REVOLVING CREDIT AGREEMENT DATED AS OF DECEMBER 15, 1997

REVOLVING CREDIT AGREEMENT

DATED AS OF DECEMBER 15, 1997

among

WELLSFORD/WHITEHALL PROPERTIES, L.L.C., as Borrower

and

BANKBOSTON, N.A.,

▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY,

and

OTHER BANKS WHICH MAY BECOME
PARTIES TO THIS AGREEMENT, as Banks

and

BANKBOSTON, N.A.,
AS ADMINISTRATIVE AGENT AND CO-ARRANGER
AND CO-SYNDICATION AGENT

and

▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY,
AS CO-ARRANGER AND CO-SYNDICATION AGENT

REVOLVING CREDIT AGREEMENT

THIS REVOLVING CREDIT AGREEMENT is made as of the 15th day of
December, 1997, by and among WELLSFORD/WHITEHALL PROPERTIES, L.L.C., a
Delaware limited liability company having its principal place of business
at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Borrower"),
BANKBOSTON, N.A., a national banking association, ▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE
COMPANY, a New York limited partnership, and the other lending institutions
which may become parties hereto pursuant to Section 18 (collectively, the
"Banks"), and BANKBOSTON, N.A., as Agent for the Banks and Co-Arranger and
Co-Syndication Agent (the "Agent"), and ▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY, as
Co-Arranger and Co-Syndication Agent.

Section 10. DEFINITIONS AND RULES OF INTERPRETATION.

Section 10.1. Definitions. The following terms shall have the
meanings set forth in this Section l or elsewhere in the provisions of
this Agreement referred to below:

Agent. BankBoston, N.A., a national banking association, its
successors and assigns, acting as agent for the Banks.

Agent's Head Office. The Agent's head office located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as the Agent
may designate from time to time by notice to the Borrower and the Banks.

Agent's Special Counsel. Long ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP or such other
counsel as may be approved by the Agent.

Agreement. This Revolving Credit Agreement, including the Schedules
and Exhibits hereto.

Agreement Regarding Fees. The Agreement Regarding Fees dated of even
date herewith among Borrower, BKB and Goldman.

Appraisal. An MAI appraisal of the value of a parcel of Mortgaged
Property or Mezzanine Property, determined on an "as-is" fair market value
basis, performed by an independent appraiser selected by the Agent who is
not an employee of the Borrower, any Subsidiary of the Borrower, the Agent
or a Bank, the form and substance of such appraisal and the identity of the
appraiser to be in accordance with regulatory laws and policies (both
regulatory and internal) applicable to the Banks, including, without
limitation, FIRREA, and otherwise acceptable to the Majority Banks.

Appraised Value. The fair market value of a parcel of Mortgaged
Property or Mezzanine Property, determined by the most recent Appraisal of
such parcel or update obtained pursuant to Section 5.2 or Section 10.7,
subject, however, to such changes or adjustments to the value determined
thereby as may be required by the appraisal departments of the Majority
Banks in their good faith business judgment.

Assignment of Interests. An Assignment of Interests from Borrower to
the Agent, as the same may be modified or amended, pursuant to which there
shall be assigned to the Agent for the benefit of the Banks a security
interest in the Equity Interests, such assignment to be in form and
substance satisfactory to the Agent.

Assignment of Leases and Rents. Each of the collateral assignments of
leases and rents from the Borrower to the Agent pursuant to which there
shall be assigned to the Agent for the benefit of the Banks a security
interest in the interest of such party, as lessor with respect to all
Leases of all or any part of a Mortgaged Property, each such collateral
assignment to be in form and substance satisfactory to the Agent.

Balance Sheet Date. September 30, 1997.

Banks. BKB, Goldman and any other Person who becomes an assignee of
any rights of a Bank pursuant to Section 18 (but not including any
Participant, as defined in Section 18).

Base Rate. The higher of (a) the annual rate of interest announced
from time to time by BKB at its head office in Boston, Massachusetts as its
"base rate", and (b) one-half of one percent (0.5%) above the Federal Funds
Effective Rate (rounded upwards, if necessary, to the next one-eighth of
one percent). Any change in the rate of interest payable hereunder
resulting from a change in the Base Rate shall become effective as of the
opening of business on the day on which such change in the Base Rate
becomes effective.

Base Rate Loans. Those Loans bearing interest calculated by reference
to the Base Rate.

BKB. BankBoston, N.A., a national banking association.

Borrower. As defined in the preamble hereto.

Building. All of the buildings, structures and improvements now or
hereafter located on any Mortgaged Property.

Building Service Equipment. All apparatus, fixtures and articles of
personal property owned by the Borrower, now or hereafter attached to or
used or procured for use in connection with the operation or maintenance of
any building, structure or other improvement located on or included in the
Mortgaged Property, including, but without limiting the generality of the
foregoing, all engines, furnaces, boilers, stokers, pumps, heaters, tanks,
dynamos, motors, generators, switchboards, electrical equipment, heating,
plumbing, lifting and ventilating apparatus, air-cooling and
air-conditioning apparatus, gas and electric fixtures, elevators,
escalators, fittings, and machinery and all other equipment of every kind
and description, used or procured for use in the operation of a Building
(except apparatus, fixtures or articles of personal property belonging to
lessees or other occupants of such building or to persons other than the
Borrower, unless the same be abandoned by any such lessee or other occupant
or person and shall become the Borrower's property by reason of such
abandonment), together with any and all replacements thereof and additions
thereto.

Business Day. Any day on which banking institutions in the city in
which the Agent's Head Office is located are open for the transaction of
banking business and, in the case of Eurodollar Rate Loans, which also is a
Eurodollar Business Day.

Capital Improvement Project. With respect to any Real Estate now or
hereafter owned by the Borrower which is utilized principally as commercial
office space, capital improvements consisting of rehabilitation,
refurbishment, replacement and improvements to the existing Buildings on
such Real Estate which may be properly capitalized under generally accepted
accounting principles.

Capital Improvement Reserve. For any period an amount equal to
seventy-five cents ($0.75) per annum multiplied by the weighted average of
rentable square footage of Real Estate owned by the Borrower and its
Subsidiaries and Property Owner (after the inclusion of the Equity
Interests in the Collateral) during such period.

CERCLA. See Section 6.20.

Closing Date. The first date on which all of the conditions set forth
in Section 10 and Section 11 have been satisfied.

Co-Agent. Goldman.

Code. The Internal Revenue Code of 1986, as amended.

Collateral. All of the property, rights and interests of the Borrower
which are or are intended to be subject to the security interests, liens
and mortgages created by the Security Documents, including, without
limitation, the Mortgaged Property.

Commitment. With respect to each Bank, the amount set forth on
Schedule 1.1 hereto as the amount of such Bank's Commitment to make or
maintain Loans to the Borrower, as the same may be reduced from time to
time in accordance with the terms of this Agreement.

Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1.1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.

Compliance Certificate. See Section 7.4(e).

Conditional Guaranty. A Conditional Guaranty of Payment and
Performance made by the Members in favor of Agent and the Banks, as the
same may be modified or amended, such guaranty to be in form and substance
satisfactory to the Agent.

Consolidated or combined. With reference to any term defined herein,
that term as applied to the accounts of the Borrower and its Subsidiaries,
consolidated or combined in accordance with generally accepted accounting
principles.

Consolidated Operating Cash Flow. With respect to any Test Period, an
amount equal to the Operating Cash Flow of the Borrower and its
Subsidiaries for such period consolidated in accordance with generally
accepted accounting principles. The Consolidated Operating Cash Flow of
the Borrower and its Subsidiaries on the consolidated financial statements
of the Borrower and its Subsidiaries shall be adjusted to reflect the
Borrower's allocable share of such Consolidated Operating Cash Flow for the
relevant period or as of the date of determination.

Consolidated Tangible Net Worth. The amount by which Consolidated
Total Assets exceeds Consolidated Total Liabilities.

Consolidated Total Assets. With respect to the Borrower and its
Subsidiaries, the sum of (a) an amount equal to (i) an amount equal to the
difference of (A) the Net Operating Income of the Stabilized Properties for
the period covered by the four previous consecutive fiscal quarters
(treated as a single accounting period) minus (B) the Capital Improvement
Reserve for such period divided by (ii) a nine and one-fourth percent
(9.25%) capitalization rate, (b) the sum of (i) the Appraised Value of the
Non-Stabilized Properties that are Collateral and of the Mezzanine Property
(after the acquisition by the Borrower of the Equity Interests if the
Equity Interests are Collateral) plus (ii) the historic cost of capital
improvements to such Non-Stabilized Properties and the Mezzanine Property
from the date of the most recent Appraisal thereof pursuant to this
Agreement, (c) the sum of (i) the all-in acquisition cost (including
reasonable closing costs) of the Non-Stabilized Properties that are not
Collateral and the Mezzanine Property (after the acquisition by the
Borrower of the Equity Interests if the Equity Interests are not
Collateral) plus (ii) the historic cost of capital improvements to such
Non-Stabilized Properties and the Mezzanine Property (if this clause (c) is
applicable thereto) from the date of acquisition thereof (provided that the
Agent shall have the right to obtain at Borrower's expense an Appraisal
with respect to any of such Non-Stabilized Properties or the Mezzanine
Property, and the Appraised Value determined from such Appraisal shall be
substituted for the amount in clause (c)(i) for the applicable property for
the purposes of such calculation), (d) the historic cost of investments in
Investment Partnerships; and (d) the aggregate cash and Short-term
Investments of such Person; provided that prior to such time as the
Borrower or a Subsidiary has owned and operated any Stabilized Property for
four full fiscal quarters, the Net Operating Income with respect to such
Stabilized Property shall be annualized in such manner as the Agent shall
approve, such approval not to be unreasonably withheld. The assets of the
Borrower and its Subsidiaries shall be adjusted to reflect Borrower's
allocable share of such assets for the relevant period or as of the date of
determination.

Consolidated Total Liabilities. All liabilities of the Borrower and
its Subsidiaries determined on a consolidated basis in accordance with
generally accepted accounting principles and all Indebtedness of the
Borrower and its Subsidiaries, whether or not so classified. In the event
that the Borrower or its Subsidiaries has an ownership or other equity
interest in any other Person, which investment is not consolidated in
accordance with generally accepted accounting principles (that is, such
interest is a "minority interest"), then the liabilities of the Borrower
and its Subsidiaries shall include the Borrower's or its Subsidiaries', as
applicable, allocable share of all indebtedness of such Person in which a
minority interest is owned based on the Borrower's or its Subsidiary's
respective ownership interest in such other Person. Such liabilities of
the Borrower and its Subsidiaries shall be adjusted to reflect the
Borrower's and its Subsidiaries' allocable share of such liabilities for
the relevant period or as of the date of determination. For the purposes
hereof, such liabilities and Indebtedness shall include the liabilities and
Indebtedness of the Property Owner after the acquisition by the Borrower of
the Equity Interests.

Construction Inspector. A firm of professional engineers or architects
selected by the Agent and reasonably acceptable to the Borrower.

Conversion Request. A notice given by the Borrower to the Agent of
its election to convert or continue a Loan in accordance with Section 4.1.

Debt Offering. The issuance and sale by the Borrower or the Guarantor
of any debt securities of the Borrower or the Guarantor.

Debt Service. For any period of four consecutive fiscal quarters, the
sum of actual interest expense (including capitalized interest) and
mandatory or scheduled principal payments due and payable during such
period with respect to all Indebtedness of the Borrower and its
Subsidiaries, excluding any balloon payments due upon maturity of any
Indebtedness and any amortization of loan fees paid as of the Closing Date.
For the initial twelve (12) months following the Closing Date, Debt Service
shall be determined by annualizing the Debt Service from and after the
Closing Date in a manner as reasonably determined by the Borrower and
reasonably acceptable to the Agent (provided that in the event that as of
the date of any determination such amounts shall not have been determined
as so provided, then such amount shall be annualized in a manner reasonably
acceptable to the Agent).

Debt Service Coverage Test Amount. For any period of four consecutive
fiscal quarters then ended, the sum of principal and interest which would
have been payable during such period on a loan in the original principal
amount equal to the outstanding principal balance of the Term Loans as of
the date of such determination bearing interest at a rate per annum equal
to the sum of the then current annual yield on seven (7) year obligations
issued by the United States Treasury most recently prior to the date of
such determination plus one and six-tenths percent (1.6%) and with the
principal thereof being payable based on a 25 year mortgage style
amortization schedule (expressed as a mortgage constant percentage). Such
determination of the Debt Service Coverage Test Amount by the Agent shall
be conclusive and binding absent manifest error. For the initial twelve
(12) months following the Closing Date, such debt service shall be
determined by annualizing the debt service from and after the Closing Date
in a manner as reasonably determined by Borrower and reasonably acceptable
to the Agent (provided that in the event that as of the date of any
determination such amounts shall not have been determined as so provided,
then such amount shall be annualized in a manner reasonably acceptable to
the Agent).

Default. See Section 12.1.

Designated Collateral Value. At the relevant time of reference
thereto, the sum of (a) for each of the initial Mortgaged Properties, the
Initial Collateral Value for such Mortgaged Property, plus (b) the lesser
of (i) seventy-five percent (75%) of the all-in acquisition cost (including
reasonable closing costs) of a Mortgaged Property accepted as a Mortgaged
Property after the date of this Agreement plus the historic cost of
capital improvements to such Mortgaged Property after the date of such
acceptance and (ii) seventy-five percent (75%) of the Appraised Value of a
Mortgaged Property accepted as a Mortgaged Property after the date of this
Agreement as determined in connection with the acceptance of such Mortgaged
Property as Collateral or as most recently determined pursuant to Section
2.8 of this Agreement, subject to the terms of Section 5.4, plus (c) the
current value of cash and Eligible Short-term Investments, if any, at the
time pledged to the Agent as Collateral pursuant to a Pledge Agreement,
plus (d) for so long as the Equity Interests are pledged to the Agent as
Collateral pursuant to the Assignment of Interests, an amount equal to
(i) the Appraised Value of the Mezzanine Property as most recently
determined pursuant to Section 2.8 of this Agreement, subject to the terms
of Section 5.4, or (ii) the all-in acquisition costs (including reasonable
closing costs) of the Mezzanine Property, whichever is less, minus the
principal Indebtedness of the Property Owner (provided that in no event
shall such sum (being the Designated Collateral Value amount with respect
to the Mezzanine Property) plus the principal Indebtedness of the Property
Owner exceed the lesser of (A) seventy-five percent (75%) of the Appraised
Value of the Mezzanine Property as determined above, or (B) seventy-five
percent (75%) of the all-in acquisition cost of the Mezzanine Property as
determined above), plus (d) the current value determined in a manner agreed
to by the Majority Banks of Collateral accepted by the Majority Banks under
clause (v) of Section 5.1. For the purposes of clause (b) above, the
lesser of the amount determined pursuant to clause (b)(i) and (b)(ii) above
shall be the Designated Collateral Value for each such Mortgaged Property
subject thereto, and the aggregate of the amounts determined for each
Mortgaged Property subject thereto shall be the Designated Collateral Value
for all such Mortgaged Properties. For the purposes of clause (d) above,
the acquisition cost of the Mezzanine Property shall be deemed to equal the
sum of the acquisition cost of the Equity Interests plus the principal
amount of the Indebtedness of the Property Owner that is not satisfied in
connection with such acquisition.

Distribution. The declaration or payment of any dividend or
distribution on or in respect of any shares of the Borrower, other than
dividends or distributions payable solely in equity securities of the
Borrower; the purchase, redemption, exchange or other retirement of any
shares of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its
shareholders as such; or any other distribution on or in respect of any
shares of the Borrower.

Dollars or $. Dollars in lawful currency of the United States of
America.

Domestic Lending Office. Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other office of
such Bank, if any, located within the United States that will be making or
maintaining Base Rate Loans.

Drawdown Date. The date on which any Loan is made or is to be made,
and the date on which any Loan is converted or combined in accordance with
Section 4.1.

Eligible Real Estate. Real Estate:

(a) which is owned in fee by the Borrower;

(b) which is located within the northeastern United States,
excluding those States which prescribe a "single-action" or similar
rule limiting the rights of creditors secured by real property, except
to the extent such exclusion is waived in writing by the Majority
Banks with respect to a specific parcel of Real Estate;

(d) which is approved by the Majority Banks after the date
hereof in their sole judgment;

(e) as to which all of the representations set forth in Section
6 of this Agreement concerning Mortgaged Property are true and
correct; and

(f) as to which the Agent has received all Eligible Real Estate
Qualification Documents, so long as all of such documents remain in
full force and effect.

Eligible Real Estate Qualification Documents. With respect to any
parcel of Real Estate proposed to be included in the Eligible Real Estate
each of the following:

(a) Security Documents. Such Security Documents relating to
such Real Estate as the Agent shall require, in form and substance
satisfactory to the Agent and duly executed and delivered by the
respective parties thereto.

(b) Enforceability Opinion. The favorable legal opinion of
counsel to the Borrower reasonably acceptable to the Agent qualified
to practice in the State in which such Real Estate is located,
addressed to the Banks and in form and substance satisfactory to the
Agent as to the enforceability of such Security Documents and such
other matters as the Agent shall reasonably request.

(c) Perfection of Liens. Evidence reasonably satisfactory to
the Agent that the Security Documents are effective to create in favor
of the Agent a legal, valid and enforceable first (except for
Permitted Liens entitled to priority under applicable law) lien and
security interest in such Real Estate and that all filings,
recordings, deliveries of instruments and other actions necessary or
desirable to protect and preserve such liens or security interests
have been duly effected.

(d) Survey and Taxes. The Survey of such Real Estate, together
with the Surveyor Certification and evidence of payment of all real
estate taxes, assessments and municipal charges on such Real Estate
which on the date of determination are required to have been paid
under Section 7.8.

(e) Title Insurance; Title Exception Documents. The Title
Policy covering such Real Estate, including all endorsements thereto,
and together with proof of payment of all fees and premiums for such
policy, and true and accurate copies of all documents listed as
exceptions under such policy.

(f) UCC Certification. A certification from the Title Insurance
Company or counsel satisfactory to the Agent that a search of the
public records designated by the Agent disclosed no conditional sales
contracts, security agreements, chattel mortgages, leases of
personalty, financing statements or title retention agreements which
affect any property, rights or interests of the Borrower that are or
are intended to be subject to the security interest, assignments, and
mortgage liens created by the Security Documents relating to such Real
Estate except to the extent that the same are discharged and removed
prior to or simultaneously with the inclusion of the Real Estate in
the Collateral.

(g) Management Agreement. A true copy of the Management
Agreement relating to such Real Estate.

(h) Leases. True and correct copies of all Leases for such
Real Estate and any lease summaries prepared by Borrower with respect
thereto, together with the forms of Lease to be used by the Borrower
in connection with future leasing of such Mortgaged Property, such
forms of Lease to be in form and substance satisfactory to the Agent.

(i) Subordination Agreements. A Subordination, Attornment and
Non-Disturbance Agreement from each tenant of such Real Estate as
required by the Agent, dated not more than sixty (60) days prior to
the inclusion of such Real Estate in the Collateral and satisfactory
in form and substance to the Agent.

(j) Estoppel Certificates. Estoppel certificates from each
tenant of such parcel of Real Estate as required by the Agent, such
certificates to be dated not more than sixty (60) days prior to the
inclusion of such Real Estate in the Collateral and to be satisfactory
in form and substance to the Agent.

(k) Certificates of Insurance. Each of (i) a current
certificate of insurance as to the insurance maintained on such Real
Estate (including flood insurance if necessary) from the insurer or an
independent insurance broker dated as of the date of determination,
identifying insurers, types of insurance, insurance limits, and policy
terms; (ii) certified copies of all policies evidencing such insurance
(or certificates therefor signed by the insurer or an agent authorized
to bind the insurer); and (iii) such further information and
certificates from the Borrower, its insurers and insurance brokers as
the Agent may reasonably request, all of which shall be in compliance
with the requirements of this Agreement.

(l) Hazardous Substance Assessments. A hazardous waste site
assessment report concerning Hazardous Substances and asbestos on such
Real Estate dated or updated not more than three months prior to the
inclusion of such Real Estate in the Collateral unless otherwise
approved by the Agent, from an Environmental Engineer, such report to
contain no qualifications except those that are acceptable to the
Majority Banks in their sole discretion and to otherwise be in form
and substance satisfactory to the Majority Banks.

(m) Certificate of Occupancy. A copy of the certificate(s) of
occupancy issued to the Borrower for such parcel of Real Estate
permitting the use and occupancy of the Building thereon (or evidence
that any previously issued certificate(s) of occupancy is not required
to be reissued to the Borrower), or a legal opinion reasonably
satisfactory to the Agent that no certificates of occupancy are
necessary to the use and occupancy thereof.

(n) Appraisal. An Appraisal of such Real Estate, in form and
substance satisfactory to the Majority Banks and dated not more than
three months prior to the inclusion of such Real Estate in the
Collateral.

(o) Zoning and Land Use Opinion of Counsel. A favorable opinion
concerning the Real Estate addressed to the Agent and dated the date
of the inclusion of such Real Estate in the Collateral, in form and
substance satisfactory to the Agent, from counsel approved by the
Agent admitted to practice in the State in which such parcel is
located, as to zoning and land use compliance, or such other evidence
regarding zoning and land use compliance as the Agent may approve in
its reasonable discretion.

(p) Construction Inspector Report. A report or written
confirmation from the Construction Inspector satisfactory in form and
content to the Majority Banks, dated or updated not more than three
months prior to the inclusion of such Real Estate in the Collateral,
addressing such matters as the Majority Banks may reasonably require,
including without limitation that the Construction Inspector has
reviewed the plans and specifications or other available materials for
all Buildings on the Real Estate, that the condition of the Buildings
is good, that all Buildings were constructed and completed in a good
and workmanlike manner, that the Buildings satisfy all applicable
building, zoning, handicapped access and Environmental Laws applicable
thereto, and whether or not the Real Estate and the Buildings thereon
are a conforming use under applicable zoning laws.

(q) Permit and Legal Compliance Assurances. Evidence
satisfactory to the Agent that all activities being conducted on such
Real Estate which require federal, state or local licenses or permits
have been duly licensed and that such licenses or permits are in full
force and effect, and that the Real Estate, the Buildings and the use
and occupancy thereof are in compliance in all material respects with
all applicable federal, state or local laws, ordinances or
regulations.

(r) Operating Statements. Operating statements for such Real
Estate in the form of such statements delivered to the Banks under
Section 6.4(c) covering each of the four fiscal quarters ending
immediately prior to the addition of such Mortgaged Property to the
Collateral.

(s) Doing Business Opinion. An opinion, dated the date of the
inclusion of such Real Estate in the Collateral, of legal counsel to
the Borrower reasonably acceptable to the Agent qualified to practice
in the State in which such Real Estate is located to the effect that
neither the Agent nor any Bank shall be required to qualify to do
business in such State or any political subdivision thereof or to
become liable to pay any taxes in such State or any political
subdivision thereof solely on account of the receipt of the lien on
such Real Estate securing the Obligation, such opinion to be
satisfactory to the Agent.

(t) Additional Documents. Such other documents, certificates,
reports or assurances as the Agent or the Majority Banks may
reasonably require in their discretion.

Employee Benefit Plan. Any employee benefit plan within the meaning
of Section 3(3) of ERISA maintained or contributed to by the Borrower or
any ERISA Affiliate, other than a Multiemployer Plan.

Environmental Engineer. A firm of independent professional engineers
or other scientists generally recognized as expert in the detection,
analysis and remediation of Hazardous Substances and related environmental
matters and reasonably acceptable to the Agent.

Environmental Laws. See Section 6.20(a).

Equity Interests. One hundred percent (100%) of the direct legal,
equitable and beneficial interests in the Property Owner.

Equity Offering. The issuance and sale by the Borrower or the
Guarantor of any of its equity securities.

ERISA. The Employee Retirement Income Security Act of 1974, as
amended and in effect from time to time.

ERISA Affiliate. Any Person which is treated as a single employer with
the Borrower under Section 414 of the Code.

ERISA Reportable Event. A reportable event with respect to a
Guaranteed Pension Plan within the meaning of Section 4043 of ERISA and
the regulations promulgated thereunder as to which the requirement of
notice has not been waived.

Eurocurrency Reserve Rate. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any lender
subject thereto would be required to maintain reserves under Regulation D
of the Board of Governors of the Federal Reserve System (or any successor
or similar regulations relating to such reserve requirements) against
"Eurocurrency Liabilities" (as that term is used in Regulation D or any
successor or similar regulation), if such liabilities were outstanding.
The Eurocurrency Reserve Rate shall be adjusted automatically on and as of
the effective date of any change in the Eurocurrency Reserve Rate.

Eurodollar Business Day. Any day on which commercial banks are open
for international business (including dealings in Dollar deposits) in
London or such other Eurodollar interbank market as may be selected by the
Agent and the Banks in their sole discretion acting in good faith.

Eurodollar Lending Office. Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other office of
such Bank, if any, that shall be making or maintaining Eurodollar Rate
Loans.

Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate per annum equal to the quotient (rounded upwards to the
nearest 1/16 of one percent) of (a) the rate at which the Reference Bank's
Eurodollar Lending Office is offered Dollar deposits two Eurodollar
Business Days prior to the beginning of such Interest Period in whatever
interbank Eurodollar market may be selected by the Reference Bank in its
sole discretion, acting in good faith, for delivery on the first day of
such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of the Eurodollar Rate Loan to which such
Interest Period applies, divided by (b) a number equal to 1.00 minus the
Eurocurrency Reserve Rate.

Eurodollar Rate Loans. Loans bearing interest calculated by reference
to a Eurodollar Rate.

Event of Default. See Section 12.1.

Federal Funds Effective Rate. For any day, the rate per annum equal
to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent.

generally accepted accounting principles. Principles that are (a)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to
time and (b) consistently applied with past financial statements of the
Borrower adopting the same principles; provided that a certified public
accountant would, insofar as the use of such accounting principles is
pertinent, be in a position to deliver an unqualified opinion (other than a
qualification regarding changes in generally accepted accounting
principles) as to financial statements in which such principles have been
properly applied.

Goldman. ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company.

Goldman Group. Collectively, the partners of WHWEL as of any date
that are affiliates of The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group L.P.

Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the
Borrower or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA,
other than a Multiemployer Plan.

Guarantor. Collectively, the Members and any other Person which may
hereafter become a Guarantor, and individually any one of them.

Guaranty. Collectively, the Indemnity and Guaranty Agreement by the
Members in favor of Agent and the Banks, in form and substance satisfactory
to Agent in its sole discretion, the Conditional Guaranty, and any other
guaranty which may hereafter be delivered to the Agent and the Banks in
connection with the Loan.

Hazardous Substances. See Section 6.20(b).

Holdback. See Section 5.5.

Indebtedness. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be
classified upon the obligor's balance sheet as liabilities, or to which
reference should be made by footnotes thereto, including in any event and
whether or not so classified: (a) all debt and similar monetary
obligations, whether direct or indirect (including, without limitation, all
obligations evidenced by bonds, debentures, notes or similar debt
instruments and subordinated indebtedness); (b) all liabilities secured by
any mortgage, pledge, security interest, lien, charge or other encumbrance
existing on property owned or acquired subject thereto, whether or not the
liability secured thereby shall have been assumed; and (c) all guarantees,
interest rate and currency swap obligations, endorsements and other
contingent obligations whether direct or indirect in respect of
indebtedness of others, including contingent obligations that in accordance
with generally accepted accounting principles are required to be footnoted
on the Borrower's consolidated balance sheets and any obligation to supply
funds to or in any manner to invest directly or indirectly in a Person, to
purchase indebtedness, or to assure the owner of indebtedness against loss
through an agreement to purchase goods, supplies or services for the
purpose of enabling the debtor to make payment of the indebtedness held by
such owner or otherwise, and the obligation to reimburse the issuer in
respect of any letter of credit; (d) any obligation as a lessee or an
obligor under a capitalized lease; and (e) the Borrower's or any of its
Subsidiaries' pro rata share of any of the above-described obligations of
its unconsolidated affiliates.

Indemnity Agreement. Collectively, the Indemnity Agreements Regarding
Hazardous Materials made by the Borrower and the Members in favor of the
Agent and the Banks, pursuant to which such parties agree to indemnify the
Agent and the Banks with respect to Hazardous Substances and Environmental
Laws, such Indemnity Agreement to be in form and substance satisfactory to
the Agent.

Initial Collateral Values. With respect to each initial Mortgaged
Property described on Schedule 1.3 hereto, the corresponding Designated
Collateral Value for such Mortgaged Property as shown on Schedule 1.3.

Interest Payment Date. (a) As to each Loan, the first day of each
January, April, July and October during the term of such Loan (with the
first Interest Payment Date pursuant to this clause (a) being April 1,
1998), and (b) also as to each Eurodollar Rate Loan, the last day of the
Interest Period relating thereto.

Interest Period. With respect to each Eurodollar Rate Loan (a)
initially, the period commencing on the Drawdown Date of such Loan and
ending one, two or three months thereafter, and (b) thereafter, each period
commencing on the day following the last day of the next preceding Interest
Period applicable to such Loan and ending on the last day of one of the
periods set forth above, as selected by the Borrower in a Conversion
Request; provided that all of the foregoing provisions relating to Interest
Periods are subject to the following:

(A) if any Interest Period with respect to a Eurodollar Rate
Loan would otherwise end on a day that is not a Eurodollar Business
Day, that Interest Period shall end and the next Interest Period shall
commence on the next preceding or succeeding Eurodollar Business Day
as determined conclusively by the Reference Bank in accordance with
the then current bank practice in the applicable Eurodollar interbank
market;

(B) if the Borrower shall fail to give notice as provided in
Section 4.1, the Borrower shall be deemed to have requested a
conversion of the affected Eurodollar Rate Loan to a Base Rate Loan on
the last day of the then current Interest Period with respect thereto;
and

Investment Partnerships. Investments in joint ventures, general
partnerships, limited partnerships, limited liability companies or any
other business association formed for the purpose of acquiring fee
interests in income-producing commercial office properties, provided that
Borrower shall have sufficient Voting Interests or other rights to veto or
block any major actions to be taken by any other Person owning an interest
in such Investment Partnership. A wholly-owned Subsidiary of the Borrower
and the Property Owner shall not be an Investment Partnership.

Investments. With respect to any Person, all shares of capital stock,
evidences of Indebtedness and other securities issued by any other Person,
all loans, advances, or extensions of credit to, or contributions to the
capital of, any other Person, all purchases of the securities or business
or integral part of the business of any other Person and commitments and
options to make such purchases, all interests in real property, and all
other investments; provided, however, that the term "Investment" shall not
include (i) equipment, inventory and other tangible personal property
acquired in the ordinary course of business, or (ii) current trade and
customer accounts receivable for services rendered in the ordinary course
of business and payable in accordance with customary trade terms. In
determining the aggregate amount of Investments outstanding at any
particular time: (a) there shall be included as an Investment all interest
accrued with respect to Indebtedness constituting an Investment unless and
until such interest is paid; (b) there shall be deducted in respect of each
such Investment any amount received as a return of capital (but only by
repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (c) there shall not be deducted in respect of
any Investment any amounts received as earnings on such Investment, whether
as dividends, interest or otherwise, except that accrued interest included
as provided in the foregoing clause (a) may be deducted when paid; and
(d) there shall not be deducted from the aggregate amount of Investments
any decrease in the value thereof.

Leases. Leases, licenses and agreements whether written or oral,
relating to the use or occupation of space in or on the Building or on the
Real Estate.

Liens. See Section 8.2.

Loan Documents. This Agreement, the Notes, the Security Documents,
the Guaranty, and all other documents, instruments or agreements executed
or delivered by or on behalf of the Borrower or the Guarantor evidencing or
securing the Loans.

Loan Request. See Section 2.6.

Loans. The aggregate Loans to be made by the Banks hereunder.

Majority Banks. As of any date, the Bank or Banks whose aggregate
Commitment Percentage is equal to or greater than sixty-six and two-thirds
percent (66.67%).

Management Agreements. Agreements, whether written or oral, providing
for the management of the Mortgaged Property or any of them.

Maturity Date. December 15, 2000, as the same may be extended as
provided in Section 2.8, or such earlier date on which the Loans shall
become due and payable pursuant to the terms hereof.

Members. Wellsford Commercial and WHWEL.

Mezzanine Property. The Real Estate owned by the Property Owner, to
be more particularly described in the Assignment of Interests.

Mortgaged Property. Collectively, the Eligible Real Estate which is
conveyed to and accepted by the Agent as security for the Obligations
pursuant to the Security Deeds.

Multiemployer Plan. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate.

Negative Carry. See Section 5.5.

Net Income (or Deficit). With respect to any Person (or any asset of
any Person) for any fiscal period, the net income (or deficit) of such
Person (or attributable to such asset), after deduction of all expenses,
taxes and other proper charges, determined in accordance with generally
accepted accounting principles.

Net Operating Income. With respect to the Borrower and its
Subsidiaries for any period, an amount equal to the sum of (a) the Net
Income of such Persons (attributable to the collateral for the Term Loan)
for such period plus (b) depreciation, amortization and interest deducted
in calculating such Net Income plus (c) any extraordinary or non-recurring
losses deducted in calculating such Net Income plus/minus (d) Rent
Adjustments with respect to Leases for such collateral for the Term Loan
minus (e) any income included in calculating such Net Income from the
collateral for the Term Loan from tenants which are 60 or more days
delinquent in the payment of any rent minus (f) any extraordinary or non-
recurring gains included in calculating such Net Income. Net Operating
Income shall be determined in a manner consistent with the manner in which
it has previously been calculated and provided to the Banks.

Non-Recourse Indebtedness. Indebtedness of the Borrower or a
Subsidiary which is secured by one or more parcels of Real Estate and
related personal property or interests therein and is not a general
obligation of the Borrower or any Subsidiary, the holder of such
Indebtedness having recourse solely to the parcels of Real Estate securing
such Indebtedness, the improvements and leases thereon and the rents and
profits thereof securing such Indebtedness, subject to such exceptions for
fraud, misapplication of rents, environmental issues and other customary
matters as Agent may reasonably approve.

Non-Stabilized Property. Any Real Estate owned by the Borrower or its
Subsidiaries which is not a Stabilized Property.

Notes. See Section 2.4.

Notice. See Section 19.

Obligations. All indebtedness, obligations and liabilities of the
Borrower to any of the Banks and the Agent, individually or collectively,
under this Agreement or any of the other Loan Documents or in respect of
any of the Loans or the Notes, or other instruments at any time evidencing
any of the foregoing, whether existing on the date of this Agreement or
arising or incurred hereafter, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise.

Operating Cash Flow. With respect to any Person (or any asset of any
Person) for any period, an amount equal to the sum of (a) the Net Income of
such Person (or attributable to such asset) for such period plus (b)
depreciation and amortization, interest expense, and any extraordinary or
non-recurring losses deducted in calculating such Net Income minus (c) any
extraordinary or nonrecurring gains included in calculating such Net Income
plus/minus (d) Rent Adjustments minus (e) any income included in
calculating such Net Income from tenants which are 60 or more days
delinquent in the payment of any rent.

Outstanding. With respect to the Loans, the aggregate unpaid
principal thereof as of any date of determination.

PBGC. The Pension Benefit Guaranty Corporation created by Section
4002 of ERISA and any successor entity or entities having similar
responsibilities.

Permitted Liens. Liens, security interests and other encumbrances
permitted by Section 8.2.

Person. Any individual, corporation, partnership, limited liability
company, trust, unincorporated association, business, or other legal
entity, and any government or any governmental agency or political
subdivision thereof.

Plan Assets. Assets of any employee benefit plan subject to Part 4,
Subtitle A, Title I of ERISA.

Pledge Agreement. Each agreement from time to time in effect in form
and substance satisfactory to the Agent pursuant to which the Borrower or
the Guarantor may pledge cash, Short-term Investments or other property
referred to in clause (v) of Section 5.1 as part of the Collateral
securing the Obligations.

Potential Collateral. Any property of the Borrower which is not at
the time included in the Collateral and which consists of (i) Eligible Real
Estate which is a Stabilized Property, (ii) Real Estate which is a Non-
Stabilized Property which is capable of becoming Eligible Real Estate
through the approval of all of the Banks and the completion and delivery of
Eligible Real Estate Qualification Documents, (iii) cash, (iv) Short-term
Investments and (v) other property referred to in clause (v) of Section
5.1.

Property Owner. ▇▇▇▇▇ Avenue Senior Holdings LLC.

Real Estate. All real property at any time owned or leased (as lessee
or sublessee) by the Borrower or any of its Subsidiaries.

REIT Status. With respect to Wellsford Commercial, its status as a
real estate investment trust as defined in Section 856(a) of the Code.

Record. The record, including computer records, maintained by the
Agent with respect to any Loan referred to in the Notes.

Reference Bank. BKB.

Release. See Section 6.20(c)(iii).

Rent Adjustments. For any Person, straight line adjustments to rent
payable under Leases, as determined in accordance with generally accepted
accounting principles.

Rent Roll. A report prepared by the Borrower showing for each tenant
its occupancy status, lease expiration date, market rent, lease rent and
other information in such form as may have been approved by the Agent, such
approval not to be unreasonably withheld.

Reportable Event. Any of the events set forth in Section 4043(b) of
ERISA or the regulations thereunder.

SEC. The federal Securities and Exchange Commission.

Security Deeds. The Mortgages, Deeds to Secure Debt and Deeds of
Trust from the Borrower to the Agent for the benefit of the Banks (or to
trustees named therein acting on behalf of the Agent for the benefit of the
Banks) pursuant to which the Borrower has conveyed a Mortgaged Property as
security for the Obligations.

Security Documents. Collectively, the Security Deeds, the Assignments
of Rents and Leases, the Indemnity Agreement, the Guaranty, the Assignment
of Interests, any further collateral assignments to the Agent for the
benefit of the Banks, and each Pledge Agreement, including, without
limitation, U.C.C.-1 financing statements executed and delivered in
connection therewith.

Shareholders' Equity. At any date, the total consolidated
shareholders' equity of the Borrower and its Subsidiaries determined in
accordance with generally accepted accounting principles.

Short-term Investments. Investments described in subsections (a)
through (g), inclusive, of Section 8.3. For all purposes of this
Agreement and the other Loan Documents, the value of Short-term Investments
at any time shall be the current market value thereof determined in a
manner reasonably satisfactory to the Agent.

Stabilized Property. Each parcel of Eligible Real Estate (a) which is
fully operational; (b) which is eighty percent (80%) leased and occupied
pursuant to bona-fide arm's length leases to third parties unaffiliated
with Borrower, any Guarantor or any of the Subsidiaries of Borrower; (c) no
more than thirty-five percent (35%) of the Leases (based on the ratio of
the rentable square footage of such Real Estate that is occupied under such
Leases to the total rentable square footage of such Real Estate) for such
Real Estate are scheduled to expire (without regard to any extension
options not exercised) within two (2) years of the acceptance of such Real
Estate as a Mortgaged Property or as collateral for the Term Loan,
whichever occurs first; (d) less than all of the Leases for such Real
Estate are scheduled to expire (without regard to any extension options not
exercised) within five (5) years of the date of the acceptance of such Real
Estate as a Mortgaged Property or as collateral for the Term Loan,
whichever occurs first; and (e) such Real Estate shall have a projected
annual return to Borrower of not less than 9% on acquisition cost based
upon cash flows in place as of the date of determination.

State. A state of the United States of America.

Subordination, Attornment and Non-Disturbance Agreement. An agreement
among the Agent, the Borrower and a tenant under a Lease pursuant to which
such tenant agrees to subordinate its rights under the Lease to the lien of
the Security Deed and agrees to recognize the Agent or its successor in
interest as landlord under the Lease in the event of a foreclosure under
the Security Deed, such agreement to be in form and substance satisfactory
to the Agent.

Subsidiary. Any corporation, association, partnership, limited
liability company, trust, or other business or other legal entity of which
the designated parent shall at any time own directly or indirectly through
a Subsidiary or Subsidiaries at least a majority (by number of votes or
controlling interests) of the outstanding Voting Interests.

Survey. An instrument survey of Mortgaged Property prepared by a
registered land surveyor which shall show the location of all buildings,
structures, easements and utility lines on such property, shall be
sufficient to remove the standard survey exception from the Title Policy,
shall show that all buildings and structures are within the lot lines of
the Mortgaged Property and shall not show any encroachments by others (or
to the extent any encroachments are shown, such encroachments shall be
acceptable to the Agent in its sole discretion), shall show rights of way,
adjoining sites, establish building lines and street lines, the distance
to, and names of the nearest intersecting streets and such other details as
the Agent may reasonably require; shall show the zoning district or
districts in which the Mortgaged Property is located and shall show whether
or not the Mortgaged Property is located in a flood hazard district as
established by the Federal Emergency Management Agency or any successor
agency or is located in any flood plain, flood hazard or wetland protection
district established under federal, state or local law and shall otherwise
be in form and substance reasonably satisfactory to the Agent.

Surveyor Certification. With respect to each parcel of Mortgaged
Property, a certificate executed by the surveyor who prepared the Survey
with respect thereto, dated as of a recent date and containing such
information relating to such parcel as the Majority Banks or the Title
Insurance Company may reasonably require, such certificate to be reasonably
satisfactory to the Agent in form and substance.

Term Loan Agreement. That certain Term Loan Agreement among Term Loan
Borrower, BankBoston, Goldman, the other lending institutions that are or
become parties thereto and BankBoston, N.A. in its capacity as agent for
itself and the other lending institutions that are or become parties
thereto, dated of even date as this Agreement, as the same may be amended,
modified or restated.

Term Loan Banks. The "Banks" from time to time under the Term Loan
Agreement.

Term Loan Borrower. WEL/WH 1275 K Street, L.L.C., a Delaware limited
liability company.

Term Loans. All loans and other indebtedness or liabilities arising
under the Term Loan Agreement and all other loan documents related thereto.

Test Period. See Section 9.2.

Title Insurance Company. Commonwealth Land Title Insurance Company or
another title insurance company or companies reasonably approved by the
Agent.

Title Policy. With respect to each parcel of Mortgaged Property, an
ALTA standard form title insurance policy (or, if such form is not
available, an equivalent form of or legally promulgated form of mortgagee
title insurance policy reasonably acceptable to the Agent) issued by a
Title Insurance Company (with such reinsurance or co-insurance as the Agent
may require, any such reinsurance to be with direct access endorsements to
the extent available under applicable law) in such amount as the Agent may
require insuring the priority of the Security Deeds and that the Borrower
holds marketable fee simple title (or good and indefeasible fee simple
title to any Real Estate in the State of Texas) to such parcel, subject
only to the encumbrances permitted by the Security Deed and which shall not
contain standard exceptions for mechanics liens, persons in occupancy
(other than tenants as tenants only under Leases) or matters which would be
shown by a survey, shall not insure over any matter except to the extent
that any such affirmative insurance is acceptable to the Agent in its sole
discretion, and shall contain (a) a revolving credit endorsement and (b)
such other endorsements and affirmative insurance as the Agent reasonably
may require and is available in the State in which the Real Estate is
located, including but not limited to (i) a comprehensive endorsement, (ii)
a variable rate of interest endorsement, (iii) a usury endorsement, (iv) a
doing business endorsement, (v) in States where available, an ALTA form 3.1
zoning endorsement, (vi) a "tie-in" endorsement and (vii) a "first loss"
endorsement.

Total Commitment. The sum of the Commitments of the Banks, as in
effect from time to time.

Type. As to any Loan, its nature as a Base Rate Loan or a Eurodollar
Rate Loan.

Under Development. Any Real Estate shall be considered under
development until such time as (a) a certificate of occupancy has been
obtained, (b) seventy-five percent (75%) of the net leasable area is leased
and occupied, and (c) the gross revenue from the operation of such Real
Estate shall have been not less than the operating costs (including amounts
properly allocable to such period for expenses which are not payable on a
regular basis during such period, such as taxes and insurance) for three
(3) consecutive months.

Voting Interests. Stock or similar ownership interests, of any class
or classes (however designated), the holders of which are at the time
entitled, as such holders, (a) to vote for the election of a majority of
the directors (or persons performing similar functions) of the corporation,
association, partnership, trust or other business entity involved, or (b)
to control, manage, or conduct the business of the corporation,
partnership, association, trust or other business entity involved.

Wellsford Commercial. Wellsford Commercial Property Trust, a Maryland
real estate investment trust.

Wellsford Real Properties. Wellsford Real Properties, Inc., a
Maryland corporation.

WHWEL. WHWEL Real Estate Limited Partnership, a Delaware limited
partnership.

Section 10.2. Rules of Interpretation.

(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Agreement.

(b) The singular includes the plural and the plural includes the
singular.

(d) A reference to any Person includes its permitted successors
and permitted assigns.

(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles
applied on a consistent basis by the accounting entity to which they refer.

(f) The words "include", "includes" and "including" are not
limiting.

(g) The words "approval" and "approved", as the context so
determines, means an approval in writing given to the party seeking
approval after full and fair disclosure to the party giving approval of all
material facts necessary in order to determine whether approval should be
granted.

(h) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the State of New York, have the meanings
assigned to them therein.

(i) Reference to a particular "Section ", refers to that
section of this Agreement unless otherwise indicated.

(j) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.

Section 11. THE REVOLVING CREDIT FACILITY.

Section 11.1. Commitment to Lend. Subject to the terms and
conditions set forth in this Agreement, each of the Banks severally agrees
to lend to the Borrower, and the Borrower may borrow (and repay and
reborrow) from time to time between the Closing Date and the Maturity Date
upon notice by the Borrower to the Agent given in accordance with Section
2.6, such sums as are requested by the Borrower for the purposes set forth
in Section 7.11 up to the lesser of (a) a maximum aggregate principal
amount outstanding (after giving effect to all amounts requested) at any
one time equal to such Bank's Commitment and (b) such Bank's Commitment
Percentage of the difference of (i) the aggregate Designated Collateral
Value minus (ii) an amount equal to the aggregate Holdback; provided, that,
in all events no Default or Event of Default shall have occurred and be
continuing; and provided, further, that the outstanding principal amount of
the Loans (after giving effect to all amounts requested) shall not at any
time exceed the Total Commitment. The Loans shall be made pro rata in
accordance with each Bank's Commitment Percentage. The Loan Request shall
constitute a representation and warranty by the Borrower that all of the
conditions set forth in Section 10 and Section 11, in the case of the
initial Loan, and Section 11, in the case of all other Loans, have been
satisfied on the date of such funding.

Section 11.2. Facility Fee. The Borrower agrees to pay to the Agent
for the accounts of the Banks in accordance with their respective
Commitment Percentages a facility fee calculated at the rate of one-fourth
of one percent (1/4%) per annum on the average daily amount by which the
Total Commitment exceeds the outstanding principal amount of Loans during
each calendar quarter or portion thereof commencing on the date hereof and
ending on the Maturity Date. The facility fee shall be payable quarterly
in arrears on the first day of each calendar quarter for the immediately
preceding calendar quarter or portion thereof, or on any earlier date on
which the Commitments shall be reduced or shall terminate as provided in
Section 2.3, with a final payment on the Maturity Date.

Section 11.3. Reduction of Commitment. The Borrower shall have the
right at any time and from time to time upon five Business Days' prior
written notice to the Agent to reduce by $1,000,000 or an integral multiple
of $1,000,000 in excess thereof or to terminate entirely the unborrowed
portion of the Commitments, whereupon the Commitments of the Banks shall be
reduced pro rata in accordance with their respective Commitment Percentages
of the amount specified in such notice or, as the case may be, terminated,
any such reduction to be without penalty (unless such reduction requires
repayment of a Eurodollar Rate Loan). Promptly after receiving any notice
of the Borrower delivered pursuant to this Section 2.3, the Agent will
notify the Banks of the substance thereof. Upon the effective date of any
such reduction or termination, the Borrower shall pay to the Agent for the
respective accounts of the Banks the full amount of any facility fee under
Section 2.2 then accrued on the amount of the reduction. No reduction or
termination of the Commitments may be reinstated. Notwithstanding the
foregoing, in no event shall the aggregate Commitments be reduced to less
than $50,000,000.00.

Section 11.4. Notes. The Loans shall be evidenced by a single
promissory note of the Borrower to each Bank in substantially the form of
Exhibit A hereto (collectively, the "Notes"), dated as of the Closing Date
and completed with appropriate insertions. One Note shall be payable to
the order of each Bank in the principal amount equal to such Bank's
Commitment or, if less, the outstanding amount of all Loans made by such
Bank, plus interest accrued thereon, as set forth below. The Borrower
irrevocably authorizes the Agent to make or cause to be made, at or about
the time of the Drawdown Date of any Loan or at the time of receipt of any
payment of principal thereof, an appropriate notation on the Agent's Record
reflecting the making of such Loan or (as the case may be) the receipt of
such payment. The outstanding amount of the Loans set forth on the Agent's
Record shall be prima facie evidence of the principal amount thereof owing
and unpaid to each Bank, but the failure to record, or any error in so
recording, any such amount on the Agent's Record shall not limit or
otherwise affect the obligations of the Borrower hereunder or under any
Note to make payments of principal of or interest on any Note when due.

Section 11.5. Interest on Loans.

SFO Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the date on which
such Base Rate Loan is converted to a Eurodollar Rate Loan at a rate per
annum equal to the Base Rate.

(b) Each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at a rate per annum equal to the sum
of the Eurodollar Rate determined for such Interest Period plus two and
one-half percent (2.5%).

(d) Base Rate Loans and Eurodollar Rate Loans may be converted
to Loans of the other Type as provided in Section 4.1.

Section 11.6. Requests for Loans. Except with respect to the
initial Loan, the Borrower shall give to the Agent written notice in the
form of Exhibit B hereto (or telephonic notice confirmed in writing in the
form of Exhibit B hereto) of each Loan requested hereunder (a "Loan
Request") no less than five (5) Business Days prior to the proposed
Drawdown Date. The Borrower shall not make a Loan Request more frequently
than two times each month. Each such notice shall specify with respect to
the requested Loan the proposed principal amount, Drawdown Date, Interest
Period (if applicable) and Type. Each such notice shall also contain (i) a
statement as to the purpose for which such advance shall be used (which
purpose shall be in accordance with the terms of Section 7.11), (ii) in
the case of any advance relating to any Capital Improvement Project for a
Mortgaged Property or Mezzanine Property, a certification from the Borrower
that all materialmen, laborers, subcontractors and any other parties who
might or could claim statutory or common law liens and are furnishing or
have furnished material or labor to the Mortgaged Property or Mezzanine
Property, as applicable, have been paid (or will be paid from the proceeds
of the requested advance) all amounts due for such labor and materials, and
if requested by the Agent, delivery to the Agent of affidavits, lien
waivers or other evidence reasonably satisfactory to the Agent evidencing
the same, and (iii) a certification by the chief financial or chief
accounting officer of the Borrower that the Borrower and the Guarantor are
and will be in compliance with all covenants under the Loan Documents after
giving effect to the making of such Loan. Promptly upon receipt of any
such notice, the Agent shall notify each of the Banks thereof. Except as
provided in this Section 2.6, each such Loan Request shall be irrevocable
and binding on the Borrower and shall obligate the Borrower to accept the
Loan requested from the Banks on the proposed Drawdown Date, provided that,
in addition to the Borrower's other remedies against any Bank which fails
to advance its proportionate share of a requested Loan, such Loan Request
may be revoked by the Borrower by notice received by the Agent no later
than the Drawdown Date if any Bank fails to advance its proportionate share
of the requested Loan in accordance with the terms of this Agreement,
provided further that the Borrower shall be liable in accordance with the
terms of this Agreement (including, without limitation, amounts due
pursuant to Section 4.8) to any Bank which is prepared to advance its
proportionate share of the requested Loan for any costs, expenses or
damages incurred by such Bank as a result of the Borrower's election to
revoke such Loan Request. Nothing herein shall prevent the Borrower or the
funding Banks from seeking recourse against any Bank that fails to advance
its proportionate share of a requested Loan (but not any other Bank) as
required by this Agreement for the actual and consequential damages
incurred by the Borrower (including, without limitation, amounts required
to be paid under this Agreement by the Borrower to any Bank) and such
funding Banks proximately caused by such Bank that has failed to advance
its proportionate share, provided that in no event shall such Bank be
liable for punitive or exemplary damages. The Borrower may without cost or
penalty revoke a Loan Request by delivering notice thereof to each of the
Banks no later than three (3) Business Days prior to the Drawdown Date.
Each Loan Request shall be (a) for a Base Rate Loan in a minimum aggregate
amount of $1,000,000 or an integral multiple of $100,000 in excess thereof,
or (b) for a Eurodollar Rate Loan in a minimum aggregate amount of
$2,000,000 or an integral multiple of $100,000 in excess thereof; provided,
however, that there shall be no more than five (5) Eurodollar Rate Loans
outstanding at any one time. In the event that the proceeds from such Loan
are to be used for a purpose other than a Capital Improvement Project, then
the Borrower shall provide to the Agent as soon as practicable thereafter
such evidence as the Agent shall reasonably require to evidence that such
funds have been used for such purpose (which evidence may include, without
limitation, a closing statement).

Section 11.7. Funds for Loans.

(a) Not later than 11:00 a.m. (Boston time) on the proposed
Drawdown Date of any Loans, each of the Banks will make available to the
Agent, at the Agent's Head Office, in immediately available funds, the
amount of such Bank's Commitment Percentage of the amount of the requested
Loans which may be disbursed pursuant to Section 2.1. Upon receipt from
each Bank of such amount, and upon receipt of the documents required by
Section 10 and Section 11 and the satisfaction of the other conditions
set forth therein, to the extent applicable, the Agent will make available
to the Borrower the aggregate amount of such Loans made available to the
Agent by the Banks by crediting such amount to the account of the Borrower
maintained at the Agent's Head Office. The failure or refusal of any Bank
to make available to the Agent at the aforesaid time and place on any
Drawdown Date the amount of its Commitment Percentage of the requested
Loans shall not relieve any other Bank from its several obligation
hereunder to make available to the Agent the amount of such other Bank's
Commitment Percentage of any requested Loans, including any additional
Loans that may be requested subject to the terms and conditions hereof to
provide funds to replace those not advanced by the Bank so failing or
refusing, provided that the Borrower may by notice received by the Agent no
later than the Drawdown Date refuse to accept any Loan which is not fully
funded in accordance with the Borrower's Loan Request subject to the terms
of Section 2.6. In the event of any such failure or refusal, the Banks
not so failing or refusing shall be entitled to a priority secured position
as against the Bank or Banks so failing or refusing for such Loans as
provided in Section 12.4.

(b) Unless Agent shall have been notified by any Bank prior to
the applicable Drawdown Date that such Bank will not make available to
Agent such Bank's pro rata share of a proposed Loan, Agent may in its
discretion assume that such Bank has made such Loan available to Agent in
accordance with the provisions of this Agreement and Agent may, if it
chooses, in reliance upon such assumption make such Loan available to
Borrower, and such Bank shall be liable to the Agent for the amount of such
advance.

Section 11.8. Extension of Maturity Date.

(a) Provided that no Default or Event of Default shall have
occurred and be continuing, the Borrower shall have the option, to be
exercised by giving written notice to the Agent in the form of Exhibit D
hereto at least 90 days prior to the Maturity Date, subject to the terms
and conditions set forth in this Agreement, to extend the Maturity Date by
one (1) year. The request by the Borrower for extension of the Maturity
Date shall constitute a representation and warranty by the Borrower that
all of the conditions set forth in this Section shall have been satisfied
on the date of such request or shall be satisfied prior to the then
existing Maturity Date.

(b) The obligations of the Agent and the Banks to extend the
Maturity Date shall be subject to the satisfaction of the following
conditions precedent on or prior to the Maturity Date (without regard to
any extension):

(i) Payment of Extension Fee. The Borrower shall pay to
the Agent for the pro rata accounts of the Banks in accordance with
their respective Commitment Percentages an extension fee equal to one-
fourth of one percent (0.25%) of the Total Commitment, which fee
shall, when paid, be fully earned and non-refundable under any
circumstances.

(ii) No Default. On the date the Extension Request is given
and on the Maturity Date (as determined without regard to such
extension) there shall exist no Default or Event of Default.

(iii) Representations and Warranties. The representations
and warranties made by the Borrower or the Guarantors in the Loan
Documents or otherwise made by or on behalf of the Borrower, the
Guarantors, the Members or any of the their respective Subsidiaries in
connection therewith or after the date thereof shall have been true
and correct in all material respects when made and (other than
representations as to the Guarantors or Members) shall also be true
and correct in all material respects on the Maturity Date (as
determined without regard to such extension) other than for changes in
the ordinary course of business permitted by this Agreement that have
not had any materially adverse affect on the business of the Borrower,
the Guarantors or any of their respective Subsidiaries.

(iv) Covenant Compliance. On the Maturity Date (as
determined without regard to such extension request), the Borrower
would be in compliance with the covenants set forth in Section 9.1
and Section 9.2 at the levels set forth in such covenants as would be
applicable during the extension period.

(v) Appraisals. At the option of the Majority Banks, the
Agent shall have received at Borrower's expense Appraisals or updates
of prior Appraisals to determine the current Appraised Value and
Designated Collateral Value of the Mortgaged Property and the
Mezzanine Property, which Appraisals shall be ordered, reviewed and
approved as provided in Section 5.2(a). The aggregate outstanding
principal amount of the Loans shall be reduced to an amount such that
the aggregate outstanding principal amount of the Loans does not
exceed the Designated Collateral Value (as most recently determined
based upon the Appraisals obtained pursuant to this Section 2.8).

Section 12. REPAYMENT OF THE LOANS.

Section 12.1. Stated Maturity. The Borrower promises to pay on the
Maturity Date, and there shall become absolutely due and payable on the
Maturity Date, all of the Loans outstanding on such date, together with any
and all accrued and unpaid interest thereon.

Section 12.2. Intentionally omitted.

Section 12.3. Optional Prepayments. The Borrower shall have the
right, at the Borrower's election, to prepay the outstanding amount of the
Loans, as a whole or in part, at any time without penalty or premium;
provided, that the full or partial prepayment of the outstanding amount of
any Eurodollar Rate Loans pursuant to this Section 3.3 may be made only on
the last day of the Interest Period relating thereto except as otherwise
required pursuant to Section 4.7, unless payment is first made of any
amounts payable pursuant to Section 4.8. The Borrower shall give the
Agent, no later than 10:00 a.m., Boston time, at least three Business Days
prior written notice of any prepayment pursuant to this Section 3.3 of any
Base Rate Loans and at least four Eurodollar Business Days notice of any
proposed repayment pursuant to this Section 3.3 of Eurodollar Rate Loans,
in each case specifying the proposed date of payment of Loans and the
principal amount to be paid.

Section 12.4. Partial Prepayments. Each partial prepayment of the
Loans under Section 3.2(a) and Section 3.3 shall be in an integral
multiple of $100,000, shall be accompanied by the payment of accrued
interest on the principal prepaid to the date of payment and, after payment
of such interest, shall be applied, in the absence of instruction by the
Borrower, first to the principal of Base Rate Loans and then to the
principal of Eurodollar Rate Loans.

Section 12.5. Effect of Prepayments. Amounts of the Loans prepaid
under Section 3.2 and Section 3.3 prior to the Maturity Date may be
reborrowed as provided in Section 2.

Section 13. CERTAIN GENERAL PROVISIONS.

Section 13.1. Conversion Options.

(a) The Borrower may elect from time to time to convert any
outstanding Loan to a Loan of another Type and such Loan shall thereafter
bear interest as a Base Rate Loan or a Eurodollar Rate Loan, as applicable;
provided that (i) with respect to any such conversion of a Eurodollar Rate
Loan to a Base Rate Loan, the Borrower shall give the Agent at least three
Business Days' prior written notice of such election, and such conversion
shall only be made on the last day of the Interest Period with respect to
such Eurodollar Rate Loan; (ii) with respect to any such conversion of a
Base Rate Loan to a Eurodollar Rate Loan, the Borrower shall give the Agent
at least four Eurodollar Business Days' prior written notice of such
election and the Interest Period requested for such Loan, the principal
amount of the Loan so converted shall be in a minimum aggregate amount of
$2,000,000 or an integral multiple of $100,000 in excess thereof and, after
giving effect to the making of such Loan, there shall be no more than five
(5) Eurodollar Rate Loans outstanding at any one time; and (iii) no Loan
may be converted into a Eurodollar Rate Loan when any Default or Event of
Default has occurred and is continuing. All or any part of the outstanding
Loans of any Type may be converted as provided herein, provided that no
partial conversion shall result in a Base Rate Loan in an aggregate
principal amount of less than $1,000,000 or a Eurodollar Rate Loan in an
aggregate principal amount of less than $2,000,000 and that the aggregate
principal amount of each Loan shall be in an integral multiple of $100,000.
On the date on which such conversion is being made, each Bank shall take
such action as is necessary to transfer its Commitment Percentage of such
Loans to its Domestic Lending Office or its Eurodollar Lending Office, as
the case may be. Each Conversion Request relating to the conversion of a
Base Rate Loan to a Eurodollar Rate Loan shall be irrevocable by the
Borrower.

(b) Any Loan may be continued as such Type upon the expiration
of an Interest Period with respect thereto by compliance by the Borrower
with the terms of Section 4.1; provided that no Eurodollar Rate Loan may
be continued as such when any Default of the type described in subsections
(a), (b), (c) or (d) of Section 12.1 or Event of Default has occurred and
is continuing, but shall be automatically converted to a Base Rate Loan on
the last day of the Interest Period relating thereto ending during the
continuance of any Default or Event of Default.

(c) In the event that the Borrower does not notify the Agent of
its election hereunder with respect to any Loan, such Loan shall be
automatically converted to a Base Rate Loan at the end of the applicable
Interest Period.

Section 13.2. Closing Fee. The Borrower agrees to pay, on or before
the Closing Date, to the Agent for the ratable account of the Banks a
closing fee as specified in the Agreement Regarding Fees.

Section 13.3. Agent's Fee. The Borrower shall pay to the Agent, for
the Agent's own account, an Agent's fee as specified in the Agreement
Regarding Fees.

Section 13.4. Funds for Payments.

(a) All payments of principal, interest, facility fees, Agent's
fees, closing fees and any other amounts due hereunder or under any of the
other Loan Documents shall be made to the Agent, for the respective
accounts of the Banks and the Agent, as the case may be, at the Agent's
Head Office, not later than 12:00 noon (Boston time) on the day when due,
in each case in immediately available funds. The Agent is hereby
authorized to charge the account of the Borrower with BKB, on the dates
when the amount thereof shall become due and payable, with the amounts of
the principal of and interest on the Loans and all fees, charges, expenses
and other amounts owing to the Agent and/or the Banks under the Loan
Documents.

(b) All payments by the Borrower hereunder and under any of the
other Loan Documents shall be made without setoff or counterclaim and free
and clear of and without deduction for any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any
jurisdiction or any political subdivision thereof or taxing or other
authority therein unless the Borrower is compelled by law to make such
deduction or withholding. If any such obligation is imposed upon the
Borrower with respect to any amount payable by it hereunder or under any of
the other Loan Documents, the Borrower will pay to the Agent, for the
account of the Banks or (as the case may be) the Agent, on the date on
which such amount is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars as shall be necessary to enable
the Banks or the Agent to receive the same net amount which the Banks or
the Agent would have received on such due date had no such obligation been
imposed upon the Borrower. The Borrower will deliver promptly to the Agent
certificates or other valid vouchers for all taxes or other charges
deducted from or paid with respect to payments made by the Borrower
hereunder or under such other Loan Document.

Section 13.5. Computations. All computations of interest on the
Loans and of other fees to the extent applicable shall be based on a
360-day year and paid for the actual number of days elapsed. Except as
otherwise provided in the definition of the term "Interest Period" with
respect to Eurodollar Rate Loans, whenever a payment hereunder or under any
of the other Loan Documents becomes due on a day that is not a Business
Day, the due date for such payment shall be extended to the next succeeding
Business Day, and interest shall accrue during such extension. The
outstanding amount of the Loans as reflected on the records of the Agent
from time to time shall be considered prima facie evidence of such amount.

Section 13.6. Inability to Determine Eurodollar Rate. In the event
that, prior to the commencement of any Interest Period relating to any
Eurodollar Rate Loan, the Agent shall determine that adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate for
such Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and
the Banks) to the Borrower and the Banks. In such event (a) any Loan
Request with respect to Eurodollar Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans and (b) each
Eurodollar Rate Loan will automatically, on the last day of the then
current Interest Period thereof, become a Base Rate Loan, and the
obligations of the Banks to make Eurodollar Rate Loans shall be suspended
until the Agent determines that the circumstances giving rise to such
suspension no longer exist, whereupon the Agent shall so notify the
Borrower and the Banks.

Section 13.7. Illegality. Notwithstanding any other provisions
herein, if any present or future law, regulation, treaty or directive or
the interpretation or application thereof shall make it unlawful, or any
central bank or other governmental authority having jurisdiction over a
Bank or its Eurodollar Lending Office shall assert that it is unlawful, for
any Bank to make or maintain Eurodollar Rate Loans, such Bank shall
forthwith give notice of such circumstances to the Agent and the Borrower
and thereupon (a) the commitment of the Banks to make Eurodollar Rate Loans
or convert Loans of another type to Eurodollar Rate Loans shall forthwith
be suspended and (b) the Eurodollar Rate Loans then outstanding shall be
converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such Eurodollar Rate Loans or within such earlier
period as may be required by law.

Section 13.8. Additional Interest. If any Eurodollar Rate Loan or
any portion thereof is repaid or is converted to a Base Rate Loan for any
reason on a date which is prior to the last day of the Interest Period
applicable to such Eurodollar Rate Loan, the Borrower will pay to the Agent
upon demand for the account of the Banks in accordance with their
respective Commitment Percentages, in addition to any amounts of interest
otherwise payable hereunder, any amounts required to compensate the Banks
for any losses, costs or expenses which may reasonably be incurred as a
result of such payment or conversion, including, without limitation, an
amount equal to daily interest for the unexpired portion of such Interest
Period on the Eurodollar Rate Loan or portion thereof so repaid or
converted at a per annum rate equal to the excess, if any, of (a) the
interest rate calculated on the basis of the Eurodollar Rate applicable to
such Eurodollar Rate Loan minus (b) the yield obtainable by the Agent upon
the purchase of debt securities customarily issued by the Treasury of the
United States of America which have a maturity date most closely
approximating the last day of such Interest Period (it being understood
that the purchase of such securities shall not be required in order for
such amounts to be payable and that a Bank shall not be obligated or
required to have actually obtained funds at the Eurodollar Rate).

Section 13.9. Additional Costs, Etc. Notwithstanding anything
herein to the contrary, if any future applicable law or any amendment or
modification of present applicable law which expression, as used herein,
includes statutes, rules and regulations thereunder and legally binding
interpretations thereof by any competent court or by any governmental or
other regulatory body or official with appropriate jurisdiction charged
with the administration or the interpretation thereof and requests,
directives, instructions and notices at any time or from time to time
hereafter made upon or otherwise issued to any Bank or the Agent by any
central bank or other fiscal, monetary or other authority (whether or not
having the force of law), shall:

(a) subject any Bank or the Agent to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature with respect to
this Agreement, the other Loan Documents, such Bank's Commitment or the
Loans (other than taxes based upon or measured by the income or profits of
such Bank or the Agent), or

(b) materially change the basis of taxation (except for changes
in taxes on income or profits) of payments to any Bank of the principal of
or the interest on any Loans or any other amounts payable to any Bank under
this Agreement or the other Loan Documents, or

(c) impose or increase or render applicable any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held
by, or deposits in or for the account of, or loans by, or commitments of an
office of any Bank beyond those in effect as of the date hereof, or

(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Agreement, the other Loan Documents, the
Loans, such Bank's Commitment, or any class of loans or commitments of
which any of the Loans or such Bank's Commitment forms a part; and the
result of any of the foregoing is

(i) to increase the cost to any Bank of making, funding,
issuing, renewing, extending or maintaining any of the Loans or such
Bank's Commitment, or

(ii) to reduce the amount of principal, interest or other
amount payable to such Bank or the Agent hereunder on account of such
Bank's Commitment or any of the Loans, or

(iii) to require such Bank or the Agent to make any
payment or to forego any interest or other sum payable hereunder, the
amount of which payment or foregone interest or other sum is
calculated by reference to the gross amount of any sum receivable or
deemed received by such Bank or the Agent from the Borrower hereunder,

then, and in each such case, the Borrower will, within fifteen (15) days of
demand made by such Bank or (as the case may be) the Agent at any time and
from time to time and as often as the occasion therefor may arise, pay to
such Bank or the Agent such additional amounts as such Bank or the Agent
shall determine in good faith to be sufficient to compensate such Bank or
the Agent for such additional cost, reduction, payment or foregone interest
or other sum. Each Bank and the Agent in determining such amounts may use
any reasonable averaging and attribution methods, generally applied by such
Bank or the Agent.

Section 13.10. Capital Adequacy. If after the date hereof any Bank
determines that (a) the adoption of or change in any law, rule, regulation
or guideline regarding capital requirements of general application for
banks or bank holding companies or any change in the interpretation or
application thereof by any governmental authority charged with the
administration thereof, or (b) compliance by such Bank or its parent bank
holding company with any future guideline, request or directive of any such
entity regarding capital adequacy or any amendment or change in
interpretation of any existing guideline, request or directive (whether or
not having the force of law), has the effect of reducing the return on such
Bank's or such holding company's capital as a consequence of such Bank's
commitment to make Loans hereunder to a level below that which such Bank or
holding company could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's or such holding company's
then existing policies with respect to capital adequacy and assuming the
full utilization of such entity's capital) by any amount deemed by such
Bank to be material, then such Bank may notify the Borrower thereof. The
Borrower agrees to pay to such Bank the amount of such reduction in the
return on capital as and when such reduction is determined, upon
presentation by such Bank of a statement of the amount setting for the
Bank's calculation thereof. In determining such amount, such Bank may use
any reasonable averaging and attribution methods, generally applied by such
Bank or the Agent.

Section 13.11. Indemnity of Borrower. The Borrower agrees to
indemnify each Bank and to hold each Bank harmless from and against any
loss, cost or expense that such Bank may sustain or incur as a consequence
of (a) default by the Borrower in payment of the principal amount of or any
interest on any Eurodollar Rate Loans as and when due and payable,
including any such loss or expense arising from interest or fees payable by
such Bank to lenders of funds obtained by it in order to maintain its
Eurodollar Rate Loans, or (b) default by the Borrower in making a borrowing
or conversion after the Borrower has given (or is deemed to have given) a
Loan Request or a Conversion Request; provided, however, that the Borrower
shall not be required to so indemnify any Bank pursuant to clause (b) above
which fails or refuses to fund its proportionate share of a Loan in
accordance with the terms of this Agreement.

Section 13.12. Interest on Overdue Amounts; Late Charge. Overdue
principal and (to the extent permitted by applicable law) interest on the
Loans and all other overdue amounts payable hereunder or under any of the
other Loan Documents shall bear interest payable on demand at a rate per
annum equal to four percent (4.0%) above the Base Rate from the date due
until such amount shall be paid in full (after as well as before judgment).
In addition, the Borrower shall pay a late charge equal to three percent
(3.0%) of any amount of interest and/or principal payable on the Loans or
any other amounts payable hereunder or under the Loan Documents, which is
not paid within ten days of the date when due.

Section 13.13. Intentionally Omitted.

Section 13.14. Certificate. A certificate setting forth any amounts
payable pursuant to Section 4.8, Section 4.9, Section 4.10, Section
4.11 or Section 4.12 and a brief explanation of such amounts which are
due, submitted by any Bank or the Agent to the Borrower, shall be
conclusive in the absence of manifest error.

Section 13.15. Limitation on Interest. Notwithstanding anything in
this Agreement to the contrary, all agreements between the Borrower and the
Banks and the Agent, whether now existing or hereafter arising and whether
written or oral, are hereby limited so that in no contingency, whether by
reason of acceleration of the maturity of any of the Obligations or
otherwise, shall the interest contracted for, charged or received by the
Banks exceed the maximum amount permissible under applicable law. If, from
any circumstance whatsoever, interest would otherwise be payable to the
Banks in excess of the maximum lawful amount, the interest payable to the
Banks shall be reduced to the maximum amount permitted under applicable
law; and if from any circumstance the Banks shall ever receive anything of
value deemed interest by applicable law in excess of the maximum lawful
amount, an amount equal to any excessive interest shall be applied to the
reduction of the principal balance of the Obligations and to the payment of
interest or, if such excessive interest exceeds the unpaid balance of
principal of the Obligations, such excess shall be refunded to the
Borrower. All interest paid or agreed to be paid to the Banks shall, to
the extent permitted by applicable law, be amortized, prorated, allocated
and spread throughout the full period until payment in full of the
principal of the Obligations (including the period of any renewal or
extension thereof) so that the interest thereon for such full period shall
not exceed the maximum amount permitted by applicable law. This section
shall control all agreements between the Borrower and the Banks and the
Agent.

Section 13.16. Certain Provisions Relating to Increased Costs. If
any Bank requests compensation for any losses or costs to be reimbursed
pursuant to any one or more of the provisions of Section 4.9 or Section
4.10, then, upon request of Borrower, such Bank shall use reasonable
efforts in a manner consistent with such institution's practice in
connection with loans like the Loan to eliminate, mitigate or reduce
amounts that would otherwise be payable by Borrower under the foregoing
provisions, provided that such action would not be otherwise prejudicial to
such Bank, including, without limitation, by designating another of such
Bank's offices, branches or affiliates; the Borrower agreeing to pay all
reasonably incurred costs and expenses incurred by such Bank in connection
with any such action. Notwithstanding anything to the contrary contained
herein, if no Default or Event of Default shall have occurred and be
continuing, and if any Bank has requested payment or compensation for any
losses or costs to be reimbursed pursuant to any one or more of the
provisions of Section 4.9 or Section 4.10 (each, an "Affected Bank"),
then, within thirty (30) days after such request for payment or
compensation, Borrower shall have the one-time right as to such Affected
Bank, to be exercised by delivery of written notice delivered to the Agent
and the Affected Bank within thirty (30) days of receipt of such notice, to
elect to cause the Affected Bank to transfer its Commitment. The Agent
shall promptly notify the remaining Banks that each of such Banks shall
have the right, but not the obligation, to acquire a portion of the
Commitment, pro rata based upon their relevant Commitment Percentages, of
the Commitment of the Affected Bank (or if any of such Banks does not elect
to purchase its pro rata share, then to such remaining Banks in such
proportion as approved by the Agent). In the event that the Banks do not
elect to acquire all of the Affected Bank's Commitment, then the Agent
shall endeavor to obtain a new Bank to acquire such remaining Commitment.
Upon any such purchase of the Commitment of the Affected Bank, the Affected
Bank's interest in the Obligations and its rights hereunder and under the
Loan Documents shall terminate at the date of purchase, and the Affected
Bank shall promptly execute all documents reasonably requested to surrender
and transfer such interest. The purchase price for the Affected Bank's
Commitment shall equal any and all amounts outstanding and owed by Borrower
to the Affected Bank, including principal and all accrued and unpaid
interest or fees.

Section 14. COLLATERAL SECURITY.

Section 14.1. Collateral. The Obligations shall be secured by (i) a
perfected first priority lien or security title to be held by the Agent for
the benefit of the Banks in the Mortgaged Property pursuant to the terms of
the Security Deeds, (ii) a perfected first priority security interest to be
held by the Agent for the benefit of the Banks in the Leases pursuant to
the Assignments of Rents and Leases, (iii) the Indemnity Agreement, (iv) a
perfected first priority lien to be held by the Agent for the benefit of
the Banks in cash and Short-term Investments of the Borrower from time to
time pledged to the Agent pursuant to one or more Pledge Agreements and
(v) such additional collateral, if any (including without limitation the
Equity Interests), as the Agent for the benefit of the Banks from time to
time may accept as security for the Obligations with the consent of the
Majority Banks, whether pursuant to Section 5.4 or Section 5.7 hereof or
otherwise, which consent may be given or withheld in the sole discretion of
the Majority Banks. The Obligations shall also be guaranteed pursuant to
the Guaranty.

Section 14.2. Appraisals.

(a) The Agent on behalf of the Banks shall require biennial
Appraisals of each of the Mortgaged Property and the Mezzanine Property,
which will be ordered by the Agent and reviewed and approved by the
appraisal departments of the Majority Banks, in order to determine the
current Appraised Value of the Mortgaged Property and the Mezzanine
Property, and the Borrower shall pay to the Agent on demand all reasonable
costs of all such Appraisals; provided, however, that so long as no Default
or Event of Default shall have occurred and be continuing and regulatory
requirements of any Bank generally applicable to real estate loans of the
category made under this Agreement as reasonably interpreted by such Bank
shall not require more frequent Appraisals, the Borrower shall not be
required to pay for Appraisals more often than once in any 24-month period,
with the result that unless such condition shall occur the first Appraisals
for which the Borrower shall be financially responsible after the Closing
Date shall not be required prior to the second anniversary of the date of
this Agreement.

(b) Notwithstanding the provisions of Section 5.2(a), the Agent
may obtain Appraisals or perform internal studies updating and revising
prior Appraisals with respect to the Mortgaged Property and the Mezzanine
Property or such portion thereof as the Majority Banks shall determine, for
the purpose of determining the current Appraised Value of the Mortgaged
Property and the Mezzanine Property at any time following a partial
condemnation of or uninsured casualty to a Mortgaged Property or the
Mezzanine Property (provided that such Appraisal shall be limited to the
affected property). The expense of such Appraisals and updates performed
pursuant to this Section 5.2(b) shall be borne by the Borrower.

Section 14.3. Release of Collateral. Provided no Default or Event
of Default shall have occurred hereunder and be continuing (or would exist
immediately after giving effect to the transactions contemplated by this
Section 5.3 except as provided in this Section 5.3), the Agent shall
release a Mortgaged Property or other Collateral from the lien of the
Security Documents encumbering the same upon the request of the Borrower
and upon the following terms and conditions:

(a) The Borrower shall deliver to the Agent written notice of
its desire to obtain each such release no later than fifteen (15) days
prior to the date on which each such release is to be effected together
with evidence satisfactory to the Agent that such release is to facilitate
a sale of such Mortgaged Property or other Collateral to an unrelated third
party in a bona-fide arms-length transaction for a cash sales price
(provided that such transfer may be to Term Loan Borrower in connection
with a refinance pursuant to the Term Loan Agreement) or a bona-fide
refinance; and

(b) The Borrower shall submit to the Agent with such request a
Compliance Certificate prepared using the financial statements of the
Borrower most recently provided or required to be provided to the Agent
under Section 6.4 or Section 7.4 adjusted in the best good faith estimate
of the Borrower to give effect to the proposed release and demonstrating
that no Default or Event of Default with respect to the covenants referred
to therein shall exist after giving effect to such release; and

(c) The Borrower shall pay all reasonable costs and expenses of
the Agent in connection with such release, including without limitation,
reasonable attorney's fees; and

(d) The Borrower shall pay to the Agent for the account of the
Banks, which payment shall be applied to reduce the outstanding principal
balance of the Loans, a release price as follows: (i) if such Collateral
was a Stabilized Property at the time such property became Collateral and
such Collateral is being refinanced by proceeds of the Term Loan or such
property is refused as collateral for the Term Loan as described in Section
8.1(g), the release price shall equal one hundred percent (100%) of the
Designated Collateral Value of such Collateral; or (ii) in connection with
a release of such Collateral for any other reason (as a result of a sale or
refinance), the release price shall be equal to one hundred twenty percent
(120%) of the Designated Collateral Value of such Collateral. In the event
of a release pursuant to Section 5.3(d)(ii), the amount available to be
borrowed against the Collateral remaining after such release shall be
reduced by an amount equal to twenty percent (20%) of the Designated
Collateral Value of the Collateral so released without reducing the
Designated Collateral Value of such remaining collateral for the purposes
of calculating release prices. Notwithstanding the foregoing, the vacant
land located at the Mortgaged Property commonly known as Point View
described on Schedule 5.3 hereto shall be released upon the payment to the
Agent for the account of the Banks an amount (without premium) equal to the
amount allocated to such vacant land in the Appraisal of such Mortgaged
Property (as most recently determined pursuant to this Agreement) upon the
sale of such land to an unrelated third party, provided that the Borrower
shall submit to the Agent with the request for the release of such land
(A) a survey satisfactory to Agent showing such land that Borrower desires
to release from the Security Documents and such other evidence as Agent may
reasonably require to show the availability of unrestricted (whether by
private agreement or governmental provision) direct access to public roads
and utilities from all unreleased portions of such Mortgaged Property,
(B) a certification from Borrower that the conveyance by Borrower of such
land which is requested to be released will not violate the terms of any
lease, agreement, ordinance or restriction by which such Mortgaged Property
is subject, and (C) evidence of the proper subdivision of the property to
be released. Such payments shall be applied to reduce the outstanding
principal balance of the Loans; provided, that the Borrower shall not be
required to make a payment which would reduce the principal balance below
zero.

Section 14.4. Additional Collateral.

(a) The Borrower shall have the right subject to the terms
hereof to add to the Collateral any other Real Estate that is owned by the
Borrower and which is not security for any other Indebtedness. Such
addition shall be completed by the execution and delivery to the Agent of
each of the Eligible Real Estate Qualification Documents. Notwithstanding
the foregoing, the addition of such Collateral shall not increase the
Designated Collateral Value or the amounts available to be borrowed by the
Borrower unless each of the following conditions shall be satisfied:

(i) if such proposed collateral is Real Estate, such Real
Estate shall be Eligible Real Estate;

(ii) no Default or Event of Default has occurred or would
occur if such asset were included within the Collateral;

(iii) the Borrower shall have executed and delivered to
the Agent all Eligible Real Estate Qualification Documents or other
instruments, documents, or agreements, including Uniform Commercial
Code financing statements, as the Agent shall deem necessary or
desirable to perfect a first priority security interest in, or lien
on, such Collateral, all of which instruments, documents or agreements
shall be in form and substance satisfactory to the Agent in its sole
discretion; and

(iv) the Agent, on behalf of the Banks, shall have received
any other appraisals, surveys, rent rolls, environmental reports,
title insurance reports, certificates, opinions or other information
or documentation with respect to the Collateral as the Agent, in its
sole discretion, shall deem necessary or desirable.

The Borrower acknowledges that the decision of all of the Banks to
grant or withhold their consent to the acceptance of additional Collateral
under this Section 5.4 shall be based entirely on such factors as the
Majority Banks deem relevant in their sole discretion, including, without
limitation, those enumerated in clauses (i) through (iv) hereinabove, and
such consent may be granted or withheld solely at the discretion of the
Majority Banks; provided, however, that if the such Real Estate is a
Stabilized Property, acceptance of such Real Estate shall be subject only
to the satisfaction of the terms of Section 5.4(a)(ii), (iii) and (iv).

(b) In connection with each such addition, the Borrower shall
pay to the Agent the reasonable out-of-pocket costs and expenses (including
reasonable attorney's fees and expenses) of the Agent in connection with
the addition of such Collateral.

(c) In the event that the Borrower requests an advance as a
result of the addition of Real Estate which is eligible to cause an
increase in the Designated Collateral Values but the Appraisal for such
Real Estate has not yet been received and approved pursuant to this
Agreement, then notwithstanding the definition of the term "Designated
Collateral Value", the Designated Collateral Value for such Real Estate
shall equal seventy-five percent (75%) of the all-in acquisition cost
(including reasonable closing costs) of such Real Estate until such time as
the Appraised Value for such Real Estate is determined as provided herein,
at which time the Designated Collateral Value for such Real Estate shall be
determined as provided in the definition of such term.

(d) In no event shall the acquisition cost of any Mortgaged
Property exceed $40,000,000.00.

Section 14.5. Holdback. The Banks have required that Borrower
reserve from the amounts available to be borrowed under this Agreement an
amount necessary to cover (a) the corporate general and administrative
costs of the Borrower, and (b) operating expenses for each Non-Stabilized
Property for which net operating income from such property is insufficient
to cover (such amount pursuant to clause (b) is hereinafter referred to as
the "Negative Carry") as reasonably determined by the Borrower subject to
the approval of the Agent in an amount to cover all such costs for a period
of eighteen (18) months; provided that in the event that as of any date of
determination such amount shall not have been determined as so provided,
then such amount shall be as reasonably determined by Agent (such amount is
hereafter referred to as the "Holdback"). Amounts reserved under the
Holdback shall not bear interest until disbursed. The Borrower may request
a disbursement of amounts reserved pursuant to the Holdback to pay such
costs as such costs are incurred, but at no time shall the amount of the
Holdback be less than an amount sufficient to cover such cost and expenses
for period of six (6) months, and the Borrower shall take such actions as
are necessary (including the prepayment of the Loan to reinstate the
Holdback to such minimum level if it should ever fall below such level).
At such time as a Non-Stabilized Property shall become a Stabilized
Property, the Holdback for such Non-Stabilized Property shall be
eliminated. As of the date of this Agreement, the Holdback is
$6,600,000.00. The Holdback shall be determined by the Agent for each
additional Mortgaged Property that is included as Collateral which is a
Non-Stabilized Property at the time such property is added to the
Collateral. At such time as the Borrower is able to comply with the
covenants set forth in Section 9.1 and 9.2 assuming that general and
administrative costs of the Borrower and the uncapitalized Negative Carry
are added back (with respect to the calculation in Section 9.2) and that
the Holdback has been fully disbursed, the Holdback shall no longer be
required.

Section 14.6. [Intentionally omitted. ]

Section 14.7. Mezzanine Properties.

(a) The Borrower has advised the Agent and the Banks of its
pending acquisition of the Equity Interests, and has requested that the
Agent and the Banks accept the Equity Interests as Collateral upon
consummation of such acquisition by the Borrower. The Agent and the Banks
have agreed that the Equity Interests, subject to terms hereof, may
constitute Potential Collateral, provided that the same shall not
constitute Collateral and shall not increase the Designated Collateral
Value and the amounts available to be borrowed by the Borrower unless each
of the following conditions shall be satisfied:

(i) The Borrower shall execute and deliver to the Agent the
Assignment of Interests, an Indemnity Agreement, a Conditional
Guaranty and all other instruments, documents or agreements, including
Uniform Commercial Code financing statements, as the Agent shall deem
necessary or desirable to perfect the first priority security interest
and, lien on, such Collateral, all of which instruments, documents or
agreements shall be in form and substance satisfactory to the Agent in
its sole discretion;

(ii) No Default or Event of Default has occurred or will
occur if such assets were included within the Collateral;

(iii) The Borrower shall have delivered to the Agent all
Eligible Real Estate Qualification Documents concerning the Mezzanine
Property (assuming for the purposes hereof that the Mezzanine Property
constitutes "Eligible Real Estate" for the purposes of the definition
of the term "Eligible Real Estate Qualification Documents") as Agent
deems necessary;

(iv) the Agent shall have received true and correct copies
of all mortgages, loan agreements or other loan documents affecting
the Property Owner or the Mezzanine Property and approved the same;

(v) the Agent, on behalf of the Banks, shall receive any
other reports, certificates, opinions, rating agency consents,
mortgagee consents and estoppels or other information or documentation
with respect to the Mezzanine Property or the Collateral, and the
Borrower and the Guarantor shall have executed and delivered such
amendments to the Loan Documents, as the Agent, in its sole
discretion, shall deem necessary or desirable; and

(vi) such Collateral is approved by all of the Banks in
their sole judgment.

(b) The Borrower acknowledges that the decision of the Banks to
grant or withhold their consent to the acceptance of such Collateral under
this Section 5.7 shall be based entirely on such factors as the Banks deem
relevant in their sole discretion, including, without limitation, those
enumerated in clauses (a)(i) through (a)(vi) herein above. It shall
further be a condition to the admission of such asset as Collateral that
the Mezzanine Property and the Equity Interests shall otherwise satisfy the
conditions applicable to the Mortgaged Properties in the Loan Documents and
that each and every covenant contained in, and each and every warranty and
representation made in, the Loan Documents with respect to Real Estate
shall be satisfied and true and correct as if the same were applicable to
the Mezzanine Property and the Equity Interests.

(c) In connection with such addition, the Borrower shall pay to
the Agent the reasonable out-of-pocket expenses (including reasonable
attorney's fees and expenses) of the Agent in connection with the addition
of such Collateral.

(d) In no event shall the Designated Collateral Value of the
Equity Interests exceed $40,000,000.00.

Section 15. REPRESENTATIONS AND WARRANTIES.

The Borrower represents and warrants to the Agent and the Banks as
follows.

Section 15.1. Corporate Authority, Etc.

(a) Incorporation; Good Standing. The Borrower is a limited
liability company duly organized pursuant to its organizational documents
and amendments thereto filed with the Secretary of State of Delaware and is
validly existing and in good standing under the laws of the State of
Delaware. Wellsford Commercial is a Maryland real estate investment trust
duly organized pursuant to its organizational documents and amendments
thereto filed with the Secretary of State of Maryland and is validly
existing and in good standing under the laws of the State of Maryland.
WHWEL is a limited partnership duly organized pursuant to its
organizational documents and amendments thereto filed with the Secretary of
State of Delaware and is validly existing and in good standing under the
laws of the State of Delaware. Each of the Borrower and the Members (i)
has all requisite power to own its property and conduct its business as now
conducted and as presently contemplated, and (ii) is in good standing as a
foreign entity and is duly authorized to do business in the jurisdictions
where the Mortgaged Property and other Collateral is located and in each
other jurisdiction where a failure to be so qualified in such other
jurisdiction could have a materially adverse effect on the business, assets
or financial condition of such Person. Wellsford Commercial is a real
estate investment trust in full compliance with and entitled to the
benefits of Section 856 of the Code. The Borrower is a qualified
subsidiary of a real estate investment trust within the meaning of the
Code.

(b) Subsidiaries. Each of the Subsidiaries of the Borrower and
the Guarantor (i) is a corporation, limited partnership, limited liability
company or trust duly organized under the laws of its State of organization
and is validly existing and in good standing under the laws thereof, (ii)
has all requisite power to own its property and conduct its business as now
conducted and as presently contemplated and (iii) is in good standing and
is duly authorized to do business in each jurisdiction where Mortgaged
Property and other Collateral held by it is located and in each other
jurisdiction where a failure to be so qualified could have a materially
adverse effect on the business, assets or financial condition of the
Borrower or such Subsidiary or any Guarantor.

(c) Authorization. The execution, delivery and performance of
this Agreement and the other Loan Documents to which the Borrower, the
Members or the Guarantor are or are to become a party and the transactions
contemplated hereby and thereby (i) are within the authority of the such
Person, (ii) have been duly authorized by all necessary proceedings on the
part of such Person, (iii) do not and will not conflict with or result in
any breach or contravention of any provision of law, statute, rule or
regulation to which such Person is subject or any judgment, order, writ,
injunction, license or permit applicable to such Person, (iv) do not and
will not conflict with or constitute a default (whether with the passage of
time or the giving of notice, or both) under any provision of the articles
of incorporation , bylaws, or other charter documents of, or any agreement
or other instrument binding upon, such Person, or any of its properties,
and (v) do not and will not result in or require the imposition of any lien
or other encumbrance on any of the properties, assets or rights of the
Borrower or the Guarantor, as applicable.

(d) Enforceability. The execution and delivery of this
Agreement and the other Loan Documents to which the Borrower, the Members
or the Guarantor are or are to become a party are valid and legally binding
obligations of such Person enforceable in accordance with the respective
terms and provisions hereof and thereof, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors' rights and
except to the extent that availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.

Section 15.2. Governmental Approvals. The execution, delivery and
performance by the Borrower, the Members and the Guarantor of this
Agreement and the other Loan Documents and the transactions contemplated
hereby and thereby do not require the approval or consent of, or filing
with, any governmental agency or authority other than those already
obtained and the filing of the Security Documents in the appropriate
records office with respect thereto.

Section 15.3. Title to Properties: Leases. Except as indicated on
Schedule 6.3 hereto, the Borrower and its Subsidiaries own all of the
assets reflected in the consolidated balance sheet of the Borrower as at
the Balance Sheet Date or acquired since that date (except property and
assets sold or otherwise disposed of in the ordinary course of business
since that date), subject to no rights of others, including any mortgages,
leases, conditional sales agreements, title retention agreements, liens or
other encumbrances except Permitted Liens.

Section 15.4. Financial Statements. The Borrower has furnished to
each of the Banks: (a) an unaudited consolidated balance sheet and an
unaudited consolidated statement of income and cash flows of the Borrower
and its Subsidiaries as of the Balance Sheet Date certified by Borrower's
chief financial or chief accounting officer to have been prepared in
accordance with generally accepted accounting principles and to fairly
present the financial condition of the Borrower and its Subsidiaries as at
the close of business on the dates thereof (subject to year-end
adjustments), and (b) to the extent there is any Mortgaged Property, an
unaudited consolidated statement of operating income for the Mortgaged
Property satisfactory in form to the Agent and certified by the Borrower's
chief financial or accounting officer as fairly presenting the operating
income for such parcels for such periods. Such balance sheet and
statements of income, stockholder's equity and cash flows have been
prepared in accordance with generally accepted accounting principles and
fairly present the financial condition of the Borrower and its Subsidiaries
as of such dates and the results of the operations of the Borrower and its
Subsidiaries for such periods. There are no liabilities, contingent or
otherwise, of the Borrower or any of its Subsidiaries involving material
amounts not disclosed in said financial statements and the related notes
thereto. The all-in acquisition costs of the initial Mortgaged Properties
are as set forth on Schedule 6.4 hereto. The all-in acquisition costs of
the Real Estate of the Term Loan Borrower as of the date hereof are as set
forth on Schedule 6.4 hereto.

Section 15.5. No Material Changes. Since the Balance Sheet Date,
there has occurred no materially adverse change in the financial condition
or business of the Borrower and its Subsidiaries taken as a whole as shown
on or reflected in the consolidated balance sheet of the Borrower as of the
Balance Sheet Date, or its consolidated statement of income or cash flows
for the fiscal year then ended, other than changes in the ordinary course
of business that have not had any materially adverse effect either
individually or in the aggregate on the business or financial condition of
the Borrower and its Subsidiaries taken as a whole.

Section 15.6. Franchises, Patents, Copyrights, Etc. The Borrower,
its Subsidiaries, the Members and the Guarantor possess all franchises,
patents, copyrights, trademarks, trade names, service marks, licenses and
permits, and rights in respect of the foregoing, adequate for the conduct
of their business substantially as now conducted without known conflict
with any rights of others.

Section 15.7. Litigation. Except as stated on Schedule 6.7 there
are no actions, suits, proceedings or investigations of any kind pending or
threatened against the Borrower or any of its Subsidiaries, any Member or
any Guarantor before any court, tribunal or administrative agency or board
that, if adversely determined, might, either in any case or in the
aggregate, materially adversely affect the properties, assets, financial
condition or business of such Person or materially impair the right of such
Person to carry on business substantially as now conducted by it, or result
in any liability not adequately covered by insurance, or for which adequate
reserves are not maintained on the balance sheet of such Person, or which
question the validity of this Agreement or any of the other Loan Documents,
any action taken or to be taken pursuant hereto or thereto or any lien or
security interest created or intended to be created pursuant hereto or
thereto, or which will adversely affect the ability of such Person to pay
and perform the Obligations in the manner contemplated by this Agreement
and the other Loan Documents.

Section 15.8. No Materially Adverse Contracts, Etc. None of the
Borrower, any of its Subsidiaries, any Member nor any Guarantor is subject
to any charter, corporate or other legal restriction, or any judgment,
decree, order, rule or regulation that has or is expected in the future to
have a materially adverse effect on the business, assets or financial
condition of the Borrower or any Guarantor. None of the Borrower, any of
its Subsidiaries, any Member nor any Guarantor is a party to any contract
or agreement that has or is expected, in the judgment of the officers of
such Person, to have any materially adverse effect on the business of any
of them.

Section 15.9. Compliance with Other Instruments, Laws, Etc. None of
the Borrower, any of its Subsidiaries, any Member nor any Guarantor is in
violation of any provision of its charter or other organizational
documents, by-laws, or any agreement or instrument to which it may be
subject or by which it or any of its properties may be bound or any decree,
order, judgment, statute, license, rule or regulation, in any of the
foregoing cases in a manner that could result in the imposition of
substantial penalties or materially and adversely affect the financial
condition, properties or business of such Person.

Section 15.10. Tax Status. The Borrower, each of its Subsidiaries,
the Members and the Guarantor (a) has made or filed all federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject, (b) has paid all taxes and other
governmental assessments and charges shown or determined to be due on such
returns, reports and declarations, except those being contested in good
faith and by appropriate proceedings and (c) has set aside on its books
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due
by the taxing authority of any jurisdiction, and the officers of such
Person know of no basis for any such claim.

Section 15.11. No Event of Default. No Default or Event of Default
has occurred and is continuing.

Section 15.12. Holding Company and Investment Company Acts. None of
the Borrower, any of its Subsidiaries, any Member nor any Guarantor is a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company", as such terms are defined in the Public
Utility Holding Company Act of 1935; nor is it an "investment company", or
an "affiliated company" or a "principal underwriter" of an "investment
company", as such terms are defined in the Investment Company Act of 1940.

Section 15.13. Absence of UCC Financing Statements, Etc. Except
with respect to Permitted Liens, there is no financing statement, security
agreement, chattel mortgage, real estate mortgage or other document filed
or recorded with any filing records, registry, or other public office, that
purports to cover, affect or give notice of any present or possible future
lien on, or security interest or security title in, any property of the
Borrower or its Subsidiaries or rights thereunder.

Section 15.14. Setoff, Etc. The Collateral and the rights of the
Agent and the Banks with respect to the Collateral are not subject to any
setoff, claims, withholdings or other defenses. The Borrower is the owner
of the Collateral free from any lien, security interest, encumbrance or
other claim or demand, except Permitted Liens.

Section 15.15. Certain Transactions. None of the officers,
trustees, directors, or employees of the Borrower, any of its Subsidiaries,
any Member or any Guarantor is a party to any transaction with the Borrower
or any of its Subsidiaries (other than for services as employees, officers
and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of
real or personal property to or from, or otherwise requiring payments to or
from any officer, trustee, director or such employee or, to the knowledge
of the Borrower, any corporation, partnership, trust or other entity in
which any officer, trustee, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.

Section 15.16. Employee Benefit Plans. The Borrower and each ERISA
Affiliate are in compliance in all material respects with ERISA. There has
been no Reportable Event with respect to any Employee Benefit Plan,
Multiemployer Plan or Guaranteed Pension Plan. There has been no
institution of proceedings or any other action by PBGC, the Borrower or any
ERISA Affiliate to terminate or withdraw or partially withdraw from any
such Plan under any circumstances which could lead to material liabilities
to PBGC or, with respect to a Multiemployer Plan, the "Reorganization" or
"Insolvency" (as each such term is defined in ERISA) of any such Plan. To
the best of the Borrower's knowledge, no "prohibited transaction" (within
the meaning of Section 406 of ERISA or Section 4975 of the Code) has
occurred with respect to any such Plan, and neither the consummation of the
transactions provided for in this Agreement and compliance by the Borrower
with the provisions hereof and the other Loan Documents will involve any
prohibited transaction.

Section 15.17. ERISA Taxes. Neither the Borrower nor any ERISA
Affiliate thereof is currently and the Borrower has no reason to believe
that the Borrower or any ERISA Affiliate thereof will become subject to any
liability (other than routine expenses or contributions relating to the
Plans set forth on Schedule 6.17, if timely paid), tax or penalty
whatsoever to any person whomsoever, which liability, tax or penalty is
directly or indirectly related to any Plans set forth on Schedule 6.17
including, but not limited to, any penalty or liability arising under Title
I or Title IV of ERISA, any tax or penalty resulting from a loss of
deduction under Section s 404 and 419 of the Code, or any tax or penalty
under Chapter 43 of the Code, except such liabilities, taxes or penalties
(when taken as a whole) as will not have a material adverse effect on the
Borrower or upon its financial condition, assets, business, operations,
liabilities or prospects.

Section 15.18. Plan Payments. The Borrower and each ERISA Affiliate
has made full and timely payment of all amounts (i) required to be
contributed under the terms of each Plan set forth on Schedule 6.17 and
applicable law and (ii) required to be paid as expenses of each Plan set
forth on Schedule 6.17. No Plan set forth on Schedule 6.17 would have an
"amount of unfunded benefit liabilities" (as defined in Section
4001(a)(18) of ERISA) if such Plan were terminated as of the date on which
this representation and warranty is made.

Section 15.19. Regulations U and X. No portion of any Loan is to be
used for the purpose of purchasing or carrying any "margin security" or
"margin stock" as such terms are used in Regulations U and X of the Board
of Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.

Section 15.20. Environmental Compliance. The Borrower or an
affiliate or agent thereof has conducted or caused to be conducted Phase I
environmental site assessments with respect to the past usage and condition
of the Real Estate and the operations conducted thereon, and the Borrower
is familiar with the present condition and usage of the Real Estate and the
operations conducted thereon and, based upon such reports and knowledge,
makes the following representations and warranties.

(a) With respect to the Mortgaged Property, and to the best of
the Borrower's knowledge with respect to any other Real Estate, none of the
Borrower, its Subsidiaries, any Member, any Guarantor or any operator of
the Real Estate, or any operations thereon is in violation, or alleged
violation, of any judgment, decree, order, law, license, rule or regulation
pertaining to environmental matters, including without limitation, those
arising under the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 as amended ("CERCLA"), the Superfund Amendments and Reauthorization
Act of 1986 ("▇▇▇▇"), the Federal Clean Water Act, the Federal Clean Air
Act, the Toxic Substances Control Act, or any state or local statute,
regulation, ordinance, order or decree relating to the environment
(hereinafter "Environmental Laws"), which violation involves the Mortgaged
Property or involves other Real Estate and would have a material adverse
effect on the environment or the business, assets or financial condition of
the Borrower, any of its Subsidiaries, any Member or any Guarantor.

(b) None of the Borrower, any of its Subsidiaries. any Member
nor any Guarantor has received any notice from any third party including,
without limitation, any federal, state or local governmental authority, (i)
that it has been identified by the United States Environmental Protection
Agency ("EPA") as a potentially responsible party under CERCLA with respect
to a site listed on the National Priorities List, 40 C.F.R. Part ▇▇▇
▇▇▇▇▇▇▇▇ ▇ (1986); (ii) that any hazardous waste, as defined by 42 U.S.C.
Section 9601(5), any hazardous substances as defined by 42 U.S.C. Section
9601(14), any pollutant or contaminant as defined by 42 U.S.C. Section
9601(33) or any toxic substances, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws ("Hazardous
Substances") which it has generated, transported or disposed of have been
found at any site at which a federal, state or local agency or other third
party has conducted or has ordered that the Borrower, any of its
Subsidiaries, any Member or any Guarantor conduct a remedial investigation,
removal or other response action pursuant to any Environmental Law; or
(iii) that it is or shall be a named party to any claim, action, cause of
action, complaint, or legal or administrative proceeding (in each case,
contingent or otherwise) arising out of any third party's incurrence of
costs, expenses, losses or damages of any kind whatsoever in connection
with the release of Hazardous Substances.

(c) With respect to the Mortgaged Property, and to the best of
the Borrower's knowledge with respect to any other Real Estate, except as
specifically set forth in the environmental site assessment reports for the
initial Mortgaged Properties, each of which has been provided to the Agent
on or about the date hereof or, in the case of Real Estate acquired after
the date hereof, the environmental site assessment reports with respect
thereto provided to the Agent under Section 7.4(h): (i) no portion of the
Real Estate has been used for the handling, processing, storage or disposal
of Hazardous Substances except in accordance with applicable Environmental
Laws, and no underground tank or other underground storage receptacle for
Hazardous Substances is located on any portion of the Mortgaged Property;
(ii) in the course of any activities conducted by the Borrower, its
Subsidiaries, the Members, the Guarantor or the operators of its
properties, no Hazardous Substances have been generated or are being used
on the Real Estate except in the ordinary course of business and in
accordance with applicable Environmental Laws; (iii) there has been no past
or present releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping (a
"Release") or threatened Release of Hazardous Substances on, upon, into or
from the Mortgaged Property, or, to the best of the Borrower's knowledge,
on, upon, into or from the other properties of the Borrower, its
Subsidiaries or the Guarantor, which Release would have a material adverse
effect on the value of any of the Real Estate or adjacent properties or the
environment; (iv) to the best of the Borrower's knowledge, there have been
no Releases on, upon, from or into any real property in the vicinity of any
of the Real Estate which, through soil or groundwater contamination, may
have come to be located on, and which would have a material adverse effect
on the value of, the Real Estate; and (v) to the best of Borrower's
knowledge and belief, any Hazardous Substances that have been generated on
any of the Real Estate have been transported off-site only by carriers
having an identification number issued by the EPA or approved by a state or
local environmental regulatory authority having jurisdiction regarding the
transportation of such substance and, to the best knowledge of the Borrower
without independent investigation, treated or disposed of only by treatment
or disposal facilities maintaining valid permits as required under all
applicable Environmental Laws, which transporters and facilities have been
and are, to the best of the Borrower's knowledge, operating in compliance
with such permits and applicable Environmental Laws.

(d) Neither the Borrower, its Subsidiaries, the Members, the
Guarantor, the Mortgaged Property nor any other Real Estate is required by
any applicable Environmental Law to perform Hazardous Substances site
assessments, or remove or remediate Hazardous Substances, or give notice to
any governmental agency or record or deliver to other Persons an
environmental disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby, or as a condition to
the recording of the Security Deed or to the effectiveness of any other
transactions contemplated hereby.

Section 15.21. Subsidiaries. Schedule 6.21 sets forth all of the
Subsidiaries of the Borrower. The form and jurisdiction of organization of
each of the Subsidiaries, and the Borrower's ownership interest therein, is
set forth in said Schedule 6.21.

Section 15.22. Leases. The Borrower has delivered to the Agent true
copies of the Leases and any amendments thereto relating to the Mortgaged
Property.

Section 15.23. Loan Documents. All of the representations and
warranties made by or on behalf of the Borrower, its Subsidiaries, the
Members or the Guarantor made in the Loan Documents to which it is a party
or any document or instrument delivered to the Agent or the Banks pursuant
to or in connection with any of such Loan Documents are true and correct in
all material respects, and no such party has failed to disclose such
information as is necessary to make such representations and warranties not
misleading.

Section 15.24. Mortgaged Property. The Borrower makes the following
representations and warranties concerning each Mortgaged Property:

(a) Off-Site Utilities. All water, sewer, electric, gas,
telephone and other utilities necessary for the use and operation of the
Mortgaged Property are installed to the property lines of the Mortgaged
Property through dedicated public rights-of-way or through perpetual
private easements approved by the Agent with respect to which the
applicable Security Deed creates a valid and enforceable first lien and,
except in the case of drainage facilities, are connected to the Building
located thereon with valid permits and are adequate to service the Building
in compliance with applicable law.

(b) Access, Etc. The streets abutting the Mortgaged Property
are dedicated and accepted public roads, to which the Mortgaged Property
has direct access by trucks and other motor vehicles and by foot, or are
perpetual private ways (with direct access by trucks and other motor
vehicles and by foot to public roads) to which the Mortgaged Property has
direct access approved by the Agent and with respect to which the
applicable Security Deed creates a valid and enforceable first lien. All
private ways providing access to the Mortgaged Property are zoned in a
manner which will permit access to the Building over such ways by trucks
and other commercial and industrial vehicles.

(c) Independent Building. The Building is fully independent in
all respects including, without limitation, in respect of structural
integrity, heating, ventilating and air conditioning, plumbing, mechanical
and other operating and mechanical systems, and electrical, sanitation and
water systems, all of which are connected directly to off-site utilities
located in public streets or ways or through insured perpetual private
easements approved by the Agent. The Building is located on a lot which is
separately assessed for purposes of real estate tax assessment and payment.
The Building, all Building Service Equipment and all paved or landscaped
areas related to or used in connection with the Building are, except as
specifically disclosed on a Survey delivered to the Agent prior to the date
hereof, located wholly within the perimeter lines of the lot or lots on
which the Mortgaged Property is located.

(d) Condition of Building; No Asbestos. Except as may otherwise
be specifically disclosed in any written engineering report furnished or
caused to be furnished by the Borrower to the Agent prior to the date
hereof, the Building is structurally sound, in good repair and free of
material defects in materials and workmanship. All major building systems
located within the Building, including without limitation heating,
ventilating and air conditioning, electrical, sprinkler, plumbing or other
mechanical systems, are in good working order and condition. No asbestos
is located in or on the Building, except for nonfriable asbestos or
contained friable asbestos which is being monitored and/or remediated in
accordance with the recommendations of an Environmental Engineer.

(e) Building Compliance with Law. Except as may otherwise be
specifically disclosed on the face of any certificate of occupancy
delivered to the Agent prior to the date hereof, the Building as presently
constructed, used, occupied and operated does not violate any applicable
federal or state law or governmental regulation, or any local ordinance,
order or regulation, including but not limited to laws, regulations, or
ordinances relating to zoning, building use and occupancy, subdivision
control, fire protection, health, sanitation, safety, handicapped access,
historic preservation and protection, tidelands, wetlands, flood control
and Environmental Laws. The Building complies with applicable zoning laws
and regulations and is not a so-called non-conforming use. The zoning laws
permit use of the Building for its current use. There is such number of
parking spaces on the lot or lots on which the Mortgaged Property is
located as is adequate under the zoning laws and regulations to permit use
of the Building for its current use.

(f) No Required Mortgaged Property Consents, Permits, Etc.
Neither the Borrower, any of its Subsidiaries nor the Guarantor, as
applicable, has received notice of, or has knowledge of, any approvals,
consents, licenses, permits, utility installations and connections
(including, without limitation, drainage facilities), curb cuts and street
openings, required by applicable laws, rules, ordinances or regulations or
any agreement affecting the Mortgaged Property for the maintenance,
operation, servicing and use of the Mortgaged Property or the Building for
its current use which have not been granted, effected, or performed and
completed (as the case may be), or any fees or charges therefor which have
not been fully paid, or which are no longer in full force and effect. No
such approvals, consents, permits or licenses (including, without
limitation, any railway siding agreements) will terminate, or become void
or voidable or terminable on any foreclosure sale of the Mortgaged Property
pursuant to the Security Deed. To the best knowledge of the Borrower,
there are no outstanding notices, suits, orders, decrees or judgments
relating to zoning, building use and occupancy, fire, health, sanitation or
other violations affecting, against, or with respect to, the Mortgaged
Property or any part thereof.

(g) Insurance. Neither the Borrower, any of its Subsidiaries
nor the Guarantor has received any notice from any insurer or its agent
requiring performance of any work with respect to the Mortgaged Property or
canceling or threatening to cancel any policy of insurance, and the
Mortgaged Property complies with the requirements of all carriers of
insurance on the Mortgaged Property.

(h) Real Property Taxes; Special Assessments. There are no
unpaid or outstanding real estate or other taxes or assessments on or
against the Mortgaged Property or any part thereof which are payable by the
Borrower, any Subsidiary of the Borrower or the Guarantor (except only real
estate or other taxes or assessments, that are not yet due and payable).
The Borrower has delivered or caused to be delivered to the Agent, or has
requested from the appropriate authorities and will deliver to the Agent
promptly upon receipt, true and correct copies of real estate tax bills for
the Mortgaged Property for the past three fiscal tax years. No abatement
proceedings are pending with reference to any real estate taxes assessed
against the Mortgaged Property. There are no betterment assessments or
other special assessments presently pending with respect to any portion of
the Mortgaged Property, and none of Borrower, any of its Subsidiaries nor
the Guarantor has received any notice of any such special assessment being
contemplated.

(i) Historic Status. The Building is not a historic structure
or landmark and neither the Building nor the Mortgaged Property is located
within any historic district pursuant to any federal, state or local law or
governmental regulation.

(j) Eminent Domain; Casualty. There are no pending eminent
domain proceedings against the Mortgaged Property or any part thereof, and,
to the knowledge of the Borrower, no such proceedings are presently
threatened or contemplated by any taking authority. Neither the Mortgaged
Property, the Building nor any part thereof is now damaged or injured as a
result of any fire, explosion, accident, flood or other casualty.

(k) Leases. An accurate and complete Rent Roll and summary
thereof in a form reasonably satisfactory to the Agent as of the date of
inclusion of each Mortgaged Property in the Collateral (or such other
recent date as may be acceptable to the Agent) with respect to all Leases
of any portion of the Mortgaged Property has been provided to the Agent.
The Leases reflected on such Rent Roll constitute as of the date thereof
the sole agreements and understandings relating to leasing or licensing of
space at such Mortgaged Property and in the Building relating thereto.
There are no occupancies, rights, privileges or licenses in or to any
Mortgaged Property or portion thereof other than pursuant to the Leases
reflected in Rent Rolls previously furnished to the Agent for such
Mortgaged Property. Except as set forth in each Rent Roll, the Leases
reflected therein are in full force and effect in accordance with their
respective terms, without any payment default or any other material default
thereunder, nor are there any defenses, counterclaims, offsets, concessions
or rebates available to any tenant thereunder, and none of the Borrower,
any of its Subsidiaries nor the Guarantor has given or made, any notice of
any payment or other material default, or any claim, which remains uncured
or unsatisfied, with respect to any of the Leases. The Rent Rolls
furnished to the Banks accurately and completely set forth all rents
payable by and security, if any, deposited by tenants, no tenant having
paid more than one month's rent in advance. The Borrower has reviewed the
estoppel certificates delivered by the tenants of the Mortgaged Property to
the Agent and such estoppel certificates are true and correct in all
material respects. All tenant improvements or work to be done, furnished
or paid for by the Borrower, any of its Subsidiaries or the Guarantor, as
applicable, or credited or allowed to a tenant, for, or in connection with,
the Building pursuant to any Lease has been completed and paid for or
provided for in a manner satisfactory to the Agent. No material leasing,
brokerage or like commissions, fees or payments are due from the Borrower,
any of its Subsidiaries or the Guarantor in respect of the Leases.

(l) Management Agreements. Borrower has delivered to Agent
true, correct and complete copies of the Management Agreements for the
Mortgaged Property. To the best knowledge of the Borrower, there are no
material claims or any bases for material claims in respect of the
Mortgaged Property or its operation by any party to any Management
Agreement.

(m) Other Material Real Property Agreements; No Options. There
are no material agreements pertaining to the Mortgaged Property, any
Building thereon or the operation or maintenance of either thereof other
than as described in this Agreement (including the Schedules hereto) or
otherwise disclosed in writing to the Agent and the Banks by the Borrower;
and no person or entity has any right or option to acquire the Mortgaged
Property on any Building thereon or any portion thereof or interest
therein.

Section 15.25. Brokers. Neither the Borrower nor any of its
Subsidiaries has engaged or otherwise dealt with any broker, finder or
similar entity in connection with this Agreement or the Loans contemplated
hereunder.

Section 15.26. Fair Consideration. The Borrower (and, as
applicable, the Guarantor), by receiving the benefits under this Agreement
is receiving "reasonably equivalent value" within the meaning of Section
548 of the Bankruptcy Code, Title 11, U.S.C.A. and "fair consideration"
within the meaning of Consolidated Laws of New York Annotated, Chapter 12,
Article 10, Section 272 in exchange for the delivery of the Security
Documents to Agent, and but for the willingness of the Guarantors to
guaranty the Loan, Borrower would be unable to obtain the financing
contemplated hereunder which financing will enable Borrower and its
Subsidiaries (including the Guarantors) to have available financing to
conduct and expand their business. The transaction evidenced by this
Agreement and the other Loan Documents is in the best interests of the
Borrower, the Members and the Guarantors and the creditors of such Persons.

Section 15.27. Solvency. As of the Closing Date and after giving
affect to the transactions contemplated by this Agreement and the other
Loan Documents, including all of the Loans made or to be made hereunder
neither the Borrower nor any Guarantor is insolvent on a balance sheet
basis, the sum of such Person's assets exceeds the sum of such Person's
liabilities, the Borrower and each Guarantor is able to pay its debts as
they become due, and the Borrower and each Guarantor has sufficient capital
to carry on its business.

Section 15.28. No Bankruptcy Filing. None of the Borrower, the
Members nor the Guarantors is contemplating either the filing of a petition
by it under any state or federal bankruptcy or insolvency laws or the
liquidation of its assets or property, and Borrower has no knowledge of any
Person contemplating the filing of any such petition against it or any of
such other Persons.

Section 15.29. No Fraudulent Intent. Neither the execution and
delivery of this Agreement or any of the other Loan Documents nor the
performance of any actions required hereunder or thereunder is being
undertaken by the Borrower, any Member or any Guarantor with or as a result
of any actual intent by any of such Persons to hinder, delay or defraud any
entity to which any of such Persons is now or will hereafter become
indebted.

Section 15.30. Other Debt. None of the Borrower, the Guarantor nor
any of their respective Subsidiaries is in default in the payment of any
other Indebtedness or under any agreement, mortgage, deed of trust,
security agreement, financing agreement, indenture or lease to which any of
them is a party. The Borrower is not a party to or bound by any agreement,
instrument or indenture that may require the subordination in right or time
of payment of any of the Obligations to any other indebtedness or
obligation of the Borrower. The Borrower has provided to the Agent copies
of all agreements, mortgages, deeds of trust, financing agreements or other
material agreements binding upon Borrower, the Guarantor or their
respective properties and entered into by such Person as of the date of
this Agreement with respect to any Indebtedness of such Person.

Section 15.31. Members. Wellsford Commercial and WHWEL are the sole
members of the Borrower. Wellsford Real Properties is the sole legal,
equitable and beneficial owner of Wellsford Commercial.

Section 16. AFFIRMATIVE COVENANTS OF THE BORROWER.

The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any Bank has any obligation to make any Loans:

Section 16.1. Punctual Payment. The Borrower will duly and
punctually pay or cause to be paid the principal and interest on the Loans
and all interest and fees provided for in this Agreement, all in accordance
with the terms of this Agreement and the Notes as well as all other sums
owing pursuant to the Loan Documents.

Section 16.2. Maintenance of Office. The Borrower will maintain its
chief executive office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ County, New
York, New York, or at such other place in the United States of America as
the Borrower shall designate upon prior written notice to the Agent and the
Banks, where notices, presentations and demands to or upon the Borrower in
respect of the Loan Documents may be given or made.

Section 16.3. Records and Accounts. The Borrower will (a) keep, and
cause each of its Subsidiaries to keep, true and accurate records and books
of account in which full, true and correct entries will be made in
accordance with generally accepted accounting principles and (b) maintain
adequate accounts and reserves for all taxes (including income taxes),
depreciation and amortization of its properties and the properties of its
Subsidiaries, contingencies and other reserves. Neither the Borrower nor
any of its Subsidiaries shall, without the prior written consent of the
Majority Banks, (x) make any material changes to the accounting procedures
used by such Person in preparing the financial statements and other
information described in Section 6.4 (excluding the conversion of a
Subsidiary's accounting procedures such that they are consistent with the
Borrower's accounting procedures) or (y) change its fiscal year.

Section 16.4. Financial Statements, Certificates and Information.
The Borrower will deliver or cause to be delivered to each of the Banks:

(a) as soon as practicable, but in any event not later than 90
days after the end of each fiscal year of the Borrower, the audited
consolidated balance sheet of the Borrower and its Subsidiaries at the end
of such year, and the related audited consolidated statements of income,
changes in shareholders' equity and cash flows for such year, each setting
forth in comparative form the figures for the previous fiscal year and all
such statements to be in reasonable detail, prepared in accordance with
generally accepted accounting principles, and accompanied by an auditor's
report prepared without qualification by Ernst & Young LLP or by another
"Big Six" accounting firm, together with the unaudited annual operating
statement of each Mortgaged Property and the Mezzanine Property (which
statement shall also be reconciled to the budget for the Mortgaged Property
and the Mezzanine Property), together with a certification by Borrower's
chief financial or chief accounting officer that the information contain in
such statement fairly presents the operations of the Mortgaged Property and
the Mezzanine Property for such period, and any other information the Banks
may reasonably need to complete a financial analysis of the Borrower;

(b) as soon as practicable, but in any event not later than 45
days after the end of each fiscal quarter of the Borrower (including the
fourth quarter), copies of the unaudited consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such quarter, and the
related unaudited consolidated statements of income, changes in
shareholders' equity and cash flows for the portion of the Borrower's
fiscal year then elapsed, and the unaudited operating statement for the
Mortgaged Property and the Mezzanine Property for such quarter and year-to-
date (which statement shall also be reconciled to the budget for the
Mortgaged Property and the Mezzanine Property), all in reasonable detail
and prepared in accordance with generally accepted accounting principles,
together with a certification by the principal financial or accounting
officer of the Borrower that the information contained in such financial
statements fairly presents the financial position of the Borrower and its
Subsidiaries and the operations of the Mortgaged Property and the Mezzanine
Property on the date thereof (subject to year-end adjustments);

(d) as soon as practicable, but in any event not later than 45
days after the end of each fiscal quarter of the Borrower (including the
fourth fiscal quarter in each year), copies of a consolidated statement of
Operating Cash Flow for such fiscal quarter and year-to-date for the
Borrower and its Subsidiaries and a statement of Net Operating Income for
such fiscal quarter and year-to-date for each of the Mortgaged Properties
and the Mezzanine Property, prepared in a manner reasonable satisfactory to
the Agent, together with a certification by the Borrower's chief financial
or chief accounting officer that the information contained in such
statement fairly presents the Operating Cash Flow of the Borrower and its
Subsidiaries and the Net Operating Income of the Mortgaged Property and the
Mezzanine Property for such period;

(e) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement (a "Compliance
Certificate") certified by the principal financial or accounting officer of
the Borrower in the form of Exhibit C hereto setting forth in reasonable
detail computations evidencing compliance with the covenants contained in
Section 9, and (if applicable) reconciliations to reflect changes in
generally accepted accounting principles since the Balance Sheet Date;

(f) concurrently with the delivery of the financial statements
described in subsections (b) and (c) above, a certificate signed by the
President or Chief Financial Officer of the Borrower to the effect that,
having read this Agreement, and based upon an examination which they deem
sufficient to enable them to make an informed statement, there does not
exist any Default or Event of Default, or if such Default or Event of
Default has occurred, specifying the facts with respect thereto;

(g) contemporaneously with the filing, mailing or releasing
thereof, copies of all press releases and all material of a financial
nature filed with the SEC, if applicable, or sent to all of the members of
the Borrower;

(h) as soon as practicable but in any event not later than 45
days after the end of each fiscal quarter of the Borrower (including the
fourth fiscal quarter in each year), updated Rent Rolls with respect to the
Mortgaged Property and the Mezzanine Property and a summary of each Rent
Roll in form reasonably satisfactory to the Agent;

(i) not later than 30 days following each acquisition of an
interest in Real Estate by the Borrower or any of its Subsidiaries (which
for the purposes of this Section 7.4(i) shall include the Investments
described in Section 8.3(j)), each of the following: (i) a description of
the property acquired, (ii) an environmental site assessment prepared by an
Environmental Engineer stating no material qualification with respect to
such Real Estate or property, and (iii) a Compliance Certificate prepared
using the financial statements of the Borrower most recently provided or
required to be provided to the Banks under Section 6.4 or this Section
7.4 adjusted in the best good-faith estimate of the Borrower to give effect
to such acquisition and demonstrating that no Default or Event of Default
with respect to the covenants referred to therein shall exist after giving
effect to such acquisition;

(j) as soon as practicable, but in any event not later than 30
days prior to the beginning of each calendar year, the annual operating
budget for each of the Mortgaged Property and the Mezzanine Property, in
form and substance satisfactory to the Majority Banks;

(k) promptly after they are filed with the Internal Revenue
Service, copies of all annual federal income tax returns and amendments
thereto of the Borrower, its Members and the Guarantor;

(l) not later than 45 days after the end of each fiscal quarter
of the Borrower (including the fourth fiscal quarter in each year), the
market comparable study conducted by the Borrower's internal staff or its
property managers, and at other times copies of such market studies
relating to the Mortgaged Property and the Mezzanine Property as are from
time to time prepared by or on behalf of the Borrower; and

(m) from time to time such other financial data and information
in the possession of the Borrower (including without limitation auditors'
management letters, property inspection and environmental reports and
information as to zoning and other legal and regulatory changes affecting
the Borrower) as the Agent may reasonably request.

Section 16.5. Notices.

(a) Defaults. The Borrower will promptly notify the Agent in
writing of the occurrence of any Default or Event of Default. If any
Person shall give any notice or take any other action in respect of a
claimed default (whether or not constituting an Event of Default) under
this Agreement or under any note, evidence of indebtedness, indenture or
other obligation to which or with respect to which the Borrower, any of its
Subsidiaries, any Member or any Guarantor is a party or obligor, whether as
principal or surety, and such default would permit the holder of such note
or obligation or other evidence of indebtedness to accelerate the maturity
thereof, which acceleration would have a material adverse effect on the
Borrower, any Member or any Guarantor, the Borrower shall forthwith give
written notice thereof to the Agent and each of the Banks, describing the
notice or action and the nature of the claimed default.

(b) Environmental Events. The Borrower will promptly give
notice to the Agent (i) upon the Borrower or the Guarantor obtaining
knowledge of any potential or known Release, or threat of Release, of any
Hazardous Substances at or from the Mortgaged Property or the Mezzanine
Property; (ii) of any violation of any Environmental Law that the Borrower,
any of its Subsidiaries, any Member or any Guarantor, reports in writing or
is reportable by such Person in writing (or for which any written report
supplemental to any oral report is made) to any federal, state or local
environmental agency and (iii) upon becoming aware thereof, of any inquiry,
proceeding, investigation, or other action, including a notice from any
agency of potential environmental liability, of any federal, state or local
environmental agency or board, that in either case involves the Mortgaged
Property or the Mezzanine Property or has the potential to materially
affect the assets, liabilities, financial conditions or operations of such
Person or the Agent's liens on the Collateral pursuant to the Security
Documents.

(c) Notification of Claims Against Collateral. The Borrower
will, immediately upon becoming aware thereof, notify the Agent in writing
of any setoff, claims (including, with respect to the Mortgaged Property,
environmental claims), withholdings or other defenses to which any of the
Collateral, or the rights of the Agent or the Banks with respect to the
Collateral, are subject.

(d) Notice of Litigation and Judgments. The Borrower will give
notice to the Agent in writing within 15 days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation
and proceedings affecting the Borrower or any of its Subsidiaries or any
Member or any Guarantor or to which any of such Persons is or is to become
a party involving an uninsured claim against any of such Persons that could
reasonably be expected to have a materially adverse effect on any of such
Persons and stating the nature and status of such litigation or
proceedings. The Borrower will give notice to the Agent, in writing, in
form and detail satisfactory to the Agent and each of the Banks, within ten
days of any judgment not covered by insurance, whether final or otherwise,
against the Borrower, any of its Subsidiaries, any Member or any Guarantor
in an amount in excess of $250,000.

(e) Notice of Proposed Sales, Encumbrances, Refinance or
Transfer of Non-Mortgaged Property. The Borrower will give notice to the
Agent of any proposed or completed sale, encumbrance, refinance or transfer
of any Real Estate or other Investment described in Section 8.3 (j) of the
Borrower or its Subsidiaries other than Mortgaged Property within any
fiscal quarter of the Borrower, such notice to be submitted together with
the Compliance Certificate provided or required to be provided to the Banks
under Section 7.4 with respect to such fiscal quarter. The Compliance
Certificate shall with respect to any proposed or completed sale,
encumbrance, refinance or transfer be adjusted in the best good-faith
estimate of the Borrower to give effect to such sale, encumbrance,
refinance or transfer and demonstrate that no Default or Event of Default
with respect to the covenants referred to therein shall exist after giving
effect to such sale, encumbrance, refinance or transfer. Notwithstanding
the foregoing, in the event of any sale, encumbrance, refinance or transfer
of any Real Estate or other Investment described in Section 8.3(j) of the
Borrower or its Subsidiaries other than the Mortgaged Property involving an
amount in excess of $10,000,000.00, the Borrower shall promptly give notice
to the Agent of such transaction, which notice shall be accompanied by a
Compliance Certificate prepared using the financial statements of the
Borrower most recently provided or required to be provided to the Banks
under Section 6.4 or Section 7.4 adjusted as provided in the preceding
sentence.

(f) Notification of Banks. Promptly after receiving any notice
under this Section 7.5, the Agent will forward a copy thereof to each of
the Banks, together with copies of any certificates or other written
information that accompanied such notice.

Section 16.6. Existence; Maintenance of Properties.

(a) The Borrower will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence as a
Delaware limited liability company. The Borrower will cause each of its
Subsidiaries to do or cause to be done all things necessary to preserve and
keep in full force and effect its legal existence. The Borrower will do or
cause to be done all things necessary to preserve and keep in full force
all of its rights and franchises and those of its Subsidiaries. The
Borrower will, and will cause each of its Subsidiaries to, continue to
engage primarily in the respective businesses now conducted by each of them
and in related businesses.

(b) The Borrower (i) will cause all of its properties and those
of its Subsidiaries used or useful in the conduct of its business or the
business of its Subsidiaries to be maintained and kept in good condition,
repair and working order (ordinary wear and tear excepted) and supplied
with all necessary equipment, and (ii) will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof in
all cases in which the failure so to do would have a material adverse
effect on the condition of the applicable Mortgaged Property or other
Collateral or on the financial condition, assets or operations of the
Borrower or any Guarantor.

Section 16.7. Insurance.

(a) The Borrower will, at its expense, procure and maintain, or
cause to be procured and maintained, for the benefit of the Borrower and
the Agent, insurance policies issued by such insurance companies, in such
amounts, in such form and substance, and with such coverages, endorsements,
deductibles and expiration dates as are acceptable to the Agent, providing
the following types of insurance covering the Mortgaged Property:

(i) "All Risks" property insurance (including broad form
flood, broad form earthquake and comprehensive boiler and machinery
coverages) on each Building and the contents therein of the Borrower
and its Subsidiaries in an amount not less than one hundred percent
(100%) of the full replacement cost of each Building and the contents
therein of the Borrower and its Subsidiaries, with deductibles not to
exceed $50,000 for any one occurrence, with a replacement cost
coverage endorsement, and, if requested by the Agent, a contingent
liability from operation of building laws endorsement in such amounts
as the Agent may require. Full replacement cost as used herein means
the cost of replacing the Building (exclusive of the cost of
excavations, foundations and footings below the lowest basement floor)
and the contents therein of the Borrower and its Subsidiaries without
deduction for physical depreciation thereof;

(ii) During the course of construction or repair of any
Building having a cost in excess of $1,000,000, the insurance required
by clause (i) above shall be written on a builders risk, completed
value, non-reporting form, meeting all of the terms required by clause
(i) above, covering the total value of work performed, materials,
equipment, machinery and supplies furnished, existing structures, and
temporary structures being erected on or near the Real Estate,
including coverage against collapse and damage during transit or while
being stored off-site, and containing a soft costs (including loss of
rents) coverage endorsement and a permission to occupy endorsement;

(iii) Flood insurance if at any time any Building is
located in any federally designated "special hazard area" (including
any area having special flood, mudslide and/or flood-related erosion
hazards, and shown on a Flood Hazard Boundary Map or a Flood Insurance
Rate Map published by the Federal Emergency Management Agency as Zone
A, AO, Al-30, AE, A99, AH, ▇▇, ▇▇-30, VE, V, M or E) and the broad
form flood coverage required by clause (i) above is not available, in
an amount equal to the full replacement cost or the maximum amount
then available under the National Flood Insurance Program;

(iv) Rent loss insurance in an amount sufficient to recover
at least the total estimated gross receipts from all sources of
income, including without limitation, rental income, for the Real
Estate for a twelve month period;

(v) Commercial general liability insurance against claims
for personal injury (to include, without limitation, bodily injury and
personal and advertising injury) and property damage liability, all on
an occurrence basis, if commercially available, with such coverages as
the Agent may reasonably request (including, without limitation,
contractual liability coverage, completed operations coverage for a
period of two years following completion of construction of any
improvements on the Real Estate, and coverages equivalent to an ISO
broad form endorsement), with a general aggregate limit of not less
than $1,000,000, a completed operations aggregate limit of not less
than $1,000,000, and a combined single "per occurrence" limit of not
less than $1,000,000 for bodily injury, property damage and medical
payments;

(vi) During the course of construction or repair of any
improvements on the Real Estate in excess of $1,000,000, owner's
contingent or protective liability insurance covering claims not
covered by or under the terms or provisions of the insurance required
by clause (v) above;

(vii) Employers liability insurance (with respect to the
Borrower's employees only);

(viii) Umbrella liability insurance with limits of not
less than $50,000,000 to be in excess of the limits of the insurance
required by clauses (v), (vi) and (vii) above, with coverage at least
as broad as the primary coverages of the insurance required by clauses
(v), (vi) and (vii) above, with any excess liability insurance to be
at least as broad as the coverages of the lead umbrella policy. All
such policies shall be endorsed to provide defense coverage
obligations;

(ix) Workers' compensation insurance for all employees of
the Borrower or its Subsidiaries engaged on or with respect to the
Real Estate; and

(x) Such other insurance in such form and in such amounts
as may from time to time be required by the Majority Banks against
other insurable hazards and casualties which at the time are commonly
insured against in the case of properties of similar character and
location to the Real Estate.

The Borrower shall pay or cause to be paid all premiums on insurance
policies. The insurance policies with respect to all Mortgaged Property
provided for in clauses (v), (vi) and (viii) above with respect to all
Mortgaged Property shall name the Agent and each Bank as an additional
insured. The insurance policies provided for in clauses (i), (ii), (iii)
and (iv) above shall name the Agent as mortgagee and loss payee, shall be
first payable in case of loss to the Agent, and shall contain mortgage
clauses and lender's loss payable endorsements in form and substance
acceptable to the Agent. The Borrower shall deliver duplicate originals or
certified copies of all such policies to the Agent, and the Borrower shall
promptly furnish to the Agent all renewal notices and evidence that all
premiums or portions thereof then due and payable have been paid. At least
15 days prior to the expiration date of the policies, the Borrower shall
deliver to the Banks evidence of continued coverage, including a
certificate of insurance, as may be satisfactory to the Agent.

(b) All policies of insurance required by this Agreement shall
contain clauses or endorsements to the effect that (i) no act or omission
of either the Borrower or any Subsidiary of the Borrower or anyone acting
for the Borrower or any Subsidiary of the Borrower shall affect the
validity or enforceability of such insurance insofar as the Agent is
concerned, (ii) the insurer waives any right of setoff, counterclaim,
subrogation, or any deduction in respect of any liability of the Borrower
or any Subsidiary of the Borrower and the Agent, (iii) such insurance is
primary and without right of contribution from any other insurance which
may be available, (iv) such policies shall not be modified, canceled or
terminated prior to the scheduled expiration date thereof without the
insurer thereunder giving at least 15 days prior written notice to the
Agent by certified or registered mail, and (v) that the Agent or the Banks
shall not be liable for any premiums thereon or subject to any assessments
thereunder, and shall in all events be in amounts sufficient to avoid any
coinsurance liability.

(c) The insurance required by this Agreement may be effected
through a blanket policy or policies covering additional locations and
property of the Borrower, its Subsidiaries, and other Persons not included
in the Mortgaged Property, provided that such blanket policy or policies
comply with all of the terms and provisions of this Section 7.7 and
contain endorsements or clauses reasonably satisfactory to the Agent.

(d) All policies of insurance required by this Agreement shall
be issued by companies licensed to do business in the State where the
policy is issued and also in the states where the Real Estate is located
and having a rating in Best's Key Rating Guide of at least "A" and a
financial size category of at least "VIII".

(e) Neither the Borrower nor any Subsidiary of the Borrower
shall carry separate insurance, concurrent in kind or form or contributing
in the event of loss, with any insurance required under this Agreement
unless such insurance complies with the terms and provisions of this
Section 7.7.

(f) In the event of any loss or damage to the Mortgaged
Property, the Borrower shall give immediate written notice to the insurance
carrier and the Agent, and the Agent shall furnish a copy of such notice
promptly to each of the Banks. The Borrower may make proof of loss and
adjust and compromise any claim under insurance policies which is of an
amount not more than $1,000,000.00 so long as no Event of Default has
occurred and is continuing and so long as such claim is pursued diligently
and in good faith. The Borrower hereby irrevocably authorizes and empowers
the Agent, at the Agent's option in the Agent's sole discretion or at the
request of the Majority Banks in their sole discretion, as attorney in fact
for the Borrower, to make proof of any loss except as provided in the
preceding sentence, to adjust and compromise any claim under insurance
policies, to appear in and prosecute any action arising from such insurance
policies, to collect and receive insurance proceeds, and to deduct
therefrom the Agent's expenses incurred in the collection of such proceeds.
If the Mortgaged Property is acquired by the Agent or any nominee through
foreclosure, deed in lieu of foreclosure or otherwise is acquired from the
owner thereof, all right, title and interest of the owner of such Mortgaged
Property in and to any insurance policies and unearned premiums thereon and
in and to the proceeds thereof resulting from loss or damage to the
Mortgaged Property prior to such sale or acquisition shall pass to the
Agent or any other successor in interest to the owner or purchaser or
grantee of the Mortgaged Property.

(g) Subject to the terms of the following sentence, the Borrower
authorizes the Agent, at the Agent's option or at the request of the
Majority Bank's in their sole discretion, to (i) apply the balance of such
proceeds to the payment of the Obligations whether or not then due, or
(ii) if the Agent or the Majority Banks shall require the reconstruction or
repair of the Mortgaged Property, to hold the balance of such proceeds to
be used to pay all taxes, charges, sewer use fees, water rates and
assessments which may be imposed upon the Mortgaged Property and the
Obligations as they become due during the course of reconstruction or
repair of the Mortgaged Property and to reimburse the Borrower, in
accordance with such terms and conditions as Agent may prescribe, for the
cost of such reconstruction or repair of the Mortgaged Property, and on
completion of such reconstruction or repair to pay any excess funds to the
Borrower so long as no Default or Event of Default has occurred and is
continuing, or if a Default or Event of Default has occurred and is
continuing, to apply any of the excess to the payment of the Obligations.
Notwithstanding the foregoing, the Agent shall make such net proceeds
available to the Borrower to reconstruct and repair the Mortgaged Property,
in accordance with such terms and conditions as the Agent may prescribe for
the disbursement of such proceeds to assure completion of such
reconstruction or repair provided that (A) no Default or Event of Default
shall have occurred and be continuing, (B) the Borrower shall have provided
to Agent additional cash security in an amount equal to the amount
reasonably estimated by the Agent to be the amount in excess of such
proceeds which will be required to complete such repair or restoration, and
(C) the Agent shall determine that such repair or reconstruction can be
completed prior to the Maturity Date, (D) the cost of such reconstruction
or repair is not estimated by the Agent to exceed fifty percent (50%) of
the Appraised Value of such Mortgaged Property, (E) the Agent shall have
approved the plans and specifications for such repair or restoration and
determined that the repaired or restored Mortgaged Property will provide
the Banks with adequate security for the Obligations, and (F) the Borrower
shall have delivered to the Agent written agreements binding upon all
tenants or other parties having present or future rights to possession of
any portion of the Mortgaged Property or having any right to require
repair, restoration or completion of the Mortgaged Property or any portion
thereof, agreeing upon a date for delivery of possession of the Mortgaged
Property or their respective portions thereof, or for such required repair,
restoration or completion, to permit time which is sufficient in the
judgment of the Agent for such repair or restoration and approving the
plans and specifications for such repair or restoration, or other evidence
satisfactory to the Agent that none of such tenants or other parties may
terminate their Leases as a result of such casualty or have a right to
approve the plans and specifications for such repair or restoration.

(h) The Borrower, at its expense, will procure and maintain or
cause to be procured and maintained, insurance covering the Borrower and
the Real Estate other than the Mortgaged Property in such amounts and
against such risks and casualties as are customary for properties of
similar character and location, due regard being given to the type of
improvements thereon, their construction, location, use and occupancy.

(i) The Borrower shall provide or cause to be provided to the
Agent for the benefit of the Banks Title Policies for all of the Mortgaged
Property which shall at all times be in an aggregate amount of not less
than the initial Designated Collateral Value attributable to such Mortgaged
Property (provided that a Title Policy for an individual Mortgaged Property
need not equal the aggregate Designated Collateral Value). Each Title
Policy shall also contain, to the extent available, a tie-in endorsement
aggregating the insurance coverage provided under all of the policies with
tie-in endorsements.

Section 16.8. Taxes. The Borrower and each Subsidiary will duly pay
and discharge, or cause to be paid and discharged, before the same shall
become overdue, all taxes, assessments and other governmental charges
imposed upon it and upon the Mortgaged Property and the other Real Estate
and Collateral, sales and activities, or any part thereof, or upon the
income or profits therefrom, as well as all claims for labor, materials, or
supplies that if unpaid might by law become a lien or charge upon any of
its property; provided that any such tax, assessment, charge, levy or claim
need not be paid if the validity or amount thereof shall currently be
contested in good faith by appropriate proceedings and if the Borrower or
such Subsidiary shall have set aside on its books adequate reserves with
respect thereto; and provided, further, that forthwith upon the
commencement of proceedings to foreclose any lien that may have attached as
security therefor, the Borrower and each Subsidiary of the Borrower either
(i) will provide a bond issued by a surety reasonably acceptable to the
Majority Banks and sufficient to stay all such proceedings or (ii) if no
such bond is provided, will pay each such tax, assessment, charge, levy or
claim.

Section 16.9. Inspection of Properties and Books. The Borrower
shall permit the Banks, through the Agent or any representative designated
by the Agent, at the Borrower's expense to visit and inspect any of the
properties of the Borrower or any of its Subsidiaries, to examine the books
of account of the Borrower and its Subsidiaries (and to make copies thereof
and extracts therefrom) and to discuss the affairs, finances and accounts
of the Borrower and its Subsidiaries with, and to be advised as to the same
by, its officers, all at such reasonable times and intervals as the Agent
or any Bank may reasonably request. The Banks shall use good faith efforts
to coordinate such visits and inspections so as to minimize the
interference with and disruption to the Borrower's normal business
operations.

Section 16.10. Compliance with Laws, Contracts, Licenses, and
Permits. The Borrower will comply with, and will cause each of its
Subsidiaries to comply in all respects with (i) all applicable laws and
regulations now or hereafter in effect wherever its business is conducted,
including all Environmental Laws, (ii) the provisions of its corporate
charter, and other charter documents and bylaws, (iii) all agreements and
instruments to which it is a party or by which it or any of its properties
may be bound, (iv) all applicable decrees, orders, and judgments, and
(v) all licenses and permits required by applicable laws and regulations
for the conduct of its business or the ownership, use or operation of its
properties. If at any time while any Loan or Note is outstanding or the
Banks have any obligation to make Loans hereunder, any authorization,
consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in
order that the Borrower may fulfill any of its obligations hereunder, the
Borrower will immediately take or cause to be taken all steps necessary to
obtain such authorization, consent, approval, permit or license and furnish
the Agent and the Banks with evidence thereof.

Section 16.11. Use of Proceeds. The Borrower will use the proceeds
of the Loans solely to provide short-term financing (a) for the acquisition
of fee interests by Borrower or, subject to the approval of the Majority
Banks, by a Subsidiary of the Borrower in Real Estate which is located in
the northeastern United States and utilized principally as commercial
office space, (b) for Capital Improvement Projects to Real Estate owned by
the Borrower, (c) for the repayment of Indebtedness incurred or assumed by
the Borrower or any Subsidiary of the Borrower in connection with the
acquisitions and investments described in Section 7.11(a), and to repay
third party indebtedness of the Borrower or its Subsidiaries incurred or
assumed in connection with assets acquired prior to the Closing Date,
(d) subject to the terms of this Agreement, for the acquisition of the
Equity Interests, (e) for reasonable transaction costs related to the
transactions referred to in the preceding clause (a) and (d), (f) up to
$10,000,000 for general working capital purposes, (g) to repay the
indebtedness permitted by Section 8.1(j); and (h) for such other purposes
as the Majority Banks may approve. Notwithstanding the foregoing, in no
event shall the proceeds of the Loan be used to acquire any asset that as a
part of such transaction or in a related transaction will be or is to
become subject to a lien against such asset other than a lien in favor of
the Agent and the Banks under the Loan Documents. All of the proceeds of
the advance for the property commonly known as Mountain Heights shall be
used to reduce the Indebtedness described in Section 8.1(j).

Section 16.12. Further Assurances. The Borrower will cooperate
with, and will cause each of its Subsidiaries and the Guarantor to
cooperate with, the Agent and the Banks and execute such further
instruments and documents as the Banks or the Agent shall reasonably
request to carry out to their satisfaction the transactions contemplated by
this Agreement and the other Loan Documents.

Section 16.13. Management Agreements. The Borrower shall provide
prompt written notice to the Agent of any termination or material
modification or amendment of any Management Agreement, provided that,
without the prior consent of the Majority Banks, none of the Management
Agreements shall be modified or amended to increase the fees payable
thereunder. The Borrower shall not enter into any Management Agreement or
otherwise manage any of the Mortgaged Property except with property and
leasing managers having sufficient expertise and resources to manage such
properties as class A office buildings (or if such buildings are Non-
Stabilized Properties, as class B office buildings), and on leasing terms
and conditions no less favorable to the Borrower than are contained in the
Management Agreements delivered to the Agent prior to the date hereof or
are otherwise on then commercially reasonable terms.

Section 16.14. ERISA Compliance. The Borrower will not permit the
present value of all employee benefits vested in all Employee Benefit
Plans, Multiemployer Plans and Guaranteed Pension Plans maintained by the
Borrower and any ERISA Affiliate thereof to exceed the present value of the
assets allocable to such vested benefits by an amount greater than
$500,000.00 in the aggregate. Neither the Borrower nor any ERISA Affiliate
thereof will at any time permit any such Plan maintained by it to engage in
any "prohibited transaction" as such term is defined in Section 4975 of
the Code or Section 406 of ERISA, incur any "accumulated funding
deficiency" as such term is defined in Section 302 of ERISA, whether or
not waived, or terminate any such Plan in any manner which could result in
the imposition of a lien on the property of the Borrower or the Guarantor
pursuant to Section 4068 of ERISA.

Section 16.15. Distribution of Income to the Borrower. The Borrower
shall cause all of its Subsidiaries to promptly distribute to the Borrower
(but not less frequently than once each fiscal quarter of the Borrower),
whether in the form of dividends, distributions or otherwise, all profits,
proceeds or other income relating to or arising from its Subsidiaries' use,
operation, financing, refinancing, sale or other disposition of their
respective assets and properties after (a) the payment by each Subsidiary
of its operating expenses and debt service for such quarter and (b) the
establishment of reasonable reserves for the payment of operating expenses
not paid on at least a quarterly basis and capital improvements to be made
to such Subsidiary's assets and properties approved by such Subsidiary in
the ordinary course of business consistent with its past practices.

Section 16.16. More Restrictive Agreements. Without limiting the
terms of Section 8.1, should the Borrower or any Guarantor enter into or
modify any agreements or documents pertaining to any existing or future
Indebtedness, Debt Offering or Equity Offering, which agreements or
documents include covenants (whether affirmative or negative), warranties,
representations, defaults or events of default (or any other provision
which may have the same practical effect as any of the foregoing) which are
individually or in the aggregate more restrictive against the Borrower, the
Guarantor or their respective Subsidiaries than those set forth herein or
in any of the other Loan Documents, the Borrower shall promptly notify the
Agent and, if requested by the Majority Banks, the Borrower, the Agent, and
the Majority Banks shall (and if applicable, the Borrower shall cause the
Guarantor to) promptly amend this Agreement and the other Loan Documents to
include some or all of such more restrictive provisions as determined by
the Majority Banks in their sole discretion. Notwithstanding the
foregoing, this Section 7.16 shall not apply to covenants contained in any
agreements or documents evidencing or securing Non-Recourse Indebtedness or
covenants in agreements or documents relating to recourse Indebtedness that
relate only to specific Real Estate that is collateral for such
Indebtedness.

Section 16.17. Compliance. The Borrower shall operate its business,
and shall cause each of its Subsidiaries to operate its business, in
compliance with the terms and conditions of this Agreement and the other
Loan Documents. Wellsford Commercial shall at all times comply with all
requirements of applicable laws necessary to maintain REIT Status.

Section 16.18. [Intentionally Omitted].

Section 16.19. Leasing. The Borrower will take or cause to be taken
all reasonable steps within the power of the Borrower to market and lease
the leasable area of the Mortgaged Properties. The Borrower will not lease
all or any portion of the Mortgaged Property or amend, supplement or
otherwise modify, terminate or cancel, or accept the surrender of, or
consent to the assignment or subletting of, or grant any concessions to or
waive the performance of any obligations of any tenant, lessee or licensee
under, any now existing or future Lease without the prior written consent
of the Agent; provided, however, with respect to any Lease which covers
less than 25,000 square feet or provides less than three percent (3%) of
the Operating Cash Flow of the Mortgaged Properties, whichever is less, the
Borrower may amend, supplement or otherwise modify, terminate or cancel, or
accept the surrender of, or consent to the assignment or subletting of, or
granting concessions to or waive the performance of any obligations of any
tenant, lessee or licensee under any such Lease in the ordinary course of
business consistent with sound leasing and management practices for similar
properties. The Borrower shall furnish the Agent with executed copies of
all Leases hereafter made, and all Leases now or hereafter entered into
will be in form and substance subject to the approval of the Agent. Upon
the Agent's request, the Borrower shall make a separate and distinct
assignment to the Agent as additional security, of all Leases hereafter
made. Notwithstanding the foregoing, following the Agent's approval of the
"Leasing Parameters" (as hereinafter defined) for the Mortgaged Property,
then the Borrower may, without the prior approval of the Agent and (prior
to the initial syndication) Goldman, enter into any Lease provided that the
Lease covers less than 25,000 square feet or provides less than three
percent (3%) of the Operating Cash Flow of the Mortgaged Properties, is a
bona fide arm's length lease entered into in the ordinary course of
business with a party unaffiliated with the Borrower, Guarantor or any
Member, falls within the Leasing Parameters and is on the standard lease
form (without material modification or addition). In connection with any
Lease to be approved by the Agent as provided herein, the Borrower shall
submit to the Agent for its approval the identity of the tenant and a
summary of the major terms of the Lease (which terms shall include without
limitation those matters included within the Leasing Parameters)
(collectively the "Major Terms"), and Agent's approval shall be limited to
the approval of the Major Terms, and provided further that any such terms
submitted to the Agent for approval shall be deemed approved by the Agent
unless the Agent expressly disapproves the same by written notice delivered
to the Borrower (which shall state the reasons for disapproval) within five
(5) business days after the date of the delivery of such Lease to the Agent
for approval and all other information reasonably requested by the Agent in
order to make such determination. Following the approval by the Agent of
the Major Terms, the Borrower shall be permitted to enter into a lease to
such tenant which falls within the Major Terms. As used herein, "Leasing
Parameters" means leasing parameters for the Mortgaged Property approved by
the Agent and (prior to the initial syndication) Goldman. Leasing
Parameters shall include, without limitation, the minimum and maximum term,
the minimum rent, tax and operating stops, tenant standard improvements,
tenant allowances and other tenant inducements and leasing commissions, and
shall be approved by the Agent prior to the commencement of each calendar
year during the term of the Notes. The Borrower will require, and each
Lease will require, each tenant to enter into a Nondisturbance, Attornment
and Subordination Agreement and to provide an estoppel certificate
satisfactory to the Agent upon the request of the Agent. The Agent shall
have the right, and the Borrower hereby authorizes the Agent, to
communicate directly with any tenant under a Lease to verify any
information delivered to the Agent by the Borrower concerning such tenant
or such tenant's Lease.

Section 16.20. Plan Assets, etc. The Borrower will do, or cause to
be done, all things necessary to ensure that it will not be deemed to hold
Plan Assets at any time. Each owner of an equity interest in Borrower has
certified to Borrower and the Banks, and Borrower shall require each
proposed transferee of any equity interest in Borrower, as a condition
precedent to such transfer, to certify to Borrower and the Banks, that the
source of funds used or to be used by it to acquire its interest in
Borrower are not assets of any plan subject to Title I of ERISA or Section
4975 of the Code and are not deemed to be assets of any such plan under the
U.S. Department of Labor's plan asset regulations. Borrower has provided
the Agent with a copy of each such certification from each owner of an
equity interest in Borrower and will promptly provide the Agent with a copy
of each such certification from each proposed transferee.

Section 17. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.

The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any of the Banks has any obligation to make any Loans:

Section 17.1. Restrictions on Indebtedness. The Borrower will not,
and will not permit any of its Subsidiaries to, create, incur, assume,
guarantee or be or remain liable, contingently or otherwise, with respect
to any Indebtedness other than:

(a) Indebtedness to the Banks arising under any of the Loan
Documents;

(b) current liabilities of the Borrower or its Subsidiaries
incurred in the ordinary course of business but not incurred through (i)
the borrowing of money, or (ii) the obtaining of credit except for credit
on an open account basis customarily extended and in fact extended in
connection with normal purchases of goods and services;

(c) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the
extent that payment therefor shall not at the time be required to be made
in accordance with the provisions of Section 7.8;

(d) Indebtedness in respect of judgments or awards that have
been in force for less than the applicable period for taking an appeal so
long as execution is not levied thereunder or in respect of which the
Borrower or the relevant Subsidiary shall at the time in good faith be
prosecuting an appeal or proceedings for review and in respect of which a
stay of execution shall have been obtained pending such appeal or review;

(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary
course of business;

(f) Subject to Section 9, recourse Indebtedness (other than the
Obligations) of the Borrower or any Subsidiary of the Borrower (other than
Term Loan Borrower) in the aggregate principal amount not greater than
$15,000,000.00, provided that neither the Borrower nor any of such
Subsidiaries shall incur any Indebtedness pursuant to this Section 8.1(f)
unless it shall have provided to the Agent a statement that no Default or
Event of Default exists and a Compliance Certificate demonstrating that the
Borrower will be in compliance with its covenants referred to therein after
giving effect to such incurrence. At such time as the amount determined by
performing the calculation set forth in Section 9.4 exceeds
$75,000,000.00, the $15,000,000.00 threshold in this Section 8.1(f) shall
be increased to $20,000,000.00;

(g) Non-recourse Indebtedness of the Borrower or any Subsidiary
of the Borrower (other than Term Loan Borrower), provided that:

(i) in the event that the property to be financed is a Non-
Stabilized Property, such Indebtedness is incurred in connection
with the acquisition of such Non-Stabilized Property and the
credit facility established pursuant to this Agreement is fully
funded, or if not fully funded, the Indebtedness to be incurred
in connection with an acquisition or refinance is in excess of
the remaining amounts available to be funded pursuant to this
Agreement (assuming such Real Estate was to become a Mortgaged
Property) or the Banks do not approve the addition of such
property as a Mortgaged Property; or

(ii) in the event that the property to be financed is a
Stabilized Property, such Indebtedness is incurred when (A) the
credit facility established pursuant to the Term Loan Agreement
is fully funded, or (B) if not fully funded, the Indebtedness to
be incurred in connection with the refinance of such Stabilized
Property (1) is in excess of the amounts remaining to be funded
under the Term Loan Agreement (assuming such Real Estate was to
become collateral for the Term Loan) and the "Banks" under the
Term Loan Agreement shall have been afforded a reasonable
opportunity to increase the amounts available under the Term Loan
Agreement to accommodate such funding (provided that the "Banks"
under the Term Loan Agreement need not be afforded an opportunity
to increase the amount of the Term Loan to accommodate a funding
in the event that such "Banks" shall have previously been
afforded an opportunity to increase the Term Loan to accommodate
a funding), or if the "Banks" under the Term Loan Agreement have
approved such increase, the Banks have not approved such
increase, or (2) the Term Loan Banks have rejected the request to
include such property as collateral for the Term Loan Agreement;

provided that neither the Borrower nor any of its Subsidiaries shall incur
any Indebtedness pursuant to this Section 8.1(g) unless it shall have
provided to the Agent a statement that no Default or Event of Default
exists and a Compliance Certificate demonstrating that the Borrower will be
in compliance with its covenants referred to therein and the covenants set
forth in Section 9 of the Term Loan Agreement after giving effect to such
incurrence;

(h) Subject to Section 9, Non-recourse Indebtedness existing
prior to an acquisition of Real Estate by the Borrower of its Subsidiaries
(other than the Term Loan Borrower) that is assumed by Borrower or any of
its Subsidiaries (other than Term Loan Borrower) in connection with the
acquisition of Real Estate, provided that neither the Borrower nor any of
such Subsidiaries shall incur any Indebtedness pursuant to this Section
8.1(h) unless it shall have provided to the Agent a statement that no
Default or Event of Default exists and a Compliance Certificate
demonstrating that the Borrower will be in compliance with its covenants
referred to therein after giving effect to such incurrence;

(i) Subject to Section 9, Indebtedness of the Term Loan
Borrower under the Term Loan Agreement not to exceed $225,000,000.00;
provided that in no event shall the principal Indebtedness under the Term
Loan Agreement and the Total Commitment exceed $375,000,000.00; and

(j) Indebtedness of the Borrower to Wellsford Real Properties in
a principal amount not to exceed $4,253,087.00 after the initial funding of
the Loans, which Indebtedness shall be subordinate to the repayment of the
Obligations pursuant to a subordination agreement satisfactory to the
Agent.

Section 17.2. Restrictions on Liens, Etc. The Borrower will not,
and will not permit any of its Subsidiaries to, (a) create or incur or
suffer to be created or incurred or to exist any lien, encumbrance,
mortgage, pledge, negative pledge, charge, restriction or other security
interest of any kind upon any of its property or assets of any character
whether now owned or hereafter acquired, or upon the income or profits
therefrom; (b) transfer any of its property or assets or the income or
profits therefrom for the purpose of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to payment
of its general creditors; (c) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title
retention or purchase money security agreement, device or arrangement;
(d) suffer to exist for a period of more than 30 days after the same shall
have been incurred any Indebtedness or claim or demand against it that if
unpaid might by law or upon bankruptcy or insolvency, or otherwise, be
given any priority whatsoever over its general creditors; (e) sell, assign,
pledge or otherwise transfer any accounts, contract rights, general
intangibles, chattel paper or instruments, with or without recourse; or (f)
incur or maintain any obligation to any holder of Indebtedness of the
Borrower or such Subsidiary which prohibits the creation or maintenance of
any lien securing the Obligations (collectively "Liens"); provided that the
Borrower and any Subsidiary of the Borrower owning Collateral may create or
incur or suffer to be created or incurred or to exist:

(i) liens in favor of the Borrower on all or part of the assets
of Subsidiaries of the Borrower securing Indebtedness owing by
Subsidiaries of the Borrower to the Borrower (provided that no such
liens shall be permitted with respect to any of the Collateral);

(ii) liens on properties to secure taxes, assessments and other
governmental charges or claims for labor, material or supplies in
respect of obligations not overdue;

(iii) deposits or pledges made in connection with, or to
secure payment of, workers' compensation, unemployment insurance, old
age pensions or other social security obligations;

(iv) liens on properties other than the Mortgaged Property or any
other Collateral in respect of judgments, awards or indebtedness, the
Indebtedness with respect to which is permitted by Section 8.1(d),
(f), (g), (h) or (i);

(v) encumbrances on properties other than the Mortgaged Property
and Mezzanine Property consisting of easements, rights of way, zoning
restrictions, restrictions on the use of real property and defects and
irregularities in the title thereto, landlord's or lessor's liens
under leases to which the Borrower or a Subsidiary of the Borrower is
a party, and other minor non-monetary liens or encumbrances none of
which interferes materially with the use of the property affected in
the ordinary conduct of the business of the Borrower and its
Subsidiaries, which defects do not individually or in the aggregate
have a materially adverse effect on the business of the Borrower
individually or of the Borrower and its Subsidiaries on a consolidated
basis;

(vi) liens in favor of the Agent and the Banks under the Loan
Documents; and

(vii) liens and encumbrances on a Mortgaged Property
expressly permitted under the terms of the Security Deed relating
thereto.

Section 17.3. Restrictions on Investments. The Borrower will not,
and will not permit any of its Subsidiaries to, make or permit to exist or
to remain outstanding any Investment except Investments in:

(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of purchase
by the Borrower or its Subsidiary;

(b) marketable direct obligations of any of the following:
Federal Home Loan Mortgage Corporation, Student Loan Marketing Association,
Federal Home Loan Banks, Federal National Mortgage Association, Government
National Mortgage Association, Bank for Cooperatives, Federal Intermediate
Credit Banks, Federal Financing Banks, Export-Import Bank of the United
States, Federal Land Banks, or any other agency or instrumentality of the
United States of America;

(c) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total assets in
excess of $100,000,000; provided, however, that the aggregate amount at any
time so invested with any single bank having total assets of less than
$1,000,000,000 will not exceed $200,000;

(d) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any State which at the time of purchase are rated by ▇▇▇▇▇'▇
Investors Service, Inc. or by Standard & Poor's Corporation at not less
than "P 1" if then rated by ▇▇▇▇▇'▇ Investors Service, Inc., and not less
than "A 1", if then rated by Standard & Poor's Corporation;

(e) mortgage-backed securities guaranteed by the Government
National Mortgage Association, the Federal National Mortgage Association or
the Federal Home Loan Mortgage Corporation and other mortgage-backed bonds
which at the time of purchase are rated by ▇▇▇▇▇'▇ Investors Service, Inc.
or by Standard & Poor's Corporation at not less than "Aa" if then rated by
▇▇▇▇▇'▇ Investors Service, Inc. and not less than "AA" if then rated by
Standard & Poor's Corporation;

(f) repurchase agreements having a term not greater than 90 days
and fully secured by securities described in the foregoing subsection (a),
(b) or (e) with banks described in the foregoing subsection (c) or with
financial institutions or other corporations having total assets in excess
of $500,000,000;

(g) shares of so-called "money market funds" registered with the
SEC under the Investment Company Act of 1940 which maintain a level
per-share value, invest principally in investments described in the
foregoing subsections (a) through (f) and have total assets in excess of
$50,000,000;

(h) Investments in fee interests in Real Estate located in the
northeastern United States utilized principally for commercial office
space, including ▇▇▇▇▇▇▇ money deposits relating thereto and transaction
costs;

(i) Investments in Term Loan Borrower provided it is wholly-
owned by the Borrower and other wholly-owned Subsidiaries of the Borrower
which own Investments of the type described in Section 8.3(h) or (j);
provided that in no event shall the aggregate value of such Investments
(excluding Real Estate transferred by Borrower to Term Loan Borrower in
connection with a refinancing of the Indebtedness secured thereby in
accordance with this Agreement) exceed fifteen percent (15%) of the
Borrower's Consolidated Total Assets;

(j) Investments in leasehold interests in properties located in
the northeastern United States which are used principally for commercial
office purposes under ground leases having not less than fifty (50) years
of the leasehold term remaining at the time of acquisition thereof by the
Borrower;

(k) Investments in Investment Partnerships which own Investments
of the type described in Section 8.3(h) or (j); provided that the
aggregate value of such Investments shall not exceed ten percent (10%) of
Borrower's Consolidated Total Assets; and

(l) Subject to the term of this Agreement, Investments in the
Equity Interests.

Section 17.4. Merger, Consolidation. The Borrower will not, and
will not permit any of its Subsidiaries to, become a party to any merger,
consolidation or other business combination, or agree to effect any asset
acquisition, stock acquisition or other acquisition without the prior
written consent of the Majority Banks except (i) the merger or
consolidation of one or more of the Subsidiaries of the Borrower with and
into the Borrower, (ii) the merger or consolidation of two or more
Subsidiaries of the Borrower, and (iii) the merger or consolidation of one
or more unaffiliated corporations or other entities with and into the
Borrower where (a) the Borrower is the surviving entity, (b) immediately
after the merger or consolidation, the original shareholders of the
Borrower at the time of such consolidation or merger own at least fifty-one
percent (51%) of the Voting Interests in the Borrower (which for the
purposes hereof shall include satisfaction of the provisions of clauses (a)
and (b) of the definition of the term "Voting Interests"), (c) the purpose
of the consolidation or merger is the acquisition of Real Estate used for
commercial office purposes located in the northeastern United States,
(d) the assets of such other entity do not exceed fifty percent (50%) of
the Consolidated Total Assets of the Borrower as determined prior to such
merger, and (e) immediately prior to such merger the Borrower shall have
provided to the Agent a written statement that no Default or Event of
Default exists and a Compliance Certificate demonstrating that the Borrower
will be in compliance with the covenants referred to therein after giving
effect to said merger.

Section 17.5. Sale and Leaseback. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any arrangement, directly
or indirectly, whereby the Borrower or any Subsidiary of the Borrower shall
sell or transfer any Real Estate owned by it in order that then or
thereafter the Borrower or any Subsidiary shall lease back such Real
Estate.

Section 17.6. Compliance with Environmental Laws. The Borrower will
not, and will not permit any of its Subsidiaries, to do any of the
following: (a) use any of the Real Estate or Mezzanine Property or any
portion thereof as a facility for the handling, processing, storage or
disposal of Hazardous Substances, except for small quantities of Hazardous
Substances used in the ordinary course of business and in compliance with
all applicable Environmental Laws, (b) cause or permit to be located on any
of the Real Estate or Mezzanine Property any underground tank or other
underground storage receptacle for Hazardous Substances except in full
compliance with Environmental Laws, (c) generate any Hazardous Substances
on any of the Real Estate or Mezzanine Property except in full compliance
with Environmental Laws, (d) conduct any activity at any Real Estate or
Mezzanine Property or use any Real Estate or Mezzanine Property in any
manner so as to cause a Release of Hazardous Substances on, upon or into
the Real Estate or Mezzanine Property or any surrounding properties or any
threatened Release of Hazardous Substances which might give rise to
liability under CERCLA or any other Environmental Law, or (e) directly or
indirectly transport or arrange for the transport of any Hazardous
Substances (except in compliance with all Environmental Laws).

The Borrower shall:

(i) in the event of any change in Environmental Laws governing
the assessment, release or removal of Hazardous Substances, which change
would lead a prudent lender to require additional testing to avail itself
of any statutory insurance or limited liability, take all action
(including, without limitation, the conducting of engineering tests at the
sole expense of the Borrower) to confirm that no Hazardous Substances have
been Released or disposed of on the Mortgaged Property or Mezzanine
Property in violation of any Environmental Laws; and

(ii) if any Release or disposal of Hazardous Substances shall
occur or shall have occurred on the Mortgaged Property or Mezzanine
Property (including without limitation any such Release or disposal
occurring prior to the acquisition of such Mortgaged Property or Mezzanine
Property by the Borrower), cause the prompt containment and removal of such
Hazardous Substances and remediation of the Mortgaged Property or Mezzanine
Property in full compliance with all applicable laws and regulations and to
the satisfaction of the Majority Banks; provided, that the Borrower shall
be deemed to be in compliance with Environmental Laws for the purpose of
this clause (ii) so long as it or a responsible third party with sufficient
financial resources is taking reasonable action to remediate or manage any
event of noncompliance to the satisfaction of the Majority Banks and no
action shall have been commenced by any enforcement agency. The Majority
Banks may engage their own Environmental Engineer to review the
environmental assessments and the Borrower's compliance with the covenants
contained herein.

At any time after an Event of Default shall have occurred hereunder,
or, whether or not an Event of Default shall have occurred, at any time
that the Agent or the Majority Banks shall have reasonable grounds to
believe that a Release or threatened Release of Hazardous Substances may
have occurred, relating to any Mortgaged Property or Mezzanine Property, or
that any of the Mortgaged Property or Mezzanine Property is not in
compliance with the Environmental Laws, the Agent may at its election (and
will at the request of the Majority Banks) obtain such environmental
assessments of such Mortgaged Property or Mezzanine Property prepared by an
Environmental Engineer as may be necessary or advisable for the purpose of
evaluating or confirming (i) whether any Hazardous Substances are present
in the soil or water at or adjacent to such Mortgaged Property or Mezzanine
Property and (ii) whether the use and operation of such Mortgaged Property
or Mezzanine Property comply with all Environmental Laws. Environmental
assessments may include detailed visual inspections of such Mortgaged
Property or Mezzanine Property including, without limitation, any and all
storage areas, storage tanks, drains, dry ▇▇▇▇▇ and leaching areas, and the
taking of soil samples, as well as such other investigations or analyses as
are necessary or appropriate for a complete determination of the compliance
of such Mortgaged Property or Mezzanine Property and the use and operation
thereof with all applicable Environmental Laws. All such environmental
assessments shall be at the sole cost and expense of the Borrower.

Section 17.7. Distributions. The Borrower will not make any
Distributions which would cause it to violate any of the following
covenants:

(a) The Borrower shall not pay any Distribution to the members
of the Borrower in excess of the amount (assuming that Distributions are
made pro rata to the Members in accordance with their respective ownership
interests) which is sufficient to allow Wellsford Commercial to receive
from the Borrower the minimum distributions required under the Code to
maintain the REIT Status of Wellsford Commercial (assuming for the purposes
hereof that such Distributions are the only income of Wellsford
Commercial), as evidenced by a certification of the principal financial or
accounting officer of the Borrower containing calculations in detail
reasonably satisfactory in form and substance to the Agent; provided that
in all events Distributions of not less than $1,250,000.00 per annum shall
be permitted pursuant to this Section 8.7(a); and

(b) The Borrower shall make no Distributions in the event that
an Event of Default shall have occurred and be continuing or a Default or
Event of Default would be created after giving effect to such Distribution.

Section 17.8. Asset Sales. Neither the Borrower nor any Subsidiary
of the Borrower shall sell, transfer or otherwise dispose of any Real
Estate or other Investment described in Section 8.3(j), Section 8.3(k)
or Section 8.3(l) (except as the result of a condemnation or casualty and
except for the granting of Permitted Liens) unless there shall have been
delivered to the Banks a statement that no Default or Event of Default
exists and a Compliance Certificate demonstrating that the Borrower will be
in compliance with its covenants referred to therein after giving effect to
such sale, transfer or other disposition.

Section 17.9. Development Activity. Neither the Borrower nor any
Subsidiary of the Borrower shall, without the prior written consent of the
Majority Banks, engage, directly or indirectly, in the development of
properties to be used principally for commercial office purposes or
otherwise, except that Borrower and its Subsidiaries may engage in the
development of Real Estate to be used principally for commercial office
purposes provided that the aggregate costs of acquisition and development
of all such properties Under Development (assuming the full cost of
developing such property) at any time shall not exceed the greater of
(i) ten percent (10%) of the Borrower's Consolidated Total Assets or
(ii) $25,000,000.00. For purposes of this Section 8.9, the term
"development" shall include the new construction of an office building or
office park, but shall not include Capital Improvement Projects to existing
Real Estate which is already used principally for commercial office
purposes. Without limiting the foregoing, the Borrower acknowledges that
for the purposes of this Agreement, (a) any interest by the Borrower or any
Subsidiary in a property which is proposed to be developed, or any interest
therein pursuant to which the Borrower or any Subsidiary has the right to
approve site plans or other plans and specifications or pursuant to which
such parties' obligations are conditioned upon the achievement of certain
leasing levels, (b) any agreement by the Borrower or any Subsidiary which
obligates such party to contribute or otherwise advance funds in connection
with or upon completion of the development of a property, or (c) any
acquisition of a property which is proposed to be developed or which is
under development and lease-up at the time such agreement is entered into,
shall be considered a "development" for the purposes of this Section 8.9.
The Borrower acknowledges that the decision of the Majority Banks to grant
or withhold such consent shall be based on such factors as the Majority
Banks deem relevant in their sole discretion, including without limitation,
evidence of sufficient funds both from borrowings and equity to complete
such development and evidence that the Borrower or its Subsidiary has the
resources and expertise necessary to complete such project. Nothing herein
shall prohibit the Borrower or any Subsidiary of the Borrower from entering
into an agreement to acquire Real Estate which has been developed and
initially leased by another Person.

Section 17.10. Sources of Capital. The Borrower shall, at all times
that the Borrower or any of its Subsidiaries is engaging in any development
as provided in Section 8.9 or has entered into any agreement to provide
funds with respect to a development, maintain or have identified available
sources of capital equal to the total cost to acquire and complete such
developments and to satisfy such funding obligations, which sources of
capital shall be acceptable to the Agent in its reasonable discretion.
Amounts available to be disbursed for such purposes pursuant to this
Agreement may be considered as a source of capital for the purposes of this
Section 8.10.

Section 17.11. Transfers. The Borrower shall not permit any sale,
transfer, disposition, pledge, mortgage, hypothecation or encumbering of
any direct or indirect interest (a) of Wellsford Commercial in Borrower,
(b) of Wellsford Real Properties in Wellsford Commercial, (c) of WHWEL in
Borrower, or (d) of any Person or Persons directly or indirectly holding
the ownership interests in WHWEL, provided that sales, transfers or other
dispositions (but not pledges, mortgages, hypothecations or encumbrances)
of interests in WHWEL shall be permitted if after giving effect thereto the
▇▇▇▇▇▇▇ Group, directly or indirectly, owns and controls at least seventy
percent (70%) of the ownership interests in WHWEL. Notwithstanding
anything herein to the contrary, (x) WHWEL shall be permitted at any time
and from time to time to convert all or any of its interest in the Borrower
into an interest in Wellsford Commercial and/or Wellsford Real Properties,
and (y) WHWEL and Wellsford Commercial may transfer, or pledge their
interests in Borrower to one another as may be permitted in the operating
agreement of the Borrower.

Section 18. FINANCIAL COVENANTS OF BORROWER.

The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any Bank has any obligation to make any Loans it will comply
with the following:

Section 18.1. Liabilities to Assets Ratio. The Borrower will not,
at the end of any fiscal quarter as set forth below, permit the ratio of
Consolidated Total Liabilities to Consolidated Total Assets of the Borrower
to exceed the ratio set forth below:

Fiscal Quarter Ending
On or Before: Ratio

December 31, 1999 0.75 to 1

December 31, 1999 0.70 to 1

Thereafter 0.65 to 1

Section 18.2. Consolidated Operating Cash Flow Coverage. The
Borrower will not, at the end of any fiscal quarter set forth below permit
(a) the sum of (i) its Consolidated Operating Cash Flow for any period of
four consecutive fiscal quarters then ended (treated as a single accounting
period) (the "Test Period"), plus (ii) the general and administrative costs
of the Borrower and its Subsidiaries for such Test Period plus (iii) the
aggregate Negative Carry for such Test Period minus (iv) the Capital
Improvement Reserve for such Test Period minus (v) any capitalized Negative
Carry for such Test Period to be less than (b) the multiple of Debt Service
for such Test Period as set forth below:

Fiscal Quarter Ending Multiple of
On or Before: Debt Service:

December 31, 1999 1.15

December 31, 2000 1.25

Thereafter 1.35

In the event that the Borrower shall not have any of the foregoing
components for four (4) consecutive fiscal quarters, then such components
shall be annualized in a manner reasonably satisfactory to the Agent.
Notwithstanding the foregoing, the amounts set forth in clauses (a)(ii) and
(a)(iii) above shall be added in such calculation only so long as the
Borrower is in compliance with the terms of Section 5.5, and shall not be
added back in such calculation for any periods during which the Holdback is
not required.

Section 18.3. Term Loan Debt Service. The Borrower will not, at
the end of any fiscal quarter permit (a) the difference of (i) the Net
Operating Income of the Term Loan Borrower for any Test Period minus
(ii) the Capital Improvement Reserve (as applied only to the collateral for
the Term Loan) for such Test Period to be less than the multiple of 1.3
times (b) the Debt Service Coverage Test Amount for the Test Period. In
the event that the Term Loan Borrower shall not have owned any of such
collateral properties for four (4) consecutive fiscal quarters, then the
Net Operating Income of the Term Loan Borrower for such collateral
properties shall be annualized based upon historical information with
respect to such collateral properties in a manner reasonably satisfactory
to the Agent.

Section 18.4. Minimum Shareholders Equity. The Borrower will not,
at the end of any fiscal quarter, permit the Shareholders Equity to be less
than the sum of (a) $45,000,000 plus (b) eighty percent (80%) of the net
proceeds from any Equity Offering after the Closing Date plus (c) one
hundred percent (100%) of (i) the sum of (A) all Net Income (or Deficit)
from the Closing Date plus (B) depreciation deducted in calculating such
Net Income (or Deficit) less (ii) the aggregate amount of all Distributions
made by Borrower from the Closing Date pursuant to the terms of Section
8.7(a).

Section 18.5. Real Estate Assets. The Borrower shall not permit
its direct or indirect interest in (i) undeveloped land and (ii) non-income
producing land assets to exceed, in the aggregate, five percent (5%) of the
Borrower's Consolidated Total Assets.

Section 18.6. Required Equity. The Borrower shall not permit the
ratio of the (a) aggregate Indebtedness without duplication of the Borrower
and its Subsidiaries pursuant to Section 8.1(a), (f), (g), (h) and (i) to
(b) the sum of (i) the aggregate all-in acquisition cost of the Real Estate
and the Equity Interests (as determined as provided in the definition of
the term "Designated Collateral Value") of the Borrower and its
Subsidiaries plus (ii) the historic cost of capital improvements to the
Real Estate and the Mezzanine Property after the respective acquisitions of
such assets on a consolidated basis, to exceed 0.75 to 1. For the purposes
hereof, the Indebtedness of the Property Owner shall be included as
Indebtedness of the Borrower from and after the acquisition of the Equity
Interests.

Section 19. CLOSING CONDITIONS.

The obligations of the Agent and the Banks to make the initial
Loans shall be subject to the satisfaction of the following conditions
precedent on or prior to December 15, 1997:

Section 19.1. Loan Documents. Each of the Loan Documents shall have
been duly executed and delivered by the respective parties thereto, shall
be in full force and effect and shall be in form and substance satisfactory
to the Majority Banks. The Agent shall have received a fully executed copy
of each such document, except that each Bank shall have received a fully
executed counterpart of its Note.

Section 19.2. Certified Copies of Organizational Documents. The
Agent shall have received from the Borrower a copy, certified as of a
recent date by the appropriate officer of the State in which the Borrower
and the Members are organized or in which the Mortgaged Property is
located, and by a duly authorized officer of such Person to be true and
complete, of the articles of incorporation or other organizational
documents of the Borrower and the Members or their respective qualification
to do business, as applicable, as in effect on such date of certification.

Section 19.3. Bylaws; Resolutions. All action on the part of the
Borrower and the Members necessary for the valid execution, delivery and
performance by the Borrower and the Members of the Loan Documents to which
it is or is to become a party shall have been duly and effectively taken,
and evidence thereof satisfactory to the Agent shall have been provided to
the Agent. The Agent shall have received from the Borrower and the
Members, as applicable, true copies of its bylaws and the resolutions
adopted by its board of directors or other governing body authorizing the
transactions described herein, each certified by its secretary or other
duly authorized officer as of a recent date to be true and complete.

Section 19.4. Incumbency Certificate; Authorized Signers. The Agent
shall have received from the Borrower an incumbency certificate, dated as
of the Closing Date, signed by a duly authorized officer of the Members and
giving the name and bearing a specimen signature of each individual who
shall be authorized: (a) to sign, in the name and on behalf of the Borrower
and the Members, each of the Loan Documents to which the Borrower or the
Members is or is to become a party; (b) in the case of the Borrower to make
Loan and Conversion Requests; and (c) to give notices and to take other
action on behalf of the Borrower under the Loan Documents.

Section 19.5. Opinion of Counsel. The Agent shall have received a
favorable opinion addressed to the Banks and the Agent and dated as of the
Closing Date, in form and substance satisfactory to the Banks and the
Agent, from Robinson, Silverman, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, and other
counsel of the Borrower and the Members, as to such matters as the Agent
shall reasonably request.

Section 19.6. Payment of Fees. The Borrower shall have paid to the
Agent the closing fee pursuant to Section 4.2.

Section 19.7. Appraisals. The Agent shall have received Appraisals
of the Mortgaged Property in form and substance satisfactory to the
Majority Banks prior to the Closing Date demonstrating that the initial
Collateral has a Designated Collateral Value that is in compliance with the
terms of this Agreement.

Section 19.8. Environmental Reports. The Agent shall have received
environmental site assessment reports for the Mortgaged Property prepared
by an Environmental Engineer no more than three months prior to the Closing
Date, which indicate the condition of the Mortgaged Property and such other
properties and any Buildings thereon and which set forth no qualifications
except those that are acceptable to the Majority Banks in their sole
discretion, and disclosing that each piece of Mortgaged Property and any
Building thereon is free of oil, underground storage tanks, asbestos or
asbestos containing material, lead paint and other Hazardous Substances
(except to the extent acceptable to the Majority Banks in their sole
discretion), and which reports are otherwise in form and substance
satisfactory to the Majority Banks).

Section 19.9. Insurance. The Agent shall have received duplicate
originals or certified copies of all policies of insurance required by this
Agreement.

Section 19.10. Performance; No Default. The Borrower shall have
performed and complied with all terms and conditions herein required to be
performed or complied with by it on or prior to the Closing Date, and on
the Closing Date there shall exist no Default or Event of Default.

Section 19.11. Representations and Warranties. The representations
and warranties made by the Borrower and the Guarantor in the Loan Documents
or otherwise made by or on behalf of any Borrower, any Guarantor, any
Member or any Subsidiary thereof, in connection therewith or after the date
thereof shall have been true and correct in all material respects when made
and shall also be true and correct in all material respects on the Closing
Date.

Section 19.12. Proceedings and Documents. All proceedings in
connection with the transactions contemplated by this Agreement and the
other Loan Documents shall be reasonably satisfactory to the Agent and the
Agent's Special Counsel in form and substance, and the Agent shall have
received all information and such counterpart originals or certified copies
of such documents and such other certificates, opinions or documents as the
Agent and the Agent's Special Counsel may reasonably require.

Section 19.13. Eligible Real Estate Qualification Documents. The
Eligible Real Estate Qualification Documents for each parcel of Mortgaged
Property included in the Collateral as of the Closing Date shall have been
delivered to the Agent.

Section 19.14. Compliance Certificate. A Compliance Certificate
dated as of the date of the Closing Date demonstrating compliance with each
of the covenants calculated therein as of the most recent fiscal quarter
end for which the Borrower has provided financial statements under Section
6.4 adjusted in the best good faith estimate of the Borrower dated as of
the date of the Closing Date shall have been delivered to the Agent.

Section 19.15. Other Documents. To the extent requested by the
Agent, executed copies of all material agreements of any nature whatsoever
to which the Borrower or any Subsidiary of the Borrower is a party
affecting or relating to the use, operation, development, construction or
management of the Mortgaged Property or the other Collateral.

Section 19.16. No Condemnation/Taking. The Agent shall have
received written confirmation from the Borrower that no condemnation
proceedings are pending or to the Borrower's knowledge threatened against
any Mortgaged Property or other Collateral or, if any such proceedings are
pending or threatened, identifying the same and the Real Estate affected
thereby and the Agent shall have determined that none of such proceedings
is or will be material to the Mortgaged Property or other Collateral
affected thereby.

Section 19.17. Governmental Policy. Each Bank shall have determined
that there have been no material changes in governmental regulations or
policy affecting the Banks, the Borrower or the Guarantor.

Section 19.18. Other. The Agent shall have reviewed such other
documents, instruments, certificates, opinions, assurances, consents and
approvals as the Agent or the Agent's Special Counsel may reasonably have
requested.

Section 20. CONDITIONS TO ALL BORROWINGS.

The obligations of the Banks to make any Loan, whether on or
after the Closing Date, shall also be subject to the satisfaction of the
following conditions precedent:

Section 20.1. Prior Conditions Satisfied. All conditions set forth
in Section 10 shall continue to be satisfied as of the date upon which any
Loan is to be made.

Section 20.2. Representations True; No Default. Each of the
representations and warranties contained in this Agreement, the other Loan
Documents or in any document or instrument delivered pursuant to or in
connection with this Agreement shall be true as of the date as of which
they were made and shall also be true at and as of the time of the making
of such Loan (except that representations and warranties as to the Members
and Guarantors shall not be deemed to have been repeated), with the same
effect as if made at and as of that time (except to the extent of changes
resulting from transactions contemplated or permitted by this Agreement and
the other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse, and
except to the extent that such representations and warranties relate
expressly to an earlier date) and no Default or Event of Default shall have
occurred and be continuing. Agent shall have received a certificate of the
Borrower signed by an authorized officer of the Borrower to such effect.

Section 20.3. No Legal Impediment. No change shall have occurred in
any law or regulations thereunder or interpretations thereof that in the
reasonable opinion of any Bank would make it illegal for such Bank to make
such Loan.

Section 20.4. Governmental Regulation. Each Bank shall have
received such statements in substance and form reasonably satisfactory to
such Bank as such Bank shall require for the purpose of compliance with any
applicable regulations of the Comptroller of the Currency or the Board of
Governors of the Federal Reserve System.

Section 20.5. Proceedings and Documents. All proceedings in
connection with the Loan shall be satisfactory in substance and in form to
the Majority Banks, and the Majority Banks shall have received all
information and such counterpart originals or certified or other copies of
such documents as the Majority Banks may reasonably request.

Section 20.6. Borrowing Documents. In the case of any request for a
Loan, the Agent shall have received a copy of each of the request for a
Loan required by Section 2.6 in the form of Exhibit B hereto, fully
completed.

Section 20.7. Endorsement to Title Policy. At such time as the
Agent shall determine in its discretion, to the extent available under
applicable law, a "date down" endorsement to each Title Policy indicating
no change in the state of title and containing no survey exceptions not
approved by the Agent, which endorsement shall, expressly or by virtue of a
proper "revolving credit" clause or endorsement in the Title Policy,
increase the coverage of the Title Policy to the aggregate amount of all
Loans advanced and outstanding on or before the effective date of such
endorsement, other than the Designated Collateral Value Amount for the
Equity Interests, if applicable (provided that the amount of coverage under
an individual Title Policy for an individual Mortgaged Property need not
equal the aggregate amount of all Loans), or if such endorsement is not
available, such other evidence and assurances as the Agent may reasonably
require (which evidence may include, without limitation, an affidavit from
the Borrower stating that there have been no changes in title from the date
of the last effective date of the Title Policy).

Section 20.8. Future Advances Tax Payment. As a condition precedent
to any Bank's obligations to make any Loans, the Borrower will pay or cause
to be paid to the Agent any mortgage, recording, intangible, documentary
stamp or other similar taxes and charges which the Agent reasonably
determines to be payable as a result of such Loan to any state or any
county or municipality thereof in which any of the Mortgaged Property is
located and deliver to the Agent such affidavits or other information which
the Agent reasonably determines to be necessary in connection with the
payment of such tax, in order to insure that the Security Deeds on
Mortgaged Property located in such state secure the Borrower's obligation
with respect to the Loans then being requested. The provisions of this
Section 11.8 shall be without limitation of the Borrower's obligations
under other provisions of the Loan Documents, including without limitation
Section 15 hereof.

Section 21. EVENTS OF DEFAULT; ACCELERATION; ETC.

Section 21.1. Events of Default and Acceleration. If any of the
following events ("Events of Default" or, if the giving of notice or the
lapse of time or both is required, then, prior to such notice or lapse of
time, "Defaults") shall occur:

(a) the Borrower shall fail to pay any principal of the Loans
when the same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed for
payment;

(b) the Borrower shall fail to pay any interest on the Loans or
any other sums due hereunder or under any of the other Loan Documents, when
the same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed for
payment;

(d) the Borrower shall fail to comply with any covenant
contained in Section 9.1, Section 9.2, Section 9.3, Section 9.4 or
Section 9.5 and such failure shall continue for 30 Business Days after
written notice thereof shall have been given to the Borrower by the Agent;

(e) the Borrower, any of its Subsidiaries, any Guarantor or any
other party shall fail to perform any other term, covenant or agreement
contained herein or in any of the other Loan Documents (other than those
specified above in this Section 12.1);

(f) any representation or warranty of the Borrower or any of its
Subsidiaries or any Guarantor or any Member in this Agreement or any other
Loan Document, or in any report, certificate, financial statement, request
for a Loan, or in any other document or instrument delivered pursuant to or
in connection with this Agreement, any advance of a Loan or any of the
other Loan Documents shall prove to have been false in any material respect
upon the date when made or deemed to have been made or repeated;

(g) the Borrower or any of its Subsidiaries or any Member or any
Guarantor shall fail to pay at maturity, or within any applicable period of
grace, any obligation for borrowed money or credit received, or fail to
observe or perform any material term, covenant or agreement contained in
any agreement (including without limitation the Term Loan Agreement) by
which it is bound, evidencing or securing any such borrowed money or credit
received for such period of time as would permit (assuming the giving of
appropriate notice if required) the holder or holders thereof or of any
obligations issued thereunder to accelerate the maturity thereof; provided
that the events described in this Section 12.1(g) shall not constitute an
Event of Default unless such failure to perform, together with other
failures to perform as described in this Section 12.1(g), involve singly
or in the aggregate obligations for borrowed money or credit received
totaling in excess of $10,000,000;

(h) the Borrower or any of its Subsidiaries or any Member or any
Guarantor, (A) shall make an assignment for the benefit of creditors, or
admit in writing its general inability to pay or generally fail to pay its
debts as they mature or become due, or shall petition or apply for the
appointment of a trustee or other custodian, liquidator or receiver of the
Borrower or any of its Subsidiaries or any Member or any Guarantor or of
any substantial part of the assets of any thereof, (B) shall commence any
case or other proceeding relating to the Borrower or any of its
Subsidiaries or any Member or any Guarantor under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution
or liquidation or similar law of any jurisdiction, now or hereafter in
effect, or (C) shall take any action to authorize or in furtherance of any
of the foregoing;

(i) a petition or application shall be filed for the appointment
of a trustee or other custodian, liquidator or receiver of the Borrower or
any of its Subsidiaries or any Member or any Guarantor or any substantial
part of the assets of any thereof, or a case or other proceeding shall be
commenced against the Borrower or any of its Subsidiaries or any Member or
any Guarantor under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law
of any jurisdiction, now or hereafter in effect, and the Borrower or any of
its Subsidiaries or any Member or any Guarantor shall indicate its approval
thereof, consent thereto or acquiescence therein or such petition,
application, case or proceeding shall not have been dismissed within 60
days following the filing or commencement thereof;

(j) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any of
its Subsidiaries or any Member or any Guarantor bankrupt or insolvent, or
approving a petition in any such case or other proceeding, or a decree or
order for relief is entered in respect of the Borrower or any of its
Subsidiaries or any Member or any Guarantor, in each case of the foregoing
in an involuntary case under federal bankruptcy laws as now or hereafter
constituted;

(k) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than 60 days, whether or not consecutive, any uninsured
final judgment against the Borrower or any of its Subsidiaries or any
Member or any Guarantor that, with other outstanding uninsured final
judgments, undischarged, against the Borrower or any of its Subsidiaries or
any Member or any Guarantor exceeds in the aggregate $5,000,000.00;

(l) if any of the Loan Documents shall be canceled, terminated,
revoked or rescinded otherwise than in accordance with the terms thereof or
with the express prior written agreement, consent or approval of the Banks,
or any action at law, suit in equity or other legal proceeding to cancel,
revoke or rescind any of the Loan Documents shall be commenced by or on
behalf of the Borrower, any of its Subsidiaries, any Member or any
Guarantor or any of their respective holders of Voting Interests, or any
court or any other governmental or regulatory authority or agency of
competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more of
the Loan Documents is illegal, invalid or unenforceable in accordance with
the terms thereof in any material respect as determined by the Majority
Banks;

(m) any dissolution, termination, partial or complete
liquidation, merger or consolidation of the Borrower or any of its
Subsidiaries or any Member or any Guarantor, or any sale, transfer or other
disposition of the assets of the Borrower or any of its Subsidiaries or any
Member or any Guarantor, other than as permitted under the terms of this
Agreement or the other Loan Documents;

(n) any suit or proceeding shall be filed against the Borrower,
any of its Subsidiaries, any Member, any Guarantor, any of the Mortgaged
Property or any other Collateral which in the good faith business judgment
of the Majority Banks after giving consideration to the likelihood of
success of such suit or proceeding and the availability of insurance to
cover any judgment with respect thereto and based on the information
available to them, if adversely determined, would have a materially adverse
affect on the ability of the Borrower or any Guarantor to perform each and
every one of their respective obligations under and by virtue of the Loan
Documents;

(o) the Borrower shall be indicted for a federal crime, a
punishment for which could include the forfeiture of any assets of the
Borrower or such Guarantor included in the Mortgaged Property or other
Collateral;

(p) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall cease to be the Chairman of the
Board of, or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ shall cease to be the President of, Wellsford
Commercial, and a competent and experienced successor for such Person shall
not be approved by the Majority Banks within six (6) months of such event;

(q) Any violation of the covenant set forth in Section 8.11
shall occur;

(r) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and the Majority Banks shall have
determined in their reasonable discretion that such event reasonably could
be expected to result in liability of any of the Borrower or a Guarantor to
the PBGC or such Guaranteed Pension Plan in an aggregate amount exceeding
$1,000,000 and such event in the circumstances occurring reasonably could
constitute grounds for the termination of such Guaranteed Pension Plan by
the PBGC or for the appointment by the appropriate United States District
Court of a trustee to administer such Guaranteed Pension Plan; or a trustee
shall have been appointed by the United States District Court to administer
such Plan; or the PBGC shall have instituted proceedings to terminate such
Guaranteed Pension Plan; or

(s) any Guarantor denies that such Guarantor has any liability
or obligation under the Guaranty or the Indemnity Agreement, or shall
notify the Agent or any of the Banks of such Guarantor's intention to
attempt to cancel or terminate the Guaranty or the Indemnity Agreement, or
shall fail to observe or comply with any term, covenant, condition or
agreement under the Guaranty or the Indemnity Agreement;

then, and in any such event, the Agent may, and upon the request of the
Majority Banks shall, by notice in writing to the Borrower declare all
amounts owing with respect to this Agreement, the Notes and the other Loan
Documents to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Borrower; provided
that in the event of any Event of Default specified in Section 12.1(h),
Section 12.1(i) or Section 12.1(j), all such amounts shall become
immediately due and payable automatically and without any requirement of
notice from any of the Banks or the Agent.

Section ▇▇.▇▇. Limitation of Cure Periods.

(a) Notwithstanding anything contained in Section 12.1 to the
contrary, (i) no Event of Default shall exist hereunder upon the occurrence
of any failure described in Section 12.1(b) in the event that the Borrower
cures such default within five (5) days following receipt of written notice
of such default, provided, however, that Borrower shall not be entitled to
receive more than two (2) notices in the aggregate pursuant to this clause
(i) in any period of 365 days ending on the date of any such occurrence of
default, and provided further that no such cure period shall apply to any
payments due upon the maturity of the Notes, and (ii) no Event of Default
shall exist hereunder upon the occurrence of any failure described in
Section 12.1(e) in the event that the Borrower cures such default with
thirty (30) days following receipt of written notice of such default,
provided that the provisions of this clause (ii) shall not pertain to
defaults consisting of a failure to provide insurance as required by
Section 7.7, to any default consisting of a failure to comply with Section
7.4(e), or to any default excluded from any provision of cure of defaults
contained in any other of the Loan Documents.

(b) Notwithstanding the provisions of subsections (c) and (d) of
Section 12.1 or of Section 12.1B, the cure periods provided therein shall
not be allowed and the occurrence of a Default thereunder immediately shall
constitute an Event of Default for all purposes of this Agreement and the
other Loan Documents if, within the period of twelve months immediately
preceding the occurrence of such Default, there shall have occurred two
periods of cure or portions thereof under any one or more than one of said
subsections.

Section ▇▇.▇▇. Certain Cure Periods.

(a) In the event that there shall occur any Default under
Section 12.1(c), then within five Business Days after receipt of notice of
such Default from the Agent or the Majority Banks the Borrower may elect to
cure such Default by providing additional Collateral consisting of
Potential Collateral, and/or to reduce the Total Commitment and reduce the
outstanding Loans, in which event such actions shall be completed not later
than 15 days following the date on which the Borrower is notified that the
Majority Banks have approved the Borrower's proposed actions (or 60 days in
the event that the Borrower intends to provide additional Mortgaged
Property). The Borrower's notice of its election pursuant to the preceding
sentence shall be delivered to the Agent within the period of five Business
Days provided above. Within five Business Days after receipt of such
advice, the Majority Banks shall advise the Borrower as to whether in their
good faith judgment the actions proposed by the Borrower are sufficient to
cure such Default without the creation of any other Default hereunder. In
the event that the Majority Banks determine that Borrower's proposal is
insufficient to cure such Default or is otherwise not in accordance with
the terms of this Agreement, the Borrower within an additional three
Business Days after such negative notice may submit to the Agent an
alternative plan or evidence establishing that the Borrower's original
election was sufficient. In the event that within the times provided
herein the Borrower shall have failed to provide evidence satisfactory to
the Majority Banks that Borrower's proposed actions are sufficient to cure
such Default in accordance with the terms hereof, the cure period shall
terminate and such Default immediately shall constitute an Event of
Default.

(b) In the event that the Borrower shall elect in whole or in
part under subsection 12.1B(a) to provide additional Collateral, the Real
Estate to be added to the Collateral shall be Eligible Real Estate, and on
or prior to the expiration of the 60-day period each of the Eligible Real
Estate Qualification Documents shall have been completed and provided to
the Agent for the benefit of the Banks.

Section 21.2. Termination of Commitments. If any one or more Events
of Default specified in Section 12.1(h), Section 12.1(i) or Section
12.1(j) shall occur, then immediately and without any action on the part of
the Agent or any Bank any unused portion of the credit hereunder shall
terminate and the Banks shall be relieved of all obligations to make Loans
to the Borrower. If any other Event of Default shall have occurred and be
continuing, the Agent, upon the election of the Majority Banks, may by
notice to the Borrower terminate the obligation to make Loans to the
Borrower. No termination under this Section 12.2 shall relieve the
Borrower of its obligations to the Banks arising under this Agreement or
the other Loan Documents.

Section 21.3. Remedies. In case any one or more of the Events of
Default shall have occurred and be continuing, and whether or not the Banks
shall have accelerated the maturity of the Loans pursuant to Section 12.1,
the Agent on behalf of the Banks, may, with the consent of the Majority
Banks but not otherwise, proceed to protect and enforce their rights and
remedies under this Agreement, the Notes or any of the other Loan Documents
by suit in equity, action at law or other appropriate proceeding, whether
for the specific performance of any covenant or agreement contained in this
Agreement and the other Loan Documents or any instrument pursuant to which
the Obligations are evidenced, including to the full extent permitted by
applicable law the obtaining of the ex parte appointment of a receiver,
and, if such amount shall have become due, by declaration or otherwise,
proceed to enforce the payment thereof or any other legal or equitable
right. No remedy herein conferred upon the Agent or the holder of any Note
is intended to be exclusive of any other remedy and each and every remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
any other provision of law. In the event that all or any portion of the
Obligations is collected by or through an attorney-at-law, the Borrower
shall pay all costs of collection including, but not limited to, reasonable
attorney's fees not to exceed fifteen percent (15%) of such portion of the
Obligations.

Section 21.4. Distribution of Collateral Proceeds. In the event
that, following the occurrence or during the continuance of any Event of
Default, any monies are received in connection with the enforcement of any
of the Security Documents, or otherwise with respect to the realization
upon any of the Collateral, such monies shall be distributed for
application as follows:

(a) First, to the payment of, or (as the case may be) the
reimbursement of, the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent to protect or preserve the collateral or in
connection with the collection of such monies by the Agent, for the
exercise, protection or enforcement by the Agent of all or any of the
rights, remedies, powers and privileges of the Agent under this Agreement
or any of the other Loan Documents or in respect of the Collateral or in
support of any provision of adequate indemnity to the Agent against any
taxes or liens which by law shall have, or may have, priority over the
rights of the Agent to such monies;

(b) Second, to all other Obligations in such order or preference
as the Majority Banks shall determine; provided, however, that (i)
distributions in respect of such Obligations shall be made pari passu among
Obligations with respect to the Agent's fee payable pursuant to Section
4.3 and all other Obligations, (ii) in the event that any Bank shall have
wrongfully failed or refused to make an advance under Section 2.7 and such
failure or refusal shall be continuing, advances made by other Banks during
the pendency of such failure or refusal shall be entitled to be repaid as
to principal and accrued interest in priority to the other Obligations
described in this subsection (b), and (iii) Obligations owing to the Banks
with respect to each type of Obligation such as interest, principal, fees
and expenses, shall be made among the Banks pro rata; and provided,
further, that the Majority Banks may in their discretion make proper
allowance to take into account any Obligations not then due and payable;
and

Section 22. SETOFF.

Regardless of the adequacy of any collateral, during the
continuance of any Event of Default, any deposits (general or specific,
time or demand, provisional or final, regardless of currency, maturity, or
the branch of where such deposits are held) or other sums credited by or
due from any of the Banks to the Borrower or any Guarantor and any
securities or other property of the Borrower or any Guarantor in the
possession of such Bank may be applied to or set off against the payment of
Obligations and any and all other liabilities, direct, or indirect,
absolute or contingent, due or to become due, now existing or hereafter
arising, of the Borrower or any Guarantor to such Bank. Each of the Banks
agrees with each other Bank that if such Bank shall receive from the
Borrower or any Guarantor, whether by voluntary payment, exercise of the
right of setoff, or otherwise, and shall retain and apply to the payment of
the Note or Notes held by such Bank any amount in excess of its ratable
portion of the payments received by all of the Banks with respect to the
Notes held by all of the Banks, such Bank will make such disposition and
arrangements with the other Banks with respect to such excess, either by
way of distribution, pro tanto assignment of claims, subrogation or
otherwise as shall result in each Bank receiving in respect of the Notes
held by it its proportionate payment as contemplated by this Agreement;
provided that if all or any part of such excess payment is thereafter
recovered from such Bank, such disposition and arrangements shall be
rescinded and the amount restored to the extent of such recovery, but
without interest.

Section 23. THE AGENT.

Section 23.1. Authorization. The Agent is authorized to take such
action on behalf of each of the Banks and to exercise all such powers as
are hereunder and under any of the other Loan Documents and any related
documents delegated to the Agent, together with such powers as are
reasonably incident thereto, provided that no duties or responsibilities
not expressly assumed herein or therein shall be implied to have been
assumed by the Agent. The obligations of Agent hereunder are primarily
administrative in nature, and nothing contained in this Agreement or any of
the other Loan Documents shall be construed to constitute the Agent as a
trustee for any Bank or to create any agency or fiduciary relationship.
The Borrower and any other Person shall be entitled to conclusively rely on
a statement from the Agent that it has the authority to act for and bind
the Banks pursuant to this Agreement and the other Loan Documents.

Section 23.2. Employees and Agents. The Agent may exercise its
powers and execute its duties by or through employees or agents and shall
be entitled to take, and to rely on, advice of counsel concerning all
matters pertaining to its rights and duties under this Agreement and the
other Loan Documents. The Agent may utilize the services of such Persons as
the Agent may reasonably determine, and all reasonable fees and expenses of
any such Persons shall be paid by the Borrower.

Section 23.3. No Liability. Neither the Agent nor any of its
shareholders, directors, officers or employees nor any other Person
assisting them in their duties nor any agent, or employee thereof, shall be
liable for any waiver, consent or approval given or any action taken, or
omitted to be taken, in good faith by it or them hereunder or under any of
the other Loan Documents, or in connection herewith or therewith, or be
responsible for the consequences of any oversight or error of judgment
whatsoever, except that the Agent or such other Person, as the case may be,
may be liable for losses due to its willful misconduct or gross negligence.

Section 23.4. No Representations. The Agent shall not be
responsible for the execution or validity or enforceability of this
Agreement, the Notes, any of the other Loan Documents or any instrument at
any time constituting, or intended to constitute, collateral security for
the Notes, or for the value of any such collateral security or for the
validity, enforceability or collectability of any such amounts owing with
respect to the Notes, or for any recitals or statements, warranties or
representations made herein or in any of the other Loan Documents or in any
certificate or instrument hereafter furnished to it by or on behalf of the
Borrower or any of its Subsidiaries or the Guarantor, or be bound to
ascertain or inquire as to the performance or observance of any of the
terms, conditions, covenants or agreements herein or in any other of the
Loan Documents. The Agent shall not be bound to ascertain whether any
notice, consent, waiver or request delivered to it by the Borrower or the
Guarantor or any holder of any of the Notes shall have been duly authorized
or is true, accurate and complete. The Agent has not made nor does it now
make any representations or warranties, express or implied, nor does it
assume any liability to the Banks, with respect to the creditworthiness or
financial condition of the Borrower or any of its Subsidiaries or the
Guarantor. Each Bank acknowledges that it has, independently and without
reliance upon the Agent or any other Bank, and based upon such information
and documents as it has deemed appropriate, made its own credit analysis
and decision to enter into this Agreement. Each Bank also acknowledges
that it will, independently and without reliance upon the Agent or any
other Bank, based upon such information and documents as it deems
appropriate at the time, continue to make its own credit analysis and
decisions in taking or not taking action under this Agreement and the other
Loan Documents.

Section 23.5. Payments.

(a) A payment by the Borrower or the Guarantor to the Agent
hereunder or under any of the other Loan Documents for the account of any
Bank shall constitute a payment to such Bank. The Agent agrees to
distribute to each Bank not later than one Business Day after the Agent's
receipt of good funds, determined in accordance with the Agent's customary
practices, such Bank's pro rata share of payments received by the Agent for
the account of the Banks except as otherwise expressly provided herein or
in any of the other Loan Documents.

(b) If in the opinion of the Agent the distribution of any
amount received by it in such capacity hereunder, under the Notes or under
any of the other Loan Documents might involve it in liability, it may
refrain from making distribution until its right to make distribution shall
have been adjudicated by a court of competent jurisdiction. If a court of
competent jurisdiction shall adjudge that any amount received and
distributed by the Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to the Agent its
proportionate share of the amount so adjudged to be repaid or shall pay
over the same in such manner and to such Persons as shall be determined by
such court.

(c) Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, any Bank that fails (i) to
make available to the Agent its pro rata share of any Loan or (ii) to
comply with the provisions of Section 13 with respect to making
dispositions and arrangements with the other Banks, where such Bank's share
of any payment received, whether by setoff or otherwise, is in excess of
its pro rata share of such payments due and payable to all of the Banks, in
each case as, when and to the full extent required by the provisions of
this Agreement, shall be deemed delinquent (a "Delinquent Bank") and shall
be deemed a Delinquent Bank until such time as such delinquency is
satisfied. A Delinquent Bank shall be deemed to have assigned any and all
payments due to it from the Borrower and the Guarantor, whether on account
of outstanding Loans, interest, fees or otherwise, to the remaining
nondelinquent Banks for application to, and reduction of, their respective
pro rata shares of all outstanding Loans. The Delinquent Bank hereby
authorizes the Agent to distribute such payments to the nondelinquent Banks
in proportion to their respective pro rata shares of all outstanding Loans.
A Delinquent Bank shall be deemed to have satisfied in full a delinquency
when and if, as a result of application of the assigned payments to all
outstanding Loans of the nondelinquent Banks or as a result of other
payments by the Delinquent Banks to the nondelinquent Banks, the Banks'
respective pro rata shares of all outstanding Loans have returned to those
in effect immediately prior to such delinquency and without giving effect
to the nonpayment causing such delinquency.

Section 23.6. Holders of Notes. Subject to the terms of Article 18,
the Agent may deem and treat the payee of any Note as the absolute owner or
purchaser thereof for all purposes hereof until it shall have been
furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.

Section 23.7. Indemnity. The Banks ratably agree hereby to
indemnify and hold harmless the Agent from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages,
costs, expenses (including any expenses for which the Agent has not been
reimbursed by the Borrower as required by Section 15), and liabilities of
every nature and character arising out of or related to this Agreement, the
Notes, or any of the other Loan Documents or the transactions contemplated
or evidenced hereby or thereby, or the Agent's actions taken hereunder or
thereunder, except to the extent that any of the same shall be directly
caused by the Agent's willful misconduct or gross negligence.

Section 23.8. Agent as Bank. In its individual capacity, BKB shall
have the same obligations and the same rights, powers and privileges in
respect to its Commitment and the Loans made by it, and as the holder of
any of the Notes as it would have were it not also the Agent.

Section 23.9. Resignation. The Agent may resign at any time by
giving 60 days' prior written notice thereof to the Banks and the Borrower.
Upon any such resignation, the Majority Banks shall have the right to
appoint as a successor Agent any Bank or any bank whose senior debt
obligations are rated not less than "A" or its equivalent by ▇▇▇▇▇'▇
Investors Service, Inc. or not less than "A" or its equivalent by Standard
& Poor's corporation and which has total assets in excess of $10 billion.
Unless a Default or Event of Default shall have occurred and be continuing,
such successor Agent shall be reasonably acceptable to the Borrower. If no
successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within 30 days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a Bank or
any bank whose debt obligations are rated not less than "A" or its
equivalent by ▇▇▇▇▇'▇ Investors Service, Inc. or not less than "A" or its
equivalent by Standard & Poor's Corporation and which has total assets in
excess of $10 billion. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder as Agent. After any retiring
Agent's resignation, the provisions of this Agreement and the other Loan
Documents shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.

Section 23.10. Duties in the Case of Enforcement. In case one or
more Events of Default have occurred and shall be continuing, and whether
or not acceleration of the Obligations shall have occurred, the Agent
shall, if (a) so requested by the Majority Banks and (b) the Banks have
provided to the Agent such additional indemnities and assurances against
expenses and liabilities as the Agent may reasonably request, proceed to
enforce the provisions of the Security Documents authorizing the sale or
other disposition of all or any part of the Collateral and exercise all or
any such other legal and equitable and other rights or remedies as it may
have in respect of such Collateral. The Majority Banks may direct the
Agent in writing as to the method and the extent of any such sale or other
disposition, the Banks hereby agreeing to indemnify and hold the Agent
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, provided that the Agent need
not comply with any such direction to the extent that the Agent reasonably
believes the Agent's compliance with such direction to be unlawful or
commercially unreasonable in any applicable jurisdiction.

Section 24. EXPENSES.

The Borrower agrees to pay (a) the reasonable costs of producing
and reproducing this Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (b) any taxes (including any
interest and penalties in respect thereto) payable by the Agent or any of
the Banks (other than taxes based upon the Agent's or any Bank's gross or
net income, except that the Agent and the Banks shall be entitled to
indemnification for any and all amounts paid by them in respect of taxes
based on income or other taxes assessed by any State in which Mortgaged
Property or other Collateral is located, such indemnification to be limited
to taxes due solely on account of the granting of Collateral under the
Security Documents and to be net of any credit allowed to the indemnified
party from any other State on account of the payment or incurrence of such
tax by such indemnified party), including any recording, mortgage,
documentary or intangibles taxes in connection with the Security Deeds and
other Loan Documents, or other taxes payable on or with respect to the
transactions contemplated by this Agreement, including any such taxes
payable by the Agent or any of the Banks after the Closing Date (the
Borrower hereby agreeing to indemnify the Agent and each Bank with respect
thereto), (c) all title insurance premiums, appraisal fees, engineer's
fees, reasonable internal charges of the Agent (determined in good faith
and in accordance with the Agent's internal policies applicable generally
to its customers) for commercial finance exams and engineering and
environmental reviews and the reasonable fees, expenses and disbursements
of the counsel to the Agent, counsel for the Majority Banks and any local
counsel to the Agent incurred in connection with the preparation,
administration or interpretation of the Loan Documents and other
instruments mentioned herein (excluding, however, the preparation of
agreements evidencing participations granted under Section 18.4), the
review of any additional or substitute Collateral, the addition of any
Guarantor, each closing hereunder, and amendments, modifications,
approvals, consents or waivers hereto or hereunder, (d) the reasonable
fees, expenses and disbursements of the Agent incurred by the Agent in
connection with the preparation, administration or interpretation of the
Loan Documents and other instruments mentioned herein, and the making of
each advance hereunder, (e) all reasonable out-of-pocket expenses
(including reasonable attorneys' fees and costs, which attorneys may be
employees of any Bank or the Agent and the fees and costs of appraisers,
engineers, investment bankers or other experts retained by any Bank or the
Agent) incurred by any Bank or the Agent in connection with (i) the
enforcement of or preservation of rights under any of the Loan Documents
against the Borrower or any Guarantor or any Member or the administration
thereof after the occurrence of a Default or Event of Default and (ii) any
litigation, proceeding or dispute whether arising hereunder or otherwise,
in any way related to the Agent's or any of the Bank's relationship with
the Borrower or any Guarantor or any Member, (f) all reasonable fees,
expenses and disbursements of any Bank or the Agent incurred in connection
with U.C.C. searches, U.C.C. filings, title rundowns, title searches or
mortgage recordings, (g) all reasonable fees and expenses of ▇▇▇▇▇▇▇ and
its counsel incurred in connection with the initial closing under this
Agreement, and (h) all reasonable fees and expenses (including reasonable
attorney's fees and costs) incurred by BankBoston and ▇▇▇▇▇▇▇ in connection
with the assignment of Commitments and interests in the Loans pursuant to
Section 18.1. The covenants of this Section 15 shall survive payment or
satisfaction of payment of amounts owing with respect to the Notes.

Section 25. INDEMNIFICATION.

The Borrower agrees to indemnify and hold harmless the Agent and
the Banks and each director, officer, employee, agent and Person who
controls the Agent or any Bank from and against any and all claims, actions
and suits, whether groundless or otherwise, and from and against any and
all liabilities, losses, damages and expenses of every nature and character
arising out of or relating to this Agreement or any of the other Loan
Documents or the transactions contemplated hereby and thereby including,
without limitation, (a) any leasing fees and any brokerage, finders or
similar fees asserted against any Person indemnified under this Section 16
based upon any agreement, arrangement or action made or taken, or alleged
to have been made or taken, by the Borrower or any of its Subsidiaries or
any Guarantor or any Member, (b) any condition of the Mortgaged Property or
other Collateral, (c) any actual or proposed use by the Borrower of the
proceeds of any of the Loans, (d) any actual or alleged infringement of any
patent, copyright, trademark, service ▇▇▇▇ or similar right of the
Borrower, any of its Subsidiaries or the Guarantor comprised in the
Collateral, (e) the Borrower and the Guarantor and the Members entering
into or performing this Agreement or any of the other Loan Documents,
(f) any actual or alleged violation of any law, ordinance, code, order,
rule, regulation, approval, consent, permit or license relating to the
Mortgaged Property or other Collateral, or (g) with respect to the
Borrower, its Subsidiaries, the Guarantor and the Members and their
respective properties and assets, the violation of any Environmental Law,
the Release or threatened Release of any Hazardous Substances or any
action, suit, proceeding or investigation brought or threatened with
respect to any Hazardous Substances (including, but not limited to claims
with respect to wrongful death, personal injury or damage to property), in
each case including, without limitation, the reasonable fees and
disbursements of counsel and allocated costs of internal counsel incurred
in connection with any such investigation, litigation or other proceeding;
provided, however, that the Borrower shall not be obligated under this
Section 16 to indemnify any Person for liabilities arising from such
Person's own gross negligence or willful misconduct. In litigation, or the
preparation therefor, the Banks and the Agent shall be entitled to select a
single law firm as their own counsel and, in addition to the foregoing
indemnity, the Borrower agrees to pay promptly the reasonable fees and
expenses of such counsel. If, and to the extent that the obligations of
the Borrower under this Section 16 are unenforceable for any reason, the
Borrower hereby agrees to make the maximum contribution to the payment in
satisfaction of such obligations which is permissible under applicable law.
The provisions of this Section 16 shall survive the repayment of the Loans
and the termination of the obligations of the Banks hereunder.

Section 26. SURVIVAL OF COVENANTS, ETC.

All covenants, agreements, representations and warranties made
herein, in the Notes, in any of the other Loan Documents or in any
documents or other papers delivered by or on behalf of the Borrower, any of
its Subsidiaries, any Member or any Guarantor pursuant hereto or thereto
shall be deemed to have been relied upon by the Banks and the Agent,
notwithstanding any investigation heretofore or hereafter made by any of
them, and shall survive the making by the Banks of any of the Loans, as
herein contemplated, and shall continue in full force and effect so long as
any amount due under this Agreement or the Notes or any of the other Loan
Documents remains outstanding or any Bank has any obligation to make any
Loans. The indemnification obligations of the Borrower provided herein and
the other Loan Documents shall survive the full repayment of amounts due
and the termination of the obligations of the Banks hereunder and
thereunder to the extent provided herein and therein. All statements
contained in any certificate or other paper delivered to any Bank or the
Agent at any time by or on behalf of the Borrower, any of its Subsidiaries,
any Member or any Guarantor pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and
warranties by the Borrower or such Subsidiary or the Member or the
Guarantor hereunder.

Section 27. ASSIGNMENT AND PARTICIPATION.

Section 27.1. Conditions to Assignment by Banks. Except as provided
herein, each Bank may assign to one or more banks or other entities all or
a portion of its interests, rights and obligations under this Agreement
(including all or a portion of its Commitment Percentage and Commitment and
the same portion of the Loans at the time owing to it, and the Notes held
by it); provided that (a) the Agent shall have given its prior written
consent to such assignment, which consent shall not be unreasonably
withheld (provided that such consent shall not be required for any
assignment to another Bank, to a bank which is under common control with
the assigning Bank or to a wholly-owned Subsidiary of such Bank provided
that such assignee shall remain a wholly-owned Subsidiary of such Bank),
(b) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Bank's rights and obligations under this
Agreement, (c) the parties to such assignment shall execute and deliver to
the Agent, for recording in the Register (as hereinafter defined), a notice
of such assignment, together with any Notes subject to such assignment,
(d) in no event shall any voting, consent or approval rights of a Bank be
assigned to any Person controlling, controlled by or under common control
with, or which is not otherwise free from influence or control by, the
Borrower or any of its Subsidiaries, any Member or any Guarantor, which
rights shall instead be allocated pro rata among the other remaining Banks,
(e) such assignee shall have a net worth as of the date of such assignment
of not less than $500,000,000 and (f) such assignee shall acquire an
interest in the Loans of not less than $10,000,000.00. No such assignment
shall be made without the prior consent of the Borrower, which consent
shall not be unreasonably withheld or delayed; provided that such consent
shall not be required in the event that a Default or Event of Default shall
have occurred. Upon such execution, delivery, acceptance and recording, of
such notice of assignment, (i) the assignee thereunder shall be a party
hereto and all other Loan Documents executed by the Banks and, to the
extent provided in such assignment, have the rights and obligations of a
Bank hereunder, (ii) the assigning Bank shall, to the extent provided in
such assignment and upon payment to the Agent of the registration fee
referred to in Section 18.2, be released from its obligations under this
Agreement, and (iii) the Agent may unilaterally amend Schedule 1.1 to
reflect such assignment. In connection with each assignment, the assignee
shall represent and warrant to the Agent, the assignor and each other Bank
as to whether such assignee is controlling, controlled by, under common
control with or is not otherwise free from influence or control by, the
Borrower or any of its Subsidiaries, any Member or any Guarantor.

Section 27.2. Register. The Agent shall maintain a copy of each
assignment delivered to it and a register or similar list (the "Register")
for the recordation of the names and addresses of the Banks and the
Commitment Percentages of, and principal amount of the Loans owing to the
Banks from time to time. The entries in the Register shall be conclusive,
in the absence of manifest error, and the Borrower, the Agent and the Banks
may treat each Person whose name is recorded in the Register as a Bank
hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower and the Banks at any reasonable
time and from time to time upon reasonable prior notice. Upon each such
recordation, the assigning Bank agrees to pay to the Agent a registration
fee in the sum of $2,000.

Section 27.3. New Notes. Upon its receipt of an assignment executed
by the parties to such assignment, together with each Note subject to such
assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrower and the
Banks (other than the assigning Bank). Within five Business Days after
receipt of such notice, the Borrower, at its own expense, shall execute and
deliver to the Agent, in exchange for each surrendered Note, a new Note to
the order of such assignee in an amount equal to the amount assumed by such
assignee pursuant to such assignment and, if the assigning Bank has
retained some portion of its obligations hereunder, a new Note to the order
of the assigning Bank in an amount equal to the amount retained by it
hereunder, and shall cause the Guarantor to deliver to Agent an
acknowledgment in form and substance satisfactory to the Agent to the
effect that the Guaranty extends and is applicable to each new Note. Such
new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective
date of such assignment and shall otherwise be in substantially the form of
the assigned Notes. The surrendered Notes shall be canceled and returned
to the Borrower.

Section 27.4. Participations. Each Bank may sell participations to
one or more banks or other entities in all or a portion of such Bank's
rights and obligations under this Agreement and the other Loan Documents;
provided that (a) any such sale or participation shall not affect the
rights and duties of the selling Bank hereunder to the Borrower, (b) such
sale and participation shall not entitle such participant any rights or
privileges under this Agreement or the Loan Documents (including, without
limitation, the right to approve waivers, amendments or modifications),
(c) such participant shall have no direct rights against the Borrower or
the Guarantor except the rights granted to the Banks pursuant to Section
13, (d) such sale is effected in accordance with all applicable laws, and
(e) such participant shall not be a Person controlling, controlled by or
under common control with, or which is not otherwise free from influence or
control by, the Borrower, any of its Subsidiaries or any Member or any
Guarantor.

Section 27.5. Pledge by Bank. Any Bank may at any time pledge all
or any portion of its interest and rights under this Agreement (including
all or any portion of its Note) to any of the twelve Federal Reserve Banks
organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section
341. No such pledge or the enforcement thereof shall release the pledgor
Bank from its obligations hereunder or under any of the other Loan
Documents.

Section 27.6. No Assignment by Borrower. The Borrower shall not
assign or transfer any of its rights or obligations under any of the Loan
Documents without the prior written consent of each of the Banks.

Section 27.7. Disclosure. The Borrower agrees that in addition to
disclosures made in accordance with standard banking practices any Bank may
disclose information obtained by such Bank pursuant to this Agreement to
assignees or participants and potential assignees or participants
hereunder.

Section 28. NOTICES.

Each notice, demand, election or request provided for or permitted to
be given pursuant to this Agreement (hereinafter in this Section 19
referred to as "Notice"), but specifically excluding to the maximum extent
permitted by law any notices of the institution or commencement of
foreclosure proceedings, must be in writing and shall be deemed to have
been properly given or served by personal delivery or by sending same by
overnight courier or by depositing same in the United States Mail, postpaid
and registered or certified, return receipt requested, or as expressly
permitted herein, by telegraph, telecopy, telefax or telex, and addressed
as follows:

If to the Agent or BKB:

BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Real Estate Division

With a copy to:

BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇ ▇▇▇▇▇
Telecopy No.: 770/390-8434

If to the Borrower:

Wellsford/Whitehall Properties, L.L.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇

With a copy to:

▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇

if to another Bank now a party to this Agreement, to the address set forth
on the signature page hereto, and to each other Bank which may hereafter
become a party to this Agreement at such address as may be designated by
such Bank. Each Notice shall be effective upon being personally delivered
or upon being sent by overnight courier or upon being deposited in the
United States Mail as aforesaid. The time period in which a response to
such Notice must be given or any action taken with respect thereto (if
any), however, shall commence to run from the date of receipt if personally
delivered or sent by overnight courier, or if so deposited in the United
States Mail, the earlier of three (3) Business Days following such deposit
or the date of receipt as disclosed on the return receipt. Rejection or
other refusal to accept or the inability to deliver because of changed
address for which no notice was given shall be deemed to be receipt of the
Notice sent. By giving at least fifteen (15) days prior Notice thereof,
the Borrower, a Bank or Agent shall have the right from time to time and at
any time during the term of this Agreement to change their respective
addresses and each shall have the right to specify as its address any other
address within the United States of America.

Section 29. RELATIONSHIP.

Neither the Agent nor any Bank has any fiduciary relationship with or
fiduciary duty to Borrower arising out of or in connection with this
Agreement or the other Loan Documents, or the transactions contemplated
hereunder or thereunder, and the relationship between each Bank and the
Borrower is solely that of a lender and borrower, and nothing contained
herein or in any of the other Loan Documents shall in any manner be
construed as making the parties hereto partners, joint venturers or any
other relationship other than lender and borrower.

Section 30. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.

THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF
THE STATE OF NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF SUCH STATE (EXCLUDING THE LAWS APPLICABLE
TO CONFLICTS OR CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING
THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE
SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT
THE ADDRESS SPECIFIED IN Section 19. THE BORROWER HEREBY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT
OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

Section 31. HEADINGS.

The captions in this Agreement are for convenience of reference only
and shall not define or limit the provisions hereof.

Section 32. COUNTERPARTS.

This Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which
when so executed and delivered shall be an original, and all of which
together shall constitute one instrument. In proving this Agreement it
shall not be necessary to produce or account for more than one such
counterpart signed by the party against whom enforcement is sought.

Section 33. ENTIRE AGREEMENT, ETC.

The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Agreement
nor any term hereof may be changed, waived, discharged or terminated,
except as provided in Section 27.

Section 34. WAIVER OF JURY TRIAL.

EACH OF THE BORROWER, THE AGENT AND THE BANKS HEREBY WAIVES ITS
RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF
ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY NOTE OR ANY OF THE OTHER
LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. THE BORROWER (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY BANK OR THE AGENT HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH BANK OR THE AGENT WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT THE AGENT AND THE BANKS HAVE BEEN INDUCED TO ENTER INTO
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY,
AMONG OTHER THINGS, THE WAIVER AND CERTIFICATIONS CONTAINED IN THIS Section
25.

Section 35. DEALINGS WITH THE BORROWER.

The Banks and their affiliates may accept deposits from, extend credit
to and generally engage in any kind of banking, trust or other business
with the Borrower, its Subsidiaries, the Guarantor or any of their
affiliates regardless of the capacity of the Bank hereunder.

Section 36. CONSENTS, AMENDMENTS, WAIVERS, ETC.

Except as otherwise expressly provided in this Agreement, any consent
or approval required or permitted by this Agreement may be given, and any
term of this Agreement or of any other instrument related hereto or
mentioned herein may be amended, and the performance or observance by the
Borrower or the Guarantor of any terms of this Agreement or such other
instrument or the continuance of any Default or Event of Default may be
waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of
the Majority Banks. Notwithstanding the foregoing, none of the following
may occur without the written consent of each Bank: a change in the rate
of interest on and the term of the Notes; a change in the amount of the
Commitments of the Banks; a forgiveness, reduction or waiver of the
principal of any unpaid Loan or any interest thereon or fee payable under
the Loan Documents; a change in the amount of any fee payable to a Bank
hereunder; the postponement of any date fixed for any payment of principal
of or interest on the Loan; an extension of the Maturity Date (except as
provided in Section 2.8); a change in the manner of distribution of any
payments to the Banks or the Agent; the release of the Borrower or the
Guarantor or any Collateral except as otherwise provided herein; an
amendment of the definition of Majority Banks or of any requirement for
consent by all of the Banks; any modification to require a Bank to fund a
pro rata share of a request for an advance of the Loan made by the Borrower
other than based on its Commitment Percentage; an amendment to this Section
27; an amendment of the definition of Majority Banks; or an amendment of
any provision of this Agreement or the Loan Documents which requires the
approval of all of the Banks or the Majority Banks to require a lesser
number of Banks to approve such action. The amount of the Agent's fee
payable for the Agent's account and the provisions of Section 14 may not
be amended without the written consent of the Agent. No waiver shall
extend to or affect any obligation not expressly waived or impair any right
consequent thereon. No course of dealing or delay or omission on the part
of the Agent or any Bank in exercising any right shall operate as a waiver
thereof or otherwise be prejudicial thereto. No notice to or demand upon
the Borrower shall entitle the Borrower to other or further notice or
demand in similar or other circumstances.

Section 37. SEVERABILITY.

The provisions of this Agreement are severable, and if any one
clause or provision hereof shall be held invalid or unenforceable in whole
or in part in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in such
jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this
Agreement in any jurisdiction.

Section 38. LIMITATION ON LIABILITY.

NO OBLIGATION OR LIABILITY WHATSOEVER OF THE BORROWER WHICH MAY ARISE
AT ANY TIME UNDER THIS AGREEMENT OR ANY OBLIGATION OR LIABILITY WHICH MAY
BE INCURRED BY IT PURSUANT TO ANY OTHER LOAN DOCUMENT SHALL BE PERSONALLY
BINDING UPON, NOR SHALL RESORT FOR THE ENFORCEMENT THEREOF BE HAD TO, THE
PRIVATE PROPERTY OF ANY OF THE BORROWER'S MEMBERS REGARDLESS OF WHETHER
SUCH OBLIGATION OR LIABILITY IS IN THE NATURE OF CONTRACT, TORT OR
OTHERWISE; PROVIDED, HOWEVER, NOTHING HEREIN SHALL DIMINISH OR IMPAIR THE
RIGHTS OF AGENT AND THE BANKS TO PURSUE ANY REMEDY AGAINST ANY ASSETS OF
THE BORROWER OR RELIEVE, REDUCE OR IMPAIR ANY OBLIGATION OF ANY GUARANTOR
UNDER ITS RESPECTIVE GUARANTY OR INDEMNITY AGREEMENT.

Section 39. NO UNWRITTEN AGREEMENTS.

THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

Section 40. TIME OF THE ESSENCE.

Time is of the essence with respect to each and every covenant,
agreement and obligation of the Borrower under this Agreement and the other
Loan Documents.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as a sealed instrument as of the date first set forth above.

WELLSFORD/WHITEHALL PROPERTIES, L.L.C., a
Delaware limited liability company, by its
managing member

By: Wellsford Commercial Property Trust, a
Maryland real estate investment trust,
manager

By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President

[SEAL]

BANKBOSTON, N.A., a national banking
association, individually and as Agent

By:/s/ ▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director

[BANK SEAL]

▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY, a New York
limited partnership, individually and as Co-
Arranger and Co-Syndication Agent

By: ▇▇▇▇▇▇▇ Sachs Real Estate Funding Corp.,
general partner

By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Signatory

[CORPORATE SEAL]

▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇ ▇▇▇▇▇
EXHIBIT A

FORM OF NOTE

$______________ December __, 1997

FOR VALUE RECEIVED, the undersigned WELLSFORD/WHITEHALL PROPERTIES,
L.L.C., a Delaware limited liability company, hereby promises to pay to
____________________________________ or order, in accordance with the terms
of that certain Revolving Credit Agreement dated as of December 15, 1997
(the "Credit Agreement"), as from time to time in effect, among the
undersigned, BankBoston, N.A., for itself and as Agent, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company, and such other Banks as may be from time to time named
therein, to the extent not sooner paid, on or before the Maturity Date, the
principal sum of ____________________________ DOLLARS ($______________), or
such amount as may be advanced by the payee hereof under the Credit
Agreement with daily interest from the date hereof, computed as provided in
the Credit Agreement, on the principal amount hereof from time to time
unpaid, at a rate per annum on each portion of the principal amount which
shall at all times be equal to the rate of interest applicable to such
portion in accordance with the Credit Agreement, and with interest on
overdue principal and, to the extent permitted by applicable law, on
overdue installments of interest and late charges at the rates provided in
the Credit Agreement. Interest shall be payable on the dates specified in
the Credit Agreement, except that all accrued interest shall be paid at the
stated or accelerated maturity hereof or upon the prepayment in full
hereof. Capitalized terms used herein and not otherwise defined herein
shall have the meanings set forth in the Credit Agreement.

Payments hereunder shall be made to BankBoston, N.A., as Agent for the
payee hereof, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.

This Note is one of one or more Notes evidencing borrowings under and
is entitled to the benefits and subject to the provisions of the Credit
Agreement. The principal of this Note may be due and payable in whole or
in part prior to the maturity date stated above and is subject to mandatory
prepayment in the amounts and under the circumstances set forth in the
Credit Agreement, and may be prepaid in whole or from time to time in part,
all as set forth in the Credit Agreement.

Notwithstanding anything in this Note to the contrary, all agreements
between the Borrower and the Banks and the Agent, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that
in no contingency, whether by reason of acceleration of the maturity of any
of the Obligations or otherwise, shall the interest contracted for, charged
or received by the Banks exceed the maximum amount permissible under
applicable law. If, from any circumstance whatsoever, interest would
otherwise be payable to the Banks in excess of the maximum lawful amount,
the interest payable to the Banks shall be reduced to the maximum amount
permitted under applicable law; and if from any circumstance the Banks
shall ever receive anything of value deemed interest by applicable law in
excess of the maximum lawful amount, an amount equal to any excessive
interest shall be applied to the reduction of the principal balance of the
Obligations and to the payment of interest or, if such excessive interest
exceeds the unpaid balance of principal of the Obligations, such excess
shall be refunded to the Borrower. All interest paid or agreed to be paid
to the Banks shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full period until
payment in full of the principal of the Obligations (including the period
of any renewal or extension thereof) so that the interest thereon for such
full period shall not exceed the maximum amount permitted by applicable
law. This paragraph shall control all agreements between the Borrower and
the Banks and the Agent.

In case an Event of Default shall occur, the entire principal amount
of this Note may become or be declared due and payable in the manner and
with the effect provided in said Credit Agreement.

This Note shall be governed by and construed in accordance with the
laws of the State of New York (without giving effect to the conflict of
laws rules of any jurisdiction).

The undersigned maker and all guarantors and endorsers, hereby waive
presentment, demand, notice, protest, notice of intention to accelerate the
indebtedness evidenced hereby, notice of acceleration of the indebtedness
evidenced hereby and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note, except as
specifically otherwise provided in the Credit Agreement, and assent to
extensions of time of payment or forbearance or other indulgence without
notice.

IN WITNESS WHEREOF the undersigned has by its duly authorized
officers, executed this Note under seal as of the day and year first above
written.

WELLSFORD/WHITEHALL PROPERTIES, L.L.C., a
Delaware limited liability company, by its
managing member

By: Wellsford Commercial Properties Trust, a
Maryland real estate investment trust,
manager

By: ______________________________
Title:

[SEAL]

EXHIBIT B

FORM OF REQUEST FOR LOAN

BankBoston, N.A.,as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇ ▇▇▇▇▇

Ladies and Gentlemen:

Pursuant to the provisions of Section 2.6 of the Revolving Credit
Agreement dated December 15, 1997, as from time to time in effect (the
"Credit Agreement"), among Wellsford/Whitehall Properties, L.L.C. (the
"Borrower"), BankBoston, N.A., for itself and as Agent, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company, and the other Banks from time to time party thereto, the
Borrower hereby requests and certifies as follows:

1. Loan. The Borrower hereby requests a Loan under Section 2.1 of
the Credit Agreement:

Principal Amount: $

Type (Eurodollar, Base Rate):

Drawdown Date: _____________, 19__

Interest Period:

by credit to the general account of the Borrower with the Agent at the
Agent's Head Office.

2. Use of Proceeds. Such Loan shall be used for the following
purposes permitted by Section 7.11 of the Credit Agreement:

[Describe]

3. Capital Improvement Project. In the event that such Loan relates
to any Capital Improvement Project or portion thereof, the Borrower
represents and warrants that such Loan will reimburse the Borrower for or
pay costs incurred for work on the Capital Improvement Project identified
above, which work covered by this request is in place or is for stored
materials which are properly secured. The Borrower further certifies that
all materialmen, laborers, subcontractors and any other parties who might
or could claim statutory or common law liens and are furnishing or have
furnished material or labor to the Mortgaged Property in connection with
such Capital Improvement Project have been paid (or will be paid from the
proceeds of the requested advance) all amounts due for such labor and
materials.

4. No Default. The undersigned chief financial or chief accounting
officer of the Borrower certifies that the Borrower is and will be in
compliance with all covenants under the Loan Documents after giving effect
to the making of the Loan requested hereby. No condemnation proceedings
are pending or to the Borrower's knowledge threatened against any Mortgaged
Property or other Collateral.

5. Representations True. Each of the representations and warranties
made by or on behalf of the Borrower and its Subsidiaries and the Guarantor
contained in the Credit Agreement, in the other Loan Documents or in any
document or instrument delivered pursuant to or in connection with the
Credit Agreement was true as of the date as of which it was made and shall
also be true at and as of the Drawdown Date for the Loan requested hereby
(except that representations as to the Guarantors and Members shall not be
deemed to have been repeated), with the same effect as if made at and as of
such Drawdown Date (except to the extent of changes resulting from
transactions contemplated or permitted by the Credit Agreement and the
other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse, and
except to the extent that such representations and warranties relate
expressly to an earlier date) and no Default or Event of Default has
occurred and is continuing.

6. Other Conditions. All other conditions to the making of the Loan
requested hereby set forth in Section 11 of the Credit Agreement have been
satisfied. (Reference title insurance "date down", if applicable.)

7. Drawdown Date. Except to the extent, if any, specified by notice
actually received by the Agent prior to the Drawdown Date specified above,
the foregoing representations and warranties shall be deemed to have been
made by the Borrower on and as of such Drawdown Date.

8. Definitions. Terms defined in the Credit Agreement are used
herein with the meanings so defined.

IN WITNESS WHEREOF, I have hereunto set my hand this _____ day of
_______________, 199___.

WELLSFORD/WHITEHALL PROPERTIES, L.L.C., a
Delaware limited liability company, by its
managing member

By: Wellsford Commercial Property Trust, a
Maryland real estate investment trust,
manager

By: ________________________________
Title:

[SEAL]

EXHIBIT C

FORM OF
COMPLIANCE CERTIFICATE

BankBoston, N.A.,
for itself and as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇ ▇▇▇▇▇

Ladies and Gentlemen:

Reference is made to the Revolving Credit Agreement dated as of
December 15, 1997 (the "Credit Agreement") by and among Wellsford/Whitehall
Properties, L.L.C. (the "Borrower"), BankBoston, N.A., for itself and as
Agent, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, and the other Banks from time to
time party thereto. Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as defined in the Credit
Agreement.

Pursuant to the Credit Agreement, the Borrower is furnishing to you
herewith (or has most recently furnished to you) the financial statements
of the Borrower and its Subsidiaries for the fiscal period ended
_______________ (the "Balance Sheet Date"). Such financial statements have
been prepared in accordance with generally accepted accounting principles
and present fairly the financial position of the Borrower and the
Subsidiaries covered thereby at the date thereof and the results of their
operations for the periods covered thereby, subject in the case of interim
statements only to normal year-end audit adjustments.

This certificate is submitted in compliance with requirements of
Section 2.6(iv), Section 5.3(b), Section 7.4(i), Section 7.5(e),
Section 8.8, Section 10.14 or Section 11.6(b) of the Credit Agreement.
If this certificate is provided under a provision other than Section
7.4(i), the calculations provided below are made using the financial
statements of the Borrower and its Subsidiaries as of the Balance Sheet
Date adjusted in the best good-faith estimate of the Borrower to give
effect to the making of a Loan, extension of the Maturity Date, acquisition
or disposition of property or other event that occasions the preparation of
this certificate; and the nature of such event and the Borrower's estimate
of its effects are set forth in reasonable detail in an attachment hereto.
The undersigned officer of the Borrower is its chief financial or chief
accounting officer.

The undersigned officer has caused the provisions of the Credit
Agreement to be reviewed and has no knowledge of any Default or Event of
Default. (Note: If the signer does have knowledge of any Default or Event
of Default, the form of certificate should be revised to specify the
Default or Event of Default, the nature thereof and the actions taken,
being taken or proposed to be taken by the Borrower with respect thereto.]

The Borrower is providing the following information to demonstrate
compliance as of the date hereof with the following covenants:

I. Section 9.1. Liabilities to Assets Ratio.

A. Consolidated Total Liabilities
per balance sheet $____________

B. Consolidated Total Assets per
balance sheet $____________

Ratio of A to B may not exceed 0.75 to 1
prior to the second anniversary, 0.70 to 1 for
the period thereafter through the third
anniversary, 0.65 to 1 for the period thereafter.

II. Section 9.2. Consolidated Operating Cash
Flow Coverage.

A. Consolidated Operating Cash Flow =

Consolidated Net Income for
most recent quarter $____________

Plus depreciation and amortization $____________

Plus interest expense $____________

Plus extraordinary or non-recurring
losses $____________

Minus extraordinary or non-
recurring gains
($____________)

Plus/Minus Rent Adjustments $____________

Minus Rents included in Net Income from
tenants delinquent in excess of 60 days
($____________)

Subtotal for most recent quarter
$_____________

Consolidated Operating Cash Flow
for three prior quarters:

Quarter ended __________
$_____________

Total
$_____________

Plus General and Administrative Costs
for four prior Quarters $____________

Plus Negative Carry for four prior Quarters $____________

Minus Capital Improvement Reserve for four
prior quarters ($___________)

Minus Capitalized Negative Carry for four
prior quarters ($___________)

Total $____________

B. Debt Service for four prior
quarters $____________

A must equal or exceed 115% of B for the period
prior to the second anniversary; A must equal or
exceed 125% of B for the period thereafter
through the third anniversary; A must equal
or exceed 135% of B thereafter.

III. Section 9.3. Term Loan Debt Service Coverage.

A. Net Operating Income

Net Income for most recent quarter $____________
from Stabilized Properties collateral for
the Term Loan

Plus depreciation and amortization $____________

Plus Capital Expenditures (including tenant $____________
improvements and leasing commissions)

Plus/Minus Rent Adjustments $____________

Minus Rents included in Net Income from
($____________)
tenants delinquent in excess of 60 days

Net Operating Income for three prior quarters:

Quarter ended __________ $____________

Quarter ended __________
$_____________

Quarter ended _________
$_____________

Total
$_____________

B. Capital Improvement Reserve for
$_____________
Stabilized Properties that are Collateral
for the Term Loan

C. Debt Service Coverage Test Amount
$_____________

[A minus B must equal or exceed 1.3 times C]

IV. Section 9.4. Minimum Shareholder's Equity

A. Shareholders' Equity
$_____________

B. $45,000,000.00
$45,000,000.00

Plus 80% of net proceeds from any Equity Offering
after Closing Date
$_____________

Plus 100% of Net Income (or Deficit) after Closing
Date
$_____________

plus Depreciation deducted in calculating Net Income
(or Deficit) after Closing Date
$_____________

Minus Aggregate Distributions pursuant to
Section 8.7(a)after Closing Date
$_____________

Total
$_____________

A must equal or exceed B

V. Section 9.5. Real Estate Assets

A. Consolidated Total Assets
$_____________

B. Value of direct or indirect interests
in undeveloped land assets
$______________

Plus Value of direct or indirect interests
in non-income producing land assets or
mortgages secured by non-income producing
land assets
$______________

Total
$______________

B may not exceed 5% of A

VI. Section 9.6. Required Equity

A. Indebtedness pursuant to this Agreement
(Section 8.1(a))
$______________

Plus Recourse Indebtedness (Section 8.1(f))
$______________
(Amount may not exceed $15,000,000.00, or
$20,000,000 after result of Section 9.4 test
exceeds $75,000,000.00)

Plus Non-Recourse Indebtedness (Section 8.1(g))
$_____________

Plus Non-Recourse Indebtedness (Section 8.1(h))
$_____________

Plus Indebtedness under Term Loan Agreement
(Section 8.1(i))
$_____________

Total
$_____________

B. Aggregate all-in acquisition cost of Real Estate
$_____________
and Equity Interests of Borrower and its
Subsidiaries and historic cost of capital
improvements

Ratio of A to B
______________

A may not exceed 0.75 of B

IN WITNESS WHEREOF, I have hereunto set my hand this _____ day of
_______________, 199___.

WELLSFORD/WHITEHALL PROPERTIES, L.L.C., a
Delaware limited liability company, by its
managing member

By: Wellsford Commercial Property Trust, a
Maryland real estate investment trust,
manager

By: ________________________________
Title:

[SEAL]

EXHIBIT D

FORM OF REQUEST FOR EXTENSION OF LOAN

BankBoston, N.A., as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇

Ladies and Gentlemen:

Pursuant to the provisions of Section 2.8 of the Revolving Credit
Agreement dated December 15, 1997, as from time to time in effect (the
"Credit Agreement"), among Wellsford/Whitehall Properties, L.L.C. (the
"Borrower"), BankBoston, for itself and as Agent, ▇▇▇▇▇▇▇ Sachs Mortgage
Company, and the other Banks from time to time party thereto, the Borrower
hereby requests and certifies as follows:

1. Extension Request. The Borrower hereby irrevocably requests that
the Maturity Date be extended as provided in Section 2.8 of the Credit
Agreement.

2. Extension Fee. The Borrower undertakes to pay the extension fee
as required by Section 2.8 (b)(i) of the Credit Agreement as required
therein.

3. No Default. The undersigned chief financial or chief accounting
officer of the Borrower certifies that the Borrower is and will be in
compliance with all covenants under the Loan Documents after giving effect
to the extension requested hereby.

4. Representations True. Each of the representations and warranties
made by or on behalf of the Borrower, its Subsidiaries, the Members and the
Guarantors contained in the Credit Agreement, in the other Loan Documents
or in any document or instrument delivered pursuant to or in connection
with the Credit Agreement was true and correct in all material respect as
of the date as of which it was made and shall also be true and correct in
all material respects at and as of the Maturity Date (without regard to
such extension request) with the same effect as if made at and as of the
Maturity Date (without regard to such extension request) (except to the
extent of changes occurring in the ordinary course of business that have
not had any materially adverse affect on the business of the Borrower, any
of its Subsidiaries, any of the Members or any Guarantor).

5. Other Conditions. All other conditions to the extension to the
Loan requested hereby set forth in Section 2.8 of the Credit Agreement
have been satisfied.

6. Date. Except to the extent, if any, specified by notice actually
received by the Agent prior to the Maturity Date (without regard to such
extension request) specified above, the foregoing representations and
warranties shall be deemed to have been made by the Borrower on and as of
the Maturity Date (without regard to such extension request).

7. Definitions. Terms defined in the Credit Agreement are used
herein with the meanings so defined.

IN WITNESS WHEREOF, I have hereunto set my hand this _____ day of
______________, 199__.

WELLSFORD/WHITEHALL PROPERTIES, L.L.C., a
Delaware limited liability company, by its
managing member

By: Wellsford Commercial Property Trust, a
Maryland real estate investment trust,
manager

By: _______________________________
Title:

[SEAL]

SCHEDULE 1.1

BANKS AND COMMITMENTS

Name and Address Commitment Commitment Percentage

BankBoston, N.A. $ 75,000,000 50%
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Real Estate Division

Eurodollar Lending Office
Same as above

▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company $ 75,000,000 50%
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇ ▇▇▇▇▇

Eurodollar Lending Office
Same as above

Total Commitment $150,000,000 100%

SCHEDULE 1.3

INITIAL COLLATERAL VALUES

Mortgaged Property Initial Collateral Value

1. Chatham $ 6,089,674.00

2. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ $ 886,489.00

3. Pointview $16,735,668.00
SCHEDULE 5.3

POINT VIEW LAND

SCHEDULE 6.3

TITLE TO PROPERTIES; LEASES

None.

SCHEDULE 6.4

ALL-IN ACQUISITION COSTS

BORROWER

Collateral Acquisition Cost

1. Chatham $ 8,119,566.00

2. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ $ 1,181,985.00

3. Pointview $22,314,224.00

TERM LOAN BORROWER

Real Estate Acquisition Cost

1. 300 Atrium $17,660,418.00

2. 400 Atrium $32,731,152.00

3. 500 Atrium $20,024,753.00

4. 700 Atrium $18,159,775.00

5. ▇▇▇▇ ▇ ▇▇▇▇▇▇ $32,832,508.00

6. Greenbrook Corporate Center $23,871,815.00

7. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ $ 2,909,695.00

SCHEDULE 6.7

LITIGATION

None.

SCHEDULE 6.17

ERISA PLANS

None.

SCHEDULE 6.21

SUBSIDIARIES OF THE BORROWER

1. WEL/WH 1275 K Street Holding, L.L.C.

2. WEL/WH 1275 K Street, L.L.C.

3. WEL/▇▇ ▇▇▇▇▇▇▇, L.L.C.

4. WEL/WH 1700 Valley, L.L.C.

5. WEL/WH Convention, L.L.C.

6. WEL/WH Berkeley, L.L.C.

7. WEL/WH Lackawanna, L.L.C.

TABLE OF CONTENTS

Section 1. DEFINITIONS AND RULES OF INTERPRETATION.. . . . . . . . . . . 1
Section 1.1. Definitions. . . . . . . . . . . . . . . . . 1
Section 1.2. Rules of Interpretation. . . . . . . . . . . .20

Section 2. THE REVOLVING CREDIT FACILITY.. . . . . . . . . . . . . . . .21
Section 2.1. Commitment to Lend. . . . . . . . . . . . . .21
Section 2.2. Facility Fee. . . . . . . . . . . . . . . . .22
Section 2.3. Reduction of Commitment. . . . . . . . . . . .22
Section 2.4. Notes. . . . . . . . . . . . . . . . . . . . .22
Section 2.5. Interest on Loans. . . . . . . . . . . . . . .23
Section 2.6. Requests for Loans. . . . . . . . . . . . . .23
Section 2.7. Funds for Loans. . . . . . . . . . . . . . . .24
Section 2.8. Extension of Maturity Date . . . . . . . . . .25

Section 3. REPAYMENT OF THE LOANS. . . . . . . . . . . . . . . . . . . .26
Section 3.1. Stated Maturity. . . . . . . . . . . . . . . .26
Section 3.2. Intentionally omitted.. . . . . . . . . . . . .26
Section 3.3. Optional Prepayments. . . . . . . . . . . . .26
Section 3.4. Partial Prepayments. . . . . . . . . . . . . .26
Section 3.5. Effect of Prepayments. . . . . . . . . . . . .26

Section 4. CERTAIN GENERAL PROVISIONS. . . . . . . . . . . . . . . . . .27
Section 4.1. Conversion Options.. . . . . . . . . . . . . .27
Section 4.2. Closing Fee. . . . . . . . . . . . . . . . . .27
Section 4.3. Agent's Fee. . . . . . . . . . . . . . . . . .27
Section 4.4. Funds for Payments.. . . . . . . . . . . . . .28
Section 4.5. Computations. . . . . . . . . . . . . . . . .28
Section 4.6. Inability to Determine Eurodollar Rate. . . .28
Section 4.7. Illegality. . . . . . . . . . . . . . . . . .29
Section 4.8. Additional Interest. . . . . . . . . . . . . .29
Section 4.9. Additional Costs, Etc. . . . . . . . . . . . .29
Section 4.10. Capital Adequacy. . . . . . . . . . . . . . .30
Section 4.11. Indemnity of Borrower. . . . . . . . . . . . .31
Section 4.12. Interest on Overdue Amounts; Late Charge. . .31
Section 4.13. Intentionally Omitted. . . . . . . . . . . . .31
Section 4.14. Certificate. . . . . . . . . . . . . . . . . .31
Section 4.15. Limitation on Interest. . . . . . . . . . . .31
Section 4.16. Certain Provisions Relating to
Increased Costs. . . . . . . . . . . . . .32

Section 5. COLLATERAL SECURITY.. . . . . . . . . . . . . . . . . . . . .32
Section 5.1. Collateral . . . . . . . . . . . . . . . . . .32
Section 5.2. Appraisals . . . . . . . . . . . . . . . . . .33
Section 5.3. Release of Collateral. . . . . . . . . . . . .33
Section 5.4. Additional Collateral. . . . . . . . . . . . .35
Section 5.5. Holdback. . . . . . . . . . . . . . . . . . .36
Section 5.6. [Intentionally omitted]. . . . . . . . . . . .36
Section 5.7. Mezzanine Properties. . . . . . . . . . . . .36

Section 6. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . .38
Section 6.1. Corporate Authority, Etc.. . . . . . . . . . .38
Section 6.2. Governmental Approvals. . . . . . . . . . . .39
Section 6.3. Title to Properties: Leases. . . . . . . . . .39
Section 6.4. Financial Statements. . . . . . . . . . . . .39
Section 6.5. No Material Changes. . . . . . . . . . . . . .40
Section 6.6. Franchises, Patents, Copyrights, Etc. . . . .40
Section 6.7. Litigation. . . . . . . . . . . . . . . . . .40
Section 6.8. No Materially Adverse Contracts, Etc. . . . .40
Section 6.9. Compliance with Other Instruments, Laws, Etc. 40
Section 6.10. Tax Status. . . . . . . . . . . . . . . . . .41
Section 6.11. No Event of Default. . . . . . . . . . . . . .41
Section 6.12. Holding Company and Investment Company Acts. .41
Section 6.13. Absence of UCC Financing Statements, Etc. . .41
Section 6.14. Setoff, Etc. . . . . . . . . . . . . . . . . .41
Section 6.15. Certain Transactions. . . . . . . . . . . . .41
Section 6.16. Employee Benefit Plans. . . . . . . . . . . .41
Section 6.17. ERISA Taxes. . . . . . . . . . . . . . . . .42
Section 6.18. Plan Payments. . . . . . . . . . . . . . . . .42
Section 6.19. Regulations U and X. . . . . . . . . . . . . .42
Section 6.20. Environmental Compliance. . . . . . . . . . .42
Section 6.21. Subsidiaries. . . . . . . . . . . . . . . . .44
Section 6.22. Leases. . . . . . . . . . . . . . . . . . . .44
Section 6.23. Loan Documents. . . . . . . . . . . . . . . .44
Section 6.24. Mortgaged Property. . . . . . . . . . . . . .44
Section 6.25. Brokers. . . . . . . . . . . . . . . . . . . .47
Section 6.26. Fair Consideration. . . . . . . . . . . . . .48
Section 6.27. Solvency. . . . . . . . . . . . . . . . . . .48
Section 6.28. No Bankruptcy Filing. . . . . . . . . . . . .48
Section 6.29. No Fraudulent Intent. . . . . . . . . . . . .48
Section 6.30. Other Debt. . . . . . . . . . . . . . . . . .48
Section 6.31. Members. . . . . . . . . . . . . . . . . . . .48

Section 7. AFFIRMATIVE COVENANTS OF THE BORROWER.. . . . . . . . . . . .49
Section 7.1. Punctual Payment. . . . . . . . . . . . . . .49
Section 7.2. Maintenance of Office. . . . . . . . . . . . .49
Section 7.3. Records and Accounts. . . . . . . . . . . . .49
Section 7.4. Financial Statements, Certificates
and Information. . . . . . . . . . . . . . . .49
Section 7.5. Notices. . . . . . . . . . . . . . . . . . . .51
Section 7.6. Existence; Maintenance of Properties.. . . . .53
Section 7.7. Insurance. . . . . . . . . . . . . . . . . . .53
Section 7.8. Taxes. . . . . . . . . . . . . . . . . . . . .58
Section 7.9. Inspection of Properties and Books. . . . . .58
Section 7.10. Compliance with Laws, Contracts,
Licenses, and Permits. . . . . . . . . . . . .58
Section 7.11. Use of Proceeds. . . . . . . . . . . . . . . .58
Section 7.12. Further Assurances. . . . . . . . . . . . . .59
Section 7.13. Management Agreements. . . . . . . . . . . . .59
Section 7.14. ERISA Compliance. . . . . . . . . . . . . . .59
Section 7.15. Distribution of Income to the Borrower. . . .59
Section 7.16. More Restrictive Agreements. . . . . . . . . .60
Section 7.17. Compliance . . . . . . . . . . . . . . . . . .60
Section 7.18. [Intentionally Omitted . . . . . . . . . . . .60
Section 7.19. Leasing. . . . . . . . . . . . . . . . . . . .60
Section 7.20. Plan Assets, etc . . . . . . . . . . . . . . .61

Section 8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. . . . . . . . . .61
Section 8.1. Restrictions on Indebtedness. . . . . . . . .62
Section 8.2. Restrictions on Liens, Etc. . . . . . . . . .64
Section 8.3. Restrictions on Investments. . . . . . . . . .65
Section 8.4. Merger, Consolidation. . . . . . . . . . . . .66
Section 8.5. Sale and Leaseback. . . . . . . . . . . . . .67
Section 8.6. Compliance with Environmental Laws. . . . . .67
Section 8.7. Distributions. . . . . . . . . . . . . . . . .68
Section 8.8. Asset Sales. . . . . . . . . . . . . . . . . .69
Section 8.9. Development Activity. . . . . . . . . . . . .69
Section 8.10. Sources of Capital. . . . . . . . . . . . . .69
Section 8.11. Transfers. . . . . . . . . . . . . . . . . . .70

Section 9. FINANCIAL COVENANTS OF BORROWER.. . . . . . . . . . . . . . .70
Section 9.1. Liabilities to Assets Ratio. . . . . . . . . .70
Section 9.2. Consolidated Operating Cash Flow Coverage. . .70
Section 9.3. Term Loan Debt Service.. . . . . . . . . . . .71
Section 9.4. Minimum Shareholders Equity. . . . . . . . . .71
Section 9.5. Real Estate Assets. . . . . . . . . . . . . .71
Section 9.6. Required Equity. . . . . . . . . . . . . . . .71

Section 10. CLOSING CONDITIONS.. . . . . . . . . . . . . . . . . . . .72
Section 10.1. Loan Documents. . . . . . . . . . . . . . . .72
Section 10.2. Certified Copies of Organizational Documents. 72
Section 10.3. Bylaws; Resolutions. . . . . . . . . . . . . .72
Section 10.4. Incumbency Certificate; Authorized Signers. .72
Section 10.5. Opinion of Counsel. . . . . . . . . . . . . .72
Section 10.6. Payment of Fees. . . . . . . . . . . . . . . .73
Section 10.7. Appraisals. . . . . . . . . . . . . . . . . .73
Section 10.8. Environmental Reports. . . . . . . . . . . . .73
Section 10.9. Insurance. . . . . . . . . . . . . . . . . . .73
Section 10.10. Performance; No Default. . . . . . . . . .73
Section 10.11. Representations and Warranties. . . . . . .73
Section 10.12. Proceedings and Documents. . . . . . . . .73
Section 10.13. Eligible Real Estate Qualification Documents.
. . . . . . . . . . . . . . . . . . . . . .74
Section 10.14. Compliance Certificate. . . . . . . . . . .74
Section 10.15. Other Documents. . . . . . . . . . . . . .74
Section 10.16. No Condemnation/Taking. . . . . . . . . . .74
Section 10.17. Governmental Policy. . . . . . . . . . . .74
Section 10.18. Other. . . . . . . . . . . . . . . . . . .74

Section 11. CONDITIONS TO ALL BORROWINGS. . . . . . . . . . . . . . . .74
Section 11.1. Prior Conditions Satisfied. . . . . . . . . .74
Section 11.2. Representations True; No Default. . . . . . .74
Section 11.3. No Legal Impediment. . . . . . . . . . . . . .75
Section 11.4. Governmental Regulation. . . . . . . . . . . .75
Section 11.5. Proceedings and Documents. . . . . . . . . . .75
Section 11.6. Borrowing Documents. . . . . . . . . . . . . .75
Section 11.7. Endorsement to Title Policy. . . . . . . . . .75
Section 11.8. Future Advances Tax Payment. . . . . . . . . .75

Section 12. EVENTS OF DEFAULT; ACCELERATION; ETC. . . . . . . . . .76
Section 12.1. Events of Default and Acceleration. . . . . .76
Section ▇▇.▇▇. Limitation of Cure Periods. . . . . . . . .79
Section ▇▇.▇▇. Certain Cure Periods. . . . . . . . . .79
Section 12.2. Termination of Commitments. . . . . . . . . .80
Section 12.3. Remedies.. . . . . . . . . . . . . . . . . . .80
Section 12.4. Distribution of Collateral Proceeds. . . . . .81

Section 13. SETOFF.. . . . . . . . . . . . . . . . . . . . . . . . . .81

Section 14. THE AGENT. . . . . . . . . . . . . . . . . . . . . . . . . .82
Section 14.1. Authorization. . . . . . . . . . . . . . . . .82
Section 14.2. Employees and Agents. . . . . . . . . . . . .82
Section 14.3. No Liability. . . . . . . . . . . . . . . . .82
Section 14.4. No Representations. . . . . . . . . . . . . .82
Section 14.5. Payments.. . . . . . . . . . . . . . . . . . .83
Section 14.6. Holders of Notes. . . . . . . . . . . . . . .84
Section 14.7. Indemnity. . . . . . . . . . . . . . . . . . .84
Section 14.8. Agent as Bank. . . . . . . . . . . . . . . . .84
Section 14.9. Resignation. . . . . . . . . . . . . . . . . .84
Section 14.10. Duties in the Case of Enforcement. . . . .85

Section 15. EXPENSES.. . . . . . . . . . . . . . . . . . . . . . . . .85

Section 16. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . .86

Section 17. SURVIVAL OF COVENANTS, ETC. . . . . . . . . . . . . . . .87

Section 18. ASSIGNMENT AND PARTICIPATION.. . . . . . . . . . . . . . .87
Section 18.1. Conditions to Assignment by Banks. . . . . . .87
Section 18.2. Register. . . . . . . . . . . . . . . . . . .88
Section 18.3. New Notes. . . . . . . . . . . . . . . . . . .88
Section 18.4. Participations. . . . . . . . . . . . . . . .89
Section 18.5. Pledge by Bank. . . . . . . . . . . . . . . .89
Section 18.6. No Assignment by Borrower. . . . . . . . . . .89
Section 18.7. Disclosure. . . . . . . . . . . . . . . . . .89

Section 19. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . .89

Section 20. RELATIONSHIP. . . . . . . . . . . . . . . . . . . . . . .91

Section 21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE. . .91

Section 22. HEADINGS.. . . . . . . . . . . . . . . . . . . . . . . . .91

Section 23. COUNTERPARTS.. . . . . . . . . . . . . . . . . . . . . . .91

Section 24. ENTIRE AGREEMENT, ETC. . . . . . . . . . . . . . . . . . .92

Section 25. WAIVER OF JURY TRIAL.. . . . . . . . . . . . . . . . . . .92

Section 26. DEALINGS WITH THE BORROWER. . . . . . . . . . . . . . . .92

Section 27. CONSENTS, AMENDMENTS, WAIVERS, ETC. . . . . . . . . .92

Section 28. SEVERABILITY.. . . . . . . . . . . . . . . . . . . . . . .93

Section 29. LIMITATION ON LIABILITY. . . . . . . . . . . . . . . . . .93

Section 30. NO UNWRITTEN AGREEMENTS. . . . . . . . . . . . . . . . . .94

Section 31. TIME OF THE ESSENCE. . . . . . . . . . . . . . . . . . . .94

LIST OF EXHIBITS

Exhibit A - Form of Note
Exhibit B - Form of Request for Loan
Exhibit C - Form of Compliance Certificate
Exhibit D - Form of Request for Extension of Loan

LIST OF SCHEDULES

Schedule 1.1 - Banks and Commitments
Schedule 1.3 - Initial Collateral Values
Schedule 5.3 - [Point View] Land
Schedule 6.3 - Title to Property; Leases
Schedule 6.4 - All-In Acquisition Costs
Schedule 6.7 - Litigation
Schedule 6.17 - ERISA Plans
Schedule 6.21 - Subsidiaries of Borrower

REVOLVING CREDIT AGREEMENT DATED AS OF DECEMBER 15, 1997

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