Deed of Trust For Green River 02/06/03

Gary Whittington, Esq. Assistant General Counsel AEGON USA Realty Advisors, Inc. 4333 Edgewood Road N.E. Cedar Rapids, Iowa 52499


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ATTENTION: CLERK AND RECORDER--THIS INSTRUMENT COVERS GOODS THAT ARE OR WILL BECOME FIXTURES ON THE DESCRIBED REAL PROPERTY AND SHOULD BE FILED FOR RECORD IN THE REAL PROPERTY RECORDS WHERE DEEDS OF TRUST ON REAL ESTATE ARE RECORDED. THIS INSTRUMENT SHOULD ALSO BE INDEXED AS A UNIFORM COMMERCIAL CODE FINANCING STATEMENT COVERING GOODS THAT ARE OR WILL BECOME FIXTURES ON THE DESCRIBED REAL PROPERTY. THE MAILING ADDRESSES, TELEPHONE NUMBERS, AND FAX NUMBERS OF THE SECURED PARTY AND THE DEBTOR ARE WITHIN.


DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING


GREEN RIVER AT PALOMINO PARK LLC,
Grantor,


having an office at
c/o Wellsford Park Highlands Corp.,
6700 Palomino Pkwy,
Highlands Ranch, Colorado 80130
Attn: David M. Strong


to


THE PUBLIC TRUSTEE OF DOUGLAS COUNTY,
Trustee


for the benefit of


AUSA LIFE INSURANCE COMPANY, INC.,
a New York life insurance company,
Beneficiary,


having an office
c/o AEGON USA Realty Advisors, Inc.
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-5443


Loan Amount: $40,000,000.00


Premises: Green River at Palomino Park, Douglas County, Highlands Ranch,
Colorado


DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING


THIS DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING (this "Deed of Trust") is made and given as of February 6th 2003 by GREEN RIVER AT PALOMINO PARK LLC, a Colorado limited liability company, whose address is c/o Wellsford Park Highlands Corp., 6700 Palomino Pkwy, Highlands Ranch, Colorado 80130, Attn: David M. Strong (the "Grantor"), to the Public Trustee of Douglas County, as Trustee, (the "Trustee"), for the benefit of AUSA LIFE INSURANCE COMPANY, INC., a New York life insurance company having an office c/o AEGON USA Realty Advisors, Inc., 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499-5443 (the "Beneficiary"). The definitions of capitalized terms used in this Deed of Trust may be found either in Section 3 below, or through the cross-references provided in that Section.


1. RECITALS


A. Under the terms of that certain Third Revised Loan Application/Commitment
dated November 8, 2002 (the "Commitment"), AEGON USA Realty Advisors, Inc.
("AEGON"), as agent for the Beneficiary, agreed to fund a loan in the
principal amount of $40,000,000 (the "Loan").


B. The Beneficiary has funded the Loan in the principal amount of $40,000,000
in accordance with the Commitment, and to evidence the Loan, the Grantor
has executed and delivered to the Beneficiary a certain secured promissory
note, of even date, in the amount of $40,000,000.


C. The Commitment requires that the Loan be secured by all of the Grantor's
existing and after-acquired interest in certain real property and by
certain tangible and intangible personal property.


2. GRANTING CLAUSE


To secure the repayment of the Indebtedness, any increases, modifications, renewals or extensions of the Indebtedness, and any substitutions for the Indebtedness, as well as the performance of the Grantor's other Obligations, and in consideration of the sum of ten dollars ($10.00) and other valuable consideration, the receipt and sufficiency of which are acknowledged, the Grantor grants, bargains, warrants, conveys, alienates, releases, assigns, sets over and confirms to the Trustee, in trust with the power of sale for the benefit of the Beneficiary and to his or her successors and assigns forever, all of the Grantor's existing and after acquired interests in the Real Property.


3. DEFINED TERMS


The following defined terms are used in this Deed of Trust. For ease of reference, terms relating primarily to the Security Agreement are defined in Section 22.1.


"Absolute Assignment of Leases and Rents" means the Loan Document bearing this heading. "Appurtenances" means all rights, estates, titles, interests, privileges, easements, tenements,


hereditaments, titles, royalties, reversions, remainders and other interests, whether presently held by the Grantor or acquired in the future, that may be conveyed as interests in the Land under the law of Colorado. Appurtenances include the Easements and the Assigned Rights.


"Assigned Rights" means all of the Grantor's rights, easements, privileges, tenements, hereditaments, contracts, claims, licenses or other interests, whether presently existing or arising in the future. The Assigned Rights include all of the Grantor's rights in and to:


(a) any greater estate in the Real Property;


(b) insurance policies required to be carried hereunder, including the right to
negotiate claims and to receive Insurance Proceeds and unearned insurance
premiums (except as expressly provided in Section 8.1);


(c) Condemnation Proceeds;


(d) licenses and agreements permitting the use of sources of groundwater or
water utilities, septic leach fields, railroad sidings, sewer lines, means
of ingress and egress;


(e) drainage over other property;


(f) air space above the Land;


(g) mineral rights;


(h) party walls;


(i) vaults and their usage;


(j) franchises;


(k) commercial tort claims that arise during the Loan term in respect of
damages to the Real Property or to its operations, in respect of any
impairment to the value of the Real Property, or in respect of the
collection of any Rents;


(l) construction contracts;


(m) roof and equipment guarantees and warranties;


(n) building and development licenses and permits;


(o) tax credits or other governmental entitlements, credits or rights, whether
or not vested;


(p) licenses and applications (whether or not yet approved or issued);


(q) rights under management and service contracts;


(r) leases of Fixtures;


(s) trade names; trademarks, trade styles, service marks, copyrights, , and
agreements with architects, environmental consultants, property tax
consultants, engineers, and any other third party contractors whose
services benefit the Real Property. "Bankruptcy Code" shall mean the
Bankruptcy Reform Act of 1978, as amended, 11 U.S.C. Sections 101 et seq.,
and the regulations promulgated pursuant to those statutes.


"Business Day" means any day when state and federal banks are open for business in Cedar Rapids, Iowa.


"Carveout Obligations" means those obligations described in Section 21.


"Carveouts" means those matters from which Carveout Obligations may arise, which are described in Section 21.


"Condemnation Proceeds" means all money or other property that has been, or is in the future, awarded or agreed to be paid or given in connection with any taking by eminent domain of all or any part of the Real Property (including a taking through the vacation of any street dedication or through a change of grade of such a street), either permanent or temporary, or in connection with any purchase in lieu of such a taking, or as a part of any related settlement, except for the right to condemnation proceeds granted to the tenant in a separate proceeding including in respect of the lost value of the tenant's leasehold interest.


"Default" means any of the acts, omissions, or circumstances specified in Section 10 below. "Default Rate" means the rate of interest specified as the "Default Rate" in the Note. "Development Agreements" means all development, utility or similar agreements included in the Permitted Encumbrances.


"Distribution System" means all cable, wiring, conduit, fiber optics and other similar medium whether installed above or underground or in the buildings on the Real Property, but not including the Telecommunications Equipment.


"Easements" means the Grantor's existing and future interests in and to the declarations, easements, covenants, and restrictions appurtenant to the Land.


"Environmental Indemnity Agreement" means the Loan Document bearing that heading. "Environmental Laws" means all present and future laws, statutes, ordinances, rules, regulations, orders, guidelines, rulings, decrees, notices and determinations of any Governmental Authority to the extent that they pertain to: (A) the protection of health against environmental hazards; (B) the protection of the environment, including air, soils, wetlands, and surface and underground water, from contamination by any substance that may have any adverse health effect on humans, livestock, fish, wildlife, or plant life, or which may disturb an ecosystem; (C) underground storage tank regulation or removal; (D) wildlife conservation; (E) protection or regulation of natural resources; (F) the protection of wetlands; (G) management, regulation and disposal of solid and hazardous wastes; (H) radioactive materials; (I) biologically hazardous materials; (J) indoor air quality; (K) the manufacture, possession, presence, use, generation, storage, transportation, treatment, release, emission, discharge, disposal, abatement, cleanup, removal, remediation or handling of any Hazardous Substances. "Environmental Laws" include the Comprehensive Environmental Response, Compensation, and Liability Act, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.ss.9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C.ss.6901 et seq., the -- --- - -- --- Federal Water Pollution Control Act, as amended by the Clean Water Act, 33 U.S.C.ss.1251 et seq., the -- --- Clean Air Act, 42 U.S.C.ss.7401 et seq., the Toxic Substances Control Act, 15 U.S.C.ss.2601 et seq., all -- --- -- --- similar state statutes and local ordinances, and all regulations promulgated under any of those statutes, and all administrative and judicial actions respecting such legislation, all as amended from time to time. "ESA" means the written environmental site assessment of the Real Property obtained under the terms of the Commitment.


"Escrow Expenses" means those expenses in respect of Insurance Premiums and such other lienable Impositions as the Beneficiary pays from time to time directly from the Escrow Fund using monies accumulated through the collection of Monthly Escrow Payments.


"Escrow Fund" means the funds deposited by Grantor with the Beneficiary pursuant to Section 9 hereof, as reflected in the accounting entry maintained on the books of the Beneficiary as funds available for the payment of Escrow Expenses under the terms of this Deed of Trust.


"Fixtures" means all materials, supplies, equipment, apparatus and other items now or hereafter attached to or installed on the Land and Improvements in a manner that causes them to become fixtures under the law of Colorado, including all built-in or attached furniture or appliances, elevators, escalators, heating, ventilating and air conditioning system components, emergency electrical generators and related fuel storage or delivery systems, septic system components, storm windows, doors, electrical equipment, plumbing, water conditioning, lighting, cleaning, snow removal, lawn, landscaping, irrigation, security, incinerating, fire-fighting, sprinkler or other fire safety equipment, bridge cranes or other installed materials handling equipment, satellite dishes or other telecommunication equipment, built-in video conferencing equipment, sound systems or other audiovisual equipment, and cable television distribution systems. Fixtures do not include the Telecommunications Equipment and Distribution System, trade fixtures, furniture and equipment owned by tenants and vendors who are unrelated to the Grantor, provided such items may be detached and removed by the tenants without damage to the Real Property, other than incidental damage that the tenants are obligated to repair under the terms of their Leases. Fixtures expressly include HVAC, mechanical, security and similar systems of general utility for the operation of the Improvements as leasable commercial real property.


"Governmental Authority" means any political entity with the legal authority to impose any requirement on the Property, including the governments of the United States, the State of Colorado, Douglas County, and any other entity with jurisdiction to decide, regulate, or affect the ownership, construction, use, occupancy, possession, operation, maintenance, alteration, repair, demolition or reconstruction of any portion or element of the Real Property.


"Hazardous Substance" means any substance the release of or the exposure to which is prohibited, limited or regulated by any Environmental Law, or which poses a hazard to human health, including: (A) any "oil," as defined by the Federal Water Pollution Control Act and regulations promulgated thereunder (including crude oil or any fraction of crude oil), (B) any radioactive substance and (C) STACCHYBOTRIS CHARTARUM or other molds. However, the term "Hazardous Substance" includes neither (A) a substance used in the cleaning and maintenance of the Real Property, if the quantity, storage and manner of its use are customary, prudent, and do not violate applicable law, or (B) automotive motor oil in immaterial quantities, if leaked from vehicles in the ordinary course of the operation of the Real Property and cleaned up in accordance with reasonable property management procedures and in a manner that violates no applicable law.


"Impositions" means all real and personal property taxes levied against the Property; general or special assessments; ground rent; water, gas, sewer, vault, electric or other utility charges; common area charges; owners' association dues or fees; fees for any easement, license or agreement maintained for the benefit of the Property; and any and all other taxes, levies, user fees, claims, charges and assessments whatsoever that at any time may be assessed, levied or imposed on the Property or upon its ownership, use, occupancy or enjoyment, and any related costs, interest or penalties. In addition, "Impositions" include all documentary, stamp or intangible personal property taxes that may become due in connection with the Indebtedness, including Indebtedness in respect of any future advance made by the Beneficiary to the Grantor, or that are imposed on any of the Loan Documents.


"Improvements" means, to the extent of the Grantor's existing and future interest, all buildings and improvements of any kind erected or placed on the Land now or in the future, including the Fixtures, together with Grantor's existing and future interest in all appurtenant rights, privileges, easements, tenements, hereditaments, titles, reversions, remainders and other interests.


"Indebtedness" means all sums that are owed or become due pursuant to the terms of the Note, this Deed of Trust, or any of the other Loan Documents or any other writing executed by the Grantor relating to the Loan, including scheduled principal payments, scheduled interest payments, default interest, late charges, prepayment premiums, accelerated or matured principal balances, advances, collection costs (including reasonable attorneys' fees), reasonable attorneys' fees and costs in enforcing or protecting the Note, the Deed of Trust, or any of the other Loan Documents in any probate, bankruptcy or other proceeding, receivership costs, fees and costs of the Trustee and all other financial obligations of the Grantor incurred in connection with the Loan transaction, provided, however, that this Deed of Trust shall not secure any Loan Document or any particular person's liabilities or obligations under any Loan Document to the extent that such Loan Document expressly states that it or such particular person's liabilities or obligations are unsecured by this Deed of Trust. Indebtedness shall also include any obligations under agreements which specifically provide that such obligations are secured by this Deed of Trust.


"Insurance Premiums" means all premiums or other charges required to maintain in force any and all insurance policies that this Deed of Trust requires that the Grantor maintain.


"Insurance Proceeds" means (A) all proceeds of all insurance now or hereafter carried by or payable to the Grantor with respect to the Real Property, including with respect to the interruption of rents or income derived from the Property, all unearned insurance premiums and all related claims or demands, and (B) all Proceeds.


"Land" means that certain tract of land located in Douglas County, Colorado, which is described on the attached Exhibit A, together with the Appurtenances.


"Leases" means all leases, subleases, licenses, concessions, extensions, renewals and other agreements (whether written or oral, and whether presently effective or made in the future) through which the Grantor grants any possessory interest in and to, or any right to occupy or use, all or any part of the Real Property, and any related guaranties.


"Legal Control" means the power, either directly or indirectly, to exercise the authority of the owner of the Real Property, either as the majority shareholder of the common stock of a corporation, as the sole general partner of a limited partnership, as the managing general partner of a general partnership, or as the sole manager of a limited liability company, provided the entity exercising such authority cannot be divested of such authority without its consent, either directly or indirectly, except for cause.


"Legal Requirements" means all laws, statutes, rules, regulations, ordinances, judicial decisions, administrative decisions, building permits, development permits, certificates of occupancy, or other requirements of any Governmental Authority.


"Loan Documents" means all documents evidencing the Loan or delivered in connection with the Loan, whether entered into at the closing of the Loan or in the future.


"Maximum Lawful Rate" means the maximum lawful rate of interest that may be paid or collected under the laws of Colorado.


"Monthly Escrow Payment" means the sum of the Monthly Imposition Requirement, the Monthly Insurance Premium Requirement, and the Monthly Reserve Requirement.


"Monthly Imposition Requirement" means one-twelfth of the annual amount that the Beneficiary estimates will be required to permit the timely payment by the Beneficiary of those Impositions that the Beneficiary elects, from time to time, to include in the calculation of the Monthly Imposition Requirement. Such Impositions shall include real and personal property taxes and may include, at the Beneficiary's sole and absolute discretion any Impositions that the Grantor has failed to pay on a timely basis during the term of the Loan. The Beneficiary shall base its estimate on the most recent information supplied by the Grantor concerning future Impositions. If the Grantor fails to supply such information or if it is unavailable at the time of estimation, the Beneficiary shall estimate future Impositions using historical information and an annual inflation factor equal to the lesser of 5% and the maximum inflation factor permitted by law.


"Monthly Insurance Premium Requirement" means one-twelfth of the annual amount that the Beneficiary estimates (based on available historical data and using, if future Insurance Premiums are as yet undeterminable, a 5% inflation factor) will be required to permit the timely payment of the Insurance Premiums by the Beneficiary.


"Monthly Reserve Requirement" means the monthly payment amount which the Beneficiary estimates will, over the subsequent twelve months, result in the accumulation of a surplus in the Escrow Fund equal to the sum of the Monthly Imposition Requirement and the Monthly Insurance Premium Requirement.


"Note" means the promissory note dated of even date herewith to evidence the Indebtedness in the original principal amount of $40,000,000, together with all extensions, renewals and modifications.


"Notice" means a notice given in accordance with the provisions of Subsection 26.12. "Obligations" means all of the obligations required to be performed under the terms and conditions of any of the Loan Documents by any Obligor, except for obligations that are expressly stated to be unsecured under the terms of another Loan Document.


"Obligor" means the Grantor, or any other Person that is liable under the Loan Documents for the payment of any portion of the Indebtedness, or the performance of any other obligation required to be performed under the terms and conditions of any of the Loan Documents, under any circumstances.


"Participations" means participation interests in the Loan Documents granted by the Beneficiary. "Permitted Control Group Member" shall mean any member of a group comprised of Wellsford Real Property, Inc. and EOP Limited Partnership.


"Permitted Encumbrances" means (A) the lien of taxes and assessments not yet due and payable and (B) those matters listed as special exceptions in the Beneficiary's title insurance policy insuring the priority of this Deed of Trust.


"Permitted Transfer" means a transfer specifically described in Section 14 as permitted.


"Person" means any individual, corporation, limited liability company, partnership, trust, unincorporated association, government, governmental authority or other entity.


"Prohibited Structural Change" means (A) a change in the ownership structure of Grantor, if, following the change, Legal Control of the Real Property is no longer exercised by one or more Permitted Control Group Member, or (B) a change in the identity or capacity of any intermediate entity through which any Permitted Control Group Member exercises such Legal Control.


"Property" means the Real Property, the Personal Property, the Leases and the Rents.


"Rating Agencies" means one or more credit rating agencies approved by Lender.


"Real Property" means the Land, the Improvements, the Leases and the Rents.


"Rents" means all rents, income, receipts, issues and profits and other benefits paid or payable for using, leasing, licensing, possessing, operating from or in, residing in, selling, mining, extracting minerals from, or otherwise enjoying the Real Property, whether presently existing or arising in the future, to which the Grantor may now or hereafter become entitled or may demand or claim from the commencement of the Loan term through the time of the satisfaction of all of the Obligations, including security deposits, amounts drawn under letters of credit securing tenant obligations, minimum rents, additional rents, common area maintenance charges, parking revenues, deficiency rents, termination payments, space contraction payments, damages following default under a Lease, premiums payable by tenants upon their exercise of cancellation privileges, proceeds from lease guarantees, proceeds payable under any policy of insurance covering loss of rents resulting from untenantability caused by destruction or damage to the Real Property, all rights and claims of any kind which the Grantor has or may in the future have against the tenants under the Leases, lease guarantors, or any subtenants or other occupants of the Real Property, all proceeds of any sale of the Real Property in violation of the Loan Documents, any future award granted the Grantor in any court proceeding involving any such tenant in any bankruptcy, insolvency, or reorganization proceedings in any state or federal court, and any and all payments made by any such tenant in lieu of rent.


"Restoration" means (A) in the case of a casualty resulting in damage to or the destruction of the Improvements, the repair or rebuilding of the Improvements to their original condition, or (B) in the case of the condemnation of a portion of the Real Property, the completion of such work as may be necessary in order to remedy the effects of the condemnation so that the value and income-generating characteristics of the Real Property are restored.


"Securities" means mortgage pass-through certificates or other securities evidencing a beneficial interest in the Loan, issued in a rated or unrated public offering or private placement.


"Securitization" means the issuance of Securities.


"Telecommunications" means (i) local telephone exchange services and point-to-point telephone communications (including dedicated long-distance service), call waiting, call forwarding, speed dialing and other similar services; paging, voice mail and message center service; video communications service; 800 or other toll-free-number service; telephone credit or debit card service; audio conferencing; (ii) multichannel video or audio programming, including, without limitation, cable television services, satellite master antenna television, wireless or microwave technology, direct feed from a local franchise cable provider or video delivery provider, multichannel multipoint distribution service, direct broadcast satellite, or other similar video or audio transmission services; and (iii) high speed Internet access and other Internet-related communication services, which may include all other services such as voice, video, data, facsimile or other communication services (or any combination of the foregoing), data transmission service; access to computer "Internet" or other networked computer-based communications and related content, including access via Internet "portal" service; provision of telephone, video communication or other similar communications equipment or infrastructure.


"Telecommunications Equipment" means the facilities and equipment owned by Palomino Park Telecom, LLC or its licensees for the transmission and reception of Telecommunications services, including without limitation: servers, racks, cabinets, cable, risers, junction boxes, hangers, pull boxes, innerducts, connecting equipment, termination blocks, intermediate distribution facilities, a/k/a customer service boxes, electrical wiring and related equipment, electronic devises, and hardware and software or any components thereof, but not including the Distribution System.


4. TITLE


The Grantor represents to and covenants with the Beneficiary and with its successors and assigns that, at the point in time of the grant of the lien created by this Deed of Trust, the Grantor is well seized of good and indefeasible title to the Real Property, in fee simple absolute, subject to no lien or encumbrance except the Permitted Encumbrances. The Grantor warrants this estate and title to the Beneficiary and to its successors and assigns forever, against all lawful claims and demands of all persons subject to the Permitted Encumbrances. The Grantor shall maintain mortgagee title insurance issued by a solvent carrier, covering the Real Property in an amount at least equal to the amount of the Loan's original principal balance. This Deed of Trust is and shall remain a valid ...