Document:

WELLSFORD REAL PROPERTIES, INC.
                         535 Madison Avenue, 26th Floor
                            New York, New York 10022

                               As of July 1, 2001

Mr. William H. Darrow II
7 Hunt Road
Darien, CT 06820

Dear Mr. Darrow:

     We are pleased to offer you employment with Wellsford Real Properties, Inc.
(the  "Company").  This  letter  agreement  (this  "Agreement")  sets  forth our
understanding regarding your employment.

     1. Duties.  The Company hereby employs you as Managing  Director to perform
such services for the Company and its affiliated entities commensurate with your
position as Managing  Director as may be assigned to you from time to time.  You
shall devote your full business time,  attention and energies to the performance
of your duties hereunder as requested by the Company from time to time.

     2. Term.  The term of this  Agreement  shall commence as of the date hereof
and,  unless  sooner  terminated  in  accordance  with  the  provisions  of this
Agreement,  shall continue up to and including,  June 30, 2003. The term of this
Agreement may be extended by the written agreement of you and the Company.

     3. Salary. For all services rendered by you pursuant to this Agreement, you
shall receive a salary at a rate per annum at least equal to $200,000 to be paid
at such regular intervals,  not less frequently than monthly, as the Company may
establish from time to time with respect to its employees generally.

     4. Bonuses.  You shall also be eligible for bonuses in the sole  discretion
of the Company.

     5. Health Insurance & Benefits. The Company shall provide you with the same
standard health and other insurance coverages as is afforded to all employees of
the Company  pursuant to the  contributory  coverages  maintained by the Company
from time to time.  You shall also be entitled to  participate  in the Company's
401(k) Plan consistent with, and subject to, the terms of such plan. The Company
may also provide you with other benefits in accordance  with the policies of the
Company in effect from time to time.

<PAGE>

     6. Expenses.  You shall be reimbursed for all reasonable  business  related
expenses  incurred  by you at the  request  of or on  behalf of the  Company  in
connection with the performance of your duties and  responsibilities  hereunder,
consistent   with,   and  subject  to,  the   Company's   policies  for  expense
reimbursement.

     7. Termination.

     (a) Your  employment  hereunder  may be  terminated  by the Company (i) for
Cause (as defined below) or (ii) for any reason other than Cause,

     (b) "Cause" shall mean (i) you have committed fraud,  willful misconduct or
gross  negligence in the  performance of your  obligations  hereunder,  (ii) you
shall be  convicted  of a felony or (iii) you shall  violate  any of the  terms,
covenants or conditions of this Agreement.

     8. Results of Termination.

     (a) If your employment under this Agreement is terminated by the Company by
reason  of  Cause  or as a  result  of your  disability  (as  determined  in the
reasonable discretion of the Company) or as a result of your death or by you for
any reason  (other than as provided for in  subparagraph  8 (c) below) you shall
not be entitled to receive salary for periods following termination.

     (b) If your  employment  under this  Agreement is terminated by the Company
other than by reason of Cause or your death or disability, you shall be entitled
to  receive a lump sum  payment  equal to twice the  amount of your then  annual
salary  in lieu of any  salary,  bonus or other  compensation  which  you  would
otherwise be entitled to under this Agreement.  Such amount shall be paid within
60 days of the effective date of termination.

     (c) If you  terminate  your  employment  hereunder  following  a "change in
control of the  Company"  (as  described  below) and  provided you have not been
offered  "comparable  employment"  (as defined  below)  within 60 days after the
event resulting in the change in control of the Company you shall be entitled to
receive a lump sum payment  equal to twice the amount of your annual  salary for
the calendar  year in which the event  resulting in the change in control of the
Company occurs in lieu of any salary,  bonus or other  compensation to which you
would otherwise be entitled to under this  Agreement.  Such amount shall be paid
within 60 days of the effective date of termination.

     (d) For  purposes of this  Agreement,  a "change in control of the Company"
shall be deemed to occur if:

<PAGE>

     (i) the Company merges or consolidates  with, or sells all or substantially
all of its  assets  to,  another  company  (each,  a  "Transaction"),  provided,
however,  that a  Transaction  shall not be  deemed  to  result in a "change  in
control of the Company" if (A)  immediately  prior thereto (1) you are the other
party to the transaction  that would otherwise result in a "change in control of
the Company" or (2) you are an executive officer, trustee, director or more than
5%  equity  holder  of the  other  party to the  transaction  or of any  entity,
directly or indirectly,  controlling such other party or (B)(1) the shareholders
of the Company  immediately before such Transaction own, directly or indirectly,
immediately  following such Transaction in excess of sixty-nine percent (69%) of
the  combined  voting  power  of  the  outstanding   voting  securities  of  the
corporation or other entity  resulting  from such  Transaction  (the  "Surviving
Corporation")  in  substantially  the same  proportion as their ownership of the
voting securities of the Company immediately before such Transaction and (2) the
individuals  who were members of the  Company's  Board of Directors  immediately
prior  to  the  execution  of  the  agreement  providing  for  such  Transaction
constitute  at least a majority of the members of the board of  directors or the
board of trustees,  as the case may be, of the  Surviving  Corporation,  or of a
corporation  or  other  entity  beneficially  directly  or  indirectly  owning a
majority of the outstanding voting securities of the Surviving Corporation,

     (ii) the Company  acquires assets of another company or a subsidiary of the
Company  merges  or   consolidates   with  another   company  (each,  an  "Other
Transaction") and (i) the shareholders of the Company,  immediately  before such
Other Transaction own, directly or indirectly,  immediately following such Other
Transaction 69% or less of the combined  voting power of the outstanding  voting
securities  of the  corporation  or  other  entity  resulting  from  such  Other
Transaction  (the  "Other  Surviving  Corporation")  in  substantially  the same
proportion  as  their  ownership  of  the  voting   securities  of  the  Company
immediately  before  such Other  Transaction  or (ii) the  individuals  who were
members of the Company's Board of Directors  immediately  prior to the execution
of the agreement  providing for such Other  Transaction  constitute  less than a
majority of the members of the board of directors  or the board of trustees,  as
the case may be, of the Other  Surviving  Corporation,  or of a  corporation  or
other  entity  beneficially  directly  or  indirectly  owning a majority  of the
outstanding  voting  securities of the Other  Surviving  Corporation,  provided,
however, that an Other Transaction shall not be deemed to result in a "change in
control of the  Company"  if  immediately  prior  thereto the  circumstances  in
(i)(A)(1) or (i)(A)(2) above exist, or

     (iii) any person or entity or group of affiliated  persons or entities owns
at any time 30% or more of the  outstanding  voting  securities  of the Company,
provided  that such  person,  entity or group  shall not be deemed to own 30% or
more of the  outstanding  voting  securities of the Company if the last event or
transaction  which  results  in  such  ownership  is (a)  the  issuance  of such
securities  in  connection  with the  sale by the  Company  of less  than all or
substantially  all of its assets or (b) the  acquisition  by the  Company of any
such voting securities.

<PAGE>

     (e) For purposes of this Agreement, you shall be deemed to have received an
offer of  "comparable  employment"  if you  receive  an offer to  continue  your
employment for at least the balance of the term covered by this Agreement,  with
the same  title set forth in  Paragraph  1 hereof,  pursuant  to which you would
perform the same type of duties you had been performing under this Agreement and
at a salary not less than that provided for in Paragraph 3 hereof.

     9.  Governing  Law;  Severability.  This  Agreement  shall be governed  and
construed in accordance with the laws of the State of New York. If any provision
of this Agreement is determined to be invalid,  it shall not affect the validity
or enforceability of any of the other remaining provisions hereof.

     10. Entire Agreement. This Agreement sets forth the entire agreement of the
parties  and  is  intended  to  supersede  all  prior  employment  negotiations,
understandings  and agreements.  No provision of this Agreement may be waived or
changed,  except by a writing signed by the party to be charged with such waiver
or change.  Notwithstanding  the  foregoing,  this  Agreement  is subject to the
policies of the Company in effect from time to time with respect to the terms of
the employment of the Company's employees.

     11. Counterparts.  This Agreement may be executed in counterparts,  each of
which shall  constitute an original but all of which when taken  together  shall
constitute but one and the same agreement.

<PAGE>

     Please  acknowledge  your  agreement  to  the  foregoing  by  signing  this
Agreement in the space indicated and returning it to the Company.

                                            Very truly yours,

                                            WELLSFORD REAL PROPERTIES, INC.

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

ACCEPTED AND AGREED TO:

/s/ William H. Darrow II
------------------------------
William H. Darrow IIFIRST AMENDMENT TO LOAN AGREEMENT
                            AND OTHER LOAN DOCUMENTS

     This First  Amendment  to Loan  Agreement  and Other Loan  Documents  (this
"AGREEMENT")  is entered into as of October .l, 2002, by and between  WELLSFORD/
WHITEHALL HOLDINGS,  L.L.C., a Delaware limited liability company  ("BORROWER"),
and GENERAL ELECTRIC CAPITAL  CORPORATION,  a Delaware  corporation  ("Lender").
This Agreement is made with reference to the following facts:

                                    RECITALS

     A. Lender has made a loan to Borrower in the aggregate  principal amount of
up to  $352,600,000.00  (the  "LOAN"),  pursuant to terms of that  certain  Loan
Agreement  dated June 25,  2001 by and  between  Borrower  and Lender (the "LOAN
AGREEMENT"). Capitalized terms used in this Agreement and not defined shall have
the meanings assigned to such terms in the Loan Agreement. The Loan is evidenced
by that certain Promissory Note dated June 25, 2001, executed by Borrower to the
order of Lender in the face principal amount of $352,600,000.00 (the "NOTE").

     B. Borrower has requested  that Lender agree to make an additional  advance
to Borrower in the aggregate amount of up to $6,500,000.00.  The funds from such
additional advance shall be used to refinance that certain real property located
in Warren,  New Jersey,  more  particularly  described  in Exhibit "A"  attached
hereto and incorporated herein (the "SOMERSET' TECH CENTER"), and to pay certain
closing costs relating to such additional  advance.  Borrower has also requested
that Lender  reallocate a portion of the Working Capital  Advance  Allocation to
pay for or  reimburse  Borrower for certain  costs in respect of  necessary  and
customary  replacements  or  substitutions  to improvements to the Somerset Tech
Center. Subject to the terms and conditions contained in this Agreement,  Lender
has agreed to modify the Loan Agreement and other Loan Documents to increase the
amount of the Loan, and to reallocate a portion of the Working  Capital  Advance
Allocation, as requested by Borrower.

     C. As of the  date of  this  Agreement  (and  exclusive  of the  Additional
Advance  described  below),  the  outstanding  principal  balance of the Loan is
$258,060,434. The unfunded balance of the Loan is $72,230,000, consisting of the
Nomura Holdback of $28,000,000,  the Mt. Airy Holdback of $200,000,  the Gateway
Tower  Holdback of  $1,800,000  and the Working  Capital  Advance  Allocation of
$42,230,000.  Pursuant to the terms of the Loan  Agreement,  the Shattuck Office
Center  Holdback,  in the amount of  $7,088,000,  and the portion of the Working
Capital Advance Allocation which was originally allocated to the Shattuck Office
Center Property, in the amount of $370,000, were canceled.

     D. As used in this  Agreement,  the term  "LOAN  DOCUMENTS"  means the Loan
Agreement,  the Note, the Deeds of Trust,  the  Assignments  of Leases,  and the
other "Loan  Documents"  described in the Loan Agreement.  This  Agreement,  the
Amendments  described  below and the Amended and Restated Note  described  below
also shall constitute Loan Documents.

<PAGE>

                                    AGREEMENT

     NOW,  THEREFORE,  with reference to the foregoing Recitals and information,
and in consideration  of the mutual  covenants and agreements  contained in this
Agreement, and for other valuable consideration,  the receipt and sufficiency of
which  are  hereby  acknowledged,  Borrower  and  Lender  agree as  follows:

     1. Recitals;  Representations and Warranties.  The above statement of facts
set forth in the  Recitals  is true and  correct,  and the  Recitals  hereby are
incorporated  herein as an  agreement of Borrower  and Lender.  Borrower  hereby
represents  and  warrants  to Lender that (a) no Default or Event of Default has
occurred  or exists,  and (b) all  representations  and  warranties  of Borrower
contained in the Loan  Agreement or in any of the other Loan  Documents  (as the
Loan  Agreement and such other Loan  Documents are amended  hereby) are true and
correct as of the date  hereof,  excluding  the  representation  in Section 6.28
regarding the Shattuck Office Center Property.

     2.  Additional  Advance.  Subject  to the  terms  and  conditions  of  this
Agreement,   Lender  agrees  to  provide  Borrower,  and  Borrower  accepts,  an
additional  advance (the  "ADDITIONAL  ADVANCE") in the  principal  sum of up to
$6,500,000.00.  The Additional Advance,  together with the outstanding principal
balance and remaining unfunded proceeds of the original Loan, shall be evidenced
by the- Amended and Restated  Note  described  below and shall be secured by the
Deeds of Trust and the other Collateral Documents.

     2.1.  Initial  Advance.  Upon  fulfillment  of the  conditions set forth in
Section 8 Lender shall disburse (a) a portion of the Additional  Advance,  equal
to the commitment fee payable to Lender (described in Section 8.1 (a) below) and
all other  sums owing to Lender  described  in  Section 8 below,  to itself,  in
payment  of the  commitment  fee and such  other  sums (to the  extent  not paid
through  escrow in accordance  with clause (b) of this Section 2.1 (b) a portion
of the Additional  Advance by wire transfer to  Commonwealth  Land Title Company
for the  escrow  established  to  consummate  the  closing  of the  transactions
contemplated  by this  Agreement,  to be  disbursed by  Commonwealth  Land Title
Company (upon  satisfaction  of the conditions set forth in Lender's  escrow and
recording  instructions)  to pay certain closing costs, and (iii) the balance of
the Additional Advance less the amount of the GMAC Holdback) by wire transfer to
Borrower to finance or refinance the Somerset Tech Center.

     2.2.  GMAC  Holdback.  Lender  shall  disburse a portion of the  Additional
Advance in the amount of $400,000 (the "GMAC HOLDBACK") in one or more Advances,
subject to satisfaction of the following conditions as to each such Advance:

     (a) Borrower  shall have  satisfied the terms and  conditions  set forth in
Part B of Schedule 2.1 to the Loan Agreement;

     (b)  Advances  shall not be made  more  frequently  than once per  calendar
month;

     (c) After giving effect to the requested Advance,  the undisbursed  portion
of the GMAC Holdback (if any) shall not be less than the then  remaining  amount
(if any) of the  "Allowance"  defined and described in Section 5(a) of Exhibit C
to the Lease dated  February 28, 2001 between  Borrower,  as landlord,  and GMAC
Home Services, as Tenant,  covering space at the Somerset Tech Center.  Borrower
shall deliver to Lender evidence reasonably  satisfactory to Lender,  evidencing
the then remaining amount of the Allowance.

<PAGE>

     3.  Consolidation of Indebtedness.  The original Loan is consolidated  with
the Additional  Advance to form a single  indebtedness  (the "MQREGATE LOAN") in
the  principal  amount  of  $336,790,434.00,  which  is the  sum of the  amounts
described in Recital C plus the Additional Advance.  The Aggregate Loan shall be
evidenced by that  certain  Amended and  Restated  Promissory  Note of even date
herewith  executed  by  Borrower  in  favor of  Lender  in the  face  amount  of
$336,790,434.00 (the "AMENDED AND RESTATED NOTE"). The Amended and Restated Note
shall amend, restate and replace the Note in its entirety.

     Amendments  to Loan  Agreement.  Borrower and Lender  hereby amend the Loan
Agreement as follows:

     4.1.  Definition  of GECC.  The  definition  of "GECC" set forth in Section
1.1(61) is amended  and  restated in its  entirety  to read as follows:  "'GECC"
means General Electric Capital Corporation, a Delaware corporation."

     4.2.  Definition  of Maximum Loan Amount.  The  definition of "Maximum Loan
Amount" set forth in Section  1.1(93) is amended and restated in its entirety to
read as FOLLOWS:

     "'MAXIMUM LOAN AMOUNT" means $336,790,434.00."

     4.3.  Definition  of Note.  The  definition  of "Note" set forth in Section
1.1(107) of the Loan  Agreement  is amended and restated in its entirety to read
as follows:  "'NOTE" shall mean the Amended and Restated  Promissory  Note dated
October 1, 2002,  in the stated  principal  amount of Three  Hundred  Thirty-Six
Million  Seven  Hundred  Ninety  Thousand  Four  Hundred  Thirty Four and No/100
Dollars  ($336,790,434.00)  executed  by  Borrower  and  payable to the order of
Lender, in evidence of the Loan."

     4.4. New  Definitions.  Section 1.1 of the Loan Agreement is hereby amended
to  add  the  following  new  definitions  to the  end  thereof:  "(156)  "FIRST
AMENDMENT"  shall mean that certain First  Amendment to Loan Agreement and Other
Loan  Documents  dated as of October 1, 2002 entered  into between  Borrower and
Lender." "(157) "FIRST AMENDMENT DATE" shall mean October_, 2002."

     4.5.  Definition  of  Borrower  Properties.  The  definition  of  "Borrower
Properties"  set forth in Section 1.1 of the Loan Agreement is hereby amended to
include,  in addition to all other real property  currently included within such
definition, (a) the Somerset Tech Center, and (b) all other "Property" described
in the Deed of Trust encumbering the Somerset Tech Center.

     4.6. Working Capital Budgets. Effective as of the First Amendment Date, the
remaining  undisbursed  Working Capital Advance  Allocation shall be reallocated
among the  Properties  (including  Somerset Tech Center) in accordance  with the
Working Capital Budgets set forth in revised Schedule 2.1(5) attached hereto.

<PAGE>

     4.7. Amendment to Section 2.1(5)(d)(ii).  Section 2.1(5)(d)(ii) of the Loan
Agreement  is amended  and  restated in its  entirety to read as follows:  "(ii)
subject to paragraph (e) below, an amount which,  when added to the Loan balance
and all  undisbursed  Loan funds  allocated  to the Mount Airy  Holdback and the
Gateway  Tower  Holdback and the GMAC  Holdback  (as defined r- Z.  Holdback the
First Amendment),  is equal to the lesser of (A) the Cash On Cash Limit CU I.,~%
Amount and (B) the Debt Service Coverage Ratio Limit Amount; and" Mc;!:: 1.3}G

     4.8.  Amendment to Section 2.3(4).  Section 2.3(4) of the Loan Agreement is
amended and restated in its entirety to read as follows:

     "(4)  PREPAYMENT.  Except as provided  below,  at any time during the Term,
upon not less than ten (10) days' prior written  notice to Lender,  Borrower may
prepay the Loan in whole or in part without  premium or penalty,  provided  that
each such  prepayment  shall be accompanied by the payment of accrued and unpaid
interest on the principal amount being prepaid,  through the date of prepayment,
and any other costs or expenses  which are payable to Lender in accordance  with
the terms hereof or any other Loan Document. The foregoing notwithstanding, from
the Closing Date  through  December  31, 2002  prepayment  (in whole or in part)
shall  only be  permitted  in  connection  with a sale or  other  transfer  of a
Property to a Person  which is not an  Affiliate  of Borrower or of any Borrower
Party.  From and  after  January  1,  2003,  Loan  shall be  closed  to  partial
prepayment  from a Refinance  (including a Refinance of any or all of the Nomura
Properties). A prepayment premium equal to two percent (2.0%) of the outstanding
principal balance of the Loan shall be payable if an Event of Default occurs and
the Loan is accelerated prior to January 1, 2003. Borrower acknowledges that the
prepayment  premium  required  by  this  Section  2.3(4)   constitutes   partial
compensation  to Lender for the costs of  reinvesting  the Loan proceeds and for
loss of the  contracted  rate  of  return  on the  Loan.  Furthermore,  Borrower
acknowledges  that the loss that may be  sustained by Lender as a result of such
prepayment  by  Borrower  is not  susceptible  of  precise  calculation  and the
prepayment  premium  represents  the good faith effort of Borrower and Lender to
compensate Lender for such loss.  Borrower  confirms that Lender's  agreement to
make the Loan at the  interest  rate and on the other  terms  set  forth  herein
constitutes  adequate and valuable  consideration,  given  individual  weight by
Borrower, for the prepayment provision set forth in this Section."

     4.9.  Amendment to Section 3.1(1). The following is hereby added to the end
of Section 3.1(1) of the Loan Agreement: "In addition to the foregoing insurance
requirements,  Borrower shall keep in full force and effect through July 1, 2003
the  existing  insurance  policies,  issued by Lexington  Insurance  Company and
National  Fire and Marine  Insurance  Company,  which insure the  buildings  and
improvements located at each Borrower Property against loss or damage by acts of
terrorism  (and while such  policies are in effect,  Lender shall be listed as a
"mortgagee" and "loss payee" thereunder); provided that Borrower shall not be in
breach of this covenant if either of such policies terminates due to dissolution
of the insurer or a unilateral cancellation of such policy by the insurer (other
than a cancellation  caused by any action or inaction by Borrower which entitled
the insurer to cancel the policy)."

<PAGE>

     4.10.  Schedules.  Schedules 1.1(A),  1.1(B),  2.1(5), 4.2, 5.1 (A)-5.1(F),
6.4, 6.5, 6.6, 6.7, 6.10,  6.26,  6.27 and 8.19 to the Loan Agreement are hereby
replaced  in  their  entirety  with  Schedules  1.1(A),   1.1(B),  2.1(5),  4.2,
5.1(A)-5.1(F),  6.4, 6.5,  6.6, 6.7,  6.10,  6.26,  6.27 and 8.19  respectively,
attached to this Agreement.  All defined terms making specific  reference to any
information  contained within any of these Schedules are hereby amended to refer
to such Schedule(s) as attached hereto.

     5. Amendments to Loan Documents.  Borrower and Lender hereby amend the Loan
Documents as follows:

     5.1.  References to Loan and Note.  All  references to the Loan in the Loan
Documents  hereafter shall be deemed to be references to the Aggregate Loan, and
all  references  to the Note  hereafter  shall be deemed to be references to the
Amended and Restated Note.

     5.2. Amendment to Hazardous Substances Indemnity Agreement.  The definition
of "Premises" in the recitals of the Hazardous Substances Indemnity Agreement is
hereby amended to include,  in addition to all other Property currently included
within such definition,  the Somerset Tech Center. Borrower hereby reaffirms and
restates all representations,  warranties, covenants and agreements contained in
the  Hazardous  Substances  Indemnity   Agreement,   as  such   representations,
warranties, covenants and agreements apply to the Somerset Tech Center. WWPH and
WWG shall execute the Consent of Borrower Parties  attached hereto,  and Gateway
Tower Owner shall execute the Consent of Guarantor  attached hereto, to evidence
their consent to the foregoing amendment to the Hazardous  Substances  Indemnity
Agreement.

     5.3.  Amendment to Agreement  Regarding  Asset  Management.  The  Agreement
Regarding Asset Management is hereby amended to include the Somerset Tech Center
within the definition of "Property" used therein.

     5.4.  Collateral  Documents.  The Deeds of Trust  and all other  Collateral
Documents shall secure,  in addition to all other  indebtedness  and obligations
secured  thereby,  the  payment  and  performance  of  all  present  and  future
indebtedness  and  obligations  of Borrower  under (a) this  Agreement,  (b) the
Amended  and  Restated  Note,  and (c) any  and all  amendments,  modifications,
renewals  and/or  extensions of this Agreement or the Amended and Restated Note,
regardless of whether any such amendment,  modification, renewal or extension is
evidenced by a new or additional instrument,  document or agreement. The Deed of
Trust which Borrower is executing concurrently herewith and which shall encumber
the Somerset Tech Center shall also constitute one of the Collateral Documents.

     6. Replacement of Front Building at Somerset Tech Center. The Somerset Tech
Center is currently  improved  with two  buildings,  one of which is a currently
vacant  single-story  building  located closest to the southern  boundary of the
Somerset Tech Center (the "FRONT BUILDING").  Subject to the following terms and
conditions,  Borrower  shall be  entitled  to demolish  the Front  Building  and
replace it with a new office building (together with any related improvements to
be  constructed  in  connection   therewith,   the  "NEW  BUILDING")  containing
approximately 60,000 net rentable square feet:

<PAGE>

     6.1. Prior to seeking a loan  commitment from another lender to finance the
construction  of the New  Building  (the  "NEW  BUILDING  FINANCING"),  Borrower
covenants to notify Lender in writing of its intention to seek such New Building
Financing  and shall  provide to Lender  fifteen (15)  Business Days to submit a
proposal to provide the New Building Financing. If Borrower elects to accept the
terms of such proposal,  Lender shall provide the New Building Financing on such
terms as may be contained in the  definitive  documentation  relating to the New
Building  Financing  executed by Lender,  Borrower and the other parties thereto
(it being understood and agreed,  however,  that Lender shall not be required to
provide,  and Borrower  shall not be required to accept,  any such. New Building
Financing  except  pursuant to  definitive  documentation  that is executed  and
delivered by Lender, Borrower and the other parties thereto). If Lender does not
make a proposal  to provide  the New  Building  Financing  within  fifteen  (15)
Business  Days after  being  given the  opportunity  to make such  proposal,  or
Borrower  does not  elect  to  accept  Lender's  proposal  for the New  Building
Financing,  or  Lender  and  Borrower  do not  execute  and  deliver  definitive
documentation  with  respect to the New Building  Financing  within a reasonable
period of time after Borrower accepts Lender's  proposal with respect to the New
Building  Financing,  Borrower may, subject to compliance with the provisions of
Sections 6.2 and 6.3 below,  obtain the New Building  Financing  from such other
lender and on such terms as it shall, in its sole  discretion,  deem appropriate
("PERMITTED FINANCING").

     6.2.  Notwithstanding  anything to the contrary contained herein,  Borrower
shall not obtain any Permitted  Financing unless,  prior to or concurrently with
the closing of such Permitted  Financing,  Borrower shall have (a) satisfied all
conditions  set forth in Section 2.4 of the Loan Agreement to the release of the
Somerset  Tech  Center  from  the  Lien of the Loan  Documents,  other  than the
requirement  that the release be in connection  with a sale or other transfer of
such  Property  to a  Person  that is not an  Affiliate  of  Borrower  or of any
Borrower Party;  provided,  however,  that if such release occurs within six (6)
months of the First  Amendment Date, the Release Payment shall be the greater of
(i) the  Adjusted  Loan Basis of the  Somerset  Tech Center and (ii) the minimum
amount which,  when applied to the  outstanding  principal  balance of the Loan,
would  result in a Cash On Cash Return of at least  eleven  percent  (11%) and a
Debt Service  Coverage  Ratio of at least 1.25 to 1.0; and (b)  transferred  the
Somerset  Tech Center to an entity which may be related to Borrower,  so long as
Borrower is not  directly or  indirectly  liable on a recourse  basis for any of
such entity's indebtedness or obligations to any Person.

     6.3. If the New Building  will be  constructed  with funds from a Permitted
Financing,  then  (a)  Borrower  shall  not  undertake  any  demolition  or  new
construction work at the Somerset Tech Center unless and until the Somerset Tech
Center has been released from the Lien of the Loan Documents in accordance  with
Section 6.2 above, and (b) Section 6.4, Section 6.5, Section 6.6 and Section 6.7
below shall not apply.

     6.4. If the New Building will be constructed with funds from Lender or with
funds from capital  contributions  to Borrower,  then prior to  undertaking  any
demolition or new  construction  work,  Borrower shall have delivered to Lender,
and Lender shall have reasonably approved:

     (a) a detailed  line item budget of all costs to be incurred in  connection
with the demolition of the Front Building and the  construction  and lease-up of
the New Building (the "NEW BUILDING BUDGET");
<PAGE>

     (b) the final plans and  specifications  for the New Building,  bearing the
signed approval thereof by the project architect, accompanied by the architect's
signed estimate,  bearing the architect's seal, of the entire cost of completing
the New Building;

     (c) evidence  that all necessary  approvals and consents  regarding the New
Building have been obtained,  and that the Somerset Tech Center, upon completion
of the New Building,  will be in compliance  with all applicable Laws (including
all zoning, parking, setback and other land use restrictions);

     (d) copies of all building  permits and other permits,  licenses,  consents
and approvals of all  applicable  Governmental  Authorities  relating to the New
Building,  as well as copies of all  construction  contracts and other contracts
relating to the New Building; and

     (e) if Borrower is funding the work from  capital  contributions,  Borrower
shall have provided Lender with (i) evidence  reasonably  satisfactory to Lender
that  Borrower  has access to all capital  funds  necessary  to complete the New
Building  in  accordance  with the plans and New  Building  Budget  approved  by
Lender, and (ii) a guaranty of completion of the New Building in accordance with
the plans approved

     6.5. Lender, which guaranty shall be in form and substance, and from WWG or
another guarantor reasonably satisfactory to Lender.

     6.6.  The  New  Building  shall  be  constructed  in  accordance  with  all
applicable  Laws. At such time as the foundations for the New Building have been
completed,  Borrower  shall  cause the Title  Company to issue to Lender an CLTA
102.5 (or local equivalent)  foundation Endorsement to Lender's Title Policy for
the Somerset Tech Center.

     6.7. Upon completion of the New Building,  Borrower shall deliver to Lender
a certificate  of occupancy  covering the New Building,  together with a written
certification  from the architect  retained in connection  with the New Building
that the New Building has been  completed in accordance  with the plans approved
by Lender and that the New Building is fully operational and ready for occupancy
and use.

     7. Anti-Terroism and Anti-Money Laundering Compliance.

     7.1. Compliance with Anti-Terrorism Laws. Borrower represents, warrants and
covenants to Lender that Borrower,  the Gateway Tower Owner and Borrower's other
direct and indirect  wholly-owned  subsidiaries  (collectively  with the Gateway
Tower Owner, the "BORROWER  SUBSIDIARIES"),  WWPII and WWG are not and shall not
be, and,  after  making due inquiry,  that no Person who directly or  indirectly
owns a  controlling  interest in or otherwise  controls  Borrower,  WWPII or WWG
(each,  a  "CONTROLLING  PERSON")  is or shall be, (a)  listed on the  Specially
Designated Nationals and Blocked Persons List (the "SDN LIST") maintained by the
Office of Foreign Assets Control ("OFAC"  Department of the Treasury,  and/or on
any other similar list ("OTHER LISTS" and,  collectively  with the SDN List, the
"Lists") maintained by the OFAC pursuant to any authorizing  statute,  Executive
Order or regulation (collectively, "OFAC LAWS AND REGULATIONS"); or (b) a Person
(a  "DESIGNATED  PERSON")  either  (i)  included  within  the  term  "designated
national" as defined in the Cuban Assets Control Regulations, 31 C.F.R Part 515,
or (ii)  designated  under Sections 1(a),  1(b), 1(c) or 1(d) of Executive Order
No.  13224,  66 Fed.  Reg.  49079  (published  September  25,  2001) or a Person
similarly designated under any related enabling legislation or any other similar
Executive  Orders  (collectively,  the  "EXECUTIVE  ORDERS").  The OFAC Laws and
Regulations  and the  Executive  Orders  are  collectively  referred  to in this
Agreement as the "ANTI-TERRORISM  LAWS".  Borrower also shall require, and shall
take  reasonable  measures to ensure  compliance with the  requirement,  that no
Person who owns any otherdirect  interest in Borrower,  WWPII or WWG is or SHALL
be  listed  on any of the  Lists  or is or shall be a  Designated  Person.  This
Section  7.1 shall not apply to any  Person  to the  extent  that such  Person's
interest in the Borrower is through a U.S. Publicly-Traded or Pension Entity. As
used in this Agreement,  "U.S.  PUBLICLY-TRADED  OR PENSION ENTITY" means either
(A) a Person  (other  than an  individual)  whose  securities  are  listed  on a
national securities exchange, or quoted on an automated quotation system, in the
United  States,  or a  wholly-owned  subsidiary  of  such  a  Person,  or (B) an
"employee  pension benefit plan" or "pension plan" as defined in Section 3(2) of
ERISA.
<PAGE>

     7.2.  Compliance by Interest  Holders.  Borrower  shall require each Person
that proposes to become a Controlling  Person after the First Amendment Date and
that is not a U.S.  Publicly-Traded or Pension Entity to sign, and to deliver to
Borrower  (and  Borrower   shall   deliver  to  Lender),   an  Interest   Holder
Certification  and Agreement,  substantially in the form attached as Exhibit "B"
("INTEREST HOLDER AGREEMENT").  No transfer of an interest which would otherwise
cause such a Person to become a Controlling Person shall be effective unless and
until the transferee  has executed and delivered to Borrower an Interest  Holder
Agreement  as required  above,  and  Borrower  has  delivered a copy  thereof to
Lender.  From time to time upon the written  request of Lender,  Borrower  shall
deliver  to Lender a  schedule  of the name,  legal  domicile  address  and (for
entities) place of organization of each holder of a direct interest in Borrower,
WWPII or WWG.

     7.3.  Anti-Terrorism  Policies.  Borrower  agrees  to  adopt  and  maintain
adequate  policies,  procedures  and  controls to ensure that it and each of the
Borrower  Subsidiaries is in compliance with all Anti-Terrorism Laws and related
government  guidance (such  policies,  procedures and controls are  collectively
referred to in this Agreement as "BORROWER ANTI-TERRORISM  POLICIES").  Borrower
further agrees to make the Borrower Anti-Terrorism  Policies, and the respective
policies,  procedures  and  controls  for  Persons  who  are or  are  to  become
Controlling Persons or direct members in Borrower (such policies, procedures and
controls are collectively  referred to as "INVESTOR  ANTI-TERRORISM  POLICIES"),
together  with  the  information  collected  thereby  concerning  Borrower,  the
Borrower  Subsidiaries,  WWPII,  WWG and such  Controlling  Persons  and  direct
members (but not indirect  members that are not  Controlling  Persons,  WWPII or
WWG),  available to Lender for review and inspection by Lender from time to time
during normal  business  hours and upon  reasonable  prior notice,  and Borrower
agrees to deliver  copies of the same to Lender from time to time upon  request.
Lender  will  keep  the  Borrower   Anti-Terrorism  Policies  and  the  Investor
Anti-Terrorism  Policies,  and the information  collected thereby,  confidential
subject to customary exceptions for legal process,  auditors,  regulators, or as
otherwise  reasonably  required  by Lender to comply with  requirements  of law.
Borrower  consents to the  disclosure to U.S.  regulators  and law,  enforcement
authorities  by Lender or any of its  Affiliates  or agents of such  information
about Borrower,  the Borrower Subsidiaries and the owners of direct interests in
Borrower, WWPII and WWG that Lender reasonably deems necessary or appropriate to
comply with applicable Anti-Terrorism Laws and Anti-Money Laundering Laws.
<PAGE>

     7.4. Funds Invested in Borrower.  Borrower  represents and warrants that it
has taken, and that it shall continue to take,  reasonable measures  appropriate
to the circumstances (and in any event as required by law), with respect to each
holder of a direct  interest  in  Borrower,  WWPII and WWG to assure  that funds
invested by such holders in Borrower are derived from legal sources ("ANTI-MONEY
LAUNDERING MEASURES"). The Anti-Money Laundering Measures have been and shall be
undertaken in accordance with the Bank Secrecy Act, 31  U.S.C.ss.ss.5311 et seq.
("BSA" and all  applicable  laws,  regulations  and  government  guidance on BSA
compliance and on the prevention  and detection of money  laundering  violations
under 18  U.S.C.ss.ss.1956  and  1957  (collectively  with the BSA,  "ANTI-MONEY
LAUNDERING LAWS").

     7.5. No Violation of Anti-Money  Laundering Laws.  Borrower  represents and
warrants to Lender, to its actual knowledge after making reasonable  inquiry (in
accordance with the Anti-Money Laundering Measures),  that neither Borrower, nor
any Borrower Subsidiary,  nor any holder of a direct interest in Borrower, WWPII
or WWG (a) is under investigation by any Governmental Authority for, or has been
charged with, or convicted of, money  laundering under 18  U.S.C.ss.ss.1956  and
1957,  or  drug  trafficking,   terrorist-related   activities  or  other  money
laundering  predicate  crimes,  or a violation of the BSA, (b) has been assessed
civil penalties under any Anti-Money  Laundering Laws, or (c) has had any of its
funds seized or forfeited in an action under any Anti-Money Laundering Laws.

     7.6.  Borrower   Compliance  with  Anti-Money   Laundering  Laws.  Borrower
represents,  warrants and covenants to Lender that it has taken, and agrees that
it shall continue to take,  reasonable measures appropriate to the circumstances
(in any event as required  by law),  to ensure that  Borrower  and all  Borrower
Subsidiaries  are and  shall  be in  compliance  with  all  current  and  future
Anti-Money.  Laundering Laws and laws,  regulations and government  guidance for
the prevention of terrorism, terrorist financing and drug trafficking.

     7.7.  Notification of Lender:  Quarantine Steps. Borrower shall immediately
notify Lender if Borrower  obtains actual  knowledge that any holder of a direct
interest in Borrower,  WWPII or WWG, or any director,  manager or officer of any
of such  holder,  (a) has been  listed  on any of the  Lists,  (b) has  become a
Designated Person, (c) is under investigation by any Governmental Authority for,
or has been charged with or convicted of, money laundering or drug  trafficking,
terrorist-related  activities or other money laundering predicate crimes, or any
violation of the BSA, (d) has been assessed civil penalties under any Anti-Money
Laundering Laws, or (e) has had funds seized or forfeited in an action under any
Anti-Money  Laundering  Laws. In addition,  if Borrower obtains actual knowledge
that any holder of an indirect  interest in Borrower,  WWPII or WWG (i) has been
listed on any of the Lists, (ii) has become a Designated Person,  (iii) has been
indicted for, or has been charged with or convicted of, money laundering or drug
trafficking,  terrorist-related  activities or other money laundering  predicate
crimes,  or any  violation of the BSA, (iv) has been  assessed  civil  penalties
under any Anti-Money  Laundering  Laws, or (v) has had funds seized or forfeited
in  an  action  under  any  Anti-Money  Laundering  Laws,  Borrower  shall  take
reasonable  steps  ("QUARANTINE  STEPS") to assure that funds received from such
indirect interest holder thereafter are not used by Borrower to make payments to
Lender  under  the  Loan  Documents;  provided,  however,  that if the  facts or
circumstances which caused such indirect interest holder to be classified within
one of the categories  described in the foregoing  clauses (i) through (v) cease
to exist or to apply to such indirect  interest holder,  then Borrower may cease
taking  Quarantine  Steps with respect to such indirect  interest  holder.  As a
matter of clarification  and not limitation,  any payments by Borrower to Lender
which are made  from  Gross  Receipts  of the  Properties  shall be deemed to be
payments that are not derived from funds  received  from such indirect  interest
holder.
<PAGE>

     7.8. Additional Events of Default. The occurrence of any one or more of the
following events shall constitute an Event of Default:

     (a)  Borrower  shall  fail to  comply  with any of the  provisions  of this
Section 7 or any Person  executing an Interest  Holder  Agreement  shall fail to
comply with the provisions of such agreement,  and in either case the same shall
remain  unremedied  for a period of thirty  (30) days  after  Borrower  receives
written notice of such failure from Lender;  provided,  however, if such failure
is of the type WHICH IS curable but cannot be cured  within such 30-day  period,
then Borrower  shall have an additional  sixty (60) days to cure such failure if
Borrower,  within  the  initial  30 days,  shall  have  commenced  and  shall be
diligently pursuing such cure.

     (b) Any representation or warranty of Borrower under this Section 7, or any
representation  or warranty made to Lender under an Interest  Holder  Agreement,
shall be  false,  misleading  or  incorrect  as of the date  when  made and such
representation  or  warranty,  if the  condition  that gave  raise to the breach
thereof is capable of being cured,  shall remain false,  misleading or incorrect
for a period  ending on the first to occur of thirty  (30) days  after  Borrower
shall receive  written notice from Lender  regarding  such false,  misleading or
inaccurate  representation or warranty, or thirty (30) days after Borrower shall
become  aware that such  representation  or  warranty  is false,  misleading  or
incorrect;  provided,  however,  that if the  breach  of the  representation  or
warranty  that is  capable  of being  cured is of the type that  cannot be cured
within such 30-day  period,  then Borrower  shall have an additional  sixty (60)
days to effect such cure so long as Borrower  shall have  commenced  to cure the
condition that gave raise to the breach of representation or warranty within the
initial 30-day period, and Borrower thereafter diligently pursues such cure.

     (c)  Notwithstanding  the  foregoing,  it  shall be an  immediate  Event of
Default (for which no cure periods  shall apply) if Borrower or any  Controlling
Person is at any time listed on the SDN List.

     7.9.  Representations and Warranties True and Correct.  Borrower represents
and  warrants  to  Lender  that,  as of the  First  Amendment  Date,  all of the
representations  and  warranties  contained  in the Interest  Holder  Agreements
delivered to Lender  prior to the First  Amendment  Date are true and  'correct.
Borrower  further  represents  and  warrants  that all  evidence of  Borrower's,
Gateway Tower Owner's,  and each Borrower Party's identity provided to Lender is
genuine, that all related information is accurate and that Borrower has acquired
and  shall  hold  its  interest  in the  Assets  for its own  account,  risk and
beneficial  interest,  without the obligation or intention to sell,  distribute,
assign or transfer all or any portion of such interest to any other Person.
<PAGE>

     7.10. Blocking the Loan. Borrower  acknowledges and agrees that if Borrower
breaches any of its representations,  warranties or agreements set forth in this
Section 7, Lender has the right or may be  obligated to block the Loan by, among
other things,  prohibiting  additional  Loan  advances,  segregating  the assets
constituting  the Loan or any funds  deposited  with or otherwise  controlled by
Lender   pursuant  to  the  Loan   Documents  in  accordance   with   applicable
Anti-Terrorism Laws, declining any payment or any prepayment or consent request,
and/or  declaring  an Event of Default  and  immediately  accelerating  the Loan
(subject,  in the case of  declaring  an Event of Default and  accelerating  the
Loan, to the notice and cure provisions set forth in Section 7,.8, above).

     7.11. No Expansion of Transfer Rights.  Nothing contained in this Section 7
is intended, nor shall be construed, to permit any assignment,  transfer,  sale,
conveyance,  encumbrance,  pledge  or  hypothecation  of a  direct  or  indirect
interest  in  Borrower,  the Gateway  Tower  Owner,  WWG,  WWPII,  Wells  Avenue
Holdings,  WASH Manager or Nomura Borrower which is prohibited by Section 9.4(2)
of the Loan Agreement.

     8. Conditions Precedent. Lender's obligation to make the initial advance of
the  Additional  Advance,  and to otherwise  modify the terms of the Loan as set
forth herein, is subject to the satisfaction of all of the following  conditions
precedent:

     8.1. Lender shall have received each of the following in form and substance
satisfactory  to  Lender  (unless  otherwise  specified,  all  documents  to  be
delivered shall be originals):

     (a) The  payment  to  Lender  in cash  of (i)  the  commitment  fee for the
Additional  Advance  in an  amount  equal to  $65,000.00  (less any  portion  of
Borrower's good faith deposit applied thereto),  and (ii) $13,500,  which is the
unpaid  portion of the commitment  fee for the Loan funds  reallocated  from the
Working Capital Budgets for the Nomura  Properties to the Working Capital Budget
for the Somerset Tech Center (i.e., 0.5% of $2,700,000).

     (b) The Amended and Restated Note duly executed by Borrower.

     (c) This  Agreement  duly  executed  by  Borrower;  the Consent of Borrower
Parties attached hereto duly executed by the Whitehall Parties, Wellsford, WWPII
and WWG;  the Consent of Guarantor  attached  hereto  executed by Gateway  Tower
Owner; the Consent of Indemnitors  attached hereto executed by all "Indemnitors"
under the  Indemnification  Agreement;  and the Acknowledgment and Reaffirmation
Regarding  Asset  Management  attached hereto duly executed by WWG and the Asset
Manager.

     (d) A duly  executed  and  acknowledged  Amendment  to  Deed of  Trust  and
Assignment  of Leases and Rents  executed by  Borrower  for each of the Deeds of
Trust (collectively, the "AMENDMENTS").

     (e) A duly executed and acknowledged Deed of Trust encumbering the Somerset
Tech Center.  (f) A duly  executed and  acknowledged  Assignment  of Leases with
respect to the Somerset  Tech Center.  (g) A Collateral  Assignment of Contracts
for the Somerset Tech Center, duly executed and delivered by Borrower.

     (h) UCC-I  financing  statements for the Somerset Tech Center for filing in
each jurisdiction deemed necessary by Lender.

     (i) Opinions of Sullivan & Cromwell,  counsel to Borrower,  and opinions of
Lender's local counsel in  Massachusetts,  Maryland and New Jersey; in each case
addressing  such matters  regarding  the  Aggregate  Loan,  the  Borrower,  each
Borrower.  Party,  the Gateway  Tower  Owner,  this  Agreement,  the Amended and
Restated Note, the Amendments and/or the Loan Documents as Lender may reasonably
specify.
<PAGE>

     (j) A  current  rent  roll for the  Somerset  Tech  Center  and each  other
Property,  together  with copies of all Tenant  leases  relating to the Somerset
Tech Center and each other Property which have not been previously  delivered to
Lender.

     (k) Estoppel  certificates  and, where  required by Lender,  subordination,
nondisturbance  and  attornment  agreements  from  Tenants  under  Leases at the
Somerset Tech Center, as shall be satisfactory to Lender.

     (l) Governmental certificates, dated the most recent practicable date prior
to the First Amendment Date, with telecopy updates where available, showing that
Borrower and the Gateway Tower Owner are each  organized and in good standing in
the jurisdiction of its organization and showing that Borrower is qualified as a
foreign  limited  liability  company in good standing in all states in which the
Borrower  Properties are located,  and that the Gateway Tower Owner is qualified
as a  foreign  limited  liability  company  in good  standing  in the  state  of
Maryland.

     (m) Resolutions of the management  committee of the sole member of the sole
member of Borrower, certified by an authorized signatory of such sole member (or
the  manager  thereof)  of such  member  within a recent date prior to the First
Amendment  Date,  to be duly  adopted and in full force and effect on such date,
authorizing  (i)  the  consummation  of the  transactions  contemplated  by this
Agreement and the Amendments,  and (ii) specific officers to execute and deliver
this  Agreement,  the  Amendments,  the Amended and Restated  Note and the other
Ancillary  Agreements  which Borrower and/or Gateway Tower Owner is executing in
connection herewith.

     (n)  Certificates  of an  authorized  signatory  of the sole member (or the
manager  thereof) of the sole  member of  Borrower,  dated  within a recent date
prior to the  First  Amendment  Date,  as to the  incumbency  of the  authorized
signatories  authorized  by the  resolutions  delivered  to Lender (as  required
herein) to execute and deliver this  Agreement,  the Amended and Restated  Note,
the Amendments and the other  Ancillary  Agreements  and other  certificates  or
documents  to  be  delivered  pursuant  hereto  or  thereto,   together  with  a
certification of the incumbency of such authorized signatory.

     (o)  Resolutions  of the  management  committee  of  WWG,  certified  by an
authorized  signatory of WWG (or the manager thereof) within a recent date prior
to the First  Amendment Date, to be duly adopted and in full force and effect on
such date, authorizing (i) the consummation of the transactions  contemplated by
this Agreement,  and (ii) specific authorized signatories to execute and deliver
the  Consent  of  Borrower   Parties,   the  Consent  of  Indemnitors   and  the
Acknowledgment  and  Reaffirmation  Regarding Asset Management  attached to this
Agreement,  the other Loan Documents and Ancillary  Agreements to which WWG is a
party,  and any other  certificate  or other  document  to be  delivered  by WWG
pursuant hereto or thereto.

     (p)  Resolutions of the  management  committee of the sole member of WWPII,
certified by an  authorized  signatory  of such member (or the manager  thereof)
within a recent date prior to the First  Amendment  Date, to be duly adopted and
in full force and effect on such date,  authorizing (i) the consummation of each
of the transactions contemplated by this Agreement, and (ii) specific authorized
signatories  to execute and  deliver  the  Consent of  Borrower  Parties and the
Consent of Indemnitors attached to this Agreement,  the other Loan Documents and
Ancillary  Agreements to which WWPII is a party,  and any other  certificate  or
other document to be delivered by WWPII pursuant hereto or thereto.

     (q) Certificates of an authorized  signatory of the sole or managing member
(as  applicable) of WWG and WWPII (or the manager  thereof),  in each case dated
within a recent date prior to the First  Amendment Date, as to the incumbency of
the authorized signatories of such member (or the manager thereof) authorized by
the company  resolutions or consent  delivered to Lender (as required herein for
each such party) to execute and  deliver  the Consent of Borrower  Parties,  the
Consent of  Indemnitors  and (as to WWG) the  Acknowledgment  and  Reaffirmation
Regarding Asset Management attached to this Agreement,  the other Loan Documents
and  Ancillary  Agreements  to  which  such  entity  is a party,  and any  other
certificate or other  document to be delivered by such party pursuant  hereto or
thereto,  together with a  certification  of the  incumbency of such  authorized
signatory.

     (r) A board  resolution  of  Wellsford  certified  by the  Secretary  or an
Assistant Secretary of Wellsford, in each case within a recent date prior to the
First  Amendment  Date, to be duly adopted and in force and effect on such date,
authorizing  (i)  the  consummation  of the  transactions  contemplated  by this
Agreement,  and (ii)  specific  officers  to execute  and deliver the Consent of
Borrower Parties and the Consent of Indemnitors attached to this Agreement,  the
other Loan Documents and Ancillary Agreements to which Wellsford is a party, and
any other  certificate or other  document to be delivered by Wellsford  pursuant
hereto or thereto.

     (s)  Certificates  of  the  Secretary,  an  Assistant  Secretary  or a Vice
President of Wellsford,  dated within a recent date prior to the First Amendment
Date,  as to the  incumbency  of the  officers or  representatives  of Wellsford
authorized by the company  consent  delivered to Lender (as required  herein) to
execute  and  deliver  the  Consent  of  Borrower  Parties  and the  Consent  of
Indemnitors  attached to this Agreement,  the other Loan Documents and Ancillary
Agreements to which  Wellsford is a party,  and any other  certificate  or other
document to be delivered by Wellsford pursuant hereto or thereto,  together with
a certification of the incumbency of such Secretary or Assistant  Secretary,  as
the case may be.

     (t) A partnership.  certificate  of each  Whitehall  Party and a consent of
manager of each Whitehall  Party's general partner,  certified by the Secretary,
an Assistant Secretary or a Vice President of such general partner,  and in each
case within a recent date prior to the First  Amendment Date, to be duly adopted
and in force and effect on such date,  authorizing  (i) the  consummation of the
transactions  contemplated  by this  Agreement,  and (ii)  specific  officers to
execute  and  deliver  the  Consent  of  Borrower  Parties  and the  Consent  of
Indemnitors  attached to this Agreement,  the other Loan Documents and Ancillary
Agreements to which such Whitehall Party is a party,  and any  other'certificate
or other  document to be delivered by such Whitehall  Party  pursuant  hereto or
thereto.

     (u) Certificates of the Secretary, an Assistant Secretary or Vice President
of the general partner of each Whitehall Party, dated within a recent date prior
to the First  Amendment  Date,  hereof,  as to the incumbency of the officers or
representatives of such general partner authorized by the resolutions  delivered
to Lender (as  required  herein) to execute  and deliver the Consent or Borrower
Parties and the Consent of  Indemnitors  attached to this  Agreement,  any other
Loan  Documents and Ancillary  Agreements  to which such  Whitehall  Party is =a
party,  and any other  certificate  or other  document to be  delivered  by such
Whitehall Party pursuant hereto or thereto, together with a certification of the
incumbency of such Secretary, Assistant Secretary or Vice President, as the case
may be.
<PAGE>

     (v) A copy of any  amendments  (excluding  those  delivered to Lender at or
before the original  Loan  closing) to the  organizational  charter of Borrower,
Gateway Tower Owner,  WWG,  WWPII,  WP Commercial,  each Whitehall Party and the
general  partner of each Whitehall  Party, in each case certified as of a recent
date  prior  to the  First  Amendment  Date by the  Secretary  of  State  of the
jurisdiction of its organization,  and a copy of any amendments (excluding those
delivered to Lender at or before the  original  Loan  closing) to the  operating
agreement or  partnership  agreement,  as the case may be, of Borrower,  Gateway
Tower Owner,  WWG, WWPII, WP Commercial,  each Whitehall  Party, and the general
partner of each Whitehall Party,  certified by an authorized  officer or manager
of such entity as true and correct as of a recent date.

     (w) An environmental  engineering  report for the Somerset Tech Center, the
content of which is acceptable to Lender in its sole discretion, conducted by an
engineer  and in a manner both of which are  satisfactory  to Lender in its sole
discretion.  Such report shall be of an  investigation  which makes  appropriate
inquiry  concerning  the  existence of Hazardous  Materials on the Somerset Tech
Center, and the past or present use or release of any Hazardous Materials.

     (x) An  engineering  report for the  Somerset  Tech Center,  acceptable  to
Lender covering, among other matters, inspection of heating and cooling systems,
roof and structural details,  and showing no failure of compliance with building
plans  and  specifications  (which  must be  approved  by  Lender),  or with any
applicable local, state or federal laws.

     (y) An ALTA-form title insurance  policy (or its equivalent)  naming Lender
as insured first mortgagee in respect of the Somerset Tech Center,  and insuring
the validity and first  position lien priority of the Deed of Trust  encumbering
the Somerset Tech Center,  issued by Commonwealth Land Title Insurance  Company,
with  coverage  brought  forward  to the  date on  which  the  Deed of  Trust is
recorded,  with  such  endorsements  as may  be  required  by  Lender,  with  no
exceptions or exclusions other than Permitted Encumbrances or as may be approved
by  Lender,  and in an insured  amount not to exceed  120% of the sum of (i) the
initial  Loan Basis for the  Somerset  Tech  Center plus (ii) the amount of Loan
funds allocated to the Working Capital Budget for the Somerset Tech Center.

     (z) A current  "as-built"  survey of the  Somerset  Tech  Center,  dated or
updated to a date not earlier than thirty (30) days prior to the First Amendment
Date,  certified  to Lender  and  Commonwealth  Land  Title  Insurance  Company,
prepared by a licensed surveyor  reasonably  acceptable to Lender and such title
insurer, and conforming to Lender's current standard survey requirements.

     (aa)  Evidence  that the  Somerset  Tech Center and the  operation  thereof
comply with all legal requirements, including that all requisite certificates of
occupancy,  building  permits,  and other licenses,  certificates,  approvals or
consents  required  of any  Governmental  Authority  have  been  issued  without
variance  or  condition  and that  there  is no  litigation,  action,  citation,
injunctive proceedings, or like matter pending or threatened with respect to the
validity of such matters.  Borrower  shall have  provided  Lender with copies of
such  documentation as Lender may require from applicable  zoning,  building and
municipal agencies evidencing the foregoing.

     (bb) All other Ancillary Agreements reasonably required by Lender.

     (cc) Evidence that all actions  necessary or, in the reasonable  opinion of
Lender,  desirable to perfect and protect the security  interests created by the
existing  Deeds of Trust and other  Collateral  Documents,  as  amended  by this
Agreement and the Amendments, have been or will be taken.

     8.2. No change shall have occurred in the financial  condition of Borrower,
the Gateway Tower Owner or any Borrower  Party or in the Operating  Cash Flow of
any of the Borrower  Properties,  or in the financial  condition of any major or
anchor tenant,  which would have, in Lender's  reasonable  judgment,  a Material
Adverse Effect.

     8.3. No  condemnation  or adverse zoning or usage change  proceeding  shall
have  occurred  or  shall  have  been  threatened  against  any of the  Borrower
Properties (including the Somerset Tech Center); none of the Borrower Properties
shall have suffered any  significant  damage by fire or other casualty which has
not been  repaired;  no Law,  moratorium,  injunctive  proceeding,  restriction,
litigation,  action,  citation or similar  proceeding  or matter shall have been
enacted, adopted or threatened by any Governmental Authority,  which would have,
in Lender's judgment, a Material Adverse Effect.

     8.4.  Lender shall have verified that the amount of the Additional  Advance
does not exceed eighty percent (80%) of the Property Basis for the Somerset Tech
Center.

     8.5.  Lender shall have verified that the amount of the Additional  Advance
does not exceed  seventy-one  percent (71 %) of the  acquisition  and historical
renovation costs for the Somerset Tech Center.

     8.6.  Lender shall have  verified  that the Cash On Cash Return is not less
than 10.7%,  and Lender shall have  verified  that the Cash On Cash Return based
solely on the Somerset Tech Center and the amount of the  Additional  Advance is
not less than 10.5%.

     8.7. Lender shall have verified that (a) Borrower's cash equity invested in
the Somerset Tech Center is not less than  $2,700,000,  and (b) Borrower's  cash
equity invested in all Borrower Properties is not less than $38,400,000.

     8.8.  Borrower  shall  have  delivered  to Lender,  and  Lender  shall have
approved, a detailed two-year capital budget for the Somerset Tech Center.

     8.9.  Borrower shall have (a) established all deposit accounts  relating to
the  Somerset  Tech Center as required  by the terms of the Loan  Agreement  and
delivered to Lender satisfactory evidence thereof, and (b) delivered to Lender a
deposit account  agreement for each such account,  substantially  in the form of
Exhibit "B" to the Loan  Agreement,  executed by Borrower and the  depository at
which such account is held.

     8.10. All brokerage  fees and  commissions  payable in connection  with the
Additional Advance (if any) have been paid.

     8.11. The  representations  and warranties  contained in the Loan Agreement
and in all other Loan Documents are true and correct as of the date hereof.

     8.12. No Default or Event of Default has occurred and is continuing.
<PAGE>

     8.13. The Title Company shall have issued and delivered to Lender, or shall
have  irrevocably  and  unconditionally  committed to issue for the.  benefit of
Lender,  such  endorsements  to the Title  Policies as Lender  shall  request to
insure the validity and continuing  first position lien priority of the Deeds of
Trust,  as  amended  hereby  and  by  the  Amendments,   including  CTLA  110.10
endorsements.

     8.14. Borrower shall have reimbursed Lender (either directly tly or through
the  application  of all or part of the  Borrower's  good faith deposit) for all
third  party  costs and  expenses  incurred  by Lender  in  connection  with the
transaction  contemplated  by this Agreement,  including title insurance  costs,
recording fees, attorneys' fees and costs, costs of environmental appraisals and
structural reports and travel expenses.

     9. Consent to Merger of WXI/Mt.  Bethel Road. L.L.C. into Borrower.  Lender
acknowledges  that, as of the First Amendment Date,  Borrower will have acquired
title to Somerset Tech Center as the successor by merger to WXI/Mt. Bethel Road,
L.L.C., a Delaware limited  liability  company  ("WXI/MT.  BETHEL"),  which is a
wholly-owned  subsidiary  of WWG, and Lender  consents to such merger.  Borrower
represents and warrants to Lender that, since its inception,  WXI/Mt. Bethel has
not engaged in any  business  other than the  business  of owning and  operating
Somerset  Tech Center,  and has not incurred any  Indebtedness  other than trade
debt incurred in the ordinary  course of its ownership and operation of Somerset
Tech Center.

     10.  Return of Original  Note.  Lender agrees that,  concurrently  with the
closing  of the  transaction  contemplated  by  this  Agreement,  or  reasonably
promptly thereafter, Lender shall return the original Note to Borrower.

     11.  Non-Impairment.  Except as expressly provided herein,  nothing in this
Agreement shall alter or affect any provision,  condition or covenant  contained
in the Loan  Agreement  or other Loan  Documents or affect or impair any rights,
powers or remedies thereunder, and the parties hereto intend that the provisions
of the Loan Agreement and other Loan Documents  shall continue in FULL force and
effect except as expressly modified hereby. In the event of any conflict between
this  Agreement  and the  terms of the  respective  Loan  Documents  to which it
relates or any documents  relating  thereto,  the terms of this Agreement  shall
govern and control.  Unless otherwise specified herein,  whenever possible,  the
provisions  of  this  Agreement  shall  be  deemed  supplemental  to and  not in
derogation of the terms of the respective Loan Documents to which it relates.

     12.  Miscellaneous.  This Agreement shall be governed by, and construed and
enforced in  accordance  with,  the laws of the State of New York  applicable to
contracts  made and performed in such state,  without  regard to the  principles
thereof regarding conflict of laws, and any applicable laws of the United States
of America.  The headings used in this  Agreement are for  convenience  only and
shall  be  disregarded  in  interpreting  the  substantive  provisions  of  this
Agreement., If any provision of this Agreement shall be determined by a court of
competent  jurisdiction to be invalid,  illegal or  unenforceable,  that portion
shall be deemed  severed  herefrom and the remaining  parts shall remain IN FULL
force as though the invalid, illegal or unenforceable provision had never been a
part  hereof  As  used  in this  Agreement,  the  term  "INCLUDES)"  shall  mean
"include(s),   without   limitation,"  and  the  term  "INCLUDING"   shall  mean
"including, but not limited to."

     13.  Integration;  Interpretation.  The  Loan  Documents,  including  this.
Agreement, contain or expressly incorporate by reference the entire agreement of
the parties with respect to the matters contemplated  therein, and supersede all
prior  negotiations.  No  reference  to  this  Agreement  is  necessary  in  any
instrument or document at any time referring to a Loan  Document.  Any reference
to a Loan  Document  (including  in any other Loan  Document)  shall be deemed a
reference to such document as modified hereby.

     14.  Counterparts.  This  Agreement  may  by  executed  in  any  number  of
counterparts,  all of which shall be considered one in the same instrument.  The
original,  executed  signature  pages of exact copies of this  Agreement  may be
attached to one of such copies to form one document.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

     IN WITNESS WHEREOF,  Borrower and Lender have executed this Agreement as of
the day and year first set forth above.

     "Borrower"

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

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

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

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

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

              Lender:

              GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation

               By:  /s/ Paul St Arnauld
                    ------------------------------------
                    Paul St Arnauld, Authorzed Signatory

<PAGE>

                          CONSENT OF BORROWER PARTIES
                          ---------------------------

     The  undersigned,  having read and understood the foregoing First Amendment
to Loan Agreement and Other Loan Documents ("AGREEMENT"),  hereby (a) consent to
the Additional  Advance and to all of the terms and provisions of the Agreement,
(b) agree that the Agreement  does not terminate any of the  obligations  of the
undersigned  to Lender under the Joinder,  and (c)  reaffirm  their  obligations
under the Joinder in light of the Agreement.  The undersigned  have reviewed the
provisions  of the Joinder  and,  with the advice of their own  counsel,  hereby
reaffirm and restate the waivers, authorizations,  agreements and understandings
set forth in the Joinder as though set forth in full herein.

     By  executing  this  Consent of  Borrower  Parties,  WWG and WWPII  further
specifically  consent and agree to the  amendment  of the  Hazardous  Substances
Indemnity Agreement set forth in Section 5.2 of the Agreement, pursuant to which
the Somerset Tech Center is included  within the term  "Premises" as used in the
Hazardous  Substances  Indemnity  Agreement.  WWG and WWPII hereby  reaffirm and
restate all representations,  warranties,  covenants and agreements contained in
the  Hazardous  Substances  Indemnity   Agreement,   as  such   representations,
warranties, covenants and agreements apply to the Somerset Tech Center.

WHITEHALL STREET REAL ESTATE
LIMITED PARTNERSHIP XI, a Delaware
limited partnership

By:      WH Advisors, L.L.C. XI, a Delaware
         limited liability company, its General
         Partner

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

WHITEHALL STREET REAL ESTATE
LIMITED PARTNERSHIP VIII, a Delaware
limited partnership

By:      WH Advisors, L.L.C. XI, a Delaware
         limited liability company, its General
         Partner

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

WHITEHALL STREET REAL ESTATE
LIMITED PARTNERSHIP V, a Delaware
limited partnership

By:      WH Advisors, L.L.C. XI, a Delaware
         limited liability company, its General
         Partner

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

WELLSFORD/WHITEHALL GROUP,
L.L.C., a Delaware limited partnership

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

By:
   -----------------------------------
   Name:
   Title:
<PAGE>

WELLSFORD REAL PROPERTIES,
a Maryland corporation

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

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

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

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

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

<PAGE>

                              CONSENT OF GUARANTOR

     The  undersigned,  having read and understood the foregoing First Amendment
to Loan Agreement and Other Loan Documents ("AGREEMENT"), hereby (a) consents to
the Additional  Advance and to all of the terms and provisions of the Agreement,
(b) agrees that the Agreement  does not terminate any of the  obligations of the
undersigned to Lender under the Guaranty dated as of June 25, 2001,  executed by
the  undersigned  in  favor  of  Lender  (the  "GUARANTY"),  (c)  reaffirms  its
obligations  under the Guaranty in light of the Agreement,  and (d) agrees that,
subject to the limitations on the undersigned's  aggregate total liability under
the Guaranty for the Guaranteed  Obligations,  the Guaranteed  Obligations shall
include the payment of the Aggregate Loan and the payment and performance of all
other  present and future  indebtedness  and  obligations  of Borrower to Lender
under the Agreement and under the Loan  Documents,  as amended by the Agreement.
The  undersigned  agrees  that all  references  in the  Guaranty to (i) the Loan
hereafter  shall be deemed to be references to the Aggregate  Loan, and (ii) the
Note  hereafter  shall be deemed to be  references  to the Amended and  Restated
Note. The  undersigned has reviewed the provisions of the Guaranty and, with the
advice  of  its  own  counsel,   hereby  reaffirms  and  restates  the  waivers,
authorizations,  agreements  and  understandings  set forth in the  Guaranty  as
though set forth in full herein.

     By executing this Consent of Guarantor,  the undersigned  further  consents
and agrees to the amendment of the Hazardous  Substances Indemnity Agreement set
forth in Section  5.2 of the  Agreement,  pursuant  to which the  Somerset  Tech
Center  is  included  within  the  term  "Premises"  as  used  in the  Hazardous
Substances Indemnity Agreement.  The undersigned agrees that such amendment does
not  terminate any of the  obligations  of the  undersigned  to Lender under the
Hazardous Substances  Indemnity Agreement,  and the undersigned hereby reaffirms
and restates all representations,  warranties,  indemnities and other agreements
made by the undersigned in the Hazardous Substances  Indemnity Agreement,  which
shall continue to apply only to the Gateway Tower Premises.

WWG 401 NORTH WASHINGTON LLC, a Delaware limited liability company

    By:  WellsfordlWhitehall Holdings, L.L.C., a Delaware
         limited liability company, its sole member

         By:   Wellsford/Whitehall Properties 1I, L.L.C., a
               Delaware limited liability company, its
               managing member

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

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

                         By:
                             -----------------------------------
                             Name:
                             Title:
<PAGE>

                             CONSENT OF INDEMNITORS

     The  undersigned,  having read and understood the foregoing First Amendment
to Loan Agreement and Other Loan Documents ("AGREEMENT"),  hereby (a) consent to
the Additional  Advance and to all of the terms and provisions of the Agreement,
(b) agree that the Agreement  does not terminate any of the  obligations  of the
undersigned to Lender under the  Indemnification  Agreement dated as of June 25,
2001,  executed by the  undersigned  in favor of Lender (the  "INDEMNITY"),  (c)
reaffirm their  obligations  under the Indemnity in light of the Agreement,  and
(d) agree that all  references in the Indemnity to the Loan  hereafter  shall be
deemed to be references to the Aggregate Loan. The undersigned have reviewed the
provisions  of the Indemnity  and, with the advice of their own counsel,  hereby
reaffirm and restate the indemnities,  waivers,  authorizations,  agreements and
understandings set forth in the Indemnity as though set forth in full herein.

WHITEHALL STREET REAL ESTATE LIMITED PARTNERSHIP V, a
Delaware limited partnership

By: WH Advisors, L.L.C. V, a Delaware  limited
    libaility company, its general partner

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

WHITEHALL STREET REAL ESTATE LIMITED PARTNERSHIP
VII, a Delaware limited partnership

By: WH Advisors, L.L.C. VII, a Delaware
    limited libaility company, its general partner

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

WHITEHALL STREET REAL ESTATE LIMITED PARTNERSHIP VI,
a Delaware limited partnership

By: WH Advisors, L.L.C. VI, a Delaware limited
    libaility company, its general partner

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

WHITEHALL STREET REAL ESTATE LIMITED PARTNERSHIP
VIII, a Delaware limited partnership

By: WH Advisors, L.L.C. VIII, a Delaware
    limited libaility company, its general partner

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

<PAGE>

WHITEHALL STREET REAL ESTATE LIMITED PARTNERSHIP XI,
a Delaware limited partnership

By: WH Advisors, L.L.C.XI, a Delaware  limited
    libaility company, its general partner

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

WHITEHALL STREET REAL ESTATE LIMITED PARTNERSHIP
XII, a Delaware limited partnership

By: WH Advisors, L.L.C. XII, a Delaware
    limited libaility company, its general partner

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

WELLSFORD REAL PROPERTIES, INC., a Maryland
corporation

By:
   -----------------------------------
   Name:
   Title:
<PAGE>

                        ACKNOWLEDGMENT AND REAFFIRMATION
                        --------------------------------
                           REGARDING ASSET MANAGEMENT
                           --------------------------

                  The  undersigned,  having read and  understood  the  foregoing
First Amendment to Loan Agreement and Other Loan Documents ("AGREEMENT"), hereby
(i) reaffirms its obligations under the Agreement Regarding Asset Management, as
amended by the Agreement,  and (ii)  acknowledges  that the Somerset Tech Center
constitutes a "Property"  under the Agreement  Regarding Asset  Management,  and
that  the  Somerset  Tech  Center  constitutes  a  "Property"  under  the  Asset
Management Provisions.

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

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

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

           WP COMMERCIAL, L.L.C., a Delaware limited liability
           company

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

<PAGE>

                                   EXHIBIT "A"

                                LEGAL DESCRIPTION

     That certain real  property  situated in the Township of Warren,  County of
Somerset, State of New Jersey, described as follows:

     BEGINNING at a point on the  northerly  sideline of Mt. Bethel Road (a.k.a.
Somerset County Route 651, variable width right of way), said point being on the
dividing  line  between  Lot 11 and Lot 12.01,  Block 80,  said point also being
378.48 feet  westerly as measured  along various  courses  along said  northerly
sideline of Mt. Bethel Road from its intersection  with the westerly terminus of
a curve  connecting  Mt.  Bethel Road with the westerly  sideline of  Technology
Drive North (variable width right of way), and from said beginning point running
thence;  The following  three (3) courses  along the  northerly  sideline of Mt.
Bethel Road:

1.   North 56 degrees 24 minutes 00 seconds West, a distance of 100.41 feet to a
     point; thence

2.   North 51 degrees 46 minutes 00 seconds  West,  a distance of 224.86 feet to
     point; thence

3.   North 65 degrees 13 minutes  30  seconds  00 seconds  West,  a distance  of
     138.95 feet to a point; thence

4.   Along the  dividing  line  between  Lot 11 and Lot 10,  Block 80,  North 04
     degrees 51 minutes 16 seconds  East,  a distance of 278.00 feet to a point;
     thence

5.   Continuing  along the  dividing  line  between Lot 11 and Lot 10, Block 80,
     North 86 degrees 09 minutes 44 seconds West, a distance of 100.02 feet to a
     point; thence

6.   Along the  dividing  line  between  Lot 11 and Lot 9,  Block  80,  North 04
     degrees 51 minutes 16 seconds  East,  a distance of 300.05 feet to a point;
     thence the following two (2) courses along the dividing line between Lot 11
     and Lot 2, Block 80:

7.   South 86 degrees 09 minutes 44 seconds East, a distance of 100.02 feet to a
     point; thence

8.   North 02 degrees 56 minutes 30 seconds  East,  a distance of 613.93 feet to
     an iron pipe found; thence

9.   Along the common  dividing  line  between Lot 11 & Lot 2, Block 80, and Lot
     49,  Block 82,  North 01 degrees 06 minutes 30 seconds  West, a distance of
     303.25 feet to a point; thence

10.  Along the common dividing line between Lot 22, Block 80 and Lots 49, 48, 47
     & 46, Block 82, South 88 degrees 10 minutes 31 seconds  East, a distance of
     441.75 feet to a point; thence

<PAGE>

11.  Along the common  dividing  line  between  Lot 11, Lot 12.01 and Lot 12.02,
     Block 80 and Lot 46, Block 82, South 04 degrees 17 minutes 00 seconds West,
     a distance of 1736.02 feet to the northerly side of Mt. Bethel Rood and the
     point and place of Beginning.

FOR INFORMATIONAL PURPOSES ONLY:
"In compliance with Chapter 157, Laws of 1977, premises herein is Lot 11 & 11.01
in Block 80 on the Tax Map of the Township of Warren, County of Somerset,  State
of New Jersey."

<PAGE>

                                   EXHIBIT "B"

                        FORM OF INTEREST HOLDER AGREEMENT
                        ---------------------------------

<PAGE>

                                 SCHEDULE 1.1(A)
                                 ---------------

                              PROPERTY INFORMATION
                              --------------------
<TABLE>
<CAPTION>

          PROPERTY                          ADDRESS                 CITY       STATE         UNITS/NRSF/  PROPERTY TYPE
          --------                          -------                 ----       -----         -----------  -------------
                                                                                               ASSETS
                                                                                               ------

<S>                            <C>                                <C>            <C>           <C>          <C>
Cutler Lake Corp Center        117 Kendrick Street                Needham        MA            211,556      office

60 Turner Street               60 Turner Street                   Waltham        MA             15,876      office

24 Federal/3 P.O. Square       24 Federal St. and 79 Milk Street  Boston         MS             74,353      office
                                                                                                65,007

Gateway Tower                  401 N. Washington Street           Rockville      MD            248,463      office

Somerset Tech Center           150 Mt. Bethel                     Warren         NJ            129,227      office

300 Atrium                     300 Atrium Drive                   Franklin       NJ            147,474      office

400 Atrium                     400 Atrium Drive                   Franklin       NJ            354,669      office

500 Atrium                     500 Atrium Drive                   Franklin       NJ            169,752      office

700 Atrium                     700 Atrium Drive                   Franklin       NJ            181,069      office

Mountain Heights I & II        420-430 Mountain Avenue            Berkley        NJ            182,588      office
                                                                  Heights                      123,082

105 Challenger Road            105 Challenger Road                Ridgefield     NJ            153,550      office
                                                                  Park

Greenbrook Corporate Center    100 Passaic Avenue                 Fairfield      NJ            201,350      office

Campus Drive                   379-399 Campus Drive               Franklin       NJ            199,110      office

180/188 Mount Airy Road        180/188 Mount Airy Road            Basking Ridge  NJ            103,668      office

Garden State Convention        50 Atrium Drive                    Franklin       NJ             82,300      office
Center

Wells Reasearch Center*        75, 85, 95 Wells Avenue            Newton         MA            241,761      office

7/57 Wells Avenue*             7/57 Wells Avenue*                 Newton         MA             89,215      office

Dedham Place*                  9-11 Allied Drive                  Dedham         MA             47,662      office

128 Tech Center*               128 Technology  Drive              Waltham        MA            217,501      office

201 University Avenue*         201 University Avenue              Westwood       MA             82,000      office

*    Nomura Property
</TABLE>

<PAGE>

                                 SCHEDULE 1.1(B)

                                BASIS ALLOCATIONS
                                -----------------

      PROPERTY                           PROPERTY BASIS            LOAN BASIS
      --------                           --------------            ----------
Cutler Lake Corp. Center                  $30,072,421             $22,051,307

60 Turner Street                           $  840,113              $  605,361

24 Federal/3 P.O. Square                  $33,877,463             $29,385,454

Gateway Tower                             $33,577,228             $28,312,359

Somerset Tech Center                      $ 9,402,976             $ 6,100,000

300 Atrium                                $14,754,318             $13,489,484

400 Atrium                                $27,759 988             $25,065,149

500 Atrium                                $15,943,480             $14,902,659

700 Atrium                                $18,587,001             $15,926,886

Mountain Heights I & II                   $49,568,274             $41,223,409

105 Challenger Road                       $16,385,111             $17,554,480

Greenbrook Corporate Center               $23,236,806             $20,375,843

Campus Drive                              $15,118,598             $13,143,421

180/188 Mount Airy Road                   $13,061,316             $11,908,763

Garden State Convention Center            $ 4,849,471             $ 4,115,858

Wells Research Center                     $41,875,000              $    - 0 -

7/57 Wells Avenue                         $13,917,000              $    - 0 -

Dedham Place                              $14,504,000              $    - 0 -

333 Elm Street                            $ 6,001,000              $    - 0 -

128 Tech Center                           $33,249,000              $    - 0 -

201 University Avenue                     $ 9,339,000              $    - 0 -

                             TOTAL:      $425,919,663             $264,160,434
                                         ============             ============

<PAGE>

                                  SCHEDULE 4.2

                              ENVIRONMENTAL REPORTS
<TABLE>
<CAPTION>

           PROPERTY                             REPORT TITLE                      CONSULTANT                          DATE
           --------                             ------------                      ----------                          ----
<S>                            <C>                                                  <C>                             <C>
  Cutler Lake Corp Center      Release Notification and Downgradient Property       ENSR                            05/04/01
                               Status Submittal

  60 Turner Street             Phase I Environmental Site Assessment &              ENSR                            02/98
                               Subsurface Investigation

  Gateway Tower                Phase I Environmental Site Assessment                I'VE Environmental              11/23/94
                               Phase I & II Environmental Site Assessment           ENSR                            10/99
                               Comprehensive Asbestos Survey                        ENSR                            10/99 .
                               Asbestos Abatement Final Compliance Report           ENSR                            01/00

  Somerset Tech Center         Phase I Environmental Site Assessment                Vertex Engineering Services,    05/02/01
                                                                                    Inc.

  300 Atrium Drive             Review of Environmental Assessments Report           PMK Group                       08/01/97

  400 Atrium Drive             Review of Environmental Assessments Report           PMK Group                       08/01/97

                               Final UST Investigation                              ATC Associates, Inc.            05/15/01

  500 Atrium Drive             Review of Environmental Assessments Report           PMK Group                       08/01/97

  700 Atrium Drive             Review of Environmental Assessments Report           PMK Group                       08/01/97

  Greenbrook Corp Center       Environmental Site Assessment                        First Environmental             04/97
                               Site Assessment                                      PMK Group                       02/18/98

  180/188 Mount Airy Rd.       Environmental Assessment Report                      PMK Group.                      06/02/98

  Mountain Heights I & H       Phase I Environmental Report                         Kaselaan & IYAngelo Associates  03%30/94
                               Report of Preliminary Asbestos Survey                PMK Group                       11/03/97
                               Environmental Site Assessment                        PMK Group                       10/15/99
                               Letter                                               Environmental Health            10/19/99
                                                                                    Investigations, Inc.

  Wells Research Center        Phase I Environmental Report                         ENSR                            03/98
                               Due Diligence Report                                 Environmental Waste             03/98
                                                                                    Management

  Dedham Place                 Phase I Environmental Report                         ENSR                            03/98
                               Underground Storage Tank Report                      ENSR                            09/08/99

  333 Elm Street               Phase I Environmental Site Assessment                ENSR                            02/98

  128 Technology Center        Phase I Environmental Report                         EMG                             11/25/96
                               Limited Subsurface Investigation                     Rizw Associates                 01/30/97

  201 University Avenue        Phase I Environmental Report                         ENSR                            02/98
                               Method 3 Risk Assessment Report                      ENSR                            03/99
</TABLE>
<PAGE>

                                 SCHEDULE 5.1(A1

                              TENANT DELINQUENCIES
                              --------------------
                    ASSET NAME                         COMMENT

                    [SEE ATTACHED TENANT DELINQUENCY REPORTS]

<PAGE>

                                 SCHEDULE 5.1(B)

                        NOTICES OF TERMINATION OR DEFAULT
                        ---------------------------------

      ASSET NAME                               COMMENT
      ----------                               -------

24 Federal/3 P.O. Square   1. Andover Brokerage, aka JP Capital - termination
                              (24 Federal)
                           2. Walter S. Burrage - default (3 Post Office Square)
                           3. Destineer/Skytel -- default (3 Post Office Square)

Wells Research Center      1. HQ Business Center (default and termination)

7/57 Wells Avenue          1. Custom Communications (default)

<PAGE>

                                 SCHEDULE 5.1(C)

                                PURCHASE OPTIONS
                                ----------------

Property Name
-------------

MOUNTAIN HEIGHTS I & II

Comment
-------

COMPAQ  COMPUTER  CORP.  (TENANT) HAS RIGHT OF FIRST OFFER TO PURCHASE  BUILDING
(420  MOUNTAIN  AVENUE) IF OFFERED FOR SALE OTHER THAN AS PART OF A  MULTI-ASSET
SALE (2 OR MORE BUILDINGS).

<PAGE>

                                 SCHEDULE 5.1(D)

                            LEASE TERMINATION RIGHTS
<TABLE>
<CAPTION>

         PROPERTY NAME                TENANT                                    COMMENT
         -------------                ------                                    -------
<S>                             <C>                        <C>
  Somerset Tech Center          GMAC Home Services          One-time right to terminate at the end of the fifth lease
                                                            year, with at least 12 months prior notice and a fee
                                                            equal to 6 months "fully escalated" rent

  300 Atrium Drive              EMS America                 Termination option effective 4/04; penalty 3 months rent
                                                            + umommortized TI

  Mountain Heights 1& II        Santa Cruz                  Termination option effective 9/04; penalty $529,000
                                (430 Mountain Ave)
                                Compaq                      One-time right at the end of the seventh lease year
                                (420 Mountain Axe)          (8/07), with 12 months prior notice and termination fee
                                                            of $3,630,919 ($29.50 x 123,082 sf)

                                                            One-time right to terminate upon 6 months prior notice,
  Campus Drive                   Royal Consumer             given within 180 days after Rent
                                 Information Products       Commencement Date; exercisable if Tenant or all of
                                                            Tenant's assets have been sold to a third party in an
                                                            arms-length transaction

  180/188 Mount Airy            Research International.     Termination option effective 12/01 - 12/03 with 6 months
                                                            penalty only if Tenant wants 15,000 sf in market and
                                                            Landlord cannot deliver

  Dedham Place                  Kramer & Flgman             Termination  right after the 5th year (3/04),  with 6 months
                                                            prior notice and 2 months rent and operating expense penalty

                                Paging Network              Right to terminate anytime

                                CellcoFartnership d/b/a     Tennination option at sole discretion if unable to use
                                Verizon Wireless            property for its intended purpose by written notice via
                                                            certified mail

                                Washington Mutual           One-time  right  to  terminate  as to  all or a  portion  of
                                                            premises at the end of the third lease year, with at least 7
                                                            months  prior  notice and a fee equal to 40% of abated  base
                                                            rent and 40% of landlord's unamortized leasing costs

  7/57 Wells Avenue             EMC                         Either party may terminate at the end of any monthly
                                                            extension with no less than 15 days prior notice

                                 GEO Centers                May terminate after 12/1/95 with 6 months notice.

                                 Jungbunziauer              May terminate with 120 days prior written notice and rent
                                                            penalty

                                 Charles Murray             Right to terminate upon death or disability

  Wells Research Center          Provident Mutual           Right to terminate after 5th lease year (6/04), with no
                                                            less than 9 months notice

                                 Sodexho Marriott           May terminate with/without cause with 60 days written
                                                            notice

  60 Turner Street               Brandeis University        May terminate in entirety or partially (2,500 sf minimum)
                                                            with 6 months written notice after 7/1997

  24 Federal/3 P.O. Square       WP Commercial              Floating termination option upon 9 months written notice
                                 (3 P.O. Square)            with a partial termination right not to exceed 50% of
                                                            Premises as long as the space is "feasible".  Tenant to
                                                            pay all separation costs.

  Gateway Tower                  WP Commercial              Floating  termination  option upon 9 months  written  notice
                                                            with  a  partial  termination  right  not to  exceed  50% of
                                                            Premises as long as the space is  "feasible".  Tenant to pay
                                                            all separation costs.
</TABLE>

<PAGE>

                                 SCHLDULE 5.1(E)

                            LEASING COMMISSIONS OWING
<TABLE>
<CAPTION>

 ASSET NAME                                  COMMENT
 ----------                                  -------
<S>                  <C>
Greenbrook          Tenant: Information Resources; $136,375 commission owed

Campus Drive        Tenant: Royal Consumer Information Products; $231,908 commission owed

Gateway Tower       Tenant: GSA; $70,000 commission owed Tenant: various retail tenants; $33,776
                    commission owed Tenant: Emmes; $76,697 commission owed
                    Tenant: Montgomery County; $106,972 commission owed
</TABLE>
<PAGE>

                                 SCHEDULE 5.L(F)

                                  PREPAID RENTS

                       ASSET NAME                  COMMENT

                      [SEE ATTACHMENTS TO SCHEDULE 5.1(A)]

<PAGE>

                                  SCHEDULE 6.4

                            CONDEMNATION PROCEEDINGS
                            ------------------------

                                      None.

<PAGE>

                                  SCHEDULE 6.5

                      CASULATIES AND FLOOD ZONE PROPERTIES
                      ------------------------------------

                                      None.

<PAGE>

                                  SCHEDULE 6.6

                               MATERIAL AGREEMENTS
                               -------------------

1.   Environmental  Services Procurement and Coordination  Agreement dated as of
     January 1, 2001 between WWG and BTS Solutions LLC.

<PAGE>

                                  SCHEDULE 6.7

                               PROPERTY COMPLIANCE
                               -------------------

                                      None.

<PAGE>

                                  SCHEDULE 6.10

                                     PERMITS
                                     -------

                                      None.

<PAGE>

                                  SCHEDULE 6.17

                                   LITIGATION
                                   ----------

                                      None.

<PAGE>

                                  SCHEDULE 6.26

                             AFFILIATE INDEBTEDNESS

     Wellsford/Whitehall  Properties  II,  L.L.C.  ("WWPII") is liable under (i)
that certain Guaranty and Indemnity Agreement, dated as of July 16, 1999, by and
between  WWPII  and IDS  Life  Insurance  Company  ("IDS"),  (ii)  that  certain
Hazardous Materials Indemnity Agreement, dated as of July_, 1999, by and between
WWPII and IDS and (iii) that certain Guaranty, dated as of July 16, 1999, by and
between WWPII and Leonard Grebow,  Steven J. Grebow,  Marc G. Grebow,  Ronald S.
Deutsch  and  Governor  Warfield  LLC,  and  (iii)  that  certain   Contribution
Agreement,  dated as of June 27, 2001,  by and among WWPH,  WWG, WP  Commercial,
Wellsford,   the  Whitehall  Parties,   Whitehall  Street  Real  Estate  Limited
Partnership VI, a Delaware  limited  partnership,  Whitehall  Street Real Estate
Limited  Partnership  VIII, a Delaware limited  partnership and Whitehall Street
Real Estate Limited Partnership XII, a Delaware limited partnership.

<PAGE>

                                  SCHEDULE 6.27
                                  -------------

                             CASH EQUITY INVESTMENT
                             ----------------------

Cost Basis:
-----------
Gateway Tower                                        $ 35,740,537
24 Federal/3 P.O. Square                               35,915,583
400 Atrium                                             36,204,695
Mountain Heights I&ls                                  48,168,466
Cutler Lake Corp. Center                               35,800,640
Greenbrook Corp. Center                                25,741,614
105 Challenger Rd.                                     21,275,542
700 Atrium                                             18,746,791
500 Atrium                                             21,107,770
300 Atrium                                             19,550,744
Campus Drive                                           23,466,899
180/188 Mt. Airy Road                                  16,364,462
Garden St. Convention Center                            6,134,396
60 Turner St.                                           1,153,246
Somerset Technology Center                              9,257,262
                                                     ------------
Subtotal                                             $354,628,647
Less:
GECC Loan                                           ($264,160,434)
Net Cash Equity                                      $ 90,468,213

<PAGE>

                           SUPPLEMENTAL SCHEDULE 8.19
                           --------------------------

                           PROPERTY-SPECIFIC COVENANTS
                           ---------------------------

     1. POST CLOSING STRUCTURAL REPAIRS. Within six (6) months after the date of
the initial Advance for the Somerset Tech Center, Borrower shall have completed,
Lien-free and in accordance with applicable  Laws, the repairs  described in the
tableset  forth  below  for the  Somerset  Tech  Center  (as  such  work is more
particularly  described in the engineering  report for such Property prepared by
Lender's consultant(s) in connection with theinitial Advance for such Property):

COMPONENT OR SYSTEM          ITEM DESCRIPTION          QTY.  UNIT   UNIT   TOTAL
                                                                    COST   COST
Wall Surfaces          Repair water-damaged drywall    200   SF      $5   $1,000
                       in building 2
TOTAL                                                                     $1,000

     2. POST  CLOSING  REMEDIAL  ACTION.  Borrower  shall  complete the Remedial
Action  described  in the table set forth below for the  designated  Properties,
which  Remedial  Action shall be completed  Lien-free,  in  accordance  with all
applicable  Environmental  Laws, and within the applicable  time period (if any)
set forth below.
<TABLE>
<CAPTION>

    PROPERTY                                   REMEDIAL ACTION                              COMPLETION DATE
    --------                                   ---------------                              ---------------
<S>                        <C>                                                                  <C>
Somerset Tech Center       Borrower acknowledges that asbestos-containing materials and
                           leas based paint may be present at the Somerset Tech Center.
                           Within  45 days  after the First  Amendment  Date,  Borrower
                           shall  establish  its standard  operations  and  maintenance
                           program  at   Somerset   Tech   Center   for  the   removal,
                           encapsulation    of,   or   other    action   for   handling
                           asbestos-containing   materials  and  leas-based   paint  at
                           Somerset Tech Center, and thereafter Borrower shall

60 Turner Street           Install air venting system to ensure that radon concentration in     12/31/02
                           lowest building level (i.e., classrooms and theater) remains
                           consistently below 4 pCi/l (picocuries per liter).

                           Borrower  to  provide   Lender   with   reasonably                   12/31/02
                           satisfactory  evidence  that   the
                           out-of-service     generator    and     associated
                           above-ground   propane   storage  tank  have  been
                           removed from the Property and disposed of.

Cutler                     Lake Corp.  Center Borrower to provide Lender with                   12/31/02
                           reasonably   satisfactory   evidence  that
                           it  has  made  commercially   reasonable
                           efforts  to  obtain  an  indemnity  from Coca Cola
                           Corporation    with   respect   to   contamination
                           originating  from  an  groundwater   contamination
                           originating  from  an  upgradient  property  owned
                           and/or occupied by Coca Cola Corporation.

400 Atrium                 Borrower shall cause its Lender-approved consultant to complete      12/31/02
                           a Phase II environmental study of the portion of the Property in
                           the vicinity of the active 3,500-gallon underground storage tank
                           currently located at the Property, which Phase II study shall be
                           sufficient in scope to identify the extent of any subsurface
                           contamination associated with such underground storage tank.
                           Borrower shall cause such consultant to remediate such
                           contamination to applicable legal standards, and Borrower shall
                           obtain a "closure" or "no further action" letter from the lead
                           Governmental Authority having jurisdiction over the Remedial
                           Action and the Property.

180/188 Mount Airy Rd.     Borrower shall cause its Lender-approved consultant to conduct       12/31/02
                           additional investigation of the area of the Property in the vicinity
                           of the former location of three underground storage tanks. The
                           scope of such investigation shall be reasonably satisfactory to
                           Lender. Borrower shall cause such consultant to remediate any
                           contamination identified to applicable legal standards, and
                           Borrower shall obtain a "closure" or "no further action" letter
                           from the lead Governmental Authority having jurisdiction over
                           the Remedial Action and the Property.
</TABLE>
<PAGE>

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