather  conditions  or other matters not  reasonably  within Feld's
control  ("Force  Majeure"),  except that under no  circumstances  shall lack of
available funds be considered an event of Force Majeure.

     (aq)  "Gross  Operating  Revenues"  shall mean,  with  respect to any given
period of time, all gross operating income and rental revenues actually received
by or paid to or for the account of the Company with  respect to the  ownership,
operation,  leasing and  occupancy of the  Project,  excluding  tenant  security
deposits paid under Leases but including, but not limited to, any and all of the
following:  (i)  rentals  paid by tenants  under  leases of space in the Project
("Leases");  (ii) late charges and interest paid by tenants under Leases;  (iii)
rents and receipts  from  vending  machines  and similar  items;  (iv) fees from
parking  garages  or  carports,  if  applicable;  and (v) cable  television  and
telephone revenues.

     (ar) "Hazardous  Materials" means without  limitation,  (i) asbestos or any
material composed of or containing asbestos or

<PAGE>

urea  formaldehyde  in any form and in any type; (ii)  polychlorinated  biphenyl
compounds;  (iii) oil hydrocarbons,  petroleum,  petroleum  products or products
containing  or  derived  from  petroleum;  (iv) any  hazardous  or toxic  waste,
substance,  material,  smoke, gas or particulate matter, as presently defined by
or for purposes of Environmental Laws.

     (as) "Incentive Fee" has the meaning set forth in Section 7.5 hereof.

     (at)  "Infrastructure"  means the interior street improvements,  utilities,
landscaping,  a perimeter wall and gate, a guardhouse, a recreational center and
amenities,  and a park  and  recreational  amenities  to be  constructed  on the
Infrastructure  Land,  as more  particularly  described  on  Exhibit E  attached
hereto.

     (au)   "Infrastructure   Costs"   means  the  actual  cost  of   acquiring,
constructing  and  developing  all  of  the  Infrastructure,  including  without
limitation the cost of the  Infrastructure  Land, design and engineering  costs,
construction  management fees,  general  contractor fees,  property taxes on the
Infrastructure Land prior to completion of the Infrastructure,  interest expense
on the  Infrastructure  Land and the  Infrastructure  at an assumed nine percent
(9.0%)  rate  of  interest  for  the  period  prior  to the  completion  of each
applicable  phase of the  Infrastructure.  Infrastructure  shall not include the
cost  of  issuance  of  bonds  to  finance  the  Infrastructure.  If  all of the
Infrastructure  has not been finally  completed at the time of  determination of
Infrastructure Costs due to phasing of the construction of Infrastructure or for
any other reason, then Infrastructure Costs shall include an amount equal to the
expected  amount  of   Infrastructure   Costs  upon  final   completion  of  the
Infrastructure as reasonably determined by WPHC.

     (av)  "Infrastructure  Land" means an approximately thirty (30) acre parcel
of the Land on which the Infrastructure improvements shall be constructed, which
parcel is described on Exhibit F attached hereto.

     (aw) "Infrastructure  Improvements  Agreement" has the meaning set forth in
Section 5.3.3 hereof.

     (ax) "Initial  Closing" means the closing of the transactions  described in
Section 5.1 hereof.

     (ay)  "Initial  Closing  Date" means the date on which the Initial  Closing
occurs.

     (az) "Interest" means the ownership  interest of a Member in the Company at
any particular time,  including the right of such Member to any and all benefits
to which such member may be entitled as provided in this  Agreement  or the Act,
together with the

<PAGE>

obligations  of such Member to comply with all the terms and  provisions of this
Agreement  and  the  Act.  Such  Interest  of  each  Member  shall,   except  as
specifically  provided  herein,  be the  percentage  of the  aggregate  of  such
benefits or obligations  specified in this Agreement as such Member's Percentage
Interest.

     (ba) "Land" means the parcel of land located in Douglas  County,  Colorado,
which parcel is described on Exhibit G attached hereto.

     (bb) "Land  Contract" means that certain Second Amended and Restated Vacant
Land Purchase and Sale  Agreement  dated March 23, 1995,  between  Mission Viejo
Company,  as Seller,  and The Feld  Company,  as  Purchaser,  as assigned to and
assumed by WPHC by that certain  Assignment and Assumption  Agreement - Purchase
Agreement dated May 2, 1995, and that portion of which relating to the Land will
be  assigned  to and  assumed by the  Company  by that  certain  Assignment  and
Assumption Agreement - Phase I dated May 2, 1995.

     (bc)  "Majority In Interest"  shall mean Members  holding a majority of the
Percentage Interests.

         (bd)  "Managers"  shall  mean  one  or  more  managers.   Specifically,
"Managers"  shall mean Feld or any other  Persons  that  succeed such Manager in
that  capacity.  Managers  need not be  residents  of the State of  Colorado  or
Members of the  Company.  References  to the Manager in the  singular or as him,
her,  it,  itself,  or other like  references  shall also,  where the context so
requires,  be  deemed  to  include  the  plural  or the  masculine  or  feminine
reference, as the case may be.

     (be) "Master Development" means a five-phase,  gated apartment community to
be constructed on the Master Development Land,  including a central 23-acre park
containing  a  clubhouse,   swimming  pool  and  health  club.  The  approximate
anticipated  number  of units  in each  phase of the  Master  Development  is as
follows: Phase I -- 456; Phase II -- 316; Phase III -- 320; Phase IV -- 436; and
Phase V -- 352, for a total of 1,880 units if fully developed.

     (bf)  "Master  Development  Land"  means the Land  described  on  Exhibit H
attached hereto,  which land is all of the land to be sold and conveyed pursuant
to the Land Contract.

     (bg) "Material  Default" means a default by Feld in any of its  obligations
hereunder  which in the  reasonable  judgment of WPHC has caused or is likely to
cause damages to WPHC of $250,000 or more.

     (bh)  "Members"  shall mean Feld and WPHC and each of the  parties  who may
hereafter become additional or substituted Members.

     (bi) "Minimum Option Price" means $50,000.

<PAGE>

     (bj) "Multi-Family  Project" shall mean an apartment  project,  condominium
project, town-home project or other multi-family residential project.

     (bk) "Net  Operating  Income"  means,  with  respect to any given period of
time, the aggregate  Gross  Operating  Revenue for such period of time minus the
aggregate  Operating  Expenses  for such  period  of time.  Notwithstanding  the
foregoing,  in  connection  with  the  calculation  of the  Incentive  Fee,  Net
Operating Income shall be determined on an accrual basis for the relevant period
with the  following  additional  adjustments:  if  property  taxes do not  fully
reflect  the  completion  of the  Project,  then  the  property  taxes  shall be
increased to the amount of property  taxes that would have been assessed had the
Project been completed and included in the calculation of the property taxes.

     (bl)  "Operating  Cash Flow" means with respect to any given period the Net
Operating  Income of the Company  actually  received  and  attributable  to such
period reduced by all debt service  charges and expenses  related to such period
and by  expenditures  required to be capitalized for federal income tax purposes
incurred during such period (other than Development Costs).

     (bm) "Operating Deficits" means, for any specified period, the greater of 0
or the following:  (A) the interest payments,  accruals and periodic charges and
expenses  on the  Construction  Loan for  such  period;  plus (B) the  aggregate
Operating  Expenses for such period of time;  minus (c) Gross Operating  Revenue
for such period of time.

     (bn) "Operating Deficit Payments" shall mean the Operating Deficit Payments
to be paid by Feld pursuant to Section 6.4 of this Agreement.

     (bo)  "Operating  Expenses"  shall mean with respect to any given period of
time all expenses of the Company in connection  with the  ownership,  operation,
leasing and occupancy of buildings in the Project,  which either are  rent-ready
or all or any portion of which are  occupied by  tenants,  attributable  to such
period of time as determined on an accrual basis,  excluding  interest  payments
and accruals on the Construction Loan but including, but not limited to, any and
all of the following: (i) general real estate taxes; (ii) special assessments or
similar charges; (iii) personal property taxes, if any; (iv) sales and use taxes
applicable to such  operating  expenses;  (v) cost of utilities for the Project;
(vi) maintenance and repair costs of the Project; (vii) operating and management
expenses and fees;  (viii)  premiums of insurance  carried on or with respect to
the  Project;  (ix) costs,  including  leasing  commissions,  advertisement  and
promotional  costs,  to obtain  leases and the cost of work  performed  to ready
space in the Project for occupancy  under leases;  (x)  accounting  and auditing
fees and costs,  attorneys' fees and other  administrative  and general expenses
and disbursements of the Company in connection with the ownership,

<PAGE>

operation,  leasing and management of the Project; (xi) expensed improvements in
accordance  with the accounting  practices of WRPT;  (xii) an allocable share of
the  costs  and  expenses  of  operating  and  maintaining  the  Infrastructure,
excluding  such costs and expenses that are paid by the owner of any other phase
of  the  Master   Development  or  are  paid  from  operating  reserves  of  the
Infrastructure  owner  established  in  connection  with  the  financing  of the
Infrastructure  (the method of  allocation  of such costs and expenses  shall be
agreed upon by the Members at or prior to the  Construction  Loan Closing);  and
(xiii) any other costs,  charges or expenses  incurred by the Company  which are
not Development Costs.

     (bp) "Option  Closing  Date" means the date on which the Call Option or the
Put Option shall close.

     (bq)  "Option  Price"  means the greater of the Fair Market Value of Feld's
Interest and the Minimum Option Price.

     (br) "Outside Date" means the date that is thirty-six (36) months following
the closing of the  Construction  Loan  Closing  Date.  Such Outside Date may be
extended by Force Majeure, but in no event by more than 120 days.

     (bs)  "Percentage  Interest" shall mean the following:  (i) with respect to
Feld, one percent  (1.0%);  and (ii) with respect to WPHC,  ninety-nine  percent
(99.0%).

     (bt)  "Person"  shall  mean  any  individual  or  Entity,  and  the  heirs,
executors,  administrators,  legal representatives,  successors,  and assigns of
such Person where the context so admits.

     (bu)  "Plans  and  Specifications"  means  the  for-construction  plans and
specifications   for  the   construction   of  the  Project,   which  plans  and
specifications  are to be prepared  and  approved by the Members as described in
Section 5.2.2 hereof.

     (bv) "Pre-Existing  Environmental Condition" means the presence, if any, of
Hazardous  Materials  on or about the Project  Land on the Initial  Closing Date
which at any subsequent time  constitutes a violation of  Environmental  Laws or
which  subjects or is reasonably  expected to subject the Company or its Members
or Managers to liability to any Person.

     (bw) "Pre-Existing  Environmental Condition Liability" means any liability,
loss,  damage or cost  incurred by the Company  prior to the Final  Closing Date
arising  from  a  Pre-Existing   Environmental   Condition,   including  without
limitation,  any increase in  Development  Costs or Operating  Expenses  arising
directly from a Pre-Existing Environmental Condition.

     (bx)  "Profits"  and  "Losses" for any Fiscal Year or other period means an
amount equal to the Company's taxable income or

<PAGE>

loss for such year or period  determined in accordance  with Code Section 703(a)
and the Regulations thereunder with the following adjustments:

     (i) All items of income,  gain, loss and deduction of the Company  required
to be stated separately shall be included in taxable income or loss;

     (ii) Income of the Company  exempt from federal income tax shall be treated
as taxable income;

     (iii)Expenditures  of the Company described in Code Section 705(a)(2)(B) or
treated as such expenditures under Regulation Section 1.704-1(b)(2)(iv)(i) shall
be subtracted from taxable income;

     (iv) The difference  between Basis and Asset Value shall be treated as gain
or loss upon the happening of any event  described in Article  1(h)(i),  (ii) or
(iii);

     (v) Gain or loss resulting from the disposition of Property from which gain
or loss is recognized for federal  income tax purposes shall be determined  with
reference to the Asset Value of such Property;

     (vi) Depreciation  shall be determined based upon Asset Value instead of as
determined for federal income tax purposes; and

     (vii)Items which are specially  allocated under Article 9 of this Agreement
shall not be taken into account.

     (by) "Project" means the 456-unit  apartment complex and related facilities
and amenities to be constructed on the Project Land in accordance with the Plans
and Specifications. Project does not include the Infrastructure.

     (bz) "Project  Budget" means the budget for construction and development of
the Project by the Company.  An "Initial  Project  Budget is attached  hereto as
Exhibit  I. As  described  in  Section  5.2.3  hereof,  in  connection  with the
Construction  Loan  Closing,  the Members  shall  agree upon the "Final  Project
Budget."

     (ca) "Project Land" means the Land excluding the Infrastructure Land.

     (cb)  "Property"  means  all  real  and  personal  property,  tangible  and
intangible, owned by the Company.

     (cc)  "Property   Management   Agreement"  means  the  Property  Management
Agreement  to be entered  into  between  the Company  and The Feld  Company,  an
Affiliate  of Feld,  in the form  attached  hereto as  Exhibit  J. The  Property
Management Agreement provides that it

<PAGE>

shall  terminate  on the first to occur of the  following:  (i) at the option of
either party,  upon the Removal of Feld;  and (ii) after the Final Closing Date,
upon 30 days' written notice of termination from one party to the other.

     (cd) "Put Option" means the put option of Feld with respect to the Interest
of Feld as described in Section 16.2.2 hereof.

     (ce)  "Regulations"  means the federal  income tax  regulations,  including
temporary (but not proposed) regulations, promulgated under the Code.

     (cf) "Removal" means the removal of Feld pursuant to Section 12.12 hereof.

     (cg) "Removal Event" has the meaning set forth in Section 12.12 hereof.

     (ch) "Restricted Party" has the meaning set forth in Section 14.6.4 hereof.

     (ci) "Sales or Refinancing Cash Flow" means, for any given period, the cash
proceeds  received  from  the  Company  from the  sale,  other  disposition,  or
refinancing of any or all of the Property  (including  payments of principal and
interest on obligations  received by the Company in connection with such sale or
other   disposition)  in  excess  of  amounts  necessary  to  discharge  Company
obligations with respect to such Property.

     (cj) "Substantial  Completion" means  satisfaction of all of the following:
(i) completion of  construction  of the Project in compliance with the Plans and
Specifications  (subject  only to minor and  inconsequential  field  changes and
other changes  consented to by WPHC, punch list items and seasonal items such as
landscaping  which do not  interfere  with the occupancy and use of the Project,
and  liens  of  subcontractors,  materialmen,  and  other  providers  of  labor,
equipment,  material and/or services to the Property and the Project not yet due
and  payable or for which  either a surety  bond or title  insurance  reasonably
acceptable to WPHC is provided by Feld),  as evidenced by temporary or permanent
certificate(s)  of  occupancy,  or the  equivalent,  issued  by  the  applicable
governmental  authority for all buildings  which are part of the Project,  which
permit the occupancy and use of all the apartment  units;  and (ii) each unit in
the Project having been made  rent-ready,  including,  without  limitation,  the
installation of all appliances (including, without limitation, refrigerators and
ranges),  light fixtures,  floor coverings and window coverings  required by the
Plans and  Specifications  or  otherwise  required for the use,  occupancy,  and
operation of the units.

<PAGE>

     (ck) "Substitute  Member" shall mean any Person who or which is admitted to
the Company as a substitute  Member pursuant to Colo.  Rev.  Stat.ss.7-80-702(2)
(1991), as it may be amended.

     (cl) "Total Budgeted  Development  Costs" means the Total Development Costs
as shown on the Final Project Budget.

     (cm) "WRPT" means  Wellsford  Residential  Property  Trust, a Maryland real
estate investment trust, which is an Affiliate of WPHC.

     (cn) "WPHC" means Wellsford Park Highlands Corp., a Colorado corporation.

                                   ARTICLE 2

                              FORMATION OF COMPANY

     2.1 FORMATION.  On April 27, 1995, the parties hereto organized the Company
as a Colorado limited liability company under and pursuant to the Act.

     2.2 NAME.  The name of the  Company  is Park at  Highlands  LLC, a Colorado
limited liability company.

     2.3 PRINCIPAL  PLACE OF BUSINESS.  The  principal  place of business of the
Company  within the State of Colorado  shall be 370  Seventeenth  Street,  Suite
3100, Denver,  Colorado 80202. The Company may locate its places of business and
registered  office at any other place or places as the Managers may from time to
time deem advisable.

     2.4 REGISTERED OFFICE AND REGISTERED AGENT. The Company's registered office
shall be at the office of its registered agent at 370 Seventeenth Street,  Suite
3100,  Denver,  Colorado 80202 and the name of its initial  registered  agent at
such address shall be Wellsford  Park Highlands  Corp., a Colorado  corporation.
The  registered  agent  shall  provide  promptly to the  Managers  copies of all
written notices,  summonses and other documents received by the registered agent
on behalf of the  corporation  (other than general  advertising  and promotional
materials)  and, in any event,  such copies  shall be provided not more than ten
(10) business days after receipt thereof by such registered  agent. The Managers
shall have no liability for the effects of any failure by the  registered  agent
to timely  deliver  any such  items to the  Managers  except to the  extent  the
Managers  had actual  notice of such items prior to  delivery by the  registered
agent.  In any  contracts,  subcontracts,  loan  agreements  or other  documents
entered into by the Company,  the Managers  shall provide that the addresses for
notice to be given

<PAGE>

under  any such  agreements  shall  include  both the  registered  agent and the
Managers.

     2.5  ARTICLES OF  ORGANIZATION.  The  Articles of  Organization  are hereby
adopted and  incorporated by reference into this Agreement.  In the event of any
inconsistency between the Articles of Organization and this Agreement, the terms
of the Articles of Organization shall govern.

     2.6 TERM.  The term of the Company shall be thirty (30) years from the date
of filing of Articles of  Organization  with the Secretary of State of the State
of Colorado,  unless the Company is earlier  dissolved in accordance with either
the provisions of this Agreement or the Act.

                                   ARTICLE 3

                               BUSINESS OF COMPANY

     3.1 PERMITTED BUSINESSES. The business of the Company shall be:

     3.1.1 To acquire the Land and to construct,  develop, own, operate, manage,
lease, finance, improve and sell or otherwise dispose of the Project; and

     3.1.2 To engage in all  activities  necessary,  customary,  convenient,  or
incidental to any of the foregoing.

     3.2 OTHER  ACTIVITY OR BUSINESS.  The Company shall not engage in any other
activity or business unless approved by all Members.

                                    ARTICLE 4

                     CAPITAL CONTRIBUTIONS, CAPITAL ACCOUNTS
                            AND LOANS TO THE COMPANY

     4.1 CAPITAL CONTRIBUTIONS. Subject to the provisions of this Agreement, the
Members shall be obligated to make the following  Capital  Contributions  to the
Company:

     4.1.1 CAPITAL  CONTRIBUTIONS  BY FELD. At the Initial  Closing,  Feld shall
make a Capital Contribution of $1,000.

     4.1.2 CAPITAL  CONTRIBUTIONS BY WPHC. WPHC shall make the following Capital
Contributions:

     (a) At the Initial Closing,  WPHC shall make a Capital  Contribution in the
amount of approximately $5,118,024,  which the Company shall use as follows: (i)
approximately $4,834,016 shall be used to fund the acquisition of the Land; and

<PAGE>

     (ii) approximately $284,008 shall be used to reimburse Feld as described in
Section 5.1.2. hereof.

     (b) At the Final Closing and contingent on satisfaction of all of the Final
Closing  Funding   Conditions,   WPHC  shall  make  the  Final  Closing  Capital
Contribution  in an  amount  equal  to the  following:  (i) the  Total  Budgeted
Development Costs, minus (ii) any Capital  Contributions made prior to the Final
Closing  Date by WPHC,  plus (iii) any  distributions  made to WPHC  pursuant to
Section 10.3 hereof,  minus (iv) an amount equal to fifty  percent (50%) of Cost
Savings.

     WRPT  shall  guaranty  the  obligation  of WPHC to make the  Final  Closing
Capital Contribution by executing the Guaranty attached hereto.

     4.2 WITHDRAWAL OR REDUCTION OF MEMBERS' CONTRIBUTIONS TO CAPITAL.

     4.2.1 A Member shall not receive out of the Company's  Property any part of
such Member's Capital Contributions in violation of the Act.

     4.2.2  A  Member,  irrespective  of the  nature  of such  Member's  Capital
Contribution,  has the right to demand and receive  only cash in return for such
Member's Capital Contribution and then only in accordance with the terms of this
Agreement.

     4.3 DEVELOPMENT  DEFICIT  PAYMENTS.  Feld shall have the obligation to make
Development  Deficit  Payments  when and as  required  under  Article  6 of this
Agreement.

     4.4  OPERATING  DEFICIT  PAYMENTS.  Feld shall have the  obligation to make
Operating  Deficit  Payments  when  and as  required  under  Article  6 of  this
Agreement.

     4.5 ADDITIONAL CAPITAL CONTRIBUTIONS. Except as expressly described in this
Article 4, no Member has an  obligation  to make any  Capital  Contributions  or
loans or advances to the Company.

     4.6 MISCELLANEOUS.

     4.6.1 NO INTEREST ON CAPITAL  CONTRIBUTION.  No Member shall be entitled to
or shall receive interest on such Member's Capital Contribution.

     4.6.2 NO  WITHDRAWAL  OF CAPITAL  CONTRIBUTION.  No Member may withdraw any
capital from the capital of the Company except as expressly  provided  herein or
under the Act.

<PAGE>

     4.6.3 NO PRIORITY OF RETURN OF CAPITAL  CONTRIBUTION.  No Member shall have
any  priority  over any other  Member with  respect to the return of any Capital
Contribution, except as expressly provided herein.

     4.6.4 NO THIRD PARTY  BENEFICIARIES.  The  provisions of this Article 4 are
not  intended  to be for the  benefit  of and shall not confer any rights on any
creditor or other  Person  (other than a Member in such  Member's  capacity as a
Member) to whom any debts, liabilities or obligations are owed by the Company or
any of the Members.

                                    ARTICLE 5

                  INITIAL CLOSING; INFRASTRUCTURE LAND CLOSING;
                            CONSTRUCTION LOAN CLOSING

     5.1 INITIAL CLOSING. The Members of the Company shall cooperate to cause an
Initial Closing at which the following shall occur:

     5.1.1 LAND CLOSING. The Company shall acquire the Land pursuant to the Land
Contract to be partially  assigned to the Company.  The Company  shall obtain an
Owner's Policy of Title Insurance from a title insurer acceptable to the Members
(the "Title Company") in accordance with the terms of the Land Contract.

     5.1.2 REIMBURSEMENT OF FELD EXPENSES.  At the Initial Closing,  the Company
shall reimburse Feld and its Affiliates for those costs and expenses incurred by
Feld and its  Affiliates  as set forth on  Exhibit  A  attached  hereto  and for
accrued  pre-development  costs  incurred  by Feld on or  prior  to the  Initial
Closing for which Feld has not previously been billed ("Reimbursable Expenses").
Feld  represents  and warrants that such Exhibit A and  additional  invoices and
schedules to be provided by Feld with respect to the balance of the Reimbursable
Expenses set forth and shall set forth the costs and expenses  actually incurred
by Feld in connection with the Project. Notwithstanding anything to the contrary
herein,  only those Reimbursable  Expenses which constitute actual,  third party
costs of Feld shall be paid at the Initial Closing.  Any  Reimbursable  Expenses
for in-house  architectural  services or other services  provided by Feld or The
Feld Company ("In House Reimbursable Expenses") shall be paid as follows: (i) if
and when a bond financing of the  Infrastructure  occurs,  then proceeds of such
bond financing shall be used to pay In House  Reimbursable  Expenses relating to
the  Infrastructure  only;  and (ii) if and  when a  Construction  Loan  Closing
occurs, the Company shall pay the In House Reimbursable Expenses,  including any
In House  Reimbursable  Expenses  related to the  Infrastructure  which were not
previously  paid.  In  connection  with any  request for the payment of In House
Reimbursable Expenses, Feld shall submit to WPHC for approval the

<PAGE>

following:  (i) detailed invoices setting forth the services  performed and work
delivered by Feld and its Affiliates; and (ii) receipts,  releases and documents
of transfer and  conveyance in connection  with the work  performed and services
provided as may be  reasonably  requested  by WPHC.  The payment of any In House
Reimbursable  Expenses shall be subject to the approval of WPHC,  which approval
shall not be unreasonably  withheld. If Feld is removed or withdraws as a Member
and a Construction  Loan Closing has not occurred by the date of such removal or
withdrawal,  then the Company  shall have no  obligation  to pay Feld,  The Feld
Company or their Affiliates for any In House  Reimbursable  Expenses.  Except as
set forth in this Section  5.1.2,  neither Feld nor The Feld Company  shall have
any right of reimbursement  from the Company with respect to any other costs and
expenses  incurred in connection  with the Project prior to the Initial  Closing
Date.

     5.1.3  APPROVAL OF LAND  DOCUMENTS.  The Company shall not proceed with the
Initial Closing unless and until the form of documents related to the closing of
the acquisition of the Land have been approved by all the Members.

     5.1.4 PLEDGE OF INTEREST.

     5.1.4.1 As collateral for the performance by Feld of its obligations  under
this Agreement,  at the Initial Closing Feld shall execute a Pledge and Security
Agreement in the form of Exhibit L attached  hereto,  wherein Feld grants WPHC a
first lien  security  interest  in Feld's  Interest in the Company and in Feld's
right to receive all fees,  payments and  distributions  from the  Company.  Any
uncured  default under this Agreement  shall  constitute an Event of Default (as
such term is defined in said Pledge and  Security  Agreement)  under said Pledge
and Security Agreement,  and any Event of Default under said Pledge and Security
Agreement shall be a default under this Agreement.

     5.1.4.2 As collateral for the  performance by WPHC of their  obligations to
make Capital  Contributions  as required  under this  Agreement,  at the Initial
Closing  WPHC  shall  execute a Pledge  and  Security  Agreement  in the form of
Exhibit M attached hereto, wherein it grants Feld a first lien security interest
in its  Interest in the  Company and in its right to receive all fees,  payments
and  distributions  from the Company.  Any uncured  default under this Agreement
shall constitute an Event of Default (as such term is defined in said Pledge and
Security Agreement) under said Pledge and Security  Agreement,  and any Event of
Default under said Pledge and Security  Agreement  shall be a default under this
Agreement.

     5.2 CONSTRUCTION PROCEDURES AND CLOSING.

     5.2.1 PREDEVELOPMENT ACTIVITIES.

<PAGE>

     5.2.1.1 Feld shall  pursue,  with  reasonable  diligence and subject to the
reasonable direction of WPHC, all approvals required to commence construction of
the  Project.  Subject to the input and  approval  of WPHC,  Feld shall  develop
appropriate  site  plans  and other  plans as may be  required  to  obtain  such
approvals.  Feld shall not submit any proposed  plans or other  materials to any
governmental agency without the prior approval of WPHC. In addition,  Feld shall
not incur any third  party  expense  without the prior  approval  of WPHC.  WPHC
agrees to  reasonably  cooperate  with Feld in obtaining  the  Approvals,  which
cooperation  shall  include,  without  limitation,  prompt review of any matters
submitted  to WPHC and prompt  response to Feld in  connection  with any matters
submitted to WPHC.  Copies of all  reports,  studies and other  information  and
material  generated for or on behalf of Feld in  connection  with its review and
evaluation  of the Property  shall  promptly be  delivered  to WPHC,  including,
without  limitation,  the  full  text of all  drawings,  reports  and  memoranda
supplied by engineers and other  consultants  and any  memoranda of  discussions
with governmental officials and neighborhood groups.

     5.2.1.2   Feld  shall   prepare  and  submit  to  WPHC  for  a  approval  a
pre-development   budget  for  the  activities  of  the  Company  prior  to  the
Construction  Loan  Closing  Date.  If and  when  WPHC  approves  in  writing  a
pre-development  budget,  Feld shall be  authorized to incur costs in accordance
with  such  pre-development  budget  and WPHC  shall be  obligated  to fund such
approved pre- development budget.

     5.2.2 PLANS AND SPECIFICATIONS.  Prior to the Construction Loan Closing and
after  consultation  with  WPHC,  Feld  shall  cause  to  be  prepared  detailed
construction  Plans and  Specifications  for the Project,  and shall submit such
Plans and  Specifications  to WPHC for  approval.  If and when WPHC approves the
Plans and  Specifications,  the Members shall initial a description of the Plans
and Specifications and attach the description to this Agreement as Exhibit N.

     5.2.3  PROJECT  BUDGET.  Prior to the  Construction  Loan Closing and after
consultation with WPHC, Feld shall cause to be prepared a revised Project Budget
based on the approved  Plans and  Specifications,  and shall submit such Project
Budget to WPHC for  approval.  If and when WPHC  approves  the  revised  Project
Budget,  the Members  shall  initial such  Project  Budget and attach it to this
Agreement as Exhibit O. Upon approval, such revised Project Budget shall for all
purposes be the "Final Project Budget."

     5.2.4  OBTAINING A  CONSTRUCTION  LOAN.  Feld shall use its best efforts to
cause the Company to obtain a Construction  Loan for construction of the Project
on terms and from a Construction  Lender  acceptable to the Members,  including,
but not  limited to, the  following:  (a) the  Construction  Loan amount must be
sufficient to

<PAGE>

reimburse WPHC at the Construction  Loan Closing for the acquisition cost of the
Project  Land  and  any  advances  it  made to the  Company  for  predevelopment
activities; (b) the interest rate shall be a variable rate equal to LIBOR plus a
spread reasonably  acceptable to the Members;  (c) the Construction Loan Closing
must take place on or before  October 31,  1995,  provided,  however,  such date
shall be  extended  to a date not  later  than  December  31,  1995,  if Feld is
diligently  pursuing his obligations  and if the delay is not  attributable to a
default by Feld (such date as it may be  extended  is  referred to herein as the
"Construction  Loan Outside  Date");  (d) Feld shall  personally  guarantee  the
Construction Loan if required by the Construction  Lender;  (e) the Construction
Loan shall have a maturity date of at least thirty-six (36) months from the date
of the  Construction  Loan Closing;  and (f) the other terms shall be reasonably
acceptable to WPHC.

     5.2.5  CONSTRUCTION LOAN DOCUMENTS.  The Company shall not proceed with the
Construction  Loan Closing unless and until the form of documents related to the
Construction  Loan and the Tri- Party  Agreement  have been  approved by all the
Members.  There shall be no  modification  to the  Construction  Loan  documents
without the prior written approval of all Members.

     5.2.6 APPROVED AFFILIATE  AGREEMENTS.  On or prior to the Construction Loan
Closing Date and only with the approval of all of the Members, the Company shall
enter into (a) a  construction  management  agreement  with Tricor  Construction
Company, an Affiliate of Feld ("Contractor"),  (b) a construction  contract with
Contractor,  and (c) the  Architect's  Agreement  with  Architect.  Except for a
reasonable  fee to be  paid  pursuant  to the  Architect's  Agreement  with  the
approval of WPHC, no fees or other compensation, profit or cost savings shall be
paid to Contractor under such agreements except the fees provided for in Article
7 below.  The Company  hereby agrees that  Contractor may enter into a landscape
design  contract  and an  interior  design  contract  with  Architect,  and  all
subcontracts  entered into by Contractor  and/or  Architect shall be included in
the  Final  Project  Budget,   but  such  subcontracts  shall  provide  for  the
subcontractor  to look only to  Contractor  or  Architect,  as  applicable,  for
payment under the subcontracts. Fees or other profit, compensation or sharing of
cost savings under such subcontracts shall not exceed the amount a prudent owner
would pay in a bona fide arm's length  transaction  after obtaining  competitive
bids. The agreements described in this Section 5.2.6, together with the Property
Management   Agreement,   are   hereinafter   called  the  "Approved   Affiliate
Agreements."  Neither Feld nor  Contractor  nor  Architect  shall enter into any
other agreements with parties  affiliated with Feld without specific  disclosure
to all Members in writing of such  affiliation and without prior written consent
of all the Members in each instance.  In the event of any conflict  between this
Agreement and such Approved Affiliate Agreements,  this Agreement shall control.
In the event of an uncured default by

<PAGE>

Feld under this Agreement, the Approved Affiliate Agreements shall be terminated
at the option of WPHC. An uncured  default by Feld under any Approved  Affiliate
Agreement  shall be a default  hereunder.  There shall be no modification to the
Approved Affiliate Agreements without the prior written approval of all Members.
Each Approved Affiliate  Agreement shall provide that the Company shall have the
right  to  terminate  such  agreement  upon the  Removal  of Feld  without  such
termination constituting a default.

     5.2.7 FELD GUARANTEE.  Feld shall personally  guarantee to the Construction
Lender the payment and  performance of all  obligations of the Company under the
Construction Loan, subject to such limitations on liability of Feld and guaranty
termination provisions that are acceptable to the Construction Lender.

     5.2.8 TRI-PARTY  AGREEMENT.  At the Construction Loan Closing, the Company,
the  Construction  Lender  and  WRPT  shall  enter  into a  Tri-Party  Agreement
containing the following  principal terms: (a) if the Construction  Loan has not
been paid in full by its maturity date, the  Construction  Lender shall have the
right to require that WRPT purchase the Construction Loan from the Lender, or at
WRPT's option,  cause the Construction Loan to be repaid;  (b) the obligation of
WRPT under the Tri-Party  Agreement shall be conditioned on timely  satisfaction
of all of the Final Closing Funding  Conditions;  and (c) the purchase price for
the Construction  Loan shall equal the lesser of the outstanding  balance of the
Construction Loan,  including accrued interest,  principal and other amounts due
thereunder or the amount of the Final Closing Capital Contribution.

     5.2.9 PROPERTY MANAGEMENT AGREEMENT.  At the Construction Loan Closing, the
Company  shall  enter  into  the  Property  Management  Agreement  with The Feld
Company, an Affiliate of Feld.

     5.3 INFRASTRUCTURE LAND CLOSING AND BOND FINANCING OF INFRASTRUCTURE. It is
the intent of the Members that the  Infrastructure  be acquired and developed by
an  entity  that  will  enable  the  financing  of  the   Infrastructure  to  be
accomplished by the issuance of tax-exempt bonds.

     5.3.1 SUBDIVISION OF THE LAND; SALE OF THE  INFRASTRUCTURE  LAND. After the
date hereof and prior to the  Construction  Loan Closing,  unless WPHC otherwise
agrees, Feld shall cause the Company to effect the legal subdivision of the Land
into not fewer than two legally separate  parcels.  At least one or more parcels
shall comprise the  Infrastructure  Land, and at least one or more parcels shall
comprise the Project Land.  At or prior to the  Construction  Loan Closing,  the
Company shall sell the Infrastructure Land and any improvements  located thereon
to an

<PAGE>

entity  designated by WPHC for a purchase price  designated by WPHC and on terms
designated by WPHC.

     5.3.2  CONTROL  OVER  MATTERS  RELATED TO  INFRASTRUCTURE.  Notwithstanding
anything to the contrary herein, WPHC shall have sole and exclusive control over
all decisions of the Company relating to the sale,  financing,  construction and
development  of the  Infrastructure.  In  connection  with the  financing of the
Infrastructure  and as directed by WPHC,  the Company shall cause the Land to be
included within a special assessment  district or similar district in connection
with the  financing of the  Infrastructure  and/or shall cause the Project to be
subject to special assessments,  general assessments and/or consensual liens. In
addition,  the Company  shall enter into such  agreements  as WPHC may  require,
which agreements obligate the Company to pay or reimburse the costs of operating
and maintaining the Infrastructure.

     5.3.3 CONSTRUCTION OF INFRASTRUCTURE. After the date hereof and at or prior
to the Construction  Loan Closing,  an Affiliate of Feld shall enter into one or
more agreements (collectively, the "Infrastructure Improvements Agreement") with
the  owner of the  Infrastructure  Land (or its  contractor)  to  construct  the
Infrastructure  for a guaranteed  maximum price,  including a fee to Feld not to
exceed  three   percent  (3%)  of  the  hard  costs  of   construction   of  the
Infrastructure.  A default by Feld in the performance of its  obligations  under
that  contract not cured within any  applicable  cure period shall  constitute a
default under this  Agreement.  WPHC may in its discretion  cause the phasing of
the construction of the Infrastructure  Improvements.  An initial budget for the
costs of acquisition and development of the Infrastructure is attached hereto as
Exhibit T.

     5.4 FAILURE OF INITIAL CLOSING OR CONSTRUCTION  LOAN CLOSING TO OCCUR. Feld
covenants  to  cause  the  Initial  Closing  to  occur  by May 15,  1995 and the
Construction Loan Closing to occur by the Construction Loan Outside Date. If for
any  reason  the  Initial  Closing  has not  occurred  by May 15,  1995,  or the
Construction  Loan  Closing has not  occurred by the  Construction  Loan Outside
Date,  then WPHC shall have the right to remove  Feld as a Member and Manager of
the Company in accordance with the provisions of Section 12.12.

                                    ARTICLE 6

                 DEVELOPMENT OF PROJECT; OPERATIONS PRIOR TO THE
                               FINAL CLOSING DATE

     6.1 DUTIES OF FELD. Feld shall have the authority,  duty and the obligation
to:

<PAGE>

     6.1.1 act on behalf of the Company in relation with any governmental agency
or authority,  the Construction  Lender,  and all contractors and subcontractors
with respect to all matters  relating to the construction and development of the
Project;

     6.1.2 use its best efforts to cause the Company to obtain a commitment  for
the Construction Loan on terms and conditions  acceptable to all the Members and
satisfy the conditions for the Construction Loan Closing;

     6.1.3   coordinate   with  Architect  the  preparation  of  the  Plans  and
Specifications,  ensure that the Plans and Specifications are in compliance with
all applicable codes,  laws,  ordinances,  rules and regulations,  and recommend
alternative solutions whenever design details affect construction feasibility or
schedules;

     6.1.4  negotiate  all  necessary   contracts  and   subcontracts   for  the
construction of the Project and monitor disbursement and payment of amounts owed
the Architect, Contractor and subcontractors;

     6.1.5 choose the products and materials necessary to equip the Project in a
manner which satisfies all requirements of the Construction Lender and the Plans
and Specifications;

     6.1.6  secure  all  building  code  approvals  and obtain  certificates  of
occupancy for all of the apartment units of the Project;

     6.1.7  cause the  Project to be  commenced  not more than  thirty (30) days
after the Construction Loan Closing,  or by such earlier date as may be required
under the Construction Loan documents, and completed in a prompt and expeditious
manner, consistent with good workmanship, and in compliance with the following:

     (a) the Plans and  Specifications as they may be amended in accordance with
the terms of this Agreement;

     (b) any and all zoning  regulations,  county ordinances,  including health,
fire and safety  regulations,  and any other requirements of federal,  state and
local laws, rules,  regulations and ordinances applicable to construction of the
Project;

     6.1.8  cause  to be  performed  in a  diligent  and  efficient  manner  the
following:

     (a) construction of the Project  pursuant to and in substantial  accordance
with the Plans and Specifications, free and

<PAGE>

clear (except as otherwise  permitted herein) of all mechanics and materialmen's
liens; and

     (b) general  administration and supervision of construction of the Project,
including but not limited to activities of  subcontractors  and their  employees
and agents,  and others employed as to the Project in a manner which complies in
all respects with the Construction  Loan, the Plans and  Specifications  and the
Construction Procedures;

     6.1.9  keep,  or cause  to be kept,  accounts  and cost  records  as to the
construction  of the Project and make available to WPHC,  during normal business
hours copies of all material contracts and subcontracts;

     6.1.10 provide regular  monitoring,  and periodically (at least monthly, or
more often if  requested  by any Member)  update the Project  construction  time
schedule  and  summarize  potential  variances  between  scheduled  and probable
completion dates, the schedule for work not started or incomplete;

     6.1.11  revise and refine  the  approved  estimate  of  Development  Costs,
incorporate  changes as they occur,  and develop cash flow reports and forecasts
as needed;

     6.1.12  develop and implement a system for review and  processing of change
orders as to construction of the Project;

     6.1.13  develop and implement a procedure for the review and  processing of
applications by subcontractors for progress and final payments; and

     6.1.14  record the  progress  of the Project  and submit  written  progress
reports to WPHC,  including  the  percentage  of  completion  and the number and
amounts of change orders.

     6.2  CONSTRUCTION  COMPLETION.  Feld hereby  unconditionally  covenants and
warrants  as  follows:  (i) the  Project  shall  be  constructed  in a good  and
workmanlike  manner and all work shall be performed in accordance with the terms
of Section  6.11  hereof;  (ii) Feld shall  fully and timely  perform all of its
other obligations under this Agreement;  and (iii) subject to Force Majeure,  it
shall  cause  (a)  Substantial   Completion  of  the  Project  to  occur  within
twenty-eight  (28) months after the  Construction  Loan Closing Date;  (b) Final
Completion  to occur  within  thirty (30)  months  after the  Construction  Loan
Closing Date; (c) all Final Closing Funding  Conditions shall be satisfied prior
to the Outside Date;  and (d) completion of the  Infrastructure  by the date set
forth and in accordance with the Infrastructure Improvements Agreement.

<PAGE>

     6.3 DEVELOPMENT DEFICIT GUARANTY. Feld hereby guarantees Feld shall advance
to or for the account of the Company amounts equal to all  Development  Deficits
at  such  time  as  such  Development   Deficits  occur  ("Development   Deficit
Payments").  Feld shall make Development Deficit Payments required of him by the
earlier of (A) the date required to avoid a default  under Company  obligations,
including without limitation the Construction Loan, and (B) the date required to
keep all sources of funding for the Project "in balance" as adequate  sources of
funds to timely cause Final  Completion of the Project and satisfaction of other
obligations of the Company. In any event, all Development Deficits shall be paid
by Feld in full  prior  to the  Final  Closing  Date.  All  Development  Deficit
Payments made to the Company shall be non-reimbursable  payments, and Feld shall
not be  entitled  to any  repayment  from the  Company  (unless  advances of the
Construction  Loan are later available to reimburse Feld for the same),  and the
Capital  Account of Feld shall not be affected by any Deficit  Payments  made by
Feld.  Without  limiting  the  generality  of the  foregoing,  Feld shall not be
entitled to reimburse himself for any Development Deficits.

     6.4 OPERATING DEFICIT  GUARANTY.  Feld hereby guarantees Feld shall advance
to or for the account of the Company amounts equal to all Operating Deficits, at
such time as such Operating Deficits occur ("Operating Deficit Payments").  Feld
shall make Operating  Deficit  Payments  required of him by the date required to
avoid a default under Company  obligations,  including  without  limitation  the
Construction  Loan  and  obligations  to  trade  creditors.  In any  event,  all
Operating  Deficits  shall be paid by Feld in full  prior to the  Final  Closing
Date.   All   Operating   Deficit   Payments   made  to  the  Company  shall  be
non-reimbursable  payments,  except to the extent that, subsequent to the making
of any such Operating Deficit Payment by Feld, there is sufficient Net Operating
Income prior to the earliest of the Final Closing Date,  the Outside Date or the
date of the Removal of Feld by WPHC to reimburse Feld for the same. In no event,
shall the Capital Account of Feld be affected by any Operating  Deficit Payments
made by Feld.  Notwithstanding anything to the contrary herein, upon the Removal
of Feld, Feld shall not have any obligation hereunder to fund Operating Deficits
incurred after the date of his Removal.

     6.5  LIABILITIES OF THE COMPANY.  Feld covenants that by the earlier of the
Final  Closing  Date or the  Outside  Date,  provided  WPHC  has  satisfied  its
obligation to make the Final Closing Capital Contribution,  Feld shall cause the
Company to have no unsatisfied debts or liabilities other than obligations under
service contracts and other agreements relating to the Project permitted by this
Agreement  related  to the  period  after the Final  Closing,  or related to the
period  prior to the Final  Closing if adequate  cash  reserves  are held by the
Company to pay such liabilities.

<PAGE>

     6.6 CONSTRUCTION  CONTRACTS.  Feld shall obtain and the Company shall enter
into such contracts,  agreements or  obligations,  as are necessary to construct
and  develop the  Project.  Feld shall not,  without the consent of WPHC,  which
consent shall not be unreasonably  withheld,  do or permit to be done any of the
following:

     6.6.1  Enter  into or cause the  Company  to enter  into any other  primary
contract relating to the construction of the Project; and

     6.6.2 Amend or modify any Approved Affiliate Agreements.

     6.7  ADMINISTRATION  OF THE  CONSTRUCTION  LOAN. Feld shall  administer the
Construction  Loan  on  behalf  of  the  Company  and  in  accordance  with  the
Construction Procedures. The Company shall engage the Construction Consultant to
monitor the progress of  construction of the Project and to review draw requests
on behalf of WPHC.  Feld shall  cooperate with the  Construction  Consultant and
shall  provide  access to the  Construction  Consultant  for  inspection  of the
construction work of the Project as it progresses. Feld shall approve and submit
Construction  Loan draw  requests  to the  Construction  Lender on behalf of the
Company,  which  requests  shall be  accompanied  by those items of  information
required by the  Construction  Lender and the Title Company.  Copies of all draw
requests  and of the monthly  construction  ledger  shall be  delivered  to WPHC
simultaneously  with delivery to the  Construction  Lender.  If the Construction
Consultant  determines  that a draw request is not  justified on a percentage of
completion basis and the draw would result in construction  funding being out of
balance  by an  amount  in  excess of  $250,000,  WPHC  shall  have the right to
disapprove  such draw request in its sole  discretion  unless Feld modifies such
draw  request  to  correspond  to  percentage  of  completion   and/or  makes  a
Development  Deficit Payment such that the Construction Loan shall not be out of
balance by more than $250,000.  After any such  disapproval of a draw request by
WPHC,  all  subsequent  draw requests  shall require the prior  approval of WPHC
unless and until such right to prior approval is waived in writing by WPHC.

     6.8  CHANGE  ORDERS.  No  change  orders  with  respect  to the  Plans  and
Specifications  may be made without the prior  written  consent of WPHC,  except
that Feld shall have the right to approve  minor change orders which comply with
the  Construction  Procedures,  do not have a  material  adverse  effect  on the
Project,  do not  increase  Total  Development  Costs,  do not reduce the amount
available from the Construction Loan for payment of interest on the Construction
Loan,  and do not exceed  $10,000 as to any one change  order or $350,000 in the
aggregate.  Unless expressly approved in writing by all Members, no change order
shall be permitted or

<PAGE>

approved  that would  cause total  Development  Costs to exceed  Total  Budgeted
Development Costs.

     6.9  RETAINAGE.  Feld  shall  cause all  agreements  with  contractors  and
subcontractors  to provide for retainages at levels  acceptable to  Construction
Lender  and the  release of  retainages  as set forth in the  Construction  Loan
documents as executed at the Construction Loan Closing.

     6.10  AGREEMENTS WITH  AFFILIATES.  Feld shall cause the Company to enforce
each  Approved  Affiliate  Agreement  to which the Company is a party as would a
prudent manager of a limited liability company,  and Feld shall cause each other
Approved  Affiliate  Agreement  to be enforced  in a prudent  manner and for the
benefit of the Company.  Feld hereby  agrees,  for himself and on behalf of each
Person affiliated with Feld that is a party to an Approved Affiliate  Agreement:
(i) in the  event  of any  conflict  between  this  Agreement  and any  Approved
Affiliate  Agreement,  this Agreement  shall  control;  (ii) in the event of any
uncured  material  default by Feld under this Agreement,  the Company shall have
the right to terminate any or all of the Approved Affiliate Agreements; (iii) an
uncured  default by Feld or any person  affiliated  with Feld under an  Approved
Affiliate Agreement shall constitute a default by Feld under this Agreement; and
(iv) Feld shall defend,  indemnify and hold the Company harmless with respect to
the  effects  of any  default  by any  Person  affiliated  with Feld  under such
Approved Affiliate  Agreements,  including,  without  limitation,  any mechanics
liens with respect to claims under any Approved Affiliate Agreements.

     6.11  WARRANTY  BY FELD.  If,  within  one (1) year after the date of Final
Completion  of the  Project,  any of the  structural  or  non-  structural  work
performed to construct the Project is found to be materially defective or not in
accordance in all material respects with the Plans and  Specifications  and with
all applicable  building codes, laws, rules and regulations,  Feld shall correct
or shall cause the construction contractor to correct such defect promptly after
receipt of written notice from WPHC to do so, unless WPHC has  previously  given
Feld specific written  acceptance of such defective  condition.  With respect to
portions of the work first performed after Final Completion,  this period of one
(1) year shall be extended by the period of time between  Final  Completion  and
the actual  performance  of the work.  The  obligation  under this Section shall
survive  acceptance of the work  performed to construct the Project.  WPHC shall
give such notice  promptly  after  discovery  of the  condition.  In the event a
material  defect is  discovered  more than one (1) year  after the date of Final
Completion,  as such period may be extended  under this Section  6.11,  and such
defect was known to Feld or a Person  affiliated with Feld and was not disclosed
to WPHC or was intentionally  concealed by Feld or such affiliated Person,  then
Feld shall promptly take such action as may

<PAGE>

be necessary at Feld's sole expense to correct such defective  work.  WPHC shall
report to Feld  within  thirty  (30) days  after  discovery  any such  defective
condition  discovered  more than one (1) year after  Final  Completion,  as such
period may be extended under this Section 6.11.  Nothing  contained herein shall
require Feld to correct  defective  work that is discovered  more than three (3)
years  following  Final  Completion,  as such period may be extended  under this
Section 6.11.

     6.12  INSURANCE.  Feld  shall  at all  times  keep in force  the  following
policies of insurance naming the Company as the insured:

     6.12.1 During the construction period (which ends on the date a certificate
of occupancy for each  building  comprising  the Project is issued),  "Builder's
Risk" insurance as required by the holder(s) of the Construction Loan;

     6.12.2  After  issuance of a  certificate  of occupancy  for each  building
comprising  the  Project,  all risk  property  and,  if  applicable,  boiler and
machinery  insurance  against  loss or damage  to the  Property  or the  Project
(including  contents)  including  but not limited to fire and extended  coverage
perils (but excluding flood and earthquake unless either or both are required by
the Construction  Lender) as WPHC may from time to time require, but in no event
less  than  one  hundred  percent  (100%)  of the full  replacement  cost of the
Property or the Project  without  deduction  for physical  depreciation,  or the
unpaid balance of any loans secured by the Property or the Project, whichever is
greater;

     6.12.3  After  issuance of a  certificate  of occupancy  for each  building
comprising  the  Project,  insurance  against the loss of "rental  value" of the
improvements  on a "rented or vacant  basis"  arising out of the perils  insured
against  pursuant to Section 6.12.2 above, in any reasonable  amount required by
WPHC but in no event less than 100% of one year's  gross  "rental  value" of the
improvements with co-insurance waived.  "Rental value" as used herein is defined
as the  sum of (A)  the  total  anticipated  gross  rental  income  from  tenant
occupancy  of the  Project,  (B) the amount of all  charges  which are the legal
obligation  of  tenants,  and (C) the fair  rental  value of any  portion of the
Project occupied by the Company, if any; and

     6.12.4 At all times,  (i)  commercial  general  liability  insurance  in an
amount of not less than Five Million  Dollars  ($5,000,000)  against  claims for
personal injury, death or property damage occurring on, in or about the Property
or the Project or arising  from or connected  with use,  conduct or operation of
the Company's  business in the amount from time to time  required by WPHC;  (ii)
automobile  liability  insurance  with a combined  single  limit of One  Million
Dollars  ($1,000,000);  and (iii) workers  compensation  coverage with statutory
limits and employers liability

<PAGE>

insurance  with  limits  of  One  Million  Dollars  ($1,000,000).   Any  workers
compensation  insurance shall be accompanied by a waiver of subrogation from the
insurer endorsed on the policy.

     All insurance  policies and renewals  thereof shall be in a form and issued
by insurers  acceptable to WPHC and shall provide for  deductibles not to exceed
$2,500.00.  WPHC and Feld (but only as long as Feld is a Manager and a Member of
the Company)  shall each be additional  named  insureds on all such policies and
renewals.  Feld hereby irrevocably  appoints WPHC as Feld's attorney in fact for
purposes of endorsing payments, submitting claims and otherwise dealing with all
such  insurance and the proceeds  thereof in the name,  place and stead of Feld,
such power of attorney to take effect  immediately upon  withdrawal,  Removal or
resignation  of Feld as Manager of the Company  and member of the LLC,  and Feld
agrees that such power shall be coupled with an interest  and shall  survive the
disability  or death of Feld.  Each  policy  shall  provide  that it will not be
modified or canceled without thirty (30) days prior written notice to WPHC. Feld
shall  promptly  furnish to WPHC all renewal  notices  and all  receipts of paid
premiums.  At least thirty (30) days prior to the  expiration  date of a policy,
Feld  shall  deliver  to WPHC a  renewal  policy in form  satisfactory  to WPHC,
together with a receipt showing payment of annual premiums. Any excess insurance
proceeds or refunds of insurance premiums shall be the property of the Company.

     6.13 PERSONAL OBLIGATION.  The obligations of Feld under this Agreement are
personal  recourse  obligations  of Feld,  as limited by Section  14.1.3 of this
Agreement, for which Feld shall be fully responsible to the Company and WPHC.

     6.14 FORCE  MAJEURE.  Feld shall not be liable for delay in  performance of
his obligations under this Agreement to the extent such failure or delay results
solely  from an event of Force  Majeure,  and in no event shall any delay for an
event of Force Majeure exceed one hundred twenty (120).

     6.15  LIMITATIONS  OF FELD'S  AUTHORITY.  Anything to the  contrary  herein
notwithstanding,  Feld  shall not have the power or  authority  to do any of the
following without the prior written consent of all the other Members:

     6.15.1 to commit any act contrary to the purpose of the Company;

     6.15.2 to refinance  the Project or incur any  indebtedness  other than the
Construction Loan;

     6.15.3 to enter  into any  agreements  with  affiliates  of Feld  except as
specified above;

<PAGE>

     6.15.4 to modify the Construction  Loan documents or any agreement with any
affiliate of Feld which previously was consented to by the other Members; or

     6.15.5 to sell or dispose of any portion of the Project.

     6.16  PRE-EXISTING   ENVIRONMENTAL  CONDITION  LIABILITY.  Feld  agrees  to
promptly  disclose  to WPHC in writing if it becomes  aware of any  Pre-Existing
Environmental  Condition  Liability.  If the  Company  incurs  any  Pre-Existing
Environmental Condition Liability, it shall use any available contingency in the
Project  Budget or any Cost Savings to satisfy such  Pre-Existing  Environmental
Condition  Liability.  If such  sources of funds are not adequate to satisfy the
Pre-Existing  Environmental Condition Liability,  then WPHC shall make a Capital
Contribution to the Company equal to one-half of the amount of the  Pre-Existing
Environmental Condition Liability which is then due and Feld shall make either a
Development Deficit Payment or an Operating Deficit Payment equal to one-half of
the  amount  of  such  Pre-Existing   Environmental  Condition  Liability.  This
provision  is solely for the benefit of the members  and no other  Person  shall
have  the  right  to  rely  on  or  enforce  this   provision.   A  Pre-Existing
Environmental  Condition  Liability  shall not be satisfied  from Net  Operating
Income.

                                    ARTICLE 7

                              COMPENSATION TO FELD

     In  consideration  of the  performance  by  Feld of his  obligations  under
Article 6 of this Agreement, the Company shall pay Feld or his designee the fees
described  in this  Article 7 at the time,  in the  manner  and  subject  to the
conditions set forth herein.

     7.1 DEVELOPMENT MANAGEMENT FEE. Feld shall receive a development management
fee equal to $1,000 per unit. Such  development  management fee shall be payable
from monthly draws on the Construction Loan, on a percentage of completion basis
as certified by the Construction Consultant.

     7.2  CONSTRUCTION  MANAGEMENT FEE.  Contractor shall receive a construction
management fee under the construction  management agreement to be executed at or
before the  Construction  Loan  Closing  equal to $2,000 per unit,  payable from
monthly  draws on the  Construction  Loan based on  percentage  of completion as
certified  by the  Construction  Consultant  as  certified  by the  Construction
Consultant, minus $49,000. All amounts paid to Contractor under the construction
management  agreement  described in Section 5.2.6 above shall be applied against
and reduce the amount due under this Section 7.2.

<PAGE>

     7.3 CONSTRUCTION LOAN GUARANTEE FEE. Feld shall receive a construction loan
guarantee  fee  equal  to  1.5%  of  the  final  committed  loan  amount  of the
Construction  Loan,  payable at the Construction Loan Closing from a draw on the
Construction Loan.

     7.4 COST  SAVINGS FEE. The  Partnership  shall pay Feld at Final  Closing a
cost savings fee equal to fifty  percent  (50%) of Cost  Savings,  if any.  Feld
shall submit to WPHC a proposed  calculation of the amount of the fee to be paid
under this  Section  7.4.  WPHC shall be entitled,  at its sole  discretion,  to
submit  such  calculation  to the  Company's  Accountants  for  verification  or
auditing prior to approving such calculation. For a period of twelve (12) months
after the Final  Closing  Date,  each  Member  shall have the right to cause the
recalculation  of the Cost Savings Fee and the  post-closing  adjustment  of the
amount of the Cost Savings  Fee, if such Member pays the costs of the  Company's
Accountants in making such  recalculation and if the amount of the adjustment is
in excess of $5,000.  No  post-closing  adjustment  shall be made for amounts of
$5,000 or less or based on a  recalculation  made more than  twelve  (12) months
after the Final Closing Date.

     7.5 INCENTIVE  FEE.  Feld shall receive an incentive  fee, to be calculated
and paid in accordance with Exhibit P attached hereto.

     7.6  CONDITIONS TO PAYMENT OF FEES;  RIGHT OF OFFSET.  Each payment of fees
described  in this  Article 7 shall be  conditioned  upon there being no uncured
event  of  default  by Feld  under  this  Agreement  or any  Approved  Affiliate
Agreement.  All fees except the  Incentive Fee and any fees paid pursuant to the
Infrastructure  Improvements  Agreement(s) will be included in the Final Project
Budget to be  approved  by WPHC.  With  respect to fees  payable  prior to Final
Closing,  if the Construction Loan does not provide a source of funding for such
fees, then payment of such fees shall be deferred until the later of the date(s)
the Construction Loan permits such funding or until the Final Closing.  All fees
payable to Feld  shall be  subject to a right of offset in favor of the  Company
and WPHC with  respect to any claims or damages  they may have  against Feld and
for any  Development  Deficits  and  Operating  Deficits.  In the  event  of the
withdrawal,  resignation or Removal of Feld as a Member and Manager prior to the
Final Closing Date, except in the case of Removal of Feld due to Feld failing to
provide a Construction Loan acceptable to all the Members, in which case no fees
shall have been  earned by or be due to Feld,  Feld shall be  entitled  to fees,
except the  Incentive  Fee,  fully  earned and  accrued  through the date of his
Removal when and as such fees are otherwise  payable pursuant to this Agreement,
subject to the  foregoing  right of offset and provided that WPHC has been fully
compensated  for its out of pocket  expenses with respect to the Project.  In no
event shall the Removal of Feld accelerate the due

<PAGE>

date for any fees earned by Feld during the period prior to his Removal.

                                    ARTICLE 8

                                  FINAL CLOSING

     8.1 CONDITIONS TO FINAL  CLOSING.  The obligation of WPHC to participate in
the Final  Closing  shall be  conditioned  on all of the Final  Closing  Funding
Conditions  being  satisfied  either prior to the Final Closing or  concurrently
with the Final Closing.  WPHC shall have the right,  but not the obligation,  to
waive one or more of the Final Closing Funding Conditions. Any Member shall have
the right to require an escrow  closing  to effect  the Final  Closing,  and the
other Members shall cooperate with regard to such escrow closing.

     8.2  INITIATION OF FINAL  CLOSING.  Upon ten (10) days prior written notice
from WPHC to Feld,  the Final  Closing  shall be held on the date  designated by
WPHC.  If WPHC has not  designated  a date for the Final  Closing by the Outside
Date,  upon ten (10) days  prior  written  notice  from Feld to WPHC,  the Final
Closing shall be held, the Final Closing shall be held on the date designated by
Feld,  provided such date for the Final Closing  designated by Feld shall be not
less than thirty-six (36) months after the Construction Loan Closing Date.

     8.3 ACTIONS AT THE FINAL  CLOSING.  Once the date for the Final Closing has
been  designated as provided  herein and provided that the Final Closing Funding
Conditions  have been satisfied by Feld, the Members shall  cooperate to cause a
Final Closing at which the following shall occur:

     8.3.1 WPHC shall fund its Final Closing Capital Contribution.

     8.3.2 The Company shall pay the Construction Loan in full or shall effect a
release of Feld from its guaranty of the Construction Loan.

     8.3.3 Any  accrued  and unpaid  fees due to Feld shall be paid,  excluding,
however the Incentive Fee.

     8.3.4 If  either  WPHC or Feld has  exercised  its (his)  option  under the
Put-Call  provisions  of Article 16 hereof,  the closing of the  transfer of the
Interest of Feld to WPHC shall occur.

     8.3.5 At the election of WPHC, the responsibility for maintaining insurance
coverage on the Project or any portion thereof may be transferred to WPHC.

<PAGE>

     8.4  CERTAIN  RIGHTS OF FELD UPON  SATISFACTION  OF FINAL  CLOSING  FUNDING
CONDITIONS.  At any time after Final  Completion and  satisfaction of all of the
other Final Closing  Funding  Conditions but prior to the Outside Date, Feld may
provide WPHC notice that all of the Final Closing  Funding  Conditions have been
satisfied  and that it is  prepared  to proceed  with the Final  Closing,  which
notice shall be accompanied by all documents  necessary to verify that the Final
Closing Funding Conditions have been satisfied.  Within fifteen (15) days of its
receipt of its notice,  WPHC shall notify Feld of the election of WPHC to do one
of the  following  by the date  that is  within  forty-five  (45) days of WPHC's
receipt of notice from Feld: (the "Release Date"): (i) WPHC shall participate in
the Final Closing and make its Final  Closing  Capital  Contribution;  (ii) WPHC
shall cause Feld to be released from its guaranty of the  Construction  Loan; or
(iii)  WPHC shall  deliver  to Feld an  indemnity  agreement  executed  by WRPT,
wherein  WRPT agrees to  indemnify  Feld  against any loss or  liability  it may
suffer as a guarantor of the  Construction  Loan,  provided  that such  guaranty
shall be subject to a right of offset in favor of WRPT and WPHC with  respect to
any  liability of WRPT to WPHC arising  under this  Agreement  (the form of such
indemnity agreement shall be reasonably acceptable to Feld). If all of the Final
Closing Funding  Conditions have been and remain  satisfied on the Release Date,
WPHC shall take the action specified in its notice to Feld.

                                    ARTICLE 9
                                   ALLOCATIONS

     9.1 PROFITS AND LOSSES.  Subject to the special  allocation  provisions  in
this Article 9, the Members' distributive shares of the Profits or Losses of the
Company for any Fiscal Year shall be as follows:

     9.1.1  PROFITS.  Profits  shall be  allocated  to each  Member  pro rata in
proportion with such Member's respective Percentage Interest.

     9.1.2  LOSSES.  Losses  shall  be  allocated  to each  Member  pro  rata in
proportion to such Member's respective Percentage Interest.

     9.2 GENERAL PROVISIONS.

     9.2.1  Except  as  otherwise  provided  in  this  Agreement,  the  Members'
distributive  shares of all items of Company income,  gain,  loss, and deduction
are the same as their distributive shares of Profits and Losses.

<PAGE>

     9.2.2 The Managers shall allocate Profits, Losses, and other items properly
allocable to any period  using any method  permitted by Code Section 706 and the
Regulations thereunder.

     9.2.3 To the extent permitted by Regulations Section 1.704-2(h) and Section
1.704-2(i)(6),  the Managers shall endeavor to avoid treating  distributions  of
Operating  Cash Flow and of Sales and  Refinancing  Cash Flow as being  from the
proceeds of a Nonrecourse Liability or a Partner Nonrecourse Debt (as defined in
Regulation Sections 1.704-2(b)(3) and 1.704-2(b)(4), respectively).

     9.2.4 If there is a change in any Member's Interest in the Company during a
Fiscal Year, each Member's  distributive  share of Profits or Losses or any item
thereof for such Fiscal Year,  shall be determined  by any method  prescribed by
Code Section 706(d) or the  Regulations  thereunder  that takes into account the
varying Interests of the Members in the Company during such Fiscal Year.

     9.2.5 The  Members  agree to  report  their  shares of income  and loss for
federal income tax purposes in accordance with the provisions of this Agreement.

     9.3 SPECIAL PROVISIONS.

     9.3.1 MINIMUM GAIN CHARGEBACK.  Notwithstanding any other provision of this
Article 9, if there is a net decrease in Partnership Minimum Gain (as defined in
Regulation Section 1.704-2(d)) during any Fiscal Year, then each Member shall be
allocated such amount of income and gain for such year (and subsequent years, if
necessary)  determined  under and in the manner  required by Regulation  Section
1.704-2(f)  as  is  necessary  to  meet  the  requirements  for a  minimum  gain
chargeback as provided in that Regulation.

     9.3.2 PARTNER NONRECOURSE DEBT MINIMUM GAIN CHARGEBACK. Notwithstanding any
other  provision  of this  Article 9, except  Section  9.3.1,  if there is a net
decrease in Partner Nonrecourse Debt Minimum Gain (as defined in accordance with
Regulation Section 1.704-2(i)(3)) attributable to a Partner Nonrecourse Debt (as
defined in Regulation Section  1.704-2(b)(4)) during any Fiscal Year, any Member
who has a share of the Partner  Nonrecourse  Debt Minimum Gain  attributable  to
such Partner  Nonrecourse Debt determined in accordance with Regulation  Section
1.704-2(i)(5),  shall be allocated  such amount of income and gain for such year
(and subsequent years, if necessary) determined under and in the manner required
by Regulation Section 1.704-2(i)(4) as is necessary to meet the requirements for
a  chargeback  of Partner  Nonrecourse  Debt Minimum Gain as is provided in that
Regulation.

     9.3.3  QUALIFIED  INCOME  OFFSET.  If a Member  unexpectedly  receives  any
adjustment, allocation or distribution described in

<PAGE>

Regulation Section 1.704-1(b)(2)(ii)(d)(4),  (5) or (6), items of Company income
and gain shall be specifically  allocated to such Member in an amount and manner
sufficient to eliminate, to the extent required by the Regulations, the Adjusted
Capital Account Deficit of such Member as quickly as possible,  provided that an
allocation  pursuant  to this  Section  9.3.3  shall be made  only if and to the
extent that such Member would have an Adjusted Capital Account Deficit after all
other  allocations  provided  for in Section  9.1 and this  Section  9.3 of this
Agreement  tentatively  have been made as if this Section 9.3.3 were not in this
Agreement.

     9.3.4 LIMITATION ON LOSSES. Notwithstanding anything else contained in this
Agreement,  Losses  allocated  to any Member  pursuant  to  Section  9.1 of this
Agreement  shall not exceed the maximum  amount of Losses that may be  allocated
without  causing such Member to have an Adjusted  Capital Account Deficit at the
end of the Fiscal Year for which the allocation is made.

     9.3.5 CODE SECTION 754 ADJUSTMENT.  To the extent that an adjustment to the
Basis of any asset  pursuant to Code Section  734(b) or Code  Section  743(b) is
required to be taken into account in determining Capital Accounts as provided in
Regulation Section 1.704-1(b)(2)(iv)(m),  the adjustment shall be treated (if an
increase)  as an item of gain or (if a  decrease)  as an item of loss,  and such
gain or loss shall be allocated to the Members consistent with the allocation of
the adjustment pursuant to such Regulation.

     9.3.6 NONRECOURSE  DEDUCTIONS.  Nonrecourse Deductions (as determined under
Regulation Section  1.704-2(c)) for any Fiscal Year shall be allocated among the
Members in proportion to their Percentage Interests.

     9.3.7 PARTNER NONRECOURSE  DEDUCTIONS.  Any Partner Nonrecourse  Deductions
(as defined under Regulation Section 1.704- 2(i)(2)) shall be allocated pursuant
to Regulation  Section  1.704- 2(i) to the Member who bears the economic risk of
loss with respect to the Partner Nonrecourse Debt to which it is attributable.

     9.3.8  PURPOSE AND  APPLICATION.  The purpose and the intent of the special
allocations  provided for in this Section 9.3 are to comply with the  provisions
of Regulation Sections 1.704-1(b) and 1.704-2,  and such special allocations are
to be made so as to accomplish that result. However, to the extent possible, the
Managers,  in allocating  items of income,  gain,  loss, or deduction  among the
Members,  shall take into account the special  allocations in such a manner that
the net amount of  allocations to each Member shall be the same as such Member's
distributive  share of  Profits  and  Losses  would  have  been  had the  events
requiring the special  allocations not taken place. The Managers shall apply the
provisions of this Section 9.3 in whatever order the Managers reasonably believe
will minimize any economic distortion that

<PAGE>

otherwise might result from the application of the special allocations.

     9.4 CODE SECTION 704(C) ALLOCATIONS.  Solely for federal,  state, and local
income tax  purposes and not with respect to  determining  any Member's  Capital
Account,  distributive shares of Profits, Losses, other items, or distributions,
a Member's  distributive share of income,  gain, loss, or deduction with respect
to any Property (other than money)  contributed to the Company,  or with respect
to any  Property  the Asset  Value of which was  adjusted as provided in Article
1(g)(iii) of this  Agreement upon the  acquisition of an additional  Interest in
the  Company  by a new  Member  or  existing  Member in  exchange  for a Capital
Contribution, shall be determined in accordance with Code Section 704(c) and the
Regulations thereunder or with the principles of such provisions.

     9.5 ALLOCATIONS RELATING TO TAXABLE ISSUANCE OF INTEREST. Any income, gain,
loss or deduction  realized by the Company as a direct or indirect result of the
issuance of an Interest by the Company (the "Issuance Items") shall be allocated
among the  Members  so that,  to the  extent  possible,  the net  amount of such
Issuance Items, together with all other allocations under this Agreement to each
Member,  shall be equal to the net amount that would have been allocated to each
such Member if the Issuance Items had not been realized.

                                   ARTICLE 10
                                  DISTRIBUTIONS

     10.1 CASH FLOW.  Except when the  Company is in the process of  dissolution
and  winding  up as  provided  in  Article  18 of this  Agreement  and except as
otherwise  provided in Section 10.3 hereof,  the Managers  shall  determine  and
distribute the Cash Flow on a quarterly basis,  less reserves  determined by the
Managers  for  future  expenditures,  to the  Members in  accordance  with their
respective Percentage Interests. Notwithstanding the foregoing, no distributions
shall be made at or prior to the  completion  of the Final  Closing  without the
consent of WPHC.

     10.2 DIVISION AMONG MEMBERS. If there is a change in a Member's Interest in
the Company during a Fiscal Year, any distributions  thereafter shall be made so
as to take into account the varying  Interests of the Members  during the period
to which the  distribution  relates in any manner chosen by the Managers that is
provided in Code Section 706(d) and the Regulations thereunder.

     10.3 SPECIAL DISTRIBUTIONS TO WPHC.

     10.3.1  Immediately after the Construction Loan Closing,  the Company shall
make a distribution to WPHC as a return

<PAGE>

of its  capital in the amount  allowed for such  purpose  under the terms of the
Construction Loan.

     10.3.2  Immediately  after the  closing  of the sale of the  Infrastructure
Land, the Company shall make a  distribution  to WPHC as a return of its capital
in the amount of the net proceeds from the sale of the  Infrastructure  Land and
any related improvements or property.

                                   ARTICLE 11

                         BOOKS, RECORDS, AND ACCOUNTING

     11.1 BOOKS AND RECORDS.  The Company shall maintain at its principal  place
of  business  books of account  that  accurately  record all items of income and
expenditure  relating to the  business of the  Company and that  accurately  and
completely disclose the results of the operations of the Company.  Such books of
account  shall  be  maintained   according  to  generally  accepted   accounting
principles  consistently applied and, unless otherwise agreed by the Members, on
the basis of the Fiscal Year. Each Member shall have the right to inspect, copy,
and audit the  Company's  books and records at any time during  normal  business
hours without notice to any other Member.

     11.2 REPORTS.  Within thirty (30) days after the close of each Fiscal Year,
the  Managers  shall  furnish  to each  Member  a copy of the  income  and  loss
statement  and of the balance  sheet of the Company for such Fiscal Year,  and a
statement  disclosing all allocations of income,  gain, loss, or deduction among
the Members  and  distributions  made by the Company to the Members  during such
year.  The  statements  of income and loss and  balance  sheets to be  delivered
hereunder may be unaudited in the sole discretion of WPHC.

     11.3 TAX RETURNS.  The Managers shall cause  independent  certified  public
accountants  of the  Company to prepare and timely file all income tax and other
tax returns of the Company.  The Managers shall furnish to each Member a copy of
all such returns together with all schedules  thereto and such other information
which each Member may request in connection with such Member's own tax affairs.

     11.4 SPECIAL BASIS  ADJUSTMENT.  At the request of either the transferor or
transferee in connection with a transfer of an Interest in the Company  approved
by the Members  pursuant to Article 16 of this  Agreement,  the  Managers  shall
cause the  Company to make the  election  provided  for in Code  Section 754 and
maintain a record of the  adjustments  to Basis of Property  resulting from that
election. Any such transferee shall pay all costs incurred by the

<PAGE>

Company in connection with such election and the maintenance of such records.

     11.5 TAX MATTERS PARTNER.

     11.5.1 WPHC is hereby designated the Tax Matters Partner (as defined in the
Code) on behalf of the Company.

     11.5.2  Without  the  unanimous  consent of the  Members,  the Tax  Matters
Partner shall have no right to extend the statute of  limitations  for assessing
or computing any tax liability  against the Company or the amount of any Company
tax item.

     11.5.3  If  the  Tax  Matters   Partner  elects  to  file  a  petition  for
readjustment of any Company tax item (in accordance  with Code Section  6226(a))
such  petition  shall be filed in the United States Tax Court unless the Members
unanimously agree otherwise.

     11.5.4 The Tax Matters  Partner  shall,  within ten (10)  business  days of
receipt  thereof,  forward  to each  Member a  photocopy  of any  correspondence
relating to the Company  received  from the Internal  Revenue  Service.  The Tax
Matters Partner shall, within ten (10) business days thereof, advise each Member
in writing of the substance of any conversation held with any  representative of
the Internal Revenue Service and of any petition for readjustment.

     11.5.5  Any  reasonable  costs  incurred  by the Tax  Matters  Partner  for
retaining accountants and/or lawyers on behalf of the Company in connection with
any  Internal  Revenue  Service  audit of the  Company  shall be expenses of the
Company.  Any accountants  and/or lawyers  retained by the Company in connection
with any Internal  Revenue Service audit of the Company shall be selected by the
Tax Matters Partner and the fees therefor shall be expenses of the Company.

     11.6 BANK ACCOUNTS.  The Managers shall  establish and maintain one or more
separate  accounts in the name of the Company in one or more  federally  insured
banking institutions acceptable to all the Members into which shall be deposited
all funds of the  Company  and from  which all  Company  expenditures  and other
disbursements  shall be made.  At least one such account  shall be maintained at
First Interstate Bank.  Unless otherwise  decided by the Managers,  funds may be
withdrawn  from  such  accounts  on the  signatures  of  all  of  the  Managers,
collectively  and not  individually,  or such other  Person or Persons  that the
Managers  shall  determine,  provided,  however,  that two  signatures  shall be
required on all checks.

                                   ARTICLE 12

<PAGE>

                                   MANAGEMENT

     12.1  MANAGEMENT.  The business and affairs of the Company shall be managed
by the  designated  Managers.  Subject  to the  terms  and  limitations  of this
Agreement,  the Managers  shall  direct,  manage and control the business of the
Company to the best of such  Managers'  ability with  reasonable  diligence  and
prudence and, subject to the terms and limitations of this Agreement, shall have
the authority,  power and discretion to make any and all decisions and to do any
and all things which the Managers shall deem to be reasonably  required in light
of the Company's business and objectives.

     12.2  NUMBER,  TENURE AND  QUALIFICATIONS.  The number of  Managers  of the
Company and the length of the term of each  Manager  shall be fixed from time to
time by the Members who hold a Majority In  Interest.  Each  Manager  shall hold
office until removed  pursuant to Section  12.12 hereof or until such  Manager's
successor shall have been selected.  Managers need not be residents of the State
of Colorado or Members of the Company.

     12.3  APPOINTMENT  OF FELD AS MANAGER.  Feld is appointed as the Manager to
serve from the date hereof until the earliest to occur of (i) the Final  Closing
Date,  (ii) his  withdrawal  or Removal as a Member  and  Manager,  or (iii) the
Outside Date.  Notwithstanding  the provisions of Section 12.2, Feld shall serve
as Manager  for the  duration of his  initial  term unless and until  removed in
accordance with the terms of this Agreement.

     12.4 CERTAIN POWERS OF MANAGERS. Without limiting the generality of Section
12.1,  the  Managers  shall  have the power and  authority,  upon the  unanimous
agreement of all Managers, on behalf of the Company:

     12.4.1 To cause the Company to develop the Project in  accordance  with the
Plans and Specifications;

     12.4.2 To purchase  liability and other  insurance to protect the Company's
Property and business;

     12.4.3 To hold and own any and all Company Property on behalf of and in the
name of the Company;

     12.4.4 To invest  any  Company  funds  temporarily  in time  deposits  with
federally   insured   financial   institutions  or  short-  term  United  States
governmental obligations;

     12.4.5 Subject to the provisions of this Agreement,  to employ accountants,
legal  counsel,  managing  agents or other  experts to perform  services for the
Company and to compensate them from Company funds; and

<PAGE>

     12.4.6 To do and perform all other acts as may be necessary or  appropriate
to the conduct of the Company's ordinary course of business.

     Unless  authorized  to do so by this  Agreement  or by the  Managers of the
Company,  no Member,  agent,  or employee of the Company shall have any power or
authority  to bind the  Company in any way, to pledge its credit or to render it
liable  pecuniarily  for any  purpose.  However,  the Managers may act by a duly
authorized attorney-in-fact.

     12.5 MEMBER APPROVAL OF CERTAIN ACTS. The Managers shall have the power and
authority, but only upon the unanimous written consent of all Members, on behalf
of the Company:

     12.5.1 to amend or modify any of the documents  executed in connection with
the Construction  Loan at the  Construction  Loan Closing or to waive any rights
under such documents;

     12.5.2  to  borrow  money  or  incur  any  indebtedness   (other  than  the
Construction Loan) or to grant any liens on any assets of the Company;

     12.5.3 to enter into any agreements  with  affiliates of the Managers other
than the Approved Affiliate Agreements;

     12.5.4 to amend or modify the Approved Affiliate Agreements or to waive any
rights thereunder;

     12.5.5 except for the Management Agreement,  to execute any agreement which
will impose any  obligations on the Company which will survive the Final Closing
Date; and

     12.5.6  to sell or  dispose  of any  portion  of the  Project  or any other
material assets of the Company.

     12.6  LIABILITY  FOR CERTAIN  ACTS. A Manager of the Company  shall perform
such Manager's duties,  including duties as a member of any committee upon which
such  Manager may serve,  in good faith,  in a manner  such  Manager  reasonably
believes to be in the best  interests of the  Company,  and with such care as an
ordinarily   prudent   person  in  a  like  position  would  use  under  similar
circumstances.  A Person who so performs such Person's duties shall not have any
liability  by reason of being or having been a Manager of the Company  except as
otherwise  provided in this Agreement.  Nothing in this Section 12.6 shall limit
Feld's liability to the other Members to perform its obligations with respect to
the  development of the Project,  to make  Development  Deficit  Payments and to
perform its other obligations to the other Members arising under this Agreement.

<PAGE>

     12.7 INDEMNITY OF THE MEMBERS AND THE MANAGERS.

     12.7.1 The Company shall  indemnify  every Member and Manager in respect to
the payments made and personal liabilities reasonably incurred by that Member or
Manager  in the  ordinary  and  proper  conduct  of the  Company's  business  or
property.  No  indemnification  shall be provided if and to the extent that such
liability was incurred based on the breach of this Agreement by the Manager, his
negligence (to the extent not reimbursed by insurance), fraud or misconduct.

     12.7.2  Provided that Feld has fully and timely  performed his  obligations
under this Agreement,  the Company shall indemnify Feld against any liability he
may incur as a result of his  guaranty  of the  Construction  Loan;  the Company
shall, nevertheless, have a right of offset with respect to all damages incurred
by  the  Company  or any  Member  resulting  from  any  breach  by  Feld  of his
obligations  hereunder,  in addition to all other rights and  remedies  that the
Company and the other Members may have with respect to such breach by Feld.

     12.7.3 The  indemnification  set forth in this Article 12 shall in no event
cause the  Members to incur any  liability,  or result in any  liability  of the
Members to any third party, beyond those liabilities  specifically enumerated in
the Articles of Organization, the Act or this Agreement.

     12.8 MANNER OF ACTING.  In all actions to be taken by the Managers pursuant
to this Agreement, the unanimous act of the Managers shall be required.

     12.9 INFORMAL ACT BY MANAGERS. Any action required or permitted to be taken
at a meeting of the Managers or of any committee designated by said Managers may
be taken  without a meeting if the action is  evidenced  by one or more  written
consents  describing  the action  taken,  signed by each  Manager  or  committee
member,  and delivered to the Person having  custody of the Company  records for
inclusion in the minutes or for filing with the records. Action taken under this
Section 12.9 is effective when all Managers or committee members have signed the
consent,  unless the consent specifies a different  effective date. Such consent
has the same force and effect as an unanimous  vote of the Managers or committee
members and may be stated as such in any document.

     12.10  PARTICIPATION  BY  ELECTRONIC  MEANS.  Any Manager or any  committee
designated  by the  Managers  may  participate  in a meeting of the  Managers or
committee by means of telephone conference or similar  communications  equipment
by which all  Persons  participating  in the  meeting can hear each other at the
same  time.  Such  participation  shall  constitute  presence  in  person at the
meeting.

<PAGE>

     12.11  RESIGNATION.  Feld covenants and agrees to serve as the sole Manager
until the earlier of the Final Closing Date or the Outside Date. Otherwise,  any
Manager of the  Company may resign at any time by giving  written  notice to the
Members of the Company.  The  resignation  of any Manager shall take effect upon
receipt of notice  thereof or at such later time as shall be  specified  in such
notice.

     12.12 REMOVAL.

     12.12.1 CAUSES FOR REMOVAL. WPHC shall have the right to remove Feld as the
Manager and as a Member  ("Removal") and substitute WPHC as Manager or appoint a
new Manager upon any of the following (a "Removal Event"):

     12.12.1.1 If the Initial Closing has not occurred by May 15, 1995;

     12.12.1.2  If  the  Construction  Loan  Closing  has  not  occurred  by the
Construction Loan Closing Outside Date;

     12.12.1.3  Delays in construction  not caused by Force Majeure which result
in the Project  falling  behind  schedule by six (6) months or more based on the
Construction  Schedule  approved by the parties prior to the  Construction  Loan
Closing, or delays in construction, whether or not caused by Force Majeure which
cause  WPHC to  reasonably  conclude  that the  Project  will not or  cannot  be
completed by the Outside Date;

     12.12.1.4 The Project  having  incurred  Development  Deficits in excess of
$250,000  which have not been funded by Development  Deficit  Payments from Feld
within thirty (30) days of notice from WPHC requiring such funding;

     12.12.1.5 The Project having incurred any Operating Deficits which have not
been funded by Operating  Deficit  Payments from Feld within thirty (30) days of
notice from WPHC requiring such funding;

     12.12.1.6 The death or disability of Feld;

     12.12.1.7 If the Final Closing has not occurred by the Outside Date;

     12.12.1.8 If Feld shall be in Material  Default Feld under this  Agreement,
and such  Material  Default is not cured within  thirty (30) days after  written
notice  thereof from WPHC or, if such  Material  Default  cannot be cured within
such  30-day  period,  Feld does not  commence  within such thirty (30) days and
diligently  proceed to cure such breach and actually  completes such cure in any
event within ninety (90) days after such notice; or

<PAGE>

     12.12.1.9 If any breach or default under the Construction Loan is not cured
within any applicable cure period provided for under the Construction Loan.

     12.12.2  DOCUMENTATION  IN CONNECTION  WITH REMOVAL.  Upon Removal of Feld,
Feld shall cease to have any  interest in the Company and Feld shall cease to be
a Member of the Company.  Such removal shall be effective  without the necessity
of the execution of any  documents by Feld.  Nevertheless,  Feld shall  promptly
execute such assignment and transfer documents as WPHC may reasonably request to
evidence the Removal of Feld.

     12.12.3 EFFECT OF REMOVAL ON CERTAIN OBLIGATIONS OF FELD.

     12.12.3.1 If Feld is removed prior to the  Construction  Loan Closing Date,
he shall have no continuing  obligations  for the performance of his obligations
under  Article 6 after the date of his Removal and no  obligation to perform any
continuing covenants set forth in Article 13. Feld shall be liable, however, for
any  breach  of any  representation  or  warranty  which  occurred  prior to his
Removal.

     12.12.3.2 If Feld is removed after the Construction Loan Closing Date, Feld
shall not be released from his ongoing  performance  obligations  under Sections
6.3 or 6.10 or Article 13 of this Agreement and Feld shall be liable to WPHC for
damages resulting from any breach of his obligations arising under Sections 6.1,
6.2,  6.3, 6.6,  6.7,  6.10 or 6.11 or Article 13 of this  Agreement,  including
without  limitation,  damages relating to the period after Feld's Removal.  WPHC
shall have the  obligation  to make  reasonable  efforts to mitigate its damages
following a Removal of Feld after the Construction Loan Closing Date.

     12.13 DEATH OR DISABILITY OF FELD. Prior to the Construction  Loan Closing,
Feld,  WPHC and The Feld Company shall execute the  "Substitution  Agreement" in
the form attached hereto as Exhibit U. The Substitution  Agreement shall include
the following  principle terms: (i) upon the death or disability of Feld, at the
written  request  of WPHC,  The Feld  Company  shall  acquire  from Feld (or his
estate) the entire  interest of Feld in the Company,  The Feld Company  shall be
admitted as the Managing  Member,  and The Feld Company  shall assume in writing
all of the  obligations  of the  Managing  Member  hereunder;  (ii) Feld (or his
estate) shall remain  obligated for the performance of all of the obligations of
the  Managing  Member,  whether  relating to the period  before or after  Feld's
Removal; and (iii) if WPHC fails to exercise its option under this Section 12.13
to cause The Feld Company to be substituted as the Managing Member within ninety
(90) days of the date of Removal,  then such option shall lapse and Feld (or his
estate) shall be released from any obligation hereunder related to

<PAGE>

the period after his withdrawal in connection with his death or disability.

     12.14  VACANCIES.  Any  vacancy  occurring  for any reason in the number of
Managers of the Company may be filled by WPHC or a Manager appointed by WPHC.

     12.15 PROHIBITION  AGAINST PUBLICLY TRADED  PARTNERSHIP.  The Manager shall
take all action  necessary to prevent the Company from  qualifying as a publicly
traded partnership within the meaning of Code Section 7704,  including,  without
limitation,  limiting the number of Members to less than 500 in compliance  with
the safe harbor under IRS Notice 88-75.

                                   ARTICLE 13

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

     13.1  REPRESENTATIONS  AND  WARRANTIES  OF EACH MEMBER.  Each Member hereby
represents and warrants as of the date hereof as follows:

     13.1.1 Such Member, if other than an individual, is a duly organized entity
under  the laws of its state of  organization  and has the  requisite  power and
authority  to enter  into and  carry out the  terms of this  Agreement,  and all
required  action  has  been  taken to  authorize  such  Member  to  execute  and
consummate this Agreement.

     13.1.2 Such Member has been duly  authorized to enter into this  Agreement,
and  such  Member  is  not a  foreign  person  as  defined  under  Code  Section
1445(f)(3).

     13.1.3 To the best of such Member's knowledge, neither the execution of nor
the  compliance  with this  Agreement  has  resulted or will result in a default
under, or will create,  any encumbrance on the Property,  and there is no action
pending or threatened  which  questions the validity or  enforceability  of this
Agreement as to such Member.

     13.1.4 The  Interests to be acquired  hereunder  are being  acquired by the
Member for  investment  only and for such Member's own account;  no Person other
than the Member has or shall have any beneficial interest in the Interests;  and
the Member has no present intention of distributing,  reselling or assigning the
Interests.

     13.1.5 Such Member  understands that the Interests have not been registered
under the Securities Act of 1933, as amended (the "1933 Act"), or under the laws
of any jurisdiction; that the Company does not intend and is under no obligation
to so register the Interests; that the Interests may not be sold, assigned,

<PAGE>

pledged or  otherwise  transferred  except  upon  delivery  to the Company of an
opinion of counsel satisfactory to the Managers that registration under the 1933
Act is not required for such transfer, or the submission to the Managers of such
other evidence as may be  satisfactory  to the Managers,  to the effect that any
such  transfer  will not be in  violation  of the  1933  Act,  applicable  state
securities  laws or any  rule or  regulation  promulgated  thereunder;  and that
legends to the foregoing  effect will be placed on all documents  evidencing the
Interests.  The  Member  understands  that the  foregoing  does not limit  other
restrictions regarding the transfer of its Interests set forth in this Agreement
or in the Act.

     13.1.6 Such Member,  either itself or through its shareholders,  partner or
advisors,  is  sophisticated  and experienced in investment  matters,  and, as a
result,  is in a position to evaluate the merits and risks of an  investment  in
the Company.

     13.1.7 Such Member is an  "Accredited  Investor" as defined in Regulation D
promulgated under the 1933 Act.

     13.1.8 Except as may be disclosed in the Environmental  Report, each Member
represents  that it does not have current actual  knowledge of any  Pre-existing
Environmental Condition.

     13.2 REPRESENTATIONS,  WARRANTIES AND COVENANTS OF FELD. In addition to the
warranties  provided for in Article 6 of this  Agreement,  as of the date hereof
and as of the  date of Final  Closing,  Feld  hereby  represents,  warrants  and
covenants to the Company and the Members as follows:

     13.2.1 To the best of Feld's  knowledge,  the  Master  Development  Land is
zoned to permit its use as a matter of right for  multi-family  residential use,
subject to compliance with statutory  requirements  regarding obtaining approval
of a site development  plan.  Under the Land Contract and the closing  documents
executed  in  connection  therewith,   Mission  Viejo  Company  has  irrevocably
allocated the right to build 1880  multi-family  residential units on the Master
Development Land.

     13.2.2  Feld shall use his best  efforts to cause the  approval  by Douglas
County and any other governmental  authority whose approval may be required of a
site  development  plan for the Land (the "Land Use  Approval"),  which approval
will  permit as a matter of right the  construction  of a  multi-family  project
having not less than 456 units on the Project Land and the  construction  of the
Infrastructure pursuant to the Infrastructure Agreement(s).

     13.2.3  Feld  shall use its best  efforts  to cause by the  earlier  of the
Construction  Loan Closing Date and the  Construction  Loan  Outside  Date,  the
County of Douglas to approve the Plans and

<PAGE>

Specifications  for issuance of building permits for construction of the Project
(the "Building  Permits") and to issue all of the Building Permits necessary for
construction of the Project.

     13.2.4 Feld shall use its best efforts to cause the Company to obtain prior
to the earlier of the starting  construction of the Project or the  Construction
Loan Outside  Date,  such permits  licenses,  waivers,  consents,  approvals and
authorizations,  and Feld has made such material registrations,  qualifications,
designations,  declarations and filings required (collectively, the "Approvals")
as  determined  or as may be  determined  necessary  by Feld to the  best of his
knowledge  so that the  Project  may be  constructed  and,  subject  only to the
issuance of customary  temporary or permanent  certificates  of occupancy by the
County of Douglas  and any other  necessary  operating  permits,  operated  as a
multi-family  housing  development  with related  facilities  as depicted on the
Plans and  Specifications.  As of the date hereof, Feld has no reason to believe
such  certificates  of occupancy  will not be issued in the  ordinary  course of
business  following  completion of construction of the Project  substantially in
accordance with the Plans and Specifications. Feld shall use its best efforts to
cause all of the Approvals at the commencement of construction of the Project to
be in full force and effect. Feld shall, promptly upon receipt of any Approvals,
deliver to WPHC true, correct and complete copies of all such Approvals.

     13.2.5 The Land is, and at the Final Closing shall be, free from delinquent
water charges, sewer rents, taxes and assessments.

     13.2.6 To the best knowledge of Feld, all utility  services,  including but
not  limited  to storm  and  sanitary  sewer,  water,  gas,  electric  power and
telephone service will be prior to the earlier of Substantial  Completion of the
Project or the Outside Date,  available to the Project Land in form and capacity
sufficient for the useful  enjoyment and operation of the Project and there will
be no  unpaid  assessments,  impact  fees,  development  fees,  tap-  on fees or
recapture costs payable in connection  therewith except for charges shown on the
tax  certificates  and the usual and customary  charges involved in the ordinary
course of business and specifically identified in the Final Project Budget.

     13.2.7 To the best of Feld's knowledge,  when constructed  substantially in
accordance with the Plans and  Specifications,  the Project shall not violate in
any material  respects all applicable  covenants,  conditions and  restrictions,
zoning ordinances and regulations,  building codes,  environmental and all other
federal,  state and local  laws,  ordinances,  statutes,  rules and  regulations
applicable  to the  Project.  To the best of  Feld's  knowledge,  as of the date
hereof,  the Project is not subject to any laws, rules,  regulations,  orders or
requirements, which require the Company to

<PAGE>

designate  any of the  Project as  affordable  housing,  low  income  housing or
moderate income housing.

     13.2.8 The  construction and development of the Project shall be undertaken
and  shall be  completed  in a timely  and  workmanlike  manner  in  substantial
compliance with (a) all applicable requirements of the Construction Loan, (b) to
the best of Feld's  knowledge,  all applicable  requirements  of all appropriate
governmental  entities, the violation of which would have, or would be likely to
have,  an adverse  effect on the Project or the  Company,  and (c) the Plans and
Specifications  for the Project that have been or shall be hereafter approved by
the  Construction  Lender,  WPHC, and if required,  any applicable  governmental
entities, as such Plans and Specifications may be changed from time to time with
the approval of the Construction Lender,  WPHC, and any applicable  governmental
entities, if such approval shall be required.

     13.2.9 To the best of Feld's  knowledge  and based on Feld's  review of the
Environmental  Reports,  copies of which have been  provided to the, Land is not
designated by any governmental or quasi-governmental  authority to be subject to
environmental,  wetlands or other  regulation  that would  materially  adversely
affect the use of the Land for the Project as  contemplated  by this  Agreement,
and at the Final Closing the Land and the Project  shall be in  compliance  with
all  Environmental  Laws  and  free of  Hazardous  Materials  except  for  those
necessary for and lawfully used in operation and maintenance of the Project, and
then only in  reasonable  amounts  which  shall be  labeled,  stored and used in
compliance with Environmental Laws.

     13.2.10  To the best of Feld's  knowledge,  the Land is or will be prior to
Final  Closing  benefitted  by  such  easements  of  unlimited  duration  as are
necessary  for the  operation  of the Project.  No  additional  easements  will,
subsequent  to the Final  Closing,  be required for the  provision of utilities,
access,  egress and drainage to or for the benefit of the Land or the Project in
connection with the use and operation of the Land as the Project contemplated by
this Agreement.

     13.2.11  Feld shall use his best  efforts  to cause the  Company to obtain,
prior to the  earlier of the date of Final  Closing  or the  Outside  Date,  all
permanent  certificates  of occupancy and other consents and approvals  required
from the County of Douglas and other  governmental  authorities and associations
and boards with jurisdiction  over the Project and such consents,  approvals and
certificates shall be in full force and effect without the presence or existence
of any unsatisfied  conditions or requirements  with respect thereto,  and true,
correct and complete  copies of such  consents,  approvals and  certificates  of
occupancy shall be delivered to WPHC upon issuance thereof.

<PAGE>

     13.2.12 For the  purpose of this  Section  13.2,  the terms "to the best of
Feld's  knowledge," "to the best of his knowledge" and "to the best knowledge of
Feld" shall mean and include such  information  as is actually  known to Feld or
should  have  been  known  to him upon  diligent  inquiry  or of which  Feld has
received  constructive  notice.  If,  prior  to the  Final  Closing,  any of the
foregoing   representations,   warranties  or  covenants   become  incorrect  or
misleading  in any  material  respect,  Feld shall  immediately  notify  WPHC in
writing and such representation,  warranty or covenant shall be deemed remade by
Feld as of the date of such notification based upon such new information.

     13.2.13 Feld,  all  Affiliates of Feld and all other parties  related to or
affiliated with Feld or with such Affiliates shall receive no fees, compensation
or other profit or share of cost savings with respect to the Project  except the
amounts set forth in Article 7 hereof or in any Approved Affiliate Agreement. In
the event of any breach of this Section 13.2.14,  any amount improperly received
by such parties  shall be  immediately  paid over to the Company,  together with
interest  thereon  from the date  received  at twelve  percent  (12%) per annum,
compounded monthly.

     13.2.14  Feld  shall  cause the  Project to be at least 75% leased on terms
reasonably   acceptable  to  WPHC  within   thirty-six  (36)  months  after  the
Construction  Loan  Closing.  Failure  to do so shall be a  default  under  this
Agreement and shall give WPHC the right to cause the Removal of Feld.

     13.3 GENERAL  REPRESENTATION.  No representation,  warranty or statement of
Feld in this Agreement or in any document,  certificate or schedule furnished or
to be furnished by Feld or its agents or  contractors  to WPHC  pursuant  hereto
contains or will  contain any untrue  statement  of a material  fact or omits or
will omit to state a material  fact  necessary to make the  statements  or facts
contained therein not misleading.

     13.4  SURVIVAL;  INDEMNITY.  All of  the  representations,  warranties  and
covenants of Feld contained in this Article 13 shall survive the  resignation or
withdrawal of Feld as Manager and/or Member of the Company and shall survive the
Final  Closing  Date for a period of one (1) year after the Final  Closing  Date
except  that,  in the case of any  material  matter  intentionally  concealed or
intentionally  not disclosed by Feld, such period shall be extended to three (3)
years  after the Final  Closing  Date.  Feld shall  defend,  indemnify  and hold
harmless  WPHC  against  a  breach  of  any of  the  foregoing  representations,
warranties and covenants and any damage, loss or claim caused thereby, including
reasonable attorneys' fees and costs and expenses of litigation and collection.

<PAGE>

                                   ARTICLE 14

                        RIGHTS AND OBLIGATIONS OF MEMBERS

     14.1 LIMITATION OF LIABILITY.

     14.1.1 Each  Member's  liability  to Persons  other than the other  Members
shall be limited as set forth in the Act and other applicable law.

     14.1.2 No  officer,  director or  shareholder  of WPHC shall be bound by or
have  any  personal  liability  hereunder  or  under  any  document,  agreement,
understanding or arrangement  relating to this transaction.  The parties to this
Agreement  shall  look  solely  to the  assets of WPHC for  satisfaction  of any
liability of WPHC in respect of this  Agreement and all  documents,  agreements,
understandings  and arrangements  relating to this transaction and will not seek
recourse  or  commence  any action  against  any of the  directors,  officers or
shareholders  of WPHC or any of their  personal  assets for the  performance  or
payment of any  obligation  hereunder or  thereunder.  The foregoing  shall also
apply to any and all future documents, agreements, understandings,  arrangements
and transactions  between the parties hereto with respect to the Project or this
Agreement.

     14.1.3 The Members  acknowledge that Feld has made certain transfers to the
LES Trust and the LF Trust prior to  November 4, 1991,  and agree that no Member
will assert any right to recover  against either of such trusts by reason of any
transfer made prior to November 4, 1991, regardless of the consideration or lack
of  consideration  for such  transfer.  Feld shall make no further  transfers to
either of such  trusts as long as all or any part of  Feld's  obligations  under
this Agreement  remain  outstanding.  In addition to the foregoing,  the Members
hereby agree that the personal  residence of Feld located at One Dexter  Street,
Denver,  Colorado is not available to support the obligations of Feld under this
Agreement  and agree not to assert any right to recover  against  such  personal
residence,  and the Members hereby disclaim,  quitclaim,  release and relinquish
any right to proceed  against such  personal  residence for amounts owed by Feld
under this Agreement.

     14.2 COMPANY DEBT LIABILITY. A Member will not personally be liable for any
debts or losses of the Company, except as provided herein or in the Act.

     14.3 LIST OF MEMBERS.  Upon  written  request of any Member,  the  Managers
shall provide a list showing the names,  addresses and  Percentage  Interests of
all Members in the Company.

     14.4 COMPANY BOOKS.  The Managers  shall maintain and preserve,  during the
term of the Company, and for five (5) years thereafter, all accounts, books, and
other relevant Company documents. Upon

<PAGE>

reasonable  request,  each Member shall have the right, during ordinary business
hours, to inspect and copy such Company documents at the Member's expense.

     14.5  PRIORITY  AND  RETURN OF  CAPITAL.  Except as  specifically  provided
herein,  no Member shall have priority  over any other Member,  either as to the
return of  Capital  Contributions  or as to  Profits,  Losses or  distributions;
provided  that this  Section  shall not  apply to loans (as  distinguished  from
Capital Contributions) which a Member may make to the Company.

     14.6 OUTSIDE ACTIVITY.

     14.6.1  Except for the  limitations  on the  activities of Feld and certain
Affiliates  set forth  herein,  each  Member,  including  but not limited to the
Manager,  may  engage  in any  capacity  (as  owner,  employee,  consultant,  or
otherwise)  in any activity,  whether or not such  activity  competes with or is
benefitted  by the business of the Company,  without being liable to the Company
or the other Members for any income or profit derived from such activity.

     14.6.2  From the date  hereof  until the earlier of November 1, 1996 or the
date that Feld ceases to be a Member of the Company,  neither Feld nor any other
Restricted  Party shall construct or commence  construction of any  Multi-Family
Project located in the Denver  metropolitan area (including  without  limitation
Boulder).  The  restrictions  under this  Section  14.6.2 shall not apply to the
existing  "Breakers"  project,  which is located in Denver, or to any subsequent
phases of the Breakers, or to the Village at the Bear project,  which is located
in Jefferson County, Colorado, and is owned by Village At Bear Creek LLC.

     14.6.3 From the date hereof  until the date that Feld ceases to be a Member
of the Company,  neither  Feld nor any other  Restricted  Party shall  purchase,
construct or commence construction of any Multi-Family Project any part of which
Multi-Family Project is located within 3 miles of any portion of the Land.

     14.6.4  "Restricted  Parties"  shall mean Feld,  The Feld  Company  and any
entity in which they individually or collectively,  directly or indirectly, have
an ownership interest of in excess of 20 percent of any class of security.  Feld
covenants  that it  shall  cause  each  Restricted  Party  to  comply  with  the
restrictions in this Section 14.6, and a failure of a Restricted Party to comply
with the terms of this Agreement shall  constitute a breach of this Agreement by
Feld. Feld shall comply with the  restrictions set forth in this Section 14.6 in
good faith and shall not employ  any  artifice  or device to evade the intent of
this  provision.   The  restrictions  in  Subsections   14.6.2  and  14.6.3  are
cumulative,  and  shall  apply to a  Restricted  Party  as an owner  for its own
account

<PAGE>

or as a developer,  construction  manager,  general contractor or partner of any
other  Person.  This Section 14.6 shall not prohibit any  Restricted  Party from
conducting pre-development activities in connection with a Multi-Family Project,
provided that construction activity (including any activity for which a building
permit is required) has not commenced on such Multi-Family Project.

                                   ARTICLE 15

                               MEETINGS OF MEMBERS

     15.1 ANNUAL MEETING. The annual meeting of the Members shall be held on the
first  business  day of May or at such  other  time as  shall be  determined  by
resolution of the Members, commencing with the year 1996, for the purpose of the
transaction of such business as may come before the meeting.

     15.2 SPECIAL MEETINGS.  Special meetings of the Members, for any purpose or
purposes,  unless otherwise  prescribed by statute, may be called by any Manager
or by any Member or Members holding at least 1% of the Percentage Interests.

     15.3 PLACE OF MEETINGS.  The Members may designate any place, either within
or outside the State of Colorado, as the place of meeting for any meeting of the
Members. If no designation is made, or if a special meeting be otherwise called,
the place of meeting  shall be the principal  business  office of the Company in
the State of Colorado.

     15.4 NOTICE OF MEETINGS.  Except as otherwise provided for herein,  written
notice  stating  the  place,  day and hour of the  meeting  and the  purpose  or
purposes for which the meeting is called  shall be  delivered  not less than ten
(10) nor more  than  fifty  (50) days  before  the date of the  meeting,  either
personally or by mail, by or at the direction of the Managers or Person  calling
the meeting, to each Member entitled to vote at such meeting.

     15.5 MEETING OF ALL MEMBERS.  If all of the Members  shall meet at any time
and place, either within or outside of the State of Colorado, and consent to the
holding of a meeting at such time and place, such meeting shall be valid without
call or notice, and at such meeting lawful action may be taken.

     15.6 RECORD DATE. For the purpose of determining Members entitled to notice
of or to vote at any meeting of Members or any adjournment  thereof,  or Members
entitled  to  receive  payment  of  any  distribution,  or in  order  to  make a
determination of Members for any other purpose,  the date on which notice of the
meeting is sent or the date on which the resolution  declaring such distribution
is adopted,  as the case may be, shall be the record date for such determination
of Members. When a determination of Members entitled

<PAGE>

to vote at any meeting of Members  has been made as  provided  in this  Section,
such determination shall apply to any adjournment thereof.

     15.7 QUORUM.  Members holding at least a Majority In Interest,  represented
in person or by proxy,  shall constitute a quorum at any meeting of Members.  In
the  absence  of a quorum at any such  meeting,  a  majority  of the  Percentage
Interests so represented  may adjourn the meeting from time to time for a period
not  to  exceed  sixty  (60)  days  without  further  notice.  However,  if  the
adjournment is for more than sixty (60) days, or if after the  adjournment a new
record  date is fixed  for the  adjourned  meeting,  a notice  of the  adjourned
meeting shall be given to each Member of record entitled to vote at the meeting.

     At  such  adjourned   meeting  at  which  a  quorum  shall  be  present  or
represented,  any business may be transacted which might have been transacted at
the  meeting as  originally  noticed.  The Members  present at a duly  organized
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal  during such  meeting of Members  owning  that  number of  Percentage
Interests whose absence would cause less than a quorum.

     15.8 MANNER OF ACTING.  If a quorum is  present,  the  affirmative  vote of
Members  holding at least a Majority  In  Interest  and  entitled to vote on the
subject matter shall be the act of the Members,  unless the vote of a greater or
lesser proportion or number is otherwise required by the Act, by the Articles of
Organization, or by this Agreement.

     15.9 PROXIES. At all meetings of Members, a Member may vote in person or by
proxy   executed   in   writing   by  the   Member  or  by  a  duly   authorized
attorney-in-fact.  Such proxy  shall be filed with the  Managers  of the Company
before  or at the time of the  meeting.  No proxy  shall be valid  after  eleven
months from the date of its execution, unless otherwise provided in the proxy.

     15.10 ACTION BY MEMBERS WITHOUT A MEETING.  Action required or permitted to
be taken at a meeting of Members may be taken without a meeting if the action is
evidenced by one or more written consents describing the action taken, signed by
each Member  entitled to vote and  delivered  to the Managers of the Company for
inclusion  in the minutes or for filing with the Company  records.  Action taken
under this  Section  15.10 is effective  when all Members  entitled to vote have
signed the consent, unless the consent specifies a different effective date.

     The record date for determining  Members  entitled to take action without a
meeting shall be the date the first Member signs a written consent.

<PAGE>

     15.11 VOTING BY BALLOT. Voting on any question or in any election may be by
voice vote  unless the  Managers  or any Member  shall  demand that voting be by
ballot.

     15.12  WAIVER OF  NOTICE.  When any notice is  required  to be given to any
Member,  a waiver  thereof in  writing  signed by the  Person  entitled  to such
notice,  whether  before,  at,  or  after  the  time  stated  therein,  shall be
equivalent to the giving of such notice.

                                   ARTICLE 16

                      TRANSFERABILITY; PUT-CALL PROVISIONS

     16.1  RESTRICTIONS ON  TRANSFERABILITY.  Except as provided in Section 16.2
and Section  16.6,  no transfer,  pledge or  assignment  of all or any part of a
Member's  Interest  in the  Company  (including  the  transfer  of any rights to
receive or share in  profits,  losses,  income or the  return of  contributions)
shall be  effective  unless and until  written  notice  (including  the name and
address of the proposed purchaser,  transferee, or assignee and the date of such
transfer)  has been  provided to the Company  and the  non-transferring  Members
approve of the proposed  sale,  pledge or assignment  of a selling,  pledging or
assigning Member's Interest by unanimous written consent,  which may be withheld
in their sole discretion.

     16.2 PUT-CALL RIGHTS.

     16.2.1  WPHC shall  have the option  (the  "Call  Option")  to acquire  the
Interest  of  Feld  in  the  Company,   including   his  right  to  receive  any
distributions  related to any periods prior to and including the Option  Closing
Date:  (i) on and after the Final  Closing for the Option  Price,  or (ii) on or
after the Construction  Loan Outside Date, for $100.00 if the Construction  Loan
Closing has not  occurred by the  Construction  Loan Outside Date for any reason
whatsoever,  or (iii) at any time for  $100.00 if Feld fails to timely  cure any
default by Feld under this  Agreement.  The  exercise by WPHC of the Call Option
described  in item (i) of this Section is  conditioned  on WPHC  performing  its
obligation to make the Final Closing Capital  Contribution  when and as required
under this  Agreement.  To exercise its Call Option,  WPHC shall provide written
notice of exercise to Feld.

     16.2.2 Feld shall have the right to cause WPHC to acquire  the  Interest of
Feld in the Company, including his right to receive any distributions related to
any periods prior to and including the Option Closing Date, at Final Closing for
the Option  Price (the "Put  Option")  by  providing  written  notice to WPHC of
Feld's intention to exercise the Put Option, provided that all the Final Closing
Funding Conditions have been satisfied.

<PAGE>

     16.2.3 If the Call Option or Put Option is exercised,  Feld shall forthwith
upon request of WPHC execute an  Assignment of Interest in the form of Exhibit Q
or Exhibit R, as  applicable,  attached  hereto,  wherein  Feld shall assign its
Interest  in the Company  free and clear of all liens,  security  interests  and
competing  claims.  Feld shall execute such other instruments of transfer and of
due authorization,  execution and delivery and of the absence of any such liens,
security  interests or competing  claims as WPHC may  reasonably  request.  Feld
shall have no duty,  obligation  or right to  continue as Manager of the Company
after such transfer of its Interest.

     16.3 CALCULATION OF OPTION PRICE.

     16.3.1  The  Members  shall use their  respective,  good  faith  efforts to
determine the Option Price prior to the Option  Closing Date. For a period of at
least ten (10) business  days prior to ordering an appraisal in connection  with
the determination of the Option Price, WPHC and Feld shall attempt in good faith
to  negotiate  the  fair  market  value  of  the  Project  to be  used  in  such
determination. Each of WPHC and Feld shall be entitled to submit the calculation
of the Option Price to the Company's  Accountants for  verification or auditing.
If WPHC and Feld are unable to determine the Option Price by the Option  Closing
Date,  then WPHC shall pay Feld the Minimum Option Price as estimated by WPHC in
its good faith judgment.  The parties shall make a  determination  of the Option
Price  promptly  after the Option  Closing,  and (i) if the  Option  Price as so
determined  exceeds  the  estimated  Minimum  Option  Price  paid at the  Option
Closing,  then WPHC shall pay Feld such  excess  within five (5)  business  days
after the  determination  of the Option Price, or (ii) if the Option Price as so
determined  is less than the estimated  Minimum  Option Price paid at the Option
Closing,  then Feld shall pay the  difference  to WPHC within five (5)  business
days after the  determination of the Option Price. In addition,  for a period of
twelve (12) months after the Final Closing  Date,  WPHC and Feld shall each have
the right to cause the  recalculation  of the Option Price,  if such Member pays
the costs of the  Company's  Accountants  in making such  recalculation.  If the
amount of the adjustment is in excess of $5,000, then WPHC and Feld shall adjust
the Option  Price with five (5)  business  days after the  recalculation  of the
Option Price. No  post-closing  adjustment in the Option Price shall be made for
amounts of $5,000 or less or based on a recalculation made more than twelve (12)
months after the Option Closing Date.  Notwithstanding  anything to the contrary
herein,  the  appraised  value of the Project as  determined  shall be final and
shall not be subject to challenge or recalculation by any Member.

     16.4 RIGHT OF OFFSET.  Payment  of the Option  Price  shall be subject to a
right of offset in favor of the Company  and WPHC with  respect to any claims or
damages they may have against Feld.

<PAGE>

     16.5 RESTRICTIONS ON RESIGNATION.  Notwithstanding anything to the contrary
contained herein or under the Act, no Member shall have the right to resign from
the Company.  In the event a Member does resign in  violation  of the  foregoing
provision,  (i) the  Company  shall not be  obligated  to pay any amounts to the
Member,  nor to  distribute  any of the  Property to the Member or any  interest
therein,  (ii) the Member shall be deemed to have  forfeited any rights to legal
or beneficial ownership of its Interest,  and (iii) the Company may recover from
the resigning Member damages for breach of this Agreement.

     16.6  PERMITTED  WPHC  TRANSFER.  WPHC shall  have the right to  transfer a
portion of WPHC's  Interest in the Company (a "WPHC  Permitted  Transfer")  to a
Person (a "WPHC Permitted  Transferee"),  provided that WPHC at all times during
the term of this  Agreement  shall retain an Interest in the Company of at least
twenty-one percent (21%) of the total Interests in capital,  income, gain, loss,
deduction  and credit.  WPHC  acknowledges  that any  transfer  pursuant to this
Section  16.6 shall be solely from the  Interest of WPHC and shall not result in
the dilution of the Interest of Feld. In the event of a Permitted WPHC Transfer,
(I) WPHC shall have the exclusive authority to communicate all decisions,  votes
and elections ("Decisions") made by it and by the WPHC Permitted Transferee with
respect to the Interest of WPHC and such  transferee  in the Company,  (II) Feld
shall be  entitled  to rely  exclusively  on  communications  made by WPHC  with
respect  to all  such  Decisions,  and any  communications  by a WPHC  Permitted
Transferee  with respect to a Decision other than through WPHC shall be invalid,
and (III)  prior to and as a  condition  to the  admission  of a WPHC  Permitted
Transferee as a Member, the WPHC Permitted Transferee shall execute an admission
agreement  wherein  it agrees  to be bound by all the  terms of this  Agreement,
including without limitation, this Section 16.6.

                                   ARTICLE 17

                         ADMISSION OF ADDITIONAL MEMBERS

     From the date of the formation of the Company,  with the unanimous  written
consent of the Members, any Person acceptable to the Members may, subject to the
terms and conditions of this Agreement:  (i) become an additional Member in this
Company by the sale of new  Interests for such  consideration  as the Members by
unanimous  vote  shall  determine,  or (ii)  become  a  Substitute  Member  as a
transferee of a Member's Interest or any portion thereof.

<PAGE>

                                   ARTICLE 18

                           DISSOLUTION AND TERMINATION

     18.1 DISSOLUTION.

     18.1.1 The Company  shall be dissolved  upon the  occurrence  of any of the
following events ("Dissolution Event"):

     (a) When the period fixed for the duration of the Company shall expire;

     (b) by the unanimous written agreement of all Members; or

     (c)  upon  the  death,   retirement,   resignation,   expulsion,   Removal,
bankruptcy,  dissolution  of a Member or  occurrence  of any other  event  which
terminates  the continued  membership of a Member in the Company (a  "Withdrawal
Event"),  unless the  business of the Company is  continued  by the consent of a
majority of the Interests of the remaining Members in the capital and profits of
the Company,  as determined in accordance  with Revenue  Procedure  94-46 within
ninety  (90) days  after the  termination  and there are at least two  remaining
Members.

     18.1.2 As soon as possible  following  the  occurrence of any of the events
specified  in  this  Section  effecting  the  dissolution  of the  Company,  the
appropriate representative of the Company shall execute a statement of intent to
dissolve in such form as shall be prescribed by the Colorado  Secretary of State
and file duplicate  originals of the same with the Colorado Secretary of State's
office.

     18.2  EFFECT OF FILING OF  DISSOLVING  STATEMENT.  Upon the filing with the
Colorado  Secretary of State of a statement  of intent to dissolve,  the Company
shall cease to carry on its business, except insofar as may be necessary for the
winding up of its business,  but its separate  existence  shall  continue  until
articles of  dissolution  have been filed with the Secretary of State or until a
decree  dissolving  the  Company  has  been  entered  by a  court  of  competent
jurisdiction.

     18.3  DISTRIBUTION OF ASSETS UPON  DISSOLUTION.  In settling accounts after
dissolution,  the liabilities of the Company shall be entitled to payment in the
following order:

     18.3.1 to creditors, in the order of priority as provided by law (except to
Members on account of their Capital Contributions);

<PAGE>

     18.3.2 to Members and former Members in  satisfaction  of  liabilities  for
distributions under Section 7-80-601 or 7-80-603 of the Act; and

     18.3.3 to Members  pro rata in  accordance  with the  positive  balances in
their Capital  Accounts after taking into account all adjustments to the Capital
Accounts for all periods.

     18.4 ARTICLES OF DISSOLUTION.  When all debts,  liabilities and obligations
have been paid and discharged or adequate provisions have been made therefor and
all of the remaining  Property and assets have been  distributed to the Members,
articles  of  dissolution  shall be executed in  duplicate  and  verified by the
Person  signing the articles,  which  articles  shall set forth the  information
required by the Act.

     18.5 FILING OF ARTICLES OF DISSOLUTION.

     18.5.1  Duplicate  originals  of such  articles  of  dissolution  shall  be
delivered to the Colorado Secretary of State.

     18.5.2 Upon the filing of the articles of dissolution, the existence of the
Company  shall cease,  except for the purpose of suits,  other  proceedings  and
appropriate  action as provided in the Act. The  Managers  shall  thereafter  be
trustees  for the  Members and  creditors  of the Company and as such shall have
authority  to  distribute   any  Property  of  the  Company   discovered   after
dissolution,  convey real estate and take such other  action as may be necessary
on behalf of and in the name of the Company.

     18.6 WINDING UP. If the Property of the Company remaining after the payment
or  discharge of the debts and  liabilities  of the Company is  insufficient  to
return the  Capital  Contribution  of each  Member,  such  Member  shall have no
recourse against any other Member.  The winding up of the affairs of the Company
and the  distribution  of its  assets  shall  be  conducted  exclusively  by the
Managers,  who are hereby authorized to take all actions necessary to accomplish
such  distribution,  including  without  limitation,  selling  the assets of the
Company.  In the  discretion of the Managers,  a pro rata portion of the amounts
that otherwise  would be distributed to the Members under this Article 18 may be
withheld to provide a reasonable  reserve for unknown or contingent  liabilities
of the Company.

     18.7 NO RESTORATION OF DEFICIT CAPITAL  ACCOUNTS.  If the Company is deemed
to be  liquidated  for  federal  income  tax  purposes  within  the  meaning  of
Regulation  Section  1.704-1(b)(2)(ii)(g),  distributions  under Section 14.3(c)
shall be made in compliance with Regulation Section 1.704-1  (b)(2)(ii)(b)(2) to
those Members who have positive Capital Accounts.  If the Capital Account of any
Member has a deficit balance after such distributions (after giving

<PAGE>

effect to all  contributions,  distributions,  and  allocations  for all taxable
years),  such Member shall have no  obligation to make any  contribution  to the
capital of the Company with  respect to such deficit and such deficit  shall not
be  considered  a debt owed to the  Company or any other  Person for any purpose
whatsoever.

     18.8 DEEMED  LIQUIDATION.  If no  Dissolution  Event has occurred,  but the
Company is deemed  liquidated for federal income tax purposes within the meaning
of Regulation Section 1.704-1  (b)(2)(ii)(g),  the Company shall not be wound up
and  dissolved  but its  assets  and  liabilities  shall be  deemed to have been
distributed to the Members and  contributed to a new limited  liability  company
which shall operate and be governed by the terms of this Agreement.

     18.9 PERMITTED WITHDRAWAL BY FELD. If the Construction Loan Closing has not
occurred by the Construction Loan Outside Date, upon not less than ten (10) days
prior written  notice to WPHC,  Feld may withdraw as the Manager and as a Member
without such withdrawal (a "Permitted Withdrawal") constituting a breach of this
Agreement.  In the  event of a  Permitted  Withdrawal,  Feld  shall not have any
obligation  under the  Development  Deficit  Guaranty or the  Operating  Deficit
Guaranty,  and Feld shall be released from any obligation  hereunder  related to
the period after his Withdrawal. Upon a Permitted Withdrawal, Feld shall have no
right to any fees or payments  from the Company or any  interest in any property
of the Company. Feld shall execute such documents or instruments  evidencing his
withdrawal as WPHC may reasonably request.  Except for a Permitted Withdrawal or
a withdrawal  upon the death or disability of Feld,  any withdrawal by Feld from
the Company  shall  constitute a default by Feld under this  Agreement  and WPHC
shall be entitled to damages and any other legally  available  relief based upon
such default.

                                   ARTICLE 19

                            MISCELLANEOUS PROVISIONS

     19.1  STATEMENT OF INTENT OF PARTIES.  It is the present intent of WPHC and
Feld to jointly develop the Project and the  Infrastructure  as an initial phase
leading  to the  eventual  development  of the  Master  Development.  Due to the
changes  that may take place in the capital  and real  estate  markets and other
events,  unknown at this time,  which may alter either WPHC's or Feld's interest
in or outlook on future phases, no specific  provision is made in this Agreement
in regard to future  phases.  It is the present intent of the parties to use the
basic economic and transaction  structure of this operating  agreement on future
phases. However, either party may require changes or elect not to participate in
the joint  development of future phases.  The Members  acknowledge that Feld has
diligently pursued the purchase of the Land and the development plan of the Land
for a significant period

<PAGE>

and  has  agreed  to  WPHC's  assumption  of  the  Land  Contract  due to and in
consideration of WPHC's and WRPT's financial  commitment to the transaction.  It
is imperative to WPHC that it control the future of this  development  in regard
to all issues,  including  timing,  cost,  design,  etc.  While this  control is
absolute,  it is  WRPT's  and  Feld's  present  intent  that  Feld  continue  as
development  partner.  Notwithstanding  the foregoing  statement of intent,  the
provisions  of this  Agreement  and related  documents  governing the duties and
relationships  among the parties shall  control over the foregoing  statement of
intent and neither  party  shall have any  obligation,  express or  implied,  to
jointly develop another phase of the Master Development with the other party.

     19.2 NOTICES. Any notice or communication required or permitted to be given
by any provision of this  Agreement,  including but not limited to any consents,
shall be in writing  and shall be deemed to have been given and  received by the
Person to whom  directed (a) when  delivered  personally to such Person or to an
officer or partner of the Member to which directed,  (b) twenty-four  (24) hours
after  transmitted  by  facsimile,  evidence of  transmission  attached,  to the
facsimile  number of such  Person who has  notified  the  Company and all of the
Members of its  facsimile  number,  or (c) three (3)  business  days after being
posted in the United  States  mails if sent by  registered  or  certified  mail,
return receipt requested,  postage and charges prepaid,  or one (1) business day
after  deposited with overnight  courier,  return  receipt  requested,  delivery
charges prepaid, in either case addressed to the Person to which directed at the
address of such Person as it appears in this  Agreement or such other address of
which such Person has notified the Company and all of the Members.

         WPHC:    c/o Wellsford Residential Property Trust
                  370 Seventeenth Street, Suite 3100
                  Denver, Colorado 80202
                  Attention: Donald D. MacKenzie
                  Facsimile No. (303) 595-7799

                  with copies to:

                  Wellsford Residential Property Trust
                  610 Fifth Avenue, 7th Floor
                  New York, New York  10020
                  Attention:  Jeffrey Lynford
                  Facsimile No. (212) 333-2323

                  and to:

                  Wayne H. Hykan, Esq.
                  Brownstein Hyatt Farber & Strickland, P.C.
                  410  17th Street, 22nd Floor
                  Denver, Colorado  80202

<PAGE>

                  Facsimile No. (303) 623-1956

         Feld:    Mr. Al Feld
                  The Feld Company
                  4600 South Ulster Street, Suite 350
                  Denver, Colorado  80237
                  Facsimile No. (303) 721-9418

                  with a copy to:

                  Alan B. Lottner, Esq.
                  Haligman & Lottner, P.C.
                  633  17th Street, Suite 2700, North Tower
                  Denver, Colorado  80202
                  Facsimile No. (303) 292-1300

     19.3  APPLICATION OF COLORADO LAW. This  Agreement,  and the application or
interpretation  hereof,  shall be governed  exclusively  by its terms and by the
laws of the State of Colorado, and specifically by the Act.

     19.4 WAIVER OF ACTION FOR PARTITION.  Each Member irrevocably waives during
the term of the  Company  any right that such  Member may have to  maintain  any
action for partition with respect to the Property of the Company.

     19.5  AMENDMENTS.  This  Agreement  may be  amended  only upon the  written
Agreement of all of the Members.

     19.6  CONSTRUCTION.  Whenever the singular number is used in this Agreement
and when  required by the context,  the same shall  include the plural,  and the
masculine gender shall include the feminine and neuter genders, and vice versa.

     19.7 HEADINGS.  The headings in this Agreement are inserted for convenience
only and are in no way intended to  describe,  interpret,  define,  or limit the
scope, extent or intent of this Agreement or any provision hereof.

     19.8 WAIVERS.  The failure of any party to seek redress for violation of or
to insist  upon the strict  performance  of any  covenant or  condition  of this
Agreement  shall not  prevent a  subsequent  act,  which  would have  originally
constituted a violation, from having the effect of an original violation.

     19.9  TIME  OF  THE  ESSENCE.  Time  is of the  essence  in  regard  to the
obligations of the parties set forth in this Agreement.

     19.10 REMEDIES FOR DEFAULT. If any party hereto fails to perform any of its
obligations  under  this  Agreement,  at the time and in the  manner  set  forth
herein, and such failure continues

<PAGE>

uncured after any  applicable  notice and cure period,  then any other party may
assert a claim  against  the  defaulting  party for  damages  and, to the extent
damages are not an adequate remedy, for specific performance of this Agreement.

     19.11 RIGHTS AND REMEDIES  CUMULATIVE.  The rights and remedies provided by
this  Agreement  are  cumulative  and the use of any one  right or remedy by any
party shall not  preclude  or waive the right to use any or all other  remedies.
Said rights and  remedies  are given in addition to any other rights the parties
may have by law, statute, ordinance or otherwise.

     19.12  SEVERABILITY.  If any provision of this Agreement or the application
thereof to any Person or circumstance shall be invalid, illegal or unenforceable
to any extent, the remainder of this Agreement and the application thereof shall
not be affected and shall be enforceable to the fullest extent permitted by law.

     19.13 HEIRS, SUCCESSORS AND ASSIGNS. Each and all of the covenants,  terms,
provisions and agreements  herein  contained  shall be binding upon and inure to
the  benefit  of the  parties  hereto  and,  to the  extent  permitted  by  this
Agreement,  their  respective  heirs,  legal  representatives,   successors  and
assigns.

     19.14 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which shall  constitute one and the
same instrument.

     19.15 FURTHER  ASSURANCES.  The Members and the Company agree that they and
each of them will take whatever action or actions as are reasonably necessary or
desirable  from  time to time to  effectuate  the  provisions  or intent of this
Agreement,  and to that end,  the Members  and the Company  agree that they will
execute,  acknowledge,  seal,  and deliver any further  instruments or documents
which may be necessary to give force and effect to this  Agreement or any of the
provisions  hereof,  or to carry out the intent of this  Agreement or any of the
provisions hereof.

     19.16 ENTIRE  AGREEMENT.  This Agreement and each of the exhibits  attached
hereto  set  forth  all  (and  are  intended  by  all  parties  hereto  to be an
integration  of all) of the promises,  agreements,  conditions,  understandings,
warranties,  and  representations  among the parties  hereto with respect to the
formation and operations of the Company; and there are no promises,  agreements,
conditions,  understandings,  warranties,  or representations,  oral or written,
express or  implied,  among them other than as set forth  herein.  The  exhibits
attached hereto are incorporated herein by reference.

<PAGE>

                                   CERTIFICATE

     The  undersigned  hereby agree,  acknowledge and certify that the foregoing
Agreement  constitutes the Operating  Agreement of Park at Highlands LLC adopted
by the Members of the Company effective as of May 17, 1995.

                                        /s/ Al Feld
                                        -----------------------------------
                                        Al Feld

                                        WELLSFORD PARK HIGHLANDS CORP., a
                                        Colorado corporation

                                        By:   /s/ Donald D.  MacKenzie
                                              ------------------------------
                                        Name: Donald D.  MacKenzie
                                        Title: Vice  President

<PAGE>

                                    GUARANTY

     By its execution hereof,  WELLSFORD  RESIDENTIAL PROPERTY TRUST, a Maryland
real estate  investment  trust ("WRPT"),  hereby  guarantees to Al Feld ("Feld")
that Wellsford Park Highlands  Corp., a Colorado  corporation,  shall timely and
fully  satisfy its  obligation to fund the Final  Closing  Capital  Contribution
when, as and if required by the foregoing Operating Agreement, as such Agreement
may be amended from time to time (the "Obligation").

     This guaranty is a guaranty of payment and performance of the  Obligations,
not merely of collection.  Any amendment or modification of the Obligations made
by WPHC and Feld shall not release the duties and obligations of WRPT hereunder,
and this  Guaranty  shall extend to the  Obligations  as so amended or modified.
This Guaranty shall be continuing and  irrevocable  until the  Obligations  have
been  satisfied  in full.  WRPT  hereby  waives  notice  of  acceptance  of this
Guaranty.

     WRPT waives and agrees not to assert or take advantage of: (a) any right to
require  Feld to  proceed  against  any other  person or to  proceed  against or
exhaust any  security  held by Feld at any time or to pursue any other remedy in
Feld's power before  proceeding  against WRPT;  (b) any right to require Feld to
proceed  against WPHC or any other  person or to proceed  against or exhaust any
security  held by Feld at any time or to pursue any other remedy in Feld's power
before proceeding  against WRPT; and (c) any requirement that notice be provided
to WRPT.

     This   Guaranty  and  all   documents,   agreements,   understandings   and
arrangements  relating to this Guaranty have been executed by the undersigned on
behalf of WRPT in  his/her  capacity  as an officer or trustee of WRPT which has
been formed as a Maryland real estate investment trust pursuant to a Declaration
of Trust of WRPT dated as of July 10, 1992,  and not  individually,  and neither
the  trustees,  officers or  shareholders  of WRPT shall be bound by or have any
personal  liability  hereunder or thereunder.  The  beneficiary of this Guaranty
shall look solely to the assets of WRPT for  satisfaction  of any  liability  of
WRPT in respect of this Agreement and all documents, agreements,  understandings
and  arrangements  relating to this  transaction  and will not seek  recourse or
commence any action  against any of the trustees,  officers or  shareholders  of
WRPT or any of their  personal  assets  for the  performance  or  payment of any
obligation  hereunder or thereunder.  The foregoing  shall also apply to all and
any future documents, agreements, understandings,  arrangements and transactions
between  the  parties  hereto  with  respect to the this  Guaranty or any matter
related thereto.

<PAGE>

     Should any one or more provisions of this Guaranty  Agreement be determined
to be illegal  or  unenforceable,  all other  provisions  nevertheless  shall be
effective.

     This  Guaranty  Agreement  shall be governed by and construed in accordance
with the laws of the State of Colorado.

         EXECUTED as of ______________, 1995.
         WELLSFORD RESIDENTIAL PROPERTY TRUST,
         a Maryland real estate investment trust

         By:________________________________
         Name:
         Title:

<PAGE>

STATE OF COLORADO                           )
                                            )  ss.
COUNTY OF DENVER                            )

     The foregoing  operating agreement was acknowledged before me this 27th day
of April, 1995 by Al Feld.

         WITNESS my hand and official seal.

         My commission expires:

         /s/ Notary Public
         -----------------
         Notary Public

STATE OF COLORADO                           )
                                            )  ss.
COUNTY OF DENVER                            )

     The foregoing  operating agreement was acknowledged before me this 27th day
of April,  1995 by Donald D.  MacKenzie  as Vice  President  of  Wellsford  Park
Highlands Corp., a Colorado corporation.

         WITNESS my hand and official seal.

         My commission expires:

         /s/ Notary Public
         -----------------
         Notary Public

STATE OF COLORADO                           )
                                            )  ss.
COUNTY OF DENVER                            )

     The foregoing  guaranty was acknowledged  before me this 27th day of April,
1995 by  __________________  as _____________ of Wellsford  Residential Property
Trust, a Maryland real estate investment trust.

         WITNESS my hand and official seal.

         My commission expires:

         /s/ Notary Public
         -----------------
         Notary Public

<PAGE>

                                    EXHIBITS

EXHIBIT A         Feld Reimbursable Expenses
EXHIBIT B         Construction Procedures
EXHIBIT C         Deposit and Contract Administration Agreement
EXHIBIT D         Final Closing Funding Conditions
EXHIBIT E         Description of Infrastructure
EXHIBIT F         Description of Infrastructure Land
EXHIBIT G         Description of the Land
EXHIBIT H         Description of the Master Development Land
EXHIBIT I         Initial Project Budget
EXHIBIT J         Property Management Agreement
EXHIBIT K         Intentionally Omitted
EXHIBIT L         Pledge and Security Agreement -- Feld to WPHC
EXHIBIT M         Pledge and Security Agreement -- WPHC to Feld
EXHIBIT N         Description of Plan and Specifications
EXHIBIT O         Final Project Budget
EXHIBIT P         Calculation of the Feld Incentive Fee
EXHIBIT Q         Assignment of Interest -- Call Option
EXHIBIT R         Assignment of Interest -- Put Option
EXHIBIT S-1       Architect's Certificate
EXHIBIT S-2       Engineer's Certificate
EXHIBIT T         Infrastructure Budget
EXHIBIT U         Substitution Agreement

<PAGE>

                                    EXHIBIT A

                           FELD REIMBURSABLE EXPENSES

<PAGE>

                                    EXHIBIT B

                             CONSTRUCTION PROCEDURES

1.   Requests  for advances by the  Construction  Lender for payment of costs of
     labor,  materials,  and  services  supplied  for  the  construction  of the
     improvements and other items shown in the Project Budget shall be submitted
     by Feld, not more  frequently then as specified in the  Construction  Loan,
     after actual  commencement of construction of the  improvements.  WPHC, and
     the   Construction   Consultant  shall  be  provided  with  copies  of  the
     application for advance  simultaneously  with delivery to the  Construction
     Lender,  except as  otherwise  provided  in  Section  6.6 of the  Operating
     Agreement.

2.   WPHC and the  Construction  Consultant  shall have the right and Feld shall
     permit them to enter upon the  Property and any  location  where  materials
     which are intended to be utilized in the  construction of the  improvements
     are stored for purpose of inspection of the Property and such  materials at
     all reasonable times.

3.   Feld shall timely comply with and promptly furnish to WPHC and Construction
     Consultant  a  true  and  complete  copy  of any  notice  or  claim  by any
     governmental  authority  pertaining  to the  Property  and of any notice or
     claim from the  Construction  Lender or any  subcontractor or supplier with
     respect to the Project.

4.   Feld shall  disburse  all  advances  for payment of costs and  expenses for
     purposes specified in the Project Budget, and for no other purpose.

5.   WPHC and Construction Consultant shall be advised, in advance of, and shall
     have the right to attend all meetings pertaining to the construction of the
     improvements. Feld agrees to use his best efforts to attempt to notify WPHC
     and Construction Consultant reasonably in advance of such meetings in order
     to allow  attendance  at such  meeting by  representatives  of WPHC and the
     Construction Consultant.

6.   Feld shall not reallocate to other line items any portion of the line items
     in the Project  Budget that relate to  Construction  Loan  interest or loan
     fees.

7.   Feld shall deliver copies of the monthly  construction ledger to WPHC on or
     before the 10th day of the following month.

8.   Change  orders  shall be  dealt  with as  provided  in  Section  6.7 of the
     Operating Agreement.

<PAGE>

                                    EXHIBIT C

                  DEPOSIT AND CONTRACT ADMINISTRATION AGREEMENT

<PAGE>

                                    EXHIBIT D

                        FINAL CLOSING FUNDING CONDITIONS

     (a) No Default; Certificate From Feld. There shall be no uncured default by
Feld under this Agreement and no uncured  default under the  Construction  Loan,
and WPHC shall have received a certificate  from Feld that the  representations,
warranties  and covenants of Feld in Articles 6 and 13 are  materially  true and
accurate  as of the date of the  proposed  Final  Closing  and that Feld and the
Company are not in default of any of their  obligations  hereunder  or under any
contracts or  agreements  relating to the Project as of the date of the proposed
Final Closing.

     (b)  Construction  Loan. Feld shall provide  evidence  satisfactory to WPHC
that the  principal  amount of the  Construction  Loan and all accrued  interest
thereon  have either been paid in full or will be paid in full from the proceeds
of the Final Closing Capital  Contribution  immediately  upon the funding of the
Final Closing Capital Contribution. Such evidence may consist of a payoff letter
in form  sufficient  to allow the title  insurer to insure  over the lien of the
Construction Loan.

     (c) Physical Inspection.  The Construction Consultant shall have prepared a
physical inspection report reasonably satisfactory to WPHC.

     (d) Final Completion; Development Deficits. Final Completion of the Project
shall have occurred,  and all Development  Deficit Payments shall have been made
by Feld.

     (e)  Lien  Waivers.  Feld  shall  obtain  and  provide  copies  to  WPHC of
unconditional lien releases from all  subcontractors,  materialmen and providers
of labor,  equipment,  material and/or services to the Property and the Project,
as to all  work  performed  and  materials  purchased  in  connection  with  the
construction of the Project,  in form  reasonably  satisfactory to WPHC or, with
respect to any liens not so released,  Feld shall have provided  surety bonds to
which any contested liens are  transferred  (and released from the Property) and
title insurance over any such liens.

     (f) Title  Policy.  The title  insurance  company  shall  have  issued  the
following  endorsements  to the  Company's  title  policy:  (1)  an  endorsement
indicating  that the Company  owns fee simple title to the Project Land and that
the Project Land will be free and clear of the Construction Loan upon payment of
the Final Closing  Capital  Contribution;  (2) a "date down"  endorsement to the
title policy  extending  the  effective  date of the title policy to the date of
Final  Closing and  showing no  exceptions  to title  other than the  exceptions
reflected  on the  title  policy  as of  Initial  Closing,  except  as  shall be
acceptable to WPHC in its  reasonable  judgment;  (3) an  endorsement  affording
mechanics lien coverage;

<PAGE>

(4) an endorsement  increasing the amount of insurance by an amount equal to the
Final Closing Capital Contribution;  and (5) such other endorsements as WPHC may
reasonably require,  including without limitation,  the following: (i) 103.1 and
103.2 (Encroachments) to the extent required and available; (ii) 103.7 (Property
Abuts Open Street);  (iii) 107.2 (Increase  Policy Amount) for the amount of the
Final  Closing   Capital   Contribution   plus  the  Initial   Closing   Capital
Contribution; (iv) 110.1 (Deleting Standard Exceptions) if not already provided;
(v)  110.2  (Special  Exceptions)  if any new  exceptions  appear  that  are not
acceptable  to WPHC in its  sole  discretion;  (vi)  115.2  (PUD);  (vii)  116.1
(Survey); (viii) 123.2 (Zoning).

     (g)  Survey.   WPHC  shall  have  received  and  approved  an  updated  and
recertified  as-built survey reasonably  satisfactory to WPHC dated no more than
thirty (30) days prior to the date of Final Closing, showing no encroachments or
other  adverse  matters  affecting  title  to the  Project,  except  as shall be
reasonably acceptable to or have been previously approved in writing by WPHC.

     (h) As-Built Plans and Specifications.  Feld shall have submitted to WPHC a
written  document  executed by Feld,  the architect  and the general  contractor
certifying  no  material  change to the  approved  "for-construction"  Plans and
Specifications  except any changes  stated  therein  that have  previously  been
approved by WPHC.

     (i)  Permits,  Licenses  and  Certificates  of  Occupancy.  WPHC shall have
received a copy of the final and  unconditional  certificate or  certificates of
occupancy issued by the appropriate  governmental authorities for the Project in
its entirety  and a copy of any permits and licenses  which are required for the
operation and use of the Project.

     (j) Architect's and Engineer's  Certificates.  Feld shall have delivered to
WPHC an architect's  certificate in the form attached  hereto as Exhibit S-1 and
an Engineer's Certificate in the form attached hereto as Exhibit S-2.

     (k) Payment of Taxes. WPHC shall have received satisfactory evidence (which
may be included in the title policy  described in subsection  (f) of these Final
Closing Funding Conditions) that all real property taxes and assessments for the
Project due and payable  through the date of funding  have been timely and fully
paid.

     (l) Release and Waiver.  Feld and each affiliate of Feld that is a party to
an  Approved  Affiliate  Agreement  shall have  executed  for the benefit of the
Members a Release  and  Waiver,  substantially  in the form  attached  hereto as
Exhibit B-3 with respect to all  liabilities  incurred by Feld during its period
of membership in the Company, including, without limitation, all

<PAGE>

liabilities incurred by Feld under the Architect's  Agreement,  the construction
contract for the construction of the Project, and any contracts,  agreements, or
other  instruments  entered into by Feld in connection with the  construction of
the Project or the business of the Company.

<PAGE>

                                    EXHIBIT E

                          DESCRIPTION OF INFRASTRUCTURE

         TO BE AGREED UPON BY PARTIES PRIOR TO CONSTRUCTION LOAN CLOSING

<PAGE>

                                    EXHIBIT F

                       DESCRIPTION OF INFRASTRUCTURE LAND

         TO BE AGREED UPON BY PARTIES PRIOR TO CONSTRUCTION LOAN CLOSING

<PAGE>

                                    EXHIBIT G

                             DESCRIPTION OF THE LAND

LOT 1, HIGHLANDS RANCH FILING 126-A, DOUGLAS COUNTY, COLORADO.

<PAGE>

                                    EXHIBIT H

                   DESCRIPTION OF THE MASTER DEVELOPMENT LAND

LOTS 2 THROUGH 5,  INCLUSIVE,  HIGHLANDS  RANCH FILING  126-A,  DOUGLAS  COUNTY,
COLORADO

<PAGE>

                                    EXHIBIT I

                             INITIAL PROJECT BUDGET

<PAGE>

                                    EXHIBIT J

                          PROPERTY MANAGEMENT AGREEMENT

         TO BE AGREED UPON BY PARTIES PRIOR TO CONSTRUCTION LOAN CLOSING

<PAGE>

                                    EXHIBIT K

                              INTENTIONALLY OMITTED

<PAGE>

                                    EXHIBIT L

                      PLEDGE AND SECURITY AGREEMENT BY FELD

         TO BE AGREED UPON BY PARTIES PRIOR TO CONSTRUCTION LOAN CLOSING

<PAGE>

                                    EXHIBIT M

                      PLEDGE AND SECURITY AGREEMENT BY WPHC

         TO BE AGREED UPON BY PARTIES PRIOR TO CONSTRUCTION LOAN CLOSING

<PAGE>

                                    EXHIBIT N

                            PLANS AND SPECIFICATIONS

(to be approved by all Members prior to the closing of the Construction Loan and
a  description  thereof to be  attached  hereto at or before  Construction  Loan
Closing)

<PAGE>

                                    EXHIBIT O

                              FINAL PROJECT BUDGET

<PAGE>

                                    EXHIBIT P

                  CALCULATION AND PAYMENT OF THE INCENTIVE FEE

     1.  Definitions.  The following  definitions shall apply for the purpose of
calculation of the Incentive Fee:

     a. "Cost  Recovery"  shall mean that (I) the sum of  Disposition  Recovery,
Land Recovery, and Ownership Recovery, exceeds (II) Infrastructure Costs for any
an all phases of the Infrastructure, plus interest on Infrastructure Costs at an
annual  rate of  nine  percent,  compounded  monthly.  Cost  Recovery  shall  be
determined on a calendar year basis; such  determination  shall be made by March
31 of each year for the preceding calendar year.

     b. "Disposition Recovery" shall mean (I) the sale proceeds net of all costs
of closing  and  brokerage  costs  received  by the  Company  from a sale of the
Project by the Company,  plus (II) the sale proceeds net of all costs of closing
and brokerage  costs  received  from the sale of Future  Projects by the initial
owner(s) of such Future Projects,  minus (III) Total  Development  Costs for the
Project  (if sold by the  Company)  and Total  Development  Costs for all Future
Projects (which have been sold).

     c. "Future Project" shall mean any apartment  project  constructed by WPHC,
WRPT or an Affiliate of them  (provided that WPHC or WRPT directly or indirectly
owns 50% or more of such Affiliate),  which project is constructed on the Master
Development Land. "Future Project" shall not include, however, the Project which
is the subject of the Operating Agreement.

     d. "Incentive Cap" shall mean the lesser of $1,957,447.00 or the product of
$4,255.32 and the number of apartment units actually  constructed in Phase I. If
subsequent  phases are  developed,  each will have an Incentive Cap based on the
number of units in such  phases and a per unit limit of  $4,255,32.  In no event
shall the Incentive Cap for all phases exceed an aggregate of $8,000,000.

     e.  "Land  Recovery"  shall  mean  (I) the  amount(s)  received  by WPHC in
connection  with the  sale(s)  of all or a portion of its  interest  in the Land
Contract or in the Master  Development  Land acquired by it pursuant to the Land
Contract,  minus (II) the purchase  price paid by the WPHC or its Affiliates for
such Master  Development Land, plus all closing costs and incidental holding and
carrying costs at an assumed annual  interest rate of nine percent (9%), and the
earnest money deposit in connection with the Land Contract unless and until such
earnest  money  deposit  is  applied   against  the  purchase  price  of  Master
Development  Land. Land Recovery shall not include any amounts received from the
sale of the Project or a Future Project.

<PAGE>

     f.  "Ownership  Recovery"  shall mean (I) the Project Value for the Project
and any Future Projects,  minus (II) Total Development Costs for the Project and
all such Future  Projects.  If the Project or a Future  Project is sold  anytime
during the calendar year preceding the date of  determination  of Cost Recovery,
such  Project or Future  Project  shall not be  included in the  calculation  of
Ownership Recovery for such calendar year.

     g. "Project  NOI" shall mean the Net Operating  Income for the Project or a
Future Project for the calendar year preceding the date of determination of Cost
Recovery.

     h.  "Project  Value"  shall mean with  respect to the Project or any Future
Project  the  Project  NOI for such  Project  or Future  Project  divided by ten
percent (10.0%).

     i. "Stabilized NOI" shall mean the Net Operating Income for Phase I for the
12 month period following the Stabilization Date.

     j. "Stabilization Date" shall mean the first day of the month following the
date on which any one of the following shall have occurred: (i) 93% occupancy in
the operations of the Project at any point in time; (ii) 6 months after issuance
of a certificate of occupancy for all of the apartments  comprising the Project;
or (iii) forty-two (42) months after the Initial Closing.

     k. "Total  Development  Costs" with respect to the Project shall mean Total
Development Costs as set forth in the Operating  Agreement,  and with respect to
any Future Phase shall have an equivalent meaning.  Total Development Costs does
not include an allocation of Infrastructure Costs.

     l. "Target Fee" shall mean an amount equal to 3% of Total Development Costs
(including any Cost Saving Fee paid to Feld).

     m. "Yield" shall mean (i)  Stabilized  NOI,  divided by (ii) the sum of (A)
Total  Development  Costs  (including any Cost Saving Fee paid to Feld), (B) the
Incentive Fee, (C) the  Infrastructure  Costs allocable to the Project (i.e. for
Phase  I,  24.26%  of  total  Infrastructure  Cost),  and  (D)  interest  at 9%,
compounded monthly, on the pro rata share of the Infrastructure Cost.

     2. Calculation of Incentive Fee. The LLC's  accountants shall calculate the
Incentive  Fee promptly  after they have  sufficient  information  to accurately
calculate Stabilized NOI. The Incentive Fee shall equal the following,  provided
that in no event shall the Incentive Fee exceed the Incentive Cap:

<PAGE>

     a. If the Yield is 9% or less, the Incentive Fee shall equal zero;

     b. If the Yield is greater than 9% and less than or equal to 10%,  then the
Incentive Fee shall equal (A) the Target Fee,  multiplied by (B) the Yield minus
9%, multiplied by (C) 100.

     c. If the Yield is greater  than 10% and less than or equal to 11.5%,  then
the Incentive Fee shall equal the following:

     (i) the Target Fee, plus

     (ii) (A) the  Incentive  Cap minus the Target  Fee,  multiplied  by (B) the
Yield minus 10%, divided by (C) 1.5, multiplied by (D) 100.

     d. If the Yield is greater than 11.5%,  then the  Incentive Fee shall equal
the Incentive Cap.

     3. Payment of Incentive  Fee. The  Incentive  Fee shall be deemed earned at
the time it is calculated  but shall not be due or payable unless and until Cost
Recovery has occurred.  The Incentive Fee shall accrue simple interest at 9% per
annum from the date it is deemed earned until paid.

     4. Accelerated  Payment of Incentive Fee.  Notwithstanding  anything to the
contrary in this Exhibit C, if WPHC,  in its sole  discretion,  causes the Final
Closing to occur more than thirty (30) days prior to the Outside Date,  then the
Incentive Fee shall equal the Target Fee and the Company shall pay 50 percent of
such  Incentive  Fee at the Final  Closing and 50 percent of such  Incentive Fee
within two years of the date of Final Closing.

     5. Allocation of  Infrastructure  Costs.  The allocation of  Infrastructure
Costs for purposes of the  calculation  of the  Incentive Fee is solely for such
purpose and is distinct  from and will not be modified by the actual  allocation
of Infrastructure Costs per unit.

<PAGE>

                                    EXHIBIT Q

                 EXERCISE OF CALL OPTION; ASSIGNMENT OF INTEREST
                                POWER OF ATTORNEY

     THIS ASSIGNMENT OF INTEREST (this "Assignment") is made and entered into as
of the ____ day of  ______________  19__,  by and between Al Feld, an individual
("Assignor"),  and  Wellsford  Park  Highlands  Corp.,  a  Colorado  corporation
("Assignee").

                                    RECITALS

     b. Pursuant to that certain Operating Agreement (the "Operating Agreement")
of Park at Highlands LLC, a Colorado limited  liability  company (the "Company")
dated as of ______________,  1995, by and among Assignor and Assignee,  Assignee
is the owner of an option (the "Call Option") to acquire the ownership  interest
of  Assignor  in the  Company  as of the date  hereof  (including  the  right of
Assignor  to  receive  any  distributions  related to any  periods  prior to and
including  the date  hereof),  which  ownership  interest  includes the right of
Assignor to any and all  benefits to which  Assignor may be entitled as a Member
and as a Manager  (each as defined in the Operating  Agreement),  as provided in
the Operating Agreement or the version of the Colorado Limited Liability Company
Act adopted by the State of Colorado, Co. Rev. Stat. ss.ss.7-80-101 to 7-80-913,
as  amended  from  time  to  time  (the  "Act"),  together  with  the  unaccrued
obligations of Assignor, in its capacity as a Member and Manager, to comply with
all  the  terms  and   provisions  of  the  Operating   Agreement  and  the  Act
(collectively, the "Ownership Interest").

     c. In accordance with Section 16.2.1 of the Operating Agreement,  Assignee,
by its execution and delivery of this Assignment to Assignor, hereby desires (i)
to exercise the Call Option as  contemplated  therein and (ii) to cause Assignor
to resign as Member and Manager of the Company.

     d. Assignor has agreed,  concurrently  with the exercise of the Call Option
by Assignee:  (i) to assign and sell the Ownership Interest to Assignee pursuant
to the terms and  conditions  set forth in the  Operating  Agreement and (ii) to
appoint Assignee as its true and lawful attorney-in-fact, as set forth herein.

     e. Terms not otherwise  defined herein shall have the meanings set forth in
the Operating Agreement.

                                    AGREEMENT

     In  consideration  of the receipt of Ten and no/100  Dollars  ($10.00)  and
other good and valuable  consideration in hand paid by Assignee to Assignor, the
receipt and sufficiency of which are

<PAGE>

hereby  acknowledged  and  confessed by Assignor,  Assignor and Assignee  hereby
agree as follows:

     1. Assignment and Assumption.  Concurrently  with and conditioned  upon the
satisfaction  of all of the  conditions  and covenants of Section  16.2.1 of the
Operating Agreement, Assignor hereby assigns, grants and conveys to Assignee all
of  Assignor's  right,  title and  interest  in and to the  Ownership  Interest.
Assignee  hereby  assumes the  Ownership  Interest and agrees to be bound by and
comply with and perform all of the  obligations of Assignor in its capacity as a
Member and as a Manager arising under the Operating Agreement which accrue after
the  date  hereof.  Assignor  shall  remain  obligated  to  perform  all  of the
obligations  of  Assignor  under  the  Operating  Agreement  (i)  which  are not
expressly  assumed  hereunder or (ii) which have accrued on or prior to the date
hereof.  Further,  all benefits of the Operating Agreement relating to Assignor,
including, without limitation, the right to receive any distributions related to
any periods prior to and  including the date hereof,  shall inure to the benefit
of Assignee.

     2.  Representation  and  Warranty  of  Assignor.  Assignor  represents  and
warrants that: (i) Assignor is the sole owner of the entire Ownership  Interest;
(ii)  Assignor  is  not in  default  under  or in  breach  of any of the  terms,
covenants or  provisions of the Operating  Agreement,  and Assignor  knows of no
event which, but for the passage of time or the giving of notice, or both, would
constitute an event of default  under or a breach of the Operating  Agreement by
Assignor;  (iii)  Assignor  is duly  authorized  to  execute  and  deliver  this
Assignment;  and (iv) the  Ownership  Interest  is free and clear of any and all
liens, security interests, encumbrances, and competing claims.

     3.  Appointment of Assignee as  Attorney-in-Fact.  Effective as of the date
hereof,  Assignor hereby irrevocably constitutes and appoints Assignee to be its
true and lawful  attorney-in-fact  to act for Assignor,  in the name,  place and
stead of Assignor, for the following purposes:

to endorse any check or other instrument  payable to Assignor in connection with
the  Project,  to  submit  claims  and  otherwise  deal with all  insurance  and
insurance  proceeds  with respect to the  Project,  to execute and file with the
appropriate  governmental authority or office any and all certificates,  reports
or other evidence of the withdrawal of Assignor from the Company, and to perform
such other acts as may be  necessary  to carry out the purpose and intent of the
within assignment or to continue the business of the Company.

Assignor hereby ratifies,  acknowledges and confirms all acts taken by Assignee,
as attorney-in-fact, pursuant to this appointment.

<PAGE>

Assignor hereby revokes,  annuls and cancels any and all powers of attorney,  if
any, previously  executed by Assignor with respect to such stated purposes,  and
the same shall be of no further force or effect.  Assignor  hereby  acknowledges
that  such  power  shall be  coupled  with an  interest  and shall  survive  the
disability or death of the Assignor.

     4.  Indemnity.  Assignor hereby agrees to indemnify and defend Assignee and
hold it harmless  against any claim,  loss or liability  arising from any of the
following:  (i) any breach of any representation or warranty hereunder;  or (ii)
any assertion  that Assignee is liable for any debts or obligations of Assignor,
whether  based  on any  act or  omission  of  Assignor  which  occurs  prior  or
subsequent to the date of this Assignment.

     5. Governing Law. This Assignment  shall be governed by and construed under
the laws of the State of Colorado.

     6. Successors and Assigns.  This Assignment  shall inure to the benefit and
be binding upon the successors and assigns of Assignor and Assignee.

     7.  Counterparts.  This  Assignment  may  be  executed  in  any  number  of
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument.

     This  Assignment is executed to be effective as of the date first set forth
above.

                       ASSIGNOR:

                       AL FELD, an individual

                       ASSIGNEE:

                       WELLSFORD PARK HIGHLANDS CORP., a
                              Colorado corporation

                       By:
                           -----------------------
                           Name:
                           Title:

<PAGE>

CONSENT:

     Pursuant  to  Section  18.1.1  of  the  Operating   Agreement  and  Section
7-80-801(1)(c)  of the Act,  Assignee hereby consents to the continuation of the
business of the Company,  notwithstanding  the  withdrawal  and  resignation  of
Assignor as a Member of the Company.

                     ASSIGNEE:

                     WELLSFORD PARK HIGHLANDS CORP., a
                            Colorado corporation

                     By:
                              Name:
                              Title:

[NOTE: Continuing  Members to execute  Unanimous  Written Consent per Schedule A
     attached hereto.]

STATE OF                      }
                              }ss
COUNTY OF                     }

The foregoing  instrument was acknowledged  before me on __________ __, 19__, by
AL FELD, an individual.

                           Commission expires:
---------------------------                    -----------
Notary Public

STATE OF                      }
         ---------------------}ss
COUNTY OF                     }

The foregoing instrument was acknowledged before me on           ,
                                                       ------- --
    , by                                    , as
----    ------------------------------------    ------------------
            of Wellsford Park Highlands Corp., a Colorado
-----------
corporation.

                           Commission expires:
---------------------------                    -----------
Notary Public

<PAGE>

                                  SCHEDULE A TO
                                    EXHIBIT Q

                            UNANIMOUS WRITTEN CONSENT
                               IN LIEU OF MEETING
                                       BY

                                 THE MEMBERS OF
                             PARK AT HIGHLANDS LLC,
                      a Colorado Limited Liability Company
                          __________________ ___, 19___

     Section 7-80-711 of the Colorado Limited  Liability Company Act, as amended
(the "Act")  provides  that any action  required or  permitted  to be taken at a
meeting of the members of a limited  liability  company  may be taken  without a
meeting if a written consent, setting forth the action so taken, shall be signed
by all the members  entitled to vote with respect to the subject  matter thereof
and delivered to the limited  liability  company in the manner  described in the
Act. Section 15.10 of that certain Operating Agreement  ("Operating  Agreement")
of Park at Highlands LLC (the "Company"),  a Colorado limited liability company,
dated as of  _______________,  1995 by and  between Al Feld and  Wellsford  Park
Highlands Corp., a Colorado corporation ("WPHC"),  provides that action required
or permitted  to be taken at a meeting of Members of the  Company,  may be taken
without a meeting under similar circumstances.

The undersigned,  which constitute all of the Remaining  Members (defined below)
of the Company,  by signing this document,  waive any and all notice that may be
required  for a meeting of the  members of the  Company  and take the  following
action:

     WHEREAS,  pursuant to Section 16.2.1 of the Operating  Agreement,  WPHC, by
executing the attached Exercise of Call Option, Assignment of Interest and Power
of Attorney  attached  hereto as Exhibit L-1, has given notice to the Company of
its desire (i) to exercise  the Call  Option as  contemplated  in the  Operating
Agreement  and (ii) to cause Al Feld to  resign  as Member  and  Manager  of the
Company; and

     WHEREAS,  the Members other than Al Feld (the "Remaining  Members")  desire
(i) to accept the withdrawal and resignation of Al Feld as Member and Manager of
the Company,  (ii) to consent to the transfer and  assignment  of the  Ownership
Interest  (as  defined in the  attached  exhibit)  of Al Feld to WPHC,  (iii) to
appoint and elect WPHC as the successor Manager to Al Feld, to hold office until
removed  pursuant  to  Section  12.12 of the  Operating  Agreement  or until its
successor  has been elected and  qualified;  and (iv) to consent to continue the
business of the Company  after the  resignation  and  termination  of Al Feld as
Member and Manager of the Company;

<PAGE>

     RESOLVED,  that the  Remaining  Members  hereby accept the  withdrawal  and
resignation of Al Feld as Member and Manager of the Company; and

     FURTHER  RESOLVED,  that the  Remaining  Members  hereby (i) consent to the
transfer and  assignment of the  Ownership  Interest (as defined in the attached
exhibit)  of Al Feld to  WPHC,  (ii)  appoint,  elect  and  qualify  WPHC as the
successor  Manager to Al Feld, to hold office until removed  pursuant to Section
12.12 of the  Operating  Agreement or until its  successor  has been elected and
qualified;  (iii)  consent to continue  the  business  of the Company  after the
resignation and termination of Al Feld as Member and Manager of the Company; and
(iv) authorize the Members to execute,  deliver and take all action necessary to
effectuate the actions contemplated under the attached Exhibit L-1.

     This Consent,  when signed by all of the  Remaining  Members of the Company
and delivered to the Company in the manner prescribed in the Act, shall have the
same  force and  effect as a  unanimous  vote,  and may be stated as such in any
document.

     IN WITNESS  WHEREOF,  the undersigned  have executed this Consent as of the
date above written.

                                   WELLSFORD PARK HIGHLANDS CORP.,
                                   a Colorado corporation, Member

                                   By:      ____________________________
                                            Title:

<PAGE>

                                    EXHIBIT R

                 EXERCISE OF PUT OPTION; ASSIGNMENT OF INTEREST
                                POWER OF ATTORNEY

     This ASSIGNMENT OF INTEREST (this "Assignment") is made and entered into as
of the ____ day of , 19 by and between Al Feld, an individual ("Assignor"),  and
Wellsford Park Highlands Corp., a Colorado corporation ("Assignee").

                                    RECITALS

     A. Pursuant to that certain Operating Agreement (the "Operating Agreement")
of Park at Highlands LLC, a Colorado limited  liability  company (the "Company")
dated as of _________,  1995, by and between Assignor and Assignee,  Assignor is
the owner of an option  (the "Put  Option")  to cause  Assignee  to acquire  the
ownership  interest of Assignor in the Company as of the date hereof  (including
the right of Assignor to receive any distributions  related to any periods prior
to and including the date hereof),  which ownership  interest includes the right
of  Assignor  to any and all  benefits  to which  Assignor  may be entitled as a
Member  and as a  Manager  (each as  defined  in the  Operating  Agreement),  as
provided  in the  Operating  Agreement  or the version of the  Colorado  Limited
Liability  Company  Act  adopted  by the  State  of  Colorado,  Co.  Rev.  Stat.
ss.ss.7-80-101 to 7-80-913,  as amended from time to time (the "Act"),  together
with the  unaccrued  obligations  of  Assignor,  in its capacity as a Member and
Manager,  to comply with all the terms and provisions of the Operating Agreement
and the Act (collectively, the "Ownership Interest").

     B. In accordance with Section 16.2.2 of the Operating Agreement,  Assignor,
by its execution and delivery of this Assignment to Assignee, hereby desires (i)
to exercise the Put Option as contemplated  therein and (ii) to resign as Member
and Manager of the Company.

     C. At Final Closing (as defined in the Operating  Agreement),  concurrently
with the above  exercise of the Put Option by Assignor,  (i) Assignee has agreed
to acquire and buy the Ownership  Interest  from Assignor  pursuant to the terms
and  conditions set forth in the Operating  Agreement,  provided that all of the
Final  Closing  Funding  Conditions  have been  satisfied  and (ii) Assignor has
agreed to appoint Assignee as its true and lawful attorney-in-fact, as set forth
herein.

     D. Terms not otherwise  defined herein shall have the meanings set forth in
the Operating Agreement.

<PAGE>

                                    AGREEMENT

     In  consideration  of the receipt of Ten and no/100  Dollars  ($10.00)  and
other good and valuable  consideration in hand paid by Assignor to Assignee, the
receipt  and  sufficiency  of which are hereby  acknowledged  and  confessed  by
Assignee, Assignor and Assignee hereby agree as follows:

     1. Assignment and Assumption. At Final Closing (as defined in the Operating
Agreement),  concurrently  with and conditioned  upon the satisfaction of all of
the conditions and covenants of Section 16.2.2 of the Operating  Agreement,  (i)
Assignor hereby assigns, grants and conveys to Assignee all of Assignor's right,
title and interest in and to the  Ownership  Interest and (ii)  Assignee  hereby
assumes  the  Ownership  Interest  and agrees to be bound by and comply with and
perform all of the  obligations  of Assignor in its  capacity as a Member and as
Manager,  arising  under the  Operating  Agreement  which  accrue after the date
hereof.  Assignor  shall remain  obligated to perform all of the  obligations of
Assignor  under the  Operating  Agreement  (i) which are not  expressly  assumed
hereunder or (ii) which have  accrued on or prior to the date  hereof.  Further,
all benefits of the Operating Agreement relating to Assignor, including, without
limitation,  the right to receive any distributions related to any periods prior
to and including the date hereof, shall inure to the benefit of Assignee.

     2.  Representation  and  Warranty  of  Assignor.  Assignor  represents  and
warrants that: (i) Assignor is the sole owner of the entire Ownership  Interest;
(ii)  Assignor  is  not in  default  under  or in  breach  of any of the  terms,
covenants or  provisions of the Operating  Agreement,  and Assignor  knows of no
event which, but for the passage of time or the giving of notice, or both, would
constitute an event of default  under or a breach of the Operating  Agreement by
Assignor;  (iii)  Assignor  is duly  authorized  to  execute  and  deliver  this
Assignment;  and (iv) the  Ownership  Interest  is free and clear of any and all
liens, security interests, encumbrances, and completing claims.

     3.  Appointment of Assignee as  Attorney-in-Fact.  Effective as of the date
hereof,  Assignor hereby  constitutes  and appoints  Assignee to be its true and
lawful  attorney-in-fact  to act for Assignor,  in the name,  place and stead of
Assignor, for the following purposes:

     to endorse any check or other instrument  payable to Assignor in connection
     with the Project,  to submit claims and  otherwise  deal with all insurance
     and  insurance  proceeds  with respect to the Project,  to execute and file
     with  the  appropriate   governmental  authority  or  office  any  and  all
     certificates,  reports or other evidence of the withdrawal of Assignor from
     the Company, and to perform

<PAGE>

     such other acts as may be  necessary to carry out the purpose and intent of
     the within assignment or to continue the business of the Company.

Assignor hereby ratifies,  acknowledges and confirms all acts taken by Assignee,
as  attorney-in-fact,  pursuant to this  appointment.  Assignor  hereby revokes,
annuls and cancels any and all powers of attorney,  if any,  previously executed
by Assignor  with respect to such stated  purposes,  and the same shall be of no
further force or effect.  Assignor hereby  acknowledges that such power shall be
coupled  with an  interest  and shall  survive  the  disability  or death of the
Assignor.

     4.  Indemnity.  Assignor hereby agrees to indemnify and defend Assignee and
hold it harmless  against any claim,  loss or liability  arising from any of the
following:  (i) any breach of any representation or warranty hereunder;  or (ii)
any assertion  that Assignee is liable for any debts or obligations of Assignor,
whether  based  on any  act or  omission  of  Assignor  which  occurs  prior  or
subsequent to the date of this Assignment.

     5. Governing Law. This Assignment  shall be governed by and construed under
the laws of the State of Colorado.

     6. Successors and Assigns.  This Assignment  shall inure to the benefit and
be binding upon the successors and assigns of Assignor and Assignee.

     7.  Counterparts.  This  Assignment  may  be  executed  in  any  number  of
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument.

     This  Assignment is executed to be effective as of the date first set forth
above.

                       ASSIGNOR:

                       AL FELD, an individual

<PAGE>

                       ASSIGNEE:

                       WELLSFORD PARK HIGHLANDS CORP., a
                              Colorado corporation

                       By:
                                Name:
                                Title:

CONSENT:

Pursuant to Section 18.1.1 of the Operating Agreement and Section 7-80-801(1)(c)
of the Act,  Assignee hereby consents to the continuation of the business of the
Company,  notwithstanding the withdrawal and resignation of Assignor as a Member
of the Company.

                      ASSIGNEE:

                      WELLSFORD PARK HIGHLANDS CORP., a
                             Colorado corporation

                       By:
                                Name:
                                Title:

[NOTE: Continuing  Members to execute  Unanimous  Written Consent per Schedule A
     attached hereto.]

STATE OF                            }
                                    }ss
COUNTY OF                           }

The  foregoing  instrument  was  acknowledged  before  me on , , by AL FELD,  an
individual.

                           Commission expires:
---------------------------                    -----------
Notary Public

<PAGE>

STATE OF                            }
                                    }ss
COUNTY OF                           }

     The foregoing instrument was acknowledged before me on ___________,  199__,
by ________________________,  as __________________________________ of WELLSFORD
PARK HIGHLANDS CORP., a Colorado corporation.

                           Commission expires:
---------------------------                    -----------
Notary Public

<PAGE>

                                   SCHEDULE A
                                  TO EXHIBIT R

                            UNANIMOUS WRITTEN CONSENT
                               IN LIEU OF MEETING
                                       BY

                                 THE MEMBERS OF
                             PARK AT HIGHLANDS LLC,
                      a Colorado Limited Liability Company
                          __________________ ___, 19__

     Section 7-80-711 of the Colorado Limited  Liability Company Act, as amended
(the "Act")  provides  that any action  required or  permitted  to be taken at a
meeting of the members of a limited  liability  company  may be taken  without a
meeting if a written consent, setting forth the action so taken, shall be signed
by all the members  entitled to vote with respect to the subject  matter thereof
and delivered to the limited  liability  company in the manner  described in the
Act. Section 15.10 of that certain Operating Agreement  ("Operating  Agreement")
of Park at Highlands LLC (the "Company"),  a Colorado limited liability company,
dated as of __________, 1995 by and between Al Feld and Wellsford Park Highlands
Corp.,  a Colorado  corporation  ("WPHC"),  provides  that  action  required  or
permitted  to be taken at a meeting  of  Members  of the  Company,  may be taken
without a meeting under similar circumstances.

 The undersigned,  which constitute all of the Remaining Members (defined below)
of the Company,  by signing this document,  waive any and all notice that may be
required  for a meeting of the  members of the  Company  and take the  following
action:

     WHEREAS, pursuant to Section 16.2.2 of the Operating Agreement, Al Feld, by
executing the attached Exercise of Put Option,  Assignment of Interest and Power
of Attorney  attached  hereto as Exhibit L-2, has given notice to the Company of
its  desire (i) to  exercise  the Put Option as  contemplated  in the  Operating
Agreement and (ii) to resign as Member and Manager of the Company; and

     WHEREAS,  the Members other than Al Feld (the "Remaining  Members")  desire
(i) to accept the withdrawal and resignation of Al Feld as Member and Manager of
the Company,  (ii) to consent to the transfer and  assignment  of the  Ownership
Interest  (as  defined in the  attached  exhibit)  of Al Feld to WPHC,  (iii) to
appoint and elect WPHC as the successor Manager to Al Feld, to hold office until
removed  pursuant  to  Section  12.12 of the  Operating  Agreement  or until its
successor  has been elected and  qualified;  and (iv) to consent to continue the
business of the Company  after the  resignation  and  termination  of Al Feld as
Member and Manager of the Company;

<PAGE>

     RESOLVED,  that the  Remaining  Members  hereby accept the  withdrawal  and
resignation of Al Feld as Member and Manager of the Company; and

     FURTHER  RESOLVED,  that the  Remaining  Members  hereby (i) consent to the
transfer and  assignment of the  Ownership  Interest (as defined in the attached
exhibit)  of Al Feld to  WPHC,  (ii)  appoint,  elect  and  qualify  WPHC as the
successor  Manager to Al Feld, to hold office until removed  pursuant to Section
12.12 of the  Operating  Agreement or until its  successor  has been elected and
qualified;  (iii)  consent to continue  the  business  of the Company  after the
resignation and termination of Al Feld as Member and Manager of the Company; and
(iv) authorize the Members to execute,  deliver and take all action necessary to
effectuate the actions contemplated under the attached Exhibit L-2.

     This Consent,  when signed by all of the  Remaining  Members of the Company
and delivered to the Company in the manner prescribed in the Act, shall have the
same  force and  effect as a  unanimous  vote,  and may be stated as such in any
document.

     IN WITNESS  WHEREOF,  the undersigned  have executed this Consent as of the
date above written.

                        WELLSFORD PARK HIGHLANDS CORP.,
                        a Colorado Corporation, Member

                        By:
                                 Title:

<PAGE>

                                   EXHIBIT S-1

                         FORM OF ARCHITECT'S CERTIFICATE

                            (Letterhead of Architect)

                            CERTIFICATE OF ARCHITECT

______________, 1996

Park at Highlands LLC
Wellsford Residential Property Trust
370  17th Street, Suite 3100
Denver, CO  80202

Reference:        ______________________
                  ____________, Colorado

Ladies and Gentlemen:

Please refer to the final architectural plans and specifications  reflecting all
field notes and field changes as built described in the attached  Exhibit A (the
"Plans"). The undersigned understands that ______________________________ or its
designee  ("Wellsford")  is acquiring an interest in or is causing the repayment
of the  construction  loan for a residential  complex owned by Park at Highlands
LLC, a Colorado limited  liability  company  ("Owner"),  located on that certain
parcel of real property having an address of  ___________________________ in the
City of ______,  County of ______,  State of Colorado and described on Exhibit B
attached hereto (the "Site"), on which Owner has constructed a complex of ______
apartment  units  known  as   _______________________   (the  "Project").   This
Certificate  is a condition  precedent to  Wellsford's  acquiring the Project or
repaying such loan,  and the  undersigned  acknowledges  that  Wellsford will be
relying upon this Certificate in consummating such transaction.

With  such   understanding,   the  undersigned  has  reviewed  the  Plans,   the
construction of the Project in relationship to the Plans, and its conformity and
compliance  with  applicable laws and  regulations  (i.e.,  applicable  federal,
state,  county and municipal  laws and  regulations  and  ordinances,  including
without limitation,  governing building and fire codes, zoning,  subdivision and
land  use  laws  and   regulations,   environmental   and  safety  statutes  and
regulations, and the rules and regulations of other governmental agencies having
jurisdiction over the Site or the Project  ("Applicable Laws"). Based upon these
reviews and upon due professional investigation,

<PAGE>

the undersigned declares and certifies to and for the benefit of
Owner and Wellsford that:

1.   The undersigned is the architect who prepared the Plans and coordinated and
     supervised the construction of the Project.

2.   The Project commonly known as  ______________  contains 456 apartment units
     in __ buildings,  and _______  parking spaces,  with related  amenities and
     facilities.   The  Site  is  zoned  _______________  under  the  applicable
     ordinances of the City of ____________, Colorado.

3.   We have  examined  all  applicable  materials  relative  to those  types of
     restrictions and requirements  sometimes  referred to as use,  dimensional,
     bulk  and  parking  restrictions,   jurisdictional  wetlands  requirements,
     setback and buffering  requirements,  density  restraints,  landscaping and
     vegetation  preservation  ordinances,   laws,  rules  and  regulations  and
     environmental restraints, which relate to the Site (hereinafter referred to
     as    "Development    Constraints")    and   have   determined   that   the
     -----------------------  Project is  permitted  as a matter of right except
     for the following variances: ----------------------------------- , and that
     the    ----------------------------------    following   restrictions   and
     requirements (the  "Restrictions and  Requirements")  are applicable to the
     ----------------------------- Project:

     Minimum Lot Area:

     Height Limitation:

     Maximum Floor Area Ratio (or other type of bulk bulk restriction):

     Limitation on Number of Dwelling Units (if any):

     Front Yard Requirements:

     Side and Rear Yard

     Requirements:

     Parking Requirements:

4.   The Project and the Site are in compliance with the Development Constraints
     and the Restrictions and Requirements.

<PAGE>

5.   The  improvements   contemplated  by  the  Plans  have  been  completed  in
     substantial compliance with the Plans, except for the items in the attached
     Exhibit C which are  incomplete  to the extent  indicated and for which the
     estimated cost to complete is indicated on said Exhibit C.

6.   We are of the opinion that the Project has been designed in accordance with
     the applicable  provisions of Colorado law, the Americans with Disabilities
     Act of 1990, 42 U.S.C.  Section 12101,  et seq., as amended,  and any other
     applicable  law, rule or regulation of any kind or description  relating to
     the elimination of architectural barriers for the handicapped.

7.   We  certify  that any and all  amounts  due and  payable  to us under or in
     connection with the Standard Form of Agreement  between Owner and Architect
     for Housing Services  (AIA-Document B181) dated  ______________ with regard
     to the Project have been paid in full.

8.   The Project,  the Plans and all  improvements  comply with Applicable Laws,
     including  without  limitation,  the applicable PUD, and with all necessary
     and required notices,  permits or license agreements in connection with the
     Plans,   and  all  permits,   licenses  and  approvals   required  for  the
     construction of the improvements  contemplated by the Plans and for the use
     and  occupancy of the Project  (including,  without  limitation,  all final
     certificates   of  occupancy)   have  been  obtained  from  the  applicable
     governmental  or  quasi-governmental  agency  having  jurisdiction  or  any
     private party from whom any license is required.

9.   The improvements are ready for occupancy.

10.  The  improvements  on the Property,  contain a minimum of _________  square
     feet of net rentable  living area (as measured from inside face of exterior
     wall to apartment side of corridor wall to centerline of tenant  separation
     wall) for the apartments.

11.  The undersigned is a licensed  architect and has the power and authority to
     render  this  Certificate  and to execute  and deliver it on behalf of Feld
     Design, Inc.

<PAGE>

     This Certificate may be relied upon only by Wellsford and the Owner.

Very truly yours,

By:      Pamela J.L. English
         Supervising Architect

Dated:________________________

<PAGE>

                                  EXHIBIT A TO

                            CERTIFICATE OF ARCHITECT

                             ____________, Colorado

                                  DRAWING LIST

ARCHITECTURAL:

STRUCTURAL:

FOUNDATION:

MECHANICAL:

PLUMBING:

ELECTRICAL:

LANDSCAPING:

<PAGE>

                                  EXHIBIT B TO

                            CERTIFICATE OF ARCHITECT

                                LEGAL DESCRIPTION

<PAGE>

                                  EXHIBIT C TO

                            CERTIFICATE OF ARCHITECT

Incomplete Items                                              Cost of Completion

<PAGE>

                                   EXHIBIT S-2

                         FORM OF ENGINEER'S CERTIFICATE

                        (Letterhead of Project Engineer)

                             ENGINEER'S CERTIFICATE

__________________, 1996

Park at Highlands LLC
Wellsford Residential Property Trust
370  17th Street, Suite 3100

Denver, Colorado  80202

Reference:      ______________
                _________________, Colorado

Ladies and Gentlemen:

The  undersigned  understands  that  __________________________  or its designee
("Wellsford")  is  acquiring  an interest in or is causing the  repayment of the
construction  loan for a residential  complex owned by Park at Highlands  LLC, a
Colorado limited liability company ("Owner"),  located on that certain parcel of
real  property  having  an  address  of  ______________________  in the  City of
___________,  County of __________, State of Colorado and described on Exhibit A
attached hereto (the "Site"), on which Owner has constructed a complex of ______
apartment units known as ______________  (the "Project").  This Certificate is a
condition precedent to Wellsford's  acquiring the Project or repaying such loan,
and the  undersigned  acknowledges  that  Wellsford  will be  relying  upon this
Certificate in consummating such transaction.

With such  understanding,  the  undersigned  has reviewed  those portions of the
plans and  specifications  for the Project that are listed on Exhibit B attached
hereto  (the   "Engineering   Plans"),   the  construction  of  the  Project  in
relationship  to the Engineering  Plans,  and its conformity and compliance with
certain  applicable laws and regulations.  Based upon these reviews and upon due
professional  investigation,  the undersigned  declares and certifies to and for
the benefit of Owner and Wellsford that:

1.   Satisfactory  methods of access to and egress from the Site and the Project
     and adjoining or nearby  public ways are  available  and are  sufficient to
     meet the reasonable needs of the Project and all applicable requirements of
     public  authorities.  Sanitary  water  supply and storm sewer and  sanitary
     sewer facilities and other required utilities (gas, electricity, telephone,
     etc.) are

<PAGE>

     likewise  available and are sufficient to meet the reasonable  needs of the
     Project and all applicable requirements of public authorities.

2.   We are of the opinion that the Property is not located in a 100-Year  Flood
     Plain or in an  identified  "flood  prone  area,"  as  defined  by the U.S.
     Department of Housing and Urban Development, pursuant to the Flood Disaster
     Protection  Act of 1973,  as amended,  and is not  subject to any  federal,
     state or local "wetlands" rules, regulations, ordinances or requirements.

3.   We have reviewed and are familiar with all tests and analyses performed and
     professional  recommendations  made by soil engineers and other consultants
     regarding  the  condition  of the  soil of the  Site.  In our  professional
     opinion,  the  condition of the soil of the Site is adequate to support the
     Project as completed.

4.   We have reviewed the locations of all easements, rights- of-way, subsurface
     rights or jurisdictional wetlands, and all rules and regulations pertaining
     to the same in force  relating to the Site,  and the Plans are  prepared so
     that the Project does not encroach over, across or upon any such easements,
     rights-of-way,  subsurface rights or jurisdictional  wetlands and the like,
     and all necessary permits and approvals  required for the Project have been
     obtained.

5.   We have reviewed all deeds,  easements,  covenants,  restrictions and other
     matters set forth in Schedule B of Title Commitment No.  __________  issued
     by Land Title Guaranty  Company,  and the Project satisfies and/or does not
     violate any provisions concerning  construction of improvements on the Site
     set  forth in such  deeds,  easements,  covenants,  restrictions  and other
     matters.

This Certificate may be relied upon only by Owner and Wellsford.

Very Truly yours,

[ENGINEER]

By:
         Title:
Dated:

<PAGE>

                                  EXHIBIT A TO

                           CERTIFICATE OF ENGINEERING

                                LEGAL DESCRIPTION

<PAGE>

                                  EXHIBIT B TO

                           CERTIFICATE OF ENGINEERING

                            ______________, Colorado

                                  DRAWING LIST

CIVIL ENGINEERING
 DRAWINGS:

STRUCTURAL:

FOUNDATION:

MECHANICAL:

PLUMBING:

ELECTRICAL:

LANDSCAPING:

<PAGE>

                                    EXHIBIT T

                              INFRASTRUCTURE BUDGET

         TO BE AGREED UPON BY PARTIES PRIOR TO CONSTRUCTION LOAN CLOSING

<PAGE>

                                    EXHIBIT U

                             SUBSTITUTION AGREEMENT

         TO BE AGREED UPON BY PARTIES PRIOR TO CONSTRUCTION LOAN CLOSING

<PAGE>FIRST AMENDMENT TO OPERATING AGREEMENT
                            OF PARK AT HIGHLANDS LLC

     THIS FIRST AMENDMENT TO OPERATING  AGREEMENT OF PARK AT HIGHLANDS LLC (this
"First Amendment") is made as of the 29th day of December,  1995, by and between
AL FELD, an individual  ("Feld") and WELLSFORD PARK HIGHLANDS  CORP., a Colorado
corporation ("WPHC").

                                    RECITALS

     A.  Feld  and  WPHC  constitute  all  of  the  members  (collectively,  the
"Members") of Park at Highlands LLC, a Colorado limited  liability  company (the
"Company"),  which is governed by that  certain  Operating  Agreement of Park at
Highlands LLC (the "Operating Agreement") dated as of April 27, 1995.

     B. The Members  now desire to amend the  Operating  Agreement  as set forth
herein.

     C.  Capitalized   terms  not  otherwise   defined  herein  shall  have  the
definitions set forth in the Operating Agreement.

     NOW,  THEREFORE,  for and in  consideration of the above recitals and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged,  Feld and WPHC hereby  agree to amend the  Operating  Agreement as
follows:

     1.  Construction  Loan Outside Date. The Construction  Loan Outside Date as
defined in Section  5.2.4 of the  Operating  Agreement  is hereby  postponed  to
January 5, 1996

     2. Cost  Savings Fee.  The first  sentence of Section 7.4 of the  Operating
Agreement is hereby  deleted in its entirety  and the  following is  substituted
therefor:

<PAGE>

     "The  Company  shall pay Feld at Final  Closing a cost savings fee equal to
     twenty-five percent (25%) of cost savings, if any."

     3. Attorneys Fees. The following paragraph is hereby added to the Operating
Agreement as new Section 19.17 thereof:

     19.17 ATTORNEYS FEES. Should any party hereto institute any legal action or
     proceeding  to enforce any  provision  of the  Operating  Agreement  or for
     damages by reason of any alleged  breach of any  provision of the Operating
     Agreement or for any other judicial  remedy,  the prevailing party shall be
     entitled to receive from the non-prevailing party all reasonable attorneys'
     fees and all court costs in connection  with said action or proceeding,  in
     addition to any other award.

     4.  Exhibits to  Operating  Agreement.  The Members  hereby  agree that the
exhibits  listed  below,  a copy  of  each  of  which  is  attached  hereto  and
incorporated  herein,  are hereby  attached to and made a part of the  Operating
Agreement  to the  same  effect  as if each  had  been  fully  set  forth in the
Operating  Agreement at the date it was executed by the Members and that each of
the  exhibits  attached to this First  Amendment is hereby  substituted  for and
shall supersede the corresponding  exhibit attached to the Operating  Agreement,
if any:

     Exhibit C         Deposit and Contract Administration Agreement
     Exhibit E         Description of Infrastructure
     Exhibit F         Description of Infrastructure Land
     Exhibit J         Property Management Agreement
     Exhibit L         Pledge and Security Agreement--Feld to WPHC
     Exhibit M         Pledge and Security Agreement--WPHC to Feld
     Exhibit N         Description of Plans and Specifications
     Exhibit O         Final Project Budget
     Exhibit U         Substitution Agreement

<PAGE>

     5. Full Force and Effect. The Operating Agreement,  as specifically amended
herein,  is hereby  ratified by the  Members and shall  remain in full force and
effect.

     6.  Counterparts.   This  Amendment  may  be  executed  in  any  number  of
counterparts,  each of which shall be deemed to be an original and all of which,
when taken  together,  shall  constitute  one  agreement  binding on the parties
hereto,  notwithstanding  that  all the  parties  may not have  signed  the same
counterpart. Signature pages from one counterpart may be removed and attached to
another counterpart to create one fully-executed document.

                            [SIGNATURE PAGE FOLLOWS]

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto,  being all of the Members of the
Company, have executed this Amendment as of the date first written above.

By:      /s/ Al Feld
         --------------------
         Al Feld

WELLSFORD PARK HIGHLANDS CORP.,
a Colorado corporation

By:      /s/ Donald D. MacKenzie
         -----------------------
         Donald D. MacKenzie, Vice President

<PAGE>

                                    EXHIBIT J

                          PROPERTY MANAGEMENT AGREEMENT

        (Has been prepared by David Strong, but I do not yet have a copy)

<PAGE>

                                    EXHIBIT L

                   PLEDGE AND SECURITY AGREEMENT--FELD TO WPHC

     THIS PLEDGE AND SECURITY  AGREEMENT  (THIS  "AGREEMENT")  is made as of the
27th day of April,  1995, by AL FELD, an  individual,  having an address of 4600
South Ulster Street,  Suite 350,  Denver,  Colorado 80237  ("PLEDGOR"),  for the
benefit of WELLSFORD PARK HIGHLANDS  CORP.,  a Colorado  corporation,  having an
office  at  370  Seventeenth   Street,   Suite  3100,  Denver,   Colorado  80202
("PLEDGEE").

                                    RECITALS

     A. Pledgor is the Manager and a Member of Park at Highlands LLC, a Colorado
limited  liability  company (THE  "LIMITED  LIABILITY  COMPANY"),  which Limited
Liability  Company is governed by its Operating  Agreement dated as of April 27,
1995 (THE "OPERATING AGREEMENT"), by and between Pledgee and Pledgor.

     B. Pledgee is also a Member in the Limited Liability Company.

     C. In order to secure the full payment and performance by Pledgor of all of
Pledgor's obligations under the Operating Agreement, as such Operating Agreement
may be now or hereafter  amended,  modified or restated (said  obligations under
the  Operating  Agreement  are  hereinafter  referred to as the  "OBLIGATIONS"),
Pledgor is entering into this Agreement for the benefit of Pledgee.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the recitals,  covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereby  agree as
follows:

     1. Definitions.

     a. "Collateral" shall mean:

     (i) All of Pledgor's right,  title and interest in the ownership  interests
of  Pledgor  in  Limited  Liability  Company,  whether  now  owned or  hereafter
acquired,  including,  without  limitation,  its  Interest  (as  defined  in the
Operating  Agreement) in the Limited Liability Company, the right of Pledgor, if
any, to any benefits to which Pledgor may be entitled  pursuant to the Operating
Agreement or the Colorado  Limited  Liability  Company Act, Colo. Rev.  Statutes
Sections  7-80-101 to 7-80-913,  as amended  from time to time (the "Act"),  and
Pledgor's right to receive payments,  fees,  distributions and allocations under
or in connection with the Operating Agreement (whether as Member or as Manager),
as such Operating

<PAGE>

     Agreement may be modified or extended from time to time with the consent of
     the Pledgee; and

     (ii) All proceeds,  whether cash proceeds or noncash proceeds, and products
of any and all of the foregoing.

     b. "Event of Default" shall mean an event of default described in Section 8
herein.

     2. Pledge of Collateral and Grant of Security Interest. Pledgor does hereby
unconditionally and irrevocably assign, pledge, convey,  transfer,  deliver, set
over and grant unto  Pledgee,  its  successors  and  assigns,  as  security  for
Pledgor's  complete and timely  payment and  performance of the  Obligations,  a
continuing first lien security interest under the Uniform Commercial Code of the
State of Colorado in the  Collateral.  Pledgor  hereby further grants to Pledgee
all  rights  in the  Collateral  as are  available  to a  secured  party of such
collateral under the Uniform Commercial Code of the State of Colorado (being the
principal place of business of Pledgor and the location of Pledgor's  residence)
and,  concurrently  herewith,  shall  deliver to  Pledgee  duly  executed  UCC-1
financing  statements  suitable for filing in the State of Colorado with respect
to the Collateral.

     3. Delivery to Pledgee.

     a. Pledgor agrees to execute and to use its best efforts to cause all other
necessary  parties,  and any  successors  and  assigns  thereof,  to execute and
deliver to Pledgee  such other  agreements,  instruments  and  documentation  as
Pledgee  may  reasonably  request  from time to time to effect  the  conveyance,
transfer,  and grant to Pledgee of Pledgor's right, title and interest in and to
the Collateral as security for the Obligations.

     b.  Concurrently  with the execution of this Agreement,  Pledgor has caused
each of the Members of the Limited  Liability  Company,  other than Pledgee,  to
execute the Consent to Security  Interest  and  Agreement  in the form  attached
hereto as Schedule A (THE  "CONSENT")  evidencing  the consent of the Members to
the  assignment  of Pledgor's  Limited  Liability  Company  interests  and their
agreement to be bound by Section 4 of this Agreement,  and Pledgor  covenants to
execute, if required by Pledgee, an amendment to the Operating Agreement in such
form as Pledgee may reasonably require to reflect the substitution of Pledgee in
place of Pledgor as Manager of the Limited Liability Company upon the occurrence
of an Event of Default. Pledgor further agrees to execute and to cause the other
Members of the Limited  Liability  Company to execute and deliver to the Pledgee
such other  agreements,  instruments and documentation as Pledgee may reasonably
request from time to time to effectuate the conveyance, transfer, assignment and
grant to Pledgee of all of  Pledgor's  right,  title and  interest in and to the
Collateral and to evidence the  substitution  of the Pledgee in place of Pledgor
as Manager in the Limited Liability Company.

<PAGE>

     4. Proceeds and Products of the Collateral.

     a.  Notwithstanding any of the foregoing,  unless and until there occurs an
Event of Default, Pledgee agrees to forbear from exercising its right to receive
all benefits  pertaining to the Collateral (except as otherwise  permitted under
the Operating Agreement),  and Pledgor shall be permitted to exercise all rights
and to receive all benefits of the Collateral,  including,  without  limitation,
the right to exercise  all  voting,  approval,  consent  and  similar  rights of
Pledgor pertaining to the Collateral, payments due under, proceeds, whether cash
proceeds or noncash  proceeds,  and products of the Collateral and to retain and
enjoy the same.

     b.  Pledgor  acknowledges  and agrees with  Pledgee,  that  unless  Pledgee
otherwise consents, in Pledgee's sole discretion, Pledgor shall not exercise any
voting, approval,  consent or other rights with respect to the Collateral at any
time after (i) the  occurrence of an Event of Default and (ii) receipt of notice
from Pledgee  instructing  Pledgor not to exercise  any such  voting,  approval,
consent or other rights with respect to the Collateral,  provided, however, that
Pledgor  shall  exercise  any  such  right  it may  have  under  the  agreements
comprising  the Collateral  with respect to the business  affairs of the Limited
Liability  Company as is  reasonably  necessary  to  protect  and  preserve  the
Collateral.

     c.  Upon or at any time  after  the  occurrence  of an  Event  of  Default,
Pledgee, at its option, to be exercised in its sole discretion by written notice
to Pledgor,  may exercise all rights and remedies  granted under this Agreement,
including,  without  limitation,  the right to require  the  obligors  under the
Collateral to make all payments due under and to pay all proceeds,  whether cash
proceeds or noncash  proceeds,  and products of the Collateral to Pledgee.  Upon
the giving of any such notice, the security  constituted by this Agreement shall
become  immediately  enforceable by Pledgee,  without any  presentment,  further
demand,  protest or other notice of any kind, all of which are hereby  expressly
and irrevocably  waived by Pledgor.  Pledgor hereby  authorizes and directs each
respective obligor under the agreements  constituting the Collateral,  that upon
receipt  of  written  notice  from  Pledgee  of an Event of  Default  by Pledgor
hereunder,  to assign, set over, transfer,  distribute,  pay and deliver any and
all  Collateral  or said  payments,  proceeds or products of the  Collateral  to
Pledgee,  at such address as Pledgee may direct, at such time and in such manner
as Collateral and such payments,  proceeds and products of the Collateral  would
otherwise  be  distributed,  transferred,  paid or  delivered  to  Pledgor.  The
respective  obligors under the agreements  constituting  the Collateral shall be
entitled to conclusively  rely on such notice and make all such  assignments and
transfers of the Collateral and all such payments with respect to the Collateral
and pay all such  proceeds and products of the  Collateral  to Pledgee and shall
have no liability to Pledgor for any loss or damage  Pledgor may incur by reason
of said reliance.

     5. No Assumption.  Notwithstanding any of the foregoing,  whether or not an
Event of Default  shall have  occurred,  and  whether or not  Pledgee  elects to
foreclose  on its  security  interest  in the  Collateral  as set forth  herein,
neither the execution of this Agreement,  receipt by Pledgee of any of Pledgor's
right,  title and interest in and to the Collateral  and the payments,  proceeds
and products of the Collateral, now or hereafter due to Pledgor from any obligor
of the  Collateral,  nor Pledgee's  foreclosure of its security  interest in the
Collateral, shall in any

<PAGE>

way be deemed to obligate Pledgee to assume any of Pledgor's obligations, duties
or  liabilities  under  the  Collateral  or  any  agreements   constituting  the
Collateral,  as presently existing or as hereafter amended, or under any and all
other  agreements now existing or hereafter  drafted or executed  (collectively,
the "PLEDGOR'S  LIABILITIES"),  unless Pledgee otherwise agrees to assume any or
all of Pledgor's  Liabilities in writing. In the event of foreclosure by Pledgee
of its  security  interest in the  Collateral,  Pledgor  shall  remain bound and
obligated to perform the Pledgor's  Liabilities to the extent required under the
Operating Agreement,  and Pledgee shall not be deemed to have assumed any of the
Pledgor's  Liabilities,  except as provided in the  preceding  sentence.  In the
event the entity or person acquiring the Collateral at a foreclosure sale elects
to assume the Pledgor's  Liabilities,  such assignee  shall agree to be bound by
the terms and provisions of the applicable agreement.

     6.  Indemnification.  Pledgor  hereby agrees to indemnify,  defend and hold
Pledgee,  its  successors  and  assigns  harmless  from and  against any and all
damages,  losses,  claims,  costs or  expenses  (including  without  limitation,
reasonable attorneys' fees) and any other liabilities whatsoever that Pledgee or
its  successors  or assigns may incur by reason of  Pledgor's  failure to comply
with the terms and conditions of this Agreement or by reason of any  unpermitted
assignment  of Pledgor's  right,  title and interest in and to any or all of the
Collateral.

     7.   Representations,   Warranties  and  Covenants.   In  addition  to  the
representations  made by Pledgor in the Operating  Agreement,  Pledgor makes the
following  representations  and warranties,  and Pledgor covenants and agrees to
provide  written  notices to Pledgee within ten (10) days after Pledgor  becomes
aware that any of the  following  is no longer  true and  correct and to perform
diligently  all acts  reasonably  necessary to maintain or restore the truth and
correctness, in all material respects, of the following:

     a.  Pledgor  acknowledges  that  the  Operating  Agreement  and  any  other
agreements  constituting the Collateral,  currently are in full force and effect
and have not been amended or modified, except by Pledgor and Pledgee in writing.

     b. Pledgor has the full right and title to its  interest in the  Collateral
and has the full power,  legal right and authority to pledge,  convey,  transfer
and assign such  interest.  None of the  Collateral  is subject to any  existing
assignment,  claim,  lien,  pledge,  transfer or other security  interest of any
character, or to any attachment,  levy, garnishment or other judicial process or
to any claim for set-off,  counterclaim,  deduction or discount.  Pledgor  shall
not, without the prior written consent of Pledgee,  which consent may be granted
or denied in Pledgee's sole discretion,  further convey,  transfer,  set over or
pledge to any party any of its interests in the  Collateral.  Pledgor  agrees to
(i) warrant and defend its title to the  Collateral  and the  security  interest
created by this Agreement  against all claims of all persons,  and (ii) maintain
and preserve the Collateral and such security interests.

     c. The pledge of the Collateral  pursuant to this Agreement creates a valid
first priority security interest in the Collateral,  securing the performance of
the

<PAGE>

Obligations,  which security  interest shall be perfected upon the filing of the
UCC-1 Financing Statements referred to in Paragraph 2 of this Agreement.

     d.  Pledgor's  Social  Security  Number  is:  ###-##-####,   and  Pledgor's
principal residence is located at One Dexter Street, Denver, Colorado 80220.

     e.  Pledgor  agrees that it shall not,  without at least  thirty (30) days'
prior written  notification  to Pledgee,  move or otherwise  change its place of
residence.

     f. To the best knowledge of Pledgor,  neither the execution and delivery of
this  Agreement  by Pledgor  nor the  consummation  of the  transactions  herein
contemplated  nor the  fulfillment  of the terms hereof (i) violate the terms of
any agreement,  indenture,  mortgage, deed of trust, equipment lease, instrument
or other  document to which  Pledgor is a party,  or (ii) conflict with any law,
order, rule or regulation  applicable to Pledgor or any court or any government,
regulatory  body or  administrative  agency or other  governmental  body  having
jurisdiction  over Pledgor or its properties,  or (iii) result in or require the
creation  or  imposition  of any lien  (other  than the first  priority  lien of
Pledgee in the Collateral contemplated hereby).

     g. No consent or  approval  which has not been  obtained  prior to the date
hereof of any other  person or entity and no  authorization,  approval  or other
action by, and no notice to or filing  with any  governmental  body,  regulatory
authority  or  securities  exchange,  was or is  necessary as a condition to the
validity of the pledge  hereunder of the Collateral and such pledge is effective
to vest in the  Pledgee  the rights of Pledgee  in the  Collateral  as set forth
herein.

     h. Pledgor shall comply in all material  respects with all  requirements of
law applicable to the Collateral or any part thereof.

     i. Pledgor shall pay and discharge all taxes,  assessments and governmental
charges or levies against any Collateral prior to delinquency  thereof and shall
keep all Collateral free of all unpaid charges whatsoever.

     8. Event of Default.  Each of the  following  shall  constitute an Event of
Default hereunder:

     a. A breach of any  representation,  warranty,  covenant or  obligation  of
Pledgor shall have occurred under the Operating  Agreement and such breach shall
not have been cured within any applicable grace period provided therein; or

     b.  Any  warranty,  representation  or  statement  of the  Pledgor  in this
Agreement  proves  to have  been  false in any  material  respect  when  made or
furnished; or

<PAGE>

     c. There occurs the issuance of a writ,  order of attachment or garnishment
with respect to any of the  Collateral  and such writ,  order of  attachment  or
garnishment is not dismissed and removed within thirty (30) days thereafter; or

     d. A material  breach or violation  of any covenant or agreement  contained
herein shall have  occurred,  which is not cured  within  thirty (30) days after
notice has been given to Pledgor by Pledgee.

     Any Event of Default under this  Agreement  shall be an event of default by
Pledgor under the Operating Agreement.

     9. Remedies.

     a. Upon the occurrence of an Event of Default, Pledgee may by giving notice
of such Event of Default, at its option, do any one or more of the following:

     (i) Take control of the Collateral  and thereafter  exercise all rights and
powers of Pledgor with respect to the Collateral; and

     (ii) Without  notice to or demand upon  Pledgor,  make such payments and do
such acts as Pledgee may deem necessary to protect its security  interest in the
Collateral,  including,  without limitation,  paying, purchasing,  contesting or
compromising  any  encumbrance,  charge or lien which is prior to or superior to
the security  interest granted  hereunder,  and in exercising any such powers or
authority to pay all expenses incurred in connection therewith; and

     (iii)  Require  Pledgor  to take all  actions  necessary  to  deliver  such
Collateral to Pledgee, or an agent or representative designated by Pledgee; and

     (iv)  Foreclose   upon  this  Agreement  as  herein   provided  or  in  any
commercially reasonable manner permitted by law, and exercise any and all of the
rights and remedies conferred upon Pledgee by the Operating Agreement, or in any
other document  executed by Pledgor in connection with the  Obligations  secured
hereby;  and sell or cause to be sold the Collateral,  without  affecting in any
way the rights or remedies to which Pledgee may be entitled under the other such
instruments; and

     (v) Sell or otherwise  dispose of the  Collateral  at public sale,  without
having the Collateral at the place of sale, and upon terms and in such manner as
is  commercially  reasonable,  may determine.  Pledgee may be a purchaser at any
sale; and

     (vi) Exercise any remedies of a secured party under the Uniform  Commercial
Code of the State of Colorado or any other applicable law; and

<PAGE>

     (vii)  Exercise  any  remedies  available  to Pledgee  under the  Operating
Agreement,  including,  but not  limited  to, the  removal of the Pledgor as the
Manager and a Member of the Limited Liability Company and exercise of any rights
of  offset  in favor of  Pledgee  as the  Manager  and a Member  of the  Limited
Liability Company; and

     (viii)   Notwithstanding   anything  to  the  contrary  contained  in  this
Agreement,  at any time after an Event of Default  Pledgee  may,  by  delivering
written notice to the Limited Liability Company and to the Pledgor,  succeed, or
designate its nominee or designee to succeed,  to all right,  title and interest
of Pledgor (including, without limitation, the right, if any, to vote on or take
any action with respect to the matters of the Limited Liability  Company) as the
Manager  and/or a Member of the  Limited  Liability  Company  in  respect of the
Collateral.  Pledgor  hereby  irrevocably  authorizes  and  directs  the Limited
Liability Company on receipt of any such notice (a) to deem and treat Pledgee or
such nominee or designee in all respects as the Manager and/or a Member (and not
merely an  assignee of the Manager  and/or a Member) of such  Limited  Liability
Company,  entitled to exercise all the rights,  powers and privileges (including
the  right to vote on or take any  action  with  respect  to  Limited  Liability
Company   matters   pursuant  to  the  Operating   Agreement,   to  receive  all
distributions,  to be credited  with the  capital  account and to have all other
rights,  powers and privileges  appertaining  to the Collateral to which Pledgor
would have been entitled had the Collateral  not been  transferred to Pledgee or
such nominee or designee),  and (b) to file amended Articles of Organization for
such Limited Liability Company,  if required,  admitting Pledgee or such nominee
or designee as the Manager and/or a Member of the Limited  Liability  Company in
place of Pledgor; and

     (ix) The rights  granted to Pledgee under this  Agreement are of a special,
unique,  unusual  and  extraordinary  character.  The loss of any of such rights
cannot be reasonably or adequately  compensated  by way of damages in any action
at law,  and any  material  breach by  Pledgor  of any of  Pledgor's  covenants,
agreements,  obligations representations or warranties under this Agreement will
cause Pledgee  irreparable  injury and damage.  In the event of any such breach,
Pledgee shall be entitled,  as a matter of right, to injunctive  relief or other
equitable relief in any court of competent jurisdiction to prevent the violation
or  contravention  of any of the  provisions  of  this  Agreement  or to  compel
compliance  with the terms of this  Agreement by Pledgor.  Pledgee is absolutely
and  irrevocably   authorized  and  empowered  by  Pledgor  to  demand  specific
performance of each of the covenants, agreements, representations and warranties
of Pledgor in this  Agreement.  Pledgor  hereby  irrevocably  waives any defense
based on the adequacy of any remedy at law which might  otherwise be asserted by
Pledgor as a bar to the remedy of specific  performance in any action brought by
Pledgee against Pledgor to enforce any of the covenants or agreements of Pledgor
in this Agreement.

<PAGE>

     b. Unless the Collateral is perishable or threatens to decline  speedily in
value or is of a type  customarily  sold on a recognized  market,  Pledgee shall
give Pledgor at least ten (10) days' prior written  notice of the time and place
of any public sale of the Collateral subject to this Agreement or other intended
disposition thereof to be made. Such notice shall be conclusively deemed to have
been  delivered to Pledgor at the address set forth in  subsection  7(d) of this
Agreement,  unless  Pledgor shall notify Pledgee in writing of any change of its
place of  residence  and  provide  Pledgee  with the address of its new place of
residence.

     c. The proceeds of any sale under Subsections  9(a)(iv) and (v) above shall
be applied as follows:

     (i) To the  repayment  of all  reasonable  costs and  expenses of retaking,
holding and preparing for the sale and the selling of the Collateral  (including
actual  reasonable  legal expenses and attorneys' fees) and the discharge of all
assessments,  encumbrances, charges or liens, if any, on the Collateral prior to
the lien hereof (except any taxes, assessments,  encumbrances,  charges or liens
subject to which such sale shall have been made);

     (ii) To the payment of the whole amount, if any, of the Obligations, as and
when the same become due; and

     (iii) The  aggregate  surplus,  if any,  shall be paid to Pledgor in a lump
sum,  without recourse to Pledgee,  or as a court of competent  jurisdiction may
direct.

     d. Pledgee shall have the right to enforce one or more remedies  under this
Agreement and under the Operating Agreement,  successively or concurrently,  and
such action  shall not operate to estop or prevent  Pledgee  from  pursuing  any
further  remedy which it may have, and any  repossession  or retaking or sale of
the Collateral pursuant to the terms hereof shall not operate to release Pledgor
until full payment of any deficiency has been made in cash.

     e. PLEDGOR  ACKNOWLEDGES THAT PLEDGEE MAY BE UNABLE TO EFFECT A PUBLIC SALE
OF ALL OR ANY PART OF THE  COLLATERAL  AND MAY BE  COMPELLED TO RESORT TO ONE OR
MORE PRIVATE SALES TO A RESTRICTED  GROUP OF PURCHASERS WHO WILL BE OBLIGATED TO
AGREE,  AMONG OTHER THINGS,  TO ACQUIRE THE COLLATERAL FOR ITS OWN ACCOUNT,  FOR
INVESTMENT AND NOT WITH A VIEW TO THE  DISTRIBUTION OR RESALE  THEREOF.  PLEDGOR
FURTHER  ACKNOWLEDGES  THAT ANY SUCH PRIVATE SALES MAY BE AT PRICES AND ON TERMS
LESS FAVORABLE THAN THOSE OF PUBLIC SALES, AND AGREES THAT PROVIDED SUCH PRIVATE
SALES  ARE MADE IN A  COMMERCIALLY  REASONABLE  MANNER,  PLEDGEE  SHALL  HAVE NO
OBLIGATION  TO DELAY SALE OF ANY  COLLATERAL  TO PERMIT  THE  ISSUER  THEREOF TO
REGISTER IT FOR PUBLIC SALE UNDER THE  SECURITIES  ACT OF 1933.  PLEDGOR  AGREES
THAT PLEDGEE SHALL BE PERMITTED TO TAKE SUCH ACTIONS AS PLEDGEE DEEMS REASONABLY
NECESSARY  IN  DISPOSING  OF  THE  COLLATERAL  TO  AVOID   CONDUCTING  A  PUBLIC
DISTRIBUTION OF SECURITIES IN VIOLATION OF THE

<PAGE>

SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AS NOW ENACTED OR AS
THE SAME MAY IN THE FUTURE BE AMENDED,  PROVIDED  THAT ANY SUCH ACTIONS SHALL BE
COMMERCIALLY  REASONABLE.  IN ADDITION,  PLEDGOR AGREES TO EXECUTE, FROM TIME TO
TIME,  ANY  AMENDMENT  TO THIS  AGREEMENT  OR  OTHER  DOCUMENT  AS  PLEDGEE  MAY
REASONABLY REQUIRE TO EVIDENCE THE  ACKNOWLEDGEMENTS AND CONSENTS OF PLEDGOR SET
FORTH IN THIS SECTION.

     10.  Attorneys  Fees.  Pledgor  agrees to pay to Pledgee,  without  demand,
reasonable  attorneys'  fees  and all  reasonable  costs  and  other  reasonable
expenses which Pledgee  expends or incurs in collecting  any amounts  payable by
Pledgor  with respect to an Event of Default,  hereunder  or in  enforcing  this
Agreement against Pledgor whether or not suit is filed.

     11. Further  Documentation.  Pledgor hereby agrees to execute, from time to
time,  one or more  financing  statements  and such other  instruments as may be
required  to  perfect  the  security  interest  created  hereby,  including  any
continuation  or amendments of such  financing  statements,  and pay the cost of
filing or recording the same in the public records specified by Pledgee.

     12.  Waiver and  Estoppel.  Pledgor  represents  and  acknowledges  that it
knowingly waives each and every one of the following rights,  and agrees that it
will be estopped from asserting any argument to the contrary: (a) any promptness
in making  any  claim or demand  hereunder;  (b) any  defense  that may arise by
reason of the incapacity, lack of authority, death or disability of Pledgor; (c)
any defense  based upon an election  of  remedies by Pledgee  which  destroys or
otherwise  impairs  any or all of the  Collateral;  (d) the right of  Pledgor to
proceed against Pledgee or any other person, for reimbursement; and (e) all duty
or obligation of the Pledgee to perfect, protect, retain or enforce any security
for the payment of amounts payable by Pledgor hereunder.

TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY TO THIS AGREEMENT  SEVERALLY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY
JURY IN ANY ACTION, SUIT OR COUNTERCLAIM  BROUGHT BY ANY PARTY TO THIS AGREEMENT
ARISING IN CONNECTION WITH, OUT OF OR OTHERWISE RELATING TO THIS AGREEMENT.

     No delay or failure on the part of Pledgee in the  exercise of any right or
remedy  against  Pledgor or any other party  against  whom  Pledgee may have any
rights,  shall  operate as a waiver of any  agreement  or  obligation  contained
herein,  and no single or partial  exercise by Pledgee of any rights or remedies
hereunder shall preclude other or further  exercise thereof or other exercise of
any other right or remedy  whether  contained in this Agreement or in any of the
other documents  regarding the  Obligations,  including  without  limitation the
Operating  Agreement.  No  waiver  of the  rights  of  Pledgee  hereunder  or in
connection herewith and no release of Pledgor shall be effective unless executed
in writing by  Pledgee.  No actions of Pledgee  permitted  under this  Agreement
shall in any way  impair  or  affect  the  enforceability  of any  agreement  or
obligation contained herein.

<PAGE>

     13. Independent Obligations.  The obligations of Pledgor are independent of
the  obligations  of any  other  party  which  may  be  initially  or  otherwise
responsible for performance or payment of the Obligations, and a separate action
or actions for payment,  damages or performance may be brought and prosecuted by
Pledgee against  Pledgor,  individually,  for the full amount of the Obligations
then due and  payable,  whether  or not an action is brought  against  any other
party,  whether or not Pledgee is involved in any proceedings and whether or not
Pledgee or Pledgor or other person is joined in any action or proceedings.

     14. No Offset Rights of Pledgor. No lawful act of commission or omission of
any kind or at any time  upon the part of  Pledgee  shall in any way  affect  or
impair the rights of Pledgee to enforce any right,  power or benefit  under this
Agreement, and no set-off, recoupment, reduction or diminution of any obligation
which  Pledgor has or may have against  Pledgee or against any other party shall
be available against Pledgee in any suit or action brought by Pledgee to enforce
any right, power or benefit under this Agreement.

     15.   Power  of  Attorney.   Pledgor   hereby   appoints   Pledgee  as  his
attorney-in-fact to execute and file,  effective upon the occurrence of an Event
of Default, on his behalf any financing statements,  continuation  statements or
other  documentation  required  to perfect or  continue  the  security  interest
created hereby. This power, being coupled with an interest, shall be irrevocable
until all amounts  secured  hereby have been paid,  satisfied and  discharged in
full. Pledgor acknowledges and agrees that the exercise by Pledgee of its rights
under this  Section 15 will not be deemed a  satisfaction  of the  amounts  owed
Pledgee unless Pledgee so elects in writing.

     16.  GOVERNING LAW. THE PARTIES  HERETO AGREE THAT THIS AGREEMENT  SHALL BE
GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF COLORADO
WITHOUT  REGARD TO PRINCIPLES  OF CONFLICTS OF LAW.  SUCH PARTIES  FURTHER AGREE
THAT IN THE EVENT OF DEFAULT,  THIS  AGREEMENT  MAY BE ENFORCED IN THE  DISTRICT
COURT IN AND FOR THE CITY AND COUNTY OF DENVER,  STATE OF  COLORADO  AND THEY DO
HEREBY SUBMIT TO THE JURISDICTION OF SUCH COURT REGARDLESS OF THEIR RESIDENCE OR
WHERE THIS AGREEMENT MAY BE EXECUTED.

     17.  Successors  and Assigns.  All  agreements,  covenants,  conditions and
provisions of this  Agreement  shall inure to the benefit of and be binding upon
the respective  heirs,  personal  representatives  successors and assigns of the
parties hereto.

     18. Notices.  Whenever any party hereto shall desire to, or be required to,
give or serve any notice, demand, request or other communication with respect to
this Agreement,  each such notice,  demand, request or communication shall be in
writing and shall be effective only if the same is delivered by personal service
(including,  without limitation, courier or express service) or mailed certified
or registered  mail,  postage  prepaid,  return  receipt  requested,  or sent by
telegram to the parties at the addresses shown throughout this Agreement or such
other  addresses  which the parties  may  provide to one  another in  accordance
herewith.  If notice is sent to  Pledgee,  a copy of such  notice  shall also be
given to Wayne H. Hykan, Esq.,  Brownstein Hyatt Farber & Strickland,  P.C., 410
17th Street, Suite 2222, Denver, Colorado 80202. If notice is sent to Pledgor, a
copy of such

<PAGE>

notice shall also be given to Alan B. Lottner,  Esq., Haligman & Lottner,  First
Interstate Tower North, 633 Seventeenth  Street,  Suite 2700,  Denver,  Colorado
80202-3635.  Notices delivered  personally will be effective upon delivery to an
authorized  representative of the party at the designated address;  notices sent
by mail in accordance  with the above paragraph will be effective upon execution
of the Return Receipt Requested.

     19. Consent of Pledgor.  Pledgor consents to the exercise by Pledgee of any
rights of Pledgor in accordance with the provisions of this Agreement.

     20.  Severability.  Every  provision  of this  Agreement  is intended to be
severable.  In the event any term or provision  hereof is declared by a court of
competent jurisdiction to be illegal or invalid for any reason whatsoever,  such
illegality  or  invalidity  shall not affect the  legality  or  validity  of the
balance of the terms and provisions  hereof,  which terms and  provisions  shall
remain binding and enforceable.

     21.  Amendment.  This  Agreement  may be  modified or  rescinded  only by a
writing expressly relating to this Agreement and signed by all of the parties.

     22. Termination. This Agreement shall terminate, and shall be of no further
force or effect,  upon the earlier to occur of the  following:  (i) full payment
and performance of the Obligations of the Pledgor,  (ii)  acquisition by Pledgor
or an affiliate of Pledgor of 100% ownership  interest in the Limited  Liability
Company, or (iii) upon the mutual consent of Pledgor and Pledgee.

     23. Certain Matters with respect to Wellsford  Residential  Property Trust.
This Agreement and all documents,  agreements,  understandings  and arrangements
relating to this  transaction have been executed by the undersigned on behalf of
Pledgee  in his/her  capacity  as an officer or  director  of  Pledgee,  and not
individually,  and neither the directors,  officers or  shareholders  of Pledgee
shall be bound by or have any personal  liability  hereunder or thereunder.  The
parties  to this  Agreement  shall  look  solely to the  assets of  Pledgee  for
satisfaction  of any  liability of Pledgee in respect of this  Agreement and all
documents,   agreements,   understandings  and  arrangements  relating  to  this
transaction and will not seek recourse or commence any action against any of the
directors,  officers or  shareholders of Pledgee or any of their personal assets
for the  performance or payment of any obligation  hereunder or thereunder.  The
foregoing  shall  also  apply  to all  and  any  future  documents,  agreements,
understandings,  arrangements and  transactions  between the parties hereto with
respect to the Collateral or this Agreement.

                            [SIGNATURE PAGE FOLLOWS]

<PAGE>

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

                           PLEDGOR:
                                        Al Feld

                           PLEDGEE:     WELLSFORD PARK HIGHLANDS CORP., a
                                        Colorado corporation

                                        By:
                                                 Name:
                                                 Title:

STATE OF ____________               )
                                    ) ss.
COUNTY OF ___________               )

         The  foregoing  instrument  was  acknowledged  before me this __ day of
__________________, 1995, by Al Feld.

         WITNESS my hand and official seal.

         My commission expires:  ______________________________________.
         Address:

                               --------------------------------
         (SEAL)                Notary Public

STATE OF ____________               )
                                    ) ss.
COUNTY OF ___________               )

     The  foregoing  instrument  was  acknowledged  before me this  _____ day of
__________,  199__, by _________________________ as _______________ of Wellsford
Park Highlands Corp., a Colorado corporation.

         WITNESS my hand and official seal.

         My commission expires:  _____________________________________.
         Address:

                               --------------------------------
         (SEAL)                Notary Public

<PAGE>

                                    EXHIBIT A

                   CONSENT TO SECURITY INTEREST AND AGREEMENT
                                 OF THE MEMBERS
                            OF PARK AT HIGHLANDS LLC,
                      a Colorado Limited Liability Company

     The undersigned, being all the members of PARK AT HIGHLANDS LLC, a Colorado
limited liability company (the "Limited Liability Company") hereby represent and
certify to Wellsford Park Highlands Corp., a Colorado  corporation (the "Secured
Party") as follows:

     1. The Limited Liability Company has received notice from the Secured Party
that the  Secured  Party has a security  interest  in the  following  collateral
("Collateral") registered to Al Feld (the "Debtor"):

     (i) All of the  right,  title and  interest  of the  Debtor in the  Limited
Liability Company, whether now owned or hereafter acquired,  including,  without
limitation, the Debtor's Interest (as defined in the Operating Agreement) in the
Limited Liability Company and its right to receive payments, fees, distributions
and allocations under or in connection with the Operating  Agreement (whether as
Member or as Manager),  as such Operating  Agreement may be modified or extended
from time to time with the consent of the Secured Parties; and

     (ii) All proceeds,  whether cash proceeds or noncash proceeds, and products
of any and all of the foregoing.

     2. Other than the notice from the  Secured  Party  referred  to above,  the
Limited  Liability Company has not received any notice from any entity or person
claiming  an  adverse  claim  against,  lien  on or  security  interest  in  the
Collateral.

     3. The security  interest of the Secured  Party  referred to above was duly
registered in the books and records of the Limited  Liability  Company effective
April 27, 1995.

     4.  Interests  in the Limited  Liability  Company,  whether as Member or as
Manager,  are not represented in any  certificate,  instrument or document,  and
such  interest  may be  assigned,  transferred  or  pledged  without  the  party
receiving such assignment,  transfer or pledge taking physical possession of any
certificate, instrument or document.

     The Members  hereby consent to the execution and delivery of the Pledge and
Security  Agreement  by the  Debtor  and agree  hereby to be bound by  Section 4
thereof  to  assign,  set  over,  transfer,  distribute,  pay  and  deliver  the
Collateral  and any and all  payments,  proceeds or products due to Debtor under
the Collateral to the Secured Party.

     The Members  hereby  consent to the  admission of the Secured Party (or its
nominee,  designee or any person  acquiring  its  interest  under the Pledge and
Security Agreement),  as a Manager of the Limited Liability Company upon receipt
of notice by the Secured Party of an Event

<PAGE>

of Default by the Debtor  thereunder,  and (ii) that the  Secured  Party or such
nominees, designees or persons acquiring the Secured Party's interest thereunder
shall not be deemed to have assumed any of Debtor's  liability by virtue of such
admission as the Manager of the Limited Liability Company.

     This  Agreement  and  all   documents,   agreements,   understandings   and
arrangements  relating to this transaction have been executed by the undersigned
on behalf of the Secured  Party in his/her  capacity as an officer or trustee of
the Secured Party, and not individually,  and neither the directors, officers or
shareholders  of the  Secured  Party  shall be  bound  by or have  any  personal
liability  hereunder or  thereunder.  The parties to this  Agreement  shall look
solely to the assets of the Secured Party for  satisfaction  of any liability of
the Secured Party in respect of this  Agreement and all  documents,  agreements,
understandings  and arrangements  relating to this transaction and will not seek
recourse  or  commence  any action  against  any of the  directors,  officers or
shareholders  of the  Secured  Party or any of  their  personal  assets  for the
performance or payment of any obligation hereunder or thereunder.  The foregoing
shall also apply to all and any future  documents,  agreements,  understandings,
arrangements  and  transactions  between the parties  hereto with respect to the
Collateral or this Agreement.

         EXECUTED as of the date set forth above.

                  MEMBERS:      WELLSFORD PARK HIGHLANDS CORP., a
                                Colorado corporation

                                By:
                                         Name:
                                         Title:

                                AL FELD, an individual

AGREED TO AND CONCURRED:

SOLE MANAGER

-------------------------------
AL FELD

<PAGE>

                                    EXHIBIT M

                   PLEDGE AND SECURITY AGREEMENT--WPHC TO FELD

                               (Prepared by BHFS)

<PAGE>

                                    EXHIBIT U

                             SUBSTITUTION AGREEMENT

     THIS SUBSTITUTION  AGREEMENT (this "Agreement") is made and entered into as
of the ____ day of December 1995, by and among Al Feld, an individual  ("Feld"),
Wellsford Park Highlands Corp., a Colorado  corporation  ("WPHC"),  and The Feld
Company, a Colorado corporation (the "Company").

                                    RECITALS

     A. WPHC is a Member of Park at Highlands LLC, a Colorado limited  liability
company (the "LLC"),  which LLC is governed by its Operating  Agreement dated as
of April 27, 1995 (the "Operating Agreement") by and between WPHC and Feld.

     B. Feld is also a  Member,  as well as the  Manager,  in the LLC and is the
principal officer and shareholder of the Company.

     C. In order to facilitate WPHC's appointment of the Company as a substitute
Member  and the  Manager  of the LLC upon the  death  or  disability  of Feld in
accordance with Section 12.13 of the Operating Agreement and to bind the Company
to the agreements set forth in said Section 12.13, the parties hereto now desire
to enter into this Agreement.

                                    AGREEMENT

     NOW,  THEREFORE,  in  consideration  of  the  execution  of  the  Operating
Agreement and of the recitals,  covenants and agreements  set forth herein,  and
for other good and valuable consideration,  the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

     5.  Request for  Substitute  Manager.  In the event that Feld should die or
WPHC shall elect to remove Feld as manager due to  disability  (such an event is
hereinafter referred to as a "Triggering Event"),  WPHC shall have the right, at
its sole option,  to request in writing that: (a) the Company shall acquire from
Feld (or from his estate,  if Feld is deceased)  the entire  interest of Feld in
the  LLC;  (b)  the  Company  shall  be  admitted  as a  Member  of the  LLC and
substituted  for Feld as Member and Manager under the Operating  Agreement;  and
(c) the Company shall assume, in writing,  all of the obligations of the Manager
and of a Member under the Operating  Agreement,  as the same may be amended from
time to time.  The  foregoing  actions  under  items  (a),  (b) and (c) shall be
effective upon the next business day after WPHC delivers its written  request to
the Company and Feld.  Notwithstanding anything to the contrary contained herein
or in the  Operating  Agreement,  if the  Company is  substituted  for Feld as a
Member and Manager,  then Feld (or his estate if Feld is deceased)  shall remain
liable for the performance of the obligations of the Manager under the Operating
Agreement, in accordance with Section 12.12.3.2 thereof.

<PAGE>

     6. Failure to Request a Substitute  Manager.  If WPHC fails to exercise its
option under  Section 12.13 of the  Operating  Agreement  and this  Agreement to
cause the Company to be  substituted  for Feld as the Manager within ninety (90)
days after the date of a Triggering Event,  then such right shall  automatically
terminate and Feld (and his estate) shall be released from all  responsibilities
and  obligations  as Manager  under the  Operating  Agreement  arising after the
effective  date of Feld's  withdrawal or Removal (as said term is defined in the
Operating Agreement,) from the LLC in connection with the Triggering Event.

     7. Attorneys  Fees. In the event any litigation or other legal  proceedings
or alternative dispute resolution proceedings are brought for the enforcement of
or arise out of this  Agreement,  the  prevailing  party  shall be  entitled  to
recover from the non-prevailing  party all reasonable  attorneys' fees and costs
and all other  reasonable  expenses,  in addition to any other relief or damages
obtained.

     8. Further Documentation. The parties hereby agree to execute, from time to
time,  such other  documents as may be reasonably  necessary to  effectuate  the
intent of this Agreement and Section 12.13 of the Operating Agreement.

     9. GOVERNING  LAW. THE PARTIES  HERETO AGREE THAT THIS  AGREEMENT  SHALL BE
GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF COLORADO
WITHOUT  REGARD TO PRINCIPLES  OF CONFLICTS OF LAW.  SUCH PARTIES  FURTHER AGREE
THAT THIS  AGREEMENT  MAY BE ENFORCED IN THE DISTRICT  COURT IN AND FOR THE CITY
AND  COUNTY  OF  DENVER,  STATE OF  COLORADO  AND THEY DO  HEREBY  SUBMIT TO THE
JURISDICTION OF SUCH COURT REGARDLESS OF THEIR RESIDENCE OR WHERE THIS AGREEMENT
MAY BE EXECUTED.

     10.  Successors  and Assigns.  All  agreements,  covenants,  conditions and
provisions of this  Agreement  shall inure to the benefit of and be binding upon
the respective heirs,  personal  representatives,  successors and assigns of the
parties hereto.

     11. Notices.  Whenever any party hereto shall desire to, or be required to,
give or serve any notice, demand, request or other communication with respect to
this Agreement,  each such notice,  demand, request or communication shall be in
writing and shall be effective only if the same is delivered by personal service
(including,  without limitation, courier or express service) or mailed certified
or registered  mail,  postage  prepaid,  return  receipt  requested,  or sent by
telegram to the parties at the  addresses  shown in the  Operating  Agreement or
such other  addresses which the parties may provide to one another in accordance
therewith.  The notice  address for the Company  shall be the same as the notice
address for Feld. If notice is sent to WPHC, a copy of such notice shall also be
given to Wayne H. Hykan, Esq.,  Brownstein Hyatt Farber & Strickland,  P.C., 410
17th Street,  Suite 2222,  Denver,  Colorado 80202. If notice is sent to Feld or
the Company,  a copy of such notice shall also be given to Alan  Lottner,  Esq.,
Haligman and Lottner,  First  Interstate  Tower North,  633 Seventeenth  Street,
Suite 2700, Denver,  Colorado  80202-3635.  Notices delivered personally will be
effective  upon  delivery to an  authorized  representative  of the party at the
designated address; notices sent by mail in

<PAGE>

accordance  with the above  paragraph  will be effective  upon  execution of the
Return Receipt Requested.

     12.  Severability.  Every  provision  of this  Agreement  is intended to be
severable.  In the event any term or provision  hereof is declared by a court of
competent jurisdiction to be illegal or invalid for any reason whatsoever,  such
illegality  or  invalidity  shall not affect the  legality  or  validity  of the
balance of the terms and provisions  hereof,  which terms and  provisions  shall
remain binding and enforceable.

     13.  Capitalized  Terms. All capitalized terms not otherwise defined herein
shall have the meanings set forth in the Operating Agreement.

     14.  Amendment.  This  Agreement  may be  modified or  rescinded  only by a
writing expressly relating to this Agreement and signed by all of the parties.

                            [SIGNATURE PAGE FOLLOWS]

<PAGE>

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

AL FELD, individually

WELLSFORD PARK HIGHLANDS CORP., a
Colorado corporation

By:
   -----------------------------------------------------------
Its:
    ----------------------------------------------------------

THE FELD COMPANY, a Colorado corporation

By:
   -----------------------------------------------------------
Its:
    ----------------------------------------------------------

<PAGE>

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