PARTICIPATION AND SERVICING AGREEMENT

            THIS PARTICIPATION AND SERVICING AGREEMENT (this "Agreement") dated
as of the 8th day of December, 2005 by and between ARBOR REALTY FUNDING LLC,
having an address at 333 Ovington Boulevard, Uniondale, New York 11533 (together
with its successors and assigns as holder of the Senior Participation Interest,
"Senior Participant"), and FT-TOY LLC, having an address at 7 Bulfinch Place,
Suite 500, P.O. Box 9507, Boston, Massachusetts 02114 (together with its
successors and assigns as holder of the Junior Participation Interest, "Junior
Participant").

                                    RECITALS:

            A. Pursuant to that certain Fourth Mezzanine Loan Agreement dated as
of July 28, 2005 (as amended, modified or supplemented, the "Loan Agreement"),
Column Financial, Inc. ("Column") originated that certain mezzanine loan in the
original principal sum of $60,000,000.00 (the "Loan") to 200 Fifth Mezz Four LLC
(the "Borrower"), which Loan is (i) evidenced by that certain Promissory Note
dated as of July 28, 2005, in the original principal amount of $60,000,000.00
(together with any and all renewals, amendments, modifications, consolidations
and extensions thereof, the "Promissory Note"), and (ii) secured, inter alia, by
a pledge of one hundred percent of the limited liability company interests (the
"Property") in 200 Fifth Mezz Three LLC ("Mezz Three") pursuant to that certain
Pledge and Security Agreement dated as of July 28, 2005 (as amended, modified or
supplemented, the "Pledge").

            B. Mezz Three is the owner of one hundred percent of the limited
liability company interests in 200 Fifth Mezz Two LLC ("Mezz Two"); Mezz Two is
the owner of one hundred percent of the limited liability company interests in
200 Fifth Mezz One LLC ("Mezz One"); and Mezz One is the owner of one hundred
percent of the limited liability company interests in 200 Fifth, LLC Owner"),
the owner of a fee estate in certain property located at 200 Fifth Avenue, 1107
Broadway, 23 West 23rd Street and 7 West 24th Street, New York, New York and
commonly known as The International Toy Center (the "Premises").

            C. All documents evidencing or securing the Loan (including, without
limitation, the Loan Agreement, the Promissory Note, the Rate Cap Agreement and
the Guaranty (each as hereinafter defined)) shall be collectively referred to
herein as the "Loan Documents."

            D. On the date hereof, and simultaneously with the execution of this
Agreement, Senior Participant is acquiring the Loan.

            E. Senior Participant desires to sell, transfer and assign to Junior
Participant the Junior Participation Interest, and Junior Participant desires to
purchase from Senior Participant the Junior Participation Interest, upon and in
accordance with the terms of this Agreement.

            D. Capitalized terms not specifically defined herein shall have the
meanings ascribed thereto in the Loan Agreement, and if a capitalized term is
not defined in the Loan Agreement, it shall have the meaning ascribed thereto in
the other Loan Documents.

            <PAGE>

            NOW,  THEREFORE,  in  consideration  of the  foregoing and for other
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged,  the parties  hereby  covenant,  agree,  represent  and warrant as
follows:

            1. Definitions. References to a "Section", the "preamble" or the
"recitals" are, unless otherwise specified, to a Section, the preamble or the
recitals of this Agreement. Whenever used in this Agreement, the following terms
shall have the respective meanings set forth below unless the context clearly
requires otherwise.

            "Accepted Servicing Practices" shall mean the higher of (a) the same
care, skill, prudence and diligence with which Senior Participant services and
administers similar loans for other third party portfolios, giving due
consideration to customary and usual standards of practice of prudent
institutional commercial lenders servicing their own loans and (b) the same
care, skill, prudence and diligence which Senior Participant utilizes for loans
which Senior Participant owns for its own account, in each case, acting in
accordance with applicable law, the terms of this Agreement, the Loan Documents
and the Loan's insurance policies and with a view to the maximization of timely
recovery of principal and interest on a net present value basis on the Loan as a
whole, but without regard to:

                        (i) any relationship that Senior Participant or any
      Affiliate of Senior Participant may have with the Borrower or any
      Affiliates of the Borrower;

                        (ii) the ownership of any interest in the Loan by Senior
      Participant or any Affiliate of Senior Participant;

                        (iii) the ownership of any senior or junior indebtedness
      with respect to the Premises by Senior Participant or any Affiliate of
      Senior Participant; or

                        (iv) the ownership, or servicing or management for
      others, by Senior Participant or any sub-servicer, of any other loans or
      properties.

            "Agreement" shall mean this Participation and Servicing Agreement,
the exhibits and schedules hereto and all amendments hereof and supplements
hereto.

            "Borrower" shall have the meaning assigned to such term in the
recitals.

            "Borrower Related Parties" shall have the meaning assigned to such
term in Section 13.

            "Costs" shall mean all third party out-of-pocket costs, fees (not
including any servicing fees or special servicing fees), expenses, payments,
losses, liabilities, judgments and/or causes of action reasonably suffered or
incurred or paid or to be paid by the holder of the Loan pursuant to or in
connection with the Loan, the Loan Documents, the Property, this Agreement or
otherwise in connection with the Loan and the servicing, administration and/or
enforcement pursuant to the terms of this Agreement, including, without
limitation, attorneys' fees and disbursements, protective advances under the
Loan Documents to the extent permitted hereunder, and Intercreditor Payments,


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<PAGE>

except for those resulting from Senior Participant's gross negligence or willful
misconduct; provided, however, that neither (a) Senior Participant's day-to-day
customary and usual, ordinary costs of servicing and administration nor (b) any
internal or overhead costs of Senior Participant shall be deemed to be "Costs."

            "Cure Election Notice" shall have the meaning assigned to such term
in Section 5.

            "Cure Option Notice" shall have the meaning assigned to such term in
Section 5.

            "Cure Payment" shall have the meaning assigned to such term in
Section 5.

            "Cure Period" shall have the meaning assigned to such term in
Section 5.

            "Initial Junior Participant" shall mean FT-Toy LLC, a Delaware
limited liability company.

            "Initial Senior Participant" shall mean Arbor Realty Funding LLC, a
Delaware limited liability company.

            "Insolvency Proceeding" shall mean any proceeding under the
Bankruptcy Code or any other insolvency, liquidation, reorganization or other
similar proceeding concerning the Borrower, any action for the dissolution of
the Borrower, any proceeding (judicial or otherwise) concerning the application
of the assets of the Borrower, for the benefit of its creditors, the appointment
of or any proceeding seeking the appointment of a trustee, receiver or other
similar custodian for all or any substantial part of the assets of the Borrower
or any other action concerning the adjustment of the debts of the Borrower or
the cessation of business by the Borrower.

            "Intercreditor Agreement" shall mean that certain Intercreditor
Agreement dated as of July 28, 2005 among Column, as Senior Lender, Column, as
First Mezzanine Lender, Column, as Second Mezzanine Lender, Column, as Third
Mezzanine Lender, Column, as Fourth Mezzanine Lender and Column, as Fifth
Mezzanine Lender.

            "Intercreditor Payments" shall mean all amounts payable by the
holder of the Loan pursuant to the terms of the Intercreditor Agreement.

            "Junior Participant" shall mean the Initial Junior Participant or
any subsequent holder of the Junior Participation Interest.

            "Junior Participant Loan" shall mean the loan made by Senior
Participant to Junior Participant on the date hereof in the original principal
amount of $30,000,000.00.

            "Junior Participant Loan Agreement" shall mean that certain Loan
Agreement between Senior Participant and Junior Participant dated as of the date
hereof.

            "Junior Participant Loan Documents" shall mean that certain
Promissory Note dated as of the date hereof executed by Junior Participant to
the order of Senior Participant in the original principal amount of
$30,000,000.00, the Junior Participant Loan Agreement and all other documents
and instruments evidencing and securing, or executed in connection with, the
Junior Participant Loan.


                                       3
<PAGE>

            "Junior Participant Loan Event of Default" shall mean the occurrence
of an Event of Default (as defined in the Junior Participant Loan Documents)
under the Junior Participant Loan Documents.

            "Junior Participant Loan Interest Payment" shall mean, on any date
of determination, the amount of interest then due from Junior Participant under
the Junior Participant Loan Documents.

            "Junior Participant Loan Principal Balance" shall mean, on any date
of determination, the then outstanding principal amount of the Junior
Participant Loan.

            "Junior Participation Applicable Spread" shall mean 5% plus one-half
of the difference between the Applicable Spread (as defined in the Loan
Agreement) and 5%. For example purposes only, if the Applicable Spread is 6.2%,
then the Junior Participation Applicable Spread shall equal 5.6% [5% +
1/2(6.2%-5%).

            "Junior Participation Default Rate" shall mean the lesser of (a) the
highest rate allowable at law and (b) the sum of the Junior Participation Rate
plus 2.50%.

            "Junior Participation Interest" shall mean a direct, participating
beneficial ownership interest in the Loan, the Loan Documents and the proceeds
thereof, together with the other rights and privileges specified in this
Agreement, but subject and subordinate to the Senior Participation Interest as
provided in this Agreement.

            "Junior Participation Monthly Interest Payment" shall mean, on any
date of determination, an amount equal to the accrued and unpaid interest on the
Junior Participation Principal Balance at the Junior Participation Rate (or the
Junior Participation Default Rate in the event that Borrower is paying interest
on the Loan at the default rate set forth in the Loan Documents), through the
end of the Interest Period during which the applicable Monthly Payment Date
occurs.

            "Junior Participation Monthly Net Interest Payment" shall mean, on
any date of determination, an amount equal to the Junior Participation Monthly
Interest Payment minus the Junior Participant Loan Interest Payment.

            "Junior Participation Principal Balance" shall mean, on any date of
determination, $59,400,000, less the sum of any amount previously applied in
reduction of such amount pursuant to Section 2(c)(ii), Section 2(d) or Section
2(e).

            "Junior Participation Rate" shall mean the LIBOR Rate plus the
Junior Participation Applicable Spread.

            "Loan" shall have the meaning assigned to such term in the recitals.

            "Loan Documents" shall have the meaning assigned to such term in the
recitals.

            "Loan Agreement" shall have the meaning assigned to such term in the
recitals.


                                       4
<PAGE>

            "Mezzanine Loan Default" shall mean (a) the occurrence of an Event
of Default (as defined in the Loan Documents) and/or (b) the failure of the
Borrower to pay any amount due under the Loan Documents when due, whether or not
an Event of Default is declared.

            "Non-Exempt Person" shall have the meaning assigned to such term in
Section 19.

            "Premises" shall have the meaning assigned to such term in the
recitals.

            "Prime Rate" shall mean the "Prime Rate" in effect from time to time
(as published in the "Money Rates" section of The Wall Street Journal or, if
such section or publication no longer is available, such other publication as
determined by Senior Participant in its reasonable discretion).

            "Promissory Note" shall have the meaning assigned to such term in
the recitals.

            "Property" shall have the meaning assigned to such term in the
recitals.

            "Repurchase Agreement" shall mean that certain First Amended and
Restated Loan Purchase and Repurchase Agreement, dated as of July 12, 2004,
among Senior Participant, Wachovia, Arbor Realty Trust, Inc., Arbor Realty
Limited Partnership and Arbor Realty SR, Inc. as amended by that certain First
Amendment to First Amended and Restated Loan Purchase and Repurchase Agreement,
dated as of November 11, 2004, that certain Second Amendment to First Amended
and Restated Loan Purchase and Repurchase Agreement, dated as of December 22,
2004, that certain Omnibus Amendment of Certain Repurchase Documents;
Purchaser's Consent; and Joinder, dated as of January 19, 2005, that certain
Third Amendment to First Amended and Restated Loan Purchase and Repurchase
Agreement, dated as of February 25, 2005, that certain Fourth Amendment to First
Amended and Restated Loan Purchase and Repurchase Agreement, dated as of May 27,
2005, that certain Fifth Amendment to First Amended and Restated Loan Purchase
and Repurchase Agreement, dated as of June 29, 2005, that certain Sixth
Amendment to First Amended and Restated Loan Purchase and Repurchase Agreement,
dated as of October 28, 2005 and that certain Seventh Amendment to First Amended
and Restated Loan Purchase and Repurchase Agreement, dated as of November 9,
2005.

            "Repurchase Agreement Default" shall mean an event of default or
Termination Event (as defined in the Repurchase Agreement) under the Repurchase
Agreement pursuant to which Wachovia has the right to exercise remedies with
respect to its interest in the Loan.

            "Securitization" shall mean the transaction pursuant to which Senior
Participant will transfer the Loan to a trustee in connection with the
securitization or creation of collateralized debt obligations.

            "Securitization Date" shall mean the closing date on which the
Securitization is consummated.

            "Securitization Repurchase Amount" shall mean (i) one percent (1%)
of the then Junior Participation Principal Balance if the purchase is made prior
to December __, 2006, (ii) one-half of one percent (0.5%) of the then Junior
Participation Principal Balance if (a) the purchase is made after December 6,
2006 and prior to June 6, 2007 and (b) Senior Participant retains an ownership


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<PAGE>

interest in the Loan after the Securitization Date (other than any equity
interests in the issuer of the applicable collateralized debt obligations),
(iii) zero if (x) the purchase is made after December 6, 2006 and prior to June
6, 2007 and (y) Senior Participant does not retain an ownership interest in the
Loan after the Securitization Date (other than any equity interests in the
issuer of the applicable collateralized debt obligations), and (iv) zero if
after June 6, 2007.

            "Senior Participant" shall mean the Initial Senior Participant or
any subsequent holder of the Senior Participation Interest.

            "Senior Participation Interest" shall mean legal ownership of the
entire Loan and the net economic interest of Senior Participant after giving
effect to the Junior Participation Interests.

            "Senior Participation Principal Balance" shall mean, on any date of
determination, $600,000, less the sum of any amount previously applied in
reduction of such amount pursuant to Section 2(c)(ii).

            "Senior Participation Purchase Price" shall mean an amount equal to
the sum of (a) the then outstanding Senior Participation Principal Balance, (b)
one percent (1%) of all accrued and unpaid interest and other sums due under the
Loan Documents, and (c) all Costs incurred or paid by Senior Participant, to the
extent not previously reimbursed.

            "Servicing Event of Default" shall mean any one of the following
events:

                  (a) any failure by Senior Participant to remit to Junior
Participant any amount required to be so remitted by Senior Participant in
servicing the Loan pursuant to, and at the time specified by, the terms of this
Agreement, and such failure continues unremedied for more than three (3)
Business Days after the date on which the remittance was due;

                  (b) any failure on the part of Senior Participant to (i) duly
abide by Accepted Servicing Practices, or (ii) observe or perform in any
material respect any other of the material covenants or agreements of Senior
Participant relating to the servicing of the Loan under this Agreement, which,
in either case, continues unremedied for a period of 15 days (or if not
otherwise curable within such 15 day period, for such additional period as is
reasonably necessary to remedy same; provided Senior Participant is diligently
pursuing such, but in no event longer than 60 days) after the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to Senior Participant by Junior Participant;

                  (c) the entry of a decree or order of a court or agency or
supervisory authority having jurisdiction for the appointment of a conservator,
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings against Senior Participant or for
the winding-up or liquidation of the affairs of Senior Participant and such
decree or order remains unstayed and in effect for a period of 60 days;

                  (d) the consent by Senior Participant to the appointment of a
conservator or receiver or liquidator or liquidating committee in any


                                       6
<PAGE>

insolvency, readjustment of debt, marshalling of assets and liabilities,
voluntary liquidation or similar proceedings of or relating to Senior
Participant or relating to all or substantially all of the property of Senior
Participant; or

                  (e) the admission by Senior Participant in writing of its
inability to pay its debts generally as they become due, the filing by Senior
Participant of a petition to take advantage of any applicable insolvency or
reorganization statute, the making by Senior Participant of an assignment for
the benefit of its creditors or the voluntary suspension by Senior Participant
of payment of substantially all of its obligations.

            "Taxes" shall have the meaning assigned to such term in Section 19.

            "Transfer" shall have the meaning assigned such term in Section 12.

            "Wachovia" shall mean Wachovia Bank, National Association.

            2. Purchase of the Junior Participation Interests; Payments to
Senior Participant and Junior Participant.

                  (a) Junior Participant hereby purchases the Junior
Participation Interest from Senior Participant for the purchase price of
Fifty-Nine Million Four Hundred Thousand Dollars ($59,400,000). The purchase
price shall be paid on the date hereof in immediately available federal funds.
Notwithstanding anything herein to the contrary, the parties hereto acknowledge
and agree that the Junior Participation Interest does not represent a direct
ownership interest in the Loan, but rather the Junior Participation Interest
constitutes a direct, participating beneficial ownership interest in the Loan.
Senior Participant shall retain record legal title to the entire Loan, and
Junior Participant shall be deemed to be in privity only with Senior Participant
but in no event whatsoever shall Junior Participant be construed to be in
privity with the Borrower.

                  (b) All payments and proceeds (of whatever nature including,
without limitation, payments made under any interest rate cap agreement)
received with respect to interest on the Loan will be applied in the following
order of priority: (i) first, to pay or reimburse all Costs; (ii) second, to
Senior Participant in an amount equal to all amounts then due from Junior
Participant under the Junior Participant Loan Documents, other than interest and
principal, (iii) third, to Junior Participant in an amount equal to the Junior
Participation Monthly Interest Payment; provided, if the Junior Participant Loan
is outstanding, a portion of such Junior Participation Monthly Interest Payment
equal to Junior Participant Loan Interest Payment shall first be paid directly
to Senior Participant on account of Junior Participant's obligations to pay
interest under Junior Participant Loan Documents and the Junior Participation
Monthly Net Interest Payment shall be paid to Junior Participant (it being
understood and agreed that if the amounts paid by Borrower on any Monthly
Payment Date are insufficient to pay the amounts set forth pursuant to clauses
(i) through (iii), all amounts remaining after application pursuant to clauses
(i) and (ii) shall first be paid directly to Senior Participant until the Junior
Participant Loan Interest Payment then due and payable is paid in full before


                                       7
<PAGE>

payment to Junior Participant of any portion of the Junior Participation Monthly
Net Interest Payment), (iv) fourth, to Junior Participant any unreimbursed Cure
Payments, and (v) fifth, to Senior Participant the balance of such payments
received. Any amount paid to Senior Participant pursuant to Section 2(b)(iii) on
account of the Junior Participant Loan Interest Payment shall be deemed a
payment of such amount to the Junior Participant and a simultaneous payment of
such amount by Junior Participant to Senior Participant of the Junior
Participant Loan Interest Payment.

                  (c) All payments and proceeds of whatever nature (excluding
any amounts for required reserves or escrows required by the Loan Documents and
proceeds, awards or settlements to be applied to the restoration or repair of
the Property or released to the Borrower in accordance with the terms of the
Loan Documents) received with respect to the Loan (other than with respect to
interest), will be applied in the following order of priority: (i) first, to pay
or reimburse all Costs (to the extent not paid from funds applied pursuant to
Section 2(b)); (ii) second to Senior Participant and Junior Participant, pro
rata (based upon the then outstanding Senior Participation Principal Balance and
Junior Participation Principal Balance), in an amount equal to the Senior
Participation Principal Balance and the Junior Participation Principal Balance,
respectively, until paid in full; (iii) third, to Senior Participant and Junior
Participant, pro rata (based upon the then outstanding Senior Participation
Principal Balance and Junior Participation Principal Balance), in an amount
equal to the portion of any prepayment premium, extension fee or exit fee, (iv)
fourth, to Junior Participant in an amount equal to any unreimbursed Cure
Payments and (v) fifth, any excess, pro rata, to Senior Participant and Junior
Participant (based upon the then outstanding Senior Participation Principal
Balance and Junior Participation Principal Balance).

                  (d) Notwithstanding anything to the contrary contained herein,
for so long as the Junior Participant Loan is outstanding, all amounts that are
payable to Junior Participant pursuant to Section 2(c)(ii) shall first be paid
directly to Senior Participant in reduction of the Junior Participant Loan
Principal Balance until such Junior Participant Loan Principal Balance is paid
in full with the balance to be remitted to the Junior Participant. All payments
made to Senior Participant pursuant to this Section 2(d) shall be deemed
payments to the Junior Participant in reduction of the Junior Participation
Principal Balance and simultaneous payments of such amounts by Junior
Participant to Senior Participant in reduction of the Junior Participant Loan
Principal Balance.

                  (e) Notwithstanding anything to the contrary contained herein,
upon the occurrence of a Mezzanine Loan Default or a Junior Participant Loan
Event of Default, all amounts that are payable to Junior Participant pursuant to
Section 2(b) and 2(c) shall be paid directly to Senior Participant until the
Junior Participant Loan and all accrued interest and other sums due have been
paid in full. All payments made to Senior Participant pursuant to this Section
2(e) shall be deemed payments to the Junior Participant and simultaneous
payments of such amounts by Junior Participant to Senior Participant on account
of its obligations to pay the Junior Participant Loan and all accrued interest
and other sums due under the Junior Participant Loan Documents. To the extent
such amounts would have been payments in reduction of the Junior Participation
Principal Balance under Section 2(c)(ii) or deemed payments in reduction of the
Junior Participation Principal Balance under Section 2(d), such amounts shall be
deemed applied to reduce the outstanding Junior Participation Principal Balance.

            3. Administration of the Loan Generally.


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<PAGE>

                  (a) Senior Participant shall administer the Loan in a manner
consistent with the terms of this Agreement, the Loan Documents, Accepted
Servicing Practices and applicable law.

                  (b) Senior Participant shall distribute to Junior Participant,
within three (3) Business Days after the applicable Monthly Payment Date, all
payments due to Junior Participant with respect to its Junior Participation
Interest, to the extent that funds received in respect of the Loan are allocated
to amounts due with respect to Junior Participation Interest in accordance with
Section 2. Senior Participant shall deliver to Junior Participant a statement on
or before each remittance date under this Agreement reflecting Senior
Participant's calculation of the payment due to Junior Participant under the
terms of the Loan Documents.

                  (c) Senior Participant shall deliver to Junior Participant the
operating statements, financial statements and budgets delivered by the Borrower
pursuant to the Loan Agreement promptly after receipt thereof.

                  (d) Senior Participant shall keep and maintain accounting
records upon which shall be recorded all amounts payable to Junior Participant
pursuant to the terms of the Loan Documents. Such accounting records shall at
all times reflect the current and correct outstanding principal balance of the
Promissory Note, the Senior Participation Interest and Junior Participation
Interest. Junior Participant shall have the right upon reasonable notice to
Senior Participant, at any reasonable time during normal business hours and at
Junior Participant's expense, to have access to and to examine Senior
Participant's books and records relating to the Promissory Note, the Senior
Participation Interest, the Junior Participation Interest, the Loan Documents
and the Property.

                  (e) Senior Participant shall, subject to Accepted Servicing
Practices, make all decisions with respect to the ordinary day-to-day matters
regarding the administration of the Loan, including determination of the LIBOR
Rate to be utilized in the calculation of the applicable interest rate under the
Promissory Note.

                  (f) Subject to the terms of Section 3(g), Senior Participant
shall not make any decisions or take any actions other than with respect to
ordinary day-to-day matters regarding the administration of the Loan without the
prior written consent of Junior Participant. Decisions and/or actions requiring
the consent of Junior Participant include, without limitation, decisions and/or
actions to (i) modify or waive any of the terms of the Loan Documents, (ii)
consent to any action or failure to act by the Borrower or any party to the Loan
Documents, (iii) vote all claims with respect to the Loan in any bankruptcy,
insolvency or similar proceedings, whether voluntary or involuntary including
the right to approve or reject any plan of reorganization, (iv) take legal
action to enforce or protect Senior Participant's and Junior Participant's
interests with respect to the Loan or to exercise or refrain from exercising any
powers or rights which Senior Participant may have under the Loan Documents,
including, without limitation, the right at any time to accelerate, or refrain
from accelerating, the Loan, to foreclose and sell and otherwise deal with the
Property, or refrain from foreclosing, selling or otherwise dealing with the
Property, and to enforce or refrain from enforcing the Loan Documents, (v) make


                                       9
<PAGE>

protective advances to protect the Property and/or the Premises, (vi) exercise
or refrain from exercising any rights (including cure rights and purchase
options) granted to the holder of the Loan under the Intercreditor Agreement,
(vii) retain professionals in connection with the enforcement of the Loan,
including attorneys and accountants, and (viii) voluntarily incur any Costs.

                  (g) Notwithstanding the foregoing, Junior Participant shall
not give any direction to, or approve or disapprove of an action of, Senior
Participant that would cause Senior Participant to take any action or refrain
from taking any action which would violate any law of any applicable
jurisdiction or the Repurchase Agreement, or be inconsistent with this
Agreement, the Intercreditor Agreement or the Loan Documents. Notwithstanding
anything to the contrary in this Agreement, in no event shall Senior Participant
be required to take any action or refrain from taking any action which would
violate any law of any applicable jurisdiction, the Repurchase Agreement, the
Intercreditor Agreement or the Loan Documents. The taking, or refraining from
taking, of any action by Senior Participant contrary to the directions of, or in
a manner disapproved by, Junior Participant shall not constitute a Servicing
Event of Default so long as Senior Participant's taking, or refraining from
taking, such action in accordance with the direction of, or with the approval
of, Junior Participant would have violated any law of any applicable
jurisdiction, the Repurchase Agreement, the Intercreditor Agreement, the Loan
Documents or any other provision of this Agreement.

                  (h) Senior Participant shall have the right to delegate its
servicing duties hereunder to Arbor Commercial Mortgage, LLC, an Affiliate of
Senior Participant.

            4. Payment Procedure.

                  (a) Senior Participant, in accordance with the priorities set
forth in Section 2, shall transfer all compensation with respect to the Senior
Participation Interest and the Junior Participation Interest pursuant to the
recipient's written instructions. Senior Participant shall deposit such amounts
to the applicable account within three (3) Business Days following the date such
payment was received by Senior Participant from the Borrower.

                  (b) If Senior Participant determines, or a court of competent
jurisdiction orders, at any time that any amount received or collected in
respect of the Senior Participation Interest or the Junior Participation
Interest must, pursuant to any insolvency, bankruptcy, fraudulent conveyance,
preference or similar law, be returned to the Borrower or paid to any other
Person, then, notwithstanding any other provision of this Agreement, Senior
Participant shall not be required to distribute any portion thereof to Junior
Participant or Senior Participant, as applicable, and Junior Participant will
promptly on demand by Senior Participant repay to Senior Participant any portion
thereof that Senior Participant shall have theretofore distributed to Junior
Participant together with interest thereon at such rate, if any, as Senior
Participant shall have been required (or entitled, in the case of itself) to pay
to the Borrower or such other Person with respect thereto.

                  (c) If, for any reason, Senior Participant makes any payment
to Junior Participant before Senior Participant has received the corresponding
payment (it being understood that Senior Participant is under no obligation to
do so), and Senior Participant does not receive the corresponding payment within
five (5) Business Days of its payment to Junior Participant, Junior Participant
will, at Senior Participant's request, promptly return that payment to Senior
Participant (together with, in the event that Junior Participant fails to return


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<PAGE>

such payment within three (3) Business Days of Senior Participant's request,
interest on that payment at the Prime Rate for each day from the date which is
three (3) days after the date of such request through the date prior to the date
it is returned to Senior Participant).

                  (d) Each of Senior Participant and Junior Participant agrees
that if at any time it shall receive from any sources whatsoever any payment on
account of the Loan in excess of its distributable share thereof, it will
promptly remit such excess to Junior Participant or Senior Participant, as the
case may be. Senior Participant shall have the right to offset any amounts due
hereunder from Junior Participant with respect to the Loan or the Junior
Participant Loan against any future payments due to Junior Participant under the
Loan. Senior Participant's and Junior Participant's obligations under this
Section 4 constitute absolute, unconditional and continuing obligations.

            5. Junior Participant's Cure and Purchase Rights. (a) In the event
any monetary default beyond applicable notice and grace periods or non-monetary
default beyond applicable notice and grace periods (of which Senior Participant
has knowledge) shall exist with respect to the Loan, then, upon notice from
Senior Participant (a "Cure Option Notice") of the occurrence of such default
beyond applicable notice and grace periods (which notice Senior Participant
shall promptly give to Junior Participant upon receipt of knowledge thereof),
Junior Participant shall have the right, which right shall be exercisable by
Junior Participant giving written notice of its intent to cure a default
specified in a Cure Option Notice to the extent permitted in this Section 5 (a
"Cure Election Notice") to Senior Participant within two (2) Business Days of
receipt of the Cure Option Notice, to exercise the rights granted to it pursuant
to this Section 5. In the event that Junior Participant has delivered a Cure
Election Notice, the default must be cured by Junior Participant within, in the
case of a monetary default, five (5) Business Days of receipt of such Cure
Option Notice and, in the case of a non-monetary default, thirty (30) days of
receipt of such Cure Option Notice (such period, the "Cure Period"). In the
event that Junior Participant elects to cure a default that can be cured by the
payment of money (each such payment, a "Cure Payment"), then, during the time
period it is entitled to effect a cure as provided above, Junior Participant
shall make such Cure Payment as directed by Senior Participant. The right of
Junior Participant to reimbursement of any Cure Payment will be subordinate in
all respects to the payment of all other amounts due with respect to the Junior
Participant Loan. Notwithstanding anything to the contrary contained in this
Section 5, (a) Junior Participant's right to cure a monetary default or
non-monetary default shall be limited to five (5) Cure Events over the life of
the Loan and (b) no single Cure Event may exceed three (3) consecutive months.
As used herein, "Cure Event" means Junior Participant's exercise of cure rights,
whether for one (1) month or for consecutive months in the aggregate.

                  (b) Upon written notice from Senior Participant (a "Purchase
Option Notice") of the occurrence of a Mezzanine Loan Default (which notice
Senior Participant shall promptly give to Junior Participant upon receipt of
knowledge thereof and which may be included in a Cure Option Notice, if
applicable), Junior Participant shall have the right to purchase the Senior
Participation Interest at the Senior Participation Purchase Price, which right
shall be exercisable by Junior Participant giving written notice of its intent
to purchase the Senior Participation Interest (a "Purchase Notice") to Senior
Participant within five (5) Business Days of receipt of the Purchase Option
Notice. In the event that Junior Participant has delivered a Purchase Notice,
then Junior Participant shall purchase, and Senior Participant shall sell to
Junior Participant, the Senior Participation Interest on a date mutually agreed
upon by the parties (the "Purchase Date"), but in no event later than ten (10)


                                       11
<PAGE>

days after delivery of the Purchase Notice (or, if Junior Participant is
exercising its cure option pursuant to Section 5(a), ten (10) days after the
earlier of (x) the date on which Junior Participant no longer has the right to
cure such Mezzanine Loan Default under Section 5(a) and (y) the date on which
Junior Participant ceases curing such Mezzanine Loan Default). The Senior
Participation Purchase Price shall be calculated by Senior Participant three (3)
Business Days prior to the Purchase Date (and such calculation shall be
accompanied by reasonably detailed back-up documentation explaining how such
price was determined) and shall, absent manifest error, be binding upon Junior
Participant. Upon the consummation of the sale of the Senior Participation
Interest, (i) Senior Participant shall assign to Junior Participant (without
recourse or warranty except for a representation that it owns the Senior
Participation Interest free and clear, and that it is authorized to execute the
assignment documentation) all of its right, title and interest in and to the
Senior Participation Interest, the Loan and the Loan Documents and (ii)
simultaneously therewith, Junior Participant shall be required to pay in full
all amounts due and owing on the Junior Participant Loan . At the closing of the
transfer, Senior Participant shall deliver (or shall instruct Wachovia (or its
custodian) to deliver) to Junior Participant (or its designee) copies of all
relevant files and documents, to the extent then in its possession.
Notwithstanding anything to the contrary contained in this Section 5(b), (A) (i)
during the period in which the Senior Participation Interest is subject to
purchase by the Junior Participant pursuant to this Section 5(b), the Loan shall
continue to be serviced in accordance with Accepted Servicing Practices and (ii)
the right of Junior Participant to purchase the Senior Participation Interest
shall automatically terminate upon the cure by Borrower of the Mezzanine Loan
Default. The rights granted to Junior Participant hereunder are subject to all
purchase options granted under the Intercreditor Agreement.

                  (c) Upon written notice from Senior Participant (a "Repurchase
Option Notice") of the occurrence of a Repurchase Agreement Default (which
notice Senior Participant shall promptly give to Junior Participant upon receipt
of knowledge thereof and which may be included in a Cure Option Notice, if
applicable), Junior Participant shall have the right to purchase the Senior
Participation Interest at the Senior Participation Purchase Price, which right
shall be exercisable by Junior Participant giving written notice of its intent
to purchase the Senior Participation Interest (a "Repurchase Notice") to Senior
Participant within one (1) Business Day of receipt of the Repurchase Option
Notice (as the same may be extended if Wachovia grants Senior Participant more
than two (2) Business Days to repurchase the Loan). In the event that Junior
Participant has delivered a Repurchase Notice, then Junior Participant shall
purchase, and Senior Participant shall sell to Junior Participant, the Senior
Participation Interest on the (the "Repurchase Date") which is two (2) Business
Days after the Repurchase Option Notice (as the same may be extended if Wachovia
grants Senior Participant more than two (2) Business Days to repurchase the
Loan). The Senior Participation Purchase Price shall be calculated by Senior
Participant and set forth in the Repurchase Option Notice (and such calculation
shall be accompanied by reasonably detailed back-up documentation explaining how
such price was determined) and shall, absent manifest error, be binding upon
Junior Participant. Upon the consummation of the sale of the Senior
Participation Interest, (i) Senior Participant shall assign to Junior
Participant (without recourse or warranty except for a representation that it
owns the Senior Participation Interest free and clear, and that it is authorized
to execute the assignment documentation) all of its right, title and interest in
and to the Senior Participation Interest, the Loan and the Loan Documents and
(ii) simultaneously therewith, Junior Participant shall be required to pay in
full all amounts due and owing on the Junior Participant Loan . At the closing
of the transfer, Senior Participant shall deliver (or shall instruct Wachovia
(or its custodian) to deliver) to Junior Participant (or its designee) copies of
all relevant files and documents, to the extent then in its possession.
Notwithstanding anything to the contrary contained in this Section 5(c), (A) (i)


                                       12
<PAGE>

during the period in which the Senior Participation Interest is subject to
purchase by the Junior Participant pursuant to this Section 5(b), the Loan shall
continue to be serviced in accordance with Accepted Servicing Practices and (ii)
the right of Junior Participant to purchase the Senior Participation Interest
shall automatically terminate upon the cure by Senior Participant of the
Repurchase Agreement Default.

            6. Limitation on Liability of Senior Participant. Senior Participant
shall have no liability to Junior Participant with respect to the Junior
Participation Interest, except with respect to losses actually suffered due to
the gross negligence, willful misconduct or breach of this Agreement on the part
of Senior Participant and notwithstanding any other provision hereof, such
liability shall be limited to the seeking of damages by Junior Participant in an
amount not to exceed the principal, interest and other amounts relating to the
Junior Participation Interest. Junior Participant also acknowledges that Senior
Participant owes Junior Participant no fiduciary duty with respect to any action
taken under the Loan Documents (but the foregoing shall not relieve Senior
Participant from the obligation to make any disbursements of funds as set forth
herein).

            7. Representations of Initial Junior Participant. (a) Initial Junior
Participant, as of the date hereof, hereby represents and warrants to, and
covenants with Senior Participant, that:

                        (i) Initial Junior Participant is a Qualified Transferee
      (as defined in the Intercreditor Agreement).

                        (ii) The execution and delivery of this Agreement by
      Initial Junior Participant, and performance of, and compliance with, the
      terms of this Agreement by Initial Junior Participant, will not violate
      Initial Junior Participant's organizational documents or constitute a
      default (or an event which, with notice or lapse of time, or both, would
      constitute a default) under, or result in the breach of, any material
      agreement or other instrument to which it is a party or that is applicable
      to it or any of its assets, in each case which materially and adversely
      affect its ability to carry out the transactions contemplated by this
      Agreement.

                        (iii) Initial Junior Participant has the full power and
      authority to enter into and consummate all transactions contemplated by
      this Agreement, has duly authorized the execution, delivery and
      performance of this Agreement and has duly executed and delivered this
      Agreement.

                        (iv) This Agreement is the legal, valid and binding
      obligation of Initial Junior Participant enforceable against Initial
      Junior Participant in accordance with its terms (except as such,
      enforcement may be limited by bankruptcy, insolvency, reorganization,
      receivership, moratorium or other laws or equitable principles limiting to
      the rights of creditors generally and except that rights with respect to
      indemnification and contribution obligations may be limited by applicable
      law).


                                       13
<PAGE>

                        (v) Initial Junior Participant has the right to enter
      into this Agreement without the consent of any third party, and such
      Initial Junior Participant has the right to purchase from Initial Senior
      Participant the Junior Participation Interest.

                        (vi) Initial Junior Participant is acquiring the Junior
      Participation Interest for its own account or an account in which it is
      the asset manager or investment advisor in the ordinary course of its
      business.

                        (vii) Initial Junior Participant has not dealt with any
      broker, investment banker, agent or other Person, other than Initial
      Senior Participant and its affiliates, that may be entitled to any
      commission or compensation in connection with the consummation of any of
      the transactions contemplated hereby.

                        (viii) The financial records of Initial Junior
      Participant will report the purchase of the Junior Participation Interest
      as a purchase by such Initial Junior Participant.

                  (b) Initial Junior Participant hereby remakes all of the
representations and warranties made by Senior Participant, as holder of the
Loan, under the Intercreditor Agreement for the benefit of Senior Lender (as
defined in the Intercreditor Agreement) and the other Junior Lenders (as defined
in the Intercreditor Agreement).

            8. Representations of Initial Senior Participant. Initial Senior
Participant, as of the date hereof, hereby represents and warrants to, and
covenants with, Junior Participant, that:

                  (a) It is a Qualified Transferee.

                  (b) The execution and delivery of this Agreement by it, and
the performance of, and compliance with, the terms of this Agreement by it, will
not violate its organizational documents or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a default) under,
or result in the breach of, any material agreement or other instrument to which
it is a party or that is applicable to it or any of its assets, in each case
which materially and adversely affect its ability to carry out the transactions
contemplated by this Agreement.

                  (c) It has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly authorized
the execution, delivery and performance of this Agreement and has duly executed
and delivered this Agreement.

                  (d) This Agreement is its legal, valid and binding obligation
enforceable against it in accordance with its terms (except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or other laws or equitable principles limiting to the rights of
creditors generally and except that rights with respect to indemnification and
contribution obligations may be limited by applicable law).


                                       14
<PAGE>

                  (e) Senior Participant has the right to enter into this
Agreement without the consent of any third party, and Senior Participant has the
right to sell to Initial Junior Participant the Junior Participation Interest,
subject to Section 12(c).

                  (f) The financial records of Initial Senior Participant will
report the sale of the Junior Participation Interests as a sale by Initial
Senior Participant.

                  (g) Initial Senior Participant has not dealt with any broker,
investment banker, agent or other Person that may be entitled to any commission
or compensation in connection with the consummation of any of the transactions
contemplated hereby.

                  (h) Initial Senior Participant has transferred the Loan to
Wachovia pursuant to the Repurchase Agreement and Wachovia is the sole legal and
beneficial owner of the Loan free and clear of any lien, security interest,
option or other charge or encumbrance.

                  (i) The Property does not secure any other loan from Initial
Senior Participant to Borrower or any other Affiliate of Borrower.

                  (j) The proceeds of the Loan have been fully disbursed and
there is no requirement for future advances thereunder.

                  (k) Initial Senior Participant (i) is the sole holder of the
Loan (subject to the Repurchase Agreement), (ii) has delivered to Junior
Participant true and correct copies of the Loan Documents, (iii) has no
knowledge of any default under the Loan Documents, and (iv) subject to the terms
and conditions of the Repurchase Agreement, has all economic and other rights
incidental to the ownership of the Loan including, without limitation, the
ability to receive and apply payments thereunder and to exercise all rights of
the lender under the Loan.

The representations and warranties of Initial Senior Participant contained in
this Section 8 are personal to Initial Senior Participant and no successor or
assign of Initial Senior Participant shall have any liability therefrom.

            9. Independent Analysis of Junior Participant. Initial Junior
Participant has been given reasonable opportunity to review and, to the extent
Initial Junior Participant deemed necessary, has examined, and in any case,
Initial Junior Participant hereby approves and acknowledges that Initial Senior
Participant provided Initial Junior Participant with copies of (a) the Loan
Agreement and all of the other Loan Documents, (b) documents relating to the
state of title to the Property and the Premises, as reflected in the title
insurance policy issued in connection with the Loan, and (c) documents relating
to the title, property and other insurance documentation and arrangements with
respect to the Loan. In addition, Initial Junior Participant hereby approves all
third-party reports or summaries and any financial and other data and
information relating to the Property, the Premises, the Loan and the Borrower
provided by Initial Senior Participant to Initial Junior Participant. Initial
Junior Participant acknowledges that: (a) Initial Junior Participant has,
independently and without reliance upon Initial Senior Participant and based on
such documents and information as Initial Junior Participant has deemed
appropriate, made Initial Junior Participant's own credit analysis and decision
to purchase the Junior Participation Interest, and Initial Junior Participant
accepts responsibility therefor; (b) Initial Senior Participant has not provided
Initial Junior Participant, and Initial Junior Participant has not relied on or
used in any other way, any credit analysis of the Borrower prepared by Initial
Senior Participant or an investigation or assessment of risk with respect to the
Loan prepared by Initial Senior Participant or an investigation or assessment of


                                       15
<PAGE>

risk with respect to the Loan prepared by Initial Senior Participant; and (c)
any information provided to Initial Junior Participant by Initial Senior
Participant regarding the Loan, the Borrower or any collateral for the Loan is
provided without any warranty or representation, express or implied, as to its
accuracy or completeness and is subject to independent verification by Initial
Junior Participant, except that Senior Participant has no actual knowledge of
any material falsity or material inaccuracy in the materials it has delivered to
Initial Junior Participant. Except as provided in Section 8(k), Initial Junior
Participant hereby acknowledges that Initial Senior Participant has made no
representations or warranties with respect to the Loan, and that Initial Senior
Participant shall have no responsibility for (i) the collectability of the Loan,
(ii) the validity, enforceability or legal effect of any of the Loan Documents
or the title insurance policy or policies or any survey furnished or to be
furnished to Initial Senior Participant in connection with the origination of
the Loan, (iii) the validity, sufficiency or effectiveness of the lien created
or to be created by the Loan Documents, or (iv) the financial condition of the
Borrower. Initial Junior Participant assumes all risk of loss in connection with
its Junior Participation Interest from the failure or refusal of the Borrower to
pay interest, principal or other amounts due on the Loan, defaults by the
Borrower under the Loan Documents or the unenforceability of any of the Loan
Documents for reasons other than gross negligence or willful misconduct by
Senior Participant.

            10. No Creation of a Partnership. Nothing contained in this
Agreement, and no action taken pursuant hereto, shall be deemed to constitute
the arrangement between or among Senior Participant and Junior Participant a
partnership, association, joint venture or other entity.

            11. Termination. This Agreement shall terminate (except for such
rights as are expressly provided to survive any termination of this Agreement)
upon the earlier to occur of (a) full and final payment of all amounts due under
the Senior Participation Interest and Junior Participation Interest, as the case
may be, or (b) as otherwise set forth in this Agreement, including, without
limitation, upon the purchase by Senior Participant of the Junior Participation
Interest pursuant to Section 14. The obligations of any party to pay to the
other parties any costs, expenses, fees or other sums provided to be paid by
such party prior to the termination date pursuant to the terms of this Agreement
shall survive the termination of this Agreement.

            12. Transfers. (a) Except for Permitted Transfers (as defined in the
Junior Participant Loan Agreement), Junior Participant (and any subsequent
Junior Participant) agrees that it will not directly or indirectly sell, assign,
transfer, pledge, syndicate, sell, hypothecate, contribute, encumber or
otherwise dispose of all or any portion of its Junior Participation Interest or
any direct or indirect interest in Junior Participant (a "Transfer"), without
Senior Participant's prior written consent. Any Transfer by Junior Participant
in violation of the provisions of this Section 12 shall be void ab initio.

                  (b) Except as provided in Section 12(c), Senior Participant
agrees that it will not, directly or indirectly, Transfer all or any portion of
its Senior Participation Interest without Junior Participant's prior written
consent. Any Transfer by Senior Participant in violation of the provisions of
this Section 12 shall be void ab initio.


                                       16
<PAGE>

                  (c) On the date hereof, Senior Participant has transferred the
Loan to Wachovia pursuant to the terms of the Repurchase Agreement. The Loan
Documents have been delivered to Wachovia (or a custodian acting on behalf of
Wachovia). Junior Participant acknowledges that (i) it is aware of, and has
consented to, such transfer to Wachovia, and (ii) this Agreement, the Junior
Participation Interest and all of Junior Participant's rights with respect
thereto (including the rights to direct Senior Participant to take or refrain
from taking certain actions) are subject and subordinate to the interest of
Wachovia in and to the Loan pursuant to the Repurchase Agreement.

            13. Other Business Activities of Senior Participant and Junior
Participant. Each of Senior Participant and Junior Participant acknowledges that
each of Senior Participant and Junior Participant or its affiliates may make
loans or otherwise extend credit to, and generally engage in any kind of
business with any Affiliate of the Borrower or any Person which holds any direct
or indirect equity interest in Borrower (collectively, "Borrower Related
Parties"), and receive payments on such other loans or extensions of credit to
Borrower Related Parties and otherwise act with respect thereto freely and
without accountability in the same manner as if this Agreement and the
transactions contemplated hereby were not in effect. Junior Participant
acknowledges that it has been informed that as of the date hereof, Senior
Participant (and/or Affiliates of Senior Participant) (a) is the holder of loans
to Mezz Three and 200 Fifth Mezz Five LLC, and (b) owns certain equity interests
in Borrower Related Parties.

            14. Securitization. Senior Participant shall have the right to
purchase the Junior Participation Interest from Junior Participant in connection
with a proposed transfer by Senior Participant of the Loan to a trustee in
connection with the creation of collateralized debt obligations. Senior
Participant shall give Junior Participant not less than five (5) days prior
written notice of such proposed purchase. Immediately prior to such transfer,
Senior Participant shall purchase the Junior Participation Interest from Junior
Participant for a purchase price equal to the then Junior Participation
Principal Balance plus all accrued and unpaid interest thereon at the Junior
Participation Rate plus the Securitization Repurchase Amount. Upon payment of
such amount, Junior Participant shall convey the Junior Participation Interest
to Senior Participant and shall make customary representations and warranties to
Senior Participant as to title to the Junior Participation Interest, absence of
liens, due authorization, execution, delivery and enforceability

            15. Governing Law; Waiver of Jury Trial. The parties agree that the
State of New York has a substantial relationship to the parties and to the
underlying transaction embodied hereby, and in all respects, including, without
limitation, matters of construction, validity and performance, this Agreement
and the obligations arising hereunder shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to contracts made
and performed in such State and any applicable law of the United States of
America. Each of the parties hereby irrevocably waives all right to trial by
jury in any action, proceeding or counterclaim arising out of or relating to
this Agreement.

            16. Modification, Waiver in Writing. This Agreement shall not be
modified, cancelled or terminated except by an instrument in writing signed by
the parties hereto. The party seeking modification of this Agreement shall be
solely responsible for any and all expenses that may arise in order to modify
this Agreement.


                                       17
<PAGE>

            17. Successors and Assigns; Third Party Beneficiaries. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns. Except as provided herein, none of
the provisions of this Agreement shall be for the benefit of or enforceable by
any Person not a party hereto.

            18. Costs and Expenses.

                  (a) Junior Participant shall, promptly upon request by Senior
Participant (which shall include a statement (in reasonable detail) of any and
all Costs in respect of, or otherwise suffered or incurred or paid or to be paid
by Senior Participant in connection with, the Property, this Agreement or the
Loan) pay Senior Participant for its pro rata share of any Costs (based upon the
Senior Participation Principal Balance and the Junior Participation Principal
Balance) to the extent that any of the same have been incurred by Senior
Participant and not actually been repaid by the Borrower within the time frame
set forth in the Loan Documents in which the Borrower has to pay such Costs. Any
sums which are required to be paid in accordance with this Agreement and which
are not reimbursed to Senior Participant within three (3) Business Days after
demand shall accrue interest at the Prime Rate. To the extent Junior Participant
fails to so reimburse such Costs, Senior Participant may, from time to time and
as Senior Participant's sole and exclusive remedy, deduct from the amounts
otherwise due to Junior Participant in accordance with the provisions of this
Agreement Junior Participant's pro rata share of the Costs (based upon the
Senior Participation Principal Balance and the Junior Participation Principal
Balance). Notwithstanding the foregoing, Costs will be netted against payment
and proceeds of the Loan prior to payments to Senior Participant and Junior
Participant in accordance with the provisions of Sections 2(b) and 2(c).

                  (b) In the event that Senior Participant and Junior
Participant elect to exercise any rights under the Intercreditor Agreement, the
costs and expenses of such exercise shall be paid by pro rata by Senior
Participant and Junior Participant (based upon the Senior Participation
Principal Balance and the Junior Participation Principal Balance). In no event
shall Senior Participant be required to advance Junior Participant's pr rata
share of such amounts.

                  (c) Any and all amounts required to be paid by Junior
Participant to Senior Participant pursuant to this Section 18 or otherwise under
this Agreement shall be in immediate funds and shall be made without any offset,
abatement, withholding or reduction of any kind whatsoever. If any amounts paid
by Senior Participant and Junior Participant pursuant to Section 18a) above are
subsequently recovered (whether from the Borrower, as part of liquidation
proceeds or otherwise), Senior Participant shall promptly distribute Junior
Participant's pro rata share of such amounts to Junior Participant (based upon
the Senior Participation Principal Balance and the Junior Participation
Principal Balance).

                  (d) Notwithstanding any other provision of this Agreement,
Junior Participant shall not have any obligation whatsoever to reimburse Senior
Participant under Section 18a) or Section 18(b) other than from distributions
with respect to its Junior Participation Interest and shall have no liability
under this Section 18 in excess of payments due to Junior Participant.

                                       18
<PAGE>

            19. Withholding Taxes.

                  (a) If Senior Participant or the Borrower shall be required by
law to deduct and withhold Taxes (as hereinafter defined) from interest, fees or
other amounts payable to Junior Participant with respect to the Loan as a result
of Junior Participant constituting a Non-Exempt Person (as hereinafter defined),
Senior Participant, in its capacity as servicer, shall be entitled to do so with
respect to Junior Participant's interest in such payment (all withheld amounts
being deemed paid to Junior Participant), provided that Senior Participant shall
furnish Junior Participant with a statement setting forth the amount of Taxes
withheld, the applicable rate and other information which may reasonably be
requested for the purposes of assisting Junior Participant to seek any allowable
credits or deductions for the Taxes so withheld in each jurisdiction in which
Junior Participant is subject to tax.

                  (b) A "Non-Exempt Person" is any Person other than a Person
who is either (i) a Person formed under the laws of the United States of America
or one of the States thereof or (ii) has on file with Senior Participant for the
relevant year such duly-executed form(s) or statement(s) which may, from time to
time, be prescribed by law and which, pursuant to applicable provisions of (A)
any income tax treaty between the United States and the country of residence of
such Person, (B) the Code or (C) any applicable rules or regulations in effect
under clauses (A) or (B) above, permit Senior Participant to make such payments
free of any obligation or liability for withholding. For the purposes of this
Section, "Taxes" shall mean any income or other taxes, levies, imposts, duties,
fees, assessments or other charges of whatever nature, now or hereafter imposed
by any jurisdiction or by any department, agency, state or other political
subdivision thereof or therein.

                  (c) Junior Participant shall and hereby agrees to indemnify
Senior Participant against and hold Senior Participant harmless from and against
any Taxes, interest, penalties and attorneys' fees and disbursements arising or
resulting from any failure of Senior Participant to withhold Taxes from payment
made to Junior Participant in reliance upon any representation, certificate,
statement, document or instrument made or provided by Junior Participant to
Senior Participant in connection with the obligation of Senior Participant to
withhold Taxes from payments made to Junior Participant, it being expressly
understood and agreed that (1) Senior Participant shall be absolutely and
unconditionally entitled to accept any such representation, certificate,
statement, document or instrument as being true and correct in all respects and
to fully rely thereon without any obligation or responsibility to investigate or
to make any inquiries with respect to the accuracy, veracity, correctness or
validity of the same and (ii) Junior Participant shall, upon request of Senior
Participant and at its sole cost and expense, defend any claim or action
relating to the foregoing indemnification by counsel selected by Senior
Participant; provided that Junior Participant shall have consented to such
counsel, which consent may not be unreasonably withheld, delayed or conditioned.

                  (d) Junior Participant represents to Senior Participant (for
the benefit of the Borrower) that it is not a Non-Exempt Person and that neither
Senior Participant nor Borrower is obligated under applicable law to withhold
Taxes on sums paid to it with respect to the Loan or otherwise pursuant to this
Agreement. Contemporaneously with the execution of this Agreement and from time
to time as necessary during the term of this Agreement, Junior Participant shall


                                       19
<PAGE>

deliver to Senior Participant evidence satisfactory to Senior Participant
substantiating that it is not a Non-Exempt Person and that Senior Participant is
not obligated under applicable law to withhold Taxes on sums paid to it with
respect to the Loan or otherwise under this Agreement. Without limiting the
effect of the foregoing, if Junior Participant is not created or organized under
the laws of the United States or any state thereof, and if the payment of
interest or other amounts by the Borrower is treated for United States income
tax purposes as derived in whole or part from sources within the United States,
Junior Participant shall furnish to Senior Participant Internal Revenue Service
Form W-8ECI or Form W-8BEN or such other forms, certifications, statements or
documents as may be required from time to time, duly executed by Junior
Participant, as evidence of Junior Participant's exemption from the withholding
of United States tax with respect thereto. Senior Participant shall not be
obligated to make any payment hereunder to Junior Participant in respect of
Junior Participation Interest or otherwise until Junior Participant shall have
furnished to Senior Participant the requested forms, certificates, statements or
documents.

            20. Certain Interest Rate Matters. Senior Participant agrees to
calculate the LIBOR Rate with respect to the Loan in accordance with the terms
of the Loan Documents.

            21. Notices. All notices, consents, approvals and requests required
or permitted hereunder shall be given in writing and shall be effective for all
purposes if hand delivered or sent by (a) hand delivery, with proof of attempted
delivery, (b) certified or registered United States mail, postage prepaid, (c)
expedited delivery service, either commercial or United States Postal Service,
with proof of attempted delivery, or (d) by telecopier (with answerback
acknowledged) provided that such telecopied notice must also be delivered by one
of the means set forth in (a), (b) or (c) above, addressed if to Senior
Participant at its address set forth on the first page to the attention of Guy
Milone, Esq., with a copy to Kronish Lieb Weiner & Hellman LLP, 1114 Avenue of
the Americas, New York, New York 10036, Attention: Thomas D. O'Connor, Esq., if
to Junior Participant at its designated address set forth on the first page to
the attention of Jay Cramer, with a copy to Post Heymann & Koffler LLP, Two
Jericho Plaza, Wing A, Suite 111, Jericho, New York 11753, Attention: David J.
Heymann, Esq., or at such other address and Person as shall be designated from
time to time by any party hereto, as the case may be, in a written notice to the
other parties hereto in the manner provided for in this Section 21. A copy of
all notices, consents, approvals and requests directed to Junior Participant or
Senior Participant shall be delivered concurrently to each Person (not to exceed
four (4) in the aggregate) designated by each of Senior Participant and Junior
Participant. A notice shall be deemed to have been given: (a) in the case of
hand delivery, at the time of delivery; (b) in the case of registered or
certified mail, when delivered or the first attempted delivery on a Business
Day; (c) in the case of expedited prepaid delivery upon the first attempted
delivery on a Business Day; or (d) in the case of telecopier, upon receipt of
answerback confirmation, provided that such telecopied notice was also delivered
as required in this Section 21. A party receiving a notice which does not comply
with the technical requirements for notice under this Section 21 may elect to
waive any deficiencies and treat the notice as having been properly given.

            22. Headings; Etc. The headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose. Unless otherwise set forth herein, all
references herein to a specified Section shall mean and refer to the specified
Section of this Agreement.


                                       20
<PAGE>

            23. Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

            24. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.

            25. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter contained
in this Agreement and supersedes all prior agreements, understandings and
negotiations between the parties.

            26. Not a Security. No Junior Participation Interest shall be deemed
to be a "security" within the meaning of the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, as amended.

            27. No Pledge. This Agreement shall not be deemed to represent a
pledge of any interest in the Loan by Senior Participant to Junior Participant.
Except as otherwise provided in this Agreement, Junior Participant shall not
have any interest in any property taken as security for the Loan; provided,
however, that if any such property or the proceeds of any sale, lease or other
disposition thereof shall be applied in reduction of the principal balance of
the Loan, then Junior Participant shall be entitled to receive its pro rata
share thereof (determined in accordance with the Senior Participation Principal
Balance and the Junior Participation Principal Balance).

            28. Participation Certificates. Senior Participant will execute,
deliver and issue to Senior Participant and Junior Participant and to any other
holder of all or any portion of the Senior Participation Interest or Junior
Participation Interest one (1) or more participation certificates (in
substantially the form annexed hereto as Exhibit A and made a part hereof),
evidencing the ownership of the Senior Participation Interest or Junior
Participation Interest, as applicable. If, subsequent to the issuance of any
participation certificate(s) in accordance with the terms of this Section 28,
either Participant effects a Transfer in accordance with Section 13, at the
written request of the transferring Participant (or any transferee of all or any
portion of such Participation Interest) Senior Participant, within ten (10)
Business Days after the transferring Participant's written request therefor,
shall issue to the transferring Participant and to such transferee(s) one (1) or
more substitute participation certificates (each, in substantially the form
annexed hereto as Exhibit A), reflecting the ownership interest of such Persons
in the applicable Participation Interest. The transferring Participant shall
reimburse Senior Participant for its reasonable out-of-pocket costs and expenses
(including reasonable attorneys' fees and disbursements) incurred by Senior
Participant in connection with the terms of this Section 28. Senior Participant
and Junior Participant hereby opt to treat the Participation Certificates as
securities pursuant to Article 8 of the New York Uniform Commercial Code.

                       [SIGNATURES ON THE FOLLOWING PAGE]


                                       21
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their duly authorized representatives, all as of the day and
year first above written.

                                          ARBOR REALTY FUNDING LLC,
                                          Senior Participant


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

                                          FT-TOY LLC,
                                          Junior Participant

                                          By: WRT Realty L.P., Managing Member

                                              By: Winthrop Realty Trust, General
                                                  Partner


                                                  By:
                                                      --------------------------
                                                      Name: Peter Braverman
                                                      Title: President

<PAGE>

                                    EXHIBIT A

                        Form of Participation Certificate

                            PARTICIPATION CERTIFICATE

Date:_______________, 20__

            __________________________________ ("Senior Participant") hereby
acknowledges _____________________________ ("Junior Participant") as the holder
of a _____________ percent (__%) undivided interest in the Junior Participation
Interest (as defined in that certain Participation and Servicing Agreement dated
as of______________ (as same may be amended, restated, renewed, supplemented or
otherwise modified, the "Participation Agreement"), between Arbor Realty Funding
LLC, as Senior Participant, and ___________________________, as Junior
Participant, with respect to a mezzanine loan in the original principal amount
of $_______________, evidenced by a certain Promissory Note dated as of_________
__, 200_, made by ________________________, as maker, in favor of Column
Financial, Inc., as payee.

            All of the terms, provisions, covenants and conditions of the
agreement between Senior Participant and Junior Participant regarding the Junior
Participation Interest are set forth in the Participation Agreement. The terms
of the Participation Agreement are incorporated herein by reference and shall
govern this transaction, including, without limitation, the provisions of
Section 15 of the Participation Agreement, regarding Transfers (as defined in
the Participation Agreement) of the Junior Participation Interest or portions
thereof.


                                       -----------------------------------------
                                                 as Senior Participant

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