Document:

PLEDGE AND SECURITY AGREEMENT

      PLEDGE AND SECURITY AGREEMENT dated as of December 7, 2005 ("Pledge
Agreement") made by FT-TOY LLC ("Borrower") to Arbor Realty Funding LLC
("Lender").

      In consideration of Lender providing credit to Borrower, Borrower hereby
agrees as follows:

      Section 1. Definitions. As used in this Pledge Agreement, the following
terms have the following meanings:

      "Borrower" means FT-Toy LLC, a Delaware limited liability company.

      "Borrower Obligations" means any and all present and future indebtedness,
liabilities and obligations of Borrower to Lender under any and all of the Loan
Documents, and all claims (as defined under Section 101(5) of the United States
Bankruptcy Code, and any amendments thereto (Title 11, United States Code)) of
Lender against Borrower in respect thereof, together with all fees and expenses
incurred in collecting any or all of the items specified in this definition or
enforcing any rights under any of the documents executed in connection with any
such liabilities and obligations, including all fees and expenses of Lender's
counsel and of any experts and agents which may be paid or incurred by Lender in
collecting any such items or enforcing any such rights, in each case whether
absolute or contingent, joint or several, secured or unsecured, matured or
unmatured, monetary or non-monetary, arising by contract, operation of law or
otherwise and all extensions, renewals, refundings, replacements and
modifications of any of the foregoing.

      "Collateral" has the meaning specified in "Pledge" (Section 3).

      "Lender" means Arbor Realty Funding LLC, a Delaware limited liability
company.

      "Loan" means the loan evidenced by the Note.

      "Loan Agreement" means the Loan Agreement dated the date hereof between
Borrower and Lender, as the same may hereafter be consolidated, extended,
modified, amended and/or restated from time to time.

      "Loan Documents" means the Note, the Loan Agreement, the Recourse
Guaranty, the ARLP Guaranty and each other document or agreement entered into
pursuant to, or in connection with, the Note or Loan Agreement.

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      "Note" means the $30,000,000.00 Promissory Note dated the date hereof made
by Borrower and payable to Lender.

      "Organizational Documents" means all documents and agreements providing
for, or related to, the formation, organization and governance of Borrower,
including the certificate of formation, operating agreement and any agreement
among its members, in each case as the same have been or may hereafter be
amended or otherwise modified from time to time in accordance with this Pledge
Agreement.

      "Participation Agreement" means the Participation and Servicing Agreement
dated the date hereof, by and between Lender and Borrower.

      "Pledge Agreement" means this Pledge and Security Agreement.

      "Pledged Participation Interest" has the meaning specified in "Pledge"
(Section 3).

      "UCC" means the Uniform Commercial Code of the State of New York as in
effect from time to time.

      All terms defined in the UCC that are used in this Pledge Agreement shall
have the meaning specified in the UCC. Unless otherwise specified in this Pledge
Agreement, terms defined in the Note or Loan Agreement which are used in this
Pledge Agreement will have the same meaning when used in this Pledge Agreement.
Borrower hereby acknowledges receipt of a copy of the Note and Loan Agreement.

      Section 2. Rules of Interpretation. When used in this Pledge Agreement:
(1) "or" is not exclusive, (2) any pronouns used shall include the corresponding
masculine, feminine or neuter forms, (3) the singular form of nouns shall
include the plural and vice versa, (4) a reference to a law includes any
amendment or modification to such law, and (5) a reference to an agreement,
instrument or document includes any amendment of modification of such agreement,
instrument or document if and to the extent such amendment or modification is
permitted under the Loan Documents.

      Section 3. Pledge. Borrower hereby pledges, assigns, transfers and sets
over unto Lender and grants to Lender a continuing first priority security
interest in and lien on all right, title and interest of Borrower in and to each
of the following items, whether now owned or hereafter acquired ("Collateral"):

      (1) Pledged Participation Interest. All of the participation interest of
Borrower in Lender's rights and interest in and to a $60,000,000.00 fourth
mezzanine loan, pursuant to the Participation Agreement ("Pledged Participation
Interest"), and the certificates (if any) representing such Pledged
Participation Interest, and all distributions, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Pledged Participation Interest,
together with all claims, powers, privileges, benefits, remedies, options and

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rights of any nature, including, without limitation, voting rights, which now or
hereafter exist with respect to or on account of such Pledged Participation
Interests, including all such items under or pursuant to the Participation
Agreement,

      (2) Proceeds. All cash and non-cash Proceeds (as defined in the UCC) of
any and all of the foregoing.

      Section 4. Security for Obligations. The Collateral secures the prompt and
complete payment when due of all Borrower Obligations.

      Section 5. Perfection of Security Interest. (1) Borrower shall make the
appropriate notation in its books and records that the Pledged Participation
Interests held by Borrower are subject to a security interest pursuant to this
Pledge Agreement. All certificates representing or evidencing the Pledged
Participation Interests shall be delivered to and held by Lender concurrently
with the execution of this Agreement and shall be accompanied by duly executed
instruments of transfer, assignment in blank, all in form and substance
satisfactory to Lender.

      (2) Upon the written request of Lender, Borrower will take any and all
additional actions required to perfect the security interest of Lender in each
and every item of Collateral. If any or all of the Collateral is represented by
certificates or instruments then all such certificates and instruments
representing or evidencing the Collateral shall be delivered to and held by or
on behalf of Lender pursuant to this Pledge Agreement, and shall be in suitable
form for transfer and delivery. Lender has the right, at any time in its
discretion to register the Collateral in the name of Lender or its nominee. If
any or all of the Collateral is an uncertificated security then, Borrower will
take all actions required by Lender, in its sole discretion, to either (x)
register such security in the name of Lender or (y) cause the issuer of the
uncertificated security to agree in writing that it will comply with
instructions originated by the Lender without further consent of the registered
owner of such uncertificated security. Borrower hereby authorizes Lender to
file, without the signature of Lender, one or more financing or continuation
statements and amendments, and attachments thereto, relating to all or any part
of the Collateral.

      (3) Upon the occurrence and during the continuance of an Event of Default,
Lender shall have the right, at any time, in its discretion upon notice to
Borrower to transfer to or to register in the name of Lender or its nominee any
or all of the Collateral. Prior to or concurrently with the execution and
delivery of this Agreement, Borrower shall deliver to Lender an assignment
endorsed by Borrower in blank (an "Assignment of Interest"), for the Pledged
Participation Interests, transferring all of such Pledged Participation
Interests in blank, duly executed by Borrower and undated. Lender shall have the
right, at any time in its discretion upon the occurrence and during the
continuance of an Event of Default and without notice to Borrower, to transfer

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to, and to designate any and all Borrower's Assignment of Interest, to any
Person to whom the Pledged Participation Interests are sold in accordance with
the provisions hereof. In addition, Lender shall have the right at any time to
exchange any Assignment of Interest representing or evidencing the Pledged
Participation Interests or any portion thereof for one or more additional or
substitute Assignments of Interest representing or evidencing smaller or larger
percentages of the Pledged Participation Interests represented or evidenced
thereby, subject to the terms thereof.

      (4) Immediately upon its acquisition (directly or indirectly) of any and
all new or additional Collateral, Borrower will (1) notify Lender of the
acquisition of such Collateral, (2) take all steps required to pledge such
Collateral under this Pledge Agreement, and (3) take all actions required to
perfect the security interest of Lender in such Collateral. If delivery of such
new or additional Collateral is required under the prior sentence, then prior to
such delivery, Borrower agrees that all such Collateral will be held separate
and apart from its other property and in express trust for Lender.

      (5) Borrower will not take any actions or fail to perform any of its
duties or obligations under this Pledge Agreement so that after giving effect to
such action or inaction Lender will not then, or with the passage of time, cease
to have a perfected first priority security interest in any of the Collateral.
Borrower agrees that from time to time, it will promptly execute and deliver all
further instruments and documents, and take all further action, including but
not limited to any and all of the actions specified above in this Section that
may be necessary or desirable, or that Lender may request, in order to perfect
and protect any security interest granted or purported to be granted under this
Pledge Agreement or to enable Lender to exercise and enforce its rights and
remedies under this Pledge Agreement with respect to any of the Collateral.

      (6) Borrower acknowledges and agrees that the Pledged Participation
Interest is a certificated security (as defined under the UCC) and that the
Pledged Participation Interests are "securities" governed by and within the
meaning of Article 8 of the UCC.

      (7) Borrower will not (1) change the location of its chief executive
office or principal place of business, (2) change its name, identity, or
structure, or (3) reorganize under the laws of another jurisdiction.

      Section 6. Distributions. As long as there are no outstanding Events of
Default, Borrower shall be entitled to receive and retain any and all cash
distributions made in respect of the Collateral, provided, however, that any and
all (1) distributions paid or payable, other than in cash, in respect of, and
instruments and other property received, receivable or otherwise distributed in
respect of, or in exchange for, any such Collateral, (2) distributions paid or
payable in cash in respect of any such Collateral in connection with a partial
or total liquidation or dissolution, and (3) cash paid, payable or otherwise
distributed in redemption of, or in exchange for, any such Collateral, shall be

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forthwith delivered to Lender to hold as Collateral and shall, if received by
Borrower, be received in trust for the benefit of Lender, be segregated from the
other funds of Borrower, and be forthwith delivered to Lender as Collateral in
the same form as so received (with any necessary endorsement).

      Upon and at all times after the occurrence and during the continuance of
an Event of Default, all rights of Borrower to receive distributions which it
would otherwise be authorized to receive and retain pursuant to this Section
shall cease, and all such rights shall thereupon become vested in Lender, and
Lender shall thereupon have the sole right to receive and hold as Collateral
such distributions. Borrower shall cause Property Owner to pay and deliver any
and all such distributions directly to Lender. All distributions which are
received by Borrower contrary to the provisions of this paragraph shall be
received in trust for the benefit of Lender, shall be segregated from other
funds of Borrower and shall be forthwith delivered to Lender as Collateral in
the same form as so received (with any necessary endorsement).

      Section 7. Voting Rights. As long as there are no outstanding Events of
Default, Borrower shall be entitled to exercise any and all voting and other
consensual rights pertaining to any or all of the Collateral. Upon receipt of
written notice from Lender that there is an outstanding Event of Default and
that Lender chooses to exercise the voting and consensual rights related to the
Collateral, including all such rights under and pursuant to the terms of the
Participation Agreement, all rights of Borrower to exercise such voting and
other consensual rights shall cease, and Lender shall then have the sole right
to exercise such voting and other consensual rights. In exercising its voting or
other consensual rights with respect to the Collateral, Borrower agrees it will
not agree to or vote for (1) any changes that contravene the terms of this
Pledge Agreement, (2) any changes to the terms of the Participation Agreement,
or (3) any changes which could impair the value of any or all of the Collateral
(provided, however, that with respect to an Event of Default resulting from an
event of default under the Fourth Mezzanine Loan, Borrower shall retain such
voting and consensual rights until the Borrower's right to purchase the Senior
Participation Interest (as such term is defined in the Participation Agreement)
pursuant to the Participation Agreement has expired or otherwise is no longer in
effect).

      Section 8. Representations and Warranties. Borrower represents and
warrants to Lender as follows:

      (1) Ownership of Collateral. Borrower is the legal and beneficial owner of
the Collateral and has good and marketable title to the Collateral. The
Collateral includes, without limitation, 100% of Borrower's outstanding
participation interests in Lender's rights and interest in and to the Fourth
Mezzanine Loan pursuant to the Participation Agreement. The Collateral is
evidenced by a certificate.

      (2) Limitations on Collateral. Except as set forth in the documents
relating to the Fourth Mezzanine Loan and the Participation Agreement, to
Borrower's knowledge, none of the Collateral is subject to any agreement that
(a) provides for the sale, assignment, transfer or other disposition of such
Collateral, or (b) limits or restricts the granting of a security interest in,
or the sale of, such Collateral.

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      (3) Security Interest. This Pledge Agreement creates a valid security
interest in the Collateral and such security interest secures the payment of all
Borrower Obligations. None of the Collateral is subject to a security interest,
lien, charge or encumbrance, except for the security interest created by this
Pledge Agreement. All actions necessary or desirable to perfect and protect such
security interest have been duly taken. Except with respect to any rights in
favor of Wachovia Bank, National Association, under the Repurchase Agreement, a
valid and first priority security interest in all of the Collateral will be
created in favor of Lender upon execution of this Pledge Agreement by all of the
parties hereto and will be perfected (a) with respect to the Pledged
Participation Interests, upon delivery to the Lender of the certificate
representing the Pledged Participation Interest together with duly executed
instruments of transfer, endorsed in blank, and (b) with respect to all other
Collateral upon the filing with the office of the Secretary of State of New York
of financing statements in the form attached as Exhibit A.

      (4) Collateral. There are no outstanding agreements, options and contracts
to sell all or any portion of the Collateral. Except for the Participation
Agreement and the Loan Agreement, there are no outstanding agreements limiting
or restricting the granting of a security interest in, or the sale or transfer
of, any or all of the Collateral. There are no unpaid expenses, capital
contributions, costs, fees, charges, or other payments of any kind related to
any or all of the Collateral required to be funded or contributed by Borrower
that have not been satisfied.

      (5) Information Regarding Perfection of Security Interest. The exact legal
name of Borrower is set forth in the preamble to this Agreement. The Borrower
has not been known by any other name during the past five (5) years. The state
of formation of Borrower is New York.

      (6) Formation, Good Standing, Power and Due Qualification. Borrower (a) is
a limited liability company, duly formed, validly existing, and in good standing
under the laws of the jurisdiction of its formation, (b) has the limited
liability company power and authority to own its assets and to transact the
business in which it now engages or proposes to engage in, and (c) is duly
qualified as a foreign limited liability company and is in good standing under
the Laws of each other jurisdiction in which such qualification is required.

      (7) Authority, No Contravention. The execution, delivery and performance
by Borrower of this Pledge Agreement are within its limited liability company
powers, have been duly authorized by all necessary limited liability company
action, and do not and will not (a) require any consent or approval of its
members, which has not been obtained, or (b) contravene its articles of
organization or operating agreement. The execution, delivery and performance by
Borrower of this Pledge Agreement do not and will not (a) violate any provision

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of any Law, order, writ, judgment, injunction, decree, determination, or award
presently in effect applicable to it, (b) result in a breach of or constitute a
default under any indenture or loan or credit agreement or any other agreement,
lease, or instrument to which it is a party or by which it or its properties may
be bound or affected, or (c) except for the lien created hereby, result in, or
require, the creation or imposition of any lien upon or with respect to any of
the properties now owned or hereafter acquired by it.

      (8) Governmental Authority. No authorization, approval or other action by,
and no notice to or filing with, any Governmental Authority is required for the
due execution, delivery and performance by Borrower of this Pledge Agreement.

      (9) Legally Enforceable Pledge Agreement. This Pledge Agreement is the
legal, valid and binding obligation of Borrower, enforceable against Borrower in
accordance with its terms, except to the extent that such enforcement may be
limited by (1) applicable bankruptcy, insolvency, reorganization, receivership,
and other similar laws affecting creditors' rights generally, or (2) general
equitable principles (including specific performance and injunctive relief),
regardless of whether the issue of enforceability is considered in a proceeding
in equity or at law.

      (10) Subordination. The obligations of Borrower under this Pledge
Agreement are not subordinated in any way to any other obligations of Borrower
or to the rights of any other Person.

      (11) Organizational Documents. Each of the Organizational Documents have
been duly executed by Borrower, and constitute the legal, valid and binding
obligation of Borrower, enforceable in accordance with its terms. Copies of each
of the Organizational Documents have been delivered to Lender and such copies
are true, correct and complete copies of such documents and agreements in effect
on the date hereof and have not been otherwise modified or amended.

      (12) Participation Interests are Securities. The Participation Agreement
provides that the participation interests are "securities" governed by and
within the meaning of Article 8 of the UCC. None of the Collateral is (i) held
in a securities account as defined under Article 8 of the UCC, (ii) dealt in or
traded on a securities exchange or in a securities market, or (iii) an
investment company security as defined under Article 8 of the UCC.

      Section 9. Covenants. Borrower agrees that:

      (1) Reporting Requirements. Borrower shall promptly notify Lender if (a)
any claim is made against the Collateral, (b) any representation and warranty
included in this Pledge Agreement would no longer be true if made on such date,
or (c) there is a redemption or exchange of any or all of the Collateral.

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Borrower will furnish to Lender from time to time statements and schedules
further identifying and describing the Collateral and such other reports in
connection with such Collateral as Lender may request, all in reasonable detail.

      (2) Defense of Ownership Rights. Borrower will defend its ownership rights
in the Collateral against all claims and demands of all parties claiming any
ownership rights in any or all of the Collateral.

      (3) Transfer of Collateral. Borrower will at all times hereafter during
the term of this Pledge Agreement continue to be the legal and beneficial owner
of 100% of the Pledged Participation Interests. Borrower shall not (a) sell,
assign (by operation of law or otherwise), transfer or otherwise dispose of any
or all of the Collateral, (b) enter into any agreement for the sale, assignment,
transfer or other disposition of any or all of the Collateral, or (c) enter into
any agreement, other than agreements with Lender, that limits or restricts the
granting of a security interest in, or the sale of, any or all of the
Collateral.

      (4) Security Interest. Borrower shall not grant or suffer to exist any
security interest upon or with respect to any or all of the Collateral, except
for the security interest granted under this Pledge Agreement to Lender.
Borrower will discharge or cause to be discharged all security interests on any
or all of the Collateral, except for the security interest under this Pledge
Agreement in favor of Lender.

      (5) Organizational Documents. Borrower shall not amend any material term
or condition of its Organizational Documents except as set forth in the Loan
Agreement. Borrower will observe and enforce all the terms and provisions of its
Organizational Documents.

      (6) Books and Records. Borrower will keep true, complete and accurate
books of record with regard to the Collateral.

      Section 10. Rights and Remedies. If Borrower fails to perform any
agreement contained in this Pledge Agreement, Lender may itself perform or cause
performance of such agreement.

      Upon the occurrence of an Event of Default, Lender may exercise in respect
of any or all of the Collateral each of the following rights, remedies and
powers and Borrower agrees that each of the following rights, remedies and
powers is commercially reasonable:

      (1) General Remedies. Lender may exercise in respect of any or all of the
Collateral all the rights and remedies provided for in this Pledge Agreement, by
Law, in equity or otherwise available to it, including all rights and remedies
of a secured party under the UCC (whether or not the UCC applies to the affected
Collateral).

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      (2) Remedies Before Sale. As noted above, Lender may require Borrower to
make all payments and distributions on such Collateral directly to Lender and
Lender may exercise all management, voting and other consensual rights of
Borrower under or with respect to the Collateral.

      (3) Sale of Collateral. Lender may, without notice, except as specified
below, sell any and all of the Collateral in one or more parcels at public or
private sale, at any exchange, broker's board or at any of Lender's offices or
elsewhere, for cash, on credit or for future delivery, and upon such other terms
as Lender may deem commercially reasonable. Borrower agrees that, to the extent
notice of sale shall be required by law, at least twenty (20) days notice to
Borrower of the time and place of any public or private sale shall constitute
reasonable notification. Lender shall not be obligated to make any sale of any
or all of the Collateral after any notice of sale has been given. Lender may
adjourn any public or private sale from time to time by announcement at the time
and place fixed for such sale, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.

      (4) Proceeds. If any of the Collateral is sold by Lender upon credit or
for future delivery, Lender shall not be liable for the failure of the purchaser
to purchase or pay for the same and, in the event of any such failure, Lender
may resell the Collateral. In no event shall Borrower be credited with any part
of the proceeds of sale of any Collateral until and to the extent cash payment
in respect thereof is actually received by Lender. To the extent any of the
Borrower Obligations are contingent cash proceeds received by Lender in respect
of any sale of, collection from, or other realization upon all or any part of
the Collateral may, in the discretion of Lender, be held by Lender as collateral
for such contingent Borrower Obligations. Any cash held by Lender as Collateral
and all cash proceeds received by Lender in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral may, in the
discretion of Lender, be applied, first, to pay all costs and expenses incurred
by Lender in connection with or incident to the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon, any
and all of the Collateral, second, to pay all matured and unpaid Borrower
Obligations, third, if and to the extent any of the Borrower Obligations are
unmatured or contingent, to provide cash collateral for all such Borrower
Obligations, and fourth, in accordance with applicable law to Borrower or such
other party that is entitled to such proceeds in accordance with applicable law.
If the proceeds of the sale of Collateral are insufficient to pay all of such
Borrower Obligations, Borrower agrees to pay upon demand any deficiency to
Lender.

      Lender shall not, by any act, delay, omission or otherwise, be deemed to
have waived any of its rights or remedies under this Pledge Agreement. A waiver
by Lender of any right or remedy under this Pledge Agreement on any one
occasion, shall not be construed as a bar or waiver of any such right or remedy
which Lender would have had on any future occasion nor shall Lender be liable
for exercising or failing to exercise any such right or remedy.

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      (5) Private Sale. Lender is authorized, in connection with any such sale,
if it deems it advisable so to do, (1) to restrict the prospective bidders on or
purchasers of any of the Collateral to a limited number of sophisticated
investors who will represent and agree that they are purchasing for their own
account for investment and not with a view to the distribution or sale of any of
such Collateral, (2) to cause to be placed on any security included in the
Collateral a legend to the effect that such security has not been registered
under the Securities Act and may not be disposed of in violation of the
provisions of said Act, and (3) to impose such other limitations or conditions
in connection with any such sale as Lender deems necessary or advisable in order
to comply with said Act or any other law. At the request of Lender, Borrower
agrees that it will execute and deliver such documents and take such other
action as Lender deems necessary or advisable in order that any such sale may be
made in compliance with law. Borrower acknowledges and agrees that any such sale
might result in prices and other terms less favorable to the seller than if such
sale were a public sale without such restrictions. In the event of any such
sale, Lender shall incur no responsibility or liability for selling all or any
part of the Collateral at a price that Lender may in good faith deem reasonable
under the circumstances, notwithstanding the possibility that a substantially
higher price might have been realized if the sale were deferred until after
registration as noted above or if more than a single purchaser were approached.
Borrower agrees that sales made pursuant to this paragraph are made in a
commercially reasonable manner.

      (6)Transfer of Participation Interest. Upon the sale of Collateral,
Borrower agrees to take all actions required to transfer the Pledged
Participation Interest from Borrower to the Person that purchased such Pledged
Participation Interest.

      Section 11. Appointment as Attorney-in-Fact. Borrower hereby irrevocably
appoints Lender attorney-in-fact and proxy, with full authority in the place and
stead of Borrower and in the name of Borrower, Lender or otherwise (1) to take
any and all action and exercise all rights and remedies granted to Lender under
this Pledge Agreement, and (2) execute any instrument which Lender may deem
necessary or advisable to accomplish the purpose of this Pledge Agreement,
including, without limitation: (i) to ask, demand, collect, sue for, recover,
receive and give acquittance and receipts for monies due and to become due under
or in respect of any of the Collateral, (ii) to receive, endorse and collect any
drafts or other instruments, documents and chattel paper, and (iii) to file any
claims or take any action or institute any proceedings which Lender, in its
reasonable judgment, may deem necessary or desirable for the collection of any
of the Collateral or otherwise to enforce the rights of Lender with respect to
any of the Collateral, including, without limitation, to exercise any voting or
other rights that Lender may have with respect to any Collateral or part
thereof.

      Borrower hereby ratifies and approves all acts of Lender as its attorney
in-fact pursuant to this Section, and Lender, as its attorney in-fact, will not
be liable for any acts of commission or omission, nor for any error of judgment
or mistake of fact or law, other than those which result from Lender's gross

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negligence or willful misconduct. This power, being coupled with an interest, is
irrevocable so long as this Pledge Agreement remains in effect.

      Section 12. Duties and Reasonable Care. The powers conferred on Lender
under this Pledge Agreement are solely to protect its interests in the
Collateral and shall not impose any duty upon Lender to exercise any such
powers. Lender shall be deemed to have exercised reasonable care in the custody
and preservation of the Collateral in its possession if such Collateral is
accorded treatment substantially equal to that which Lender accords its own
property, it being understood that Lender shall not have any responsibility for
(1) ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not
Lender has or is deemed to have knowledge of such matters, (2) taking any
necessary steps to preserve rights against any parties with respect to any
Collateral, or (3) the performance of any duties or obligations under the
Collateral. Borrower will remain liable under the Participation Agreement to
perform all of its duties and obligations thereunder.

      Section 13. Indemnity and Expenses. Borrower agrees to indemnify Lender
and each of its directors, officers, employees, agents and affiliates from and
against any and all claims, losses and liabilities growing out of or resulting
from this Pledge Agreement or the transactions contemplated by this Pledge
Agreement, including enforcement of this Pledge Agreement, except claims, losses
or liabilities resulting from the gross negligence or willful misconduct of the
person to be indemnified. Borrower will upon demand pay to Lender the amount of
any and all expenses, including the fees and disbursements of its counsel and of
any experts and agents, which Lender may incur in connection with (1) any
amendment to this Pledge Agreement, (2) the administration of this Pledge
Agreement, (3) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral, (4) the
exercise or enforcement of any of the rights of Lender under this Pledge
Agreement, or (5) the failure by Borrower to perform or observe any of the
provisions of this Pledge Agreement.

      Section 14. Amendments. No amendment or waiver of any provision of this
Pledge Agreement, nor consent to any departure by Borrower from this Pledge
Agreement, shall in any event be effective unless the same shall be in writing
and signed by both Borrower and Lender, and then such amendment or waiver shall
be effective only in the specific instance and for the specific purpose for
which given.

      Section 15. Addresses for Notices. All notices and other communications
provided for under this Pledge Agreement shall be in writing and, mailed or
delivered by messenger or overnight deliver service, addressed to the address
specified below for the applicable party; or as to any such party at such other
address as shall be designated by such party in a written notice to the other
party complying as to delivery with the terms of this Section.

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<PAGE>

      To Borrower:       7 Bulfinch Place
                         Suite 500, P.O. Box 9507
                         Boston, Massachusetts 02114
                         Attention:   Jay Cramer

      With a copy to:    WRT Realty, L.P.
                         Two Jericho Plaza
                         Wing A, Suite 111
                         Jericho, New York 11753
                         Attention:  Peter Braverman

      With a copy to:    Post Heymann & Koffler LLP
                         Two Jericho Plaza
                         Wing A, Suite 111
                         Jericho, New York 11753
                         Attention:  David J. Heymann, Esq.

      To Lender:         Arbor Realty Funding LLC
                         333 Earle Ovington Boulevard, Suite 900
                         Uniondale, New York  11553
                         Attention: Guy R. Milone, General Counsel

      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.

All such notices and other communications shall, when mailed, be effective three
(3) days after being placed in the mails, or when delivered to a messenger or
nationally recognized overnight delivery service, be effective one (1) day after
being delivered to the messenger or nationally recognized overnight delivery
service, in each case, addressed as specified above.

      Section 16. Continuing Security Interest, Transfer of Secured Obligations.
This Pledge Agreement (1) shall create a continuing security interest in the
Collateral and shall remain in full force and effect until terminated by a
written agreement executed by Lender, (2) be binding upon Borrower, its
successors and assigns, and (3) inure to the benefit of Lender and its
successors and assigns. Borrow may not transfer or assign any of its duties or
obligations under this Pledge Agreement. Without limiting the generality of the
prior clause (3), Lender may assign or otherwise transfer all or a portion of
its rights or obligations with respect to the Borrower Obligations to any other
party, and such other party shall thereupon become vested with all the benefits
in respect of this Pledge Agreement granted to Lender in this Pledge Agreement
or otherwise.

                                       12
<PAGE>

      Section 17. Submission to Jurisdiction. Borrower hereby irrevocably
submits to the jurisdiction of any federal or state court sitting in Nassau
County in the State of New York over any action or proceeding arising out of or
related to this Pledge Agreement and agrees with Lender that personal
jurisdiction over Borrower rests with such courts for purposes of any action on
or related to this Pledge Agreement. Borrower hereby waives personal service by
manual delivery and agrees that service of process may be made by prepaid
certified mail directed to Borrower at the address of Borrower for notices under
this Pledge Agreement or at such other address as may be designated in writing
by Borrower to Lender, and that upon mailing of such process such service will
be effective as if Borrower was personally served. Borrower agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any manner
provided by law. Borrower further waives any objection to venue in any such
action or proceeding on the basis of inconvenient forum. Borrower agrees that
any action on or proceeding brought against Lender shall only be brought in such
courts.

      Section 18. Governing Law. This Pledge Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to its conflict of laws principles.

      Section 19. Miscellaneous. This Pledge Agreement is in addition to and not
in limitation of any other rights and remedies Lender may have by virtue of any
other instrument or agreement heretofore, contemporaneously herewith or
hereafter executed by Borrower or any other party or by law or otherwise. If any
provision of this Pledge Agreement is contrary to applicable law, such provision
shall be deemed ineffective without invalidating the remaining provisions of
this Pledge Agreement. Titles in this Pledge Agreement are for convenience of
reference only and shall not affect the interpretation or construction of this
Pledge Agreement.

      Section 20. WAIVER OF JURY TRIAL. BORROWER EXPRESSLY WAIVES ANY AND EVERY
RIGHT TO A TRIAL BY JURY IN ANY ACTION ON OR RELATED TO THIS PLEDGE AGREEMENT.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       13
<PAGE>

      IN WITNESS WHEREOF, Borrower has duly executed this Pledge Agreement as of
the date of this Pledge Agreement.

                                         FT-TOY LLC

                                         By: WRT Realty L.P.
                                             Managing Member

                                             By: Winthrop Realty Trust
                                                 General Partner

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

                                       14
<PAGE>

ACKNOWLEDGEMENT:

STATE OF ________________ )
                          ) SS:
COUNTY OF _______________ )

      Before me, a Notary Public in and for said County and State, personally
appeared ________________________, the _____________________ of _____________,
who acknowledged the execution of the foregoing instrument as such officer
acting for and on behalf of said limited liability company.

      Witness my hand and Notarial Seal this _______ day of ___________, 2005.

                                              ----------------------------------
                                                        (signature)

                                              ----------------------------------
My Commission Expires:                        (printed name)       Notary Public

_____________________                         Resident of _______________ County

                                       15
<PAGE>

                                    EXHIBIT A

                        FORM OF UCC-1 FINANCING STATEMENT

                                       16RECOURSE GUARANTY

      RECOURSE GUARANTY dated as of December 7, 2005 ("Guaranty") made by
Winthrop Realty Trust (f/k/a First Union Real Estate Equity and Mortgage
Investments), an Ohio business trust ("Guarantor") to Arbor Realty Funding LLC,
a Delaware limited liability company ("Lender").

      In consideration of Lender providing credit to Borrower, Guarantor hereby
agrees as follows:

      Section 1. Definitions. As used in this Guaranty, the following terms have
the following meanings: -----------

      "Borrower" means FT-TOY LLC, a Delaware limited liability company.

      "Borrower Obligations" means any and all present and future liabilities
and obligations of Borrower to Lender, including all present and future
liabilities or obligations under or pursuant to any and all of the Loan
Documents together with all fees and expenses incurred in collecting any or all
of the items specified in this definition or enforcing any rights under any and
all Loan Documents.

      "Guaranty" means this Recourse Guaranty.

      "Guaranteed Obligations" means all Losses Lender incurs arising out of or
in connection with: (1) fraud or intentional misrepresentation or breach of
trust by Borrower or any other Person in connection with the execution and the
delivery of any of the Loan Documents, (2) any material misrepresentation,
miscertification or breach of warranty by Borrower or any other Person with
respect to any representation, warranty or certification contained in any Loan
Document or any document, certificate or report provided under, pursuant to, or
in connection with any Loan Document, (3) the misapplication or conversion of
any proceeds or the Loan, (4) the misapplication, misappropriation or conversion
of any funds held in any account maintained under or pursuant to any of the Loan
Documents, including any reserve account, (5) application of any Law resulting
in the forfeiture by Borrower of all or any portion of the Participation
Interest, (6) gross negligence, willful misconduct, or criminal acts perpetrated
by Borrower or Guarantor or any Affiliate of any such Person, (7) any failure by
Borrower to comply with the terms and provisions of "Single Purpose Entities"
(Article IV of the Loan Agreement), (8) any failure by Borrower to pay fees and
expenses of Lender pursuant to the provisions of "Indemnity and Expenses"
(Section 8.03 of the Loan Agreement), (9) any distributions or payments made by
Borrower in violation of the terms of the Loan Agreement, including
distributions made to equity holders in Borrower and payment of fees and
commissions to Guarantor or any Affiliate of Borrower, (10) any action or
proceeding directly or indirectly affecting Borrower or Lender's rights,
interest or remedies under any of the Loan Documents, (11) any expenses of
Lender to perfect, protect or maintain the priority of any Loan Document, and
(12) Guarantor (or any person comprising Guarantor), Borrower or any Affiliate
of any of the foregoing shall, in connection with any enforcement action or
exercise or assertion of any right or remedy by or on behalf of Lender under or
in connection with this Guaranty, the Note, the Pledge Agreement or any of the
other Loan Documents, asserts a defense, seeks judicial intervention or
injunctive or other equitable relief of any kind or asserts in a pleading filed

<PAGE>

in connection with a judicial proceeding any defense against Lender or any right
in connection with any security for the Loan which the court in such action or
proceeding determines is without merit (in respect of a defense) or unwarranted
(in respect of a request for judicial intervention or injunctive or other
equitable relief).

Provided, however, Guaranteed Obligations means all liabilities and obligations
of Borrower to Lender, including all of the Borrower Obligations, (1) in the
event of a Prohibited Transfer, (2) in the event any Proceeding is instituted
by, implemented with respect to Borrower other than by Lender or for the benefit
of Lender, (3) in the event any Proceeding is filed by, consented to, or
acquiesced in by Borrower, or (4) except to the extent appointed by Lender or
the benefit of Lender, if a receiver, liquidator or trustee of Borrower is
appointed, and Borrower or any Affiliate of Borrower colludes in or otherwise
cooperates with such appointment, or Borrower does not file timely objection to
such appointment and otherwise take such appropriate actions as would be taken
by a debtor to attempt to prevent such appointment, or if Borrower is
adjudicated bankrupt or insolvent in an involuntary Proceeding and Borrower or
any Affiliate of Borrower colludes in or otherwise cooperates with such
adjudication, or Borrower does not timely object to such adjudication and
otherwise take such appropriate actions as would be taken by a debtor to attempt
to prevent such adjudication, (5) if Borrower incurs any indebtedness or
obligations in violations of the terms of the Loan Documents, (6) if the grant
by Borrower of a security interest in the Participation Interest pursuant to the
Pledge Agreement is deemed to be a fraudulent conveyance by a court of competent
jurisdiction, (7) if Borrower fails to perform or observe any term, covenant or
agreement contained in Section 6.04 of the Loan Agreement, or (8) if Borrower
opposes a motion by Lender to lift the automatic stay imposed pursuant to 11
U.S.C. ss.362 and for leave to foreclose on any collateral for the Loan.

      "Guarantor" means Winthrop Realty Trust (f/k/a First Union Real Estate
Equity and Mortgage Investments), an Ohio business trust.

      "Lender" means Arbor Realty Funding LLC, a Delaware limited liability
company.

      "Loan" means the loan evidenced by the Note.

      "Loan Agreement" means the Loan Agreement dated as of the date of this
Guaranty between Borrower and Lender.

      "Loan Documents" means the Note, the Loan Agreement and each other
document or agreement entered into pursuant to, or in connection with, the Note
or Loan Agreement.

      "Losses" means any and all losses (including loss of principal, interest
and fees under any and all Loan Documents), costs and expenses incurred by
Lender in respect of or as a result of any or all claims, suits, liabilities
(including strict liabilities), actions, demands, proceedings, obligations,
debts, damages (including punitive and consequential damages), trials, fines,
penalties, charges, injury to a person, property or natural resource, fees,
judgments, accounts, orders, adjudications, awards, liens, injunctive relief,

                                       2
<PAGE>

causes of action or amounts paid in settlement of whatever kind or nature,
including attorney's fees and consultant's fees and other cost of defense or
otherwise related thereto.

      "Material Adverse Change" means either (1) a material adverse change in
the status of the assets, liabilities, financial condition or property of
Guarantor, or (2) any event or occurrence of whatever nature which does or is
reasonably likely to have a material adverse effect on the ability of Guarantor
to perform his obligations under this Guaranty.

      "Note" means the $30,000,000.00 Promissory Note dated as of the date of
this Agreement made by Borrower and payable to Lender.

      "Obligations" means both Borrower Obligations and Guaranteed Obligations.

      "Person" means an individual, partnership (including a limited liability
partnership), corporation, limited liability company, business trust, joint
stock company, trust, unincorporated associates, joint venture, Governmental
Authority or other entity of whatever nature.

      "Proceeding" means any dissolution, winding up, liquidation, arrangement,
reorganization, adjustment, protection, relief or composition of Borrower, or
its debts, whether in any bankruptcy, insolvency, arrangement, reorganization,
receivership, relief or similar proceedings or upon an assignment for the
benefit of creditors or any other marshalling of the assets and liabilities of
Borrower.

      Unless otherwise specified in this Guaranty, terms defined in the Loan
Agreement which are used in this Guaranty will have the same meaning when used
in this Guaranty. Guarantor hereby acknowledges receipt of a copy of the Loan
Agreement.

      Section 2. Rules of Interpretation. When used in this Guaranty: (1) "or"
is not exclusive, (2) any pronouns used shall include the corresponding
masculine, feminine or neuter form, (3) the singular form of nouns shall include
the plural and vice versa, (4) a reference to a Law includes any amendment or
modification to such Law, and (5) a reference to an agreement, instrument or
document includes any amendment or modification of such agreement, instrument or
document if and to the extent such amendment or modification is permitted under
the Loan Documents.

      Section 3. Guaranty. Guarantor hereby guarantees to Lender and its
successors, endorsees, transferees and assigns the prompt and complete payment,
as and when due and payable, whether at stated maturity or by required
prepayment, acceleration, demand or otherwise, all of the Guaranteed Obligations
now existing or hereafter incurred.

      Section 4. Payment Under Guaranty. Upon demand by Lender, Guarantor shall
immediately pay to Lender at the address of Lender specified in this Guaranty in
lawful money of the United States of America each amount due by Guarantor under
this Guaranty. The amount of such payment shall not be reduced by any setoff,
counterclaim or crossclaim whether such setoff or claim relates to this
Guaranty, the Guaranteed Obligations or otherwise.

      All payments made by Guarantor pursuant to this Guaranty shall be made
free and clear of and without deduction for any taxes, levies, imposts,

                                       3
<PAGE>

deductions, charges or withholdings, and all related liabilities. If Guarantor
is required by Law to deduct any such item from or in respect of any sum payable
to Lender under this Guaranty, the amount payable under this Guaranty shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
Lender receives an amount equal to the sum it would have received had no such
deductions been made. In addition, Guarantor agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made under this Guaranty or from the
execution, delivery or registration of, or otherwise with respect to, this
Guaranty.

      Section 5. Limitation of Liability. The obligation of Guarantor under this
Guaranty shall be limited to an aggregate amount equal to the largest amount
that would not render the obligation of Guarantor under this Guaranty subject to
avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provision of any applicable state law.

      Section 6. Type of Guaranty. This Guaranty is absolute and unconditional
and as such is not subject to any conditions and Guarantor is fully liable to
perform all of his duties and obligations under this Guaranty as of the date of
execution of this Guaranty. This Guaranty is a continuing guaranty and applies
to all future Guaranteed Obligations. This Guaranty is a guaranty of payment and
not of collection. The obligations and liabilities of Guarantor under this
Guaranty shall not be conditioned or contingent upon the pursuit by Lender of
any right or remedy against Borrower or any other Person which may be or become
liable in respect of all or any part of the Guaranteed Obligations, or against
any assets securing the payment of the Guaranteed Obligations or any guarantee
of such Guaranteed Obligations or right of setoff with respect to such
Guaranteed Obligations. This Guaranty is irrevocable and as such cannot be
cancelled, terminated or revoked by Guarantor.

      Section 7. Reinstatement of Guaranty. This Guaranty shall continue to be
effective or shall be reinstated, as the case may be, if at any time any
payment, or any part thereof, of any of the Obligations are rescinded or must
otherwise be returned by Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of Borrower or otherwise, all as though such
payment had not been made.

      Guarantor hereby consents that, without the necessity of any reservation
of rights against Guarantor and without notice to or further assent by
Guarantor, any demand for payment of any of the Obligations made by Lender may
be rescinded by Lender and any of such Obligations continued after such
rescission.

      Section 8. Waiver of Notices. Guarantor hereby waives any and all notices
including (1) notice of or proof of reliance by Lender upon this Guaranty or
acceptance of this Guaranty, (2) notice of the incurrence of any Obligations or
the renewal, extension or accrual of any such Obligations, (3) notice of any
actions taken by Lender or Borrower or any other Person under any Loan Document,
(4) notices of nonpayment or nonperformance, protest, notices of protest and
notices of dishonor, and (5) notice of intent to accelerate and notice of
acceleration of any or all Obligations.

                                       4
<PAGE>

      Section 9. Waiver of Defenses. Guarantor hereby waives any and all
defenses to the performance by Guarantor of his duties and obligations under
this Guaranty, including any defense based on any of the following:

      (1) any failure of Lender to disclose to Guarantor any information
relating to the business, condition (financial or otherwise), operations,
performance, properties or prospects of any Person obligated to make payment on
any and all Obligations, whether as principal or guarantor, now or hereafter
known to Lender,

      (2) any defense to the payment of any or all the Obligations, including
lack of validity or enforceability of any of the Obligations or any Loan
Document,

      (3) any change in the time, manner or place of payment of, or in any other
term in respect of, all or any of the Obligations, or any other amendment or
waiver of or consent to any departure from any Loan Document,

      (4) any exchange or release of, or non-perfection of any security interest
on or in any assets securing the payment of the Obligations,

      (5) any failure to execute any other guaranty for all or any part of the
Obligations, or any release or amendment or waiver of, or consent to any
departure from, any other guaranty for any or all of the Obligations,

      (6) any failure to execute any subordination agreement for all or any part
of the Obligations, or any release or amendment or waiver of, or consent to any
departure from, any subordination agreement for all or any of the Obligations,

      (7) any subordination of any or all of the Obligations,

      (8) any act or omission of Lender in connection with the enforcement of,
or the exercise of rights and remedies, including any election of, or the order
of exercising any, remedies, with respect to (a) the Obligations, (b) any other
guarantor of the Obligations, (c) any person that executes a subordination
agreement for any Obligations, or (d) any assets securing the payment of the
Obligations,

      (9) any manner of application of any funds received by Lender to
Obligations or any other obligations owed to Lender, whether from the sale or
disposition of any assets securing the Obligations, from another guarantor of
the Obligations or otherwise,

      (10) any failure to give or provide any notices, demands or protests,
including those specified under "Waiver of Notices" (Section 8), and

      (11) any benefit of any statute of limitations affecting Guarantor's
liability under this Guaranty or the enforcement of this Guaranty.

      In addition, Guarantor hereby irrevocably waives any and all right to
assert any setoff, counterclaim or crossclaim of any nature with respect to this
Guaranty or the obligations of Guarantor under this Guaranty.

                                       5
<PAGE>

      Section 10. Subrogation. Guarantor agrees not to exercise any rights which
Guarantor may acquire by way of subrogation or contribution, whether acquired by
any payment made under this Guaranty, by any setoff or application of funds of
Borrower, by Lender or otherwise, until (1) the payment in full of the
Obligations, and (2) the payment of all fees and expenses to be paid by
Guarantor pursuant to this Guaranty. If any amount shall be paid to Guarantor on
account of such subrogation or contribution rights at any time when all of the
Obligations and all such other expenses have not been paid in full, such amount
shall be held in trust for the benefit of Lender, shall be segregated from the
other funds of Guarantor and shall forthwith be paid over to Lender to be
credited and applied in whole or in part by Lender against the Obligations,
whether matured or unmatured, and all such other fees and expenses.

      Section 11. Representations. At the time of execution of this Guaranty,
Guarantor represents and warrants to Lender as follows:

      (1) No Contravention. The execution, delivery and performance by Guarantor
of this Guaranty does not and will not (a) violate any provision of any Law,
order, writ, judgment, injunction, decree, determination, or award presently in
effect applicable to Guarantor, (b) result in a breach of, or constitute a
default under, any indenture or loan or credit agreement or any other agreement,
lease, or instrument to which Guarantor is a party or by which Guarantor or its
properties may be bound or affected, or (c) result in, or require, the creation
or imposition of any Lien upon or with respect to any of the properties now
owned or hereafter acquired by Guarantor.

      (2) Governmental Authority. No authorization, approval or other action by,
and no notice to or filing with, any Governmental Authority is required for the
due execution, delivery and performance by Guarantor of this Guaranty.

      (3) Legally Enforceable Guaranty. This Guaranty is the legal, valid and
binding obligation of Guarantor, enforceable against Guarantor in accordance
with its terms, except to the extent that such enforcement may be limited by (a)
applicable bankruptcy, insolvency, and other similar laws affecting creditors'
rights generally, or (b) general equitable principles, regardless of whether the
issue of enforceability is considered in a proceeding in equity or at law.

      (4) Solvency. Guarantor is solvent and will not be rendered insolvent by
the transactions contemplated by this Guaranty.

      (5) Financial Statements. The financial statements of and other financial
information related to Guarantor that were delivered to Lender, are true,
correct and complete in all material respects. Such financial statements fairly
present the financial position of Guarantor. No Material Adverse Change has
occurred since the date of such financial statements.

      (6) Disclosure. None of Guarantor's representations or warranties
contained in this Guaranty or any other document, certificate or written
statement furnished to Lender by or on behalf of Guarantor contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained in this Guaranty or in such other
document, certificate or written statement not misleading. There is no fact
known to Guarantor which could result in a Material Adverse Change which has not
been disclosed in writing to Lender by Guarantor.

                                       6
<PAGE>

      Section 12. Reporting Requirements. Guarantor will provide immediate
notice to Lender if (1) any representation and warranty included in this
Guaranty would no longer be true if made on such date or (2) there is a Material
Adverse Change. Guarantor will furnish to Lender from time to time such
information regarding Guarantor as Lender may reasonably request.

      Section 13. Remedies. Lender shall not, by any act, delay, omission or
otherwise, be deemed to have waived any of its rights or remedies under this
Guaranty or otherwise. A waiver by Lender of any right or remedy under this
Guaranty on any one occasion, shall not be construed as a ban or waiver of any
such right or remedy which Lender would have had on any future occasion, nor
shall Lender be liable for exercising or failing to exercise any such right or
remedy.

      The rights and remedies of Lender under this Guaranty are cumulative and,
as such, are in addition to any other rights and remedies available to Lender
under Law or any other agreements.

      If an Event of Default occurs and Lender is exercising any of its rights
and remedies with respect to Borrower, to the extent permitted by Law, Guarantor
will not object to any action taken by Lender in enforcing such rights and
remedies to the extent such action is permitted by Law.

      Section 14. Appointment as Attorney-in-Fact. Guarantor hereby appoints
Lender as the attorney-in-fact for Guarantor, with full authority in the place
and stead of Guarantor and in the name of Guarantor or otherwise, to exercise
all rights and remedies granted to Lender under this Guaranty and to take any
action and to execute any instrument which Lender may deem necessary or
advisable to accomplish the purposes of this Guaranty.

      Guarantor hereby ratifies and approves all acts of Lender as his
attorney-in-fact pursuant to this Section, and Lender, as his attorney-in-fact,
will not be liable for any acts of commission or omission, nor for any error in
judgment or mistake of fact or law, other than those resulting from Lender's
gross negligence or willful misconduct. This power, being coupled with an
interest, is irrevocable so long as this Guaranty remains in effect.

      Section 15. Indemnity and Expenses. Guarantor hereby indemnifies Lender
from and against any and all claims, losses, damages and liabilities growing out
of or resulting from this Guaranty, including enforcement of this Guaranty,
except claims, losses, damages or liabilities resulting from Lender's gross
negligence and willful misconduct.

      Guarantor will upon demand pay to Lender the amount of any and all
expenses, including the fees and expenses of Lender's counsel and of any experts
and agents, which Lender incurs in connection with (1) any amendment to this
Guaranty, (2) the administration of this Guaranty, (3) the exercise or
enforcement of any of the rights of Lender under this Guaranty, or (4) the
failure by Guarantor to perform or observe any of the provisions of this
Guaranty.

                                       7
<PAGE>

      Section 16. Amendments. No amendment or waiver of any provision of this
Guaranty, nor consent to any departure by Guarantor from this Guaranty, shall in
any event be effective unless the same shall be in writing and signed by
Guarantor and Lender, and then such amendment or waiver shall be effective only
in the specific instance and for the specific purpose for which given.

      Section 17. Addresses for Notices. All notices and other communications
provided for under this Guaranty shall be in writing and, mailed or delivered by
messenger or overnight delivery service, addressed, in the case of Guarantor at
the address specified below his signature, and in the case of Lender at the
address specified below, or as to any such party at such other address as shall
be designated by such party in a written notice to the other party complying as
to delivery with the terms of this Section.

                           Arbor Realty Funding LLC
                           333 Earle Ovington Boulevard
                           Uniondale, New York 11553
                           Attention: Guy R. Milone, Jr., General Counsel
                           Facsimile No. (516) 832-6421

            With a copy to:

                           Arbor Realty Funding LLC
                           333 Earle Ovington Boulevard
                           Uniondale, New York 11553
                           Attention: Asset Management - Loan Monitoring
                           Facsimile No. (516) 832-6461

                           And:

                           Kronish Lieb Weiner & Hellman LLP
                           1114 Avenue of the Americas
                           New York, New York 10036
                           Attention: Thomas D. O'Connor, Esq.
                           Facsimile No. (212) 479-6275

All such notices and other communications shall, when mailed, be effective three
(3) days after being placed in the mails, or when delivered to a messenger or
overnight delivery service, be effective one (1) day after being delivered to
the messenger or overnight delivery service, in each case, addressed as
specified above.

      Section 18. Assignment and Transfer of Obligations. This Guaranty will
bind the estate of Guarantor as to Obligations created or incurred both before
and after the death or incapacity of Guarantor, whether or not Lender receives
notice of such death or incapacity. This Guaranty shall inure to the benefit of
Lender and its successors, transferees and assigns. Guarantor may not transfer
or assign his obligations under this Guaranty. Lender may assign or otherwise
transfer all or a portion of its rights or obligations with respect to the

                                       8
<PAGE>

Obligations to any other Person, and such other Person shall then become vested
with all the benefits in respect of such transferred Obligations granted to
Lender in this Guaranty or otherwise. Guarantor agrees that Lender can provide
information regarding Guarantor to any prospective or actual successor,
transferee or assign.

      Section 19. Setoff. Guarantor agrees that, in addition to, and without
limiting, any right of setoff, banker's lien or counterclaim Lender may
otherwise have, Lender shall be entitled, at its option, to offset balances
(general or special, time or demand, provisional or final) held by Lender for
the account of Guarantor, at any of the offices of Lender, in Dollars or any
other currency, against any amount payable by Guarantor to Lender under this
Guaranty which is not paid when demanded (regardless of whether such balances
are then due to Guarantor), in which case Lender shall promptly notify
Guarantor, provided that Lender's failure to give such notice shall not affect
the validity of such offset.

      Section 20. Submission to Jurisdiction. Guarantor hereby irrevocably
submits to the jurisdiction of any federal or state court sitting in Nassau
County in the State of New York over any action or proceeding arising out of or
related to this Guaranty and agrees with Lender that personal jurisdiction over
Guarantor rests with such courts for purposes of any action on or related to
this Guaranty. Guarantor hereby waives personal service by manual delivery and
agrees that service of process may be made by prepaid certified mail directed to
Guarantor at the address of Guarantor for notices under this Guaranty or at such
other address as may be designated in writing by Guarantor to Lender, and that
upon mailing of such process such service will be effective as if Guarantor was
personally served. Guarantor agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any manner provided by Law. Guarantor further waives
any objection to venue in any such action or proceeding on the basis of
inconvenient forum. Guarantor agrees that any action on or proceeding brought
against Lender shall only be brought in such courts.

      Section 21. Governing Law. This Guaranty shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to its principles of conflicts of law.

      Section 22. Subordination. Upon the earlier of (1) the occurrence of an
Event of Default or (2) a demand for payment is made on the Guarantor under this
Guaranty, Guarantor will not (1) make any demand for payment of, or take any
action to accelerate, any obligation owed to Guarantor by Borrower, (2) seek to
collect payment of, or enforce any right or remedies against Borrower, any of
the obligations owed to Guarantor by Borrower or any guarantees, credit
supports, collateral or other security related to or supporting any of such
obligations, or (3) commence, or join with any other creditor in commencing, any
Proceeding against Borrower.

      Guarantor also agrees that the payment of all obligations of Borrower to
Guarantor shall be subordinate and junior in time and right of payment in
accordance with the terms of this Section to the prior payment in full (in cash)
of the Guaranteed Obligations. In furtherance of such subordination, (1) to the
extent possible, Guarantor will not take or receive from Borrower any payments,
in cash or any other property, by setoff or any other means, of any or all of
the obligations owed to Guarantor by Borrower, or purchase, redeem, or otherwise
acquire any such obligations, or change the terms or provisions of any such
obligations and (2) if for any reason and under any circumstance Guarantor
receives a payment on such obligation, whether in a Proceeding or otherwise, all
such payments or distributions upon or with respect to such obligations shall be
received in trust for the benefit of Lender, shall be segregated from other
funds and property held by Guarantor and shall be forthwith paid over to Lender
in the same form as so received (with any necessary endorsement) to be applied
to, or held as collateral for, the payment or prepayment of the Guaranteed
Obligations.

                                       9
<PAGE>

      In the event Borrower is in a Proceeding, to the extent permitted by Law,
as directed by Lender Guarantor will either (1) duly and promptly take all
actions required, and if so directed by Lender as directed by Lender, to collect
and receive any and all payments and distributions on the obligations owed to
Guarantor by Borrower and all related guaranties, collateral and other security
in connection with such Proceeding, including the filing of all claims and
proofs of claim, or (2) take all actions and execute all documents required to
enable Lender to exercise all rights to collect and receive any and all payments
and distributions on the obligations owed to Guarantor by Borrower and all
related guaranties, collateral and other security in connection with such
Proceeding, including the assignment, endorsement and delivery of all notes or
instruments evidencing the obligations owed to Guarantor by Borrower together
with all guarantees, collateral and other security related thereto, and then
Lender shall have the right to (a) make all claims, (b) enforce all rights
related to the obligations owed to Guarantor by Borrower, either in its own name
or in the name of Guarantor, and (c) collect, receive and accept any and all
sums or distributions of any kind that may become due and payable or
distributable on or in respect of any or all of the obligations owed to
Guarantor by Borrower or such guarantees, collateral or other security. In
addition, to the extent permitted by Law, Guarantor shall not object to any
action taken by Lender in connection with a Proceeding.

      Guarantor agrees that any subrogation rights Guarantor may acquire as a
result of a payment under this Section may not be exercised until (1) the
payment in full of the Obligations, and (2) the payment of all fees and expenses
to be paid by Guarantor pursuant to this Guaranty.

      Section 23. Miscellaneous. This Guaranty is in addition to and not in
limitation of any other rights and remedies Lender may have by virtue of any
other instrument or agreement previously, contemporaneously or hereafter
executed by Guarantor or any other Person or by Law or otherwise. If any
provision of this Guaranty is contrary to applicable Law, such provision shall
be deemed ineffective without invalidating the remaining provisions of this
Guaranty. Titles in this Guaranty are for convenience of reference only and
shall not affect the interpretation or construction of this Guaranty. This
Guaranty constitutes the entire agreement between Guarantor and Lender with
respect to the matters covered by this Guaranty and supercedes all written or
oral agreements with respect to such matters.

      Section 24. WAIVER OF JURY TRIAL. GUARANTOR EXPRESSLY WAIVES ANY AND EVERY
RIGHT TO A TRIAL BY JURY IN ANY ACTION ON OR RELATED TO THIS GUARANTY.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       10
<PAGE>

      IN WITNESS WHEREOF, Guarantor has duly executed and delivered this
Guaranty as of the date of this Guaranty.

                                              WINTHROP REALTY TRUST

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

                                              Address for Notices:

                                              7 Bulfinch Place
                                              Suite 500, P.O. Box 9507
                                              Boston, Massachusetts 02114
                                              Attention: Jay Cramer

                                              With copies to:

                                              Winthrop Realty Trust
                                              Two Jericho Plaza
                                              Wing A, Suite 111
                                              Jericho, New York 11753
                                              Attention: Peter Braverman

                                              and

                                              Post Heymann & Koffler LLP
                                              Two Jericho Plaza
                                              Wing A, Suite 111
                                              Jericho, New York 11753
                                              Attention: David J. Heymann, Esq.

                                       11
<PAGE>

ACKNOWLEDGEMENT:

STATE OF ________________     )
                              )  SS:
COUNTY OF _______________     )

      Before me, a Notary Public in and for said County and State, personally
appeared ________________________, the _____________________ of _____________,
who acknowledged the execution of the foregoing instrument as such officer
acting for and on behalf of said limited liability company.

      Witness my hand and Notarial Seal this _______ day of ___________, 2005.

                                              ----------------------------------
                                                        (signature)

                                              ----------------------------------
My Commission Expires:                        (printed name)       Notary Public

_____________________                         Resident of _______________ County

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