MEZZANINE LOAN AGREEMENT DATED AS OF JULY 16, 1998

MEZZANINE LOAN AGREEMENT

DATED AS OF JULY 16, 1998

among

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

and

BANKBOSTON, N.A.,

▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY,

THE OTHER BANKS WHICH ARE PARTIES TO THIS AGREEMENT,

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

TABLE OF CONTENTS

Page

Section 1. DEFINITIONS AND RULES OF INTERPRETATION. . . . . . . . . . . .-1-
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . .-1-
Section 1.2. Rules of Interpretation . . . . . . . . . . . . . . . -22-

Section 2. THE FACILITY.. . . . . . . . . . . . . . . . . . . . . . . . -23-
Section 2.1. Commitment to Lend. . . . . . . . . . . . . . . . . . -23-
Section 2.2. Facility Fee. . . . . . . . . . . . . . . . . . . . . -23-
Section 2.3. Reduction of Commitment . . . . . . . . . . . . . . . -24-
Section 2.4. Notes . . . . . . . . . . . . . . . . . . . . . . . . -24-
Section 2.5. Interest on Loans . . . . . . . . . . . . . . . . . . -25-
Section 2.6. Requests for Loans. . . . . . . . . . . . . . . . . . -25-
Section 2.7. Funds for Loans . . . . . . . . . . . . . . . . . . . -26-
Section 2.8. Extension of Maturity Date. . . . . . . . . . . . . . -27-
Section 2.9. Termination of Advances.. . . . . . . . . . . . . . . -28-

Section 3. REPAYMENT OF THE LOANS.. . . . . . . . . . . . . . . . . . . -28-
Section 3.1. Stated Maturity . . . . . . . . . . . . . . . . . . . -28-
Section 3.2. Mandatory Prepayments . . . . . . . . . . . . . . . . -29-
Section 3.3. Optional Prepayments. . . . . . . . . . . . . . . . . -30-
Section 3.4. Partial Prepayments . . . . . . . . . . . . . . . . . -30-
Section 3.5. Effect of Prepayments . . . . . . . . . . . . . . . . -30-

Section 4. CERTAIN GENERAL PROVISIONS.. . . . . . . . . . . . . . . . . -31-
Section 4.1. Conversion Options. . . . . . . . . . . . . . . . . . -31-
Section 4.2. Closing Fee . . . . . . . . . . . . . . . . . . . . . -32-
Section 4.3. Agent's Fee . . . . . . . . . . . . . . . . . . . . . -32-
Section 4.4. Funds for Payments. . . . . . . . . . . . . . . . . . -32-
Section 4.5. Computations. . . . . . . . . . . . . . . . . . . . . -32-
Section 4.6. Inability to Determine Eurodollar Rate. . . . . . . . -33-
Section 4.7. Illegality. . . . . . . . . . . . . . . . . . . . . . -33-
Section 4.8. Additional Interest . . . . . . . . . . . . . . . . . -33-
Section 4.9. Additional Costs, Etc.. . . . . . . . . . . . . . . . -33-
Section 4.10. Capital Adequacy. . . . . . . . . . . . . . . . . . . -35-
Section 4.11. Indemnity of Borrower . . . . . . . . . . . . . . . . -35-
Section 4.12. Interest on Overdue Amounts; Late Charge. . . . . . . -35-
Section 4.13. Intentionally Omitted . . . . . . . . . . . . . . . . -35-
Section 4.14. Certificate . . . . . . . . . . . . . . . . . . . . . -36-
Section 4.15. Limitation on Interest. . . . . . . . . . . . . . . . -36-
Section 4.16. Certain Provisions Relating to Increased Costs. . . . -36-

Section 5. COLLATERAL SECURITY. . . . . . . . . . . . . . . . . . . . . -37-
Section 5.1. Collateral. . . . . . . . . . . . . . . . . . . . . . -37-
Section 5.2. Appraisals. . . . . . . . . . . . . . . . . . . . . . -37-
Section 5.3. Release of Property . . . . . . . . . . . . . . . . . -38-
Section 5.4. Additional Collateral . . . . . . . . . . . . . . . . -40-
Section 5.5. Holdback. . . . . . . . . . . . . . . . . . . . . . . -41-
Section 5.6. Disbursement of Tenant Improvement Reserve. . . . . . -42-

Section 6. REPRESENTATIONS AND WARRANTIES.. . . . . . . . . . . . . . . -43-
Section 6.1. Corporate Authority, Etc. . . . . . . . . . . . . . . -44-
Section 6.2. Governmental Approvals. . . . . . . . . . . . . . . . -45-
Section 6.3. Title to Properties; Leases . . . . . . . . . . . . . -45-
Section 6.4. Financial Statements. . . . . . . . . . . . . . . . . -45-
Section 6.5. No Material Adverse Changes . . . . . . . . . . . . . -46-
Section 6.6. Franchises, Patents, Copyrights, Etc. . . . . . . . . -46-
Section 6.7. Litigation. . . . . . . . . . . . . . . . . . . . . . -46-
Section 6.8. No Materially Adverse Contracts, Etc. . . . . . . . . -47-
Section 6.9. Compliance with Other Instruments, Laws, Etc. . . . . -47-
Section 6.10. Tax Status. . . . . . . . . . . . . . . . . . . . . . -47-
Section 6.11. No Event of Default . . . . . . . . . . . . . . . . . -47-
Section 6.12. Holding Company and Investment Company Acts . . . . . -47-
Section 6.13. Absence of UCC Financing Statements, Etc. . . . . . . -48-
Section 6.14. Setoff, Etc.. . . . . . . . . . . . . . . . . . . . . -48-
Section 6.15. Certain Transactions. . . . . . . . . . . . . . . . . -48-
Section 6.16. Employee Benefit Plans. . . . . . . . . . . . . . . . -48-
Section 6.17. ERISA Taxes . . . . . . . . . . . . . . . . . . . . . -49-
Section 6.18. Plan Payments . . . . . . . . . . . . . . . . . . . . -49-
Section 6.19. Regulations U and X . . . . . . . . . . . . . . . . . -49-
Section 6.20. Environmental Compliance. . . . . . . . . . . . . . . -49-
Section 6.21. Subsidiaries. . . . . . . . . . . . . . . . . . . . . -51-
Section 6.22. Leases. . . . . . . . . . . . . . . . . . . . . . . . -51-
Section 6.23. Loan Documents. . . . . . . . . . . . . . . . . . . . -51-
Section 6.24. Mortgaged Property and Mezzanine Property . . . . . . -51-
Section 6.25. Brokers . . . . . . . . . . . . . . . . . . . . . . . -55-
Section 6.26. Fair Consideration. . . . . . . . . . . . . . . . . . -55-
Section 6.27. Solvency. . . . . . . . . . . . . . . . . . . . . . . -55-
Section 6.28. No Bankruptcy Filing. . . . . . . . . . . . . . . . . -55-
Section 6.29. No Fraudulent Intent. . . . . . . . . . . . . . . . . -55-
Section 6.30. Other Debt. . . . . . . . . . . . . . . . . . . . . . -56-
Section 6.31. Ownership . . . . . . . . . . . . . . . . . . . . . . -56-
Section 6.32. Special Purpose Entity. . . . . . . . . . . . . . . . -57-
Section 6.33. Obligations as Members. . . . . . . . . . . . . . . . -57-
Section 6.34. Mortgage Loan Documents. . . . . . . . . . . . . . . -57-

Section 7. AFFIRMATIVE COVENANTS OF THE BORROWER. . . . . . . . . . . . -58-
Section 7.1. Punctual Payment. . . . . . . . . . . . . . . . . . . -58-
Section 7.2. Maintenance of Office . . . . . . . . . . . . . . . . -58-
Section 7.3. Records and Accounts. . . . . . . . . . . . . . . . . -58-
Section 7.4. Financial Statements, Certificates and Information. . -58-
Section 7.5. Notices . . . . . . . . . . . . . . . . . . . . . . . -61-
Section 7.6. Existence; Maintenance of Properties. . . . . . . . . -63-
Section 7.7. Insurance . . . . . . . . . . . . . . . . . . . . . . -64-
Section 7.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . -65-
Section 7.9. Inspection of Properties and Books. . . . . . . . . . -66-
Section 7.10. Compliance with Laws, Contracts, Licenses,
and Permits . . . . . . . . . . . . . . . . . . . . . -66-
Section 7.11. Use of Proceeds . . . . . . . . . . . . . . . . . . . -67-
Section 7.12. Further Assurances. . . . . . . . . . . . . . . . . . -68-
Section 7.13. Management Agreements . . . . . . . . . . . . . . . . -68-
Section 7.14. ERISA Compliance. . . . . . . . . . . . . . . . . . . -68-
Section 7.15. Condemnation. . . . . . . . . . . . . . . . . . . . . -69-
Section 7.16. Distribution of Income to the Borrower. . . . . . . . -69-
Section 7.17. More Restrictive Agreements . . . . . . . . . . . . . -70-
Section 7.18. Compliance. . . . . . . . . . . . . . . . . . . . . . -70-
Section 7.19. Leasing . . . . . . . . . . . . . . . . . . . . . . . -70-
Section 7.20. Plan Assets, etc. . . . . . . . . . . . . . . . . . . -71-
Section 7.21. Preservation and Maintenance. . . . . . . . . . . . . -72-
Section 7.22. Use of Mortgaged Property and Mezzanine Property. . . -73-
Section 7.23. Property Owner to Remain a Single-Purpose Entity. . . -73-

Section 8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.. . . . . . . . . -73-
Section 8.1. Restrictions on Indebtedness. . . . . . . . . . . . . -73-
Section 8.2. Restrictions on Liens, Etc. . . . . . . . . . . . . . -75-
Section 8.3. Restrictions on Investments . . . . . . . . . . . . . -77-
Section 8.4. Merger, Consolidation . . . . . . . . . . . . . . . . -78-
Section 8.5. Sale and Leaseback; Ground Lease. . . . . . . . . . . -79-
Section 8.6. Compliance with Environmental Laws. . . . . . . . . . -79-
Section 8.7. Distributions . . . . . . . . . . . . . . . . . . . . -81-
Section 8.8. Asset Sales . . . . . . . . . . . . . . . . . . . . . -81-
Section 8.9. Development Activity. . . . . . . . . . . . . . . . . -81-
Section 8.10. Sources of Capital. . . . . . . . . . . . . . . . . . -82-
Section 8.11. Transfers . . . . . . . . . . . . . . . . . . . . . . -82-
Section 8.12. Additional Restrictions Concerning the Mortgaged
Property and the Mezzanine Property . . . . . . . . . -82-
Section 8.13. Mortgage Loan Documents . . . . . . . . . . . . . . . -84-

Section 9. FINANCIAL COVENANTS OF BORROWER. . . . . . . . . . . . . . . -84-
Section 9.1. Liabilities to Assets Ratio . . . . . . . . . . . . . -84-
Section 9.2. Consolidated Operating Cash Flow Coverage . . . . . . -85-
Section 9.3. Minimum Shareholders Equity . . . . . . . . . . . . . -85-
Section 9.4. Real Estate Assets. . . . . . . . . . . . . . . . . . -86-
Section 9.5. Required Equity . . . . . . . . . . . . . . . . . . . -86-

Section 10. CLOSING CONDITIONS.. . . . . . . . . . . . . . . . . . . . . -86-
Section 10.1. Loan Documents. . . . . . . . . . . . . . . . . . . . -86-
Section 10.2. Certified Copies of Organizational Documents. . . . . -86-
Section 10.3. Bylaws; Resolutions . . . . . . . . . . . . . . . . . -87-
Section 10.4. Incumbency Certificate; Authorized Signers. . . . . . -87-
Section 10.5. Opinion of Counsel. . . . . . . . . . . . . . . . . . -87-
Section 10.6. Payment of Fees . . . . . . . . . . . . . . . . . . . -87-
Section 10.7. Appraisals. . . . . . . . . . . . . . . . . . . . . . -87-
Section 10.8. Environmental Reports . . . . . . . . . . . . . . . . -87-
Section 10.9. Insurance . . . . . . . . . . . . . . . . . . . . . . -88-
Section 10.10. Performance; No Default . . . . . . . . . . . . . . . -88-
Section 10.11. Representations and Warranties. . . . . . . . . . . . -88-
Section 10.12. Proceedings and Documents . . . . . . . . . . . . . . -88-
Section 10.13. Eligible Real Estate Qualification Documents. . . . . -88-
Section 10.14. Compliance Certificate. . . . . . . . . . . . . . . . -88-
Section 10.15. Other Documents . . . . . . . . . . . . . . . . . . . -88-
Section 10.16. No Condemnation/Taking. . . . . . . . . . . . . . . . -88-
Section 10.17. Governmental Policy . . . . . . . . . . . . . . . . . -89-
Section 10.18. Other . . . . . . . . . . . . . . . . . . . . . . . . -89-
Section 10.19. Satisfaction of Conditions as to Initial Collateral. -89-

Section 11. CONDITIONS TO ALL BORROWINGS.. . . . . . . . . . . . . . . . -89-
Section 11.1. Prior Conditions Satisfied. . . . . . . . . . . . . . -89-
Section 11.2. Representations True; No Default. . . . . . . . . . . -89-
Section 11.3. No Legal Impediment . . . . . . . . . . . . . . . . . -89-
Section 11.4. Governmental Regulation . . . . . . . . . . . . . . . -89-
Section 11.5. Proceedings and Documents . . . . . . . . . . . . . . -90-
Section 11.6. Borrowing Documents . . . . . . . . . . . . . . . . . -90-

Section 12. EVENTS OF DEFAULT; ACCELERATION; ETC.. . . . . . . . . . . . -90-
Section 12.1. Events of Default and Acceleration. . . . . . . . . . -90-
Section 12.1A. Limitation of Cure Periods. . . . . . . . . . . . . . -93-
Section 12.2. Termination of Commitments. . . . . . . . . . . . . . -94-
Section 12.3. Remedies. . . . . . . . . . . . . . . . . . . . . . . -94-
Section 12.4. Distribution of Collateral Proceeds . . . . . . . . . -95-
Section 12.5. Default under Mortgage Loan Documents or Mezzanine
Mortgage Loan Documents . . . . . . . . . . . . . . . -95-

Section 13. SETOFF.. . . . . . . . . . . . . . . . . . . . . . . . . . . -97-

Section 14. THE AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . -97-
Section 14.1. Authorization . . . . . . . . . . . . . . . . . . . . -97-
Section 14.2. Employees and Agents. . . . . . . . . . . . . . . . . -98-
Section 14.3. No Liability. . . . . . . . . . . . . . . . . . . . . -98-
Section 14.4. No Representations. . . . . . . . . . . . . . . . . . -98-
Section 14.5. Payments. . . . . . . . . . . . . . . . . . . . . . . -99-
Section 14.6. Holders of Notes. . . . . . . . . . . . . . . . . . . -99-
Section 14.7. Indemnity . . . . . . . . . . . . . . . . . . . . . .-100-
Section 14.8. Agent as Bank . . . . . . . . . . . . . . . . . . . .-100-
Section 14.9. Resignation; Removal. . . . . . . . . . . . . . . . .-100-
Section 14.10. Duties in the Case of Enforcement . . . . . . . . . .-100-

Section 15. EXPENSES.. . . . . . . . . . . . . . . . . . . . . . . . . .-101-

Section 16. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . .-102-

Section 17. SURVIVAL OF COVENANTS, ETC.. . . . . . . . . . . . . . . . .-103-

Section 18. ASSIGNMENT AND PARTICIPATION.. . . . . . . . . . . . . . . .-104-
Section 18.1. Conditions to Assignment by Banks . . . . . . . . . .-104-
Section 18.2. Register. . . . . . . . . . . . . . . . . . . . . . .-104-
Section 18.3. New Notes . . . . . . . . . . . . . . . . . . . . . .-105-
Section 18.4. Participations. . . . . . . . . . . . . . . . . . . .-105-
Section 18.5. Pledge by Bank. . . . . . . . . . . . . . . . . . . .-105-
Section 18.6. No Assignment by Borrower . . . . . . . . . . . . . .-105-
Section 18.7. Disclosure. . . . . . . . . . . . . . . . . . . . . .-106-
Section 18.8. Additional Restrictions on Assignments
and Participations. . . . . . . . . . . . . . . . . .-106-

Section 19. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . .-106-

Section 20. RELATIONSHIP.. . . . . . . . . . . . . . . . . . . . . . . .-108-

Section 21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.. . . . .-108-

Section 22. HEADINGS.. . . . . . . . . . . . . . . . . . . . . . . . . .-108-

Section 23. COUNTERPARTS.. . . . . . . . . . . . . . . . . . . . . . . .-108-

Section 24. ENTIRE AGREEMENT, ETC. . . . . . . . . . . . . . . . . . . .-109-

Section 25. WAIVER OF JURY TRIAL.. . . . . . . . . . . . . . . . . . . .-109-

Section 26. DEALINGS WITH THE BORROWER.. . . . . . . . . . . . . . . . .-109-

Section 27. CONSENTS, AMENDMENTS, WAIVERS, ETC.. . . . . . . . . . . . .-109-

Section 28. SEVERABILITY.. . . . . . . . . . . . . . . . . . . . . . . .-110-

Section 29. LIMITATION ON LIABILITY. . . . . . . . . . . . . . . . . . .-110-

Section 30. NO UNWRITTEN AGREEMENTS. . . . . . . . . . . . . . . . . . .-110-

Section 31. TIME OF THE ESSENCE. . . . . . . . . . . . . . . . . . . . .-111-

Section 32. BANKRUPTCY.. . . . . . . . . . . . . . . . . . . . . . . . .-111-

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
EXHIBIT E FORM OF CERTIFICATE

SCHEDULE 1.1 BANKS AND COMMITMENTS
SCHEDULE 5.3 DESCRIPTIONS OF GREENBROOK CORPORATE CENTER AND POINT
VIEW VACANT LAND
SCHEDULE 6.3 TITLE TO PROPERTIES
SCHEDULE 6.4 ALL-IN ACQUISITION COST, DESIGNATED COLLATERAL VALUE,
STABILIZED PROPERTIES AND RELEASE PRICES
SCHEDULE 6.7 LITIGATION
SCHEDULE 6.17 ERISA PLANS
SCHEDULE 6.21 SUBSIDIARIES OF THE BORROWER
SCHEDULE 6.30-1 MEZZANINE MORTGAGE LOAN DOCUMENTS
SCHEDULE 6.30-2 MORTGAGE LOAN DOCUMENTS
SCHEDULE 6.30-3 ALLOCATION OF MEZZANINE MORTGAGE LOAN

MEZZANINE LOAN AGREEMENT

THIS MEZZANINE LOAN AGREEMENT is made as of the 16th day of July, 1998,
by and among WELLSFORD/WHITEHALL PROPERTIES II, 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, the other lending institutions which are parties to this
Agreement as "Banks", 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 Arranger and Syndication Agent
(the "Agent"), and ▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY, as Co-Arranger and Co-
Syndication Agent.

RECITALS

WHEREAS, Wellsford/Whitehall Properties, L.L.C. ("Revolver Borrower"),
BankBoston, N.A., ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and Agent have entered into
that certain Revolving Credit Agreement dated as of December 15, 1997 (the
"Original Revolving Credit Agreement"); and

WHEREAS, Revolver Borrower has merged into and with "Property Owner" (as
hereinafter defined), with Property Owner being the surviving entity, and
accordingly, the assets and liabilities of Revolver Borrower have been
assumed by the Property Owner; and

WHEREAS, Agent, Borrower and the Banks desire to continue to provide to
Borrower a portion of the credit facility provided to Revolver Borrower
pursuant to the Original Revolving Credit Agreement;

NOW, THEREFORE, in consideration of the recitals herein and the mutual
covenants contained herein, the parties hereto hereby covenant and agree as
follows:

Section 1. DEFINITIONS AND RULES OF INTERPRETATION.

Section 1.1. 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:

Acknowledgments. The Acknowledgments executed by the Property Owner,
WASH, WASH Manager and ▇▇▇▇▇ Avenue Holdings, respectively, in favor of the
Agent.

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

Advance Termination Date. March 31, 2000.

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 Mezzanine Loan Agreement, including the Schedules and
Exhibits hereto.

Agreement Regarding Fees. The Amended and Restated 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. The Assignment of Member's Interest of even
date herewith 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.

Balance Sheet Date. May 31, 1998.

Bankruptcy Code. Title 11, U.S.C.A., as amended from time to time or
any successor statute thereto.

Banks. BKB, Goldman, the other lending institutions which are a party
hereto 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 or Mezzanine Property.

Building Service Equipment. All apparatus, fixtures and articles of
personal property owned by the Property Owner or WASH, 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 or Mezzanine 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 Property Owner or WASH, unless the same be
abandoned by any such lessee or other occupant or person and shall become the
Property Owner's or WASH'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 Property Owner, which is utilized principally as
commercial office space, capital improvements consisting of rehabilitation,
refurbishment, replacement and improvements (including Tenant Improvement
Projects and Leasing Commissions) 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 the Real Estate owned by Borrower and its Subsidiaries
(including WASH) 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 and liens
created by the Security Documents, including, without limitation, the Equity
Interests.

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; provided that from and after the Advance
Termination Date, the Commitment of each Bank shall equal its Commitment
Percentage of the aggregate principal amount of the Loans from time to time
outstanding.

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(d).

Condominium. As defined in the Mortgage Loan Agreement.

Condominium Documents. As defined in the Mortgage Loan Agreement.

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 of
WWP and its Subsidiaries 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 Stabilized Properties 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 Mortgaged Properties and Mezzanine Properties plus (ii) the historic
cost of capital improvements to such Non-Stabilized Properties (including
Tenant Improvement Projects and Leasing Commissions) 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 of WWP and its Subsidiaries that are not Mortgaged
Properties or Mezzanine Properties plus (ii) the historic cost of capital
improvements to such Non-Stabilized Properties (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, 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 (e) 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.
Notwithstanding anything herein to the contrary, Leasing Commissions shall
only be included for the purposes of clause (b)(ii) after and only for so
long as the tenant under the applicable Lease takes occupancy and is paying
rent in accordance with the terms of the Lease approved pursuant to Section
5.6. 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 and
WASH.

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 on or prior to 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 such 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).

Default. See Section 12.1.

Designated Collateral Value. At the relevant time of reference thereto,
the sum of (a) the lesser of (i) fifteen percent (15%) of the sum of (x) the
all-in acquisition cost (including reasonable closing costs) of a Mortgaged
Property accepted as a Mortgaged Property pursuant to this Agreement plus
(y) the historic cost of capital improvements (including any Tenant
Improvement Projects and Leasing Commissions) to such Mortgaged Property
after the date of such acceptance and (ii) fifteen percent (15%) of the sum
of (x) the Appraised Value of a Mortgaged Property accepted as a Mortgaged
Property pursuant to this Agreement as determined in connection with the
acceptance of such Mortgaged Property pursuant to this Agreement or as most
recently determined pursuant to Section 2.8 of this Agreement, subject to the
terms of Section 5.4, plus (y) the historic cost of Tenant Improvement
Projects and Leasing Commissions to such Mortgaged Property after the date of
such acceptance, plus (b) the current value of cash and Short-term
Investments, if any, at the time pledged to the Agent as Collateral pursuant
to a Pledge Agreement, plus (c) an amount equal to the sum of (i) seventy-
five percent (75%) of the Appraised Value of the Mezzanine Property as
determined in connection with the acceptance of the Mezzanine Collateral or
as most recently determined pursuant to Section 2.8 of this Agreement,
subject to the terms of Section 5.4, minus (ii) the principal Indebtedness of
WASH as of the date of the acquisition by Property Owner of the equity
interests in ▇▇▇▇▇ Avenue Holdings (such amount being $68,340,815.57), minus
(iii) the maximum amount available to be borrowed against the Mezzanine
Property pursuant to the Mortgage Loan Agreement as of the date hereof (such
amount being $5,939,184.00), plus (d) the current value determined in a
manner agreed to by the Majority Banks of Collateral accepted by the Majority
Banks under clause (iv) of Section 5.1. Notwithstanding anything herein to
the contrary, Leasing Commissions shall only be included for the purposes of
clauses (a)(i)(y) and (a)(ii)(y) after and only for so long as the tenant
under the applicable Lease takes occupancy and is paying rent in accordance
with the terms of the Lease approved pursuant to Section 5.6. For the
purposes of clause (a) above, the lesser of the amount determined pursuant to
clause (a)(i) and (a)(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; provided
however, that with respect to the Mortgaged Properties listed on Schedule 6.4
hereto, the initial Designated Collateral Value for such properties is as set
forth on Schedule 6.4; provided further that in the event that the Maturity
Date is extended pursuant to Section 2.8, the Designated Collateral Value for
each of such Mortgaged Properties listed on Schedule 6.4 shall be the lesser
of the amount determined pursuant to clause (a)(i) and (a)(ii) above. The
initial Designated Collateral Values for the Mortgaged Property and the
Mezzanine Property is set forth in Schedule 6.4 hereto.

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 1.1 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 Property Owner;

(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) 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.

(b) 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.

(c) 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 Property Owner that are or are
intended to be subject to the security interest, assignments, and
mortgage liens created by the Mortgage Loan 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 such Real
Estate in the collateral for the Mortgage Loan.

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

(e) 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 Property
Owner in connection with future leasing of such Mortgaged Property, such
forms of Lease to be in form and substance satisfactory to the Agent.

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

(g) 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.

(h) 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 for the Mortgage Loan
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.

(i) Certificate of Occupancy. A copy of the certificate(s) of
occupancy issued to the Property Owner 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 Property Owner), or a legal opinion reasonably
satisfactory to the Agent that no certificates of occupancy are
necessary to the use and occupancy thereof.

(j) 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 for the Mortgage Loan.

(j) 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 for the Mortgage
Loan, 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.

(k) 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 for
the Mortgage Loan, 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.

(l) 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.

(m) Operating Statements. Operating statements for such Real
Estate in the form of such statements delivered to the Banks under
Section 6.4(b) covering each of the four fiscal quarters ending
immediately prior to the addition of such Mortgaged Property to the
collateral for the Mortgage Loan.

(n) 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 of the Borrower in and to 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 1.1 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 WWP Members and any other Person which is
now or may hereafter become a party to a Guaranty, and individually any one
of them.

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

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 subsidiaries.

Indemnity Agreement. Collectively, the Indemnity Agreements Regarding
Hazardous Materials made by the Borrower and the WWP 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.

Interest Payment Date. (a) As to each Loan, the first day of each
January, April, July and October during the term of such Loan, 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

Notwithstanding anything herein to the contrary, each Interest Period
selected by the Borrower hereunder shall be for the same duration selected by
Property Owner for the corresponding advance under the Mortgage Loan
Agreement, or conversion or continuation thereof.

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. Any wholly-owned Subsidiary of the Borrower and the Property
Owner shall not be deemed to 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
Mortgaged Property or the Mezzanine Property.

Leasing Commissions. Reasonable and customary commissions paid to a
licensed real estate broker in connection with a Lease for all or any portion
of the Mortgaged Properties commonly known as Point View, 15 Broad, Mountain
Heights, ▇▇▇▇▇▇ Technology Center and the Polaroid Buildings, approved
pursuant to Section 5.6, pursuant to commission agreements containing such
terms and provisions as are then prevailing between third party, unaffiliated
owners and brokers for comparable leases of space at properties similar to
such Mortgaged Property in the market area in which such Mortgaged Property
is located.

Liens. See Section 8.2.

Loan Documents. This Agreement, the Notes, the Security Documents, the
Guaranty, the Acknowledgments and all other documents, instruments or
agreements executed or delivered by or on behalf of the Borrower, the
Guarantor, Property Owner, WASH, WASH Manager, ▇▇▇▇▇ Avenue Holdings or the
parties to the WWP Member Indemnity Agreement 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, the Mezzanine 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.

Mezzanine Collateral. As defined in the Mortgage Loan Agreement.

Mezzanine Conditional Guaranty. The Mezzanine Conditional Guaranty of
Payment made by Wellsford Commercial, WHWEL, Wellsford Real Properties,
Whitehall Street Real Estate Limited Partnership V, Whitehall Street Real
Estate Limited Partnership VI, Whitehall Street Real Estate Limited
Partnership VII and Whitehall Street Real Estate Limited Partnership VIII, in
favor of the Agent and the Banks, as the same may be modified or amended.

Mezzanine Management Agreement. As defined in the Mortgage Loan
Agreement.

Mezzanine Mortgage Loan. As defined in the Mortgage Loan Agreement.

Mezzanine Mortgage Loan Agreement. As defined in the Mortgage Loan
Agreement.

Mezzanine Mortgage Loan Documents. As defined in the Mortgage Loan
Agreement.

Mezzanine Mortgagee. As defined in the Mortgage Loan Agreement.

Mezzanine Property. Collectively, the real property owned by WASH and
commonly known as ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇/▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, 75/85/95 ▇▇▇▇▇ Avenue,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and Norfolk Place (333 Elm Street), for
so long as such properties shall be owned by WASH and the Property Owner's
interests therein shall be collateral for the Mortgage Loan.

Mortgaged Property. The Eligible Real Estate from time to time owned by
the Property Owner which is conveyed to and accepted by the Mortgagee as
security for the indebtedness evidenced by the Mortgage Loan Documents, for
so long as such property remains as security for such indebtedness.

Mortgagee. The Mortgage Loan Banks and any agent acting on behalf of
the Mortgage Loan Banks, as the case may be.

Mortgage Loan. The first mortgage loan to the Property Owner, in the
original principal amount of up to $300,000,000.00.

Mortgage Loan Agreement. The First Amended and Restated Loan Agreement
dated of even date herewith between the Property Owner, the Mortgage Loan
Banks and BKB as Agent, as same may be amended, modified or restated.

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

Mortgage Loan Documents. Collectively, the Mortgages and other
documents listed on Schedule 6.30-2 attached hereto and made a part hereof.

Mortgages. The Mortgages, Deeds to Secure Debt and Deeds of Trust from
the Property Owner to the Mortgagee (or to trustees named therein acting on
behalf of the Mortgagee) pursuant to which the Property Owner has conveyed a
Mortgaged Property as security for the obligations evidenced by the Mortgage
Loan Documents.

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 any Person for any period, an
amount equal to the sum of (a) the Net Income of such Person (attributable to
the Mortgaged Properties and the Mezzanine Properties 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 the Mortgaged Properties and the Mezzanine Properties minus (e)
any income included in calculating such Net Income from the Mortgaged
Properties or the Mezzanine Properties 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.

Nomura Conditional Guaranty. The Nomura Conditional Guaranty of Payment
made by Wellsford Commercial, WHWEL, Wellsford Real Properties, Whitehall
Street Real Estate Limited Partnership V, Whitehall Street Real Estate
Limited Partnership VI, Whitehall Street Real Estate Limited Partnership VII
and Whitehall Street Real Estate Limited Partnership VIII, in favor of the
Agent and the Banks, as the same may be modified or amended.

Nomura Mortgages. As defined in the Mortgage Loan Agreement.

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. When such term is used with respect to a
Mortgaged Property, "Permitted Liens" shall mean only those liens and
encumbrances as are shown in the Title Policy with respect to such Mortgaged
Property. When such term is used with respect to the Mezzanine Property,
"Permitted Liens" shall mean only those liens and encumbrances as are shown
in the Pro Forma Marked Owner's Title Insurance Commitment #9851-00015 issued
by Chicago Title Insurance Company in connection with the acquisition by the
Property Owner of the direct and indirect interests in WASH.

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 (iv) of Section 5.1 as part of the Collateral securing the
Obligations.

Property Owner. Wellsford/Whitehall Holdings, L.L.C., a Delaware
limited liability company.

Property Owner Organizational Agreements. That certain Amended and
Restated Limited Liability Company Operating Agreement of Wellsford/Whitehall
Holdings, L.L.C., dated as of July 16, 1998.

Rating Agencies. Collectively, the "Rating Agencies" as defined in the
Mezzanine Mortgage Loan Documents.

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.

Revolving Credit Termination Date. December 31, 1998.

SEC. The federal Securities and Exchange Commission.

Security Documents. Collectively, 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 the 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 the inclusion of the equity interests in the
Mezzanine Property as collateral for the Mortgage Loan (whether under the
Mortgage Loan Agreement, the "Original Loan Agreement" (as such term is
defined in the Mortgage Loan Agreement) or the Original Revolving Credit
Agreement; (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 the inclusion of the equity interests in the Mezzanine Property
as collateral for the Mortgage Loan (whether under this Agreement, the
Original Loan Agreement or the Original Revolving Credit Agreement); 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. The determination of whether a property is a
Stabilized Property for the purposes of determining the Designated Collateral
Value shall be made at such time as it is accepted as a Mortgaged Property or
the inclusion of the equity interests in the Mezzanine Property as collateral
for the Mortgage Loan as provided above, as applicable; provided that a
property may be later determined to be a Stabilized Property for the purposes
of determining Consolidated Total Assets at such time as a property satisfies
the requirements for a Stabilized Property set forth in this definition.

State. A state of the United States of America.

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 a Mortgaged Property or a Mezzanine
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 or the Mezzanine 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 or the Mezzanine
Property is located and shall show whether or not the Mortgaged Property or
the Mezzanine 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 or Mezzanine 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.

Tenant Improvement Project. With respect to the Mortgaged Properties
commonly known as Point View, 15 Broad, Mountain Heights, ▇▇▇▇▇▇ Technology
Center and the Polaroid Buildings, base building and/or tenant improvements
to the existing Buildings on such Mortgaged Property to be performed by the
Property Owner in connection with any Lease approved pursuant to Section 5.6.

Tenant Improvement Reserve. The amount of $8,000,000.00, which amount
shall be reserved from the amounts available to be borrowed under this
Agreement and shall be disbursed as provided in Section 5.6.

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 owner's 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 that the Property Owner holds marketable fee simple title to such
parcel, subject only to the encumbrances approved by Agent 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 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.

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.

WASH. ▇▇▇▇▇ Avenue Senior Holdings LLC, a Massachusetts limited
liability company.

WASH Manager. WASH Manager L.L.C., a Delaware limited liability
company.

WASH Manager Organizational Agreements. The WASH Manager Organizational
Agreements shall mean the "Manager Organizational Agreements" as defined in
the Mortgage Loan Agreement.

WASH Organizational Agreements. The WASH Organizational Agreements
shall mean the "Property Owner Organizational Agreements" as defined in the
Mortgage Loan Agreement.

▇▇▇▇▇ Avenue Holdings. ▇▇▇▇▇ Avenue Holdings L.L.C., a Delaware limited
liability company.

▇▇▇▇▇ Avenue Holdings Organizational Agreements. The ▇▇▇▇▇ Avenue
Holdings Organizational Agreements shall mean the "Member Organizational
Agreements" as defined in the Mortgage Loan Agreement.

Wellsford Commercial. Wellsford Commercial Properties 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.

WWP Member Indemnity Agreement. The Indemnity Agreement by Wellsford
Real Properties, Whitehall Street Real Estate Limited Partnership V,
Whitehall Street Real Estate Limited Partnership VI, Whitehall Street Real
Estate Limited Partnership VII and Whitehall Street Real Estate Limited
Partnership VIII in favor of the Agent and the Banks, as the same may be
modified or amended.

WWP Members. Wellsford Commercial and WHWEL.

Section 1.2. 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 2. THE FACILITY.

Section 2.1. 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 from time to time between the
Closing Date and the Advance Termination 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 Borrower may repay
and reborrow from time to time between the Closing Date and the Revolving
Credit Termination Date. Notwithstanding anything herein to the contrary, in
no event shall the amount of the Loans advanced for purposes permitted under
this Agreement, other than the purposes contemplated by Section 5.6, exceed
$67,000,000.00, and in no event shall the Borrower be permitted to request
Loans after the Revolving Credit Termination Date except for amounts
requested pursuant to Section 5.6. 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 2.2. 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 0.1875% 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 Advance Termination Date;
provided, however, that from and after the Revolving Credit Termination Date
and ending on the Advance Termination Date, such fee shall be calculated at
the rate of 0.1875% per annum on the average daily amount by which the Tenant
Improvement Reserve exceeds the outstanding principal amount of Loans
disbursed pursuant to Section 5.6 from the Tenant Improvement Reserve. 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
Advance Termination Date.

Section 2.3. 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 2.4. 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. Each such 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. By delivery of
the Notes, there shall not be deemed to have occurred, and there has not
otherwise occurred, any payment, satisfaction or novation of the Indebtedness
evidenced by the "Notes" described in the Original Revolving Credit
Agreement.

Section 2.5. Interest on Loans.

law 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 sum of the Base Rate plus one and one-half percent (1.50%).

(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
three and two-tenths percent (3.20%).

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

Section 2.6. Requests for Loans.

(a) Except with respect to the initial Loan funded at the Closing Date, 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 (2)
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; provided, that, notwithstanding
anything herein to the contrary, each Type of Loan requested by Borrower
shall be the same Type requested by Property Owner for the corresponding
advance under the Mortgage Loan Agreement. 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
5.6 or Section 7.11, as applicable), (ii) in the case of any advance
relating to any Capital Improvement Project for a Mortgaged Property or
a 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 of their
respective covenants under the Loan Documents after giving effect to the
making of such Loan. With respect to any Loan proposed to be funded
after the initial Loan funded at the Closing Date, the Borrower shall
have complied with all requirements set forth in Section 5.4 and the
Majority Banks shall have granted their consent to and agreed to advance
against a Mortgaged Property in accordance with the terms and conditions
of Section 5.4.

(b) 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).

(c) Notwithstanding the foregoing, the Banks shall not be obligated to
advance a Loan to Borrower unless and until the Mortgage Loan Banks have
contemporaneously therewith advanced a pro rata amount for the same
purpose as Borrower is requesting funds pursuant to Section 7.11. For
the purposes hereof, the Banks' pro rata amount shall be twenty percent
(20%) and the Mortgage Loan Banks' pro rata amount shall be eighty
percent (80%).

Section 2.7. Funds for Loans.

(a) Not later than 2:00 p.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 2.8. 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 fifteen-
hundredths of one percent (0.15%) 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, the Guarantor or the Property Owner or
any of their respective Subsidiaries in the Loan Documents or otherwise
made by or on behalf of such Persons 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 Guarantor)
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 any
of such Persons.

(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 after December 31, 2000.

(v) Appraisals. 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).

(vi) Extension of Mortgage Loan Agreement Maturity Date. The
maturity date for the Mortgage Loan shall have been extended to coincide
with the Maturity Date, as extended.

Section 2.9. Termination of Advances. Notwithstanding anything in this
Agreement to the contrary, the Borrower shall have no right to obtain from
the Banks, and the Banks shall have no obligation to lend to Borrower, any
additional sums under this Agreement after the Advance Termination Date.

Section 3. REPAYMENT OF THE LOANS.

Section 3.1. 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 3.2. Mandatory Prepayments.

(a) If at any time the outstanding principal amount of the Mortgage Loan is
prepaid in full and the obligation of the Mortgagee to advance Mortgage
Loans thereunder shall terminate, whether voluntarily or involuntarily
or as the result of an acceleration of the maturity date thereof, all
proceeds from any repayment or refinance thereof in excess of the
amounts due and payable under the Mortgage Loan Documents shall be paid
to Agent for the account of the Banks as a prepayment of the Loans;
provided that Borrower shall not permit Property Owner to refinance the
Mortgage Loans unless the holder of such new loan shall enter into an
intercreditor agreement with Agent and the Banks in the form of the
intercreditor agreement entered into of even date herewith between Agent
and BKB as agent for the Mortgagee. For the purposes hereof, and
without limiting the generality of the foregoing, the Mortgage Loan
shall be deemed to have been prepaid in the event that a Mortgage or the
Mortgages are assigned by the holder thereof to a new holder for the
purpose of facilitating a refinance of the indebtedness secured thereby.

(b) In the event that the Borrower shall prepay in whole or in part the
outstanding amount of the Mortgage Loans and the obligation of the
Mortgagee to advance Mortgage Loans thereunder shall not have
terminated, then the Borrower shall pay to the Agent for the account of
the Banks as a prepayment of the Loans an amount such that the principal
amount of the Loans shall be reduced in the same proportion as the
Mortgage Loans are reduced as a result of the corresponding prepayment
thereof. By way of example, if ten percent (10%) of the outstanding
principal balance of the Mortgage Loans is prepaid, then the Borrower
shall prepay the Loans in an amount equal to ten percent (10%) of the
outstanding principal balance thereof. The provisions of this Section
3.2(b) shall not apply to a prepayment in full of the Mortgage Loan and
the termination of the Mortgage Loan Documents, which prepayment shall
be governed by Section 3.2(a).

(c) Except with the prior written approval of the Majority Banks, which
approval may be withheld in the sole and absolute discretion of the
Majority Banks, if at any time the outstanding principal amount of the
Mezzanine Mortgage Loan is prepaid in full, whether voluntarily,
involuntarily or as the result of an acceleration of the maturity date
thereof, all of the outstanding Obligations together with any and all
accrued but unpaid interest thereon and prepayment fees shall become
absolutely due and payable. For the purposes hereof, and without
limiting the generality of the foregoing, the Mezzanine Mortgage Loan
shall be deemed to have been prepaid in the event that (i) a Nomura
Mortgage or the Nomura Mortgages are assigned by the holder thereof to a
new holder for the purpose of facilitating a refinance of the
indebtedness secured thereby or (ii) WASH defeases the Mezzanine
Mortgage Loan as permitted by Section 2.3.3 of the Mezzanine Mortgage
Loan Agreement.

(d) If at any time there shall occur, whether voluntarily, involuntarily or
by operation of law, a sale, transfer, assignment, conveyance, option or
other disposition of, or any mortgage, hypothecation, encumbrance,
financing or refinancing of (i) any assets or properties of WASH, except
for the Mezzanine Mortgage Loan and releases of the Mezzanine Property
in accordance with the terms of this Agreement, and except as provided
in Section 7.21(a) with respect to the replacement of fixtures,
equipment, machinery and other personal property by WASH in connection
with the operation of the Mezzanine Property in the ordinary course of
business, (ii) any assets or properties of the Property Owner, except
for the Mortgage Loan and releases of the Mortgaged Property in
accordance with the terms of this Agreement, and except as provided in
Section 7.21(a) with respect to the replacement of fixtures, equipment,
machinery and other personal property by the Property Owner in
connection with the operation of the Mortgaged Property in the ordinary
course of business, (iii) any of the Collateral or the Mezzanine
Collateral except as provided in this Agreement, (iv) any other assets
or properties of WASH Manager or ▇▇▇▇▇ Avenue Holdings, (v) any direct
or indirect interest of Borrower in the Property Owner or either
Property Owner, WASH Manager or ▇▇▇▇▇ Avenue Holdings in WASH, (vi) any
direct or indirect interest of ▇▇▇▇▇ Avenue Holdings in WASH Manager, or
(vii) any direct or indirect interest of Property Owner in ▇▇▇▇▇ Avenue
Holdings, all of the Obligations outstanding on such date, together with
any and all accrued but unpaid interest thereon and prepayment fees,
shall become absolutely due and payable.

Section 3.3. 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 Section 3.2(b) or 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 (3) Business Days prior written
notice of any prepayment pursuant to Section 3.2(b) or 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 3.4. Partial Prepayments. Each partial prepayment of the Loans
under 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 3.5. Effect of Prepayments. Amounts of the Loans prepaid under
Section 3.2(b) and Section 3.3 prior to the Revolving Credit Termination Date
may be reborrowed as provided in Section 2. Notwithstanding anything herein
to the contrary, amounts of the Loans prepaid after the Revolving Credit
Termination Date may not be reborrowed.

Section 4. CERTAIN GENERAL PROVISIONS.

Section 4.1. 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.

(d) Notwithstanding anything herein to the contrary, each Loan that is
continued or converted pursuant to this Section 4.1 shall be continued
as or converted to the same Type of Loan as the corresponding loan to
Property Owner under the Mortgage Loan Agreement is converted or
continued, and if such Type is a Eurodollar Rate Loan, the Interest
Period selected shall comply with the conditions set forth in the
definition of the term "Interest Period".

Section 4.2. Closing Fee. The Borrower has paid to BKB and ▇▇▇▇▇▇▇ a
closing fee as specified in the Agreement Regarding Fees. BKB and ▇▇▇▇▇▇▇
shall pay on the Closing Date to the other Banks a closing fee in accordance
with their separate agreement.

Section 4.3. 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 nlaw 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 4.5. 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 4.6. 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 4.7. 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 4.8. 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 4.9. 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 4.10. 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 4.11. 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 4.12. 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 4.13. Intentionally Omitted.

Section 4.14. 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 4.15. 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 4.16. 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 5. COLLATERAL SECURITY.

Section 5.1. Collateral. The Obligations shall be secured by (i) the
Indemnity Agreement, (ii) a perfected first priority security interest to be
held by the Agent for the benefit of the Banks in the Equity Interests
pursuant to the terms of the Assignment of Interests, (iii) 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 (iv) such additional
collateral, if any, as the Agent may from time to time accept as security for
the Obligations with the consent of the Majority Banks, 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 5.2. Appraisals.

(a) The Agent on behalf of the Banks shall require Appraisals of each of the
Mortgaged Property and the Mezzanine Property in the event that the
Borrower exercises its extension option pursuant to Section 2.8, 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, and except as required
with respect to the approval of Eligible Real Estate as a Mortgaged
Property under Section 5.4, the Borrower shall not be required to pay
for an Appraisal of a particular Mortgaged Property or Mezzanine
Property except in connection with such extension request.

(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
a 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 5.3. Release of Property.

(a) 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), the Property Owner may
release a Mortgaged Property from the lien of the Mortgage encumbering
the same upon the request of the Borrower and upon the following terms
and conditions (provided that a release of a Mezzanine Property shall be
governed by the provisions of Section 5.3(b)):

(i) The Borrower shall deliver to the Agent written notice of
Property Owner's 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 to an
unrelated third party in a bona-fide arms-length transaction for a cash
sales price and that such release is in compliance with the requirements
of the Mortgage Loan Documents (or has otherwise been consented to by
the Mortgagee); and

(ii) 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

(iii) 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 disbursements; and

(iv) 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 equal to one hundred
twenty percent (120%) of the Designated Collateral Value attributable to
such Mortgaged Property. In the event of a release pursuant hereto, 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 Mortgaged Property so released
without reducing the Designated Collateral Value of the remaining
Mortgaged Properties or other Collateral for purposes of calculating
release prices. Notwithstanding the foregoing, (A) the vacant land
described on Schedule 5.3(a) hereto comprising part of the Mortgaged
Property commonly known as Point View and (B) the farmhouse improvements
at the Mortgaged Property commonly known as ▇▇▇/▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇
subject to the purchase option contained in Paragraph 33 of that certain
Agreement between Fidelity Union Bank, as ancillary trustee for Mellon
Bank, N.A., as trustee for Westinghouse Master Trust Fund, as landlord,
and Mt. Airy Associates/Management, as tenant, dated November 8, 1982,
shall be released upon the payment to the Agent for the account of the
Banks of an amount (without premium) equal to twenty percent (20%) of
the gross sales proceeds less reasonable and customary closing costs
from such sale, the Mortgaged Property commonly known as ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ shall be released upon the payment to the Agent for the account
of the Banks an amount (without premium) equal to seventy-six percent
(76%) of the gross sales proceeds less reasonable and customary closing
costs from such sale (the "74 ▇▇▇▇▇▇ Release Price"), and the vacant
land described in Schedule 5.3(b) hereto comprising part of the
Mortgaged Property commonly known as Greenbrook Corporate Center 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 the Point View and Greenbrook
Corporate Center land, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ or such improvements at Mt. Airy
(A) a survey satisfactory to Agent showing such land that Borrower
desires to release from the Mortgage 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, with respect to the release of
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, any lease, agreement, ordinance or restriction by
which the Mezzanine Property commonly known as 128 Technology Center is
subject) and, with respect to the release of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, a
certification from an appropriate licensed professional that the
Mezzanine Property commonly known as 128 Technology Center satisfies all
zoning requirements applicable thereto, including without limitation,
parking requirements without utilization of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, 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.
Upon the release of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, the Designated Collateral Value
for the Mezzanine Property commonly known as 128 Technology Center shall
be reduced by the amount of the 74 ▇▇▇▇▇▇ Release Price.

(b) Provided no Default or Event of Default shall have occurred hereunder or
the other Loan Documents and be continuing (or would exist immediately
after giving effect to the transactions contemplated by this Section
5.3), WASH may from time to time release a Mezzanine Property from the
lien of the Nomura Mortgage encumbering the same (and Property Owner may
obtain a release thereof from the Collateral for the Mortgage Loan), and
thereafter (or concurrently) sell, transfer or otherwise convey such
Mezzanine Property to a third party, without thereby requiring the
prepayment of the outstanding Obligations as provided in Section 3.2(c)
upon the request of the Borrower and upon the following terms and
conditions:

(i) The Borrower shall deliver to the Agent written notice of
WASH's 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 Mezzanine Property to an unrelated third party
in a bona-fide arms-length transaction for a cash sales price or a bona-
fide refinance and that such release is in compliance with the
requirements of the Mezzanine Mortgage Loan Documents and the Mortgage
Loan Documents (or has otherwise been consented to by the Mortgagee and
the Mezzanine Mortgagee); and

(iii) 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 disbursements; and

(iv) 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 for such property as set
forth on Schedule 6.4. In the event of a release pursuant hereto, the
amount available to be borrowed against the Collateral remaining for the
Loans after such release shall be reduced by an amount equal to twenty
percent (20%) of the Designated Collateral Value attributable to the
property so released without reducing the Designated Collateral Value of
such remaining property for the purposes of calculating release prices
or the release prices set forth on Schedule 6.4; provided that upon a
release of the Mezzanine Property commonly known as 201 University, the
amount available to be borrowed against the balance of the Mezzanine
Collateral remaining for the Loan shall be reduced by the sum of
$151,535.00, provided further that such reduction shall not reduce the
release prices set forth on Schedule 6.4. 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 5.4. Additional Collateral.

(a) The Borrower shall have the right subject to the terms hereof to permit
Property Owner to add to the collateral for the Mortgage Loan any other
Real Estate that is owned by Property Owner and which is not security
for any other Indebtedness. Such addition shall be completed by the
delivery to the Agent of each of the Eligible Real Estate Qualification
Documents. Notwithstanding the foregoing, the addition of such
collateral for the Mortgage Loan 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;

[Remainder of This Page Intentionally Left Blank]

(ii) no Default or Event of Default shall have occurred or exist or
would occur or exist if such asset were included within the Collateral
and the requested Loan fully funded;

(iii) the Borrower shall have delivered to the Agent all
Eligible Real Estate Qualification Documents or other instruments,
documents or agreements as the Agent shall deem necessary or desirable,
all of which instruments, documents or agreements shall be in form and
substance satisfactory to the Agent in its sole discretion;

(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 such Real Estate as the Agent, in its sole
discretion, shall deem necessary or desirable; and

(v) the Mortgagee shall have accepted such Real Estate as a
Mortgaged Property.

The Borrower acknowledges that the decision of the Majority Banks to
grant or withhold their consent to the acceptance of an additional Mortgaged
Property 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 (v) 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), (iv) and (v).

(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 property.

(c) In no event shall the acquisition cost of any Mortgaged Property or the
equity interests of Property Owner in the Mezzanine Property exceed
$40,000,000.00.

Section 5.5. Holdback. The Banks have required that Borrower reserve
from the amounts available to be borrowed under this Agreement an amount
necessary to cover (a) twenty percent (20%) of the corporate general and
administrative costs of the Borrower and Property Owner, and (b) twenty
percent (20%) of the 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 subject
to the other terms of this Agreement, but at no time shall the amount of the
Holdback be less than an amount sufficient to cover such cost and expenses
for a 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). The Holdback
described on Section 5.5(a) shall be allocated pro rata among all Non-
Stabilized Properties that also have a Holdback described in Section 5.5(b).
At such time as a Non-Stabilized Property shall become a Stabilized Property,
the Holdback for such Non-Stabilized Property shall be eliminated, provided
that any Holdback for corporate general and administrative costs shall be re-
allocated among the remaining Non-Stabilized Properties that also have a
Holdback described in Section 5.5(b) pro rata based upon their respective
Designated Collateral Values. As of the date of this Agreement, the Holdback
is $989,400.40. The Holdback shall be determined by the Agent for each
additional Mortgaged Property that is included as collateral for the Mortgage
Loan which is a Non-Stabilized Property at the time it becomes a Mortgaged
Property. At such time as the Borrower is able to comply with the covenants
set forth in Sections 9.1 and 9.2 assuming that 100% of the general and
administrative costs of the Borrower and Property Owner and the uncapitalized
Negative Carry (which for the purposes hereof shall include 100% of the
uncapitalized Negative Carry and shall not be limited to the 20% reserved
against under this Section 5.5) are added back (with respect to the
calculation of Section 9.2) and that the Holdback has been fully disbursed,
the Holdback shall no longer be required.

Section 5.6. Disbursement of Tenant Improvement Reserve. Amounts from
the Tenant Improvement Reserve shall be available to be disbursed hereunder
for Tenant Improvement Projects and Leasing Commissions. With respect to
Loan Requests for Loans to fund Tenant Improvement Projects or Leasing
Commissions, Loans shall be made on the following basis:

(a) prior to any disbursements from the Tenant Improvement Reserve, the
Borrower shall submit to the Agent for approval by the Majority Banks
the proposed Lease to which the Tenant Improvement Project and/or
Leasing Commission relate and a separate budget for such proposed Tenant
Improvement Project and Leasing Commission (a "Building Capital Project
Budget") setting forth the total cost required to construct the Tenant
Improvement Project to be constructed by the Property Owner pursuant to
such Lease (such cost is hereinafter referred to as the "Total Cost")
and the Leasing Commissions with respect to such Lease;

(b) upon written approval by the Majority Banks in their sole and absolute
discretion of a Lease and the corresponding Building Capital Project
Budget (which approval may include, without limitation, evidence that
such matters have been approved pursuant to the Mortgage Loan
Agreement), the Borrower may thereafter submit Loan Requests for Tenant
Improvement Projects with respect to the applicable Mortgaged Property
which Loan Requests shall separately identify the Mortgaged Property and
the Tenant Improvement Project for which funds are requested and shall
identify that portion of the Total Cost that has been drawn and the
amount of the Total Cost remaining to be drawn (separately identifying
amounts drawn under this Agreement and amounts drawn by Property Owner
under the Mortgage Loan Agreement) and a certification that the amount
of the Total Cost remaining to be drawn (including amounts available to
be drawn by Property Owner under the Mortgage Loan Agreement with
respect thereto) together with equity funds to be provided by Borrower
will be sufficient to cause the Tenant Improvement Project to be
completed in full; provided that prior to the initial disbursement with
respect to a Tenant Improvement Project, the Borrower shall provide to
the Agent evidence satisfactory to the Agent that Borrower has paid from
equity twenty-five percent (25%) of the amounts identified in the
Building Capital Project Budget for such Tenant Improvement Project;

(c) upon compliance with all terms and conditions set forth in this
Agreement with respect to advances of the Loans including, without
limitation, the terms and conditions in Section 2.6 and this Section
5.6, Loan Requests for Tenant Improvement Projects for work in place
will be funded in accordance with the applicable Building Capital
Project Budget; provided, however, if the Agent in its sole and absolute
discretion determines at any time that the cost of completing a Tenant
Improvement Project is in excess of the amount remaining with respect
thereto in the Building Capital Project Budget and equity funds provided
by Borrower, no additional advances with respect to such Tenant
Improvement Project shall be made unless the Borrower shall provide such
funds as the Agent in its sole and absolute discretion determines are
necessary to fully complete such Tenant Improvement Project in
accordance with the terms of this Section 5.6;

(d) amounts disbursed for any approved Tenant Improvement Project shall be
an amount not to exceed, under any circumstances, the costs and expenses
actually incurred by the Borrower with respect thereto notwithstanding
the approval by the Agent of the Total Cost thereof or the amounts set
forth in any Building Capital Project Budget with respect thereto;

(e) the Borrower shall construct each Tenant Improvement Project in a good
and workmanlike manner and in compliance with all applicable laws and
complete the approved Tenant Improvement Project within the time periods
and as required by, and in accordance with, the Lease with respect
thereto;

(f) amounts disbursed for Leasing Commissions shall be an amount not to
exceed, under any circumstances, the commission actually incurred by
Borrower which is reasonable and customary for a licensed real estate
broker in the market area in which the Mortgaged Property is located;

(g) with respect to a Loan Request to pay any portion of the Leasing
Commissions, Borrower shall provide evidence as reasonably requested by
the Agent that such Leasing Commissions are then due and payable or have
been properly paid; provided that prior to the initial disbursement with
respect to a Leasing Commission, the Borrower shall provide to the Agent
evidence satisfactory to the Agent that Borrower has paid from equity
twenty-five percent (25%) of the amounts identified in the Building
Capital Project Budget for such Leasing Commission; and

(h) with respect to each Loan Request for Tenant Improvement Projects or
Leasing Commissions, the Borrower shall provide the Agent with such
additional documents, certificates, lien waivers and affidavits as the
Agent may reasonably request.

Section 6. REPRESENTATIONS AND WARRANTIES.

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

Section 6.1. 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. The Property Owner 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 WWP
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
held by it 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.
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, Mezzanine Property, Collateral or
collateral for the Mortgage Loan 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 any of the Borrower, any
of its Subsidiaries, the Property Owner 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
any such Person (other than those in favor of the Agent pursuant to the
terms of the Loan Documents).

(d) Enforceability. The execution and delivery of this Agreement and the
other Loan Documents to which any of the Borrower, any of its
Subsidiaries, the Property Owner 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 6.2. Governmental Approvals. The execution, delivery and
performance by the Borrower, any of its Subsidiaries, the Property Owner and
the Guarantor of this Agreement and the other Loan Documents, as applicable,
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 6.3. 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 pro forma consolidated balance sheet of the Borrower as of
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. The Property Owner owns all of the
assets reflected in the balance sheet of the Property Owner dated as of May
31, 1997, subject to no rights of others, including any rights of first
refusal, right of first offer or other right to acquire, mortgages, leases,
conditional sales agreements, title retention agreements, liens or other
encumbrances, except the Mortgage Loan, the Mezzanine Mortgage Loan, the
Permitted Liens, the rights of tenants as tenants only under the Leases
reflected in the Rent Rolls for the Mortgaged Property and the Mezzanine
Property and the right of first offer with respect to a sale of ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇.

Section 6.4. Financial Statements. The Borrower has furnished to each
of the Banks: (a) a pro forma unaudited consolidated balance sheet and a pro
forma unaudited consolidated statement of income and cash flows of the
Borrower and its Subsidiaries as of the Balance Sheet Date certified by the
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) the balance sheet of the Property Owner dated as of May 31, 1998 and
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, the
Mortgaged Property, the Mezzanine Property and the Property Owner for such
periods. There are no liabilities, contingent or otherwise, of the Borrower
or any of its Subsidiaries or the Property Owner involving material amounts
not disclosed in said financial statements and the related notes thereto as
of their respective dates. The all-in acquisition costs of the Mortgaged
Property, the Mezzanine Property, the Designated Collateral Value as of the
date hereof allocable thereto and the classification of such property as a
Stabilized Property or Non-Stabilized Property are as set forth on Schedule
6.4 hereto.

Section 6.5. No Material Adverse 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
and its Subsidiaries 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.
There has occurred no materially adverse change in the financial condition or
business of the Property Owner as shown on or reflected in the balance sheet
of the Property Owner dated as of May 31, 1998, or its 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 Property Owner.

Section 6.6. Franchises, Patents, Copyrights, Etc. The Borrower, its
Subsidiaries, the Property Owner 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 6.7. 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, the Property
Owner, the Guarantor, the Mortgaged Property, the Mezzanine Property, the
Collateral or any other collateral for the Mortgage Loan 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 or any of the Mortgage 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. There are no judgments outstanding against or affecting the
Borrower, any of its Subsidiaries (other than the Property Owner, WASH, WASH
Manager or ▇▇▇▇▇ Avenue Holdings) in excess of $250,000.00 or against or
affecting Property Owner, WASH, WASH Manager, ▇▇▇▇▇ Avenue Holdings, the
Guarantor or the Mortgaged Property, the Mezzanine Property, the Collateral,
or any other collateral for the Mortgage Loan.

Section 6.8. No Materially Adverse Contracts, Etc. None of the
Borrower, any of its Subsidiaries, the Property Owner or 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 any such Person. None of the Borrower, any of its
Subsidiaries, the Property Owner or the 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 such
Person.

Section 6.9. Compliance with Other Instruments, Laws, Etc. None of the
Borrower, any of its Subsidiaries, the Property Owner or the 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 6.10. Tax Status. Each of the Borrower, its Subsidiaries, the
Property Owner 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 or members of each of the
Borrower, its Subsidiaries, the Property Owner and the Guarantor know of no
basis for any such claim.

Section 6.11. No Event of Default. No Default or Event of Default has
occurred and is continuing.

Section 6.12. Holding Company and Investment Company Acts. None of the
Borrower, any of its Subsidiaries, the Property Owner or the 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 6.13. Absence of UCC Financing Statements, Etc. Except with
respect to Permitted Liens, the Mezzanine Mortgage Loan Documents, the
Mortgage Loan Documents and the Loan Documents, 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, any of its Subsidiaries or the Property Owner or
rights thereunder.

Section 6.14. 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 6.15. Certain Transactions. Except as disclosed in writing to
the Agent, and except with respect to (i) that certain Asset Management
Agreement dated May 15, 1998 between Wellsford/Whitehall Properties, L.L.C.
and Saracen Partners, LLC, as assigned to Borrower, and (ii) that certain
Property Management Agreement between WASH and Northeast Real Estate
Services, LLC, dated May 15, 1998, none of the members, officers, trustees,
directors, or employees of the Borrower, any of its Subsidiaries, the
Property Owner or the Guarantor is a party to any transaction with each other
(other than for services as employees, officers and directors and
transactions solely between Guarantors), 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 such Person, any corporation, partnership, trust or
other entity in which any member, officer, trustee, director, or any such
employee has a substantial interest or is a member, officer, director,
trustee or partner.

Section 6.16. Employee Benefit Plans. The Borrower, its Subsidiaries
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, any
of its Subsidiaries, 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, its Subsidiaries, and the Guarantor with the
provisions hereof and the other Loan Documents, nor the consummation of the
transactions provided for in the Mortgage Loan Documents and compliance by
the Property Owner with the provisions thereof, will involve any prohibited
transaction.

Section ful o ERISA Taxes. None of the Borrower, its Subsidiaries nor
any ERISA Affiliate thereof is currently and the Borrower has no reason to
believe that any such Person or any ERISA Affiliate 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 Sections
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 such Person or upon its financial
condition, assets, business, operations, liabilities or prospects.

Section 6.18. Plan Payments. The Borrower, its Subsidiaries 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 6.19. 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 6.20. 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, the Mortgaged Property and the Mezzanine Property and the
operations conducted thereon, and is familiar with the present condition and
usage of the Real Estate, the Mortgaged Property, and the Mezzanine Property,
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 the Mezzanine Property, and
to the best of the Borrower's knowledge with respect to any other Real
Estate, none of the Borrower, its Subsidiaries, the Property Owner or
the Guarantor or any operator of the Real Estate, the Mortgaged Property
or the Mezzanine Property, 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 Real Estate, the Mortgaged Property or the Mezzanine
Property, and would have a material adverse effect on the environment or
the business, assets or financial condition of any such Person.

(b) None of the Borrower, any of its Subsidiaries, the Property Owner 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 such Person, 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 the Mezzanine 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 Property and the Mezzanine
Property, each of which has been provided to the Agent on or before 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 5.4 or Section 7.4(h): (i) no
portion of the Real Estate, the Mortgaged Property or the Mezzanine
Property 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
Real Estate, the Mortgaged Property or the Mezzanine Property; (ii) in
the course of any activities conducted by the Borrower, its
Subsidiaries, the Property Owner, the Guarantor or the operators of its
properties, no Hazardous Substances have been generated or are being
used on the Real Estate, the Mortgaged Property or the Mezzanine
Property 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 Real Estate, the Mortgaged Property or the Mezzanine
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, the Mortgaged Property or the Mezzanine
Property 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, the
Mortgaged Property or the Mezzanine Property 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,
the Mortgaged Property or the Mezzanine Property; and (v) to the best of
Borrower's knowledge and belief, any Hazardous Substances that have been
generated on any of the Real Estate, the Mortgaged Property or the
Mezzanine Property 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) None of the Borrower, its Subsidiaries, the Property Owner, the
Guarantor nor any of the Mortgaged Property, the Mezzanine 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 to
record or deliver to other Persons an environmental disclosure document
or statement by virtue of the transactions set forth herein and
contemplated hereby, or to the effectiveness of any other transactions
contemplated hereby.

Section 6.21. 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 6.22. Leases. The Borrower has delivered to the Agent true
copies of the Leases and any amendments thereto relating to the Mortgaged
Property and the Mezzanine Property.

Section 6.23. Loan Documents. All of the representations and
warranties made by or on behalf of the Borrower, its Subsidiaries, the
Property Owner or the Guarantor 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 Person has failed to disclose such information
as is necessary to make such representations and warranties not misleading.

Section 6.24. Mortgaged Property and Mezzanine Property. The Borrower
makes the following representations and warranties concerning each Mortgaged
Property and Mezzanine Property:

(a) Off-Site Utilities. All water, sewer, electric, gas, telephone and
other utilities necessary for the use and operation of the Mortgaged
Property and Mezzanine Property are installed to the property lines of
the Mortgaged Property and Mezzanine Property through dedicated public
rights-of-way or through perpetual private easements approved by the
Agent, 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 and Mezzanine
Property are dedicated and accepted public roads, to which the Mortgaged
Property and Mezzanine Property have 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 and Mezzanine Property have direct
access approved by the Agent. All private ways providing access to the
Mortgaged Property and Mezzanine 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. Each 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. Each Building is
located on a lot which is separately assessed for purposes of real
estate tax assessment and payment. Each Building, all Building Service
Equipment and all paved or landscaped areas related to or used in
connection with each Building are, except as specifically disclosed on a
Survey delivered to the Agent prior to the date hereof and except as
disclosed in the Condominium Documents with respect to the Condominium
only, located wholly within the perimeter lines of the lot or lots on
which the Mortgaged Property or the Mezzanine Property is located. WASH
has not made any additions, alterations or improvements to the Mezzanine
Property, nor have any other changes occurred with respect to the
Mezzanine Property, from the last revision date of the survey of the
Mezzanine Property delivered by Borrower to the Agent that in accordance
with good surveying practices should be disclosed on an as-built survey
of the Mezzanine Property.

(d) Condition; 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, each
Building is structurally sound, in good repair and free of material
defects in materials and workmanship. All major building systems
located within each 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 any 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) 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, each 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. Each Building complies with applicable
zoning laws and regulations and is not a so-called non-conforming use.
The zoning laws permit use of each Building for its current use. There
is such number of parking spaces on the lot or lots on which each
Building is located as is adequate under the zoning laws and regulations
to permit use of each Building for its current use.

(f) No Required Consents, Permits, Etc. None of the Borrower, any of its
Subsidiaries, the Property Owner or the Guarantor 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 or the Mezzanine Property for the
maintenance, operation, servicing and use of the Mortgaged Property or
the Mezzanine 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. 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 the Mezzanine Property or any part
thereof.

(g) Insurance. None of the Borrower, any of its Subsidiaries, the Property
Owner or the Guarantor has received any notice from any insurer or its
agent requiring performance of any work with respect to the Mortgaged
Property or the Mezzanine Property or canceling or threatening to cancel
any policy of insurance, and the Mortgaged Property and the Mezzanine
Property comply with the requirements of all carriers of insurance on
the Mortgaged Property and the Mezzanine 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 the Mezzanine Property or any part thereof which
are payable by the Property Owner, WASH or any prior owner of the
Mortgaged Property or the Mezzanine Property (except only real estate
taxes or other taxes or assessments, that are not yet due and payable).
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 or the Mezzanine Property, and
none of the Borrower, any of its Subsidiaries, the Property Owner or the
Guarantor has received any notice of any such special assessment being
contemplated.

(i) Historic Status. No Building is a historic structure or landmark and no
Building or Mortgaged Property or Mezzanine 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 the Mezzanine Property or
any part thereof, and, to the knowledge of the Borrower, no such
proceedings are presently threatened or contemplated by any taking
authority. No Mortgaged Property, Mezzanine Property or 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 or interests in the Mezzanine Property (or such
other recent date as may be acceptable to the Agent) with respect to all
Leases of any portion of the Mortgaged Property and the Mezzanine
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 or Mezzanine Property and in the Building relating
thereto. There are no occupancies, rights, privileges or licenses in or
to any Mortgaged Property or Mezzanine Property or portion thereof other
than pursuant to the Leases reflected in Rent Rolls previously furnished
to the Agent for such Mortgaged Property or Mezzanine 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, the Property Owner or 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 and the Mezzanine Property to the Agent and such
estoppel certificates as of the date thereof are true and correct in all
material respects. Except as otherwise set forth in Schedule A-5 to the
Contribution Agreement, all tenant improvements or work to be done,
furnished or paid for by the Borrower, any of its Subsidiaries, the
Property Owner, WASH or the Guarantor 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, the
Property Owner 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 and the Mezzanine 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 the Mezzanine 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 or the
Mezzanine Property, any Building thereon or the operation or maintenance
of any thereof other than as described in this Agreement (including the
Schedules hereto) or otherwise disclosed in writing to the Agent by the
Borrower; and no person or entity has any right or option to acquire the
Mortgaged Property, the Mezzanine Property or any Building thereon or
any portion thereof or interest therein (other than the right of first
offer of Computer Associates set forth in its lease with respect to ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, the option to purchase the farmhouse improvements at
the Mortgaged Property commonly known as ▇▇▇/▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇ as
described in Section 5.3(a)(iv), and the option of JVC Americas Corp. to
acquire approximately 2.5 acres of the Mortgaged Property commonly known
as 1800 Valley). All service agreements with respect to the Mortgaged
Property and the Mezzanine Property are terminable upon thirty (30) days
notice with no penalty or premium or as otherwise disclosed in writing
to the Agent.

Section 6.25. Brokers. None of the Borrower, any of its Subsidiaries,
the Property Owner or the Guarantor has engaged or otherwise dealt with any
broker, finder or similar entity in connection with this Agreement or the
Loans contemplated hereunder.

Section 6.26. Fair Consideration. The Borrower (and, as applicable,
the Guarantor), by receiving the benefits under this Agreement and the other
Loan Documents 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 Guarantor to
enter into the Guaranty, the Borrower would be unable to obtain the financing
contemplated hereunder which financing will enable the Borrower and its
Subsidiaries (including the Guarantor) to have available financing to conduct
and expand its business. The transaction evidenced by this Agreement and the
other Loan Documents is in the best interests of the Borrower and the
Guarantor and the creditors of such Persons.

Section 6.27. Solvency. As of the Closing Date and after giving effect
to the transactions contemplated by this Agreement and the other Loan
Documents, including all of the Loans made or to be made hereunder, none of
the Borrower, any of its Subsidiaries, the Property Owner or the Guarantor is
insolvent on a balance sheet basis, the sum of such Person's assets exceeds
the sum of such Person's liabilities, each such Person is able to pay its
debts as they become due, and each such Person has sufficient capital to
carry on its business.

Section 6.28. No Bankruptcy Filing. None of the Borrower, any of its
Subsidiaries, the Property Owner or the Guarantor 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 6.29. 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 of its Subsidiaries, the Property Owner or the 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 6.30. Other Debt. None of the Borrower, the Property Owner,
the Guarantor or 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. None of the Borrower, the Property Owner, the
Guarantor or any of their respective Subsidiaries is 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 such Person. Without limiting the foregoing, no
"Default" or "Event of Default" under the Mortgage Loan Documents or the
Mezzanine Mortgage Loan Documents has occurred. The Borrower has provided to
the Agent copies of all agreements, mortgages, deeds of trust, financing
agreements or other material agreements binding upon the Borrower, the
Property Owner, WASH, the Guarantor and their respective Subsidiaries and
properties and entered into by such Person as of the date of this Agreement
with respect to any Indebtedness of such Person. Attached hereto as Schedule
6.30-1 and Schedule 6.30-2 is a true, accurate and complete list of all of
the Mortgage Loan Documents and the Mezzanine Mortgage Loan Documents.
Without limiting the foregoing, Borrower has delivered to the Agent true,
correct and complete copies of the Mortgage Loan Documents and the Mezzanine
Mortgage Loan Documents, and none of such documents has been modified or
amended in any respect except as set forth in Schedule 6.30-1 or Schedule
6.30-2 hereto. As of the date hereof, the outstanding principal balance
secured by the Nomura Mortgages is [$68,340,815.57] and interest has been
paid through [May 10, 1998.] The initial allocation of the Mezzanine
Mortgage Loan among the Mezzanine Properties is set forth on Schedule 6.30-3
hereto. As of the date hereof, the amount on deposit in the "Tax and
Insurance Escrow Fund" (as defined in the Mezzanine Mortgage Loan Documents)
is approximately [$278,184.89,] the amount on deposit in the "Capital Reserve
Fund" (as defined in the Mezzanine Mortgage Loan Documents) is approximately
[$181,243.70,] and the amount on deposit in the "Rollover Reserve Fund" (as
defined in the Mezzanine Mortgage Loan Documents) is approximately
[$608,232.64.]

Section 6.31. Ownership. Wellsford Commercial and WHWEL own 94.64% of
the membership units in the Borrower. Wellsford Real Properties owns not
less than 99% of the legal, equitable and beneficial interests in Wellsford
Commercial. Whitehall Street Real Estate Limited Partnership V, Whitehall
Street Real Estate Limited Partnership VI, Whitehall Street Real Estate
Limited Partnership VII and Whitehall Street Real Estate Limited Partnership
VIII are partners of WHWEL, a member of the Borrower. The Borrower is and
shall remain the sole member of the Property Owner free and clear of all
liens, restrictions, claims, pledges, encumbrances, charges, claims or rights
of third parties and rights of set-off or recoupment whatsoever, and no other
Person owns or shall own any legal, equitable or beneficial interests in the
Property Owner, or have any right to vote or exercise control over the
Property Owner or its management. ▇▇▇▇▇ Avenue Holdings and WASH Manager
are and shall remain the sole members of WASH, free and clear of all liens,
restrictions, claims, pledges, encumbrances, charges, claims or rights of
third parties and rights of set-off or recoupment whatsoever, and no other
Person owns or shall own any legal, equitable or beneficial interests in
WASH, or have any right to vote or exercise control over WASH or its
management (except for the rights of the "independent manager" of WASH, as
set forth in the WASH Organizational Agreements). ▇▇▇▇▇ Avenue Holdings is
and shall remain the sole member of WASH Manager, free and clear of all
liens, restrictions, claims, pledges, encumbrances, charges, claims or rights
of third parties and rights of set-off or recoupment whatsoever, and no other
Person owns or shall own any legal, equitable or beneficial interests in WASH
Manager, or have any right to vote or exercise control over WASH Manager or
its management (except for the rights of the "independent manager" of WASH
Manager, as set forth in the WASH Manager Organizational Agreements).
Property Owner is and shall remain the sole member of ▇▇▇▇▇ Avenue Holdings
free and clear of all liens, restrictions, claims, pledges, encumbrances,
charges, claims or rights of third parties and rights of set-off or
recoupment whatsoever, and no other Person owns or shall own any legal,
equitable or beneficial interest in ▇▇▇▇▇ Avenue Holdings, or have any right
to vote or exercise control over ▇▇▇▇▇ Avenue Holdings or its management
(except for the rights of the "independent manager" of ▇▇▇▇▇ Avenue Holdings
as set forth in the ▇▇▇▇▇ Avenue Holdings Organizational Agreements). WASH
owns no assets other than the Mezzanine Property, and no other Person owns
any legal, equitable or beneficial interests in the Mezzanine Property, other
than the interest as tenants only of the tenants listed on the Rent Roll
delivered to the Agent pursuant to Section 6.24(k). WASH Manager and ▇▇▇▇▇
Avenue Holdings own no assets other than their respective interests in WASH,
and as to ▇▇▇▇▇ Avenue Holdings, its interests in WASH Manager. Property
Owner owns no assets other than the Mortgaged Property and the member
interest in ▇▇▇▇▇ Avenue Holdings L.L.C. and no other Person owns any legal,
equitable or beneficial interests in the Mortgaged Property or such member
interest, other than the interest as tenants only of the tenants listed on
the Rent Roll delivered to the Agent pursuant to Section 6.24(k).

Section 6.32. Special Purpose Entity. The Property Owner is in full
and complete compliance with the Property Owner Organizational Agreements.

Section 6.33. Obligations as Members.

(a) All duties, obligations and responsibilities required to be performed by
the Borrower as of the date hereof under the Property Owner
Organizational Agreements have been performed, and no default or
condition which with the passage of time or the giving of notice, or
both, would constitute a default exists under the Property Owner
Organizational Agreements.

(b) Except for the Loan Documents, the Mortgage Loan Documents, the
Mezzanine Mortgage Loan Documents and, with respect to clause (iii)
only, the Property Owner Organizational Agreements, neither the Property
Owner nor the Borrower is a party to or is bound by any indenture,
contract or other agreement which purports to prohibit, restrict, limit,
or control (i) the transfer or pledge of direct or indirect interests in
the Property Owner or the Borrower, (ii) the exercise of voting rights
with respect to the such Persons or (iii) the management of such
Persons.

Section 6.34. Mortgage Loan Documents. The Borrower hereby restates
and reaffirms each of the representations and warranties made by the Property
Owner set forth in the Mortgage Loan Documents as if the same were more fully
set forth herein and were made to the Agent and the Banks herein as of the
date hereof.

Section 7. 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 7.1. 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 7.2. 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 7.3. Records and Accounts. The Borrower will keep and will
cause each of its Subsidiaries and the Property Owner to (a) 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, contingencies and
other reserves. The Borrower will not make and will not allow any of its
Subsidiaries or the Property Owner to make, without the prior written consent
of the Majority Banks, (x) 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) a change in its fiscal year.

Section 7.4. Financial Statements, Certificates and Information. The
Borrower will deliver or cause to be delivered to the Agent with sufficient
copies for 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 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 (other than the fiscal
year ending prior to the Closing Date for which such statements of
Borrower were not separately prepared) 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
contained 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 of 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);

(c) 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 Properties, 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;

(d) 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 the other covenants described therein, and
(if applicable) reconciliations to reflect changes in generally accepted
accounting principles since the Balance Sheet Date;

(e) 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;

(f) 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;

(g) 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;

(h) 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(h) shall include the Investments described
in Section 8.3(k)), each of the following: (i) a description of the
interest 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;

(i) 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 Mortgaged Property, in form and substance satisfactory to the
Majority Banks, and a copy of each budget that is submitted by WASH to
the Mezzanine Mortgagee for approval by the Mezzanine Mortgagee pursuant
to the Mezzanine Mortgage Loan Documents, or any revision or amendment
thereof, as the same are submitted by WASH to the Mezzanine Mortgagee
pursuant to the Mezzanine Mortgage Loan Documents;

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

(k) 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 Mezzanine Property as are from
time to time prepared by or on behalf of the Borrower;

(l) to the extent not otherwise provided to Agent hereunder, a copy of each
statement, report, Rent Roll, tax return or other matter required to be
delivered to the Mortgagee or the Mezzanine Mortgagee pursuant to the
Mortgage Loan Documents and the Mezzanine Mortgage Loan Documents,
respectively, as and when the same is required to be delivered to the
Mortgagee or the Mezzanine Mortgagee pursuant to the terms thereof;

(m) not later than 45 days after the end of each fiscal quarter (including
the fourth quarter), a certification by the principal financial or
accounting officer of the Borrower to the effect that to such Person's
knowledge no "Default" or "Event of Default" exists under the Mortgage
Loan Documents or the Mezzanine Mortgage Loan Documents, or if such
Person shall obtain knowledge of any then existing "Default" or "Event
of Default" under the Mortgage Loan Documents or the Mezzanine Mortgage
Loan Documents, they shall disclose in such statement such "Defaults" or
"Events of Default";

(n) not later than 45 days after the end of each fiscal quarter (including
the fourth quarter), a copy of each Lease entered into by or on behalf
of the Property Owner or WASH during such quarter;

(o) promptly upon issuance of the same by any of the Property Owner, the
Borrower or any of its Subsidiaries, duplicate copies of any and all
notices of any proposed sale or other disposition, or financing or
refinancing, of any interest of or in the Property Owner, the Mortgaged
Property, the Collateral or any collateral for the Mortgage Loan,
together with all material documents related thereto and a description
of the material terms thereof;

(p) duplicate copies of any and all notices of default by or under the
Property Owner Organizational Agreements or of any failure by any
Persons to perform any obligation under such agreements;

(q) not later than 45 days after the end of each calendar year, evidence
that the Property Owner has taken all actions required by the state in
which it is organized to remain in good standing;

(r) duplicate copies of any and all appraisals or updates thereof that are
required to be delivered by the Property Owner or WASH to the Mortgagee
or Mezzanine Mortgagee, as applicable, pursuant to any of the Mortgage
Loan Documents or the Mezzanine Mortgage Loan Documents as and when the
same are required to be delivered to the Mortgagee or Mezzanine
Mortgagee, as applicable;

(s) duplicate copies of any and all notices sent by WASH to any Rating
Agency, or sent by a Rating Agency to WASH; and

(t) from time to time such other financial data and information in the
possession of or reasonably obtainable by the Borrower, any of its
Subsidiaries or the Property Owner relating to the Borrower, the
Property Owner, WASH, the Guarantor, the Mortgaged Property, the
Mezzanine Property or the Collateral (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, any of its Subsidiaries, the Property
Owner or WASH) as the Agent may reasonably request.

Section 7.5. 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 (including, without limitation, the Mortgage Loan Documents
or the Mezzanine Mortgage Loan Documents) to which or with respect to
which any of the Borrower, any of its Subsidiaries, the Property Owner
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 any such Person,
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, the Property Owner or the 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 or security
title 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
and Mezzanine Property, environmental claims), withholdings or other
defenses to which any of the Collateral, the Mortgaged Property or the
Mezzanine Property or the rights of the Borrower, its Subsidiaries, the
Property Owner, WASH, the Guarantor or the Agent or the Banks with
respect to the Mortgaged Property, the Mezzanine Property or any of the
Collateral are subject. In addition, the Borrower will, immediately
upon becoming aware thereof, notify the Agent in writing of the
occurrence of any material default under any Lease, the intention of any
tenant under a Lease to withhold any fixed or base rent or the actual
withholding thereof, or any bankruptcy, insolvency or cessation of
operations by any tenant under a Lease.

(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 any of the Borrower, its Subsidiaries, the
Property Owner or the 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, the
Property Owner or the 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(k) 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(k) 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 7.6. 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 and shall not amend or modify the Operating
Agreement in any manner without the prior written consent of the Agent.
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. The
Borrower will cause each of its Subsidiaries and the Property Owner to
do or cause to be done all things necessary to preserve and keep in full
force and effect and in good standing their legal existence as a
corporation, limited partnership, trust or limited liability company, as
applicable. Without limiting the foregoing, the Property Owner shall
take all actions as are necessary to maintain all protection afforded to
limited liability companies in its state of organization. The Borrower
will do or cause to be done all things necessary to preserve and keep in
full force and affect all of the rights and franchises of its
Subsidiaries and the Property Owner. The Borrower will continue to
engage primarily in the business now conducted by it. The Borrower will
cause each of its Subsidiaries and the Property Owner 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 and 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, Mezzanine Property or Collateral or on the financial
condition, assets or operations of any of the Borrower, its
Subsidiaries, the Property Owner or the Guarantor.

Section 7.7. Insurance.

(a) The Borrower will cause the Property Owner, at its expense, to procure
and maintain the insurance policies required by the Mortgage Loan
Documents. Each commercial general liability or umbrella liability
policy with respect to the Mortgaged Property and the Mezzanine Property
shall name the Agent and the Banks as an additional insured and shall
contain a cross liability/severability endorsement. 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 all such policies, the Borrower shall deliver to the
Agent evidence of continued coverage, including a certificate of
insurance, as may be reasonably satisfactory to the Agent. Agent
acknowledges and agrees that such insurance may be provided by the
Borrower covering the Mortgaged Property and the Mezzanine Property as
well as other properties directly or indirectly owned by the Borrower,
provided that such insurance satisfies the requirements of the Mezzanine
Mortgage Loan Documents, the Mortgage Loan Documents and the Loan
Documents.

(b) In the event of any loss or damage to the Mortgaged Property or the
Mezzanine Property, the Borrower shall give prompt written notice to the
insurance carrier and the Agent. The Agent acknowledges that the
Property Owner's and WASH's rights to any insurance proceeds are subject
to the terms of the Mortgage Loan Documents and the Mezzanine Mortgage
Loan Documents, respectively. The Borrower may not and shall not permit
the Property Owner or WASH, respectively, to settle, adjust or
compromise any claim under such insurance policies without the prior
written consent of the Agent; provided, further, that the Property Owner
or WASH, as applicable, may make proof of loss and adjust and compromise
any claim under casualty insurance policies which is of an amount less
than $1,000,000.00 so long as no Default or Event of Default has
occurred. Any proceeds of such claim which are not used to reconstruct
or repair the Mortgaged Property or the Mezzanine Property, as
applicable, or applied to the balance of the loan evidenced by the
Mortgage Loan Documents or the Mezzanine Mortgage Loan Documents, as
applicable, shall be deposited into the accounts established pursuant to
the Mortgage Loan Documents or the Mezzanine Mortgage Loan Documents, as
applicable, to the extent required thereby, or if such deposit is not
required thereunder, then such proceeds shall be, subject to the rights
of the Mortgagee, paid to (i) Borrower (and not to Agent) so long as the
Mortgaged Property or the Mezzanine Property, as applicable, has been
fully repaired and restored and no Default or Event of Default has
occurred and is continuing, or (ii) if a Default of Event of Default has
occurred and is continuing, or if the Mortgaged Property or the
Mezzanine Property, as applicable, has not been so fully repaired or
restored, then such excess insurance proceeds shall, subject to the
rights of the Mortgagee, be paid to Agent and applied to the payment of
the Obligations whether or not then due. Notwithstanding anything
contained in the Loan Documents to the contrary, Agent hereby agrees
that the Property Owner and WASH may use all insurance proceeds to
restore and repair the Mortgaged Property or the Mezzanine Property, as
applicable, provided that such use is permitted or required under the
terms of the Mortgage Loan Documents or the Mezzanine Mortgage Loan
Documents, as applicable.

(c) In the event that the Property Owner or WASH is permitted pursuant to
the terms of the Mortgage Loan Documents or the Mezzanine Mortgage Loan
Documents, as applicable, to reconstruct, restore or repair the
Mortgaged Property or the Mezzanine Property, as applicable, following a
casualty to any portion of the Mortgaged Property or the Mezzanine
Property, the Borrower shall cause the Property Owner or WASH, as
applicable, to promptly and diligently repair and restore the Mortgaged
Property or the Mezzanine Property, as applicable, in the manner and
within the time periods required by the Mortgage Loan Documents or the
Mezzanine Mortgage Loan Documents, as applicable, the Leases and any
other agreements affecting the Mortgaged Property or the Mezzanine
Property. In the event that Property Owner or WASH, as applicable, is
permitted pursuant to the terms of the Mortgage Loan Documents or the
Mezzanine Mortgage Loan Documents, as applicable, to elect not to
reconstruct, restore or repair the Mortgaged Property or the Mezzanine
Property following a casualty to any portion of the Mortgaged Property
or the Mezzanine Property, the Borrower shall not permit the Property
Owner or WASH to elect not to reconstruct, restore or repair the
Mortgaged Property or the Mezzanine Property without the prior written
consent of the Agent.

Section 7.8. Taxes.

(a) The Borrower will duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all taxes, assessments
and other governmental and private charges imposed upon the Borrower,
its Subsidiaries and upon the Collateral and the other Real Estate, such
Person's 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, and shall in any event cause the prompt, full and
unconditional discharge of all liens imposed on or against the
Collateral or any portion thereof within thirty (30) days after
receiving written notice (whether from the Mortgagee, the Agent, the
lienholder or any other Person) of the filing thereof; provided that so
long as no Event of Default has occurred, 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
which shall suspend the collection thereof with respect to such
property, neither such property nor any portion thereof or interest
therein would be in any danger of sale, forfeiture or loss by reason of
such proceeding and the Borrower or such Person shall have set aside
adequate reserves with respect thereto as the Agent may reasonably
require; and provided, further, that forthwith upon the commencement of
proceedings to foreclose any lien that may have attached as security
therefor, 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.

(b) Notwithstanding the foregoing, the Borrower shall cause the Property
Owner and WASH to pay all taxes, assessments and other charges, to pay
all claims for labor, material or supplies that if unpaid or unbonded
might by law become a lien or charge upon any of its property (including
the Mortgaged Property and the Mezzanine Property), and to keep the
Mortgaged Property and Mezzanine Property free from all liens (other
than the lien of the Mortgages, the Nomura Mortgages and the Permitted
Liens), and shall in any event cause the prompt, full and unconditional
discharge of all Liens imposed upon the Mortgaged Property and the
Mezzanine Property or any portion thereof within thirty (30) days after
receiving written notice (whether from the Mortgagee, the Mezzanine
Mortgagee, the Agent, the lienholder or any other Person) of the filing
thereof or such earlier time as may be required by the Mortgage Loan
Documents or the Mezzanine Mortgage Loan Documents, as applicable;
subject in each case to the Property Owner's or WASH's, as applicable,
right to contest the same as permitted in but subject to the conditions
set forth in the Mortgages or the Nomura Mortgages, as applicable, so
long as no Event of Default has occurred. In the event that the
Property Owner or WASH elects to commence any contest or similar
proceeding with respect to any such taxes, other charges, liens or other
claims described herein, the Borrower shall provide prompt written
notice thereof to the Agent together with such other evidence as the
Agent may reasonably require showing compliance with the requirements of
the Mortgage Loan Documents and the Mezzanine Mortgage Loan Documents,
as applicable. Notwithstanding the foregoing, the Borrower shall cause
the Property Owner and WASH promptly to pay any contested taxes, other
charges, liens or claims and the payment thereof shall not be deferred,
if the Mortgagee, the Mezzanine Mortgagee, the Property Owner or WASH,
as applicable, may be subject to civil or criminal damages as a result
thereof. If such action or proceeding is terminated or discontinued
adversely to the Property Owner or WASH, then the Borrower shall deliver
to the Agent reasonable evidence of payment of such contested taxes,
other charges or lien.

Section 7.9. 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 and the Mortgaged Property and the
Mezzanine Property, 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 and its Subsidiaries' normal business operations.

Section 7.10. Compliance with Laws, Contracts, Licenses, and Permits.
The Borrower will comply 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 or their certificate of formation, operating
agreement, 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. The Borrower covenants and agrees to give Agent
prompt notice of any non-compliance with such laws, ordinances, regulations
or requirements and of any notice of non-compliance therewith which the
Borrower or any of its Subsidiaries receives or any threatened or pending
proceedings in respect thereto or with respect to the Mortgaged Property or
the Mezzanine Property (including, without limitation, changes in zoning), of
which the Property Owner, the Borrower or any of its Subsidiaries receives
notice. 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
or the Property Owner 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. Notwithstanding the
foregoing, the Property Owner and WASH shall have the right to contest the
applicability of any legal requirement subject to the approval of the
Mortgagee and the Mezzanine Mortgagee, as applicable, so long as Property
Owner or WASH is in good faith, and by proper legal proceedings, diligently
contesting the application thereof, provided no Event of Default shall exist
and be continuing hereunder, and the Borrower provides evidence to the Agent
that the Property Owner or WASH is otherwise fully complying with each of the
conditions set forth in the Mortgage Loan Documents or the Mezzanine Mortgage
Loan Documents, as applicable, or prescribed by the Mortgagee or the
Mezzanine Mortgagee, as applicable, applicable to such contest. The Borrower
shall promptly notify the Agent of the commencement of any contest or similar
proceeding hereunder. Notwithstanding the foregoing, the Borrower shall
cause the Property Owner or WASH promptly to comply with any contested legal
requirement, and compliance therewith shall not be deferred, if the Property
Owner, WASH, the Mortgagee or the Mezzanine Mortgagee, as applicable, may be
subject to civil or criminal charges or damages as a result thereof or such
noncompliance might place the Mortgaged Property, the Mezzanine Property or
any part thereof in danger of being forfeited, lost or closed. If such
action or proceeding is terminated or discontinued adversely to the Property
Owner or WASH, then, the Borrower shall, upon written demand, deliver to the
Agent reasonable evidence of compliance by the Property Owner or WASH with
such contested legal requirement.

Section 7.11. 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 the Property Owner in Real Estate which is located in the
northeastern corridor of the United States and utilized principally as
commercial office space, (b) for Capital Improvement Projects to Real Estate
owned by the Property Owner, (c) for the repayment of Indebtedness incurred
or assumed by the Property Owner or any Subsidiary of the Borrower in
connection with the acquisitions and investments described in Section
7.11(a), (d) for the acquisition by Property Owner of the equity interests in
▇▇▇▇▇ Avenue Holdings; (e) for reasonable transaction costs related to the
transactions referred to in the preceding clause (a) and (d), (f) for Tenant
Improvement Projects and Leasing Commissions, (g) up to $10,000,000 for
general working capital purposes, 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 (i) 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 Mortgagee
under the Mortgage Loan Documents, or (ii) without the consent of the
Majority Banks, to pay amounts due under the Mortgage Loan Documents.

Section 7.12. Further Assurances. The Borrower will cooperate with,
and will cause each of its Subsidiaries and the Property Owner 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 7.13. Management Agreements. The Borrower will 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 and provided
further, that without the prior consent of the Majority Banks, which consent
shall not be unreasonably withheld or delayed, the Borrower shall not permit
WASH to terminate, modify or amend any Management Agreement for the Mezzanine
Property. The Borrower will not enter into and will not permit the Property
Owner or WASH to enter into any Management Agreement or otherwise manage any
of the Mortgaged Property or Mezzanine 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 with respect to the
Mezzanine Property are approved by the Agent, and on leasing terms and
conditions no less favorable to the Borrower or the Property Owner or WASH
than are contained in the Management Agreements delivered to the Agent prior
to the date hereof or are otherwise on then commercially reasonable terms.
Any Management Agreement for the Mortgaged Property or the Mezzanine Property
shall be in form and substance reasonably satisfactory to the Agent. The
Agent hereby approves the Mezzanine Management Agreement. Notwithstanding
the foregoing, any manager of the Mezzanine Property shall satisfy any
conditions or requirements contained in the Mezzanine Mortgage Loan Documents
applicable to such entity acting as the manager of the Mezzanine Property,
and in no event shall there be a change to the manager of the Mezzanine
Property or any Management Agreement for the Mezzanine Property if the same
would constitute a "Default" or "Event of Default" under the Mezzanine
Mortgage Loan Documents.

Section 7.14. 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 7.15. Condemnation. In the event that all or any portion of the
Mortgaged Property or the Mezzanine Property shall be damaged or taken
through condemnation (which term shall include any damage or taking by any
governmental authority, quasi-governmental authority, any party having the
power of condemnation, or any transfer by private sale in lieu thereof), or
any such condemnation shall be threatened, the Borrower shall give prompt
written notice to the Agent. The Agent and the Banks acknowledge that the
Property Owner's and WASH's rights to any condemnation award is subject to
the terms of the Mortgage Loan Documents and the Mezzanine Mortgage Loan
Documents, respectively. The Borrower may not and shall not permit the
Property Owner or WASH to settle or compromise any claim, action or
proceeding relating to such damage or condemnation without the prior written
consent of the Agent. Any proceeds, award or damages from such damage or
condemnation which are not used to reconstruct or repair the Mortgaged
Property or the Mezzanine Property, as applicable, or applied to the balance
of the loan evidenced by the Mortgage Loan Documents or the Mezzanine
Mortgage Loan documents, as applicable, shall, subject to the rights of the
Mortgagee, be paid to the Agent and applied to the payment of the Obligations
whether or not then due. Notwithstanding anything contained in the Loan
Documents to the contrary, Agent hereby agrees that the Property Owner or
WASH, as applicable, may use all condemnation proceeds, awards and damages to
restore and repair the Mortgaged Property or the Mezzanine Property, as
applicable, provided that such use is permitted or required under the terms
of the Mortgage Loan Documents or the Mezzanine Mortgage Loan Documents, as
applicable. In the event that the Property Owner or WASH, as applicable, is
permitted pursuant to the terms of the Mortgage Loan Documents or the
Mezzanine Mortgage Loan Documents, as applicable, to reconstruct, restore or
repair the Mortgaged Property or the Mezzanine Property, as applicable,
following a condemnation of any portion of the Mortgaged Property or the
Mezzanine Property, the Borrower shall cause the Property Owner or WASH, as
applicable, to promptly and diligently repair and restore the Mortgaged
Property or the Mezzanine Property in the manner and within the time periods
required by the Mortgage Loan Documents or the Mezzanine Mortgage Loan
Documents, as applicable, the Leases and any other agreements affecting the
Mortgaged Property or the Mezzanine Property. In the event that the Property
Owner or WASH, as applicable, is permitted pursuant to the terms of the
Mortgage Loan Documents or the Mezzanine Mortgage Loan Documents, as
applicable, to elect not to reconstruct, restore or repair the Mortgaged
Property or the Mezzanine Property following a condemnation of any portion of
the Mortgaged Property or the Mezzanine Property, the Borrower shall not
permit the Property Owner or WASH to elect not to reconstruct, restore or
repair the Mortgaged Property or the Mezzanine Property without the prior
written consent of the Agent.

Section 7.16. 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 monthly), 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 month and (b) the establishment of reasonable reserves for the
payment of operating expenses not paid on at least a monthly 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 7.17. 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 7.17 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 7.18. 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 7.19. Leasing. The Borrower will cause the Property Owner and
WASH to take or cause to be taken all reasonable steps within the power of
the Property Owner and WASH to market and lease the leasable area of the
Mortgaged Property and the Mezzanine Property in accordance with sound and
customary leasing and management practices for similar properties. The
Borrower will not allow the Property Owner or WASH to lease all or any
portion of the Mortgaged Property or the Mezzanine 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 Property and the Mezzanine
Property, whichever is less, the Property Owner or WASH, as applicable, may
amend, supplement or otherwise modify, terminate or cancel, or accept the
surrender of, or consent to the assignment or subletting of, or grant
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
provided that such action with respect to a lease for a Mortgaged Property or
Mezzanine Property shall not cause (with the passage of time or otherwise) a
default under the Mortgage Loan Documents or the Mezzanine Mortgage Loan
Documents. The Borrower shall furnish or cause the Property Owner and WASH
to 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. Notwithstanding the foregoing,
following the Agent's approval of the "Leasing Parameters" (as hereinafter
defined) for the Mortgaged Property and the Mezzanine Property, then the
Borrower may permit Property Owner or WASH, without the prior approval of the
Agent, to 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 Property and the Mezzanine Property, is a bona
fide arm's length lease entered into in the ordinary course of business with
a party unaffiliated with the Borrower, any of its Subsidiaries, the Property
Owner or the Guarantor, 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 Property Owner or WASH, as applicable, 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 and the Mezzanine Property approved by the Agent. 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 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. The Borrower shall
not collect and shall not permit the Property Owner or WASH to collect any
rents, issues, profits, revenues, income or other benefits payable under any
of the Leases more than one (1) month in advance (provided that the foregoing
shall not prohibit the collection of security deposits). The Borrower shall
not, directly or indirectly, cause or permit to exist, or allow the Property
Owner or WASH to cause or permit to exist, any condition which would result
in the termination or cancellation of, or which would relieve the performance
of any obligations of any tenant under, any Lease.

Section 7.20. Plan Assets, etc. The Borrower will do, or cause to be
done, all things necessary to ensure that the Borrower, its Subsidiaries and
the Property Owner 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 7.21. Preservation and Maintenance.

(a) The Borrower (i) shall not permit or commit waste, impairment, or
deterioration of the Mortgaged Property or the Mezzanine Property or
permit the Property Owner or WASH to abandon the Mortgaged Property or
the Mezzanine Property, (ii) shall cause the Property Owner or WASH to
restore or repair promptly and in a good and workmanlike manner all or
any part of the Mortgaged Property and the Mezzanine Property in the
event of any damage, injury or loss thereto, to the equivalent of its
condition prior to such damage, injury or loss, or such other condition
as the Agent may approve in writing, (iii) shall cause the Property
Owner and WASH to keep the Mortgaged Property and the Mezzanine
Property, including the Building and any fixtures, equipment, machinery
and personal property, in good order, repair and tenantable condition
(subject to ordinary wear and tear) and shall replace fixtures,
equipment, machinery and personal property on the Mortgaged Property and
the Mezzanine Property when necessary to keep such items in good order,
repair, and tenantable condition, and (iv) shall cause Property Owner
and WASH to keep all trademarks, tradenames, servicemarks and licenses
and permits necessary for the use and occupancy of the Mortgaged
Property and the Mezzanine Property in good standing and in full force
and effect. Subject to the provisions of Section 7.21(b) below, neither
the Borrower, the Property Owner, WASH nor any tenant or other Person
shall remove, demolish or alter any Building now existing or hereafter
erected on the Mortgaged Property or the Mezzanine Property or any other
fixtures, equipment, machinery or personal property in or on the
Mortgaged Property or the Mezzanine Property except when incident to the
replacement of fixtures, equipment, machinery or other personal property
with items of like kind and value. The Borrower shall cause the
Property Owner and WASH to comply with the asbestos operations and
maintenance program in effect as of the date hereof (if any) or adopted
hereafter with respect to any new Mortgaged Property, and shall not
permit the Property Owner or WASH to discontinue or materially modify
such program without the Agent's prior written consent. In the event
that the Property Owner or WASH shall remove any asbestos or asbestos-
containing materials after the date hereof, such removal shall be
performed in accordance with all applicable laws and, upon the request
of the Agent, the Borrower shall provide evidence of such compliance to
the Agent.

(b) Provided that no Event of Default shall have occurred and be continuing
hereunder, the Borrower may permit the Property Owner and WASH to
undertake any alteration, improvement, demolition or removal of the
Mortgaged Property or the Mezzanine Property or any portion thereof (an
"Alteration") so long as such Alteration (i) is performed strictly in
compliance with the terms and conditions of the Mortgages and the other
Mortgage Loan Documents and the Nomura Mortgages and the other Mezzanine
Mortgage Loan Documents, respectively, (ii) is permitted by the Leases,
(iii) shall not materially adversely affect the value of the applicable
Mortgaged Property or Mezzanine Property or materially reduce the income
from the level available immediately prior to commencement of such
Alteration, and (iv) shall not have a material adverse effect on the
ability of the Property Owner or WASH to perform its obligations under
the Mortgage Loan Documents or the Mezzanine Mortgage Loan Documents,
respectively, and the Leases or of the Borrower to perform its
obligations under the Loan Documents. Any other Alteration shall
require the prior written consent of the Agent, such consent not to be
unreasonably withheld or delayed. All work performed in connection with
any Alteration shall be performed in accordance with all applicable
laws. The Borrower shall cause the Property Owner and WASH to provide
to the Agent such evidence as the Agent may reasonably require to
evidence the Property Owner's and WASH's compliance with the terms of
the Mortgage Loan Documents, the Mezzanine Mortgage Loan Documents and
this Agreement in connection with any Alteration.

Section 7.22. Use of Mortgaged Property and Mezzanine Property. Unless
required by applicable law or unless the Agent has otherwise agreed in
writing, the Borrower shall not allow or permit the Property Owner or WASH to
allow changes in the nature of the occupancy or use for which the Mortgaged
Property or the Mezzanine Property was intended at the time this Agreement
was executed. The Borrower shall not initiate, permit to occur or acquiesce
in or permit the Property Owner or WASH to initiate, permit to occur or
acquiesce in a change in the zoning classification of the Mortgaged Property
or the Mezzanine Property or subject the Mortgaged Property or the Mezzanine
Property to restrictive, negative or other covenants without the Agent's
written consent, which consent shall not be unreasonably withheld or delayed.
The Borrower shall cause the Property Owner and WASH to comply with, observe
and perform in all material respects all zoning and other laws affecting the
Mortgaged Property and the Mezzanine Property, all agreements and other
covenants affecting the Mortgaged Property and the Mezzanine Property
(including without limitation the Mortgaged Mortgage Loan Documents and the
Mezzanine Mortgage Loan Documents), and all licenses and permits affecting
the Mortgaged Property and the Mezzanine Property.

Section 7.23. Property Owner to Remain a Single-Purpose Entity. The
Borrower shall cause the Property Owner, WASH Manager and ▇▇▇▇▇ Avenue
Holdings to comply with the provisions of Section 8.12 of the Mortgage Loan
Agreement, shall cause the Property Owner to do all things necessary to
observe limited liability company formalities and to preserve its existence,
and will not permit the Property Owner to amend, modify or otherwise change
its articles of organization, operating agreement or other organizational
documents.

Section 8. 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 8.1. 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 of Borrower 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 Property
Owner, WASH, WASH Manager or ▇▇▇▇▇ Avenue Holdings) in the aggregate
principal amount not greater than $20,000,000.00, provided that neither
the Borrower nor any of such permitted Subsidiaries shall incur any
Indebtedness pursuant to this Section 8.1(f) unless the Borrower 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; and provided further that
recourse to Borrower pursuant to any such recourse Indebtedness shall be
expressly subordinate in right and time of payment to the Obligations
pursuant to a subordination agreement in form and substance satisfactory
to the Majority Banks;

(g) Non-recourse Indebtedness any Subsidiary of the Borrower (other than
Property Owner, WASH, WASH Manager or ▇▇▇▇▇ Avenue Holdings), provided
that such Indebtedness is incurred in connection with the acquisition of
Real Estate by such permitted Subsidiary and the credit facility
established pursuant to this Agreement and the Mortgage Loan 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 and
the Mortgage Loan Agreement (assuming such Real Estate was to become a
Mortgaged Property) or either the Banks or the Mortgagee do not approve
the addition of such Real Estate as a Mortgaged Property, provided that
none of such Subsidiaries shall incur any Indebtedness pursuant to this
Section 8.1(g) unless the Borrower 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 Mortgage 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 any Subsidiary of the Borrower (other than
Property Owner, WASH, WASH Manager or ▇▇▇▇▇ Avenue Holdings) that is
assumed by such permitted Subsidiary in connection with the acquisition
of Real Estate, provided that none of such permitted Subsidiaries shall
incur any Indebtedness pursuant to this Section 8.1(h) unless the
Borrower 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 8.12, Section 8.13 and Section 9, Indebtedness of the
Property Owner under the Mortgage Loan Agreement not to exceed
$300,000,000.00 and, subject to the terms of this Agreement, any
refinance thereof in a principal amount not exceeding the then
outstanding balance of the Mortgage Loan; and

(j) Subject to Section 8.12, Section 8.13 and Section 9, Indebtedness of
WASH under the Mezzanine Mortgage Loan Documents not to exceed
[$68,340,815.57].

Notwithstanding anything in this Section 8.1 to the contrary, neither
Property Owner nor WASH shall be permitted to create, incur, assume,
guarantee or be or remain liable, contingently or otherwise, with respect to
any Indebtedness other than Indebtedness expressly permitted pursuant to
Section 8.1(i), Section 8.1(j) and Section 8.12, and neither WASH Manager nor
▇▇▇▇▇ Avenue Holdings shall be permitted to create, incur, assume, guarantee
or be or remain liable, contingently or otherwise, with respect to any
indebtedness other than indebtedness described in Section 8.1(b).

Section 8.2. Restrictions on Liens, Etc. Without limiting the terms of
Section 8.1, 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; (f) incur or maintain
any obligation to any holder of Indebtedness of the Borrower or any
Subsidiary which prohibits the creation or maintenance of any lien securing
the Obligations (collectively "Liens"); or (g) permit either WASH Manager or
▇▇▇▇▇ Avenue Holdings to create or incur or suffer to be created or incurred
or to exist any Lien upon any of its property or assets of any character
whether now owned or hereafter acquired, or upon the income or profits
therefrom; provided that the Borrower and its Subsidiaries (other than WASH,
WASH Manager, ▇▇▇▇▇ Avenue Holdings and Property Owner) 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 Mortgaged Property, the Mezzanine
Property, the Collateral or any other collateral for the Mortgage Loan);

(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, worker's compensation, unemployment insurance, old age
pensions or other social security obligations;

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

(v) encumbrances on Real Estate other than the Mortgaged Property
and the 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,
and which defects do not individually or in the aggregate have a
materially adverse effect on the business of the Borrower and its
Subsidiaries on a Consolidated basis;

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

(vii) Permitted Liens and the Mortgages on the Mortgaged Property
and Permitted Liens and the Nomura Mortgages on the Mezzanine Property;
and

(viii) liens in favor of the Mortgagee on the interest of Property
Owner in ▇▇▇▇▇ Avenue Holdings.

Notwithstanding anything in this Section 8.2 to the contrary, neither
Property Owner, WASH, WASH Manager or ▇▇▇▇▇ Avenue Holdings shall be
permitted to create or incur or suffer to be created or incurred any Lien
other than Liens described in Section 8.2(vii) or (viii) with respect to
Property Owner and WASH.

Section 8.3. 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 by Borrower and its
Subsidiaries (other than WASH, WASH Manager, ▇▇▇▇▇ Avenue Holdings and,
except as expressly permitted below, Property Owner) in:

(a) Investments by Borrower and its permitted Subsidiaries in 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) Investments by Borrower and its permitted Subsidiaries in 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) Investments by Borrower and its permitted Subsidiaries in 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) Investments by Borrower and its permitted Subsidiaries in 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) Investments by Borrower and its permitted Subsidiaries in
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) Investments by Borrower and its permitted Subsidiaries in 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) Investments by Borrower and its permitted Subsidiaries in 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 by Subsidiaries of the Borrower (other than WASH, WASH
Manager and ▇▇▇▇▇ Avenue Holdings) 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 (provided that as to Property Owner, such
Real Estate shall be Mortgaged Property only);

(i) Investments by Borrower in the Property Owner provided it is wholly-
owned by the Borrower and by Borrower or Property Owner in other wholly-
owned Subsidiaries of the Borrower or Property Owner, as applicable,
which own Investments of the type described in Section 8.3(h) or (j);

(j) Investments by Subsidiaries of the Borrower (other than Property Owner,
WASH, WASH Manager and ▇▇▇▇▇ Avenue Holdings) 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;

(k) Investments by Subsidiaries of the Borrower (other than Property Owner,
WASH, WASH Manager and ▇▇▇▇▇ Avenue Holdings) 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;

(l) Investments by Property Owner in ▇▇▇▇▇ Avenue Holdings, and by ▇▇▇▇▇
Avenue Holdings in WASH Manager, and by ▇▇▇▇▇ Avenue Holdings and WASH
Manager in WASH; and

(m) Investments by WASH in the Mezzanine Property.

Section 8.4. 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 8.5. Sale and Leaseback; Ground Lease. 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 of the Borrower or any
affiliate thereof shall lease back such Real Estate. The Borrower will not
permit WASH to enter into a ground lease or similar lease for the Mezzanine
Property.

Section 8.6. Compliance with Environmental Laws. The Borrower will not
do and will not permit any of its Subsidiaries, the Property Owner or any
tenant of the Real Estate or the Mezzanine Property to do any of the
following: (a) use any of the Real Estate or the 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 and the presence of asbestos or asbestos-
containing materials located in the Building which are to be maintained,
contained and removed in accordance with the terms of the Mezzanine Mortgage
Loan Documents, the Mortgage Loan Documents and the Loan Documents, (b) cause
or permit to be located on any of the Real Estate or the 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 the Mezzanine Property
except in full compliance with Environmental Laws, (d) conduct any activity
at any of the Real Estate or the 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 the 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 the 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 Property Owner or WASH, respectively), cause the
prompt containment and removal of such Hazardous Substances and
remediation of the Mortgaged Property or the 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 8.7. 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 of the Borrower 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 8.8. 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(i), Section 8.3(j) or Section
8.3(k)(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 8.9. 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 "ground-up"
development of properties to be used principally for commercial office
purposes or otherwise, except that Property Owner and Subsidiaries of
Borrower or Property Owner (other than WASH, WASH Manager and ▇▇▇▇▇ Avenue
Holdings) may engage in the "ground-up" 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. Notwithstanding anything herein to the
contrary, except for the Mortgaged Property commonly known as ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ which may be developed by the Property Owner, no "ground up"
development shall be performed by the Borrower, the Property Owner, WASH,
WASH Manager or ▇▇▇▇▇ Avenue Holdings. 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 such 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 to the extent not otherwise prohibited by this Agreement.

Section 8.10. Sources of Capital. The Borrower shall, at all times
that the Borrower or any of its Subsidiaries permitted by Section 8.9 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 8.11. 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 8.12. Additional Restrictions Concerning the Mortgaged Property
and the Mezzanine Property.

(a) Except as expressly provided in Section 5.3 or Section 7.19, the
Borrower will not, without the prior written consent of the Agent in
each instance, permit the Property Owner or WASH, directly or indirectly
to: (i) sell, convey, assign, transfer, contribute, option, mortgage,
pledge, encumber, charge, hypothecate or dispose of the Mortgaged
Property, the Mezzanine Property or any part thereof or interest
therein; or any income or profits therefrom, or any other accounts,
contract rights, general intangibles, instruments, chattel paper or
other assets or claims, whether now owned or hereafter acquired; or (ii)
create or suffer to be created or to exist any lien, encumbrance,
security interest, mortgage, pledge, restriction, attachment or other
charge of any kind upon, or any levy, seizure, attachment or foreclosure
of, the Mortgaged Property, the Mezzanine Property or any part thereof
or interest therein, or any income or profit therefrom, or any other
accounts, contract rights, general intangibles, instruments, chattel
paper or other assets or claims, whether now owned or hereafter
acquired, except for Permitted Liens. For the purposes of this
paragraph, the sale, conveyance, transfer, disposition, alienation,
hypothecation or encumbering of all or any portion of any interest in
the Property Owner, WASH ,WASH Manager or ▇▇▇▇▇ Avenue Holdings or the
creation or addition of a new member or other owner of any interest in
the Property Owner, WASH, WASH Manager or ▇▇▇▇▇ Avenue Holdings shall be
deemed to be a transfer of an interest in the Property Owner or WASH.

(b) The Borrower will not permit the Property Owner to create, incur,
assume, guarantee or be or remain liable, contingently or otherwise,
with respect to any Indebtedness other than:

(i) Indebtedness arising under the Mortgage Loan Documents (it
being acknowledged and agreed that any refinancing of such Indebtedness
in connection with an assignment and restatement of the Mortgage Loan
Documents shall not constitute permitted Indebtedness);

(ii) current liabilities of the Property Owner incurred in the
ordinary course of business but not incurred through (A) the borrowing
of money, or (B) 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; and

(iii) 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.

(c) The Borrower will not permit WASH to create, incur, assume, guarantee or
be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than:

(i) Indebtedness arising under the Mezzanine Mortgage Loan
Documents (it being acknowledged and agreed that any refinancing of such
Indebtedness in connection with an assignment and restatement of the
Mezzanine Mortgage Loan Documents shall not constitute permitted
Indebtedness);

(ii) current liabilities of WASH permitted pursuant to the budget
approved by Mezzanine Mortgagee pursuant to the Mezzanine Mortgage Loan
Documents incurred in the ordinary course of business but not incurred
through (A) the borrowing of money, or (B) 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;
and

Section 8.13. Mortgage Loan Documents. The Borrower agrees to cause
the Property Owner and WASH to deliver immediately to the Agent copies of any
notices, certificates, requests, demands or other instruments (including
without limitation any notice of default, acceleration or the exercise or
threat of exercise of any remedies under the Mortgage Loan Documents or the
Mezzanine Mortgage Loan Documents) furnished or delivered to or by the
Property Owner or WASH under or in any way relating to the Mortgage Loan
Documents or the Mezzanine Mortgage Loan Documents. The Borrower shall not
permit the Property Owner or WASH to seek nor to obtain additional advances
from the holder or holders of the Mortgage Loan Documents or the Mezzanine
Mortgage Loan Documents, respectively (provided that the foregoing shall not
be deemed violated in the event that the holder or holders of the Mortgage
Loan Documents or the Mezzanine Mortgage Loan Documents shall make a
protective advance or advances for the payment of taxes, insurance premiums
or to protect the Mortgaged Property or the Mezzanine Property pursuant to
the terms of the Mortgages or the Nomura Mortgages, as applicable, provided
that such advance may otherwise constitute a Default or Event of Default
hereunder to the extent that such protected advance is made by the Mortgagee
or Mezzanine Mortgagee as a result of a "Default" or "Event of Default" under
the Mortgage Loan Documents or the Mezzanine Mortgage Loan Documents), or to
modify, amend, terminate, extend or seek a consent or waiver under the
Mortgage Loan Documents or the Mezzanine Mortgage Loan Documents in any
respect without the prior written approval of the Agent.

Section 9. 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 9.1. Liabilities to Assets Ratio. The Borrower will not permit
the ratio of Consolidated Total Liabilities to Consolidated Total Assets of
the Borrower at the end of any fiscal quarter as set forth below to exceed
the ratio set forth below:

Fiscal Quarter Ending
On or Before: Ratio
--------------------- -----

December 31, 1999 0.75 to 1
December 31, 2000 0.70 to 1
Thereafter 0.65 to 1

Section 9.2. 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. For the
purposes hereof, the aggregate Negative Carry and capitalized Negative Carry
shall include 100% of such Negative Carry and shall not be limited to the 20%
reserved against under Section 5.5. 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 9.3. 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) $68,000,000.00 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 9.4. Real Estate Assets. The Borrower shall not permit its
direct or indirect interest in undeveloped land to exceed, in the aggregate,
five percent (5%) of the Borrower's Consolidated Total Assets; provided,
however, that, except for the Mortgaged Property commonly known as 600 Atrium
which may be owned by the Property Owner, all of the direct interests in
undeveloped land shall be owned by Subsidiaries of the Borrower, other than
Property Owner, WASH, WASH Manager and ▇▇▇▇▇ Avenue Holdings, or by
Investment Partnerships permitted by Section 8.3(k).

Section 9.5. 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), (i) and (j) to
(b) the sum of (i) the aggregate all-in acquisition cost of the Real Estate
and the Mezzanine Property 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 all-in acquisition
cost of the Mezzanine Property shall be deemed to be $130,219,292, and the
Indebtedness of the Property Owner and other Subsidiaries of the Borrower or
Property Owner shall be included as Indebtedness of the Borrower.

Section 10. 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 July 16, 1998:

Section 10.1. 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 10.2. 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
Guarantor 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 Guarantor (or a certification satisfactory to the Agent that there
have been no changes to the foregoing from those previously provided to the
Agent) or their respective qualification to do business, as applicable, as in
effect on such date of certification.

Section 10.3. Bylaws; Resolutions. All action on the part of the
Borrower and the Guarantor necessary for the valid execution, delivery and
performance by the Borrower and the Guarantor 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 Guarantor, as
applicable, true copies of its bylaws (or a certification satisfactory to the
Agent that there have been no changes to the foregoing from those previously
provided to the Agent) 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 10.4. Incumbency Certificate; Authorized Signers. The Agent
shall have received from the Borrower and Guarantor an incumbency
certificate, dated as of the Closing Date, signed by a duly authorized
officer of the Borrower and Guarantor 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 Guarantor, each of the Loan
Documents to which the Borrower or the Guarantor 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 10.5. 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, ▇▇▇▇▇▇, Aronsohn & ▇▇▇▇▇▇, and other counsel of the
Borrower and the Guarantor, as to such matters as the Agent shall reasonably
request.

Section 10.6. Payment of Fees. The Borrower shall have paid to the
Agent the commitment fee pursuant to Section 4.2.

Section 10.7. Appraisals. The Agent shall have received Appraisals of
the Mortgaged Property and the Mezzanine 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 10.8. Environmental Reports. The Agent shall have received
environmental site assessment reports for the Mortgaged Property and the
Mezzanine Property prepared by an Environmental Engineer which indicate the
condition of the Mortgaged Property and the Mezzanine 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, Mezzanine
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 10.9. Insurance. The Agent shall have received duplicate
originals or certified copies of all policies of insurance required by this
Agreement.

Section 10.10. 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 10.11. 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 and Guarantor, 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 10.12. 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 10.13. Eligible Real Estate Qualification Documents. The
Eligible Real Estate Qualification Documents for each parcel of Mortgaged
Property and Mezzanine Property as of the Closing Date shall have been
delivered to Agent.

Section 10.14. 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 10.15. 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, the Mezzanine Property or the Collateral.

Section 10.16. 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, Mezzanine 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, Mezzanine Property or other
Collateral affected thereby.

Section 10.17. 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 10.18. 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 10.19. Satisfaction of Conditions as to Initial Collateral.
The parties hereto acknowledge that the requirements of Sections 10.7, 10.8
and 10.13 for the Mezzanine Properties and the Mortgaged Properties as of the
date hereof have been satisfied.

Section 11. 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 11.1. 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 11.2. 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 Guarantor 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 11.3. 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 11.4. 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 11.5. 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 11.6. 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 12. EVENTS OF DEFAULT; ACCELERATION; ETC.

Section 12.1. 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 the 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 thirty (30) Business Days after written
notice thereof shall have been given to the Borrower by the Agent;

(e) any of the Borrower, any of its Subsidiaries, the Property Owner, the
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 in this Section 12.1);

(f) any representation or warranty of the Borrower, any of its Subsidiaries,
the Property Owner or any Guarantor 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) without limiting any other terms of the Loan Documents prohibiting or
restricting the ability of such Persons to incur Indebtedness, any of
the Borrower, its Subsidiaries, the Property Owner 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 other
Indebtedness or fail to observe or perform any material term, covenant
or agreement contained in any agreement by which it is bound (including,
without limitation, the Mortgage Loan Documents or the Mezzanine
Mortgage Loan Documents), evidencing or securing any such borrowed money
or credit received or other Indebtedness 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 or with respect to WASH only, in excess of $1,000,000;

(h) any of the Borrower, any of its Subsidiaries, the Property Owner or the
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 any such Person of any substantial part of the assets of any thereof,
(B) shall commence any case or other proceeding relating to any such
Person 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 any of the
Borrower, any of its Subsidiaries, the Property Owner or the Guarantor
or any substantial part of the assets of any thereof, or a case or other
proceeding shall be commenced against any such Person under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law of any jurisdiction, now
or hereafter in effect, and such Person 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 any of the Borrower, any of its
Subsidiaries, the Property Owner or the 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 any such Person, 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 any of the Borrower, any of its Subsidiaries, the
Property Owner or the Guarantor that, with other outstanding uninsured
final judgments, undischarged, against such Person exceeds in the
aggregate $5,000,000.00 or $1,000,000.00 with respect to WASH, WASH
Manager or ▇▇▇▇▇ Avenue Holdings (provided that in any event such
judgment with respect to Property Owner, WASH, WASH Manager or ▇▇▇▇▇
Avenue Holdings shall be sooner removed prior to the commencement of any
proceeding of foreclosure, levy or other sale pursuant thereto);

(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 any of the Borrower, any of its Subsidiaries, the
Property Owner or the 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 any of the Borrower, any of its Subsidiaries, the
Property Owner or the Guarantor, or any sale, transfer or other
disposition of the assets of any such Person, other than as permitted
under the terms of this Agreement or the other Loan Documents or
otherwise consented to in writing by the Majority Banks;

l o any suit or proceeding shall be filed against any of the Borrower, any
of its Subsidiaries, the Property Owner or the Guarantor or any of the
Mortgaged Property, the Mezzanine Property, the Collateral or any
collateral for the Mortgage Loan 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 such Person to perform each
and every one of their respective obligations under and by virtue of the
Loan Documents, the Mortgage Loan Documents or the Mezzanine Mortgage
Loan Documents, as applicable;

(o) WASH, WASH Manager or ▇▇▇▇▇ Avenue Holding shall be indicted for a
federal crime, a punishment for which could include the forfeiture of
any assets of such Person, or the Borrower or the Property Owner shall
be indicted for a federal crime, a punishment for which could include
the forfeiture of any assets of the Borrower, the Property Owner or the
Guarantor included in the Collateral, the Mortgaged Property or other
collateral for the Mortgage Loan;

(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, WASH, WASH Manager, ▇▇▇▇▇
Avenue Holdings or the 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;

(s) any Guarantor denies that it 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;

(t) any warranty or representation of the Property Owner, WASH, WASH
Manager, ▇▇▇▇▇ Avenue Holdings or the Borrower in any acknowledgment
delivered to the Agent in connection with the Loan shall prove to have
been false or misleading in any material respect upon the date when made
or deemed to have been made or repeated, or the Property Owner, WASH,
WASH Manager, ▇▇▇▇▇ Avenue Holdings or the Borrower shall fail to
perform any term, covenant or agreement contained in any such
acknowledgment; or

(u) The occurrence of an Event of Default under any of the other Loan
Documents; or

(v) The occurrence of any "Triggering Event" (as defined in each of the
Mezzanine Conditional Guaranty and the Nomura Conditional Guaranty,
respectively);

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 12.1A. 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 3.2(a), Section 7.4(e),
Section 7.23 (as to the failure of WASH, WASH Manager or ▇▇▇▇▇ Avenue
Holdings to comply therewith) Section 8.2(g), Section 8.7, Section 8.12,
Section 8.13 (as to the failure to deliver any notice of default,
acceleration or the exercise or threat of exercise of any remedies under the
Mortgage Loan Documents or the Mezzanine Mortgage Loan Documents) 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, 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 12.2. 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 12.3. 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.

Section 12.4. 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 12.5. Default under Mortgage Loan Documents or Mezzanine
Mortgage Loan Documents. Notwithstanding anything herein to the contrary,
the Borrower hereby expressly agrees that any "Event of Default" (as defined
in the Mortgage Loan Documents and the Mezzanine Mortgage Loan Documents,
respectively) (which shall be deemed to include maturity of the debt secured
by the Mortgage Loan Document or the Mezzanine Mortgage Loan Documents or any
other occurrence which would give the holder of the Mortgage Loan Documents
or the Mezzanine Mortgage Loan Documents the right to exercise remedies
thereunder) shall constitute and be deemed to be an Event of Default under
this Agreement for which no right to cure shall be available; provided,
however, that in the event that (a) a court of competent jurisdiction finally
determines in an adjudication binding upon the Mortgagee or the Mezzanine
Mortgagee, as applicable, and sufficient to prohibit or stay any exercise by
the Mortgagee or the Mezzanine Mortgagee of its remedies under the Mortgage
Loan Documents or the Mezzanine Mortgage Loan Documents, as applicable, that
an "Event of Default" under the Mortgage Loan Documents or the Mezzanine
Mortgage Loan Documents, as applicable, was in fact not an "Event of Default"
thereunder, or (b) the Mortgagee or the Mezzanine Mortgagee withdraws such
notice of the existence of an "Event of Default" (subject to the terms of
this Section 12.5 below concerning the approval thereof by the Majority
Banks), and in either event the Agent has not foreclosed on the "Member
Interests" (as defined in the Assignment of Interests), such "Event of
Default" shall no longer constitute an Event of Default hereunder. Without
limiting the foregoing, an "Event of Default" under the Mortgage Loan
Documents or the Mezzanine Mortgage Loan Documents, as applicable, shall
conclusively be deemed to have occurred upon the declaration, statement or
notice from the Mortgagee or the Mezzanine Mortgagee, as applicable, as to
the existence or occurrence of an "Event of Default" under the Mortgage Loan
Documents or the Mezzanine Mortgage Loan Documents, as applicable. The
Borrower shall cause the Property Owner or WASH, as applicable, to give the
Agent immediate notice of default and all other notices or communications
received by the Property Owner or WASH pursuant to the Mortgage Loan
Documents or in connection with the Mortgage Loan or pursuant to the
Mezzanine Mortgage Loan Documents or in connection with the Mezzanine
Mortgage Loan, respectively. Upon the occurrence of any "Default" (as
defined in the Mortgage Loan Documents or the Mezzanine Mortgage Loan
Documents, respectively), the Borrower shall cause the Property Owner or
WASH, as applicable, to deliver to the Agent within five (5) days after the
first to occur of (x) receipt by the Property Owner or WASH, as applicable,
of notice of such "Default" from the Mortgagee or the Mezzanine Mortgagee or
(y) the date the Property Owner or WASH, as applicable, obtains actual
knowledge of the occurrence of such "Default", a detailed description of the
actions to be taken by the Property Owner or WASH, as applicable, to cure
such "Default" and the dates by which each such action shall occur. Such
schedule shall be subject to the approval of the Majority Banks. The
Borrower shall cause the Property Owner or WASH, as applicable, to take all
such actions as are necessary to cure such "Default" under the Mortgage Loan
Documents or the Mezzanine Mortgage Loan Documents, as applicable, by the
date approved by the Majority Banks, and shall deliver to the Agent not less
frequently than weekly thereafter written updates concerning the status of
the Property Owner's or WASH's efforts, as applicable, to cure such
"Default". The Agent shall have the right, but not the obligation, to pay
any sums or to take any action which the Agent deems necessary or advisable
to cure any default or alleged default under the Mortgage Loan Documents or
the Mezzanine Mortgage Loan Documents (whether or not the Property Owner or
WASH, as applicable, is undertaking efforts to cure such default or the same
is an "Event of Default" under the Mortgage Loan Documents or the Mezzanine
Mortgage Loan Documents or a Default or Event of Default hereunder), and such
payment or such action is hereby authorized by the Borrower, and any sum so
paid and any expense incurred by the Agent in taking any such action shall be
evidenced by this Agreement and secured by the Security Documents and shall
be immediately due and payable by Borrower to the Agent with interest at the
rate for overdue amounts set forth in Section 4.12 until paid. The Agent
shall be authorized to take such actions upon the assertion by the Mortgagee
or the Mezzanine Mortgagee of the existence of such "Default" or "Event of
Default" without any duty to inquire or determine whether such "Default" or
"Event of Default" exist. The consent or waiver by the Mortgagee or the
Mezzanine Mortgagee of any "Event of Default" under the Mortgage Loan
Documents or the Mezzanine Mortgage Loan Documents shall not annul the
occurrence of an Event of Default hereunder unless otherwise approved by the
Majority Banks; provided, however that if the Mortgagee or the Mezzanine
Mortgagee shall accept the cure of an "Event of Default" under the Mortgage
Loan Documents or the Mezzanine Mortgage Loan Documents, as applicable,
resulting from a failure to pay any amounts due to the Mortgagee or the
Mezzanine Mortgagee thereunder within five (5) days of the occurrence of such
event, such acceptance shall not require the consent of the Majority Banks to
annul the occurrence of an Event of Default hereunder. The Borrower shall
cause the Property Owner and WASH to permit Agent to enter upon the Mortgaged
Property and the Mezzanine Property for the purpose of curing any default or
alleged default under the Mortgage Loan Documents or the Mezzanine Mortgage
Loan Documents or hereunder. The Borrower hereby transfers and assigns any
excess proceeds arising from any foreclosure or sale under power pursuant to
the Mortgages or other security documents for the Mortgage Loan or any
instrument evidencing the indebtedness secured thereby, and the Borrower
hereby authorizes and directs the holder or holders of the Mortgages to pay
such excess proceeds directly to the Agent up to the amount of the
Obligations.

Section 13. 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 14. THE AGENT.

Section 14.1. 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 14.2. 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 14.3. 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 14.4. 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, 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, 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 14.5. 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 14.6. 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 14.7. 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 14.8. 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 14.9. Resignation; Removal. The Agent may resign at any time
by giving 60 days' prior written notice thereof to the Banks and the
Borrower. In the event that a "Default" or "Event of Default" shall occur
and be continuing under the Mortgage Loan Documents and BKB shall be the
Agent, then the Majority Banks may remove BKB as Agent for cause. Upon any
such resignation or removal, the Majority Banks shall have the right to
appoint as a successor Agent any Bank or any other sophisticated investor
knowledgeable in the lending to and/or operation of real estate similar to
the Mortgaged Property and the Mezzanine Property and, so long as the
interests of Borrower in the Mezzanine Property are included in the
Collateral, who is approved by the Rating Agencies pursuant to the Mezzanine
Mortgage Loan Agreement. Any such removal shall be effective upon
appointment and acceptance of a successor agent selected by the Majority
Banks. 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 other sophisticated investor knowledgeable in the lending to and/or
operation of real estate similar to the Mortgaged Property and the Mezzanine
Property and, so long as the interests of Borrower in the Mezzanine Property
are included in the Collateral, who is approved by the Rating Agencies
pursuant to the Mezzanine Mortgage Loan Agreement. 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 or removed Agent, and the retiring or
removed Agent shall be discharged from its duties and obligations hereunder
as Agent. After any retiring Agent's resignation or the removal of an Agent,
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 14.10. 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 15. 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 the 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 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 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, (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, and (g) 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 16. 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 the
Guarantor, (b) any condition, use, operation or occupancy of the Mortgaged
Property, the Mezzanine Property or the 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 or any of its Subsidiaries or the
Guarantor comprised in the Collateral, (e) the Borrower and the Guarantor
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 the Mezzanine Property, (g) with respect to the
Borrower or any of its Subsidiaries, or the Guarantor 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), (h) the Mortgage Loan
Documents, the Mezzanine Mortgage Loan Documents, the Property Owner
Organizational Agreements, the ▇▇▇▇▇ Avenue Holdings Organizational
Agreements, the WASH Manager Organizational Agreements and the WASH
Organizational Agreements, (i) matters for which the Mezzanine Mortgagee is
indemnified pursuant to Section 9.2 of the Mezzanine Mortgage Loan Agreement
to the same extent provided therein, (j) in the event that the Agent or any
nominee of the Agent and the Banks shall foreclose or otherwise obtain title
to all or any portion of the Collateral, any obligations, duties or
liabilities of the Property Owner, WASH, WASH Manager or ▇▇▇▇▇ Avenue
Holdings other than those pursuant to Leases entered into in compliance with
this Agreement, the Mortgage Loan Documents, the Mezzanine Mortgage Loan
Documents (subject to the terms of the Loan Documents) or the approved
budgets, or (k) the exercise by the Agent of the rights and remedies set
forth in Section 32; 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 order to
provide for just and equitable contribution in circumstances in which the
indemnity agreement provided for in Section 9.2(b) or (c) of the Mezzanine
Mortgage Loan Agreement is for any reason held to be unenforceable by an
indemnified party in respect of any claims, expenses, losses, damages,
obligations or liabilities (or action in respect thereof) referred to therein
which would otherwise be indemnifiable under Section 16(i) above the Borrower
shall contribute to the amount paid or payable by the Agent or the Banks as a
result of such claims, expenses, losses, damages, obligations or liabilities
(or action in respect thereof); provided, however, that no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act of 1933) shall be entitled to contribution from any Person who
was not guilty of such fraudulent misrepresentation. In determining the
amount of contribution to which the respective parties are entitled, the
following factors shall be considered: (i) the Agent's, the Banks' and the
Borrower's or its Subsidiaries' (or the Borrower's or its Subsidiaries'
predecessors) relative knowledge and access to information concerning the
matter with respect to which claim was asserted; (ii) the opportunity to
correct and prevent any statement or omission; and (iii) any other equitable
considerations appropriate in the circumstances. Agent and the Borrower
hereby agree that it may not be equitable if the amount of such contribution
were determined by pro rata or per capita allocation. 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 17. 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,
the Property Owner 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, the Property Owner or
any Guarantor pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by such
Person hereunder.

Section 18. ASSIGNMENT AND PARTICIPATION.

Section 18.1. 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, any of its Subsidiaries, the
Property Owner 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, any
of its Subsidiaries, the Property Owner or any Guarantor. Notwithstanding
anything herein to the contrary, in the event that BKB shall at any time hold
a Commitment equal to or less than $10,000,000, then BKB shall promptly
provide written notice thereof to the Banks and the Majority Banks shall have
the right, to be exercised within fifteen (15) days of delivery of such
notice by BKB, to elect to remove BKB as Agent and replace BKB as Agent,
subject to the terms of Section 14.9.

Section 18.2. 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 18.3. 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 18.4. 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 with the prior
written consent of the Agent (after giving due regard to the limitations in
Section 18.8); 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, the Property Owner or any Guarantor.

Section 18.5. 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 18.6. 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 18.7. Disclosure. The Borrower agrees that in addition to
disclosures made in accordance with standard institutional lending 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 ul or Additional Restrictions on Assignments and
Participations. Notwithstanding anything to the contrary set forth in this
Agreement or in any of the other Loan Documents, so long as the Mezzanine
Conditional Guaranty or the Nomura Conditional Guaranty remains in effect, no
interest in the Loan may be assigned, transferred or participated, unless in
each case the additional requirements set forth in clauses (a) through (e)
below are satisfied: (a) the entity to which any interest in the Loan is
assigned, transferred or participated is an Eligible Transferee (as defined
below), (b) the minimum denomination assigned, transferred or participated
shall not be less than $10,000,000.00, (c) assignments, transfers and
participations may not be made to more than eight (8) Eligible Transferees in
the aggregate, (d) assignments, transfers and participations may not be made
without the consent of Whitehall Street Real Estate Limited Partnership V,
Whitehall Street Real Estate Limited Partnership VI, Whitehall Street Real
Estate Limited Partnership VII and Whitehall Street Real Estate Limited
Partnership VIII, which consent shall not be unreasonably withheld, delayed
or conditioned, and (e) assignments, transfers and participations may not be
made unless the prospective assignee, transferee or participant executes and
delivers a fully completed certificate in the form of Exhibit E hereto
confirming that such assignee, transferee or participant is an Eligible
Transferee. "Eligible Transferee" means a "qualified purchaser" as defined
in Section 2(a)(51)(A) of the Investment Company Act of 1940, as amended, and
the rules and regulations promulgated thereunder.

Section 19. 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 II, 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 20. 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 21. 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 22. HEADINGS.

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

Section 23. 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 24. 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 25. 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 26. 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, it Subsidiaries or the Guarantor or any of their affiliates
regardless of the capacity of the Bank hereunder.

Section 27. 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 28. 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 29. 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
GUARANTY OR INDEMNITY AGREEMENT.

Section 30. 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 ORAL AGREEMENTS
BETWEEN THE PARTIES.

Section 31. 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.

Section 32. BANKRUPTCY.

(a) Material Inducement. Each of the Borrower, WASH Manager, ▇▇▇▇▇ Avenue
Holdings and the undersigned Guarantor, jointly and severally,
acknowledges and agrees that the representations, warranties, covenants
and agreements contained in this Section 32 constitute a material
inducement to the Agent and the Banks to enter into this Agreement, the
other Loan Documents and the transactions contemplated hereby and
thereby and that without the inclusion of this Section 32 herein the
Agent and the Banks would not have entered into this Agreement and the
other Loan Documents.

(b) No Fraudulent Intent. Each of the Borrower, WASH Manager, ▇▇▇▇▇ Avenue
Holdings and the undersigned Guarantor, jointly and severally, hereby
acknowledges, warrants, represents and agrees that neither the execution
and delivery of this Agreement and the other Loan Documents nor the
performance of any actions required hereunder or thereunder is being
consummated by the Borrower, the Property Owner, WASH Manager, ▇▇▇▇▇
Avenue Holdings or the Guarantor with or as a result of any actual
intent by such Persons, or any of them, to hinder, delay or defraud any
entity to which such Persons, or any of them, are now or will hereafter
become indebted.

(c) No Bankruptcy Intent. Each of the Borrower, WASH Manager, ▇▇▇▇▇ Avenue
Holdings and the undersigned Guarantor, jointly and severally, hereby
represents, covenants and agrees that none of the Borrower, the Property
Owner, WASH, WASH Manager, ▇▇▇▇▇ Avenue Holdings or the Guarantor has
any intent (1) to file any voluntary petition in bankruptcy under any
Chapter of the Bankruptcy Code or in any manner to seek relief,
protection, reorganization, liquidation, dissolution or similar relief
for debtors under any local, state, federal or other insolvency laws or
laws providing for relief of debtors, or in equity, or directly or
indirectly to cause any of the other of such Persons to file any such
petition or to seek any such relief, either at the present time, or at
any time hereafter, or (2) directly or indirectly to cause any
involuntary petition under any Chapter of the Bankruptcy Code to be
filed against any of such Persons or directly or indirectly to cause any
of such Persons to become the subject of any dissolution, liquidation or
insolvency proceeding or any other proceeding pursuant to any local,
state, federal, or other insolvency laws or laws providing for relief of
debtors, or in equity, either at the present time, or at any time
hereafter, or (3) directly or indirectly to cause the Mortgaged
Property, the Mezzanine Property, any other collateral for the Mortgage
Loan, the Collateral or any portion thereof or any interest of such
Persons in the Mortgaged Property, the Mezzanine Property, any other
collateral for the Mortgage Loan or the Collateral to become the
property of any bankruptcy estate or the subject of any local, state,
federal or other bankruptcy, dissolution, liquidation or insolvency
proceedings, either at the present time or at any time hereafter.

(d) Agreement in Best Interests of Parties; Consideration. Each of the
Borrower, WASH Manager, ▇▇▇▇▇ Avenue Holdings and the undersigned
Guarantor, jointly and severally, hereby acknowledges and agrees that
(1) the transactions evidenced by this Agreement and the other Loan
Documents are in the best interests of such Persons and the creditors of
such Persons, and (2) the benefit to inure to such Persons pursuant to
this Agreement and the other Loan Documents constitute substantially
more than "reasonable equivalent value" (as such term is used in Section
548 of the Bankruptcy Code) and "fair consideration" (as such term is
defined and used in the New York Debtor and Creditor Law Sections 272-
279), in exchange for the benefits to be provided by such Persons to the
Agent and the Banks pursuant to this Agreement and the other Loan
Documents.

(e) Subsequent Bankruptcy; Waiver of Automatic Stay.

(1) It is expressly agreed and understood by the parties
hereto that, in the event the Property Owner, WASH, WASH Manager, ▇▇▇▇▇
Avenue Holdings, the Borrower, the undersigned Guarantor, the
Collateral, the Mortgaged Property, the Mezzanine Property, any other
collateral for the Mortgage Loan, or any portion thereof, shall be or
become the subject of any bankruptcy proceeding or the property of any
bankruptcy estate, the United States Bankruptcy Court for the Southern
District of New York (hereinafter referred to as the "Bankruptcy Court")
shall have the sole and exclusive jurisdiction of such bankruptcy
proceeding. The parties hereto hereby further acknowledge and agree
that any voluntary bankruptcy petition filed by any of the Property
Owner, WASH, WASH Manager, ▇▇▇▇▇ Avenue Holdings, the Borrower, or the
Guarantor, or any involuntary bankruptcy petition caused to be filed by
any of the Property Owner, WASH, WASH Manager, ▇▇▇▇▇ Avenue Holdings,
the Borrower or Guarantor, or any affiliate thereof against any of the
Property Owner, WASH, WASH Manager, ▇▇▇▇▇ Avenue Holdings, the Borrower
or the Guarantor (any such bankruptcy filing being hereinafter referred
to as a "Bad Faith Filing"), or any other action by the Borrower or such
Persons, or any of them, to attempt in any manner to hinder, delay,
impede, stay, void, rescind or nullify any lawful action taken by Agent
to exercise its rights and remedies under this Agreement or any of the
other Loan Documents, or at law or in equity, from and after the date
hereof, or pursuant to any bankruptcy, insolvency, reorganization,
liquidation, dissolution or similar proceedings, would be in bad faith
and contrary to the purposes of the bankruptcy laws, would be for the
sole purpose of delaying, inhibiting or interfering with the exercise by
Agent of its rights and remedies under this Agreement and the Loan
Documents and would, in and of itself, constitute "cause" for relief
from the automatic stay pursuant to the provisions of Section 362(d)(1)
of the Bankruptcy Code. Without limitation of the foregoing, the
parties hereto hereby further acknowledge and agree that, in the event
of any Bad Faith Filing by or against any of the Property Owner, WASH,
WASH Manager, ▇▇▇▇▇ Avenue Holdings, the Borrower, or Guarantor, or
their respective successors, successors-in-interest or assigns, Agent
shall be entitled to obtain upon ex parte application therefor, and
without further notice or action of any kind or nature whatsoever, (A)
an order from the Bankruptcy Court prohibiting the use of Agent's "cash
collateral" (as such term is defined in Section 363 of the Bankruptcy
Code) in connection with the Loan, and (B) an order from the Bankruptcy
Court granting immediate relief from the automatic stay pursuant to
Section 362 of the Bankruptcy Code so as to permit Agent to exercise all
of its rights and remedies pursuant to this Agreement, the Loan
Documents, and at law and in equity.

(2) The Borrower, WASH Manager, ▇▇▇▇▇ Avenue Holdings and the
undersigned Guarantor covenant not to directly or indirectly oppose or
otherwise defend against Agent's effort to obtain relief from the stay
pursuant to Section 32(e)(1), above, and covenant and agree that Agent
shall be entitled to the lifting of the stay pursuant to Section
32(e)(1), above, without the necessity of an evidentiary hearing and
without the necessity or requirement that Agent establish or prove the
value of the Mortgaged Property, the Mezzanine Property or the
Collateral, the lack of adequate protection of Agent's interest in the
Collateral, the lack of any reasonable prospect of reorganization with
respect either to the Property Owner, WASH, WASH Manager, ▇▇▇▇▇ Avenue
Holdings, the Borrower, the Guarantor, the Mortgaged Property, the
Mezzanine Property or the Collateral, or the Borrower's or the
Guarantor's lack of equity in the Collateral.

(3) The waiver by the Borrower, WASH Manager, ▇▇▇▇▇ Avenue
Holdings and the undersigned Guarantor of the Section 362 automatic stay
contained in the Bankruptcy Code pursuant to Section 32(e)(1) and (2),
above, and the waiver of the Section 362 automatic and Section 105
supplemental stay contained in the Bankruptcy Code pursuant to Section
32(f), below, shall be unconditional and absolute, and each of the
Borrower, WASH Manager, ▇▇▇▇▇ Avenue Holdings and the undersigned
Guarantor hereby agree never to directly or indirectly maintain before
any court that such waiver of the automatic stay and supplemental stay
should not be strictly enforced.

(f) Waiver of Automatic and Supplemental Stays. Each of the Borrower, WASH
Manager, ▇▇▇▇▇ Avenue Holdings and the undersigned Guarantor, on behalf
of itself only, hereby represents, covenants and agrees, in the event of
the filing of any voluntary or involuntary petition in bankruptcy by or
against any of the Property Owner, WASH, WASH Manager, ▇▇▇▇▇ Avenue
Holdings, the Borrower or the Guarantor, not to assert or request any
other party to assert that the automatic stay provided by Section 362 of
the Bankruptcy Code shall operate or be interpreted to stay, interdict,
condition, reduce or inhibit the ability of Agent to enforce any rights
it has by virtue of this Agreement or the Loan Documents, or any other
rights Agent has, whether now or hereafter acquired, against any of the
Property Owner, WASH, WASH Manager, ▇▇▇▇▇ Avenue Holdings, the Borrower,
the Guarantor, or against any of the Collateral; and further, in the
event of the filing of any voluntary or involuntary petition in
bankruptcy by or against any of the Property Owner, WASH, WASH Manager,
▇▇▇▇▇ Avenue Holdings, the Borrower or the Guarantor, not to seek a
supplemental stay or any other relief, whether injunctive or otherwise,
pursuant to Section 105 of the Bankruptcy Code or any other provision of
the Bankruptcy Code, to stay, interdict, condition, reduce or inhibit
the ability of Agent to enforce any rights it has by virtue of this
Agreement or the Loan Documents, or at law or in equity, or any other
rights Agent has, whether now or hereafter acquired against the Property
Owner, WASH, WASH Manager, ▇▇▇▇▇ Avenue Holdings, the Borrower or the
Guarantor, or against any of the Collateral. The parties hereto
acknowledge that the waivers in this Section 32(f) with respect to an
involuntary petition shall not be effective until the occurrence of an
Event of Default provided that none of the Borrower, WASH, WASH Manager,
▇▇▇▇▇ Avenue Holdings, the undersigned Guarantor, or the Property Owner
directly or indirectly causes such petition to be filed against any of
them.

(g) Approval Rights Regarding Bankruptcy Proceeding. Upon the occurrence
and during the continuance of any Event of Default, all rights of the
Borrower and the Guarantor to exercise their Voting Interests in the
Property Owner, as the case may be, shall automatically terminate and
cease to exist and all such rights shall thereupon be automatically
vested in the Agent who shall thereupon have the sole and exclusive
right to exercise such Voting Interests. Without limiting the
foregoing, in the event of a Bad Faith Filing or any other voluntary or
involuntary bankruptcy filing or any other insolvency proceeding of any
kind under local, state, federal or other insolvency laws involving the
Property Owner, WASH, WASH Manager, ▇▇▇▇▇ Avenue Holdings, the Borrower,
the Guarantor, or all of them, or any of their properties (collectively
the "Bankruptcy Filings"), the Borrower, WASH Manager, ▇▇▇▇▇ Avenue
Holdings and the Guarantor each acknowledge and agree to recognize the
rights and powers granted to the Agent in this Section 32(g) and agree
not to oppose or object on any basis whatsoever to the exercise by the
Agent of such rights in connection with the Bankruptcy Filings.
Further, upon the commencement of one or more Bankruptcy Filings, the
Borrower, WASH Manager, ▇▇▇▇▇ Avenue Holdings and the undersigned
Guarantor, jointly and severally, covenant and agree: (1) not to
propose, approve, vote for, or acquiesce in a plan of reorganization
concerning the Property Owner, WASH, WASH Manager, ▇▇▇▇▇ Avenue
Holdings, the Borrower, the Guarantor, or all of them, as it directly or
indirectly relates to the Property Owner, WASH, WASH Manager, ▇▇▇▇▇
Avenue Holdings, the Collateral, the Mortgaged Property, the Mezzanine
Property or the Mezzanine Collateral without the consent of Agent; (2)
not to challenge or object on any basis whatsoever to the standing of
Agent to be recognized as a creditor and/or party-in-interest in the
Bankruptcy Filings; and (3) not to violate or breach any of the
covenants or agreements contained in this Agreement and any of the Loan
Documents.

(h) Miscellaneous Representations. Each of the Borrower, WASH Manager,
▇▇▇▇▇ Avenue Holdings and the undersigned Guarantor warrant and
represent to Agent and the Banks that, other than Agent and the Banks,
applicable taxing authorities, and as to the Borrower only, the
Indebtedness permitted by this Agreement, the Borrower, WASH Manager,
▇▇▇▇▇ Avenue Holdings and the Guarantor have no creditors; that none of
such Persons has any employees; that each of such Persons are single
asset entities such that each of such Persons does not own or hold any
beneficial interest in any property of any kind or nature whatsoever
other than their respective direct or indirect interests in the Property
Owner; and that any dispute which may arise between Agent, the Banks,
the Borrower (arising from its interest in the Collateral), the
Guarantor (arising from its interest in the Collateral), or any of them,
would be, for all intents and purposes, a dispute, involving only Agent
and the Banks and the Borrower, or the Guarantor, or any of them, as
applicable.

(i) Covenant of Noninterference and Cooperation.

(1) The Borrower, WASH Manager, ▇▇▇▇▇ Avenue Holdings and the
undersigned Guarantor jointly and severally, covenant and agree that,
except for a "Permitted Defense" (as defined in each of the Mezzanine
Conditional Guaranty and the Nomura Conditional Guaranty, as
applicable), none of them shall take any action of any kind or nature
whatsoever, either directly or indirectly, to oppose, impede, obstruct,
hinder, frustrate, enjoin or otherwise interfere with the exercise by
Agent of any of Agent's rights and remedies against or with respect to
the Collateral, this Agreement or the other Loan Documents, including
specifically, but without limitation, those rights and remedies
contained in this Section 32, at law or in equity, and shall not, either
directly or indirectly cause any other Person to take any of the
foregoing actions.

(2) The Borrower, WASH Manager, ▇▇▇▇▇ Avenue Holdings and the
undersigned Guarantor jointly and severally, covenant and agree, except
with respect to a Permitted Defense, to cooperate fully and completely
with the exercise by Agent of any of Agent's rights and remedies against
or with respect to the Collateral, this Agreement or the other Loan
Documents, including specifically, but without limitation, those rights
and remedies contained in this Section 32.

(3) The Borrower, WASH Manager, ▇▇▇▇▇ Avenue Holdings and the
undersigned Guarantor jointly and severally covenant and agree that any
violation of either Section 32(i)(1) or (2), above, or the occurrence of
any "Triggering Event" (as defined in each of the Mezzanine Conditional
Guaranty and the Nomura Conditional Guaranty, respectively), will
constitute an act of bad faith undertaken with intent to hinder, delay
and defraud Agent.

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 II, L.L.C.,
a Delaware limited liability company

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

By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CFO & Treasurer

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

By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇
Title: Managing Director

[BANK SEAL]

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

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

[CORPORATE SEAL]

BHF-BANK AKTIENGESELLSCHAFT

By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Title: Vice President

By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Title: Vice President

BHF-BANK AKTIENGESELLSCHAFT
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇▇▇▇▇ Oh

▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.

By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Title: Vice President

▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇ ▇▇▇▇▇▇

The undersigned ▇▇▇▇▇ Avenue Holdings, WASH Manager and Guarantor hereby
join in this Agreement for the purpose of being bound to the provisions of
Section 32 of this Agreement.

▇▇▇▇▇ AVENUE HOLDINGS:
---------------------
▇▇▇▇▇ AVENUE HOLDINGS, L.L.C., a
Delaware limited liability company

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

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

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

By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CFO & Treasurer

WASH MANAGER:
------------

WASH MANAGER L.L.C., a Delaware limited
liability company

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

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

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

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

By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CFO & Treasurer

GUARANTOR:
---------

WELLSFORD COMMERCIAL PROPERTIES TRUST, a
Maryland real estate investment trust

By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CFO & Treasurer

WHWEL REAL ESTATE LIMITED PARTNERSHIP

By: WHATR Gen-Par, Inc., General Partner

By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President

EXHIBIT A

FORM OF NOTE

$______________ _______________

FOR VALUE RECEIVED, the undersigned WELLSFORD/WHITEHALL HOLDINGS II,
L.L.C., a Delaware limited liability company, hereby promises to pay to
______________________________ or order, in accordance with the terms of that
certain Mezzanine Loan Agreement dated as of July ____, 1998 (the "Credit
Agreement"), as from time to time in effect, among the undersigned,
BankBoston, N.A., for itself and as Agent, ▇▇▇▇▇▇▇ Sachs 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 II, L.L.C., a
Delaware limited liability company

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

By:___________________________________
Name:______________________________
Title:_____________________________

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 Mezzanine Loan
Agreement dated July ___, 1998, as from time to time in effect (the "Credit
Agreement"), among Wellsford/Whitehall Properties II, L.L.C. (the
"Borrower"), BankBoston, N.A., 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. 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 the Mezzanine Property or other Collateral for the Loan.

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 Guarantor 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 II, L.L.C., a
Delaware limited liability company

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

By:____________________________________
Name:_______________________________
Title:______________________________

EXHIBIT C

FORM OF
COMPLIANCE CERTIFICATE

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

Ladies and Gentlemen:

Reference is made to the Mezzanine Loan Agreement dated as of July __,
1998 (the "Credit Agreement") by and among Wellsford/Whitehall Properties II,
L.L.C. (the "Borrower"), BankBoston, N.A., for itself and as Agent, ▇▇▇▇▇▇▇
Sachs 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 its 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(iii), Section 5.3(a)(ii), Section 5.3(b)(ii), Section 7.4(d), Section
7.4(h), Section 7.5(e), Section 8.1(f), Section 8.1(g), Section 8.1(h),
Section 8.4, Section 8.8 or Section 10.14 of the Credit Agreement. If this
Certificate is provided under a provision other than Section 7.4(d), 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
definition thereof $______________
(Attach Worksheet)

Ratio of A to B ________
Ratio of A to B may not exceed 0.75 to 1 on or
before December 31, 1999; 0.70 to 1 for the
period thereafter through December 31, 2000;
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 $___________

Ratio of A to B _________
A must equal or exceed 115% of B for the period ending on
or before December 31, 1999; A must equal or exceed
125% of B for the period thereafter through
December 31, 2000; A must equal or exceed 135%
of B thereafter.

III. Section 9.3. Minimum Shareholder's Equity

A. Shareholders' Equity $__________

B. $68,000,000.00 $__________

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

IV. Section 9.4. Real Estate Assets

A. Consolidated Total Assets $______________

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

Total $______________

Ratio of B to A _______
B may not exceed 5% of A

V. Section 9.5. Required Equity

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

Plus Recourse Indebtedness (Section 8.1(f)) $______________
(Amount may not exceed $20,000,000)

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

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

Plus Indebtedness under Mortgage Loan Agreement
(Section 8.1(i)) $______________

Plus Indebtedness under Mezzanine Mortgage Loan
Agreement (Section 8.1(j)) $______________

Total $______________

B. Aggregate all-in acquisition cost of Real Estate $______________
and the Mezzanine Property of Borrower and its Subsidiaries
and historic cost of capital improvements

Ratio of A to B ________

A may not exceed 0.75 of B

VI. Section 8.3(j). Investment Partnerships

A. Value of investments in Investment Partnerships $______________

B. Consolidated Total Assets $______________

Ratio of A to B _______
A may not exceed 10% of B.

VII. Section 8.7. Distributions

A. Distributions $______________

B. Minimum Distributions required to $______________
maintain REIT status of Wellsford
Commercial

A may not exceed B (provided that B may be at least $1,250,000 per
annum)

VIII. Section 8.9. Development

A. Aggregate cost of Real Estate $______________
Under Development

B. Consolidated Total Assets $______________

A may not exceed the greater of $25,000,000.00 or 10% of B.

IN WITNESS WHEREOF, I have hereunto set may hand this __ day
____________, _______.

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

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

By:_______________________________
Name:__________________________
Title:_________________________

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 Mezzanine Loan
Agreement dated July ___, 1998, as from time to time in effect (the "Credit
Agreement"), among Wellsford/Whitehall Properties II, 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 Property Owner
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 and correct in all material
respect as of the date as of which it was made and (other than
representations as to the Guarantor) 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, the Property Owner 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 II, L.L.C., a
Delaware limited liability company

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

By:_____________________________________
Name:________________________________
Title:_______________________________

EXHIBIT E

CERTIFICATE

In connection with the purchase being made by the undersigned of a
participation interest in or assignment of the loan (the "Loan") made by the
"Banks" (as defined in the Credit Agreement referred to below) to
Wellsford/Whitehall Properties II, L.L.C. (the "Borrower") pursuant to a
Mezzanine Loan Agreement dated July ___, 1998, (the "Credit Agreement"), the
undersigned represents, warrants and covenants as follows:

(1) The undersigned either:

(a) is a "qualified institutional buyer" as defined in paragraph (a) of
Rule 144A under the Securities Act of 1933, acting for its own
account, the account of another "qualified institutional buyer", or
the account of a "qualified purchaser" as defined in paragraph
(b)(i)(2) below; provided that if the undersigned is a dealer
described in paragraph (a)(1)(ii) of Rule 144A, the undersigned
owns and invests on a discretionary basis at least $25,000,000 in
securities of issuers that are not affiliated persons of such
dealer, all within the meaning of Rule 2a51-1(g)(1) under the
Investment Company Act of 1940 (the "Act"). (For purposes of
making this determination, a plan referred to in paragraph
(a)(1)(i)(D) or (a)(1)(i)(E) of Rule 144A, or a trust fund referred
to in paragraph (a)(1)(i)(F) of Rule 144A that holds the assets of
such a plan, is not deemed to be acting for its own account if
investment decisions with respect to the plan are made by the
beneficiaries of the plan, except with respect to investment
decisions made solely by the fiduciary, trustee or sponsor of such
plan.)

(b) (i)(1) is acting for its own account or (2) is acting for the
account of individuals or entities each of which is a "qualified
purchaser" as defined in Section 2(a)(51)(A) of the Act and the
rules promulgated thereunder; and (ii) owns and invests on a
discretionary basis at least $25,000,000 in "investments" (as
defined in Section 2(a)(51)(A) of the Act), after deducting the
amount of any outstanding indebtedness incurred to acquire or for
the purpose of acquiring such investments.

(c) is a company (other than a trust formed for the specific purpose of
acquiring an interest in the Loan) all the securities of which are
beneficially owned by "qualified purchasers" as defined in
paragraph (b)(i)(2) above.

(2) The undersigned acknowledges and agrees that the interest in the Loan is
being purchased by the undersigned for its own account and not pursuant to a
public offering and that such interest may only be sold or transferred in a
manner that does not constitute a public offering to another entity that can
deliver to the Borrower a certification to the effect set forth in paragraphs
1(a), (b) or (c) and 2 of this Certificate and otherwise in accordance with
the Credit Agreement.

[name of proposed transferee]

By: ____________________________________
Name:
Title:

SCHEDULE 1.1

BANKS AND COMMITMENTS

Name and Address Commitment Commitment Percentage
---------------- ---------- ---------------------

BankBoston, N.A. $25,000,000.00 33.3333%
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Real Estate Division