<PAGE>

                                                                     EXHIBIT 2.1

                                  CONTRIBUTION
                                    AGREEMENT

                  This CONTRIBUTION AGREEMENT (this "Agreement"), dated as of
July 1, 2003, is by and among Arbor Commercial Mortgage, LLC, a New York limited
liability company ("ACM"), Arbor Realty Trust, Inc., a Maryland corporation
("ART") and Arbor Realty Limited Partnership, a Delaware limited partnership
("ARLP").

                              W I T N E S S E T H:

                           WHEREAS, ACM owns (1) the bridge loans relating to
commercial and multifamily properties listed on Schedule A-1 hereto (the "Bridge
Loans"), (2) the mezzanine loans relating to commercial and multifamily
properties listed on Schedule A-2 hereto (the "Mezzanine Loans"), (3) the loans
relating to commercial and multifamily properties listed on Schedule A-3 hereto
(the "Other Loans" and together with the Bridge Loans and the Mezzanine Loans,
the "ACM Initial Assets"), (4) 100% of the membership interests of ANMB Holdings
II, LLC (the "ANMB II Membership Interests") which owns the mezzanine loan
relating to a multifamily property listed on Schedule A-4 hereto (the "Central
Jersey Mezzanine Loan" and together with the ACM Initial Assets, the "Initial
Assets"), and (5) 100% of the membership interests (the "Membership Interests")
of the entities listed on Schedule B hereto (the "Preferred Equity Holders"),
each of which have an equity interest, as listed on Schedule C hereto, in
entities owning commercial or multifamily properties (the "Preferred Equity
Interests");

                           WHEREAS, ACM desires to contribute all of the ACM
Initial Assets, the ANMB II Membership Interests and the Membership Interests
(together, the "Contributed Assets") to ARLP in exchange for 3,146,724 units of
limited partnership interest in ARLP (the "Partnership Units") and 629,345
warrants, each of which entitles ACM to purchase an additional Partnership Unit
(the "Warrants");

                           WHEREAS, ARLP desires to issue the Partnership Units
and the Warrants to ACM in exchange for the Contributed Assets; and

                           WHEREAS, ART will contribute the net proceeds of an
offering of its units, each of which consists of five shares of common stock of
ART (the "Common Stock") and a warrant to purchase an additional share of Common
Stock (the "Units"), pursuant to the Offering Memorandum, dated June 26, 2003,
to Arbor

The material marked [*] has been omitted pursuant to a request for
confidential treatment by Arbor Realty Trust, Inc. and has been filed
separately with the Securities and Exchange Commission.
<PAGE>

Realty GPOP, Inc., a Delaware corporation and a wholly owned subsidiary of ART
("GPOP"), and Arbor Realty LPOP, Inc., a Delaware corporation and a wholly owned
subsidiary of ART ("LPOP"); and

                  WHEREAS, each of GPOP and LPOP will contribute the net
proceeds its receives from ART to ARLP in exchange for units of limited
partnership interest in ARLP, concurrently with ACM's contribution of the
Contributed Assets.

                           NOW, THEREFORE, in consideration for the foregoing
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:

1.       Contribution of the Contributed Assets. On the terms and subject to the
         conditions of this Agreement, ACM shall transfer, assign, convey and
         deliver to ARLP all right, title and interest in and to the Contributed
         Assets and ARLP shall issue the Partnership Units and the Warrants to
         ACM.

2.       Conditions.

a.       The obligation of ARLP to issue the Partnership Units and the Warrants
         to ACM in exchange for the Contributed Assets is subject to the
         following conditions (which may be waived by ARLP in ARLP's sole
         discretion): (i) that at the time of the Closing referred to in Section
         3, each of the representations and warranties of ACM made in this
         Agreement shall be true and correct, (ii) ACM shall have executed and
         delivered, and, if applicable, caused to be delivered, to ARLP an
         assignment, substantially in the form of Exhibit A (the "Assignment and
         Assumption") and such assignments and other instruments of conveyance,
         assignment and transfer, all in form satisfactory to ARLP, as shall be
         effective to vest in ARLP good title in and to the Contributed Assets,
         (iii) all approvals and consents to the transactions contemplated by
         this Agreement shall have been obtained from all necessary third
         parties, and (iv) to the best of ACM's knowledge, there shall be no
         material pending or threatened litigation regarding the Contributed
         Assets.

b.       The obligation of ACM to contribute the Contributed Assets to ARLP for
         the Partnership Units and the Warrants is subject to the following
         conditions (which may be waived by ACM in ACM's sole discretion): (i)
         that at the time of the Closing each of the representations and
         warranties of ARLP made in this Agreement shall be true and correct,
         and (ii) ARLP shall have executed and delivered to ACM the Assignment
         and Assumption.

<PAGE>

3.       Closing. The closing (the "Closing") of the transfer of the Contributed
         Assets, the Partnership Units and the Warrants shall be held, at such
         time and place as the parties may mutually agree upon, on July 1, 2003.

         a.       ACM shall deliver to ARLP at the Closing (i) the Assignment
                  and Assumption, (ii) with respect to each ACM Initial Asset,
                  an endorsement by ACM of the related promissory note or notes,
                  without recourse, to ARLP, or its designee, (iii) with respect
                  to ACM's 100% membership interest in ANMB Holdings II, LLC
                  ("ANMB II"), the operating agreement evidencing the equity
                  interest of ANMB II in the entity owning the underlying
                  property and an instrument of assignment effecting the
                  transfer of such membership interests, and (iv) with respect
                  to each of ACM's 100% Membership Interests in Preferred Equity
                  Holders, the operating agreement evidencing the equity
                  interest of the applicable Preferred Equity Holder in the
                  entity owning the underlying property and an instrument of
                  assignment effecting the transfer of the Membership Interests,
                  and (v) such other instruments of transfer executed by ACM as
                  ARLP shall reasonably request, provided that ARLP shall
                  prepare any such instruments and deliver the same to ACM at
                  Closing.

         b.       ARLP shall deliver to ACM (i) a certificate or other
                  documentation evidencing 3,146,724 of its Partnership Units
                  and (ii) a certificate or other documentation evidencing
                  629,345 Warrants.

4.       Representations and Warranties of ACM.

a.       ACM hereby represents and warrants to ARLP and ART, as follows:

i.       ACM is a limited liability company duly organized, validly existing and
         in good standing under the laws of the State of New York;

ii.      ACM 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;

iii.     This Agreement, assuming due authorization, execution and delivery by
         ARLP and ART, constitutes a valid, legal and binding obligation of ACM,
         enforceable against ACM in accordance with the terms hereof, subject to
         (A) applicable bankruptcy insolvency, reorganization, moratorium and
         other laws affecting the enforcement of creditors' rights generally,
         (B) general principles of equity, regardless of whether such
         enforcement is considered in a proceeding in equity or at law and (C)
         public

<PAGE>

         policy considerations underlying the securities laws, to the extent
         that such public policy considerations limit the enforceability of the
         provisions of this Agreement that purport to provide indemnification
         for securities laws liabilities;

iv.      The execution and delivery by ACM of this Agreement and its performance
         of, and compliance with, the terms of this Agreement will not conflict
         with or constitute a breach, violation, or default under (A) its
         certificate of formation or operating agreement, (B) any law, any order
         or decree of any court or arbiter, or any order, regulation or demand
         of any federal, state or local government or regulatory authority,
         which violation is likely to affect materially and adversely either the
         ability of ACM to perform its obligations under this Agreement or the
         financial condition of ACM or (C) any indenture, loan or credit
         agreement, or any other agreement, contract, instrument, mortgage,
         lien, lease, permit, authorization, order, writ, judgment, injunction
         or decree to which ACM is a party or by which any Contributed Asset is
         bound or affected, except for such conflicts with (1) certain
         provisions of (a) the operating agreement of ACM, dated as of January
         1, 2003, and (b) the operating agreement of the sole managing member of
         ACM, Arbor Management, LLC, each of which have been validly waived by
         each of the members thereto, (2) (a) the First Amended and Restated
         Warehousing Credit, Term Loan and Security Agreement (Structured
         Facility and Servicing Secured Facility), dated as of April 1, 2003
         (the "Warehousing Credit Facility"), by and between [*] and ACM, (b)
         the Master Repurchase Agreement, dated as of November 18, 2002 (the
         "[*] Repurchase Agreement"), by and between [*] and ACM, and (c) the
         Master Repurchase Agreement, dated as of November 1, 2002 (the "[*]
         Repurchase Agreement"), by and between [*] and ACM, for which each of
         [*], respectively, have consented to the transactions contemplated by
         this Agreement and (3) the Recognition Agreement, dated as of November
         14, 2001, by and between Fremont Investors and Loan ("Fremont") and
         ACM, for which Fremont has given its consent with further assurances to
         the transactions contemplated by this Agreement; the consummation of
         the transactions contemplated by this Agreement will not result in the
         cancellation, modification or termination of, or the acceleration of,
         or the creation of any charges, claims, conditions, security interests,
         hypothecations, encumbrances, mortgages, liens or pledges
         (collectively, "Liens") on the Contributed Assets pursuant to any
         agreement, license, lease understanding, contract, indenture, mortgage,
         instrument, promise, undertaking or other commitment or obligation
         ("Contracts") under which ACM or any Contributed Asset subject to or
         bound, except for (x) the termination of the Liens


The material marked [*] has been omitted pursuant to a request for
confidential treatment by Arbor Realty Trust, Inc. and has been filed
separately with the Securities and Exchange Commission.
<PAGE>
         of [*] pursuant to the Warehousing Credit Facility, the [*] Repurchase
         Agreement and the [*] Repurchase Agreement, respectively, on the
         Contributed Assets and (y) the creation of the Liens of [*] on the
         Contributed Assets by the execution of the (i) Assignment and
         Assumption Agreement, to be dated as of July 1, 2003, by and between
         ACM and ARLP with respect to the [*], (ii) Structured Facility
         Warehousing Credit and Security Agreement, to be dated as of July 1,
         2003, by and between [*] and ARLP, and (iii) the Master Repurchase
         Agreement, to be dated as of July 1, 2003, by and between [*] and ARLP,
         respectively;

v.       In selecting the ACM Initial Assets, the ANMB II Membership Interests
         and the Membership Interests for pledge pursuant hereto, no selection
         procedure was employed by ACM that was intended to adversely affect the
         interests of ARLP;

vi.      Except as disclosed by ACM to ARLP and ART in writing and accepted in
         writing by ARLP and ART, ACM has not dealt with any person that may be
         entitled to any commission or compensation in connection with the
         transfer of the Contributed Assets. ACM or Obligor has paid any and all
         amounts due to any such person, and ARLP shall have no responsibility
         for any payments due any such person;

vii.     There are no Contracts, and ACM will not enter into Contracts, with any
         other person or entity to sell, transfer, assign or in any manner
         create a Lien on, the Contributed Assets, except for the right, title,
         interest, lien and security interest of (A) [*] under the Warehousing
         Credit Facility, (B) [*] under the [*] Repurchase Agreement, (C) [*]
         under the [*] Repurchase Agreement, or to not sell, transfer or assign
         the Contributed Assets to ARLP;

viii.    No consents, other than those that have been obtained or obtained with
         further assurances, are required for the transfer of the Contributed
         Assets in accordance with the terms of this Agreement; and


The material marked [*] has been omitted pursuant to a request for confidential
treatment by Arbor Realty Trust, Inc. and has been filed separately with the
Securities and Exchange Commission.
<PAGE>
ix.      Each Contributed Asset was created in accordance with, and complies
         with the requirements of, the internal procedures of ACM, including,
         without limitation, ACM's underwriting policies procedures and
         standards.

b.       With respect to the Bridge Loans listed on Schedule A-1 hereto (except
         for the 1025 5th Avenue Bridge Loan), the Mezzanine Loans listed on
         Schedule A-2 hereto, the Albion Loan (as defined on Schedule A-3
         hereto) and the Central Jersey Mezzanine Loan, ACM represents and
         warrants to ART and ARLP that:

i.       ACM is in possession of a file relating to each of the Initial Assets
         which contains (1) each of the documents required to evidence ACM's
         interest in the Initial Asset (including all promissory notes, security
         agreements, guarantees and other agreements that evidence or secure
         such Initial Assets) and (2) when applicable, certain other documents
         relating to the underlying property (the "Initial Asset File");

ii.      Immediately prior to the assignment of each Contributed Asset to ARLP,
         ACM was the sole legal, beneficial and equitable owner of each
         Contributed Asset, except for the right, title, interest, lien and
         security interest of (A)[*] under the Warehousing Credit Facility,
         (B)[*] under the [*] Repurchase Agreement, (C)[*] under the [*]
         Repurchase Agreement; and ACM transferred each Contributed Asset to
         ARLP free and clear of any Lien, except for the Liens described in this
         Section 4(b)(ii); in the event that ARLP's interest in a Bridge Loan is
         deemed to be a security interest, such security interest is valid,
         perfected and of first priority; in the event that ARLP's interest in a
         Mezzanine Loan is deemed to be a security interest, such security
         interest is valid, perfected and is a first priority lien on the
         pledged ownership interest related to the Mezzanine Loan;

iii.     Neither the notes relating to the Initial Assets (the "Initial Asset
         Notes") nor the Initial Assets are subject to any right of rescission,
         set-off, counterclaim or defense, including the defense of usury, nor
         will the operation of any term of the Initial Asset Notes or the
         Initial Assets, nor the exercise of any right thereunder, render the
         Initial Asset Notes or Initial Assets unenforceable, in whole or in
         part, except to the extent enforcement may be limited by (A) applicable
         bankruptcy, insolvency, and other similar laws affecting creditor's
         rights generally, or (B) general equitable principals, regardless of
         whether the issue of enforceability is considered in a proceeding in
         equity or at law, or subject to any right of rescission, set-off,
         counterclaim or


The material marked [*] has been omitted pursuant to a request for confidential
treatment by Arbor Realty Trust, Inc. and has been filed separately with the
Securities and Exchange Commission.
<PAGE>

         defense, including the defense of usury and no such right of
         rescission, set-off, counterclaim or defense has been asserted;

iv.      Up to and including the Closing, all payments required to be made with
         respect to an Initial Asset under the terms of the related Initial
         Asset Note have been made before the end of any grace or cure period
         for such payment. ACM has not advanced funds, or induced, solicited or
         received any advance of funds from a party other than the obligor on
         the related Initial Asset Note (the "Obligor"), directly or indirectly,
         for the payment of any amount required by the Initial Asset Note. There
         has been no delinquency beyond the end of any applicable period of
         grace in any payment by the Obligor under the terms of any Initial
         Asset Note;

v.       The Initial Asset Note relating to each Initial Asset has been endorsed
         to ARLP in a form and in a manner sufficient to convey to ARLP all
         right, title and interest therein of ACM in all relevant jurisdictions,
         except to the extent that a recording or other filing is required to
         transfer such Initial Asset;

vi.      To the best of ACM's knowledge, based upon an opinion of Obligor's
         counsel, each Initial Asset at origination did not violate any
         applicable federal, state or local law;

vii.     With respect to each Initial Asset that relates to a property that is
         secured by a mortgage in favor of ACM (each a "Mortgaged Property"), a
         title insurance policy insuring the lien created by such mortgage was
         effective on the date of ACM's financing of such Initial Asset, such
         policy is valid and remains in full force and effect, and, to the best
         of ACM's knowledge each such policy was issued by a title insurer
         qualified to do business in the jurisdiction where the applicable
         Mortgaged Property is located, which policy insures either ACM or the
         original holder of the Initial Asset as to the Lien of the Initial
         Asset; no claims have been made under such title insurance policy and
         no prior holder of the applicable Initial Asset, including ACM, has
         done, by act or omission, anything that would impair the coverage of
         such title insurance policy;

viii.    To the best of ACM's knowledge based upon its review of the related
         title insurance policy, each mortgage related to a Mortgaged Property
         (A) is properly recorded (or, if the mortgage related to such Mortgaged
         Property was created within 30 days prior to the date of this Agreement
         and is not yet recorded, the mortgage relating to such Mortgaged
         Property has been submitted for recording, is in form and substance
         acceptable for recording and, when properly recorded, will be
         sufficient under the laws of the jurisdiction wherein the Mortgaged
         Property is located to reflect record of the Lien of such Mortgaged
         Property) and the mortgage relating to the Mortgaged Property is a
         valid, continuing and enforceable lien (subject only to the matters

<PAGE>

         described in the next sentence) on the Mortgaged Property, including
         all improvements on the Mortgaged Property owned by the Obligor, all
         other fixtures on the Mortgaged Property owned by the Obligor and all
         additions, alterations and replacements made at any time with respect
         to the foregoing, and (B) provides for an assignment of leases and
         rents from the Mortgaged Property, or, if the related Initial Asset
         does not so provide, a separate assignment of mortgage was executed by
         the Obligor, was properly recorded (or, if such mortgage was created
         within 30 days prior to the date this Agreement and is not yet
         recorded, such mortgage has been submitted for recording, is in form
         and substance acceptable for recording and, when properly recorded,
         will be sufficient under the laws of the jurisdiction wherein the
         Mortgaged Property is located to reflect record of the Lien of such
         assignment) and creates a valid, existing and enforceable lien and
         security interest on the leases and rents from the related Mortgaged
         Property and other property described therein. The Lien on each
         Mortgaged Property is subject only to (1) the Lien of current real
         property taxes not yet due and payable, (2) covenants, conditions and
         restrictions, rights of way, easements and other matters of public
         record as of the date of recording that are acceptable to mortgage
         lending institutions generally, are specifically referred to in
         lender's title insurance policy delivered to ACM and are taken into
         account in determining, or do not materially adversely affect, the
         appraisal value of the Mortgaged Property, and (3) other matters to
         which like properties are commonly subject that do not materially
         interfere with the benefits of the security intended to be provided by
         such Initial Asset or the use, enjoyment, value or marketability of the
         related Mortgaged Property;

ix.      In the case of a Mortgaged Property, the security agreement, chattel
         mortgage or equivalent document delivered in connection with the
         Mortgaged Property establishes and creates a valid, continuing and
         enforceable Lien and security interest in all furniture, fixtures and
         equipment on or used in connection with the related Mortgaged Property
         and other property described therein. Either a Uniform Commercial Code
         financing statement has been filed and/or recorded in all places
         necessary to perfect a valid security interest in the personal property
         subject to the Lien of the Mortgaged Property or any separate security
         agreement, chattel mortgage or equivalent document or, in the case of a
         Mortgaged Property created within 30 days prior to the date of this
         Agreement, ACM has a right to file a Uniform Commercial Code financing
         statement with respect to the personal property subject to the Lien of
         such Mortgaged Property or any separate security agreement, chattel
         mortgage or equivalent document and upon such recordation and/or filing
         thereof in all necessary places, ACM will have a perfected and valid
         security interest in such personal property;

x.       There are no delinquent taxes or assessment liens against any Mortgaged
         Property;

<PAGE>

xi.      There are no mechanics' liens or initiation of a mechanics' lien
         affecting any Mortgaged Property, except those (A) that are insured
         against by a title insurance policy, (B) that are subordinate to the
         Lien of the related Initial Asset, if applicable or (C) the payments
         required for such work, labor or materials are not yet due and payable,
         or if due and payable and unpaid are the subject of a good faith
         contest;

xii.     To the best of ACM's knowledge based on the appraisal or engineering
         report produced at the origination of the Initial Asset, except to the
         extent that it was contemplated at the time of the origination of the
         Initial Asset that repairs, restorations and improvements would be made
         to the underlying property, each related property is in good repair and
         free of structural defects, damage, waste and defects in any
         mechanical, electrical, plumbing and safety systems therein that would
         materially and adversely affect the value of such related property, and
         there is no proceeding pending for the total or partial condemnation
         thereof. Except to the extent that it was contemplated at the time of
         the origination of the Initial Asset that repairs, renovations and
         improvements would be made to the building system and the related
         property, as applicable all building systems are in good working order
         subject to ordinary wear and tear. ACM inspected the related property
         in connection with the origination of the related to the Initial
         Assets;

xiii.    There is no material default, breach, violation or event of
         acceleration existing under the Initial Asset or the Initial Asset Note
         and no event that, with the passage of time, or with notice and the
         expiration of any grace or cure period, would constitute a material
         default, breach, violation or event of acceleration thereunder;

xiv.     Each Initial Asset and related Initial Asset Note is the legal, valid
         and binding obligation of the maker thereof, enforceable in accordance
         with its terms, subject to (A) applicable bankruptcy, insolvency,
         reorganization, moratorium and other laws affecting the enforcement of
         creditors' rights generally, and (B) general principles of equity,
         regardless of whether such enforcement is considered in a proceeding in
         equity or at law. All parties to each Initial Asset had legal capacity
         to execute such Initial Asset and related Initial Asset Note, and each
         Initial Asset has been duly and properly executed by such parties and
         constitutes a legal, valid and binding obligation of each party
         thereto, subject to (A) applicable bankruptcy, insolvency,
         reorganization, moratorium and other laws affecting the enforcement of
         creditors' rights generally, and (B) general principles of equity,
         regardless of whether such enforcement is considered in a proceeding in
         equity or at law;

xv.      Each Initial Asset contains customary and enforceable provisions that
         render the rights and remedies of the holder thereof adequate for the
         practical realization

<PAGE>

         against the applicable collateral securing the Initial Asset (the
         "Collateral") of the benefits of the security intended to be provided
         thereby;

xvi.     With respect to each Initial Asset constituting a deed of trust, a
         trustee, duly qualified under applicable law to serve as such, has been
         properly designated and currently so serves and is named in such
         Initial Asset, and no fees or expenses are or will become payable to
         the trustee under the deed of trust, except in connection with a
         trustee's sale after default by the Obligor;

xvii.    The improvements upon each property related to an Initial Asset are
         covered by a valid and existing hazard insurance policy with a
         generally acceptable carrier, which policy provides for fire, extended
         coverage and such other hazards as are customary in the area where the
         property related to an Initial Asset is located representing coverage
         not less than the outstanding principal balance of the related Initial
         Asset or the minimum amount required to compensate for damage or loss
         of the improvements thereon on a replacement cost basis, whichever is
         less. Such insurance policies contain a standard mortgagee clause
         naming, in the case of an Initial Asset, ACM and its successors in
         interest as mortgagee, and ACM has received no notice that any premiums
         due and payable thereon have not been paid; the related Initial Asset
         obligates the Obligor to maintain all such insurance at the Obligor's
         cost and expense, and upon the Obligor's failure to do so, authorizes
         the holder of such Initial Asset to obtain and maintain such insurance
         at the Obligor's cost and expense and to seek reimbursement therefor
         from the Obligor;

xviii.   If a property related to an Initial Asset is in an area identified in
         the Federal Register by the Federal Emergency Management Agency as
         having special flood hazards and if required by law, a flood insurance
         policy in a form meeting the requirements of the current guidelines of
         the Flood Insurance Administration is in effect with respect to such
         property with a generally acceptable carrier in an amount representing
         coverage not less than the least of (A) the outstanding principal
         balance of the related Initial Asset, (B) the minimum amount required
         to compensate for damages or loss on a replacement cost basis or (C)
         the maximum amount of insurance that is available under the Flood
         Disaster Protection Act of 1973;

xix.     When applicable, the Initial Asset File contains an appraisal of the
         property relating to the Initial Asset made and signed, prior to the
         approval of the application for the Initial Asset, by an appraiser,
         duly appointed by ACM, who had no interest, direct or indirect, in the
         property or in any Initial Asset made by the approval or disapproval of
         the Initial Asset, who, based on a review of the appraisal, was
         state-licensed or state certified (if required under the laws of the
         state in which the related property is located) at the time the
         appraisal was conducted and signed, who, to the knowledge

<PAGE>

         of ACM, is a member of and has a professional designation from a
         nationally recognized appraisal organization. Such appraisal states
         that the appraiser examined the property;

xx.      To the best of ACM's knowledge, no material misrepresentation, fraud or
         similar occurrence with respect to an Initial Asset has taken place on
         the part of any person involved in the origination of the Initial Asset
         or in the application of any insurance in relation to such Initial
         Asset;

xxi.     To the best of ACM's knowledge, if one or more commercial tenants lease
         a portion of a property related to a Initial Asset, each such tenant is
         conducting business only in that portion of such property covered by
         its space lease, except where improvements are being made to such
         space, all tenant improvements to be completed by Obligor under a lease
         have been completed, and the payment of rent under each lease has
         commenced. To the best of ACM's knowledge, no residential space lease,
         occupancy agreement or license agreement contains an option to
         purchase, right of first refusal to purchase, or any other similar
         provision that adversely affects the Initial Asset or that might
         adversely affect the rights of ARLP. Except as set forth on Schedule
         4(b)(xxi) hereto, no commercial space lease, occupancy agreement or
         license agreement contains an option to purchase, right of first
         refusal to purchase, or any other similar provision that adversely
         affects the Initial Asset or that might adversely affect the rights of
         ARLP. To ACM's actual knowledge, each property related to an Initial
         Asset is not subject to any lease other than the space leases described
         in the rent roll related to the Initial Asset, and no person has any
         possessory interest in, or right to occupy, such property except under
         and pursuant to such a space lease. Each such material space lease,
         occupancy agreement or license agreement is subordinate to the Initial
         Asset either pursuant to its terms or a recorded subordination
         agreement and contains a customary provision for termination for cause;

xxii.    To the best of ACM's knowledge, each property related to an Initial
         Asset is in all material respects in material compliance with and
         lawfully used, operated and occupied under applicable zoning and
         building laws or regulations, and ACM has not received notification
         from any governmental authority that any such property fails to comply
         with such laws or regulations, is being used, operated or occupied
         unlawfully or has failed to obtain or maintain any inspection, license
         or certificates material to the operation of such property;

xxiii.   To the best of ACM's knowledge, all material inspections, licenses and
         certificates required to be made or issued with respect to all occupied
         portions of the property related to an Initial Asset, with respect to
         the use and occupancy of the same,

<PAGE>

         including, but not limited to, certificates of occupancy and fire
         underwriting certificates, have been made or obtained from the
         appropriate authorities and the property is lawfully occupied under
         applicable law;

xxiv.    All of the material improvements that were included for the purpose of
         determining the appraisal value of a Mortgaged Property lie wholly
         within the boundaries and building restriction lines of such property,
         and no significant improvements on adjoining properties encroach upon
         the Mortgaged Property;

xxv.     When applicable, the related Initial Asset File contains a report (the
         "Assessment Report") of an environmental assessment made with respect
         to each property related to an Initial Asset by an independent
         qualified environmental professional who had no interest, direct or
         indirect, in such property or in any Initial Asset secured thereby, and
         whose compensation was not affected by the approval or disapproval of
         the Initial Asset. To the best of ACM's knowledge and except as
         disclosed in the Assessment Report in the Initial Asset File, each
         related property is in material compliance with all environmental laws,
         ordinances, rules, regulations and orders of federal, state or
         governmental authorities relating thereto.

xxvi.    To the best of ACM's knowledge and except as disclosed in the
         Assessment Report in the Initial Asset File, each related property of
         an Initial Asset is free from contamination from any hazardous
         materials and no hazardous materials have been used, stored or
         otherwise handled in any manner on, in from or affecting any related
         property except in compliance with all environmental laws. Neither ACM
         nor, to the best knowledge of ACM, any Obligor has received
         notification from any federal, state or other governmental authority
         relating to any hazardous materials on or affecting the related
         property or to any potential or known liability under any environmental
         law arising from the ownership or operation of a related property. For
         the purposes of this subsection, the term "hazardous materials" shall
         include, without limitation, gasoline, petroleum products, explosives,
         radioactive materials, polychlorinated biphenyls or related or similar
         materials, asbestos or any material containing asbestos, lead,
         lead-based paint, area formaldehyde insulation and any other substance
         or material as may be defined as a hazardous or toxic substance by any
         federal, state or local environmental law, ordinance, rule, regulation
         or order, including, without limitation, the Comprehensive
         Environmental Response, Compensation, and Liability Act, the Clean Air
         Act, the Clean Water Act, the Resource Conservation and Recovery Act,
         the Toxic Substances Control Act and any regulations promulgated
         pursuant thereto;

xxvii.   To the best of ACM's knowledge, there are no actions, suits or
         proceedings before any court, administrative agency or arbitrator
         concerning an Initial Asset or the

<PAGE>

         related Collateral that might materially and adversely affect (1) title
         to such Initial Asset, (2) the validity or enforceability thereof, (3)
         the value of the Collateral as security for the Initial Asset or (4)
         the marketability of such Collateral;

xxviii.  Except for Partners Portfolio Mezzanine Loan (as defined on Schedule
         A-2 hereto), none of the Initial Assets is cross-collateralized with
         any Initial Asset other than another Initial Asset;

xxix.    Each Initial Asset does not by its terms permit the repayment thereof
         for an amount less than the outstanding principal balance thereof plus
         accrued interest;

xxx.     No Obligor is, to ACM's actual knowledge, a debtor in any state or
         federal bankruptcy or insolvency proceeding;

xxxi.    With respect to each Initial Asset that is a Mezzanine Loan:

(1)      The first mortgage related to the Initial Asset permits such Mezzanine
         Loan and the related first mortgage lender has consented to the rights
         of the lender under the Mezzanine Loan, if such consent is required to
         be obtained pursuant to the documents securing the loan;

(2)      With the exception of 333 East 34th Street Mezzanine Loan and Partners
         Portfolio Mezzanine Loan (each as defined on Schedule A-2 hereto), each
         Mezzanine Loan is directly secured by the pledge (the "Pledge
         Agreement") of all of the equity interest in the related Obligor. Each
         Pledge Agreement has been duly authorized, executed and delivered by
         each of the parties thereto and is a legal, valid and binding
         obligation of each of the parties thereto, subject to (A) applicable
         bankruptcy, insolvency, reorganization, moratorium and other laws
         affecting the enforcement of creditors' rights generally and (B)
         general principles of equity, regardless of whether such enforcement is
         considered a proceeding in equity or at law; and

(3)      Each related Pledge Agreement creates a valid, first priority security
         interest in the entire equity interest in the related mortgagor.

xxxii.   With respect to each Preferred Equity Holder:

(1)      Each Preferred Equity Holder is duly formed, validity existing and in
         good standing under the laws of their respective jurisdiction of
         formation;

(2)      Each Preferred Equity Interest owned by each Preferred Equity Holder is
         owned by such Preferred Equity Holder free and clear of any and all
         Liens, except for the right, title, interest, lien and security
         interest of (A) [*]

The material marked [*] has been omitted pursuant to a request for confidential
treatment by Arbor Realty Trust, Inc. and has been filed separately with the
Securities and Exchange Commission.


<PAGE>
         under the Warehousing Credit Facility, (B) [*] under the [*] Repurchase
         Agreement, and (C) [*] under the [*] Repurchase Agreement; and

(3)      Each Preferred Equity Holder is entitled to receive preferred
         distributions under and in accordance with the terms of the operating
         agreement for the entity in which such Preferred Equity Holder holds
         such Preferred Equity Interest.

xxxiii.  No Preferred Equity Holder has (A) made a general assignment for the
         benefit of creditors, (B) filed any voluntary petition in bankruptcy or
         suffered the filing of any involuntary petition by its creditors, (C)
         suffered the appointment of a receiver to take possession of all, or
         substantially all, of its assets, (D) suffered the attachment or other
         judicial seizure of all, or substantially all, of its assets, (E)
         admitted in writing its inability to pay its debts as they come due, or
         (F) made an offer of settlement, extension or composition to its
         creditors generally.

xxxiv.   Each Preferred Equity Holder and each entity controlled directly or
         indirectly by a Preferred Equity Holder (collectively the "Entities")
         is, and at all times during its existence has been, a partnership or
         limited liability company classified as a partnership (rather than an
         association or a publicly traded partnership taxable as a corporation)
         for federal income tax purposes, except for any Entity with respect to
         which an election to be treated as a taxable REIT subsidiary ("TRS")
         has been or will be made effective for all periods following the
         Closing, or which has been or will be contributed to a TRS. To the best
         of ACM's knowledge, each Entity has timely, including extensions, filed
         all material tax returns required to be filed by it and has timely,
         including extensions, paid all material taxes required to be paid by it
         and none of the tax returns filed by any of the Entities is the subject
         of a pending or ongoing audit, and no federal, state, location or
         foreign taxing authority has asserted any material tax deficiency or
         other assessment in writing against any Entity or any property of any
         Entity.

5.       Representations and Warranties of ARLP. ARLP hereby represents and
         warrants to ACM as follows:

a.       ARLP is duly organized, validly existing and in good standing under the
         laws of the State of Delaware;

The material marked [*] has been omitted pursuant to a request for confidential
treatment by Arbor Realty Trust, Inc. and has been filed separately with the
Securities and Exchange Commission.
<PAGE>

b.       ARLP 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;

c.       This Agreement, assuming due authorization, execution and delivery by
         ACM, constitutes a valid, legal and binding obligation of ARLP,
         enforceable against ARLP in accordance with the terms hereof, subject
         to (A) applicable bankruptcy, insolvency, reorganization, moratorium
         and other laws affecting the enforcement of creditors' rights
         generally, (B) general principles of equity, regardless of whether such
         enforcement is considered in a proceeding in equity or at law and (C)
         public policy considerations underlying the securities laws, to the
         extent that such public policy considerations limit the enforceability
         of the provisions of this Agreement that purport to provide
         indemnification for securities laws liabilities; and

d.       ARLP is not in violation of, and its execution and delivery of this
         Agreement and its performance of, and compliance with, the terms of
         this Agreement will not constitute a violation of, any law, any order
         or decree of any court or arbiter, or any order, regulation or demand
         of any federal, state or local governmental or regulatory authority,
         which violation, in ARLP 's good faith and reasonable judgment, is
         likely to affect materially and adversely either the ability of ARLP to
         perform its obligations under this Agreement or the financial condition
         of ARLP.

6.       Investment Representations and Warranties. ACM hereby represents and
         warrants to ART and ARLP as follows:

a.       The Partnership Units and the Warrants to be acquired by ACM are being
         acquired for ACM's own account with the present intention of holding
         such interests for purposes of investment, and ACM has no intention of
         selling such interests in a public distribution, and the Partnership
         Units and the Warrants will not be disposed of in contravention of the
         Securities Act of 1933, as amended (the "Act"), or any applicable state
         securities laws. No other person will have any direct or indirect
         (other than through the ownership of a direct or indirect interest in
         ACM) beneficial interest in or right to the Partnership Units or
         Warrants purchased hereunder;

b.       ACM understands that the Partnership Units and Warrants have not been
         registered under the Act or any state securities laws by reason of
         specific exemptions under the provisions thereof, the availability of
         which depend in part upon the bona fide nature of ACM's investment
         intent and upon the accuracy of ACM's representations made in this
         Section 6. ACM understands that the Partnership Units and the Warrants
         have not been approved or disapproved by the Securities and Exchange
         Commission or by any other federal or state agency. ACM understands
         that ARLP is relying upon the

<PAGE>

         representations and agreements contained in this Section 6 for the
         purpose of determining whether this transaction meets the requirements
         for such exemptions under the Act and any state securities laws;

c.       ACM understands that the Partnership Units and Warrants are "restricted
         securities" under the applicable federal securities laws and that the
         Securities Act and the rules of the Securities and Exchange Commission
         provide in substance that ACM may dispose of the Partnership Units and
         the Warrants only pursuant to an effective registration statement under
         the Securities Act or an exemption therefrom, and ACM understands that
         ARLP has no current obligation or intention to register the Partnership
         Units or the Warrants. ACM also understands that no public market
         exists for any of the securities issued by ARLP and that ARLP has no
         obligation to ensure that a broad public market will exist for
         securities of ARLP. Accordingly, ACM understands that under the rules
         of the Securities and Exchange Commission, ACM may only dispose of the
         Partnership Units and the Warrants in transactions that are exempt from
         registration under the Act. As a consequence of all of the foregoing,
         ACM understands that it must bear the economic risk of the investment
         in the Partnership Units and the Warrants for an indefinite period of
         time;

d.       ACM is an "accredited investor "as that term is defined in Rule 501(a)
         under the Act. ACM was not formed solely for making an investment in
         the Partnership Units or Warrants. ACM acknowledges that an investment
         in the Partnership Units and the Warrants is not recommended for
         investors who have any need for a current return on this investment or
         who cannot bear the risk of losing their entire investment. ACM
         acknowledges that: (i) it has adequate means of providing for its
         current needs and has no need for liquidity in this investment; (ii) it
         is able to bear the economic risk of this investment; (iii) it is able
         to hold the Partnership Units and the Warrants indefinitely; and (iv)
         it is able to afford a complete loss of this investment;

e.       ACM either (i) has a preexisting personal or business relationship with
         ARLP or (ii) by reason of its business or financial experience, or by
         reason of the business or financial experience of its financial advisor
         who is unaffiliated with and who is not compensated, directly or
         indirectly, by ARLP or any affiliate or selling agent of ARLP, ACM is
         capable of evaluating the risks and merits of an investment in the
         Partnership Units and the Warrants and of protecting its own interests
         in connection with the investment and investment commitment pursuant to
         this Agreement; and

f.       ACM has been given the opportunity to perform its own due diligence,
         investigation of the business, operations, assets, liabilities and
         financial condition of ARLP, including access to the records and books
         of ARLP. ACM has had an opportunity to

<PAGE>

         ask questions of and receive answers from ARLP concerning the business
         and assets of ARLP in a manner deemed appropriate by ACM.

7.       Survival of Representations, Warranties and Covenants. All
         representations, warranties and covenants contained in this Agreement
         shall survive the Closing. Upon discovery by any of the parties hereto
         of a breach of any of the representations and warranties set forth in
         Sections 4, 5 and 6 that materially and adversely affects the interests
         of the other parties hereto, the party discovering such breach shall
         give prompt written notice to the other party hereto.

8.       Indemnity.

a.       ACM hereby agrees to indemnify and hold ART and ARLP harmless from and
         against any and all damage, expense, loss, cost, claim or liability
         (each a "Claim") suffered or incurred by ART and ARLP as a result of
         any untruth or inaccuracy in any of the representations or warranties
         made by ACM in Sections 4 and 6 of this Agreement;

b.       Scope of Indemnity. Notwithstanding anything to the contrary otherwise
         provided in this Agreement:

i.       No indemnity shall be available under Section 8(a) until the
         indemnifiable Claims against ACM exceed the total amount of $200,000,
         except in the case of Claims arising under breaches of any
         representations or warranties in Section 4(a)(ii), Section 4(b)(ii),
         Section 4(b)(x), Section 4(b)(xxxii), Section 4(b)(xxxiv) or Section 6
         (for purposes of determining whether the $200,000 threshold amount has
         been met, any qualification or limitation of a representation or
         warranty by reference to the materiality of matters stated herein
         having or not having a material adverse effect or words of similar
         effect shall be disregarded);

ii.      Except in the case of fraud, the indemnification set forth in Section
         8(a) shall be limited to an amount equal to the value of the
         Partnership Units received by ACM on the date hereof;

iii.     The indemnification set forth in Section 8(a) shall only extend to any
         Claim of which written notice has been given within twelve months
         following the Closing, except with respect to Claims arising under (A)
         Section 4(b)(xxv) and Section 4(b)(xxvi), for which written notice has
         been given within thirty-six months following the Closing, (B) Section
         4(b)(x) and Section 4(b)(xxxiv), for which written notice has been
         given within the applicable statute of limitations following the
         Closing, and (C) Section 4b(ii), Section 4(b)(xxxii) and Section 6; and

<PAGE>

c.       Notice to ACM. Each of ART and ARLP shall give prompt written notice to
         ACM as to the assertion of any Claim, or the commencement of any Claim.
         The omission of either of ART or ARLP to notify ACM of any such Claim
         shall not relieve ACM from any liability in respect of such Claim that
         it may have to either of ART or ARLP on account of this Agreement nor
         shall it relieve ACM from any other liability that it may have to
         either of ART or ARLP, provided, however, that ACM shall be relieved of
         liability to the extent that the failure so to notify (a) shall have
         caused prejudice to the defense of such claim, or (b) shall have
         increased the costs or liability of ACM by reason of the inability or
         failure of ACM (because of the lack of prompt notice from either of ART
         or ARLP) to be involved in any investigations or negotiations regarding
         any such claim. In case any such claim shall be asserted or commenced
         against either of ART or ARLP and it shall notify ACM thereof, ACM
         shall be entitled to participate in the negotiation or administration
         thereof and, to the extent it may wish, to assume the defense thereof
         with counsel reasonably satisfactory to the party against which such
         Claim was initially asserted or commenced, and, after notice from ACM
         to the party against which such Claim was initially asserted or
         commenced of its election so to assume the defense thereof, which
         notice shall be given within 15 days of its receipt of such notice from
         the party against which such Claim was initially asserted or commenced,
         ACM will not be liable to the party against which such Claim was
         initially asserted or commenced hereunder for any legal or other
         expenses subsequently incurred by the party against which such Claim
         was initially asserted or commenced in connection with the defense
         thereof other than reasonable costs of investigation. ACM shall not
         settle any claim without the written consent of the party against which
         such Claim was initially asserted or commenced, which consent shall not
         be unreasonably withheld or delayed.

9.       Covenants.

         ACM hereby agrees to provide ARLP with a limited guaranty with respect
         to the 130 West 30th Street Bridge Loan (as defined on Schedule A-1
         hereto), 333 East 34th Street Mezzanine Loan and the Central Jersey
         Mezzanine Loan (each as defined on Schedule A-2 hereto) and the
         Preferred Equity Interest held by ANMB Holdings, LLC (as described on
         Schedule C hereto), pursuant to a Guaranty, made by ACM in favor of
         ARLP, substantially in the form of Exhibit B;

10.      Specific Performance. ACM and ARLP acknowledge that damages would be an
         inadequate remedy for any breach of the provisions of this Agreement
         and agree that the obligations of the parties hereunder shall be
         specifically enforceable.

<PAGE>

11.      Expenses. Whether or not the Closing occurs, all costs and expenses
         incurred in connection with this Agreement and the transactions
         contemplated hereby shall be paid by ACM.

12.      Further Assurances. From time to time following the Closing, ACM shall
         execute and deliver, or cause to be executed and delivered, to ARLP
         such other documents or instruments of conveyance and transfer as ARLP
         may reasonably request or as may be otherwise necessary to more
         effectively convey and transfer to, and vest in, ARLP, the ACM Initial
         Assets, the ANMB II Membership Interests, the Membership Interests and
         the Liabilities, or in order to fully effectuate and to implement the
         purposes, terms and provisions of this Agreement. To the extent that
         hereafter ACM receives any payments in respect of the Initial Assets or
         the Membership Interests on or after the date of the Closing, ACM shall
         forward the same to ARLP within five (5) business days.

13.      Entire Agreement: No Other Representations. Except as expressly agreed
         in a separate writing signed by the parties hereto on or after the date
         of this Agreement, this Agreement constitutes the entire agreement, and
         supersedes all other prior agreements and understandings, both written
         and oral, between the parties, with respect to the subject matter
         hereof. Except as set forth herein, ACM makes no representation,
         express or implied, with respect to the Initial Assets or the
         Membership Interests or the enforceability, collectability, suitability
         or value thereof.

14.      Severability. The provisions of this Agreement shall be deemed
         severable and the invalidity or unenforceability of any provision shall
         not affect the validity or enforceability of the other provisions
         hereof. If any provision of this Agreement, or the application thereof
         to any person or entity or any circumstance, is invalid or
         unenforceable (a) a suitable and equitable provision shall be
         substituted therefor in order to carry out, so far as may be valid and
         enforceable, the intent and purpose of such invalid or unenforceable
         provision and (b) the remainder of this Agreement and the application
         of such provision to other persons or entities or circumstances shall
         not be affected by such invalidity or unenforceability, nor shall such
         invalidity or unenforceability affect the validity or enforceability of
         such provision, or the application thereof, in any other jurisdiction.

15.      Interpretation. The section references and headings herein are for
         convenience of reference only, do not constitute part of this Agreement
         and shall not be deemed to limit or otherwise affect any of the
         provisions hereof.

16.      Successors and Assigns. This Agreement shall be binding upon and inure
         to the benefit of the parties hereto and their successors and assigns.
         ARLP shall have the

<PAGE>

         right to assign its rights under this agreement as respects any ACM
         Initial Asset, the ANMB II Membership Interests or any of the
         Membership Interests to any purchaser of such ACM Initial Asset the
         ANMB II Membership Interests or any of the Membership Interests Nothing
         in this Agreement, expressed or implied, is intended or shall be
         construed to confer upon any person or entity other than the parties
         and their successors and assigns any right, remedy or claim under or by
         reason of this Agreement.

17.      Counterparts. This Agreement may be executed in one or more
         counterparts, each of which shall be deemed to be an original but all
         of which shall constitute one instrument.

18.      Choice of Law. THIS AGREEMENT AND THE RIGHTS OF THE PARTIES HEREUNDER
         SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
         STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES GOVERNING CONFLICTS OF
         LAWS.

<PAGE>

                           IN WITNESS WHEREOF, the parties hereto have executed
         this Agreement as of the date first above written.

                                         ARBOR COMMERCIAL MORTGAGE, LLC

                                         By: /s/ Frederick C. Herbst
                                             ---------------------------
                                             Name: Frederick C. Herbst
                                             Title: Chief Financial Officer

                                         ARBOR REALTY TRUST, INC.

                                         By: /s/ Frederick C. Herbst
                                             ---------------------------
                                             Name: Frederick C. Herbst
                                             Title: Chief Financial Officer

                                         ARBOR REALTY LIMITED PARTNERSHIP

                                         By: Arbor Realty GPOP, Inc.,
                                             its General Partner

                                             By: /s/ Frederick C. Herbst
                                                 -----------------------------
                                                 Name: Frederick C. Herbst
                                                 Title: Secretary and Treasurer

<PAGE>

                                  SCHEDULE A-1

                                  BRIDGE LOANS

"1025 5th Avenue Bridge Loan" means the bridge loan evidenced by the Promissory
Note, dated as of October 10, 2002, by Adam C. Hochfelder and Amy M. Hochfelder
in favor of Arbor Commercial Mortgage, LLC.

"130 West 30th Street Bridge Loan" means the bridge loan evidenced by the
Amended, Consolidated and Restated Promissory Note, dated as of September 20,
2001 by 130 West 30th, LLC in favor of Arbor Commercial Mortgage, LLC.

"Concord and Henry Bridge Loan" means the bridge loan evidenced by the
Promissory Note, dated April 3, 2003, by Henry Terrace, LLC and 100 Concord St.,
LLC in favor of Arbor Commercial Mortgage, LLC.

"Dylan Hotel Bridge Loan" means the bridge loan evidenced by the Amended and
Restated Mortgage Note, dated as of March 31, 2003, by Grand Palace Hotel at the
Park LLC in favor of Arbor Commercial Mortgage, LLC, subject to all right, title
and interest of BD Hotels, LLC ("BD") to a certain amount of the principal and
interest payments due on Dylan Hotel Bridge Loan and such other rights, title
and interests of BD with respect to the Dylan Hotel Bridge Loan, each as granted
by ACM to BD pursuant to the Participation Agreement, dated as of April 8, 2003
between Arbor Commercial Mortgage, LLC and BD.

"Emerald Bay Bridge Loan" means the bridge loan evidenced by the Promissory
Note, dated as of May 14, 2003, by Empirian Bay LLC in favor of Arbor Commercial
Mortgage, LLC, subject to all right, title and interest of RFC to a certain
amount of the principal and interest payments due on Emerald Bay Bridge Loan and
such other rights, title and interests of [*] with respect to the Emerald Bay
Bridge Loan, each as granted by ACM to [*] pursuant to the Participation
Agreement, dated as of May 14, 2003 between Arbor Commercial Mortgage, LLC and
[*].

"Grand Plaza Bridge Loan" means the bridge loan evidenced by the Promissory
Note, dated as of November 27, 2002, by Grand Plaza Limited Partnership in favor
of Arbor Commercial Mortgage, LLC.

"Holiday Inn - Deland Bridge Loan" means the bridge loan evidenced by the
Promissory Note, dated as of March 31, 2000 by Hospitality Associates of Deland
Florida, Ltd., in favor of Arbor National Commercial Mortgage, LLC.


The material marked [*] has been omitted pursuant to a request for confidential
treatment by Arbor Realty Trust, Inc. and has been filed separately with the
Securities and Exchange Commission.
<PAGE>

"NHP Bridge Loan" means the bridge loan evidenced by the Promissory Note, dated
as of February 27, 2003, by NSH Affordable Housing of Indiana, Inc. in favor of
Arbor Commercial Mortgage, LLC.

"Palmetto Villas Bridge Loan" means the bridge loan evidence by the Promissory
Note, dated as of May 7, 2003, by Palmetto Villas Investors, LLC in favor of
Arbor Commercial Mortgage, LLC.

"Partners Portfolio Bridge Loan" means the bridge loan evidenced by the
Promissory Note with respect to Tranch A, dated as of April 30, 2003, by SRH/LA
Chesapeake Apartments, L.P., SRH/LA Nottingham, LLC, SRH/LA Hunter, LLC, SRH/LA
Melvin, LLC in favor of Arbor Commercial Mortgage, LLC.

"Tropical Gardens Bridge Loan" means the bridge loan evidenced by the Promissory
Note, dated as of December 20, 2002, by NHP Tropical Gardens Limited Partnership
in favor of Arbor Commercial Mortgage, LLC.

"Vermillion Apartments Bridge Loan" means the bridge loan evidenced by the
Promissory Note, dated as of September 24, 2002, by SRH Vermillion Limited
Partnership in favor of Arbor Commercial Mortgage, LLC.

<PAGE>

                                  SCHEDULE A-2

                                 MEZZANINE LOANS

"333 East 34th Street Mezzanine Loan" means the mezzanine loan evidenced by the
Promissory Note by 333 East 34th, LLC, dated as of January 9, 2002, in favor of
Arbor Commercial Mortgage, LLC.

"Carlton Arms Mezzanine Loan" means the mezzanine loan evidenced by the
Promissory Note, dated as of November 14, 2001, by Carlton Arms, LLC and HRA
Egypt Lake, Inc. in favor of Arbor Commercial Mortgage, LLC.

"Partners Portfolio Mezzanine Loan" means the mezzanine loan evidenced by the
Promissory Note with respect to Tranch B, dated as of April 30, 2003, by SRH/LA
Chesapeake Apartments, L.P., SRH/LA Nottingham, LLC, SRH/LA Hunter, LLC, SRH/LA
Melvin, LLC in favor of Arbor Commercial Mortgage, LLC.

"Turtle Creek Apartments Mezzanine Loan" means the mezzanine loan evidenced by
the Promissory Note, dated as of October 7, 2002, by Turtle Creek Development,
L.P. in favor of Arbor Commercial Mortgage, LLC.

<PAGE>

                                  SCHEDULE A-3

                                   OTHER LOANS

"Albion Loan" means the loan evidenced by the Severed Promissory Note B, dated
as of March 14, 2001, by Albion Associates, Ltd. in favor of Mezzobridge Funding
LLC, and assigned to Arbor Commercial Mortgage LLC as of July 31, 2001.

"Ornstein Loan" means the loan evidenced by the Multifamily Note, dated as of
August 31, 1995, by and between Ornstein 215-217 East 86 LLC and Arbor National
Commercial Mortgage Corporation.

<PAGE>

                                  SCHEDULE A-4

"Central Jersey Mezzanine Loan" means the mezzanine loan evidenced by the
Promissory Note made as of August 1, 2002 by Central Jersey Sub VI LLC and
Central Jersey Sub VII LLC in favor of ANMB II, as amended by (1) the
Modification of Promissory Note and Other Loan Documents and Assumption and
Reaffirmation, made as of October 31, 2002, by and among Central Jersey Sub VII
LLC, Central Jersey Sub VIII LLC, Central Jersey Prime III LLC, Livingston
Terrace L.L.C., Highland Montgomery L.L.C., Rubin Schron, David Lichtenstein,
Joseph Tabak and Jersey Central Management, L.L.C. and ANMB II and (2) the
Second Modification of Promissory Note and Other Loan Documents and
Reaffirmation, dated as of May 9, 2003, by and among Central Jersey Sub VII LLC,
Central Jersey Sub VIII LLC, Central Jersey Prime III LLC, Livingston Terrace
L.L.C., Highland Montgomery L.L.C., Rubin Schron, David Lichtenstein, Joseph
Tabak and Jersey Central Management, L.L.C. and ANMB II.

<PAGE>

                                   SCHEDULE B

                            PREFERRED EQUITY HOLDERS

1.       ANMB Holdings, LLC, a wholly-owned subsidiary of ACM and the holder of
         100% of the preferred interests in Central Jersey Prime Holdings LLC,
         pursuant to the Limited Liability Company Agreement of Central Jersey
         Prime Holdings LLC, dated as of May 9, 2003, by and among Central
         Jersey LLC, ANMB Holdings, LLC, Arbor National CJ LLC, TRAC Central
         Jersey LLC and CAM Jersey LLC.

2.       Arbor Park Place LLC, a wholly-owned subsidiary of ACM and holder of
         18% of the membership interest in Santa Ana Park Place Associates LLC,
         pursuant to the Operating Agreement of Santa Ana Park Place Associates
         LLC, dated as of January 8, 2002, by and among Santa Ana Park Place
         Corp., Hanover Financial Company and Arbor Park Place LLC.

3.       Arbor Devonshire, LLC, a wholly-owned subsidiary of ACM and holder of
         100% of the preferred interests of Merchant Devonshire Limited
         Partnership, pursuant to the Amended and Restated Limited Partnership
         Agreement of Merchant Devonshire Limited Partnership, dated as of
         December 23, 1998 (the "Devonshire LP Agreement"), by and among Third
         Merchant Investors Corp., Arbor Devonshire, LLC and First Merchants
         Group Limited Partnership, as amended by Amendment No. 1 to the
         Devonshire LP Agreement, dated as of May 30, 2000, Amendment No. 2 to
         the Devonshire LP Agreement, dated as of January 1, 2002 and Amendment
         No. 3 to the Devonshire LP Agreement, dated as of January 1, 2003.

4.       Arbor Texas CDS, LLC, a wholly-owned subsidiary of ACM and holder of
         100% of the Class C Partnership Units of CDS-Texas Investors, L.P.,
         pursuant to the Amended and Restated Agreement of Limited Partnership
         of CDS-Texas Investors, L.P., dated as of January 1, 2003, by and among
         Daniel R. Stanger, Christian V. Young, Dean A. Allara, Skyline Property
         Associates II, L.P. and Arbor Texas CDS, LLC.

5.       ACM Gateway, LLC, a wholly-owned subsidiary of ACM and holder of 100%
         of the preferred interests of BP-CO 4 Property Associates, LLC,
         pursuant to the Limited Liability Company Agreement of BP-CO 4 Property
         Associates, LLC, dated as of February 8, 2002, by and among BP Villages
         Management, Inc, ACM Gateway, LLC and other junior members.

<PAGE>

                                   SCHEDULE C

                           PREFERRED EQUITY INTERESTS

1.       100% of the preferred interests, held by Arbor Devonshire, LLC, a
         wholly owned subsidiary, of Merchant Devonshire Limited Partnership as
         evidenced by the Amended and Restated Limited Partnership Agreement of
         Merchant Devonshire Limited Partnership, entered into as of January 17,
         2002, by and among Third Merchant Investors Corp., Arbor Devonshire LLC
         and First Merchants Group Limited Partnership.

2.       100% of the Class C Partnership Units of CDS-Texas Investors, L.P.,
         held by Arbor Texas CDS, LLC, a wholly owned subsidiary, as evidenced
         by the Amended and Restated Agreement of Limited Partnership of
         CDS-Texas Investors, L.P., by and among Daniel R. Stanger, Christian V.
         Young, Dean A. Allara, Skyline Property Associates II, L.P. and Arbor
         Texas CDS, LLC.

3.       100% of the preferred interests of Central Jersey Prime Holdings, LLC,
         held by ANMB Holdings, LLC, as evidenced by the Limited Liability
         Company Agreement of Central Jersey Prime Holdings, LLC, dated as of
         May 9, 2003, by and among Central Jersey LLC, ANMB Holdings, LLC, Arbor
         National CJ LLC, TRAC Central Jersey LLC and CAM Jersey LLC.

4.       18% of the membership interests in Santa Ana Park Place Associates LLC,
         held by Arbor Park Place, LLC, and evidenced by the Operating Agreement
         of Santa Ana Park Place Associates LLC, dated as of January 8, 2002, by
         and among Santa Ana Park Place Corp., Hanover Financial Company and
         Arbor Park Place LLC;

5.       100% of the preferred interests of BP-CO 4 Property Associates, LLC
         held by ACM Gateway, LLC and evidenced by the Limited Liability Company
         Agreement of BP-CO 4 Property Associates, LLC, effective as of February
         8, 2002, by and among BP Villages Management, Inc, ACM Gateway, LLC and
         other junior members.

<PAGE>

                                                              SCHEDULE 4(b)(XXI)

         None.

<PAGE>

                                                                       EXHIBIT A

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

         This ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as July 1, 2003, is
executed and delivered, by and between Arbor Commercial Mortgage, LLC, a
Delaware limited liability company ("ACM") and Arbor Realty Limited Partnership,
a Delaware limited partnership ("ARLP"), pursuant to that certain Contribution
Agreement dated as of July 1, 2003 (the "Contribution Agreement"), by and among
ACM, Arbor Realty Trust, Inc., a Maryland corporation ("ART") and ARLP.

                                    RECITALS

         WHEREAS, pursuant to the Contribution Agreement, ARLP has agreed to
transfer the Partnership Units and the Warrants to ACM in exchange for the
Contributed Assets, upon the terms and conditions specified in the Contribution
Agreement.

         Capitalized terms used herein but not otherwise defined herein shall
have the meanings ascribed thereto in the Contribution Agreement.

         NOW, THEREFORE, in consideration of the promises contained in the
Contribution Agreement and for other good and valuable consideration, ARLP and
ACM agree as follows:

1.   ACM does hereby transfer, convey, assign and deliver to ARLP, and ARLP
     hereby accepts from ACM, all of the rights, title and interests of ACM in,
     to and under the ACM Initial Assets (including all promissory notes,
     security agreements, guarantees and other agreements that evidence or
     secure such ACM Initial Assets), in each case to have and hold unto ARLP,
     its successors and assigns forever.

2.   ACM does hereby transfer, convey, assign and deliver to ARLP, and ARLP
     hereby accepts from ACM, (a) 100% of the Membership Interests of each of
     the Preferred Equity Holders of the Preferred Equity Interests and (b) 100%
     of the ANMB II Membership Interests, in each case to have and hold unto
     ARLP, its successors and assigns forever.

3.   ARLP hereby assumes all of the liabilities and agrees to perform any and
     all duties and obligations of ACM under the documents that evidence or
     otherwise

<PAGE>

     govern the rights and obligations of ACM with respect to the liabilities
     and under any agreement referred to paragraph 1, with respect to the ACM
     Initial Assets.

4.   The terms and provisions of this Assignment and Assumption Agreement shall
     be binding upon and inure to the benefit of the parties and their
     respective successors and assigns.

5.   This Assignment and Assumption Agreement shall be governed by and construed
     in accordance with the laws of the State of New York without giving effect
     to principles governing conflicts of laws.

<PAGE>

IN WITNESS WHEREOF, each of ARLP and ACM have caused this Assignment and
Assumption Agreement to be duly executed and attested to by its officer hereunto
duly authorized as of the day and year first above written.

                                       ARBOR COMMERCIAL MORTGAGE, LLC

                                       By: _________________________
                                       Name: Frederick C. Herbst
                                       Title: Chief Financial Officer

                                       ARBOR REALTY LIMITED PARTNERSHIP

                                       By: Arbor Realty GPOP, Inc.,
                                           its General Partner

                                           By: _________________________
                                               Name: Frederick C. Herbst
                                               Title: Secretary and Treasurer

<PAGE>

                                                                       EXHIBIT B

                                    GUARANTY

                  This GUARANTY (this "Guaranty"), dated as of July 1, 2003, is
by Arbor Commercial Mortgage, LLC, a New York limited liability company ("ACM"),
ACM 34th Street, LLC, a Delaware limited liability company and a wholly-owned
subsidiary of ACM ("ACM 34th"), Arbor 30th LLC, a New York limited liability
company and a wholly-owned subsidiary of ACM ("Arbor 30th"), Arbor National CJ
LLC, a New York limited liability company and a wholly-owned subsidiary of ACM
("CJ") and Arbor National CJ II, LLC, a New York limited liability company and a
wholly-owned subsidiary of ACM ("CJ II", and together with ACM 34th, Arbor 30th
and CJ, the "Subsidiary Guarantors"), in favor of Arbor Realty Limited
Partnership, a Delaware limited partnership ("ARLP"), ANMB Holdings, LLC, a New
York limited liability company ("ANMB") and ANMB Holdings II, LLC, a New York
limited liability company ("ANMB II").

                               W I T N E S S E T H

                  WHEREAS, pursuant to the terms of that certain contribution
agreement (the "Contribution Agreement"), dated as of July 1, 2003 (the
"Contribution Date"), by and among ACM, Arbor Realty Trust, Inc., a Maryland
corporation ("ART") and ARLP (capitalized terms used but not defined herein have
the meanings assigned to them in the Contribution Agreement), ACM has agreed to
contribute (i) the ACM Initial Assets, (ii) ACM's membership interests in ANMB
II, the original lender under the Central Jersey Mezzanine Loan, and (iii) the
Membership Interests of the Preferred Equity Holders of the Preferred Equity
Investments to ARLP, collectively, in exchange for the Partnership Units and the
Warrants;

         WHEREAS, each of the 333 East 34th Street Mezzanine Loan, the 130 West
30th Street Bridge Loan and the Central Jersey Mezzanine Loan (collectively, the
"Guaranteed Loans") are Initial Assets;

         WHEREAS, ANMB is a Preferred Equity Holder in that it holds 100% of the
preferred interests of Central Jersey Prime Holdings, LLC (the "Guaranteed
Preferred Equity Investment" and together with the Guaranteed Loans, the
"Guaranteed Investments");

<PAGE>

         WHEREAS, ACM 34th holds a 15% Percentage Interest (as defined in the
Operating Agreement of 333 East 34th, LLC) in 333 East 34th, LLC, the borrower
under the 333 East 34th Street Mezzanine Loan;

         WHEREAS, Arbor 30th holds a 50% Percentage Interest (as defined in the
Operating Agreement of 130 West 30th, LLC) in 130 West 30th, LLC, the borrower
under the 130 West 30th Street Bridge Loan;

         WHEREAS, CJ II holds a 18% Sharing Percentage (as defined in the
Operating Agreement of Central Jersey Prime III LLC) in Central Jersey Prime III
LLC, the managing member of the borrower under the Central Jersey Mezzanine
Loan;

         WHEREAS, CJ holds a 18% Junior Interest (as defined in the Operating
Agreement of Central Jersey Prime Holdings LLC) in Central Jersey Prime Holdings
LLC; and

                  WHEREAS, ACM and the Subsidiary Guarantors (together, the
"Guarantors") desire to provide ARLP, ANMB and ANMB II with a limited guaranty
of (i) the repayment of a certain portion of the principal balance of each of
the Guaranteed Loans and (ii) the repurchase of a certain portion of the
preferred capital contribution of ANMB in Central Jersey Prime Holdings LLC.

                  NOW, THEREFORE, in consideration of the foregoing and the
covenants and obligations set forth in this Guaranty, the parties hereto agree
as follows:

1.       Definitions. The following terms, as used in this Guaranty, shall have
         the following meanings (unless otherwise expressly provided herein):

         "130 West 30th Street Note" means the Amended, Consolidated and
         Restated Promissory Note made as of September 20, 2001 by 130 West
         30th, LLC in favor of ACM.

         "130 West 30th Operating Agreement" means the Operating Agreement of
         130 West 30th, LLC, dated as of September 20, 2001, by and between H.J.
         Development, LLC and Arbor 30th.

         "333 East 34th Street Note" means the Promissory Note made as of
         January 9, 2002 by 333 East 34th, LLC in favor of ACM.

<PAGE>

         "333 East 34th Operating Agreement" means the Operating Agreement of
         333 East 34th, LLC, dated as of June 19, 2001, by and among ACM 34th,
         East 34th Street Management, LLC and 333 East 34th Street, LLC.

         "Central Jersey Mezzanine Operating Agreement" means the Operating
         Agreement of Central Jersey Prime III LLC, dated as of July 12, 2000,
         by and among Central Jersey LLC, ANMB II, TRAC Central Jersey II LLC
         and CJ II, as amended by the Amendment to Operating Agreement, dated as
         of August 1, 2002 and the Amendment to Operating Agreement, dated as of
         May 9, 2003.

         "Central Jersey Note" means the Promissory Note made as of August 1,
         2002 by Central Jersey Sub VI LLC and Central Jersey Sub VII LLC in
         favor of ANMB II, as amended by (1) the Modification of Promissory Note
         and Other Loan Documents and Assumption and Reaffirmation, made as of
         October 31, 2002, by and among Central Jersey Sub VII LLC, ANMB II and
         the other parties thereto and (2) the Second Modification of Promissory
         Note and Other Loan Documents and Reaffirmation, made as of May 9,
         2003, by and among Central Jersey Sub VII LLC, ANMB II and the other
         parties thereto.

         "Central Jersey Preferred Operating Agreement" means the Limited
         Liability Company Agreement of Central Jersey Prime Holdings LLC, dated
         as of May 9, 2003, by and among Central Jersey LLC, ANMB, CJ and TRAC
         Central Jersey LLC.

         "Guaranteed Loan Principal Balance" means:

         (a)      with respect to the 130 West 30th Street Bridge Loan, the
         outstanding principal balance of the 130 West 30th Street Bridge Loan
         as of the Contribution Date, namely $16,000,000.00, plus (a) any
         Interest Expense relating to the 130 West 30th Street Bridge Loan paid
         by ARLP subsequent to the Contribution Date, minus (b) the aggregate of
         the following amounts received by ARLP subsequent to the Contribution
         Date in accordance with the terms of the 130 West 30th Street Note: (i)
         interest payments on the unpaid principal balance of the 130 West 30th
         Street Bridge Loan, and (ii) Late Charges (as defined Section 1.3 of
         the 130 West 30th Street Note);

         (b)      with respect to the 333 East 34th Street Mezzanine Loan, the
         outstanding principal balance of the 333 East 34th Street Mezzanine
         Loan as of the Contribution Date, namely $10,000,000.00, plus (a) any
         Interest Expense relating to the 333 East 34th Street Mezzanine Loan
         paid by ARLP

<PAGE>

         subsequent to the Contribution Date, minus (b) the aggregate of the
         following amounts received by ARLP subsequent to the Contribution Date
         in accordance with the terms of the 333 East 34th Street Note: (i)
         interest payments on the unpaid principal balance of the 333 East 34th
         Street Mezzanine Loan, (ii) Late Charges (as defined Section 1.9 of the
         333 East 34th Street Note), and (iii) Extension Fees (as defined
         Section 2.7 of the 130 West 30th Street Note); and

         (c)      with respect to the Central Jersey Mezzanine Loan, the
         outstanding principal balance of the Central Jersey Mezzanine Loan as
         of the Contribution Date, namely $3,000,000.00, plus (a) any Interest
         Expense relating to the Central Jersey Mezzanine Loan paid by ANMB II
         (or ARLP, if applicable) subsequent to the Contribution Date, minus (b)
         the aggregate of the following amounts received by ANMB II (or ARLP, if
         applicable) subsequent to the Contribution Date in accordance with the
         terms of the Central Jersey Note: (i) interest payments on the unpaid
         principal balance of the Central Jersey Mezzanine Loan, and (ii) any
         Exit Fees (as defined in the Central Jersey Note).

         "Guaranteed Preferred Capital Contribution" means the Unreturned
         Preferred Capital Contribution (as defined in the Central Jersey
         Preferred Operating Agreement) as of the Contribution Date, namely
         $19,300,000.00, plus (a) any Interest Expense relating to the Central
         Jersey Preferred Equity Investment paid by ARLP (or ANMB, if
         applicable) subsequent to the Contribution Date, minus (b) the
         aggregate of the following amounts received by ANMB subsequent to the
         Contribution Date: (i) any Capital Proceeds or Net Cash Receipts (as
         each such term is defined in the Central Jersey Preferred Operating
         Agreement) and (ii) any Preferred Return (as defined in the Central
         Jersey Preferred Operating Agreement).

         "Interest Expense" means any interest payments made by ARLP after the
         Contribution Date with respect to any of the Guaranteed Investments
         pursuant to (a) the Assignment and Assumption Agreement, dated as of
         July 1, 2003, by and between ACM and ARLP relating to the [*]
         Repurchase Agreement, (b) the Structured Facility Warehousing Credit
         and Security Agreement, dated as of July 1, 2003, by and between [*]
         and ARLP, (c) the Master Repurchase Agreement, dated as of July 1,
         2003, by and between [*] and ARLP, or (d) any other warehouse facility,
         repurchase agreement, credit agreement or other


The material marked [*] has been omitted pursuant to a request for confidential
treatment by Arbor Realty Trust, Inc. and has been filed separately with the
Securities and Exchange Commission.
<PAGE>

         agreement entered into by ARLP which provides financing for the
         Guaranteed Investments.

         "Subsidiary Guarantors' Aggregate Return" means the total of the
         following amounts received prior to and including the Termination Date:

         (a)      any "net cash flow" (as such term is defined in the 130 West
         30th Operating Agreement) distributed to Arbor 30th pursuant to Section
         8 of the 130 West 30th Operating Agreement, subject to the terms and
         provisions of the 130 West 30th Operating Agreement, plus

         (b)      any Cash Available for Distribution (as defined in the 333
         East 34th Operating Agreement) distributed to ACM 34th pursuant to
         Article IV of the 333 East 34th Operating Agreement, subject to the
         terms and provisions of the 333 East 34th Operating Agreement, plus

         (c)      any Capital Proceeds and Net Cash Receipts (as each such term
         is defined in the Central Jersey Preferred Operating Agreement)
         distributed to CJ pursuant to Article 5 of the Central Jersey Preferred
         Operating Agreement, subject to the terms and provisions of the Central
         Jersey Preferred Operating Agreement, plus

         (d)      any Available Cash or Capital Proceeds (as each such term is
         defined in the Central Jersey Mezzanine Operating Agreement) or Special
         Tax Distributions (as described in Section 8.9 of the Central Jersey
         Mezzanine Operating Agreement) distributed to CJ II pursuant to Article
         8 of the Central Jersey Mezzanine Operating Agreement, subject to the
         terms and provisions of the Central Jersey Mezzanine Operating
         Agreement.

2.       Guaranty.

         (a)      Subject to the limitations set forth in Section 3 hereof, if
         any portion of the Guaranteed Loan Principal Balance of any of the
         Guaranteed Loans is not paid to ARLP or ANMB II, as applicable, at the
         applicable Guaranteed Loan's maturity date in accordance with the terms
         of the note and other loan documents relating to such Guaranteed Loan
         (the "Unpaid Guaranteed Loan Principal Balance"), the Guarantors,
         jointly and severally, hereby agree to pay to ARLP or ANMB II, as
         applicable, the portion of the Unpaid Guaranteed Loan Principal Balance
         of such Guaranteed Loan that is equal to or less than the Subsidiary
         Guarantors' Aggregate Return.

<PAGE>

         (b)      Subject to the limitations set forth in Section 3 hereof, if
         any portion of the Guaranteed Preferred Capital Contribution is not
         paid to ANMB (or ARLP, if applicable) at the Required Purchase Date (as
         defined in the Central Jersey Preferred Operating Agreement) in
         accordance with Section 11.3 of the Central Jersey Preferred Operating
         Agreement (the "Unpaid Guaranteed Preferred Capital Contribution"), the
         Guarantors, jointly and severally, hereby agree to pay to ANMB (or
         ARLP, if applicable) the portion of the Unpaid Guaranteed Preferred
         Capital Contribution that is equal to or less than the Subsidiary
         Guarantors' Aggregate Return.

         (c)      As an Unpaid Guaranteed Loan Principal Balance or the Unpaid
         Guaranteed Preferred Capital Contribution becomes due and payable from
         time to time by the Guarantors pursuant to Section 2(a) and Section
         2(b), respectively, ARLP shall deliver to ACM, within 10 business days
         of such amounts becoming due, written notice stating the amount of such
         Unpaid Guaranteed Loan Principal Balance or Unpaid Guaranteed Preferred
         Capital Contribution, as applicable. To the extent that the Subsidiary
         Guarantors' Aggregate Return as of the date such notice is received is
         greater than or equal to the amount stated in such notice, the
         Guarantors shall disburse the Unpaid Guaranteed Loan Principal Balance
         or Unpaid Guaranteed Preferred Capital Contribution, as applicable, to
         ARLP, ANMB II or ANMB, as applicable, within 10 business days of
         receipt of such notice. To the extent that the Subsidiary Guarantors'
         Aggregate Return as of the date such notice is received is less than
         the amount stated in such notice, such Unpaid Guaranteed Loan Principal
         Balance or Unpaid Guaranteed Preferred Capital Contribution, as
         applicable, shall remain due and payable by the Guarantors, and, as
         amounts constituting Subsidiary Guarantors' Aggregate Return are
         received by the Guarantors, such amounts shall be disbursed to ARLP,
         ANMB II or ANMB, as applicable, within five business days following
         their receipt, until all Unpaid Guaranteed Loan Principal Balances or
         the Unpaid Guaranteed Preferred Capital Contribution, as applicable,
         has been fully paid.

3.       Termination. This Guaranty will be terminated and the Guarantors will
         no longer be obligated to pay any further amounts to ARLP or ANMB II,
         as applicable, in respect of any of the Guaranteed Loans or to pay any
         further amounts to ANMB in respect of the Guaranteed Preferred Equity
         Investment on the date on which all of the following conditions are met
         (the "Termination Date"):

<PAGE>

         (a) the remaining aggregate Unpaid Guaranteed Loan Principal Balance of
             the Guaranteed Loans, plus the remaining Unpaid Guaranteed
             Preferred Capital Contribution, is less than $5,000,000,

         (b) no Event of Default (as such term is defined in note and the loan
             documents relating to each of the Guaranteed Loans) with respect to
             any Guaranteed Loan has occurred and is continuing, and

         (c) no Trigger Event (as defined in the Central Jersey Preferred
             Operating Agreement) has occurred and is continuing.

4.       Notice of Receipt of Returns. ACM shall provide written notice to ARLP
         within 15 business days of the end of each fiscal quarter of all
         amounts that constitute Subsidiary Guarantors' Aggregate Return
         received by the Guarantors during the preceding quarter.

5.       Governing Law. This Guaranty shall be governed by and construed in
         accordance with the laws of the State of New York.

6.       Severability. If any provision of this Guaranty or the application of
         any such provision to any person or circumstances shall be held invalid
         by a court of competent jurisdiction, the remainder of this Guaranty,
         including the remainder of the provision held invalid, or the
         application of such provision to persons or circumstances other than
         those as to which it is held invalid, shall not be affected thereby.

7.       Counterparts. This Guaranty may be executed in one or more
         counterparts, each of which shall be deemed to be an original, but all
         of which together shall constitute one and the same instrument.

8.       Headings. All section headings herein are for convenience of reference
         and are not part of this Guaranty, and no construction or interference
         shall be derived therefrom.

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto has executed this
Guaranty as of the date first above written.

                                            ARBOR COMMERCIAL MORTGAGE, LLC

                                            By: _____________________________
                                            Name: Frederick C. Herbst
                                            Title: Chief Financial Officer

<PAGE>

                                            ARBOR 30th, LLC

                                            By: _____________________________
                                                Name:
                                                Title:

                                            ACM 34th STREET LLC

                                            By: _____________________________
                                                Name:
                                                Title:

                                            ARBOR NATIONAL CJ LLC

                                            By: _____________________________
                                                Name:
                                                Title:

                                            ARBOR NATIONAL CJ II, LLC

                                            By: _____________________________
                                                Name:
                                                Title:

<PAGE>

Acknowledged and Accepted by:

ARBOR REALTY LIMITED PARTNERSHIP

         By: ARBOR REALTY GPOP, INC.,
         its General Partner

         By: _______________________________
             Name: Frederick C. Herbst
             Title: Treasurer and Secretary

<PAGE>

ANMB HOLDINGS, LLC

By: ARBOR REALTY LIMITED PARTNERSHIP,
    its sole member

    By: ARBOR REALTY GPOP, INC.,
        its General Partner

        By: ________________________
            Name: Frederick C. Herbst
            Title: Treasurer and Secretary

ANMB HOLDINGS II, LLC

By: ARBOR REALTY LIMITED PARTNERSHIP,
    its sole member

    By: ARBOR REALTY GPOP, INC.,
        its General Partner

        By: ________________________
            Name: Frederick C. Herbst
            Title: Treasurer and Secretary

