8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported)          August 15, 2006                                                       

AMERICAN MORTGAGE ACCEPTANCE COMPANY

(Exact Name of Registrant as Specified in Its Charter)

MASSACHUSETTS

(State or Other Jurisdiction of Incorporation)

0-23972	13-6972380
(Commission File Number)	(IRS Employer Identification No.)

625 Madison Avenue
New York, New York	10022
(Address of Principal Executive Offices)	(Zip Code)

(212) 317-5700

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On August 15, 2006, the Registrant entered into a securities purchase agreement in connection with the sale of all of its interest in ARCap Investors, L.L.C. ("ARCap Investors"). The information set forth under Item 2.01 below with respect to the securities purchase agreement is hereby incorporated by reference into this Item 1.01.

Item 2.01 Completion of Acquisition or Disposition of Assets.

On August 15, 2006, American Mortgage Acceptance Company (the “Registrant") issued a press release announcing the completion of the sale of AMAC's interests in ARCap Investors to CharterMac, pursuant to the securities purchase agreement (the “Security Purchase Agreement”) entered into by CharterMac with the members of ARCap Investors listed on Schedule I thereto, including the Registrant (the “Selling Members”), ARCap REIT, Inc. (“ARCap REIT”), AI Sellers Representative, L.L.C. (“AISR”), Charter Mac Corporation, a wholly owned subsidiary of CharterMac (“CM Corp”), and CM ARCap Investors LLC, a wholly owned subsidiary of CharterMac (“CM ARCap Investors,” and, together with CM Corp, the “Purchasers”). Pursuant to the Securities Purchase Agreement, CM Corp agreed to acquire all of the issued and outstanding capital stock of ARCap Services, Inc. (“ASI”), and CM ARCap Investors agreed to acquire all of the outstanding common units and preferred units of ARCap Investors not already owned by CharterMac (the “Sale”).

As previously announced, in order to comply with REIT distribution rules, the Registrant expects that a portion of the proceeds from the Sale will be used to make a special distribution to common shareholders, in the range of $1.40 - $1.50 per share, before the end of 2006. The special distribution is subject to the approval of the Board of Trustees and to the Registrant achieving its business goals for the year.

In connection with the Sale, the Registrant received total proceeds of $41.3 million, including its share of the purchase price and proceeds from a special distribution made by ARCap Investors. Of such amount, approximately $2.5 million was held back as the Registrant 's contribution to an escrow account having a value of approximately $22,500,000 in the aggregate (the “Escrow Amount”), which was deposited to satisfy the Selling Members post-closing indemnification obligations to CharterMac and the Purchasers.

The Securities Purchase Agreement provides that the Selling Members, jointly and severally, will indemnify CharterMac and the Purchasers with respect to certain matters including, without limitation, the following: any inaccuracy or breach of any representation or warranty of ARCap Investors or ARCap REIT (provided that any claim attributable to any such inaccuracy or breach exceeds $50,000 in each instance and $1 million in the aggregate (see below)); certain tax matters; claims for brokerage or similar fees. Each of the Selling Members, severally and not jointly, will indemnify CharterMac and the Purchasers with respect to certain matters including, without limitation, any inaccuracy or breach of any representation or warranty of such Selling Member. CharterMac and the Purchasers, jointly and severally, will indemnify each of the Selling Members and AISR with respect to certain matters including, without limitation, the following: any inaccuracy or breach of any representation or warranty of CharterMac or the Purchasers; claims for brokerage or similar fees; the ownership and operation of ARCap Investors and its subsidiaries on and after the closing date. The Securities Purchase Agreement contains representations and warranties that are customary for a transaction of this type.

Pursuant to the Securities Purchase Agreement, subject to certain exceptions, CharterMac and the Purchasers, on the one hand, and the Selling Members, on the other hand, will not be liable to indemnify the other party until damages exceed $1,000,000, and then such indemnifying party shall only be liable to the extent such damages exceed the initial $1,000,000. Subject to certain exceptions, resort to the Escrow Amount will be the sole and exclusive remedy of CharterMac and the Purchasers for any and all claims for indemnification pursuant to the Securities Purchase Agreement. The Escrow Amount is scheduled to be released as follows: (i) $3,000,000 on April 15, 2007, (ii) $15,000,000 on the earlier of October 15, 2007 or the date upon which the latest 2006 federal tax return is filed with respect to ARCap Investors or any of its subsidiaries and (iii) the remainder on April 15, 2008.

The Securities Purchase Agreement is attached hereto as Exhibit 2.1 and is incorporated herein by reference. The foregoing description of the Securities Purchase Agreement is qualified in its entirety by reference to the full text of such agreement.

Item 7.01 Regulation FD Disclosure.

On August 15, 2006, the Registrant issued a press release announcing the transactions described in Item 1.01 and Item 2.01 above. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein solely for purposes of this Item 7.01 disclosure.

The information in this Item 7.01, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section. The information in this Item 7.01, including Exhibit 99.1, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act, regardless of any incorporation by reference language in any such filing.

ITEM 9.01 Financial Statements, Pro Forma Financial Information and Exhibits

a. Financial Statements

	Not Applicable
b.		Pro Forma Financial Information

	Not Applicable
(c)		Exhibits.

Exhibit No.	Description
10.1	Securities Purchase Agreement, dated as of August 15, 2006, by and among CharterMac, ARCap Investors, the Selling Members, ARCap REIT, AISR, CM Corp and CM ARCap Investors*
99.1	Press Release dated August 15, 2006

- - - - -

*Schedules and exhibits to this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant agrees to furnish supplementally copies of any of the omitted schedules and exhibits to the SEC upon request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

American Mortgage Acceptance Company

August 21, 2006 By: /s/ Alan P. Hirmes

Name: Alan P. Hirmes

Title: Chief Financial Officer

Exhibit Index

10.1	Securities Purchase Agreement, dated as of August 15, 2006, by and among CharterMac, ARCap Investors, the Selling Members, ARCap REIT, AISR, CM Corp and CM ARCap Investors*
99.1	Press Release dated August 15, 2006

- - - - -

*Schedules and exhibits to this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant agrees to furnish supplementally copies of any of the omitted schedules and exhibits to the SEC upon request.

EX-10

                                                                    Exhibit 10.1


                                                                 Execution Copy




                          SECURITIES PURCHASE AGREEMENT

                                  BY AND AMONG

                                   CHARTERMAC,

                            CHARTER MAC CORPORATION,

                             CM ARCAP INVESTORS LLC,

                 THE COMMON MEMBERS LISTED ON SCHEDULE I HERETO,

               THE PREFERRED MEMBERS LISTED ON SCHEDULE I HERETO,

                             ARCAP INVESTORS, L.L.C.

                                ARCAP REIT, INC.

                                       AND

                        AI SELLERS REPRESENTATIVE, L.L.C.













                                 August 15, 2006




                          SECURITIES PURCHASE AGREEMENT

         THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is made this 15th
day of August, 2006, by and among the members of ARCap Investors, L.L.C., a
Delaware limited liability company ("ARCap"), listed as the Common Members on
Schedule I hereto (the "Common Members"), the members of ARCap listed as the
Preferred Members on Schedule I hereto (the "Preferred Members" and together
with the Common Members, collectively, "ARCap Sellers" and, each, an "ARCap
Seller"), ARCap REIT, Inc., a Delaware corporation ("ARCap REIT" and together
with ARCap Sellers, collectively, "Sellers" and, each, a "Seller"), as sellers,
AI Sellers Representative, L.L.C., a Delaware limited liability company
("AISR"), as sellers' representative (AISR acting in such capacity or such other
Person as may succeed AISR in such capacity being referred to herein as "Sellers
Representative"), ARCap, CharterMac, a Delaware statutory trust, ("CharterMac"),
Charter Mac Corporation, a Delaware corporation and a wholly owned subsidiary of
CharterMac ("Purchaser 1"), and CM ARCap Investors LLC, a Delaware limited
liability company and a wholly owned subsidiary of CharterMac ("Purchaser 2" and
together with Purchaser 1, collectively, "Purchasers" and, each a "Purchaser"),
as purchasers.

                                    RECITALS

         THE PARTIES TO THIS AGREEMENT enter into this Agreement on the basis of
the following facts, intentions and understandings:

         A.     ARCap Sellers own certain of the Common Units and Series A
Preferred Units of ARCap, in the respective amounts set forth in Schedule I
attached hereto (collectively, the "Seller Units");

         B.     CharterMac owns certain of the Common Units and Series A
Preferred Units of ARCap, in the amounts set forth in Schedule II attached
hereto (collectively, the "CharterMac Units");

         C.     Prior to the Closing Date (as defined below), CharterMac shall
transfer the CharterMac Units to Purchaser 2 in accordance with the terms and
conditions of the LLC Agreement;

         D.     ARCap owns all of the issued and outstanding class A common
stock of ARCap REIT, and ARCap REIT owns all of the issued and outstanding
capital stock of ARCap Servicing, Inc. ("ASI"), ARCap Finance Corporation
("AFC"), ARCap 2004-RR3 Resecuritization, Inc. ("RR3") and ARCap 2005-RR5
Resecuritization, Inc. ("RR5" and, together with RR3, ASI, AFC, ARCap and ARCap
REIT, the "Companies," individually, a "Company");

         E.     Upon the terms and subject to the conditions contained in this
Agreement, Purchaser 1 desires to acquire from ARCap REIT the ASI Stock, and
ARCap REIT desires to sell to Purchaser 1 the ASI Stock; and


                                       1



         F.     Upon the terms and subject to the conditions contained in this
Agreement, Purchaser 2 desires to acquire from ARCap Sellers the Seller Units,
and each ARCap Seller desires to sell to Purchaser 2 such ARCap Seller's Seller
Units.

         NOW, THEREFORE, in consideration of the mutual promises,  covenants and
agreements  herein  contained,  and other good and valuable  consideration,  the
receipt and sufficiency of which are hereby  acknowledged,  the parties agree as
follows:

                                   ARTICLE 1

                       CERTAIN DEFINITIONS; INTERPRETATION

          1.1 Certain defined terms.
              ---------------------

                     (a) For purposes of this Agreement, the following terms
           shall have the following meanings:

                        (i) "Advisory Committee" shall have meaning specified in
Section 7.15(a) of this Agreement.

                        (ii) "Affiliate" of a Person means a Person that
Controls, is Controlled by, or is under common Control with, the first mentioned
Person.

                        (iii) "AFC" shall have the meaning specified in the
recitals to this Agreement.

                        (iv) "Agreement" shall have the meaning specified in the
introductory paragraph to this Agreement.

                        (v) "AISR" shall have the meaning specified in the
introductory paragraph to this Agreement.

                        (vi) "AMAC" means American Mortgage Acceptance Company,
a Massachusetts business trust.

                        (vii) "Amended LLC Agreement" means the Second Amended
and Restated Limited Liability Agreement of ARCap, attached hereto as Exhibit M.

                        (viii) "ARCap" shall have the meaning specified in the
introductory paragraph to this Agreement.

                        (ix) "ARCap Closing Certificate" means a certificate
required to be provided by ARCap, ARCap REIT or ARCap Sellers pursuant to
Sections 2.3(a)(v), 2.3(a)(vi), 2.3(b)(i)(4), 2.3(c)(iii), 2.3(c)(iv),
2.3(d)(ii) or 2.3(d)(iii) of this Agreement.


                                       2



                        (x) "ARCap REIT" shall have the meaning specified in the
introductory paragraph to this Agreement.

                        (xi) "ARCap Sellers" shall have the meaning specified in
the introductory paragraph to this Agreement.

                        (xii) "ARCap Transaction Costs" means all costs and
expenses incurred by ARCap or any of its Subsidiaries or Affiliates in
connection with the negotiation and consummation of the transactions
contemplated by this Agreement, including all legal, accounting, advisory and
banking fees, as evidenced by a certificate delivered by the chief financial
officer of ARCap to Purchaser 2.

                        (xiii) "ARESS" shall have the meaning specified in the
definition of "Fund Entities".

                        (xiv) "ASI" shall have the meaning specified in the
recitals to this Agreement.

                        (xv) "ASI Distribution" shall have meaning specified in
Section 2.1(a)(iii) of this Agreement.

                        (xvi) "ASI Stock" shall have the meaning specified in
Section 5.4 of this Agreement.

                        (xvii) "Audited Balance Sheets" shall have meaning
specified in Section 4.5(a) of this Agreement.

                        (xviii) "Audited Financial Statements" shall have the
meaning specified in Section 4.5(a) of this Agreement.

                        (xix) "Balance Sheets" shall have the meaning specified
in Section 4.5(d) of this Agreement.

                        (xx) "Basic Purchase Price" shall have the meaning
specified in Section 2.1(a) of this Agreement.

                        (xxi) "Bonus Plans" means the following bonus plans of
ARCap REIT: ARCap Annual Senior Management Incentive Bonus Compensation Plan and
ARCap Annual Incentive Bonus Compensation Plan.

                        (xxii) "Carryover Returns" shall have the meaning
specified in Section 9.1 of this Agreement.

                        (xxiii) "Cash Consideration" shall have the meaning
specified in Section 2.1(a)(v) of this Agreement.


                                       3



                        (xxiv) "Cash Units" means the Seller Units owned by
certain ARCap Sellers in the respective amounts for such ARCap Sellers as set
forth in Schedule III attached hereto.

                        (xxv) "CharterMac" shall have the meaning specified in
the introductory paragraph to this Agreement.

                        (xxvi) "CharterMac Balance Sheet" shall have the meaning
specified in Section 6.10 of this Agreement.

                        (xxvii) "CharterMac Balance Sheet Date" shall have the
meaning specified in Section 6.11 of this Agreement.

                        (xxviii) "CharterMac Closing Certificate" means a
certificate required to be provided by CharterMac or either Purchaser pursuant
to Sections 2.3(e)(i), 2.3(f)(i) or 2.3(g)(i) of this Agreement.

                        (xxix) "CharterMac Financial Statements" shall have the
meaning specified in Section 6.9(b) of this Agreement.

                        (xxx) "CharterMac SEC Documents" shall have the meaning
specified in Section 6.9(a) of this Agreement.

                        (xxxi) "CharterMac Units" shall have the meaning
specified in the recitals to this Agreement.

                        (xxxii) "Claim" means a claim for indemnity for Damages
made by any Sellers Indemnitee or Purchasers Indemnitee.

                        (xxxiii) "Closing" shall have the meaning specified in
Section 2.2 of this Agreement.

                        (xxxiv) "Closing Balance Sheet" shall have the meaning
specified in Section 2.4(a) of this Agreement.

                        (xxxv) "Closing Date" shall have the meaning specified
in Section 2.2 of this Agreement.

                        (xxxvi) "Closing Working Capital Amount" shall have the
meaning specified in Section 2.4(a) of this Agreement.

                        (xxxvii) "Code" means the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.

                        (xxxviii) "Common Members" shall have the meaning
specified in the introductory paragraph to this Agreement.


                                       4



                        (xxxix) "Common Unit" means a "Common Unit" of ARCap as
defined in the LLC Agreement.

                        (xl) "Companies" shall have the meaning specified in the
recitals to this Agreement.

                        (xli) "Confidentiality Agreement" shall have the meaning
specified in Section 7.4 of this Agreement.

                        (xlii) "Continuing Employees" shall have the meaning
specified in Section 7.10(b) of this Agreement.

                        (xliii) "Contract" means any written, oral, implied or
other contract, agreement, mortgage, deed of trust, lease, sublease, offer to
lease, agreement to lease, sales order, purchase order, indenture, note, bond,
loan, instrument, license, permit, franchise, commitment or other, instrument,
arrangement or agreement that is binding on any Person or any part of its
property under applicable Law.

                        (xliv) "Control" (including the terms "Controlled by"
and "under common Control with") means the possession, direct or indirect,
through one or more intermediaries, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of stock, as trustee or executor, by contract or credit arrangement or
otherwise.

                        (xlv) "Cotton Promissory Note" means that certain
Revolving Credit Promissory Note, dated as of June 28, 2004, by and between
Leonard W. Cotton and ARCap REIT.

                        (xlvi) "Damages" shall include any actual loss, damage,
injury, liability, claim, demand, settlement, judgment, award, fine, penalty,
Tax, fee (including reasonable attorneys' fees), charge, cost (including costs
of investigation and defense) or expense of any nature.

                        (xlvii) "D&O/E&O Insurance" shall have the meaning
specified in Section 7.11(c) of this Agreement.

                        (xlviii) "Disclosure Schedule" means Schedule VII
attached hereto, dated as of the date hereof, and forming a part of this
Agreement, which Disclosure Schedule shall (i) consist of items of disclosure
categorized by sections, and (ii) provide information, or otherwise qualify, the
representations and warranties set forth in this Agreement.

                        (xlix) "Dispute" shall have the meaning specified in
Section 12.8(a) of this Agreement.

                        (l) "DOJ" shall have the meaning specified in Section
7.2(a) of this Agreement.


                                       5



                        (li) "Duggins Promissory Note" means that certain
Revolving Credit Promissory Note, dated as of June 28, 2004, by and between
James L. Duggins and ARCap REIT.

                        (lii) "Effective Time" shall have the meaning specified
in Section 2.2 of this Agreement.

                        (liii) "Employment Agreements" shall have the meaning
specified in Section 2.3(a)(ii) of this Agreement.

                        (liv) "Encumbrance" means any security interest, pledge,
mortgage, lien, charge, encumbrance, adverse claim, preferential arrangement,
option, right of first refusal, easement, encroachment, indenture, right of way,
deed of trust, lease, security agreement or restriction of any kind, excluding
licenses of Intellectual Property.

                        (lv) "Environmental Claims" means any claim, cause of
action, or notice by any Person alleging potential liability arising out of,
based on or resulting from (A) the presence, or release into the environment, of
any Materials of Environmental Concern at any location, or (B) circumstances
forming the basis of any violation, or alleged violation, of any Environmental
Law.

                        (lvi) "Environmental Laws" means all federal,
interstate, state, local and foreign Laws relating to pollution or protection of
human health, safety, or the environment, including Laws relating to emissions,
discharges, releases or threatened releases of Materials of Environmental
Concern, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Materials of
Environmental Concern.

                        (lvii) "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations promulgated
thereunder.

                        (lviii) "ERISA Affiliate" means any Person that is (or
at any relevant time was) treated as a single employer with ARCap or any of its
Subsidiaries under Section 414 of the Code or Section 4001 of ERISA.

                        (lix) "Escrow Account" means the escrow account in which
the Escrow Amount shall be held by the Escrow Agent in accordance with the terms
of the Escrow Agreement.

                        (lx) "Escrow Agent" means LaSalle Bank National
Association.

                        (lxi) "Escrow Agreement" shall have the meaning
specified in Section 2.1(b) of this Agreement.


                                       6



                        (lxii) "Escrow Amount" shall have the meaning specified
in Section 2.1(b)(iii) of this Agreement.

                        (lxiii) "Escrow Shares" shall have the meaning specified
in Section 2.1(b)(iii) of this Agreement.

                        (lxiv) "Exchange Rights Agreement" means the Exchange
Rights Agreement substantially in the form attached hereto as Exhibit P.

                        (lxv) "Exchange Act" means the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder.

                        (lxvi) "Exchange Units" means the Seller Units owned by
certain ARCap Sellers in the respective amounts for such ARCap Sellers as set
forth in Schedule IV attached hereto.

                        (lxvii) "Final Fund Documents" means, with respect to
each Fund Entity, the final, executed transaction documents related thereto as
identified with respect to such Fund Entity on Schedule VIII.

                        (lxviii) "Financial Statements" shall have the meaning
specified in Section 4.5(d) of this Agreement.

                        (lxix) "FTC" shall have the meaning specified in Section
7.2(a) of this Agreement.

                        (lxx) "Fund Entities" means, collectively, ARCap High
Yield CMBS Fund, L.L.C., ARCap Diversified Risk CMBS Fund, L.L.C., ARCap CMBS
Fund REIT, Inc., ARCap High Yield CMBS Fund II, L.L.C., ARCap Diversified Risk
CMBS Fund II, L.L.C., ARCap CMBS Fund II REIT, Inc. and ARCap Real Estate
Special Situations Mortgage Fund, L.L.C. ("ARESS").

                        (lxxi) "Fund Entity Reports" shall have the meaning
specified in Section 4.21(a) of this Agreement.

                        (lxxii) "Fund PPMs" means, collectively, ARCap High
Yield CMBS Fund, L.L.C. Private Placement Memorandum, ARCap High Yield CMBS Fund
II, L.L.C. Private Placement Memorandum, ARCap Diversified Risk CMBS Fund II,
L.L.C. Private Placement Memorandum and ARCap Real Estate Special Situations
Mortgage Fund, L.L.C. Private Placement Memorandum, together, in each case, with
any supplements thereto.

                        (lxxiii) "Fund Reporting Entities" means, collectively,
ARCap High Yield CMBS Fund, L.L.C., ARCap Diversified Risk CMBS Fund, L.L.C.,
ARCap High Yield CMBS Fund II, L.L.C. and ARCap Diversified Risk CMBS Fund II,
L.L.C.


                                       7




                        (lxxiv) "Fund Reporting Entities Audited Balance Sheets"
shall have the meaning specified in Section 4.5(c) of this Agreement.

                        (lxxv) "Fund Reporting Entities Audited Financial
Statements" shall have the meaning specified in Section 4.5(c) of this
Agreement.

                        (lxxvi) "Fund Reporting Entities Unaudited Balance
Sheets" shall have the meaning specified in Section 4.5(d) of this Agreement.

                        (lxxvii) "Fund Reporting Entities Unaudited Financial
Statements" shall have the meaning specified in Section 4.5(d) of this
Agreement.

                        (lxxviii) "GAAP" means United States generally accepted
accounting principles consistently applied.

                        (lxxix) "Governmental Authority" means any foreign or
United States federal, state or local governmental, regulatory or administrative
agency or any court or tribunal.

                        (lxxx) "HSR Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, and the rules and regulations promulgated thereunder.

                        (lxxxi) "Information Systems" shall have the meaning
specified in Section 4.8 of this Agreement.

                        (lxxxii) "Intellectual Property" means all (i) U.S. and
foreign patents and applications therefor and all divisionals, reissues,
renewals, registrations, confirmations, re-examinations, certificates of
inventorship, extensions, continuations and continuations-in-part thereof, (ii)
U.S. and foreign trademarks, trade dress, service marks, service names, trade
names, Internet domain names, brand names, logo or business symbols, whether
registered or unregistered, and pending applications to register the same,
including all extensions and renewals thereof and all goodwill associated
therewith, (iii) U.S. and foreign copyrights in writings, designs, software,
mask works or other works, whether registered or unregistered, and pending
applications to register the same, (iv) confidential or proprietary know-how,
trade secrets, methods, processes, practices, formulas and techniques, and (v)
computer software programs and software systems.

                        (lxxxiii) "Key Employees" means Leonard W. Cotton, James
L. Duggins, Paul Smyth, Steve R. Inman, Bryan Carr, Steven D. Carnes, John E.
D'Amico and Christopher Crouch.

                        (lxxxiv) "Knowledge" - an individual will be deemed to
have "Knowledge" of a particular fact or other matter if (i) such individual is
actually aware of such fact or other matter, or (ii) a prudent individual would
have been expected to discover or otherwise become aware of such fact or


                                       8



other matter in the course of conducting his or her duties. A Person (other than
an individual) will be deemed to have "Knowledge" of a particular fact or other
matter if (a) with respect to ARCap, its Subsidiaries or any Fund Entity, any
Key Employee has, or at any time had, Knowledge of such fact or other matter,
and (b) in all other cases, any individual who is serving, or who has at any
time served, as a director, officer, partner, executor, or trustee of such
Person (or in any similar capacity) has, or at any time had, Knowledge of such
fact or other matter.

                        (lxxxv) "Law" means any law, statute, ordinance, treaty,
code, rule or regulation of any Governmental Authority, or any binding agreement
with any Government Authority, or any principle of common law.

                        (lxxxvi) "Lease" shall have the meaning specified in
Section 4.25(a) of this Agreement.

                        (lxxxvii) "Leased Real Property" shall have the meaning
specified in Section 4.25(a) of this Agreement.

                        (lxxxviii) "LLC Agreement" means the First Amended and
Restated Limited Liability Agreement of ARCap, as amended to the date of Closing
prior to effectiveness of the Amended LLC Agreement.

                        (lxxxix) "Material Adverse Effect" means with respect to
any Person, any change affecting, or condition having an affect on, such Person
and its Subsidiaries, if any, taken as a whole (i) that is, or would reasonably
be expected to be, materially adverse to the business, assets, liabilities,
results of operations or condition (financial or otherwise) of such Person and
its Subsidiaries, if any, taken as a whole, (ii) that will, or would reasonably
be expected to, prevent or materially impair the ability of such Person to
fulfill its obligations under this Agreement at the Closing Date, (iii) that
would, or would reasonably be expected to, prevent or materially impair the
ability of such Person to operate its or any of its Subsidiaries' businesses
following the Effective Time, (iv) in the case of ARCap REIT, ARCap CMBS Fund
REIT, Inc. or ARCap CMBS Fund II REIT, Inc., that could reasonably be expected
to prevent or materially impair ARCap REIT, ARCap CMBS Fund REIT, Inc. or ARCap
CMBS Fund II REIT, Inc. from qualifying as a REIT prior to the Effective Time or
(v) that will, or would reasonably be expected to, prevent or materially impair
the ability of Purchaser 1 or Purchaser 2 to exercise ownership rights with
respect to the ASI Stock or the Seller Units, respectively; provided, however,
that any such change or effect having the results described in the foregoing (i)
through (v) that results from (A) a change in law, rule or regulation, or GAAP
or interpretations thereof that applies to such Person, (B) general economic or
market conditions, including, without limitation, changes in interest rates, or
(C) economic or market conditions in the commercial mortgage industry generally
shall not be considered when determining whether a Material Adverse Effect on
such Person or its Subsidiaries has occurred, except to the extent that such
change or effect disproportionately affects such Person or its Subsidiaries;
provided, further, that a decline in the market value of the securities of the
Person resulting from the

                                       9





public announcement of this Agreement and the proposed transactions contemplated
by this Agreement shall not be deemed a Material Adverse Effect on such Person.

                        (xc) "Materials of Environmental Concern" means
chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, radioactive materials, asbestos, petroleum and petroleum products.

                        (xci) "Maximum Annual Premium" shall have the meaning
specified in Section 7.11(c) of this Agreement.

                        (xcii) "Mediation Request" shall have the meaning
specified in Section 12.8(b) of this Agreement.

                        (xciii) "Multiemployer Plan" means any "multiemployer
plan", as defined in Section 4001(a) of ERISA that ARCap or any of its
Subsidiaries or ERISA Affiliates maintains, sponsors, participates in or
contributes to, or has maintained, established, sponsored, participated in, or
contributed to, or under which such entity has or may incur any liability or
obligation.

                        (xciv) "New Shares" shall have the meaning specified in
Section 11.7(a) of this Agreement.

                        (xcv) "Non-Cash Consideration" shall have the meaning
specified in Section 2.1(a)(ix) of this Agreement.

                        (xcvi) "Non-Cash Consideration Dollar Amount" means the
Basic Purchase Price minus (i) the ARCap Transaction Costs and (ii) the Cash
Consideration.

                        (xcvii) "Objection Notice" shall have the meaning
specified in Section 2.4(b) of this Agreement.

                        (xcviii) "Order" means any order, writ, judgment,
injunction, decree, stipulation, determination, decision, ruling, award,
subpoena, or verdict entered, issued, made or rendered by any court,
administrative agency or any other Governmental Authority or by any arbitrator.

                        (xcix) "Pension Plan" means any "employee pension
benefit plan" as defined in Section 3(2) of ERISA (other than a Multiemployer
Plan) that ARCap or any of its Subsidiaries or, solely with respect to any
Pension Plan that is subject to Title IV of ERISA, ERISA Affiliates maintains,
sponsors, participates in or contributes to, or has maintained, established,
sponsored, participated in, or contributed to, or under which any such entity
has or may or incur any liability or obligation.

                        (c) "Permit" means any permit, consent, franchise,
waiver, authorization, license or other approval issued, granted, given, or

                                       10





otherwise made available by or under any Governmental Authority or pursuant to
any Law.

                        (ci) "Person" means an individual, corporation,
partnership, limited liability company, association, trust, unincorporated
organization, entity or group.

                        (cii) "Phantom Escrow Cash" shall have the meaning
specified in Section 2.1(b)(ii) of this Agreement.

                        (ciii) "Phantom Unit Amount" means an amount equal to
all amounts that will be accrued and payable as of the Closing Date (after
payment is made to the participants under the Phantom Unit Plans on account of
any supplemental distribution (other than in respect of the REIT Distribution),
if any, made by ARCap to holders of Common Units on the Closing Date) to the
participants under the Phantom Unit Plans, including any amounts payable in
connection with the termination of the Phantom Unit Plans and the extinguishment
of all rights of participants thereunder with respect to their interests
therein; provided, however, that solely for purposes of Section 2.1(b), the
Phantom Unit Amount shall exclude any amounts payable to participants under the
Phantom Unit Plans in respect of the REIT Distribution.

                        (civ) "Phantom Unit Plans" means the following plans of
ARCap REIT: ARCap Deferred Compensation Plan and ARCap Deferred Compensation
Plan II.

                        (cv) "Plan" means each Multiemployer Plan, Pension Plan,
Welfare Plan, Phantom Unit Plan, Promote Plan, and Bonus Plan, and each other
employment, bonus, deferred compensation, pension, collective bargaining, stock
option, stock appreciation right, equity-based compensation, profit-sharing or
retirement plan, arrangement, agreement, policy or practice, each medical,
vacation, severance pay plan, fringe benefit plan, and each other plan,
arrangement, agreement, policy or practice (including any severance, change in
control or similar agreement with any current or former employee, director or
consultant of ARCap or any of its Subsidiaries), whether or not subject to
ERISA, in each case that is sponsored or maintained by ARCap or any of its
Subsidiaries that affects or covers any current or former employee, director or
consultant of ARCap or any of its Subsidiaries, whether written or written,
funded or unfunded.

                        (cvi) "Preferred Members" shall have the meaning
specified in the introductory paragraph to this Agreement.

                        (cvii) "Procedure" shall have the meaning specified in
Section 12.8(b) of this Agreement.

                        (cviii) "Proceeding" means any claim, action,
proceeding, investigation, audit, hearing, arbitration, administrative or agency

                                       11





complaint or charge, litigation or suit (whether civil, criminal,
administrative, investigative or informal).

                        (cix) "Projections" shall have the meaning specified in
Section 4.5(h) of this Agreement.

                        (cx) "Promote Plans" means the following incentive plans
of ARCap REIT: ARCap Fund I Incentive Compensation Plan, ARCap Fund I Senior
Management Incentive Compensation Plan, ARCap Fund II Incentive Compensation
Plan, ARCap Fund II Senior Management Incentive Compensation Plan and ARCap Real
Estate Special Situations Mortgage Fund Incentive Compensation Plan.

                        (cxi) "Purchase Price" shall have the meaning specified
in Section 2.4(b) of this Agreement.

                        (cxii) "Purchaser 1" shall have the meaning specified in
the introductory paragraph to this Agreement.

                        (cxiii) "Purchaser 2" shall have the meaning specified
in the introductory paragraph to this Agreement.

                        (cxiv) "Purchaser 1 Cash Consideration" shall have the
meaning specified in Section 2.1(a)(i) of this Agreement.

                        (cxv) "Purchaser 2 Cash Consideration" means an amount
equal to (a) the Basic Purchase Price minus (1) the ARCap Transaction Costs, (2)
the Phantom Unit Amount and (3) the Purchaser 1 Cash Consideration, multiplied
by (b) a fraction, the numerator of which is the aggregate number of Cash Units
and the denominator of which is the sum of the aggregate number of Cash Units
and the aggregate number of Exchange Units.

                        (cxvi) "Purchaser 2 Escrow Cash" shall have the meaning
specified in Section 2.1(b)(i) of this Agreement.

                        (cxvii) "Purchasers" shall have the meaning specified in
the introductory paragraph to this Agreement.

                        (cxviii) "Purchasers Indemnitee" means CharterMac,
Purchasers, their respective current and future Affiliates and Subsidiaries
(including, after the Closing, ARCap, ARCap REIT, all of their respective
Subsidiaries and Affiliates, but excluding the Fund Entities, their Subsidiaries
and respective Affiliates, except to the extent that any Damages suffered from
any of the foregoing (including the Fund Entities) have been allocated to ARCap
or any of its Subsidiaries or are subject to a claim against ARCap or any of its
Subsidiaries for indemnification, in each case in accordance with the applicable
Final Fund Documents), and their respective stockholders, directors, trustees,
officers, employees, agents, successors and assigns of each of them.

                                       12





                        (cxix) "Registration Rights Agreement" means the
Registration Rights Agreement substantially in the form attached hereto as
Exhibit Q.

                        (cxx) "REIT Distribution" shall have the meaning
specified in Section 2.1(a)(iv) of this Agreement.

                        (cxxi) "Restricted Common Shares" means the restricted
common shares authorized for issuance pursuant to that certain CharterMac
Amended and Restated Incentive Share Plan, dated as of November 26, 2003,
awarded to the Continuing Employees at the Closing in the respective amounts and
according to the vesting schedule set forth in Schedule VI attached hereto.

                        (cxxii) "RR3" shall have the meaning specified in the
recitals to this Agreement.

                        (cxxiii) "RR5" shall have the meaning specified in the
recitals to this Agreement.

                        (cxxiv) "SEC" means the U.S. Securities and Exchange
Commission.

                        (cxxv) "Securities Act" means the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.

                        (cxxvi) "Seller Units" shall have the meaning specified
in the recitals to this Agreement.

                        (cxxvii) "Sellers" shall have the meaning specified in
the introductory paragraph to this Agreement.

                        (cxxviii) "Sellers' Assignments" shall have the meaning
specified in Section 2.3(c)(i) of this Agreement.

                        (cxxix) "Sellers Indemnitee" means Sellers
Representative and each ARCap Seller, their respective current and future
Affiliates and Subsidiaries, and the respective stockholders, directors,
trustees, officers, employees, agents, successors and assigns of each of them.

                        (cxxx) "Sellers' Portion" means, with respect to any
indemnification of Damages hereunder, 89.265%.

                        (cxxxi) "Sellers' Releases" shall have the meaning
specified in Section 2.3(c)(ii) of this Agreement.

                        (cxxxii) "Sellers Representative" shall have the meaning
specified in the introductory paragraph to this Agreement.

                                       13





                        (cxxxiii) "Series A Preferred Unit" means a "Series A
Preferred Unit" of ARCap as defined in the LLC Agreement.

                        (cxxxiv) "Serviced Loans" shall have the meaning
specified in the definition of Servicing Agreement.

                        (cxxxv) "Servicing Agreement" means any servicing
agreement, pooling and servicing agreement, mortgage selling and servicing
contract, indenture or other agreement or instrument, whether written or oral,
pursuant to which ARCap, the Fund Entities or any of their respective
Subsidiaries provide servicing for commercial mortgage loans and other mortgage
loans owned by others (such loans, collectively, the "Serviced Loans"), all of
which agreements are listed on Section 4.23(a) of the Disclosure Schedule (to
the extent identified as such).

                        (cxxxvi) "Special Common Interests" means the "Special
Common Interests" of ARCap as defined in the Amended LLC Agreement.

                        (cxxxvii) "Specially Serviced Loan" means any commercial
mortgage loan that is a "specially serviced loan" under any Servicing Agreement
under which ASI acts as special servicer.

                        (cxxxviii) "Statute of Limitations" means the expiration
of the time period for the assessment of a deficiency by any Taxing Authority.

                        (cxxxix) "Subsidiary" means, with reference to any
Person, any corporation or other legal entity of which such Person (either alone
or through or together with any other Subsidiary or Subsidiaries) is the general
partner or managing entity or of which at least a majority of the stock or other
equity interests the holders of which are generally entitled to vote for the
election of the board of directors or others performing similar functions of
such corporation or other legal entity is directly or indirectly owned or
controlled by such Person (either alone or through or together with any other
Subsidiary or Subsidiaries); provided, however, that unless otherwise
specifically stated herein, "Subsidiary" shall exclude, with respect to ARCap
and its Subsidiaries, any Fund Entity and any entity that would be, but for the
application of this proviso, a Subsidiary of any Fund Entity. For the avoidance
of doubt, ARCap REIT is a Subsidiary of ARCap.

                        (cxl) "Survival Period" shall have the meaning specified
in Section 11.1 of this Agreement.

                        (cxli) "Tax" or "Taxes" means any and all domestic or
foreign, federal, state, local or other taxes, assessments, duties, charges,
fees, levies or required deposits of any kind (together with any and all
interest, penalties, additional to tax and additional amounts imposed with
respect thereto) imposed by any Taxing Authority, including taxes with respect
to income, franchises, windfall or other profits, gross receipts, transfer,
real, personal or

                                       14





intangible property, sales, use, capital stock, employment, unemployment, social
security, workers' compensation or net worth, ad valorem, value added, single
business and taxes in the nature of excise, withholding, required deposits, ad
valorem or value added and any liability under Treasury Regulation ss.1.1502-6
or as a transferee or successor, or by contract or agreement.

                        (cxlii) "Taxing Authority" means the Internal Revenue
Service and any other domestic or foreign Governmental Authority responsible for
the administration or collection of any Taxes.

                        (cxliii) "Tax Return" means any report, return or
similar filing (including the attached schedules) required to be filed with
respect to Taxes, including any information return, claim for refund, amended
return, or declaration of estimated Taxes of ARCap, the Fund Entities and their
respective Subsidiaries.

                        (cxliv) "Third-Party Claim" means a claim for indemnity
for Damages made by any Person (other than any Sellers Indemnitee or Purchasers
Indemnitee).

                        (cxlv) "Threshold Amount" shall have the meaning
specified in Section 11.6(d) of this Agreement.

                        (cxlvi) "Unaudited Balance Sheets" shall have the
meaning specified in Section 4.5(b) of this Agreement.

                        (cxlvii) "Unaudited Financial Statements" shall have the
meaning specified in Section 4.5(b) of this Agreement.

                        (cxlviii) "Welfare Plan" means any "employee welfare
benefit plan," as defined in Section 3(1) of ERISA that ARCap or any of its
Subsidiaries maintains, sponsors, participates in or contributes to or under
which any such entity has or may incur any liability or obligation.

                        (cxlix) "Working Capital" means the amount equal to (i)
current assets of ARCap (as defined under GAAP) minus (ii) current liabilities
of ARCap (as defined under GAAP).

                        (cl) "Working Capital Certificate" shall have the
meaning specified in Section 2.4(a) of this Agreement.

         1.2 Other Interpretive Provisions. When a reference is made in this
Agreement to Articles, Sections, or Disclosure Schedule, such reference is to an
Article or a Section of, or Disclosure Schedule to, this Agreement, unless
otherwise indicated. When a reference is made in this Agreement to a party or
parties, such reference is to parties to this Agreement, unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

                                       15





Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be understood to be followed by the words "without
limitation." The inclusion of any matter in the Disclosure Schedule in
connection with any representation, warranty, covenant or agreement that is
qualified as to materiality or "Material Adverse Effect" shall not be an
admission by the party delivering such Disclosure Schedule that such matter is
material or would reasonably be expected to result in a Material Adverse Effect.

                                   ARTICLE 2

                 PURCHASE AND SALE OF ASI STOCK AND SELLER UNITS

         2.1 Purchase and Sale of ASI Stock and Seller Units.
             -----------------------------------------------

                      (a) Subject to the terms and conditions of this Agreement,
          at the Closing (as defined below), the following transactions shall be
          consummated upon the payment by Purchasers of cash and other
          consideration with an aggregate value of Two Hundred Fifty Nine
          Million Nine Hundred Fifty Thousand Dollars ($259,950,000) (as
          adjusted pursuant to Section 2.1(c) below, the "Basic Purchase Price")
          consisting of the Purchaser 1 Cash Consideration, the Purchaser 2 Cash
          Consideration, the Phantom Unit Amount, the Non-Cash Consideration and
          the ARCap Transaction Costs in the sequence and as set forth below:

                        (i) Purchaser 1 shall pay to ARCap REIT an amount equal
to Fourteen Million Five Hundred Thousand Dollars $14,500,000 in cash (the
"Purchaser 1 Cash Consideration");

                        (ii) ARCap REIT shall sell, assign, transfer, convey and
deliver or cause to be sold, assigned, transferred, conveyed and delivered to
Purchaser 1 the ASI Stock free and clear of all Encumbrances (other than
restrictions on transfer under applicable state and federal securities laws);

                        (iii) ARCap REIT shall declare and distribute to ARCap
and its other stockholders the entire Purchaser 1 Cash Consideration (the "ASI
Distribution") in accordance with its organizational documents;

                        (iv) ARCap shall declare and distribute to its members
the entire portion of the ASI Distribution received by it (the "REIT
Distribution") in accordance with its organizational documents;

                        (v) Purchaser 2 shall pay to Sellers Representative, and
Sellers Representative shall receive on behalf of (A) the holders of Cash Units,
an amount equal to the Purchaser 2 Cash Consideration less the portion thereof
to be deposited in the Escrow Account pursuant to Section 2.1(b), below, and (B)
the ARCap Sellers, an amount equal to the Phantom Unit Amount (together with the
Purchaser 1 Cash Consideration and the Purchaser 2 Cash Consideration, the "Cash
Consideration");

                                       16





                        (vi) Purchaser 2 shall pay to Sellers Representative a
cash amount equal to the ARCap Transaction Costs;

                        (vii) Sellers Representative shall deliver to each
holder of Cash Units their pro rata share of the Purchaser 2 Cash Consideration,
less the portion thereof to be deposited in the Escrow Account pursuant to
Section 2.1(b) below, such pro rata share to be calculated based on the ratio of
the number of Cash Units owned by each such holder against the aggregate number
of Cash Units owned by all such holders;

                        (viii) ARCap Sellers who are holders of Cash Units shall
sell, assign, transfer, convey and deliver or cause to be sold, assigned,
transferred, conveyed and delivered to Purchaser 2 the Cash Units free and clear
of all Encumbrances (other than restrictions on transfer under applicable state
and federal securities laws) and Purchaser 2 shall be admitted as a "Substitute
Member" of each such ARCap Seller in accordance with the terms and conditions of
the LLC Agreement;

                        (ix) Upon the effectiveness of the Amended LLC
Agreement, the Exchange Units of each ARCap Seller who is a holder thereof shall
be converted automatically into the number of Special Common Interests (and,
subject to Section 2.1(b) below, the right to receive physical certificates
evidencing such Special Common Interests) determined in accordance with the
allocation formula set forth on Schedule V attached hereto (such Special Common
Interests, the "Non-Cash Consideration");

                        (x) Sellers Representative, on behalf of the ARCap
Sellers, shall pay to ARCap an amount equal to the Phantom Unit Amount in
satisfaction of the ARCap Sellers' obligation under Section 7.10;

                        (xi) ARCap shall pay to ARCap REIT an amount equal to
the Phantom Unit Amount in satisfaction of ARCap's obligation under Section
7.10;

                        (xii) ARCap REIT shall pay to the participants under the
Phantom Unit Plans their respective entitlements to the Phantom Unit Amount, as
calculated and determined by ARCap REIT and less the portion thereof to be
deposited in the Escrow Account pursuant to Section 2.1(b) below; and

                        (xiii) Sellers Representative shall disburse the cash
paid to it by Purchaser 2 pursuant to Section 2.1(a)(vii) above to pay the ARCap
Transaction Costs.

                      (b) A portion of the Basic Purchase Price shall be paid
          into escrow, with such funds and securities to be held on behalf of
          the parties to the Escrow Agreement to be distributed to Purchaser 2,
          the ARCap Sellers and the participants under the Phantom Unit Plans,
          as applicable, in accordance with the terms and conditions of an
          escrow agreement, in substantially the form attached hereto as Exhibit
          A (the "Escrow Agreement") as follows:

                        (i) Purchaser 2 shall pay a portion of the Purchaser 2
Cash Consideration to the Escrow Agent in cash (such amount, the "Purchaser 2
Escrow Cash") which shall be an amount equal to (A) $22,500,000 multiplied by
(B) a fraction,

                                       17





the numerator of which is the Purchaser 2 Cash Consideration and the denominator
of which is the sum of the Purchaser 2 Cash Consideration, the Phantom Unit
Amount and the Non-Cash Consideration Dollar Amount;

                        (ii) From the Phantom Unit Amount, ARCap REIT shall pay
to the Escrow Agent an amount of cash (such amount, the "Phantom Escrow Cash")
equal to (A) $22,500,000 multiplied by (B) a fraction, the numerator of which is
the Phantom Unit Amount and the denominator of which is the sum of the Purchaser
2 Cash Consideration, the Phantom Unit Amount and the Non-Cash Consideration
Dollar Amount; and

                        (iii) From the Non-Cash Consideration, Purchaser 2, on
behalf of the holders of the Exchange Units, shall cause ARCap to deliver to the
Sellers Representative and Sellers Representative shall deliver to the Escrow
Agent physical certificates representing a number of Special Common Interests
(such Special Common Interests, together with any New Shares, the "Escrow
Shares"; and, together with the Purchaser 2 Escrow Cash and the Phantom Escrow
Cash, the "Escrow Amount"), equal to (A) $22,500,000 multiplied by a fraction,
the numerator of which is the Non-Cash Consideration Dollar Amount and the
denominator of which is the sum of the Purchaser 2 Cash Consideration, the
Phantom Unit Amount and the Non-Cash Consideration Dollar Amount, divided by (B)
$18.146 (the average closing price of the underlying common shares of CharterMac
during the thirty trading days immediately prior to June 15, 2006). The Escrow
Shares shall be issued in the name of the holders of Exchange Units in pro rata
amounts based upon on the ratio of the number of Exchange Units owned by each
such holder against the aggregate number of Exchange Units owned by all such
holders, with fractional amounts disregarded. Each holder of Exchange Units
shall, at the Closing, deliver to Purchaser 2 an appropriate stock power
executed in blank with respect to such holder's Escrow Shares.

                         c) The Basic Purchase Price shall be increased or
          decreased in accordance with Section 2.4 of this Agreement to the
          extent the Closing Working Capital Amount exceeds or is less than
          $1,000,000. If, based on the Closing Balance Sheet, an adjustment to
          the Basic Purchase Price in accordance with the foregoing is required
          as of the Closing, the Purchaser 2 Cash Consideration, the Phantom
          Unit Amount and the Non-Cash Consideration Dollar Amount payable
          pursuant to Sections 2.3(e) and 2.3(f) shall be recalculated in
          accordance with Section 2.1(a) above, the definition of Purchaser 2
          Cash Consideration and the definition of Non-Cash Consideration Dollar
          Amount. If there is a dispute with respect to the Closing Working
          Capital Amount initiated by Purchasers with an Objection Notice
          delivered within seven (7) business days of the date of delivery by
          Sellers Representative of the Working Capital Statement in accordance
          with Section 2.4(b), then Closing shall not occur until such dispute
          is resolved in accordance with the procedures set forth in Section
          2.4(b) as the exclusive remedy for resolution of any such dispute.

                                       18





                        (d) The Basic Purchase Price shall be allocated in
          accordance with this Section 2.1, and no party shall take a position
          inconsistent with such allocation on any Tax Return (unless otherwise
          required by a final, nonappealable determination of a court of
          competent jurisdiction or a binding closing agreement entered into
          with a Taxing Authority).

         2.2 Closing Date. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at 10:00 a.m., (New York time), at
the offices of Paul, Hastings, Janofsky & Walker LLP, 75 East 55th Street, New
York, NY, two (2) business days following satisfaction or waiver of all
conditions to Closing set forth in Article 8 (other than those conditions that
by their nature have to be satisfied at Closing (but subject to the satisfaction
or waiver of those conditions)), or at such other place and time as the parties
may agree. The date on which the Closing will occur is referred to herein as the
"Closing Date." The transfer of the ASI Stock and the Cash Units pursuant to
Section 2.1 of this Agreement shall be deemed to have become effective at 12:01
a.m. on the Closing Date (the "Effective Time"), and the conversion of the
Exchange Units into Special Common Interests shall be deemed to have occurred
immediately thereafter.

         2.3 Closing Obligations. At the Closing:
             -------------------

                      (a) ARCap REIT shall:

                        (i) deliver to Purchaser 1 stock certificate(s)
representing the ASI Stock and the accompanying stock power(s) duly executed by
ARCap REIT, evidencing transfer of the ASI Stock to Purchaser 1;

                        (ii) deliver to Purchaser 2 amended employment
agreements by and between ARCap REIT and each of the Key Employees in the form
attached hereto as Exhibit B executed by the Key Employees and ARCap REIT
(collectively, the "Employment Agreements");

                        (iii) deliver to Sellers Representative, as agent for
ARCap Sellers, the Escrow Agreement executed by ARCap REIT;

                        (iv) deliver to Purchaser 2 evidence of termination of
the Phantom Unit Plans required pursuant to Section 7.10(a);

                        (v) deliver to Purchaser 1 a certificate executed by the
chief executive officer, president and chief financial officer of ARCap REIT,
dated as of the Closing Date, certifying as to the satisfaction of the
conditions set forth in Sections 8.2(a) and 8.2(b) as to ARCap REIT;

                        (vi) deliver to Purchaser 1 an executed FIRPTA
Certificate in the form attached hereto as Exhibit J;

                        (vii) deliver to Purchaser 2 a cross-receipt executed by
ARCap REIT evidencing repayment of all amounts outstanding under (A) the

                                       19





Cotton Promissory Note and (B) the Duggins Promissory Note, together with copies
of the cancelled notes;

                        (viii) deliver to Purchaser 2 a certificate executed by
the chief financial officer of ARCap REIT, dated as of the Closing Date, setting
forth the Phantom Unit Amount;

                        (ix) pay the Phantom Unit Amount (less the Phantom
Escrow Cash) to the participants under the Phantom Unit Plans;

                        (x) pay to the Escrow Agent the Phantom Escrow Cash by
wire transfer of immediately available funds; and

                        (xi) pay the ASI Distribution.

                        (b) ARCap shall:

                         (i) deliver to Purchaser 2:

                          (1) evidence of the consent or approval of the Persons
   whose consent or approval shall be required in connection with the
   transactions contemplated under this Agreement under any Contract of ARCap,
   the Fund Entities and their respective Subsidiaries;

                          (2) the Escrow Agreement executed by Sellers
   Representative;

                          (3) opinions of (i) Orrick, Herrington & Sutcliffe,
   LLP, and (ii) Updike, Kelly & Spellacy, P.C., each dated as of the Closing
   Date, in the forms attached hereto as Exhibit E and Exhibit F;

                          (4) a certificate executed by the chief executive
   officer, president and chief financial officer of ARCap, dated as of the
   Closing Date, certifying as to the satisfaction of the conditions set forth
   in Sections 8.2(a) and 8.2(b) as to ARCap and a certificate executed by the
   Secretary or any Assistant Secretary of ARCap, dated as of the Closing Date,
   substantially in the form and to the effect of Exhibit G hereto;

                          (5) a true, complete and accurate list of each
   outstanding Specially Serviced Loan as of a date that is within five (5)
   Business Days prior to the Closing Date;

                         (ii) immediately upon the effectiveness of the Amended
LLC Agreement, issue in the names of the holders of Exchange Units the physical
certificates representing the Non-Cash Consideration and deliver such physical
certificates (excluding the physical certificates representing the Escrow
Shares) to Sellers Representative, on behalf of such holders;

                                       20





                         (iii) immediately upon the effectiveness of the Amended
LLC Agreement, deliver the physical certificates representing the Escrow Shares
to Sellers Representative, on behalf of such holders;

                         (iv) pay the Phantom Unit Amount to ARCap REIT; and

                         (v) pay the REIT Distribution.

                        (c) Each ARCap Seller who is a holder of Cash Units
               shall deliver to Purchaser 2:

                         (i) an assignment and assumption agreement with respect
to the assignment of such holder's Cash Units in the form attached hereto as
Exhibit C executed by such Seller (collectively, the "Sellers' Assignments");

                         (ii) a release in the form attached hereto as Exhibit D
executed by such Seller (collectively, the "Sellers' Releases");

                         (iii) a signature page to this Agreement executed by
such Seller (which signature page shall be deemed a certification as of the
Closing Date (unless written notice to the contrary is provided to Purchasers at
least five (5) business days prior to the Closing Date) on behalf of such Seller
(and solely with respect to such Seller) as to the satisfaction of the
conditions set forth in Sections 8.2(a) and 8.2(b)); and

                         (iv) executed FIRPTA Certificates in the forms attached
hereto as Exhibit K or Exhibit L.

                        (d) Each ARCap Seller who is a holder of Exchange Units
               shall deliver to Purchaser 2:

                         (i) a consent to the amendment of the LLC Agreement and
the Amended LLC Agreement, executed by such holder of Exchange Units;

                         (ii) a signature page to this Agreement executed by
such Seller (which signature page shall be deemed a certification as of the
Closing Date (unless written notice to the contrary is provided to Purchasers at
least five (5) business days prior to the Closing Date) on behalf of such Seller
(and solely with respect to such Seller) as to the satisfaction of the
conditions set forth in Sections 8.2(a) and 8.2(b));

                         (iii) an executed FIRPTA Certificate in the form
attached hereto as Exhibit K;

                         (iv) a stock power, executed in blank, with respect to
such ARCap Seller's Escrow Shares;

                                       21





                         (v) the Registration Rights Agreement executed by such
holder of Exchange Units; and

                         (vi) the Exchange Rights Agreement executed by such
holder of Exchange Units.

                        (e) Purchaser 1 shall:

                         (i) deliver to each of Sellers Representative, as agent
for ARCap Sellers, and ARCap REIT a certificate executed by the chief executive
officer, president and chief financial officer of Purchaser 1, dated as of the
Closing Date, certifying as to the satisfaction of the conditions set forth in
Sections 8.3(a) and 8.3(b) as to Purchaser 1; and

                         (ii) pay to ARCap REIT the Purchaser 1 Cash
Consideration by wire transfer of immediately available funds pursuant to the
wire transfer instructions provided by Sellers Representative prior to the
Closing Date.

                        (f) Purchaser 2 shall:

                         (i) deliver to Sellers Representative, as agent for
ARCap Sellers, a certificate executed by the chief executive officer, president
and chief financial officer of Purchaser 2, dated as of the Closing Date,
certifying as to the satisfaction of the conditions set forth in Sections 8.3(a)
and 8.3(b) as to Purchaser 2;

                         (ii) pay to Sellers Representative, as agent for ARCap
Sellers, the Purchaser 2 Cash Consideration less the Purchaser 2 Escrow Cash and
the Phantom Unit Amount by wire transfer of immediately available funds pursuant
to the wire transfer instructions provided by Sellers Representative prior to
the Closing Date;

                         (iii) pay to the Escrow Agent the Purchaser 2 Escrow
Cash by wire transfer of immediately available funds;

                         (iv) deliver to the holders of Exchange Units a consent
to the amendment of the LLC Agreement and the Amended LLC Agreement, executed by
Purchaser 2;

                         (v) immediately upon the effectiveness of the Amended
LLC Agreement, cause ARCap to take the actions described in Sections 2.3(b)(ii)
and (iii);

                         (vi) pay to Sellers Representative a cash amount equal
to the ARCap Transaction Costs;

                         (vii) deliver to Sellers Representative, as agent for
ARCap Sellers, the Escrow Agreement executed by Purchaser 2;

                                       22





                         (viii) deliver to Sellers Representative, as agent for
ARCap Sellers, the Sellers' Assignments, executed by Purchaser 2;

                         (ix) deliver to Sellers Representative, as agent for
ARCap Sellers, opinions of (i) Paul, Hastings, Janofsky & Walker LLP, and (ii)
Richards, Layton & Finger, P.A., each dated as of the Closing Date, in the form
attached hereto as Exhibit H and Exhibit I;

                         (x) deliver to each ARCap Seller who is a holder of
Exchange Units, the Exchange Rights Agreement executed by Purchaser 2; and

                         (xi) deliver to each ARCap Seller who is a holder of
Exchange Units, the Registration Rights Agreement executed by Purchaser 2.

                        (g) CharterMac shall deliver to:

                         (i) Sellers Representative, as agent for ARCap Sellers,
a certificate executed by the chief executive officer, president and chief
financial officer of CharterMac, dated as of the Closing Date, certifying as to
the satisfaction of the conditions set forth in Sections 8.3(a) and 8.3(b) as to
CharterMac;

                         (ii) each ARCap Seller who is a holder of Exchange
Units:

                          (1) an Exchange Rights Agreement executed by
   CharterMac;

                          (2) a Registration Rights Agreement executed by
   CharterMac; and

                         (iii) the Continuing Employees (i) a prospectus in
connection with the issuance of the Restricted Common Shares and (ii) award
agreements for the Restricted Common Shares executed by CharterMac.

                        (h) Sellers Representative, as agent for ARCap Sellers,
          shall:

                          (i) pay to the holders of Cash Units the Purchaser 2
Cash Consideration (less the Purchaser 2 Escrow Cash) by wire transfer of
immediately available funds;

                          (ii) deliver to the holders of Exchange Units the
physical certificates representing the Non-Cash Consideration (less the Escrow
Shares);

                          (iii) pay to ARCap, on behalf of the ARCap Sellers,
the Phantom Unit Amount by wire transfer of immediately available funds;

                                       23





                          (iv) pay and deliver to the Escrow Agent, on behalf
ARCap Sellers the Escrow Shares by delivery of physical certificates
representing the Escrow Shares; and

                          (v) disburse the cash paid to it by Purchaser 2
pursuant to Section 2.1(a)(vii) to pay the ARCap Transaction Costs.

         2.4 Working Capital Adjustment.
             --------------------------

                        (a) At least ten (10) business days prior to the Closing
          Date, Sellers Representative shall deliver to Purchaser 2 a
          certificate (the "Working Capital Certificate"), which shall set forth
          ARCap's good faith estimates of (i) the balance sheet of ARCap as of
          the close of business on the Closing Date (the "Closing Balance
          Sheet") and (ii) a statement of the Working Capital of ARCap reflected
          on the Closing Balance Sheet (the "Closing Working Capital Amount")
          (each of which shall include, among other things, any accrued current
          liability for amounts not paid under the Bonus Plans as of the Closing
          Date). The Closing Balance Sheet and the Closing Working Capital
          Amount shall be prepared by ARCap and determined in accordance with
          GAAP consistent with past practices.

                        (b) The Closing Balance Sheet and the Closing Working
          Capital Amount included in the Working Capital Certificate shall be
          binding and conclusive upon, and deemed accepted by, Purchaser 2
          unless Purchaser 2 shall have delivered written notice to Sellers
          Representative within seven (7) business days of the date of delivery
          by Sellers Representative of the Working Capital Statement (the
          "Objection Notice") that it disputes the accuracy thereof. The
          Objection Notice shall specify in reasonable detail (i) the specific
          items that Purchaser 2 disputes, (ii) the amounts of any adjustments
          to the Closing Balance Sheet and the Closing Working Capital Amount
          that are necessary in its good faith and reasonable judgment to
          conform to the requirements of this Agreement, and (iii) Purchaser 2's
          reasons for such disputes and adjustments, together with detailed
          explanatory notes, supporting information and calculations. If
          Purchaser 2 and Sellers Representative cannot agree on the final
          Closing Balance Sheet and the Closing Working Capital Amount within
          one (1) business day prior to Closing, the parties shall submit their
          final calculations of the items in dispute to a nationally recognized
          accounting firm selected upon mutual agreement of Sellers
          Representative and Purchaser 2 (which shall not be the auditor or have
          been a consultant to either party within the past five years), for
          resolution within thirty (30) days or as soon thereafter as reasonably
          practicable. Such accounting firm shall review such final calculations
          and make a selection as to which of the final calculations presented
          to it is, in the aggregate, more accurate (which amount, subject to
          adjustment pursuant to this Section 2.4(b), shall be the "Closing
          Working Capital Amount" for all purposes of this Agreement). The
          decision by such accounting firm shall be final and binding on the
          parties. Purchaser 2, on the one hand, and ARCap, on the other hand,
          will each bear 50% of the costs and expenses of such

                                       24





          accounting firm (and in the case of ARCap, its share of expenses shall
          be taken into account in determining the Closing Working Capital
          Amount). Purchaser 2 and ARCap shall make available to such accounting
          firm all relevant books and records relating to the calculations
          submitted and all other information reasonably requested by such
          accounting firm. Upon final determination of any adjustment to the
          Closing Working Capital Amount in accordance with the foregoing, the
          Basic Purchase Price shall be increased or decreased by the amount of
          the adjustment (as so adjusted, the "Purchase Price").



                                   ARTICLE 3

            REPRESENTATIONS AND WARRANTIES OF ARCAP SELLERS RELATING
                                TO ARCAP SELLERS

         Each of ARCap Sellers, severally and not jointly, as to himself,
herself or itself and not as to any other Seller, ARCap, Fund Entity or
Subsidiary of any of them, hereby represent and warrant to Purchaser 2 that:

         3.1 Authority. Except as set forth in Section 3.1 of the Disclosure
   Schedule, if such ARCap Seller is not an individual, such Seller has all
   necessary power and authority, and if such Seller is an individual, such
   Seller has full legal capacity, to enter into this Agreement, to carry out
   such Seller's obligations hereunder and to consummate the transactions
   contemplated hereby. This Agreement has been duly executed and delivered by
   such Seller, and (assuming due authorization, execution and delivery by
   CharterMac, Purchasers, Sellers' Representative, ARCap and each other Seller
   party hereto) this Agreement constitutes a legal, valid and binding
   obligation of such Seller, enforceable against such Seller in accordance with
   its terms, except as such enforceability may be subject to the laws of
   general application relating to bankruptcy, insolvency, and the relief of
   debtors and rules of law governing specific performance, injunctive relief,
   or other equitable remedies.

         3.2 No Conflict; Government Authorizations.
             --------------------------------------

                        (a) Except as set forth in Section 3.2(a) of the
          Disclosure Schedule, assuming compliance by CharterMac, the
          Purchasers, ARCap and ARCap REIT with the notification requirements of
          the HSR Act, if applicable, and the making and obtaining of all
          filings, notifications, consents, approvals, authorizations and other
          actions referred to in Section 3.2(b) of this Agreement, the
          execution, delivery and performance of this Agreement by such Seller
          and the consummation of the transactions contemplated hereby do not
          and will not (with or without notice or lapse of time, or both) (i) if
          such Seller is not an individual, violate, conflict with or result in
          the breach of any provision of the certificate of incorporation or
          formation, limited liability company agreement, by-laws, regulations
          or other organizational or governing documents of such

                                       25





          Seller, (ii) contravene, conflict with or violate any Law or Order
          applicable to such Seller or the Seller Units held thereby, or (iii)
          result in the creation of any Encumbrance (other than restrictions on
          transfer under applicable state and federal securities laws and under
          the LLC Agreement) on any of the Seller Units held by such Seller
          pursuant to any Contract to which such Seller is a party or by which
          any of the Seller Units held by such Seller is bound or affected,
          except in the case of clauses (ii) and (iii) above, for such
          contraventions, conflicts, violations and creations which could not
          reasonably be expected to materially impair the ability of Purchaser 2
          to consummate the transactions contemplated by this Agreement.

                        (b) Excluding any consents required pursuant to the LLC
          Agreement, no material consent of, or registration, declaration,
          notice or filing with, any Governmental Authority or third party is
          required to be obtained or made by such Seller, in connection with the
          execution, delivery and performance of this Agreement or the
          consummation of the transactions contemplated hereby.

         3.3 Ownership.
             ---------

                        (a) The Seller Units listed as owned by such Seller on
          the signature page executed and delivered by such Seller constitute
          all of the issued and outstanding securities of ARCap held by such
          Seller or in which such Seller has a beneficial interest.

                        (b) Such Seller is and will be on the Closing Date the
          record and beneficial owner and holder of such Seller Units listed as
          owned by such Seller on the signature page executed and delivered by
          such Seller, free and clear of all Encumbrances (other than
          restrictions on transfer under applicable state and federal securities
          laws and under the LLC Agreement), and, with respect to holders of
          Cash Units, upon the transfer of such Cash Units in accordance with
          this Agreement, Purchaser 2 will receive good and valid title to such
          Cash Units purchased hereby free and clear of all Encumbrances (other
          than restrictions on transfer under applicable state and federal
          securities laws and under the LLC Agreement).

         3.4 Legal Proceedings; Orders.
             -------------------------

                        (a) Except as set forth in Section 3.4 of the Disclosure
          Schedule, there is no pending Proceeding commenced by or against, or
          otherwise involving, or, to such Seller's Knowledge, threatened
          against, such Seller or that challenges, or that may have the effect
          of preventing, delaying, making illegal, or otherwise interfering
          with, the execution, delivery and performance of this Agreement or the
          consummation of the transactions contemplated hereby by such Seller.
          To such Seller's Knowledge, no event has occurred or circumstance
          exists that (with or without notice or lapse of time, or both) may
          give rise to or serve as a basis for the commencement of any such
          Proceeding described in this Section 3.4(a).

                                       26





                        (b) Such Seller has delivered to Purchaser 2 copies of
          all pleadings, correspondence, and other documents relating to each
          such Proceeding listed in Section 3.4 of the Disclosure Schedule. Such
          Proceeding, if any, listed in Section 3.4 of the Disclosure Schedule
          will not materially adversely affect the ability of such Seller to
          consummate the transactions contemplated by this Agreement.

         3.5 Brokers or Finders. Such Seller and its agents have incurred no
   obligation or liability, contingent or otherwise, for brokerage or finder's
   fees or agents' commissions or other similar payment in connection with this
   Agreement.

         3.6 Investment Intent. Each of the ARCap Sellers who will hold the
   Special Common Interests as a consequence of the transactions contemplated
   hereby has knowledge and experience in financial and business matters such
   that it is capable of evaluating the risks and merits associated with the
   ownership of such Special Common Interests and presently intends to hold such
   Special Common Interests for its own account for investment, with no
   intention of making a public distribution thereof. Each of the ARCap Sellers
   who will hold the Special Common Interests is an "accredited investor" as
   defined in Regulation D as promulgated under the Securities Act. Each of the
   ARCap Sellers who will hold the Special Common Interests will not sell or
   otherwise dispose of such Special Common Interests in violation of the
   Securities Act or any state securities laws.

                                   ARTICLE 4

                     REPRESENTATIONS AND WARRANTIES OF ARCAP

        ARCap hereby represents and warrants to Purchasers that:

          4.1 No Conflict; Government Authorizations.
              --------------------------------------

                        (a) Except as set forth in Section 4.1(a) of the
          Disclosure Schedule, assuming compliance by the Sellers, CharterMac
          and the Purchasers with the notification requirements of the HSR Act,
          if applicable, and the making and obtaining of all filings,
          notifications, consents, approvals, authorizations and other actions
          referred to in Section 4.1(b) of this Agreement, the execution,
          delivery and performance of this Agreement and the consummation of the
          transactions contemplated hereby do not and will not (with or without
          notice or lapse of time, or both) (i) violate, conflict with or result
          in the breach of any provision of the certificate of incorporation or
          formation, limited liability company agreement, by-laws, regulations
          or other organizational or governing documents of ARCap, the Fund
          Entities or any of their respective Subsidiaries, (ii) contravene,
          conflict with or violate any Law or Order applicable to the ARCap, the
          Fund Entities or any of their respective Subsidiaries, (iii) conflict
          with or violate or breach any provision of, or give any third party
          the right to declare a default or exercise any remedy under, or to
          accelerate the maturity or performance of, or to cancel, terminate or
          modify, any Contract of ARCap, the Fund Entities or any of their
          respective

                                       27





          Subsidiaries, or (iv) result in the creation of any Encumbrance (other
          than restrictions on transfer under applicable state and federal
          securities laws) on any of the properties or assets of ARCap, the Fund
          Entities or any of their respective Subsidiaries pursuant to any
          Contract to which such Person is a party or by which any of such
          Person's properties or assets are bound or affected, except in the
          case of clauses (ii), (iii) and (iv) above, for such contraventions,
          conflicts, violations, breaches, defaults, exercises, accelerations,
          cancellations, terminations, modifications and creations which could
          not reasonably be expected to result in a Material Adverse Effect on
          any such Person.

                        (b) Except as set forth in Section 4.1(b) of the
          Disclosure Schedule and excluding any consents required pursuant to
          the LLC Agreement, assuming compliance by the Sellers, CharterMac and
          the Purchasers with the notification requirements of the HSR Act, if
          applicable, no material consent of, or registration, declaration,
          notice or filing with, any Governmental Authority or third party is
          required to be obtained or made by ARCap, the Fund Entities or any of
          their respective Subsidiaries in connection with the execution,
          delivery and performance of this Agreement or the consummation of the
          transactions contemplated hereby.

          4.2 Corporate Status. Except as set forth in Section 4.2 of the
   Disclosure Schedule, each of ARCap, the Fund Entities and their respective
   Subsidiaries is duly organized, validly existing and in good standing under
   the laws of the jurisdiction of its incorporation or organization and each
   (a) has all requisite corporate or limited liability company power and
   authority to carry on its business as it is now being conducted, and (b) is
   duly qualified to do business and is in good standing in each of the
   jurisdictions in which the ownership, operation or leasing of its properties
   and assets and the conduct of its business requires it to be so qualified,
   licensed or authorized, except where the failure to have such power and
   authority or to be so qualified, licensed or authorized would not reasonably
   be expected to result in a Material Adverse Effect on any such Person. ARCap
   has made available to Purchaser a true, correct and complete copy of the
   certificate of incorporation or formation, limited liability company
   agreement, by-laws, regulations or other organizational or governing
   documents of each of ARCap, the Fund Entities and their respective
   Subsidiaries, each as in effect on the date hereof.

          4.3 Authority; Binding Effect. ARCap has all necessary limited
   liability company power and authority to enter into this Agreement, to carry
   out ARCap's obligations hereunder and to consummate the transactions
   contemplated hereby. This Agreement has been duly executed and delivered by
   ARCap, and (assuming due authorization and delivery by Sellers
   Representative, each other Seller, CharterMac and each Purchaser) this
   Agreement constitutes a legal, valid and binding obligation of ARCap,
   enforceable against ARCap in accordance with its terms, except as
   enforceability may be subject to the laws of general application relating to
   bankruptcy, insolvency and the relief of debtors and rules of law governing
   specific performance, injunctive relief or other equitable remedies.

                                       28





          4.4 Capitalization.
              --------------

                        (a) Section 4.4(a) of the Disclosure Schedule sets forth
          a list of the authorized and outstanding equity interests, name,
          jurisdiction of organization and record owner of the equity interests
          of ARCap, the Fund Entities and their respective Subsidiaries, all of
          which are duly authorized, validly issued, fully paid and
          nonassessable (except with respect to any capital commitments owed to
          a Fund Entity and not yet paid) and free and clear of any and all
          Encumbrances created by the issuer thereof, except for restrictions on
          transfer imposed under federal and state securities laws or the
          organizational documents of each such entity and Encumbrances incurred
          in connection with the financing of the transactions contemplated
          hereby or otherwise created by CharterMac or any Purchaser. The Seller
          Units and the CharterMac Units constitute all of the issued and
          outstanding equity interests issued by ARCap.

                        (b) Except as set forth in Section 4.4(b) of the
          Disclosure Schedule, there are no existing options, warrants, calls,
          rights, subscriptions, arrangements, claims, commitments (contingent
          or otherwise) or other agreements of any character, except as
          contemplated by this Agreement, to which any of ARCap, the Fund
          Entities or any of their respective Subsidiaries is a party, or is
          otherwise subject, requiring, and, except for the Series A Preferred
          Units listed on Schedule I and Schedule II hereto, there are no
          securities of any of ARCap, the Fund Entities or any of their
          respective Subsidiaries outstanding which upon exercise, conversion or
          exchange would require, the issuance, sale or transfer of any
          additional equity interests, shares of capital stock or other
          securities of any of ARCap, the Fund Entities or any of their
          respective Subsidiaries or securities convertible into, exchangeable
          for or evidencing the right to subscribe for or purchase capital stock
          or any other securities of any of ARCap, the Fund Entities or any of
          their respective Subsidiaries. Other than this Agreement, none of
          ARCap, the Fund Entities or any of their respective Subsidiaries is a
          party, or is otherwise subject, to any voting trust or other voting
          agreement with respect to any securities of ARCap, the Fund Entities
          or any of their respective Subsidiaries or to any agreement relating
          to the issuance, sale, redemption, transfer, acquisition or other
          disposition of the securities of ARCap, the Fund Entities or any of
          their respective Subsidiaries.

                        (c) Other than as listed in Section 4.4(c) of the
          Disclosure Schedule, there are no other joint ventures or other
          Persons in which any of ARCap, the Fund Entities and their respective
          Subsidiaries own, of record or beneficially, any direct or indirect
          equity or other similar interest or any right (contingent or
          otherwise) to acquire the same.

                        (d) Section 4.4(d) of the Disclosure Schedule sets forth
          all outstanding grants and other interests issued pursuant to the
          Phantom Plans.

                                       29





          4.5 Financial Statements; Projections.
              ---------------------------------

                        (a) ARCap has delivered or otherwise made available to
          Purchaser copies of the audited consolidated balance sheets of ARCap
          as of December 31st for the fiscal years 2002 through 2005, inclusive,
          (the "Audited Balance Sheets") and the related audited consolidated
          statements of operations and cash flows of ARCap for the fiscal years
          2002 through 2005, inclusive, in each case accompanied by the audit
          report of Ernst & Young LLP (the "Audited Financial Statements").

                        (b) ARCap has delivered or otherwise made available to
          Purchaser copies of an unaudited consolidated balance sheet of ARCap
          as of March 31, 2006 (the "Unaudited Balance Sheets") and the related
          unaudited consolidated statements of operations and cash flows of
          ARCap for the three (3) months then ended (the "Unaudited Financial
          Statements").

                        (c) ARCap has delivered or otherwise made available to
          Purchaser copies of the audited consolidated balance sheets of each
          Fund Reporting Entity as of December 31, 2005 for all fiscal years
          since inception, inclusive, (the "Fund Reporting Entities Audited
          Balance Sheets") and the related audited consolidated statements of
          operations and cash flows of each such Fund Reporting Entity for all
          fiscal years since inception, inclusive, in each case accompanied by
          the audit report of Ernst & Young LLP (the "Fund Reporting Entities
          Audited Financial Statements").

                        (d) ARCap has delivered or otherwise made available to
          Purchaser copies of the unaudited balance sheets of each Fund
          Reporting Entity as of March 31, 2006 (the "Fund Reporting Entities
          Unaudited Balance Sheets" and together with the Audited Balance
          Sheets, the Unaudited Balance Sheets and the Fund Reporting Entities
          Audited Balance Sheets, the "Balance Sheets") and the related
          unaudited statements of operations and cash flows of each such Fund
          Reporting Entity for the three (3) months then ended (the "Fund
          Reporting Entities Unaudited Financial Statements", together with the
          Audited Financial Statements, the Unaudited Financial Statements, the
          Fund Reporting Entities Audited Financial Statements and the Balance
          Sheets, the "Financial Statements").

                        (e) As of the date hereof, ARESS has not issued any
          financial statement to any investor.

                        (f) The Financial Statements were prepared in accordance
          with GAAP (except as disclosed in the footnotes thereto) and present
          fairly, in all material respects, the financial position and results
          of operations and cash flows of ARCap, the Fund Entities and their
          respective Subsidiaries as of the date thereof and for the period
          covered thereby.

                                       30





                        (g) The Financial Statements were prepared from the
          books and records of ARCap, the Fund Entities and their respective
          Subsidiaries, as applicable, which books and records have been
          maintained in accordance with sound business practices and all
          applicable Laws and reflect all financial transactions of ARCap, the
          Fund Entities and their respective Subsidiaries which are required to
          be reflected in accordance with GAAP. Each of ARCap, the Fund Entities
          and their respective Subsidiaries, as applicable, maintains accurate
          books and records reflecting its assets and liabilities and maintains
          proper and adequate internal accounting controls which provide
          assurance that (i) transactions are executed with management's
          authorization (including, with respect to the Fund Entities and their
          respective Subsidiaries, the authorization of the managing member
          thereof and required approval, if any, of any investment advisory or
          similar oversight committee, whether for interested party transactions
          or otherwise); (ii) transactions are recorded as necessary to permit
          preparation of the consolidated financial statements of ARCap in
          accordance with GAAP and to maintain accountability for ARCap's
          consolidated assets; (iii) access to the assets of ARCap, the Fund
          Entities and their respective Subsidiaries is permitted only in
          accordance with management's authorization (including, with respect to
          the Fund Entities and their respective Subsidiaries, the authorization
          of the managing member thereof and required approval, if any, of any
          investment advisory or similar oversight committee, whether for
          interested party transactions or otherwise); (iv) the reporting of
          ARCap's, the Fund Entities' and their respective Subsidiaries' assets
          is compared with existing assets at regular intervals; and (v)
          accounts, notes and other receivables and inventory are recorded
          accurately, and proper and adequate procedures are implemented to
          effect the collection thereof on a current and timely basis. To
          ARCap's Knowledge there are no significant deficiencies or material
          weaknesses in the design or operation of the internal control
          structure and procedures over financial reporting of ARCap, the Fund
          Entities or any of their respective Subsidiaries.

                        (h) Section 4.5(h) of the Disclosure Schedule sets forth
          a true, correct and complete copy of the projections relating to ARCap
          (the "Projections"). The Projections have been prepared by ARCap in
          good faith. Notwithstanding the foregoing, Purchaser expressly
          acknowledges that the Projections constitute management's estimates
          only, and are not and shall not constitute any guarantee or other
          assurance relating to the future performance of ARCap, the Fund
          Entities or any of their respective Subsidiaries.

          4.6 Taxes.
               -----

                        (a) Except to the extent set forth in Section 4.6 of the
          Disclosure Schedule:

                        (i) Each of ARCap, the Fund Entities and their
respective Subsidiaries has (i) duly and timely filed (or there has been filed
on its behalf) all Tax Returns required to be filed by it (taking into account
all applicable extensions, except

                                       31





with respect to the 2003 and 2004 taxable years with respect to ARCap CMBS Fund
REIT, Inc., the timely filing of which shall be determined without regard to any
available extensions) with the appropriate Taxing Authority and all such Tax
Returns are true, correct and complete in all material respects, and (ii) timely
paid all Taxes required to be paid whether or not shown as due on such Tax
Returns.

                        (ii) There are no Encumbrances for Taxes upon any
property or assets of ARCap, the Fund Entities or any of their respective
Subsidiaries, except for Encumbrances for Taxes not yet due and payable or for
which adequate reserves have been provided in accordance with GAAP in the latest
Financial Statement and the Closing Balance Sheet.

                        (iii) There is no audit, examination, deficiency,
assessment, refund litigations or proposed adjustment that have been received by
ARCap, the Fund Entities or any of their respective Subsidiaries in writing with
respect to any Taxes. As of the date hereof, none of ARCap, the Fund Entities or
any of their respective Subsidiaries has received notice in writing of any claim
made by a Taxing Authority in a jurisdiction where ARCap, such Fund Entity or
such Subsidiary does not file a Tax Return, that ARCap, such Fund Entity or such
Subsidiary is or may be subject to material taxation by that jurisdiction, where
such claim has not been resolved favorably to ARCap, such Fund Entity or such
Subsidiary.

                        (iv) There are no outstanding written requests,
agreements, consents or waivers to extend the statutory period of limitations
applicable to the assessment or collection of any income Taxes or income Tax
deficiencies against any of ARCap, the Fund Entities or any of their respective
Subsidiaries.

                        (v) Each of ARCap, the Fund Entities and their
respective Subsidiaries is in material compliance with all applicable
information reporting and Tax withholding requirements under U.S. federal, state
and local, and non-U.S. Tax laws and each has timely withheld, collected,
deposited, remitted and paid all required amounts with respect to all employee,
independent or dependent contractor, or service provider relationships.

                        (vi) None of ARCap, the Fund Entities or any of their
respective Subsidiaries has engaged in any transaction that could give rise to a
disclosure obligation as a reportable transaction under Code Section 6011 and
each are in material compliance with Code Sections 6111 and 6112 and the
Treasury Regulations thereunder related to tax shelter disclosure, registration,
list maintenance and record keeping. None of ARCap, the Fund Entities or any of
their respective Subsidiaries has at any time engaged in, entered into,
participated or sponsored a listed transaction within the meaning of Treasury
Regulation Sections 1.6011, 301.6111 or 301.6112.

                        (b) Section 4.6 of the Disclosure Schedule lists each
          pass-through partnership or limited liability company or other entity
          that is treated as a partnership, trust or disregarded entity for tax
          purposes in which ARCap, the Fund Entities or any of their respective
          Subsidiaries have an equity interest.

                                       32





          4.7 Intellectual Property.
              ---------------------

                        (a) Except as set forth in Section 4.7 of the Disclosure
          Schedule, ARCap, the Fund Entities and their respective Subsidiaries
          own or have a valid right to use all of the proprietary software
          applications, domain names or registered service marks and/or
          registered trademarks identified in Section 4.7 of the Disclosure
          Schedule required for the operation of ARCap, the Fund Entities and
          their respective Subsidiaries as currently conducted.

                        (b) Section 4.7 of the Disclosure Schedule sets forth
          all of the following that are owned by ARCap, the Fund Entities and
          their respective Subsidiaries or which ARCap, the Fund Entities and
          their respective Subsidiaries have a valid right to use: (i)
          registered service marks and/or registered trademarks; (ii) domain
          names; and (iii) proprietary software applications (other than
          shrink-wrap licenses available to businesses and/or consumers
          generally). Section 4.7 of the Disclosure Schedule is a true and
          complete list of all material patents, domain names, registered or
          applied for trademarks, service marks, or copyrights or trade names
          (reserved or registered with state authorities) or other similar
          proprietary rights that are the subject of a registration or an
          application for registration presently owned, held and/or used by
          ARCap, the Fund Entities and their respective Subsidiaries.

                        (c) Except as set forth in Section 4.7 of the Disclosure
          Schedule, no registered service marks and/or registered trademarks
          identified in Section 4.7 of the Disclosure Schedule have been or are
          now involved in any opposition or cancellation proceeding and no such
          proceeding is or has been threatened with respect to any of such
          service marks and/or registered trademarks.

                        (d) Except as set forth in Section 4.7 of the Disclosure
          Schedule, no proprietary software application or registered service
          marks and/or registered trademarks identified in Section 4.7 of the
          Disclosure Schedule have been or are now involved in any infringement
          or misappropriation proceeding and no such proceeding is or has been
          threatened with respect to any of the proprietary software
          applications or registered service marks and/or registered trademarks.

                        (e) Except as set forth in Section 4.7 of the Disclosure
          Schedule, ARCap exclusively owns, free and clear of any and all
          encumbrances all proprietary software applications, domain names and
          registered service marks and/or registered trademarks identified in
          Section 4.7 of the Disclosure Schedule. Except as set forth in Section
          4.7 of the Disclosure Schedule, all items of Intellectual Property
          owned by ARCap, the Fund Entities and their respective Subsidiaries,
          to ARCap's Knowledge, are valid and subsisting and enforceable, except
          where such invalidity, non substinance or unenforceability would not
          have a Material Adverse Effect. Except as set forth in Section 4.7 of
          the Disclosure Schedule, neither ARCap, the Fund Entities nor any of
          their

                                       33





          respective Subsidiaries have received any notice or claim challenging
          the validity, enforceability, or ownership by ARCap, the Fund Entities
          or any of their respective Subsidiaries of any of the proprietary
          software applications, domain names or registered service marks and/or
          registered trademarks identified on Section 4.7 of the Disclosure
          Schedule nor to the Knowledge of ARCap is there a reasonable basis for
          any such claim. Neither ARCap, the Fund Entities nor any of their
          respective Subsidiaries have taken any action or failed to take any
          action that could reasonably be expected to result in the abandonment,
          cancellation, forfeiture, relinquishment, invalidation or
          unenforceability of any of the proprietary software applications,
          domain names or registered service marks and/or registered trademarks
          (including the failure to pay any filing, examination, issuance, post
          registration and maintenance fees, annuities and the like), except for
          such action that would not result in a Material Adverse Effect. Except
          as set forth in Section 4.7 of the Disclosure Schedule, ARCap has
          obtained an assignment of intellectual property agreement for any
          employee, independent contractor and/or outside contractor that
          contributed to the creation, development or improvement of the
          proprietary software applications identified in Section 4.7 of the
          Disclosure Schedule.

                        (f) Except as set forth in Section 4.7 of the Disclosure
          Schedule, ARCap, the Fund Entities and their respective Subsidiaries
          have taken reasonable steps in accordance with standard industry
          practices to protect their rights in the proprietary software
          applications identified in Section 4.7 of the Disclosure Schedule and
          at all times have taken steps reasonably calculated to maintain the
          confidentiality of all information that constitutes a trade secret
          included therein.

                        (g) Except as set forth in Section 4.7 of the Disclosure
          Schedule, to ARCap's Knowledge, the activities of ARCap, the Fund
          Entities and their respective Subsidiaries, all as currently
          conducted, do not infringe upon, misappropriate, violate, or
          constitute the unauthorized use of, any Intellectual Property of any
          third party, in a manner which would result in a Material Adverse
          Effect and neither ARCap, the Fund Entities nor any of their
          respective Subsidiaries have, within the last two years, received any
          notice or claim asserting or suggesting that any such infringement,
          misappropriation, violation, or unauthorized use is or may be
          occurring or has or may have occurred.

          4.8 Information Systems.
              -------------------

                        (a) Section 4.8(a) of the Disclosure Schedule identifies
          the principal information systems (including operating systems,
          applications and databases) used by ARCap, the Fund Entities or any of
          their respective Subsidiaries (the "Information Systems"). Except as
          described in Section 4.8(a) to the Disclosure Schedule, the
          Information Systems are, in all material respects, operational and
          perform the functions for which they were intended to be used, except
          where such failure would not result in a Material

                                       34





          Adverse Effect. ARCap, the Fund Entities and their respective
          Subsidiaries own or have a valid and subsisting license for all of the
          Information Systems currently used by them in their business, except
          where the failure to have such a valid and subsisting license would
          not have a Material Adverse Effect.

                        (b) Except as described in Section 4.8(b) of the
          Disclosure Schedule, within the past twelve (12) months of the date
          hereof, ARCap, the Fund Entities and their respective Subsidiaries
          have not experienced any material disruption to, or material
          interruption in, its conduct of its business and operations
          attributable to a defect, bug, breakdown or other failure or
          deficiency on the part of the Information Systems which has resulted
          in a Material Adverse Effect. Except for scheduled or routine
          maintenance which does cause any material disruption to, or material
          interruption in, the conduct of the business and operations of ARCap,
          the Fund Entities and their respective Subsidiaries, the Information
          Systems are, taken as a whole, available for use during normal working
          hours. Each of ARCap, the Fund Entities and their respective
          Subsidiaries has taken commercially reasonable steps to provide for
          the backup and recovery of the data and information critical to the
          conduct of its business and operations.

           4.9 Legal Proceedings.
               -----------------

                        (a) Except as set forth in Section 4.9 of the Disclosure
          Schedule, there is no pending Proceeding commenced by or against, or
          otherwise involving, or, to ARCap's Knowledge, threatened against,
          ARCap, the Fund Entities or any of their respective Subsidiaries or
          that challenges, or that may have the effect of preventing, delaying,
          making illegal, or otherwise interfering with, the execution, delivery
          and performance of this Agreement or the consummation of the
          transactions contemplated hereby by ARCap. To ARCap's Knowledge, no
          event has occurred or circumstance exists that (with or without notice
          or lapse of time, or both) may give rise to or serve as a basis for
          the commencement of any such Proceeding by or against, or otherwise
          involving, ARCap, the Fund Entities or their respective Subsidiaries.

                        (b) ARCap has delivered or otherwise made available to
          Purchaser copies of all pleadings, correspondence, and other documents
          relating to each Proceeding listed in Section 4.9 of the Disclosure
          Schedule. Such Proceeding, if any, listed in Section 4.9 of the
          Disclosure Schedule will not have a Material Adverse Effect on any
          such Person.

                        (c) Except as set forth in Section 4.9 of the Disclosure
          Schedule:

                         (i) there is no Order to which any of ARCap, the Fund
Entities or any of their respective Subsidiaries or any of the assets owned or
used by any such entity, is subject;

                                       35





                         (ii) to ARCap's Knowledge, no officer, director, agent
or employee of any of ARCap, the Fund Entities or any of their respective
Subsidiaries is subject to any Order that prohibits such officer, director,
agent or employee from engaging in or continuing any conduct, activity, or
practice relating to the business of any of ARCap, the Fund Entities or any of
their respective Subsidiaries.

                        (d) Except as set forth in Section 4.9 of the Disclosure
          Schedule:

                         (i) each of ARCap, the Fund Entities and their
respective Subsidiaries is, and at all times has been, in material compliance
with all of the terms and requirements of each Order to which it, or any of the
assets owned or used by it, is or has been subject;

                         (ii) no event has occurred or circumstance exists that
may constitute or result in (with or without notice or lapse of time, or both) a
material violation of or material failure to comply with any term or requirement
of any Order to which any of ARCap, the Fund Entities or any of their respective
Subsidiaries, or any of the assets owned or used by any such entity, is subject;
and

                         (iii) none of ARCap, the Fund Entities or any of their
respective Subsidiaries has received at any time any notice or other
communication (whether oral or written) from any Governmental Authority or any
other Person regarding any actual, alleged, possible or potential material
violation of, or material failure to comply with, any term or requirement of any
Order to which any of ARCap, the Fund Entities or any of their respective
Subsidiaries, is or has been subject.

          4.10 Compliance with Laws; Permits.
               -----------------------------

                        (a) Except as set forth in Section 4.10(a) of the
          Disclosure Schedule, ARCap, the Fund Entities and their respective
          Subsidiaries are, and since January 1, 2003, have been in material
          compliance with, and have conducted their business in all material
          respects so as to comply with, all Laws applicable to their respective
          businesses.

                        (b) No event has occurred or circumstance exists that
          (with or without notice or lapse of time, or both) may give rise to
          any obligation on the part of any of ARCap, the Fund Entities or any
          of their respective Subsidiaries to undertake, or to bear all or any
          portion of the cost of, any material remedial action of any nature.

                        (c) Neither ARCap, the Fund Entities nor any of their
          respective Subsidiaries has received, at any time since January 1,
          2003, any notice or other communication (whether oral or written) from
          any Governmental Authority or any other Person regarding (i) any
          actual or alleged material violation of, or material failure to comply
          with any Law, or (ii) any actual or alleged obligation on the part of
          ARCap, the Fund Entities and their

                                       36





          respective Subsidiaries to undertake, or to bear all or any portion of
          the cost of, any remedial action of any nature, which in each case has
          not been satisfied in all material respects.

                        (d) Section 4.10(d) of the Disclosure Schedule contains
          a complete and accurate list of each Permit that is held by ARCap, the
          Fund Entities or any of their respective Subsidiaries. Except as set
          forth in Section 4.10(d) of the Disclosure Schedule, ARCap, the Fund
          Entities and their respective Subsidiaries have obtained all material
          Permits that are necessary to the conduct of their respective
          businesses as presently being conducted. All material Permits are in
          full force and effect. Except as set forth in Section 4.10(d) of the
          Disclosure Schedule:

                         (i) each of ARCap, the Fund Entities and their
respective Subsidiaries is, and at all times since January 1, 2003 has been, in
material compliance with all of the terms and requirements of each Permit
identified or required to be identified in Section 4.10(d) of the Disclosure
Schedule;

                         (ii) no event has occurred or circumstance exists that
may (with or without notice or lapse of time, or both) (A) constitute or result
directly or indirectly in a material violation of or a material failure to
comply with any term or requirement of any Permit listed or required to be
listed in Section 4.10(d) of the Disclosure Schedule, or (B) result directly or
indirectly in the revocation, withdrawal, suspension, cancellation, or
termination of, or any modification to, any material Permit listed or required
to be listed in Section 4.10(d) of the Disclosure Schedule;

                         (iii) none of ARCap, the Fund Entities or any of their
respective Subsidiaries has received, at any time since January 1, 2003, any
notice or other communication (whether oral or written) from any Governmental
Authority or any other Person regarding (A) any actual or alleged material
violation of or material failure to comply with any term or requirement of any
Permit, or (B) any actual, proposed possible, or potential revocation,
withdrawal, suspension, cancellation, termination of, or modification to any
material Permit, which in each case has not been satisfied in all material
respects; and

                         (iv) all applications required to have been filed for
the renewal of all material Permits have been duly filed on a timely basis with
the appropriate Governmental Authority, and all other filings required to have
been made with respect to such material Permit have been duly made on a timely
basis with the appropriate Governmental Authority.

                                       37





         4.11 Environmental and Safety and Health Matters.
              -------------------------------------------

         Except for matters which would not  reasonably be expected to result in
a Material  Adverse  Effect on any such Person or which are set forth in Section
4.11 of the Disclosure Schedule:

                        (a) ARCap, the Fund Entities and their respective
          Subsidiaries are, and at all times have been, in compliance with all
          Environmental Laws; and

                        (b) there is no Environmental Claim pending or
          threatened against ARCap, the Fund Entities or any of their respective
          Subsidiaries.

          4.12     Employee Matters and Benefit Plans.
                   ----------------------------------

                        (a) Section 4.12(a) of the Disclosure Schedule sets
          forth a true and complete list of all Plans. True and complete copies
          of each of the following documents have been made available by ARCap
          to Purchaser:

                          (i) each Multiemployer Plan, Pension Plan and Welfare
Plan (and, if applicable, related trust agreements) and all amendments thereto,
all written interpretations thereof and written descriptions thereof (including
summary plan descriptions and summaries of material modifications) which have
been distributed to employees, or to participants or beneficiaries in such plan,
all insurance contracts or other funding instruments, and the three most recent
annual reports (Form Series 5500), including all schedules and financial
statements attached thereto, if any, required under ERISA and the Code;

                          (ii) each other Plan and all amendments thereto
(including a complete description of each Plan that is not in writing, if any);
and

                          (iii) the most recent determination letter or opinion
letter, if any, issued by the Internal Revenue Service with respect to each
Pension Plan.

                        (b) Each Pension Plan (i) has been established and
          maintained in material compliance with its terms and with all
          applicable Laws, including ERISA and the Code, (ii) is qualified and
          tax exempt under the provisions of Code Sections 401(a) and 501(a) and
          has been so qualified during the period from its adoption to date, and
          no event has occurred since the date of the most recent determination
          letter, opinion letter or application thereof that would adversely
          affect its qualification.

                        (c) Each Plan has been operated in material compliance
          with its terms and with all applicable Laws, including, to the extent
          applicable, the provisions of Part 6 of Title I of ERISA and Section
          4980B of the Code.

                        (d) Except as disclosed in Section 4.12(d) of the
          Disclosure Schedule, (i) neither ARCap, nor any of its Subsidiaries,
          nor, to the Knowledge

                                       38





          of ARCap, any Plan or any party in interest (as defined in Section
          3(14) of ERISA) with respect to any such Plan has engaged in any
          prohibited transaction as defined in Section 406 of ERISA or Section
          4975 of the Code with respect to a Plan for which there is no
          statutory exemption under Section 408 of ERISA or Section 4975 of the
          Code, and (ii) there is no material litigation, lien, disputed claim,
          governmental proceeding or investigation pending or, to the Knowledge
          of ARCap, threatened or reasonably anticipated with respect to any of
          such Plans, the assets of such Plans (other than routine claims for
          benefits), any related trusts, or any fiduciary, trustee,
          administrator or sponsor of such Plans.

                        (e) Except as disclosed in Section 4.12(e) of the
          Disclosure Schedule, no Welfare Plan provides for post-retirement
          medical, life insurance or disability benefits.

                        (f) Neither ARCap, nor any of its Subsidiaries, nor any
          ERISA Affiliate has maintained, contributed to or otherwise had any
          obligation with respect to (i) any Multiemployer Plan, (ii) any
          Pension Plan subject to Title IV of ERISA or Section 412 of the Code,
          or (iii) any "multiple employer welfare arrangement" as defined in
          Section 3(40) of ERISA.

                        (g) With respect to each Plan, as of the Closing,
          substantially all required payments, premiums, and contributions for
          all periods ending prior to or as of the Closing shall have been made
          or accrued on the books and records of ARCap and its Subsidiaries.
          Neither ARCap, nor any of its Subsidiaries, nor any ERISA Affiliate,
          nor any Plan or associated trust or funding vehicle has any assets
          subject to liens or other encumbrances with respect to any Plan.

                        (h) Except as set forth in Section 4.12(h) of the
          Disclosure Schedule, as of the Closing, neither ARCap nor any of its
          Subsidiaries (i) is a party to any Contract or Plan that has resulted
          or would result, individually or in the aggregate, in connection with
          this Agreement or any change of control of any Company, in the payment
          of any "excess parachute payments" within the meaning of Section 280G
          of the Code or (ii) has made any payments, is obligated to make any
          payments, or is a party to any Contract or Plan that would reasonably
          be expected to obligate it to make any payments, or is a party to any
          Contract or Plan that would reasonably be expected to obligate it to
          make any payments that will not be deductible by reason of Sections
          162, 280G or 404 of the Code.

                        (i) Except as set forth in Section 4.12(i) of the
          Disclosure, no Plan or payment or benefit provided pursuant to any
          Plan between ARCap or any of its Subsidiaries and any "service
          provider" (within the meaning of Section 409A of the Code) will or may
          provide for the deferral of compensation subject to Section 409A of
          the Code, whether pursuant to the execution and delivery of this
          Agreement or the consummation of the

                                       39





          transactions contemplated hereby (either alone or upon the occurrence
          of any additional or subsequent events). Each Plan that is a
          nonqualified deferred compensation plan subject to Section 409A of the
          Code has been operated and administered in good faith compliance with
          Section 409A from the period beginning January 1, 2005 through the
          date hereof.

                        (j) Except to the extent required by this Agreement,
          none of ARCap or any of its Subsidiaries has any formal plan or
          commitment (whether or not legally binding) either to create any plan
          or arrangement that would constitute a Plan, or to make any
          contributions, modifications, or changes to any Plan, other than in
          the ordinary course of business and consistent with past practice with
          regard to amounts.

                        (k) There are no collective bargaining agreements,
          memoranda of understanding, side letters or other written agreements
          with any union or labor organization applicable to the employees of
          ARCap or any of its Subsidiaries or to which any of ARCap or any of
          its Subsidiaries is a party, a signatory, or otherwise bound.

                        (l) There are no pending, threatened or reasonably
          anticipated labor disputes, strikes, work stoppages, representation
          proceedings or attempted union organizing campaigns between any of
          ARCap or any of its Subsidiaries and any union representing the
          employees of ARCap or any of its Subsidiaries or any other collective
          bargaining representative of such employees.

                        (m) Section 4.12(m) of the Disclosure Schedule
          identifies all written material employment, consulting or independent
          contractor agreements to which ARCap or any of its Subsidiaries is a
          party with respect to any employee of ARCap or any of its Subsidiaries
          that are in effect currently or under which any of ARCap or any of its
          Subsidiaries have any liability.

                        (n) ARCap has provided Purchaser with (i) a true and
          complete list, dated as of June 30, 2006, of all employees of ARCap,
          the Fund Entities and their respective Subsidiaries, including their
          names, date of hire, current rate of compensation, employment status
          (i.e., active, inactive, on authorized leave and reason therefor),
          department, title, exempt or non-exempt status, and full-time or
          part-time status; (ii) a copy of all employee handbooks, supervisory
          handbooks, employment procedures manuals, and written employment
          policies that are in effect currently; and (iii) a copy of all EEO-1
          or similar reports and of all affirmative action plans prepared or
          submitted to any Governmental Authority by or on behalf of any of
          ARCap, the Fund Entities or any of their respective Subsidiaries since
          two years prior to the Closing Date.

                        (o) Except as set forth in Section 4.12(o) of the
          Disclosure Schedule, the consummation of the transactions contemplated
          hereby (and not,

                                       40





          for the avoidance of doubt, any acts taken by Purchaser, ARCap or any
          of their respective Subsidiaries on or after Closing) will not cause
          Purchaser, ARCap or any of their respective Subsidiaries to incur or
          suffer any liability relating to, or obligation to pay, severance,
          termination, acceleration of vesting or payment, or other payments to
          any Person under any Contract to which ARCap or any of its
          Subsidiaries is a party.

         4.13 Affiliate Arrangements.
              ----------------------

         Except as set forth in  Section  4.13 of the  Disclosure  Schedule  and
excluding this Agreement,  none of the ARCap Sellers and (to ARCap's  Knowledge)
their  Affiliates  (other than any of ARCap,  the Fund  Entities or any of their
respective  Subsidiaries),  on the one hand, and ARCap, the Fund Entities or any
of their respective Subsidiaries, on the other hand, have any interest in or are
a party to any Contract with, or relating to, ARCap, the Fund Entities or any of
their  respective  Subsidiaries  or their  respective  businesses,  that was not
negotiated and executed on an arms-length basis.

          4.14 Finder's Fee.
               ------------

         Except for Bear, Stearns & Co. Inc., neither ARCap, any Fund Entity nor
any of their respective Subsidiaries has incurred or will incur any obligation
or liability to any party for any brokerage or finder's fee or agent's
commission, or the like, in connection with the transactions contemplated by
this Agreement.

          4.15 Books and Records. The books of account, minute books, stock
    record books, and other records of ARCap, the Fund Entities and their
    respective Subsidiaries, all of which have been made available to Purchaser,
    are complete and correct in all material respects and have been maintained
    in accordance with sound business practices applicable to companies
    comparable in size and nature to ARCap, including the maintenance of an
    adequate system of internal controls. The minute books of ARCap, the Fund
    Entities and their respective Subsidiaries contain accurate and complete
    records, in all material respects, of all duly-called and held meetings held
    of, and action taken by, the stockholders, the members, the boards of
    directors, and committees of the boards of directors of ARCap, the Fund
    Entities and their respective Subsidiaries, and no duly-called meeting of
    any such stockholders, members, boards of directors or committees has been
    held for which minutes have not been prepared and are not contained in such
    minute books. At the Closing, all of such books and records will be in the
    possession of ARCap.

          4.16 Other Agreements. To ARCap's Knowledge, there are no agreements
    between and among the members of ARCap with respect to the management or
    operation of ARCap other than the LLC Agreement and this Agreement.

          4.17 No Undisclosed Liabilities. Except as set forth on the Unaudited
    Balance Sheets, or as otherwise disclosed herein or in the Disclosure
    Schedule, ARCap, the Fund Entities and their respective Subsidiaries have no
    material

                                       41





    liabilities or obligations of any nature (whether known or unknown and
    whether absolute, accrued, contingent, or otherwise) except for (i)
    liabilities or obligations reflected or reserved against in the Financial
    Statements, (ii) current liabilities incurred in the ordinary course of
    business since the respective dates thereof and (iii) liabilities and
    obligations incurred in connection with the execution of this Agreement.

          4.18 Fund Entities.
               -------------

                        (a) Since each of the Fund Entities' respective date of
          organization, and assuming the truth and accuracy of the investment
          representations made to the Fund Entities by their respective
          investors, none of the Fund Entities has been required to register as
          an investment company under the Investment Company Act of 1940.

                        (b) Since each of the Fund Entities' respective date of
          organization, none of the Fund Entities have sponsored or participated
          in the distribution by public or private offering of any interests in
          any of the Fund Entities or other entities or Persons other than
          pursuant to, and as described in, the Fund PPMs, in each case when
          read together with the related Final Fund Documents in their entirety.

          4.19 Investment Company; Investment Advisor. Assuming the truth and
    accuracy of the investment representations made to ARCap and the Fund
    Entities by their respective investors, none of ARCap, the Fund Entities nor
    any of their respective Subsidiaries has been required to register as an
    investment company under the Investment Company Act of 1940. Assuming the
    truth and accuracy of the investment representations made to ARCap and the
    Fund Entities by their respective investors, neither ARCap, ARCap REIT nor
    ARCap Fund Management, L.L.C. is or has been required to register as an
    investment adviser under the Investment Advisers Act of 1940.

          4.20 Offering Memoranda. Each of the Fund PPMs, ARCap 2003-1
    Resecuritization Trust Offering Memorandum, ARCap 2004-1 Resecuritization
    Trust Offering Memorandum, ARCap 2005-1 Resecuritization Trust Offering
    Memorandum, ARCap 2004-RR3 Resecuritization Trust Offering Memorandum, ARCap
    2005-RR5 Resecuritization Trust Offering Memorandum and ARCap 2006-RR7
    Resecuritization Trust Offering Memorandum, together, in each case, with any
    supplements thereto, in each case when read together with the related Final
    Fund Documents in their entirety, did not, as of their respective dates,
    contain any untrue statement of a material fact or omit to state a material
    fact required to be stated therein or necessary in order to make the
    statements therein, in light of the circumstances under which they were
    made, not misleading.

                                       42





          4.21 Fund Reports.
               ------------

                        (a) ARCap has previously made available to Purchaser (or
          with respect to reports furnished after the date hereof and prior to
          the Closing Date, will simultaneously with its delivery to the members
          or stockholders of each of the Fund Reporting Entities furnish to
          Purchaser) true, complete and correct copies of the last annual and
          periodic reports furnished by the managing member or the corporation
          to the members and stockholders, respectively, of the Fund Reporting
          Entity (collectively, the "Fund Entity Reports"). Each of the Fund
          Reporting Entities has furnished in all material respects all reports
          to its members or stockholders which are required to be furnished by
          it under the respective certificate of incorporation or formation,
          limited liability company agreement, by-laws, regulations or other
          organizational or governing documents of the Fund Reporting Entities.
          All financial statements contained in the Fund Entity Reports fairly
          present in accordance with GAAP the financial position and results of
          operations of the respective Fund Reporting Entity at the date and for
          the periods indicated and, if required under the respective
          certificate of incorporation or formation, limited liability company
          agreement, by-laws, regulations or other organizational or governing
          documents of the Fund Reporting Entity, have been prepared in
          conformity with GAAP. The accountants who expressed an opinion on such
          financial statements are, with respect to the respective Fund
          Reporting Entity, reasonably believed by ARCap to be independent
          public accountants.

                        (b) Since the respective dates as of which information
          is given in any of the Fund Entity Reports and the Fund PPMs
          (whichever is most recently distributed) to the date hereof, except as
          may otherwise be stated in or contemplated by such document or on
          Section 4.21(b) of the Disclosure Schedule: (i) there has not been any
          material adverse change in the condition (financial or otherwise) of
          the respective Fund Reporting Entity, or any material properties or
          assets of the Fund Reporting Entity whether or not arising in the
          ordinary course of business; and (ii) there has not been any material
          transaction entered into by the Fund Reporting Entity (except as
          otherwise in conformity with the investment objective of such Fund
          Reporting Entity), other than in the ordinary course of business.

          4.22 REIT. Except as set forth in Section 4.22 of the Disclosure
    Schedule, ARCap REIT, ARCap CMBS Fund REIT, Inc. and ARCap CMBS Fund II
    REIT, Inc. each have been organized and each of their operations have been
    conducted and maintained at all times in conformity with the requirements
    for qualification as a real estate investment trust under the Code,
    including the making of timely and valid REIT elections and the satisfaction
    of the income and asset tests of Code Section 856(c) and the distribution
    tests of Code Section 857. ASI and ARCap REIT have made a valid election to
    treat ASI as a taxable REIT subsidiary under Section 856(l) of the Code at
    all times since the formation of ASI. RR3, RR5 and AFC are properly treated
    as qualified REIT subsidiaries of ARCap REIT under Section 856(i) of the
    Code. ARCap 2003-1 Resecuritization, Inc., ARCap 2004-1 Resecuritization,
    Inc. and ARCap

                                       43





    2006-RR7 Resecuritization, Inc. are properly treated as qualified REIT
    subsidiaries of ARCap CMBS Fund REIT, Inc. under Section 856(i) of the Code.
    ARCap 2005-1 Resecuritization, Inc. is properly treated as a qualified REIT
    subsidiary of ARCap CMBS Fund II REIT, Inc. under Section 856(i) of the
    Code.

          4.23 Contracts; No Defaults.
               ----------------------

                        (a) Section 4.23(a) of the Disclosure Schedule contains
          a complete and accurate list, and ARCap has delivered to Purchaser
          true and correct copies, of all limited liability company agreements,
          employment Contracts, lines of credit Contracts, master repurchase
          Contracts, Contracts related to Intellectual Property and any other
          Contract involving payments in an aggregate amount equal to or in
          excess of $50,000, which are not terminable in 30 days or less to
          which ARCap, the Fund Entities and their respective Subsidiaries are a
          party.

                        (b) Except as set forth in Section 4.23(b) of the
          Disclosure Schedule, no Contract identified or required to be
          identified in Section 4.23(a) of the Disclosure Schedule is in default
          by its terms as a result of any act or omission by ARCap, the Fund
          Entities or any of their respective Subsidiaries or has been canceled
          by any counterparty thereto, and none of ARCap, the Fund Entities or
          any of their respective Subsidiaries are in receipt of any claim of
          default under any such agreement.

                        (c) Except as set forth in Section 4.23(c) of the
          Disclosure Schedule:

                         (i) each of ARCap, the Fund Entities and their
respective Subsidiaries has been in material compliance with all applicable
terms and requirements of each material Contract under which such entity has or
had any obligation or liability or by which such entity or any of the assets
owned or used by such entity is or was bound;

                         (ii) to ARCap's Knowledge, each other Person that has
or had any obligation or liability under any material Contract under which
ARCap, the Fund Entities or any of their respective Subsidiaries has or had any
rights is in material compliance with all applicable terms and requirements of
such Contract;

                         (iii) to ARCap's Knowledge, no event has occurred or
circumstance exists that (with or without notice or lapse of time, or both) may
contravene, conflict with, or result in a violation or breach of, or give either
ARCap, the Fund Entities or any of their respective Subsidiaries or any other
Person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate, or modify,
any material Contract; and

                         (iv) neither ARCap, any Fund Entity nor any of their
respective Subsidiaries have given to or received from any Person any notice or

                                       44





other communication (whether oral or written) regarding any actual or alleged
violation or breach of, or default under, any material Contract.

                        (d) There are no renegotiations of, attempts to
          renegotiate, or outstanding rights to renegotiate any material amounts
          paid or payable to either ARCap, the Fund Entities or any of their
          respective Subsidiaries under current or completed Contracts with any
          Person and no such Person has made written demand for such
          renegotiation.

          4.24 Insurance. Section 4.24 of the Disclosure Schedule identifies all
    of the policies of insurance and bonds of ARCap, the Fund Entities and each
    of their respective Subsidiaries. ARCap, the Fund Entities and each of their
    respective Subsidiaries have policies of insurance and bonds of the type and
    in the amounts customarily carried by persons conducting businesses or
    owning assets similar to those of ARCap, the Fund Entities and each of their
    respective Subsidiaries. There is no material claim pending under any of
    such policies or bonds as to which coverage has been questioned, denied or
    disputed by the underwriters of such policies or bonds. All premiums due and
    payable under all such policies and bonds have been paid and ARCap, the Fund
    Entities and each of their respective Subsidiaries are otherwise in material
    compliance with the terms of such policies and bonds. ARCap has no Knowledge
    of any threatened termination of, or material premium increase with respect
    to, any of such policies.

          4.25 Leases.
               ------

                        (a) Section 4.25 of the Disclosure Schedule identifies
          all of the real property presently leased by ARCap, the Fund Entities
          and their respective Subsidiaries which is used in connection with the
          business of such entities (collectively, the "Leased Real Property")
          and contains a complete and accurate list of each of the leases,
          including all amendments thereto, with respect to the Leased Real
          Property (each a "Lease" and collectively, the "Leases"). ARCap has
          made available to Purchaser true and complete copies of the Leases,
          including all schedules, amendments and modifications thereto. ARCap,
          the Fund Entities and their respective Subsidiaries do not own any
          real property. Other than the Leases, to ARCap's Knowledge, the Leased
          Real Property is not subject to any other leases or occupancy
          agreements, rights of first refusal, options to purchase or other
          rights of occupancy.

                        (b) Each Lease remains unmodified and is in full force
          and effect, and ARCap, the Fund Entities and their respective
          Subsidiaries hold a valid and existing leasehold interest under each
          of the Leases to which it is a party for the term(s) set forth
          therein. There are no other written or oral agreements amending or in
          connection with the Leases. ARCap, the Fund Entities and their
          respective Subsidiaries are not in material default or material breach
          of any Lease nor, to ARCap's Knowledge, is any other party thereto. To
          ARCap's Knowledge, no events have occurred and no circumstances exist

                                       45





          which, if not remedied, and whether with or without notice or the
          passage of time or both, would result in such a material default.

                        (c) ARCap, the Fund Entities or any of their respective
          Subsidiaries have not received written notice of any pending or
          threatened condemnations, planned public improvements, annexation,
          special assessments, zoning or subdivision changes, or other claims
          affecting the Leased Real Property.

                        (d) To ARCap's Knowledge, there is no private
          restrictive covenant or governmental use restriction (including
          zoning) on all or any portion of the Leased Real Property that
          prohibits the current use of the same.

           4.26 Partnership Treatment. Each of ARCap High Yield CMBS Fund,
    L.L.C., ARCap Diversified Risk CMBS Fund, L.L.C., ARCap High Yield CMBS Fund
    II, L.L.C., ARCap Diversified Risk CMBS Fund II, L.L.C. and ARCap Real
    Estate Special Situations Mortgage Fund, L.L.C. at all times has been
    properly treated as a partnership under the Code for federal income tax
    purposes and for all state and local tax purposes, and no election has been
    made to treat any such entity as a corporation or disregarded entity for Tax
    purposes. None of ARCap High Yield CMBS Fund, L.L.C., ARCap Diversified Risk
    CMBS Fund, L.L.C., ARCap High Yield CMBS Fund II, L.L.C., ARCap Diversified
    Risk CMBS Fund II, L.L.C. or ARCap Real Estate Special Situations Mortgage
    Fund, L.L.C. is or at any time has been or under applicable Law properly
    should be or should have been treated as a "publicly traded partnership"
    within the meaning of Section 7704(b) of the Code.

           4.27 Registration. The offer and sale of securities by each of ARCap,
    the Fund Entities or any of their respective Subsidiaries, did not require
    the registration of such securities under the Securities Act or applicable
    state securities laws. The issuance of such securities has been conducted in
    accordance with exemptions from registration under the Securities Act and
    applicable state securities laws.

           4.28 Servicing. ARCap, the Fund Entities and their respective
    Subsidiaries have complied in all material respects with (i) all applicable
    Laws and rating agency servicing standards with respect to all outstanding
    Serviced Loans as to which any of them acts as a servicer, whether as a
    master servicer, special servicer, subservicer or otherwise, and (ii) the
    material terms of the applicable Servicing Agreement and mortgage loan
    documents relating to such Serviced Loans. As of the date of this Agreement,
    ASI has a special servicer rating of "Strong" by Standard & Poor's and ASI
    has not received any notice of any ratings downgrade; provided, that no
    representation or warranty is made by ARCap with respect to any effect that
    the transactions contemplated hereby may have on such rating.

                                       46





          4.29 Serviced Loan Schedule. A true, complete and accurate copy of
    ARCap's watchlist policy has been provided to Purchaser. Section 4.29 of the
    Disclosure Schedule sets forth a true, complete and accurate list of each
    outstanding Specially Serviced Loan as of June 30, 2006. 4.30 ERISA. Except
    as set forth in Section 4.30 of the Disclosure Schedule, none of the Fund
    Entities are parties to, or have any liability or obligation with respect
    to, any Plan. With respect to each Fund Entity, based upon the truth of the
    representations made to ARCap and each Fund Entity by their respective
    investors, either of the following is true:

                        (a) such Fund Entity (A) is not (a) an "employee benefit
          plan" within the meaning of Section 3(3) of ERISA, (b) a "plan"
          defined in Section 4975 of the Code, (c) a governmental plan within
          the meaning of Section 3(32) of ERISA, or (d) a collective investment
          vehicle made up of two or more of such plans; and (B) no portion of
          the assets of any such Fund Entity constitutes "plan assets" within
          the meaning of the plan asset regulations promulgated by the U.S.
          Department of Labor at 29 C.F.R. 2510.3-101 et. seq. (1986); or

                        (b) neither ARCap, nor any of its Subsidiaries, nor any
          Fund Entity nor, to ARCap's Knowledge, any party in interest (as
          defined in Section 3(14) of ERISA) with respect to any Fund Entity has
          engaged in any non-exempt prohibited transaction as defined in Section
          406 of ERISA or Section 4975 of the Code with respect to a Fund Entity
          that would reasonably be expected to result in any material liability
          to ARCap, any of its Subsidiaries, any Fund Entity or Purchaser.

          4.31 Disclosure. No representation or warranty of ARCap in this
    Agreement and no statement of ARCap in the Disclosure Schedule, when all
    such representations, warranties and statements are read together in their
    entirety, omits to state a material fact necessary to make the statements
    herein or therein, in light of the circumstances under which they were made,
    not misleading.

          4.32 No Material Adverse Change. Since December 31, 2005, except as
    set forth on Section 4.32 of the Disclosure Schedule, no material adverse
    change has occurred with respect to ARCap, the Fund Entities or their
    respective Subsidiaries or circumstance exists that may result in a material
    adverse change with respect to ARCap, the Fund Entities or their respective
    Subsidiaries. An event, fact, violation, breach, inaccuracy, circumstance or
    other matter will be deemed to have caused a "material adverse change" with
    respect to ARCap, the Fund Entities and their respective Subsidiaries if
    such event, fact, violation, breach, inaccuracy, circumstance or other
    matter (considered together with all other matters that would constitute
    exceptions to the representations and warranties set forth in the Agreement
    but for the presence of "Material Adverse Effect" or other materiality
    qualifications, or any similar qualifications, in such representations and
    warranties) had or may be expected to have or give rise to a material
    adverse effect

                                       47





    on (i) the business, financial condition, capitalization, assets,
    liabilities, operations, financial performance of any of ARCap, the Fund
    Entities or their respective Subsidiaries, taken as a whole, (ii) the
    ability of ARCap to consummate the transactions contemplated by this
    Agreement or to perform any of its obligations under this Agreement or (iii)
    Purchaser's ability to exercise ownership rights with respect to the Cash
    Units.

           4.33 Intercompany Accounts. Section 4.33 of the Disclosure Schedule
    sets forth all intercompany accounts between any of ARCap Sellers or (to
    ARCap's Knowledge) their Subsidiaries (other than any of ARCap, the Fund
    Entities and their respective Subsidiaries), on the one hand, and any of
    ARCap, the Fund Entities and their respective Subsidiaries, on the other
    hand.

           4.34 Disclaimer of Other Representations and Warranties. Except as
    expressly set forth in Article 3 and Article 4 of this Agreement, neither
    Sellers Representative, ARCap, nor any of the Sellers makes any
    representation or warranty, express or implied, at law or in equity, with
    respect to ARCap, the Fund Entities, any of their respective Subsidiaries,
    their respective businesses or financial condition or any of their assets,
    liabilities or operations, and any such other representations or warranties
    are hereby expressly disclaimed.

           4.35 Disclosure Schedule. Any information provided in writing to
    ARCap by any ARCap Seller for inclusion in the Disclosure Schedule with
    respect to matters covered by Article 3 of this Agreement has been included
    in the Disclosure Schedule.

                                   ARTICLE 5

                  REPRESENTATIONS AND WARRANTIES OF ARCAP REIT

          ARCap REIT hereby represents and warrants to Purchasers:

          5.1 No Conflict; Government Authorizations.
              --------------------------------------

                        (a) Except as set forth in Section 5.1(a) of the
          Disclosure Schedule, assuming compliance by the ARCap Sellers, ARCap,
          CharterMac and the Purchasers with the notification requirements of
          the HSR Act, if applicable, and the making and obtaining of all
          filings, notifications, consents, approvals, authorizations and other
          actions referred to in Section 5.1(b) of this Agreement, the
          execution, delivery and performance of this Agreement and the
          consummation of the transactions contemplated hereby do not and will
          not (with or without notice or lapse of time, or both) (i) violate,
          conflict with or result in the breach of any provision of the
          certificate of incorporation or by-laws of ARCap REIT or ASI, (ii)
          contravene, conflict with or violate any Law or Order applicable to
          ARCap REIT or ASI, (iii) conflict with or violate or breach any
          provision of, or give any third party the right to declare a default
          or exercise any remedy under, or to accelerate the maturity or
          performance of, or

                                       48





          to cancel, terminate or modify, any Contract of ARCap REIT or ASI, or
          (iv) result in the creation of any Encumbrance (other than
          restrictions on transfer under applicable state and federal securities
          laws) on any of the properties or assets of ARCap REIT or ASI pursuant
          to any Contract to which such Person is a party or by which any of
          such Person's properties or assets are bound or affected, except in
          the case of clauses (ii), (iii) and (iv) above, for such
          contraventions, conflicts, violations, breaches, defaults, exercises,
          accelerations, cancellations, terminations, modifications and
          creations which could not reasonably be expected to result in a
          Material Adverse Effect on any such Person.

                        (b) Except as set forth in Section 5.1(b) of the
          Disclosure Schedule, assuming compliance by the ARCap Sellers, ARCap,
          CharterMac and the Purchasers with the notification requirements of
          the HSR Act, if applicable, no material consent of, or registration,
          declaration, notice or filing with, any Governmental Authority or
          third party is required to be obtained or made by ARCap REIT or ASI in
          connection with the execution, delivery and performance of this
          Agreement or the consummation of the transactions contemplated hereby.

           5.2 Corporate Status. Each of ARCap REIT and ASI is duly organized,
    validly existing and in good standing under the laws of the jurisdiction of
    its incorporation and each (a) has all requisite corporate power and
    authority to carry on its business as it is now being conducted, and (b) is
    duly qualified to do business and is in good standing in each of the
    jurisdictions in which the ownership, operation or leasing of its properties
    and assets and the conduct of its business requires it to be so qualified,
    licensed or authorized, except where the failure to have such power and
    authority or to be so qualified, licensed or authorized would not reasonably
    be expected to result in a Material Adverse Effect on either such Person.

           5.3 Authority; Binding Effect. ARCap REIT has all necessary power and
    authority to enter into this Agreement, to carry out ARCap REIT's
    obligations hereunder and to consummate the transactions contemplated
    hereby. This Agreement has been duly executed and delivered by ARCap REIT,
    and (assuming due authorization and delivery by Sellers Representative,
    ARCap, each other Seller, CharterMac and each Purchaser) this Agreement
    constitutes a legal, valid and binding obligation of ARCap REIT, enforceable
    against ARCap REIT in accordance with its terms, except as enforceability
    may be subject to the laws of general application relating to bankruptcy,
    insolvency and the relief of debtors and rules of law governing specific
    performance, injunctive relief or other equitable remedies.

          5.4 Ownership.
              ---------

                        (a) The authorized capital stock of ASI consists solely
          of 3000 shares of common stock, of which 3000 shares have been issued
          and are


                                       49


          outstanding (the "ASI Stock"). The ASI Stock is authorized, validly
          issued, fully paid and nonassessable. ARCap REIT owns the ASI Stock
          free and clear of all Encumbrances (other than restrictions on
          transfer under applicable state and federal securities laws), and upon
          the transfer of such ASI Stock in accordance with this Agreement,
          Purchaser 1 will receive good and valid title to the ASI Stock
          purchased hereby free and clear of all Encumbrances (other than
          restrictions on transfer under applicable state and federal securities
          laws). Except as set forth in Section 5.4 of the Disclosure Schedule
          and except for this Agreement, there are no existing options,
          warrants, calls, rights, subscriptions, arrangements, claims,
          commitments (contingent or otherwise) or other agreements of any
          character to which either of ARCap REIT or ASI is a party, or is
          otherwise subject, requiring, and there are no securities of either of
          ARCap REIT or ASI outstanding which upon exercise, conversion or
          exchange would require, the issuance, sale or transfer of any
          additional shares of ASI Stock or securities convertible into,
          exchangeable for or evidencing the right to subscribe for or purchase
          ASI Stock. Neither ARCap REIT or ASI is a party, or is otherwise
          subject, to any voting trust or other voting agreement with respect to
          ASI Stock or to any agreement relating to the issuance, sale,
          redemption, transfer, acquisition or other disposition of ASI Stock.

          5.5 Legal Proceedings; Orders.
              -------------------------

                        (a) Except as set forth in Section 5.5 of the Disclosure
          Schedule, there is no pending Proceeding commenced by or against, or
          otherwise involving, or, to ARCap REIT's Knowledge, threatened
          against, ARCap REIT or that challenges, or that may have the effect of
          preventing, delaying, making illegal, or otherwise interfering with,
          the execution, delivery and performance of this Agreement or the
          consummation of the transactions contemplated hereby by ARCap REIT. To
          ARCap REIT's Knowledge, no event has occurred or circumstance exists
          that (with or without notice or lapse of time, or both) may give rise
          to or serve as a basis for the commencement of any such Proceeding
          described in this Section 5.5(a).

                        (b) ARCap REIT has delivered to Purchasers copies of all
          pleadings, correspondence, and other documents relating to each such
          Proceeding listed in Section 5.5 of the Disclosure Schedule. Such
          Proceeding, if any, listed in Section 5.5 of the Disclosure Schedule
          will not have a Material Adverse Effect on any such Person.

          5.6 Brokers or Finders. Except with respect to Bear, Stearns & Co.
    Inc., ARCap REIT and its agents have incurred no obligation or liability,
    contingent or otherwise, for brokerage or finder's fees or agents'
    commissions or other similar payment in connection with this Agreement.

          5.7 Disclosure. No representation or warranty of ARCap REIT in this
    Agreement and no statement of ARCap REIT in the Disclosure Schedule omits to
    state a material fact necessary to make the statements herein or therein, in
    light of the circumstances in which they were made, not misleading.

                                       50





                                   ARTICLE 6

           REPRESENTATIONS AND WARRANTIES OF CHARTERMAC AND PURCHASERS

         CharterMac and Purchasers  jointly and severally  hereby  represent and
warrant to ARCap and each Seller as follows:

          6.1 Corporate Status. Each of CharterMac and Purchasers is duly
    organized, validly existing and in good standing under the laws of the
    jurisdiction of its incorporation or organization and each of CharterMac and
    Purchasers (a) has all requisite power and authority to carry on its
    business as it is now being conducted, and (b) is duly qualified to do
    business and is in good standing in each of the jurisdictions in which the
    ownership, operation or leasing of its properties and assets and the conduct
    of its business requires it to be so qualified, licensed or authorized,
    except where the failure to have such power and authority or to be so
    qualified, licensed or authorized would not reasonably be expected to result
    in a Material Adverse Effect on CharterMac.

          6.2 Authority. Each of CharterMac and Purchasers has all necessary
    power and authority to enter into this Agreement, to carry out its
    obligations hereunder and to consummate the transactions contemplated
    hereby. This Agreement has been duly executed and delivered by each of
    CharterMac and Purchasers, and (assuming due authorization and delivery by
    Sellers Representative, Sellers and ARCap) this Agreement constitutes a
    legal, valid and binding obligation of each of CharterMac and Purchasers,
    enforceable against CharterMac and Purchasers in accordance with its terms,
    except as enforceability may be subject to the laws of general application
    relating to bankruptcy, insolvency and the relief of debtors and rules of
    law governing specific performance, injunctive relief or other equitable
    remedies.

          6.3 No Conflict; Required Filings.
              -----------------------------

                        (a) Assuming compliance by the Sellers and ARCap with
          the notification requirements of the HSR Act, if applicable, and the
          making and obtaining of all filings, notifications, consents,
          approvals, authorizations and other actions referred to in Section 6.3
          (b) of this Agreement, the execution, delivery and performance of this
          Agreement and the consummation of the transactions contemplated hereby
          do not and will not (with or without notice or lapse of time, or both)
          (i) violate, conflict with or result in the breach of any provision of
          the certificate of incorporation or formation, limited liability
          company agreement, by-laws, regulations or other organizational or
          governing documents of CharterMac or Purchasers, (ii) conflict with or
          violate any Law or Order applicable to CharterMac or Purchasers, or
          (iii) result in the creation of any Encumbrance (other than
          restrictions on transfer under applicable state and federal securities
          laws) on any of the properties or assets of CharterMac or Purchasers
          pursuant to any Contract to which CharterMac or Purchasers is a

                                       51





          party or by which any of CharterMac's or Purchasers' properties or
          assets are bound or affected, except in each case for such violations,
          conflicts, breaches and creations which could not reasonably be
          expected to result in a Material Adverse Effect on CharterMac.

                        (b) Assuming compliance by the Sellers and ARCap with
          the notification requirements of the HSR Act, if applicable, no
          material consent of, or registration, declaration, notice or filing
          with, any Governmental Authority is required to be obtained or made by
          CharterMac or Purchasers in connection with the execution, delivery
          and performance of this Agreement or the consummation of the
          transactions contemplated hereby, other than those that, if not made
          or obtained, individually or in the aggregate, would not materially
          hinder or materially delay the Closing or would not reasonably be
          expected to result in a Material Adverse Effect on CharterMac.

          6.4 Legal Proceedings. There are no Proceedings pending or, to the
    Knowledge of CharterMac or Purchasers, threatened against CharterMac or
    Purchasers or any of their Affiliates or any of their respective properties
    that could reasonably be expected to have a Material Adverse Effect on
    CharterMac, or that challenges, or that may have the effect of preventing,
    delaying, making illegal, or otherwise interfering with, the execution,
    delivery and performance of this Agreement or the consummation of the
    transactions contemplated hereby by Purchasers.

          6.5 Finder's Fee. None of CharterMac nor either Purchaser has
    incurred any obligation or liability to any party, other than UBS Securities
    LLC (whose fees Purchasers acknowledges are their sole responsibility), for
    any brokerage or finder's fee or agent's commission or the like, in
    connection with the transactions contemplated by this Agreement based upon
    arrangements made by or on behalf of Purchasers.

          6.6 No Reliance. Purchasers acknowledge and agree that none of
    Sellers Representative, Sellers, ARCap, the Fund Entities, their respective
    Subsidiaries, nor any other Person has made any representation or warranty,
    express or implied, as to the accuracy or completeness of any information
    regarding ARCap, the Fund Entities, their respective Subsidiaries, their
    real property or their business or other matters that is not included in
    this Agreement, the Disclosure Schedule attached hereto, or in any ARCap
    Closing Certificate. Without limiting the generality of the foregoing, none
    of Sellers Representative, Sellers, ARCap, the Fund Entities, their
    respective Subsidiaries nor any other Person has made a representation or
    warranty to CharterMac or Purchasers with respect to (a) any projections,
    estimates or budgets for the businesses of any of ARCap, the Fund Entities
    or their respective Subsidiaries, or (b) any material, documents or
    information relating to any of ARCap, the Fund Entities or their respective
    Subsidiaries made available to CharterMac, Purchasers, or their counsel,
    accountants or advisors in any data room or otherwise, except as expressly
    covered

                                       52





          by this Agreement, the Disclosure Schedule attached hereto, or in any
          ARCap Closing Certificate.

          6.7 Special Common Interests. Each of the Special Common Interests
    held by holders of Exchange Units electing to receive Non-Cash Consideration
    pursuant to this Agreement will be, as of the Closing, duly authorized,
    validly issued, fully paid and nonassessable and, assuming the truth of the
    representations and warranties of such holders set forth in Section 3.6
    hereof, the conversion of Exchange Units into Special Common Interests will
    be exempt from registration under the Securities Act. Each of the CharterMac
    Common Shares (as defined in the Exchange Rights Agreement) issued to
    holders of Special Common Interests pursuant to the Exchange Rights
    Agreement will be, when so issued, duly authorized, validly issued, fully
    paid and nonassessable and, assuming the truth of the representations and
    warranties of such holders set forth in Section 3.2 of the Exchange Rights
    Agreement at the time of issuance, such issuance will be exempt from
    registration under the Securities Act.

          6.8 Restricted Common Shares. Each of the Restricted Common Shares
    issued to the Continuing Employees in the amounts set forth in Schedule VI
    will be, when so issued, duly authorized, validly issued, fully paid and
    nonassessable. Each of the Restricted Common Shares, when issued to the
    Continuing Employees, will have been issued under a registration statement
    on Form S-8 filed with the SEC, which registration statement is effective
    and for which no stop order has been issued.

          6.9 SEC Documents; Financial Statements.
              -----------------------------------

                        (a) CharterMac has filed all forms, reports and
          documents required to be filed by CharterMac with the SEC since
          January 1, 2003 and heretofore has made available to ARCap copies, in
          the form filed with the SEC, of (i) its Annual Report on Form 10-K for
          the fiscal years ended December 31, 2003, December 31, 2004 and
          December 31, 2005, (ii) its Quarterly Report on Form 10-Q for the
          period ended March 31, 2006, (iii) all definitive proxy statements
          relating to CharterMac's meetings of stockholders (whether annual or
          special) held since January 1, 2003 and (iv) all other forms, reports
          and registration statements (other than Quarterly Reports on Form 10-Q
          not referred to in clause (ii) above and excluding exhibits to
          registration statements and materials relating to stock option and
          compensation plans) filed with the SEC by CharterMac since January 1,
          2003 and prior to the date hereof, and CharterMac will have made
          available to ARCap true and complete copies of any additional
          documents filed with the SEC by CharterMac after the date hereof and
          prior to the Closing Date (collectively, the "CharterMac SEC
          Documents"). As of their respective filing dates, the CharterMac SEC
          Documents complied in all material respects with the requirements of
          the Exchange Act and the Securities Act, as the case may be, and none
          of the CharterMac SEC Documents contained any untrue statement of a
          material fact or omitted to state a material fact required to be
          stated therein or necessary in

                                       53





          order to make the statements made therein, in light of the
          circumstances in which they were made, not misleading, except to the
          extent corrected by a subsequently filed CharterMac SEC Document.

                        (b) The financial statements of CharterMac, including
          the notes thereto, included in the CharterMac SEC Documents (the
          "CharterMac Financial Statements") were complete and correct in all
          material respects as of their respective filing dates, complied as to
          form in all material respects with applicable accounting requirements
          and with the published rules and regulations of the SEC with respect
          thereto as of their respective dates, and have been prepared in
          accordance with GAAP applied on a basis consistent throughout the
          periods indicated (except as may be indicated in the notes thereto or,
          in the case of unaudited statements, included in Quarterly Reports on
          Forms 10-Q). The CharterMac Financial Statements fairly present in all
          material respects the consolidated financial condition and operating
          results of CharterMac and its consolidated subsidiaries at the dates
          and during the periods indicated therein (subject, in the case of
          unaudited statements, to normal, recurring year-end adjustments).
          There has been no change in CharterMac accounting policies except as
          described in the notes to the CharterMac Financial Statements.

          6.10 Absence of Undisclosed Liabilities. CharterMac has no material
    obligations or liabilities of any nature (matured or unmatured, fixed or
    contingent) other than (i) those set forth or adequately provided for in the
    balance sheet included in CharterMac's Quarterly Report on Form 10-Q
    heretofore provided to ARCap for the period ended March 31, 2006 (the
    "CharterMac Balance Sheet"), (ii) those incurred in the ordinary course of
    business and not required to be set forth in the CharterMac Balance Sheet
    under GAAP, and (iii) those incurred in the ordinary course of business
    since the CharterMac Balance Sheet Date and consistent with past practice.

          6.11 Absence of Certain Changes. Since March 31, 2006 (the
    "CharterMac Balance Sheet Date"), other than with respect to any action
    taken by CharterMac and Purchasers in connection with the transactions
    contemplated by this Agreement and the financing of the Purchase Price, each
    of CharterMac and Purchasers has conducted its business in the ordinary
    course in a manner consistent with past practice and there has not occurred:
    (i) any change, event or condition (whether or not covered by insurance)
    that has resulted in, or would reasonably be expected to result in, a
    Material Adverse Effect on CharterMac; (ii) any declaration, setting aside,
    or payment of a dividend or other distribution with respect to the shares of
    CharterMac, or any direct or indirect redemption, purchase or other
    acquisition by CharterMac of any of its shares of capital stock; (iii) any
    material amendment or change to CharterMac's certificate of incorporation or
    by-laws; or (iv) any negotiation or agreement by CharterMac to do any of the
    things described in the preceding clauses (i) through (iii).

                                       54





          6.12 Investment Intent. Each of Purchasers has knowledge and
    experience in financial and business matters such that it is capable of
    evaluating the risks and merits associated with the acquisition of the Cash
    Units and ASI Stock, as applicable, is an "accredited investor" as defined
    in Regulation D as promulgated under the Securities Act and is acquiring the
    Cash Units and ASI Stock, as applicable, for its own account for investment,
    with no present intention of making a public distribution thereof.
    Purchasers will not sell or otherwise dispose of the Cash Units or ASI Stock
    in violation of the Securities Act or any state securities laws.

                                   ARTICLE 7

                                   COVENANTS

           7.1 Interim Operations of the Companies. Except as permitted,
    required or contemplated by this Agreement, including those actions
    contemplated in Section 7.1 of the Disclosure Schedule, during the period
    commencing on the date hereof and ending on the Closing Date, ARCap shall,
    and shall cause its Subsidiaries, the Fund Entities and the Fund Entities'
    respective Subsidiaries to, conduct their respective businesses in the
    ordinary course substantially consistent with past practice and seek to
    preserve intact the assets of and the business organizations and
    relationships with employees, suppliers, agents, landlords and third parties
    having material business dealings with ARCap, the Fund Entities and their
    respective Subsidiaries. Without limiting the generality of the foregoing,
    except: (1) as otherwise expressly contemplated by, or required to
    consummate the transactions contemplated by, this Agreement; (2) for actions
    approved in advance by Purchasers in writing (which approval shall not be
    unreasonably withheld or delayed); (3) as required to comply with applicable
    Law (provided that prompt written notice of such compliance is given to
    Purchasers); and (4) as set forth in Section 7.1 of the Disclosure Schedule,
    from and after the date hereof and ending on the Closing Date, ARCap shall
    not, and shall cause its Subsidiaries, the Fund Entities and the Fund
    Entities' respective Subsidiaries not to, take any of the following actions:

                        (a) adopt any change in their respective certificate of
          incorporation or formation, limited liability company agreement,
          by-laws, regulations or other organizational or governing documents of
          such Person;

                        (b) adopt a plan or agreement of complete or partial
          liquidation, dissolution, restructuring, merger, consolidation,
          restructuring, recapitalization or other reorganization of any of
          ARCap, the Fund Entities or any of their respective Subsidiaries;

                        (c) (A) issue, sell, transfer, pledge, dispose of or
          encumber any securities issued by ARCap, the Fund Entities or any of
          their respective Subsidiaries, (B) split, combine, subdivide or
          reclassify any securities of ARCap, the Fund Entities or any of their
          respective Subsidiaries, (C) declare,

                                       55





          set aside or pay any dividend or other distribution, other than
          dividends or other distributions payable in cash, with respect to the
          Seller Units or any securities issued by ARCap, the Fund Entities or
          any of their respective Subsidiaries; or (D) redeem, purchase or
          otherwise acquire directly or indirectly the Seller Units or any
          securities of ARCap, the Fund Entities or any of their respective
          Subsidiaries;

                        (d) increase the benefits under any Plans or modify any
          Plan where such modification has a cost impact on ARCap, the Fund
          Entities or any of their respective Subsidiaries or increase the
          compensation payable to any employee, director or consultant of ARCap,
          the Fund Entities or any of their respective Subsidiaries;

                        (e) create any new arrangement, agreement, policy or
          practice that would constitute a Plan, including, without limitation,
          any employment agreements or severance agreements with new employees,
          directors or consultants;

                        (f) enter into any Contract or consummate any
          transaction involving the acquisition of the business, stock, assets
          or other properties of any other Person (other than purchases in the
          ordinary course of business consistent with past practice);

                        (g) sell, lease, license or otherwise dispose of any
          assets or property, including Intellectual Property, except pursuant
          to existing Contracts (other than transactions in the ordinary course
          of business consistent with past practice);

                        (h) (A) make or rescind any material tax election with
          respect to any of ARCap, the Fund Entities or any of their respective
          Subsidiaries, (B) change any of its material methods of reporting
          income or deductions for Tax purposes, (C) compromise any Tax
          liability of any of ARCap, the Fund Entities or any of their
          respective Subsidiaries that is material to ARCap, the Fund Entities
          or any of their respective Subsidiaries or (D) issue a waiver to
          extend the period of limitations for the payment or assessment of any
          Tax;

                        (i) (A) assume, guarantee, endorse or otherwise become
          liable or responsible (whether directly, contingently or otherwise)
          for the obligations of any other Person, except for obligations of
          ARCap, the Fund Entities and their respective Subsidiaries incurred in
          the ordinary course of business and consistent with past practice; (B)
          make any loans, advances or capital contributions to or investments in
          any other Person (other than to ARCap, the Fund Entities or any of
          their respective Subsidiaries pursuant to existing contracts or in
          connection with any servicing activity or business conducted in the
          ordinary course); (C) pledge or otherwise encumber the equity
          interests of any of ARCap REIT, the Fund Entities or any of their
          respective

                                       56





          Subsidiaries; or (D) mortgage or pledge any of its material assets,
          tangible or intangible, or create or suffer to exist any material
          Encumbrance thereupon, except in the ordinary course of business
          consistent with past practice;

                        (j) except as may be required as a result of a change in
          Law or in GAAP, change any of the accounting principles or practices
          used by ARCap, the Fund Entities or any of their respective
          Subsidiaries;

                        (k) pay accounts payable or collect accounts receivable
          other than in the ordinary course of business consistent with past
          practice;

                        (l) fail to meet all capital calls with respect to any
          commitment it has made to its Subsidiaries; or

                        (m) fail to confer with Marc D. Schnitzer concerning
          operational matters that are outside the ordinary course of business.

          7.2 Filings with Governmental Authorities.
              -------------------------------------

                        (a) ARCap and Purchasers shall, if required, promptly
          cause to be filed (i) with the United States Federal Trade Commission
          (the "FTC") and the United States Department of Justice (the "DOJ")
          the notification and report form pursuant to the HSR Act, required for
          the transactions contemplated hereby. ARCap and Purchasers shall, as
          promptly as practicable, use its reasonable best efforts to comply
          with any request for additional information and documents pursuant to
          the HSR Act. ARCap, on the one hand, and Purchasers, on the other
          hand, shall notify the other as promptly as practicable of any
          communication made by or on behalf of such party to, or received from,
          the FTC or the DOJ and shall furnish to the other such information and
          assistance as the other may reasonably request in connection with its
          preparation of any filing, submission or other act that is necessary
          or advisable under the HSR Act. ARCap, on the one hand, and
          Purchasers, on the other hand, shall keep each other timely apprised
          of the status of any communications with, and any inquiries or
          requests for additional information from, the FTC or the DOJ, and
          shall, as promptly as practicable, use its reasonable best efforts to
          comply with any such inquiry or request. Each of ARCap and Purchasers
          shall give prior notice and consult prior to any meeting such party
          has with the FTC or the DOJ with respect to the filings of such party
          under the HSR Act or any review by any of the foregoing agencies, and
          shall give the other party the opportunity to attend and participate
          in such meetings.

                        (b) The parties hereto shall cooperate with one another
          in determining whether any action by or in respect of, or filing with,
          any Governmental Authority is required or reasonably appropriate, or
          any action, consent, approval or waiver from any party to any material
          Contract is required or reasonably appropriate, in connection with the
          consummation of the transactions contemplated by this Agreement.
          Subject to the terms and

                                       57





          conditions of this Agreement and the Confidentiality Agreement (as
          defined in Section 7.4 of this Agreement), in taking such actions or
          making any such filings, the parties hereto shall furnish information
          required in connection therewith and timely seek to obtain any such
          actions, consents, approvals or waivers.

           7.3 Consents. Except as contemplated in Section 7.2 of this
    Agreement, CharterMac and Purchasers, on the one hand, and ARCap and ARCap
    REIT, on the other hand, shall each use their reasonable efforts to obtain
    all consents and authorizations required to consummate the transactions
    contemplated by this Agreement, including obtaining the consents and
    authorizations and making the filings referred to in Sections 4.1, 5.1 and
    6.3 of this Agreement; provided, however, that neither CharterMac and
    Purchasers, on the one hand, nor ARCap and ARCap REIT, on the other hand,
    will be obligated to pay any consideration therefor to any Person from whom
    consent or authorization is requested, except as otherwise required under
    existing Contracts.

           7.4 Confidentiality. Each of CharterMac, Purchasers and ARCap
    acknowledge that the information being provided or made available to it by
    the other party and their respective Subsidiaries or Affiliates (or their
    respective agents or representatives) is subject to the terms of a
    confidentiality agreement dated April 11, 2006, between ARCap and CharterMac
    (the "Confidentiality Agreement"), attached hereto as Exhibit N and the
    terms of which are incorporated herein by reference. Sellers Representative
    and each Seller severally, but not jointly, acknowledge that information
    being provided or made available to it by CharterMac and Purchasers (or its
    respective agents or representatives) is subject to the terms of the
    Confidentiality Agreement.

           7.5 Publicity. Any public announcement or similar publicity with
    respect to this Agreement or the transactions contemplated by this Agreement
    will be issued, if at all, at such time and in such manner as ARCap and
    CharterMac jointly determine. Unless consented to by CharterMac in advance
    or (subject to reasonable prior notice to, and consultation with,
    CharterMac) required by Law, prior to the Closing, Sellers and ARCap shall
    keep this Agreement strictly confidential and may not make any disclosure of
    this Agreement to any Person, other than to their respective directors,
    officers, employees, agents and advisors. Unless consented to by ARCap in
    advance or (subject in each case to reasonable prior notice to, and
    consultation with, ARCap) required by Law or any listing agreement with a
    securities exchange, prior to the Closing, CharterMac and Purchasers shall
    keep this Agreement strictly confidential and may not make any disclosure of
    this Agreement to any Person, other than to their respective directors,
    officers, employees, agents and advisors. ARCap and CharterMac will use
    reasonable efforts to consult with each other concerning the means by which
    the employees, customers, and suppliers and others having dealings with
    ARCap will be informed of the transactions contemplated by this Agreement,
    and CharterMac will have the right to be present for any such communication.

                                       58





          7.6 Books and Records.
              -----------------

                        (a) As soon as is reasonably practicable after the
          Closing, ARCap will make available to Purchasers all properties,
          books, records, Contracts, information and any other documents
          relating to the business of ARCap, the Fund Entities and their
          respective Subsidiaries that are not already in the possession or
          control of ARCap, the Fund Entities or any of their respective
          Subsidiaries.

                        (b) ARCap and Purchasers agree that each of them will
          preserve and keep the records held by it relating to the business of
          ARCap, the Fund Entities and their respective Subsidiaries for the
          longer of (i) a period of five (5) years from the Closing Date or (ii)
          such period as is required under any Final Fund Documents or related
          side letters; provided, however, that prior to disposing of any such
          records in accordance with such policies, the applicable party shall
          provide written notice to the other party of its intent to dispose of
          such records and shall provide such other party the opportunity to
          take ownership and possession of such records (at such other party's
          sole expense) within 30 days after such notice is delivered. If such
          other party does not confirm its intention in writing to take
          ownership and possession of such records within such 30-day period,
          the party who possesses the records may proceed with the disposition
          of such records. ARCap and Purchasers shall make such records
          available to the other as may be reasonably required by such party in
          connection with, among other things, any insurance claims by, legal
          proceedings against, or governmental investigations of ARCap or
          Purchasers or any of their respective Affiliates or in order to enable
          ARCap or Purchasers to comply with their respective obligations under
          this Agreement and each other agreement, document or instrument
          contemplated hereby or thereby.

           7.7 Further Action. Sellers (to the extent required of each of them
    hereunder), ARCap, CharterMac and Purchasers shall use their respective best
    efforts to (i) take, or cause to be taken, all actions (within their
    respective control) necessary or appropriate to consummate the transactions
    contemplated by this Agreement, and (ii) cause the fulfillment at the
    earliest practicable date of all of the conditions to their respective
    obligations to consummate the transactions contemplated by this Agreement
    including, but not limited to, the conditions set forth in Article 8.

           7.8 Expenses. Whether or not the transactions contemplated hereby are
    consummated, all costs and expenses incurred in connection with this
    Agreement and the transactions contemplated hereby shall be paid by the
    party hereto incurring such expenses except as otherwise expressly provided
    herein and subject to any rights of any party arising from a breach of this
    Agreement by another party.

                                       59





          7.9 Notification of Certain Matters. Each party shall give prompt
    notice to the other of the following:


                        (a) the occurrence or nonoccurrence of any event the
          occurrence or nonoccurrence of which is reasonably expected to cause
          or constitute an inaccuracy in or a breach of any of each party's
          representations and warranties as of the date of this Agreement, or if
          such party becomes aware of the occurrence or nonoccurrence after the
          date of this Agreement of any event that would reasonably be expected
          to cause or constitute an inaccuracy in or a breach of any such
          representation or warranty had such representation or warranty been
          made as of the time of occurrence, nonoccurrence or discovery of such
          event, then the occurrence or nonoccurrence of any such event;

                        (b) the occurrence or nonoccurrence of any event the
          occurrence or nonoccurrence of which is reasonably expected to cause
          any inaccuracy in or breach of any covenant in this Article 7 or of
          the occurrence or nonoccurrence of any event that may make the
          satisfaction of the conditions in Article 8 impossible or unlikely;
          and

                        (c) the status of matters relating to completion of the
          transactions contemplated hereby, including promptly furnishing the
          other with copies of notices or other communications received by any
          party or any of its respective Subsidiaries from any Governmental
          Authority or other third party with respect to this Agreement or the
          transactions contemplated hereby.

          7.10 Employee Matters and Employee Benefit Plans.
               -------------------------------------------

                        (a) Purchaser 2 acknowledges and agrees that the
          Companies and their ERISA Affiliates shall be solely responsible for
          all liabilities arising out of or related to any Plans (including,
          without limitation, liabilities attributable to periods prior to the
          Closing); provided, however, that ARCap shall be solely responsible to
          pay the Phantom Unit Amount, and in connection therewith (i) ARCap
          Sellers jointly, but not severally, hereby assume the obligation of
          ARCap set forth in the foregoing clause (i), jointly agree to pay to
          ARCap, at the Closing, the Phantom Unit Amount in satisfaction of such
          assumption and direct Sellers Representative to pay to ARCap REIT,
          upon receipt of such funds from Purchaser 2, the full Phantom Unit
          Amount, (ii) ARCap and ARCap REIT represent, warrant and agree that
          payment of the Phantom Unit Amount to the participants under the
          Phantom Unit Plans shall be satisfied by payment by ARCap REIT at
          Closing of (Y) the Phantom Unit Amount (less the Phantom Escrow Cash)
          to such participants and (Z) the Phantom Escrow Cash to the Escrow
          Agent, in accordance with Sections 2.3(a)(vii) and 2.3(a)(viii),
          respectively, and (iii) ARCap REIT shall terminate, as of the Closing
          Date, the Phantom Unit Plans so that after payment by ARCap REIT of
          the Phantom Unit Amount, the Phantom Unit Plans and the interests of
          the participants thereunder have no further legal force and effect

                                       60





          from and after the Closing (other than with respect to such
          participants' residual interest in the Phantom Escrow Cash).

                        (b) Section 7.10(b) of the Disclosure Schedule lists all
          employees of ARCap REIT whose employment shall continue following the
          Closing, and all such employees shall hereinafter be referred to as
          "Continuing Employees." Except as otherwise provided in this
          Agreement, from and after the Closing, CharterMac shall cause
          Purchaser 2 and/or ARCap REIT to provide to the Continuing Employees
          employee benefits, substantially the same, in the aggregate, as those,
          if any, provided to similarly situated employees of CharterMac and its
          Subsidiaries. From and after the Closing, Continuing Employees shall,
          to the extent permitted under the terms of such plans and by
          applicable Law, receive full credit for all purposes under any
          employee benefit plan (which, in CharterMac's discretion, may be a
          continuation of the Plans set forth in Section 4.12(a) of the
          Disclosure Schedule) maintained by CharterMac, including, without
          limitation, for purposes of determining eligibility and vesting
          levels, but not for the actual accrual of benefits, for their service
          prior to the Closing with ARCap REIT, full credit for deductibles and
          co-payments, annual limits and lifetime limits under the welfare plans
          of CharterMac, in all cases to the extent such Continuing Employees
          would have received such credit under a corresponding Plan (and in all
          cases except to the extent that such credit would result in the
          duplication of benefits), and all preexisting conditions, limitations
          and waiting periods to which any such Continuing Employees are subject
          shall be waived under the welfare plans of CharterMac; provided,
          however, that, except as required under applicable Law, CharterMac
          shall not be obligated to extend the foregoing benefits to any
          Continuing Employee who is a party to (i) any employment agreement
          with any of ARCap, the Fund Entities or their respective Subsidiaries
          that continues in effect after the Closing, to the extent that such
          employment agreement already provides for such foregoing benefits, or
          (ii) any agreement with CharterMac for the provision of compensation
          or benefits to the employee from and after the Closing. Except as
          expressly provided in this Agreement, nothing in this Section 7.10 or
          elsewhere in this Agreement will require CharterMac, Purchaser 2 or
          ARCap REIT to provide any particular form of employee benefit or to
          establish or maintain any particular type or form of employee benefit
          plan, or preclude CharterMac, Purchaser 2 or ARCap REIT from amending
          or terminating in its discretion any Plan or, following the Closing,
          terminate the employment of any Continuing Employee.

                        (c) In accordance with ARCap REIT's regular payroll
          schedule, ARCap REIT has paid and will continue to pay all
          compensation and benefits due to each employee and former employee of
          ARCap, the Fund Entities or any of their respective Subsidiaries
          through the Closing Date.

          7.11 Insurance Matters.
               -----------------

                                       61





                        (a) ARCap shall use reasonable efforts to keep, or cause
          to be kept, all insurance policies presently maintained relating to
          the businesses of ARCap, the Fund Entities and their respective
          Subsidiaries and their properties, or replacements therefor, in full
          force and effect through the Closing Date. Following the Closing,
          Purchasers shall, or shall cause ARCap, the Fund Entities or any of
          their respective Subsidiaries (as applicable), to pursue, at the
          request and on behalf of Sellers and their respective Subsidiaries
          (other than ARCap, the Fund Entities and their respective
          Subsidiaries), any claims made by Sellers or their respective
          Subsidiaries (other than ARCap, the Fund Entities and their respective
          Subsidiaries) prior to the Closing under any such policies retained by
          ARCap, the Fund Entities or any of their respective Subsidiaries
          following the Closing.

                        (b) From and after the Effective Time, subject to
          applicable Law, CharterMac shall, or shall cause ARCap or ARCap REIT
          to indemnify and hold harmless all past and present officers and
          directors of ARCap and all of its Subsidiaries to the same extent and
          in the same manner such persons are entitled to be indemnified as of
          the date of this Agreement by ARCap or any of its Subsidiaries
          pursuant to any limited liability company operating agreement and
          by-laws of ARCap or any of its Subsidiaries, for acts or omissions
          occurring at or prior to the Effective Time.

                        (c) From and after the Effective Time, CharterMac shall,
          or shall cause ARCap or ARCap REIT to provide, at the sole cost and
          expense of CharterMac, for an aggregate period of not less than six
          (6) years from the Effective Time, the current directors and officers
          of ARCap and its Subsidiaries an insurance and indemnification policy
          that provides coverage for events occurring prior to the Effective
          Time (the "D&O/E&O Insurance") that is substantially similar to
          ARCap's existing directors and officers and errors and omissions
          policies. In addition, ARCap may, with the consent of CharterMac and
          at the sole cost and expense of CharterMac (or, if at the cost or
          expense of ARCap or ARCap REIT, such cost or expense to be credited to
          ARCap in calculating the Closing Working Capital Amount), purchase a
          six (6)-year "tail" prepaid policy of D&O/E&O Insurance prior to the
          Effective Time on terms and conditions substantially similar to the
          ARCap's existing policy.

          7.12 Access and Information. Between the date of this Agreement and
    the Closing Date, upon reasonable notice from CharterMac, ARCap will, and
    will cause ARCap, the Fund Entities and their respective Subsidiaries to (a)
    afford CharterMac and its representatives reasonable access during normal
    business hours (to the extent such access does not unduly interfere with
    normal operations of ARCap and its Subsidiaries) to each of ARCap, the Fund
    Entities and their respective Subsidiaries' personnel, properties,
    Contracts, books and records, and other documents and data (b) furnish or
    make available to CharterMac and its representatives with copies of all such
    Contracts, books and records, and other existing documents and data as
    CharterMac may reasonably request, and (c) furnish or make available to
    CharterMac and its representatives with such

                                       62





    additional financial, operating and other data and information as CharterMac
    may reasonably request.

          7.13 CharterMac Appointments. CharterMac shall take such action as is
    necessary to appoint, effective immediately following the Closing, (i)
    Leonard W. Cotton to CharterMac's Board of Trustees (ii) Leonard W. Cotton
    to the office of Vice Chairman of CharterMac's Board of Trustees and (iii)
    Leonard W. Cotton and James L. Duggins to CharterMac's Strategic Planning
    Committee.

          7.14 AMAC Appointments. CharterMac shall recommend to the board of
    trustees of AMAC that AMAC take such action as is necessary to, effective
    immediately following the Closing:

                        (a) increase the size of the Board of Trustees of AMAC
          to nine members; and

                        (b) appoint (i) James L. Duggins to the office of Chief
          Executive Officer of AMAC, (ii) Harry Levine, Marc D. Schnitzer and
          James L. Duggins to AMAC's Board of Trustees and (iii) Marc D.
          Schnitzer to the office of Chairman of AMAC's Board of Trustees.

          7.15 ARCap REIT Advisory Committee; ARCap REIT Appointments. ARCap
    REIT shall take such action as is necessary to, effective immediately
    following the Closing:

                        (a) constitute an executive committee (the "Advisory
          Committee");

                        (b) appoint (i) Leonard W. Cotton to the office of
          Chairman of ARCap REIT's Board of Directors and (ii) James L. Duggins
          to the office of Chief Executive Officer of ARCap REIT;

                        (c) appoint Leonard W. Cotton, James L. Duggins, Paul
          Smyth, Steve R. Inman, Marc D. Schnitzer, Alan P. Hirmes, Daryl J.
          Carter, Donald Meyer and Robert Levy to ARCap REIT's Board of
          Directors; and

                        (d) appoint Leonard W. Cotton, James L. Duggins, Marc D.
          Schnitzer, Daryl J. Carter, Harry Levine, George Jahn and Tim
          Riddiough to ARCap REIT's Advisory Committee.

          7.16 Preparation of Financial Statements. Between the date of this
    Agreement and the Closing Date, ARCap will, and will cause the Fund Entities
    and their respective Subsidiaries to, cooperate and use their reasonable
    efforts to prepare, at the sole cost and expense of CharterMac, any audited
    and unaudited financial statements of ARCap, the Fund Entities and their
    respective Subsidiaries that CharterMac notifies ARCap are required to be
    filed by CharterMac with the Securities and Exchange Commission in
    connection with the transactions contemplated by this Agreement and to
    obtain from ARCap's certified public

                                       63





    accountants any required consent to the inclusion of their certifying audit
    report in any such filings.

          7.17 Balance Sheet Assets. Between the date of this Agreement and the
    Closing Date, ARCap will not, and will cause the Fund Entities and their
    respective Subsidiaries not to, take any action which alters in any material
    respect the composition of the assets of ARCap reflected on the balance
    sheet (attached hereto as Exhibit O) in such a manner so as to require the
    filing of a notification and report form pursuant to the HSR Act; provided,
    however, that Section 7.1 of the Disclosure Schedule sets forth the actions
    expected to be taken by ARCap, the Fund Entities and their respective
    Subsidiaries prior to the Closing Date which will alter the composition of
    the assets of ARCap reflected on such balance sheet and CharterMac and
    Purchasers hereby consent to the actions set forth on Section 7.1 of the
    Disclosure Schedule and agree that such actions shall not alter in any
    material respect the composition of the assets of ARCap reflected on the
    balance sheet (attached hereto as Exhibit O) in such a manner so as to
    require the filing of a notification and report form pursuant to the HSR
    Act.

          7.18 Specially Serviced Loan Schedule. Between the date of this
    Agreement and the Closing Date, ARCap shall promptly notify CharterMac of
    any material change to the list of Specially Serviced Loans set forth in
    Section 4.29 of the Disclosure Schedule.

                                   ARTICLE 8

                               CLOSING CONDITIONS

          8.1 Conditions to Obligations of Sellers and Purchasers. The
    respective obligations of each Seller, on the one hand, and Purchasers, on
    the other hand, to consummate the transactions contemplated by this
    Agreement are subject to the fulfillment or waiver (in the sole discretion
    of each Seller, on the one hand, and Purchasers, on the other hand), on or
    prior to the Closing Date, of each of the following conditions:

                        (a) there shall not be in effect any Order restraining,
          enjoining or otherwise prohibiting the consummation of the
          transactions contemplated hereby;

                        (b) any required waiting periods (including any
          extension thereof) applicable to the consummation of the transactions
          contemplated by this Agreement under the HSR Act shall have terminated
          or expired and any required clearances, approvals or confirmations of
          the transactions contemplated by this Agreement shall have been
          obtained pursuant to any other foreign merger control or foreign
          investment clearances required by Law to be obtained before Closing
          shall have been received; and

                                       64





                        (c) the Closing Working Capital Amount shall have been
          agreed upon between ARCap and CharterMac or otherwise determined in
          accordance with the procedures set forth in Section 2.4(b).

          8.2 Additional Conditions to Obligations of Purchasers. The
    obligation of Purchasers to consummate the transactions contemplated by this
    Agreement is subject to the fulfillment, on or prior to the Closing Date, of
    each of the following conditions (any or all of which may be waived by
    Purchasers in whole or in part in their sole discretion):

                        (a) Except for the representations and warranties set
          forth in Section 8.2(b) below, all of the representations and
          warranties of Sellers and ARCap contained in this Agreement
          (considered collectively), and each of such representations and
          warranties (considered individually) shall be true and accurate in all
          material respects (provided that any representation or warranty of
          Sellers or ARCap contained herein that is subject to a materiality,
          Material Adverse Effect or similar qualification shall be true and
          accurate in all respects after giving effect to any such
          qualification) both as of the date of this Agreement and as of the
          Closing Date (except to the extent such representations and warranties
          shall have been expressly made as of an earlier date, in which case
          such representations and warranties shall have been true and correct
          as of such earlier date) with the same force and effect as if made on
          and as of the Closing Date.

                        (b) Each of Sellers' and ARCap's representations and
          warranties in Sections 3.3 (Ownership), 4.4 (Capitalization), 4.5
          (Financial Statements; Projections), 4.6 (Taxes), 4.19 (Investment
          Company; Investment Advisor), 4.20 (Offering Memoranda), 4.21 (Fund
          Reports), 4.22 (REIT), 4.26 (Partnership Treatment), 4.27
          (Registration), 4.29 (Serviced Loan Schedule), 4.30 (ERISA), 4.31
          (Disclosure) and 5.4 (Ownership) shall be true and accurate in all
          respects both as of the date of this Agreement and as of the Closing
          Date (except to the extent such representations and warranties shall
          have been expressly made as of an earlier date, in which case such
          representations and warranties shall have been true and correct as of
          such earlier date), with the same force and effect as if made on and
          as of the Closing Date.

                        (c) All of the covenants and obligations that Sellers
          and ARCap are required to perform or to comply with pursuant to this
          Agreement at or prior to the Closing Date (considered collectively),
          and each of such covenants and obligations (considered individually),
          must have been duly performed and complied with in all material
          respects.

                        (d) There must not have been made or threatened any
          claim by any Person (other than an ARCap Seller with respect to a
          Seller Unit to be sold or exchanged pursuant to this Agreement)
          asserting that such Person (a) is the holder or the beneficial owner
          of, or has the right to acquire or to obtain beneficial ownership of,
          any stock of, or any other voting, equity, or ownership

                                       65





          interest in, (X) any of the Companies or (Y) any of the Fund Entities
          or any of their respective Subsidiaries which is held or beneficially
          owned by any of the Companies, or (b) is entitled to all or any
          portion of the Purchase Price payable for the Seller Units or ASI.

                        (e) The consent or approval of the Persons whose consent
          or approval shall be required in connection with the transactions
          contemplated under this Agreement under any Contract of ARCap, the
          Fund Entities and their respective Subsidiaries (as set forth in
          Section 4.1(b) of the Disclosure Schedule) shall have been obtained.

                        (f) Each document required to be delivered pursuant to
          Sections 2.3(a) through 2.3(d) must have been delivered.

                        (g) Sellers Representative shall have executed and
          delivered the Escrow Agreement and the Escrow Agreement shall be in
          full force and effect.

                        (h) The holders of Exchange Units shall have executed
          and delivered the Amended LLC Agreement.

                        (i) The holders of Exchange Units shall have executed
          and delivered the Registration Rights Agreement.

                        (j) The holders of Exchange Units shall have executed
          and delivered the Exchange Rights Agreement.

                        (k) The form and substance of all instruments and
          documents required to be delivered pursuant to this Agreement by
          Sellers shall be reasonably satisfactory in all respects to
          Purchasers.

          8.3 Additional Conditions to Obligations of Sellers. The obligations
    of Sellers to consummate the transactions contemplated by this Agreement are
    subject to the fulfillment, on or prior to the Closing Date, of each of the
    following conditions (any or all of which may be waived by Sellers in whole
    or in part in their sole discretion):

                        (a) (i) Except for the representations and warranties
          set forth in the following clause (ii), all of the representations and
          warranties of CharterMac and Purchasers contained in this Agreement
          (considered collectively) and each of such representations and
          warranties (considered individually) shall be true and accurate in all
          material respects (provided that any representation or warranty of
          CharterMac and Purchasers contained herein that is subject to a
          materiality, Material Adverse Effect or similar qualification shall be
          true and accurate in all respects after giving effect to any such
          qualification), and (ii) each of the representations and warranties of
          CharterMac and Purchasers set forth in Section 6.8 (Restricted Common
          Shares), and 6.9 (SEC Documents; Financial Statements) shall be true
          and accurate in all

                                       66





          respects, in each case of clauses (i) and (ii) both as of the date of
          this Agreement and as of the Closing Date (except to the extent such
          representations and warranties shall have been expressly made as of an
          earlier date, in which case such representations and warranties shall
          have been true and correct as of such earlier date) with the same
          force and effect as if made on and as of the Closing Date.

                        (b) All of the covenants and obligations that CharterMac
          and Purchasers are required to perform or to comply with pursuant to
          this Agreement at or prior to the Closing Date (considered
          collectively), and each of these covenants and obligations (considered
          individually), must have been performed and complied with in all
          material respects.

                        (c) The consent or approval of the Persons whose consent
          or approval shall be required in connection with the transactions
          contemplated under this Agreement under any Contract of CharterMac,
          the Purchasers, ARCap, the Fund Entities and their respective
          Subsidiaries shall have been obtained.

                        (d) Each of the documents required to be delivered
          pursuant to Sections 2.3(e) through 2.3(g) must have been delivered.

                        (e) Purchasers must have paid the Basic Purchase Price
          and the ARCap Transaction Costs required to be paid pursuant to
          Sections 2.3(e) and 2.3(f)

                        (f) CharterMac must have delivered to the Continuing
          Employees the Restricted Common Shares in the amounts set forth in
          Schedule VI pursuant to Section 2.3(g).

                        (g) Purchasers shall have executed and delivered the
          Escrow Agreement and the Escrow Agreement shall be in full force and
          effect.

                        (h) Purchaser 2 shall have executed and delivered the
          Amended LLC Agreement.

                        (i) Purchaser 2 and CharterMac shall have executed and
          delivered the Registration Rights Agreement.

                        (j) Purchaser 2 and CharterMac shall have executed and
          delivered the Exchange Rights Agreement.

                        (k) CharterMac shall have delivered evidence
          satisfactory to ARCap of its compliance with Sections 7.11(b) and (c).

                                       67





                                   ARTICLE 9

                               CERTAIN TAX MATTERS

          9.1 Tax Returns. Except as otherwise provided in Section 9.2 of this
    Agreement:

                        (a) ARCap shall prepare and file or cause to be prepared
          and filed when due all Tax Returns that are required to be filed by or
          with respect to ARCap, the Fund Entities and their respective
          Subsidiaries on or before the Closing Date, and ARCap shall remit or
          cause to be remitted all Taxes shown due on such Tax Returns; and

                        (b) Purchasers shall prepare and file or cause to be
          prepared and filed when due all Tax Returns that are required to be
          filed by or with respect to ARCap, the Fund Entities and their
          respective Subsidiaries after the Closing Date (other than Tax Returns
          with respect to periods for which a consolidated, unitary or combined
          Tax Return of Sellers (or any Subsidiary of any Seller other than
          ARCap, the Fund Entities or any of their respective Subsidiaries) will
          include any of ARCap, the Fund Entities or their respective
          Subsidiaries), and Purchasers shall remit or cause to be remitted any
          Taxes due in respect of such Tax Returns except those Tax Returns for
          which the due date for filing (without regard to extensions) is after
          the Closing Date but which covers a period prior to the Closing Date
          ("Carryover Returns"). With respect to such Carryover Returns,
          Purchasers shall prepare or cause to be prepared draft Tax Returns and
          submit such drafts to Sellers Representative no later than fifteen
          (15) days prior to the due date of such Carryover Returns. If the
          parties agree with such proposed Tax Returns, Purchasers shall cause
          any of ARCap, the Fund Entities or any of their respective
          Subsidiaries, as applicable, to timely file, with extensions, such Tax
          Returns, with the date of such filings to be determined by Purchasers
          in good faith, with no intent to delay the expiration of the Survival
          Period. If the parties disagree, after good faith diligent
          negotiation, Purchasers shall timely file, with extensions, such Tax
          Return as proposed by Purchasers and immediately following such
          filing, the parties will engage a nationally recognized independent
          accounting firm to mediate the dispute, with costs being shared
          equally. Sellers shall pay to the Purchasers the Sellers' Portion of
          the Taxes due with respect to the Carryover Returns attributable to
          the portion of the period up to and including the Closing Date no
          later than three (3) days prior to the due date of such payment,
          determined pursuant to the last two sentences of Section 9.2;
          provided, that Sellers shall not be responsible for, and shall not be
          required to pay, any Taxes to the extent that such Taxes do not exceed
          the accrued liability for Taxes taken into account in determining the
          Working Capital Amount under Section 2.4.

                        (c) The parties agree and acknowledge that for income
          tax purposes ARCap shall be treated as technically terminating under
          Section 708(b)(1)(B) of the Code. Subject and pursuant to the last two

                                       68





          sentences of Section 9.2, all items of income, gain, loss, deduction
          or other tax items of ARCap for periods ending on or prior to the
          Closing Date shall be allocated pursuant to the LLC Agreement and all
          items of income, gain, loss, deduction or other tax items of ARCap for
          periods beginning after the Closing Date shall be allocated to
          Purchaser 2 and the holders of the Special Common Interests in
          accordance with the Amended LLC Agreement.

                        (d) For purposes of reporting compensation income and
          calculating the applicable income and employment tax withholding with
          respect to the Phantom Unit Amount deposited pursuant to the Escrow
          Agreement, such amount shall be treated as paid or received by the
          participants under the Phantom Unit Plans at the time such amounts, if
          any, are actually paid to such participants by ARCap REIT with
          proceeds received by the Escrow Agent from the Escrow Agreement. In
          addition, ARCap, Purchaser 2 and the holders of the Exchange Units
          shall not treat the conversion of the Exchange Units into Special
          Common Interests, with the corresponding exchange rights, as a taxable
          event for income tax purposes.

          9.2 Certain Taxes. All transfer, documentary, sales, use, stamp,
    registration and other similar Taxes and fees (including any penalties and
    interest) incurred in connection with this Agreement (including any
    corporate-level gains Tax triggered by the sale of the Seller Units and any
    other Tax imposed in other states or subdivisions), shall be paid by the
    applicable Seller when due, and such Seller will, at their own expense, file
    all necessary Tax Returns and other documentation with respect to all such
    transfer, documentary, sales, use, stamp, registration and other Taxes and
    fees. With respect to other taxes imposed with respect to a taxable period
    that starts before and ends after the Closing Date, an allocation shall be
    made of such tax liabilities between Sellers and Purchaser. In making such
    allocation, taxes related to income of any of ARCap, the Fund Entities or
    any of their respective Subsidiaries shall be allocated based in a
    closing-of-the-books method, property and similar taxes shall be allocated
    based on a proration of time in the taxable period elapsed prior to the
    Closing Date, and transaction and similar taxes shall be allocated based on
    when the particular taxable transaction occurs in relation to the Closing
    Date.

                                   ARTICLE 10

                                   TERMINATION

          10.1 Termination. This Agreement may be terminated at any time before
    the Effective Time as follows:

                        (a) by mutual written consent of Sellers Representative
          and Purchasers;

                        (b) by Sellers Representative or Purchasers on or after
          September 30, 2006 if the Closing shall not have occurred by the close
          of

                                       69





          business on such date, provided that the terminating party is not
          then in default in any material respect of any of its covenants or
          other obligations hereunder;

                        (c) by Sellers Representative or Purchasers if there
          shall be in effect a final nonappealable Order restraining, enjoining
          or otherwise prohibiting the consummation of the transactions
          contemplated hereby (but only if such terminating party shall have
          complied with its obligations under this Agreement);

                        (d) by Purchasers if there shall have been a breach in
          any material respect of any of the covenants, obligations or
          agreements on the part of ARCap or Sellers set forth in this Agreement
          or a breach of any of the representations and warranties of ARCap or
          Sellers that would cause the conditions precedent set forth in Section
          8.2 of this Agreement not to be satisfied, in each case which has not
          been cured within 30 days after receipt of notice of such breach; and

                        (e) by Sellers Representative if there shall have been a
          breach in any material respect of any of the covenants, obligations or
          agreements on the part of CharterMac or Purchasers set forth in this
          Agreement or a breach of any of the representations and warranties of
          CharterMac or Purchasers that would cause the conditions precedent set
          forth in Section 8.3 of this Agreement not to be satisfied, in each
          case which has not been cured within 30 days after receipt of notice
          of such breach.

           10.2 Effect of Termination and Abandonment. In the event of
    termination of this Agreement pursuant to this Article 10, this Agreement
    (other than as set forth in Section 7.4, Section 7.8 and Article 12 of this
    Agreement) shall become void and of no effect with no liability on the part
    of any party hereto (or any of its Affiliates or representatives); provided,
    however, no such termination shall relieve any party hereto from any
    liability for damages resulting from any willful or intentional breach of
    this Agreement; provided further, that if this Agreement is terminated by
    Purchasers pursuant to Section 10.1(d), or by Sellers Representative
    pursuant to Section 10.1(e), CharterMac and the Purchasers, on the one hand,
    or Sellers Representative and each Seller, on the other hand, as applicable,
    shall be entitled to receive from ARCap (in the case of a termination by the
    Purchasers) or CharterMac (in the case of a termination by Sellers
    Representative), as applicable, reimbursement of the reasonable fees and
    expenses of the terminating party's financial advisors and attorneys
    incurred by the terminating party in connection with the negotiation,
    execution and delivery of this Agreement and the consummation of the
    transactions contemplated hereby, provided that in no event shall the
    aggregate amount of the fees and expenses of CharterMac and the Purchasers,
    on the one hand, or Sellers Representative and each Seller, on the other
    hand, as applicable, paid by ARCap or CharterMac, as applicable, under this
    Section 10.2 exceed $750,000.

                                       70





                                   ARTICLE 11

                        SURVIVAL; ESCROW; INDEMNIFICATION

           11.1 Survival Limitation. All of the representations and warranties
    in this Agreement, the Disclosure Schedule, any ARCap Closing Certificate or
    any CharterMac Closing Certificate, and all covenants, agreements and
    obligations relating to taxes, shall survive the Closing and shall expire,
    and thereafter no longer be of legal force and effect, at the earlier of (a)
    11:59 p.m. EDT on October 15, 2007 and (b) the date upon which the latest
    income Tax Return including any part of fiscal year 2006 is filed by, or
    caused to be filed by CharterMac with respect to, ARCap, the Fund Entities
    or any of their respective Subsidiaries (the "Survival Period"); provided,
    however, that all such representations, warranties, covenants, agreements
    and obligations regarding Taxes of ARCap, the Fund Entities or any of their
    respective Subsidiaries with respect to matters arising from or related to
    ARCap CMBS Fund REIT, Inc. shall survive until (i) with respect to the 2003
    Taxable year, April 15, 2007, unless the Statute of Limitations with respect
    to ARCap CMBS Fund REIT, Inc. is extended by agreement with a Taxing
    Authority prior to such date, and (ii) with respect to the 2004 Taxable
    year, April 15, 2008, unless the Statute of Limitations with respect to
    ARCap CMBS Fund REIT, Inc. is extended by agreement with a Taxing Authority
    prior to such date, and in the case of such an extension of the Statute of
    Limitations with respect to either 2003 or 2004, such Survival Period shall
    extend until the closing of such taxable year by final resolution with all
    Taxing Authorities with respect to such entity; and, provided further, that
    if, at any time prior to such expiration of the representations and
    warranties, any indemnified party delivers to any indemnifying party a
    written notice alleging the existence of an inaccuracy in or a breach of any
    of the representations and warranties made by any indemnifying party (and
    setting forth in reasonable detail the basis for such indemnified party's
    belief that such an inaccuracy or breach may exist) and asserting a Claim
    for recovery under Sections 11.2 or 11.3 based on such alleged inaccuracy or
    breach, then the representation or warranty underlying the Claim asserted in
    such notice shall continue to survive (solely with respect to the alleged
    inaccuracy or breach and to no other fact, event, occurrence, circumstance
    or condition) until such time as such Claim is fully and finally resolved.
    All of the covenants, agreements and obligations (other than those related
    to taxes, which are addressed above) of the parties contained in this
    Agreement, the Disclosure Schedule, any ARCap Closing Certificate or any
    CharterMac Closing Certificate to the extent performed as of the Closing
    shall survive until the Closing, and all other covenants, agreements and
    obligations shall survive until they have been fully performed.

           11.2 Indemnification by ARCap Sellers.
                --------------------------------

                        (a) From and after the Effective Time (but subject to
          Sections 11.1 and 11.6), each ARCap Seller, jointly and severally,
          will indemnify and hold harmless each Purchasers Indemnitee from and
          against, and shall compensate, reimburse and pay for, Sellers' Portion
          of any Damages

                                       71





          (excluding Damages arising out of liabilities reflected as such on the
          Closing Balance Sheet or otherwise taken into account when calculating
          the Working Capital Amount) which are directly or indirectly suffered
          or incurred by any Purchasers Indemnitee or to which any Purchasers
          Indemnitee may otherwise become subject (regardless of whether or not
          such Damages relate to any Third-Party Claim) and which arise from or
          as a result of, or are directly or indirectly connected with:

                        (i) any inaccuracy in, breach or alleged breach of any
representation or warranty set forth in Articles 4 and 5 of this Agreement, or,
to the extent they relate to the subject matter of the representations and
warranties contained in Articles 4 and 5, the Disclosure Schedule, or any ARCap
Closing Certificate delivered by ARCap or ARCap REIT; provided that any
inaccuracy in, breach or alleged breach of any such representation or warranty
shall be determined without regard as to any materiality qualifier therein
(provided that any Claim attributable to any such inaccuracy or breach must
exceed $50,000); and provided further that any inaccuracy or breach of the
representations and warranties contained in Sections 4.5(g), 4.6, 4.21(b) and
4.22 shall be determined without regard to any statements or information set
forth on Sections 4.5(g), 4.6, 4.21(b) or 4.22 of the Disclosure Schedule;

                        (ii) any breach or alleged breach of any covenant or
obligation of ARCap (including the covenants set forth in Article 7 other than
Section 7.2);

                        (iii) (A) any Tax due by any of ARCap or any of its
Subsidiaries attributable to a period or portion thereof prior to or ending on
the Closing Date pursuant to Article 9, and (B) with respect to the Fund
Entities or their respective Subsidiaries, the proportionate share of Tax of any
such entity allocated to ARCap REIT or its Subsidiaries or any claim by a Fund
Entity against ARCap or any of its Subsidiaries for indemnification arising out
of or related to a Tax issue attributable to a period prior to or ending on the
Closing Date; and

                        (iv) any claim by any Person for any brokerage or
finder's fee or agent's commission, or the like, alleged to have been made by
such Person with any of ARCap Sellers or ARCap, the Fund Entities or any of
their respective Subsidiaries (or any Person acting on their behalf) in
connection with the transaction contemplated by this Agreement.

                        (b) From and after the Effective Time (but subject to
          Sections 11.1 and 11.6), each ARCap Seller, severally and not jointly,
          will indemnify and hold harmless each Purchasers Indemnitee from and
          against, and shall compensate, reimburse and pay for any Damages which
          are directly or indirectly suffered or incurred by any Purchasers
          Indemnitee or to which any Purchasers Indemnitee may otherwise become
          subject (regardless of whether or not such Damages relate to any
          Third-Party Claim) and which arise from or as a result of, or are
          directly or indirectly connected with:

                                       72





                        (i) any inaccuracy in, breach or alleged breach of any
representation or warranty of such ARCap Seller set forth in Article 3 of this
Agreement, or, to the extent they relate to the subject of the representations
and warranties contained in Article 3, such portions of the Disclosure Schedule
provided in writing to ARCap by such ARCap Seller for inclusion in the
Disclosure Schedule with respect to matters covered by Article 3 of this
Agreement, or any ARCap Closing Certificate delivered by such ARCap Seller;
provided that any inaccuracy in, breach or alleged breach of any such
representation or warranty shall be determined without regard as to any
materiality qualifier therein; and

                        (ii) any breach or alleged breach of any covenant or
obligation of Sellers (including the covenants set forth in Article 7).

           11.3 Indemnification by Purchasers. From and after the Effective Time
    (but subject to Section 11.1(a)), CharterMac and Purchasers, severally and
    jointly, will indemnify and hold harmless each Sellers Indemnitee from and
    against, and shall compensate, reimburse and pay for, any Damages which are
    directly or indirectly suffered or incurred by any Sellers Indemnitee or to
    which any Sellers Indemnitee may otherwise become subject (regardless of
    whether or not such Damages relate to any Third-Party Claim) and which arise
    from or as a result of, or are directly or indirectly connected with:

                        (a) any inaccuracy in, breach or alleged breach of any
          representation or warranty set forth in Article 6 of this Agreement,
          or any other document, certificate, schedule or instrument delivered
          or executed by CharterMac or Purchasers in connection with this
          Agreement; provided that any inaccuracy in, breach or alleged breach
          of any such representation or warranty shall be determined without
          regard as to any materiality qualifier therein;

                        (b) any breach or alleged breach of any covenant or
          obligation of CharterMac or Purchasers (including the covenants set
          forth in Article 7);

                        (c) any claim by any Person for any brokerage or
          finder's fee or agent's commission, or the like, alleged to have been
          made by such Person with any of CharterMac or the Purchasers (or any
          Person acting on their behalf) in connection with the transaction
          contemplated by this Agreement; and

                        (d) for the ownership and operation of ARCap, the Fund
          Entities or any of their respective Subsidiaries on and after the
          Closing Date.

          11.4 Defense of Third-Party Claims.
               -----------------------------

                        (a) In the event of the assertion or commencement of any
          Third-Party Claim with respect to which any indemnified party may be
          entitled to indemnification or any other remedy pursuant to this
          Article 11, such indemnified party shall promptly give Purchasers or
          Sellers Representative, as

                                       73





          applicable, written notice of such Third-Party Claim; provided,
          however, that any failure on the part of such indemnified party to so
          notify Purchasers or Sellers Representative, as applicable, shall not
          limit any of such indemnified party's rights to indemnification under
          this Article 11 (except to the extent such failure materially
          prejudices the defense of such Third-Party Claim).

                        (b) Within ten days of delivery of such written notice,
          Purchasers or Sellers Representative, as applicable, may elect (by
          written notice delivered to the other), at the sole cost and expense
          of CharterMac or Sellers, as applicable, to take all necessary steps
          properly to contest any Third-Party Claim or to prosecute such
          Third-Party Claim to conclusion or, subject to Section 11.4(c), settle
          such Third-Party Claim. If Purchasers or Sellers Representative, as
          applicable, makes the foregoing election, an indemnified party will
          have the right to participate at its own expense in all proceedings.
          If Purchasers or Sellers Representative, as applicable, does not make
          such election within such period or fails to diligently contest such
          Third-Party Claim after such election, then the indemnified party
          shall be free to handle the prosecution or defense of any such
          Third-Party Claim, and will take all necessary steps to contest the
          Third-Party Claim or to prosecute such Third-Party Claim to conclusion
          or settlement, and will notify Purchasers or Sellers Representative,
          as applicable, of the progress of any such Third-Party Claim, will
          permit Purchasers or Sellers Representative, as applicable, at the
          sole cost and expense of CharterMac or Sellers, as applicable, to
          participate in such prosecution or defense and will provide Purchasers
          or Sellers Representative, as applicable, with reasonable access to
          all relevant information and documentation relating to the Third-Party
          Claim and the prosecution or defense thereof. Notwithstanding the
          foregoing, Purchasers shall control the defense and settlement of any
          Third-Party Claim with respect to Taxes.

                        (c) Neither Purchasers nor Sellers Representative will
          compromise or settle any such Third-Party Claim without the written
          consent of either Purchasers (if Sellers Representative defends the
          Third-Party Claim) or Sellers Representative (if Purchasers or any
          Purchasers Indemnitee defends the Third-Party Claim). Notwithstanding
          anything in this Agreement to the contrary, any indemnified party may
          withhold its consent to any settlement that does not include a full
          general release of all the claims against such indemnified party from
          all parties to the litigation or that requires such indemnified party
          or any of its Affiliates to perform any covenant or refrain from
          engaging in any activity.

                        (d) If Sellers Representative elects, by written notice
          delivered to CharterMac within ten days following the delivery of
          written notice of any Third-Party Claim, to assume the defense of such
          Third-Party Claim, Sellers Representative shall be entitled to direct
          the Escrow Agent to release from the Escrow Amount the reasonable
          costs and expenses of such defense incurred by Sellers Representative.
          Such reimbursements shall occur in accordance with the terms of the
          Escrow Agreement.

                                       74





          11.5 Exercise of Remedies; Tax Treatment.
               -----------------------------------

                        (a) No Purchasers Indemnitee (other than Purchasers or
          any successor thereto or assign thereof) shall be permitted to assert
          any Claim or exercise any other remedy under this Agreement unless
          Purchasers (or any successor thereto or assign thereof) shall have
          consented to the assertion of such Claim or the exercise of such other
          remedy.

                        (b) The parties shall report any indemnification payment
          made pursuant to this Article 11 as a purchase price adjustment unless
          otherwise required by applicable Law.

          11.6 Exclusive Remedy; Limitations; Threshold Amount.
               -----------------------------------------------

                        (a) Purchasers, ARCap and Sellers each acknowledge that
          Sellers' Portion of Damages suffered by Purchasers Indemnitees, if
          any, would relate to unresolved contingencies existing at the Closing
          Date, which if resolved at the Closing Date would have led to a
          reduction in the total consideration Purchasers would have agreed to
          pay in connection with the purchase of the Seller Units and the ASI
          Stock. Resort to the Escrow Amount shall be the sole and exclusive
          remedy of CharterMac, Purchasers and each Purchasers Indemnitee for
          any Damages under this Agreement; provided, however, nothing in this
          Agreement shall limit the indemnification obligations of any
          indemnifying party with respect to Damages which arise from the fraud,
          willful or criminal misconduct of such indemnifying party.

                        (b) The maximum liability of an individual ARCap Seller
          for Damages shall be only that portion of the Purchaser 2 Escrow Cash
          and/or the Escrow Shares which would otherwise become distributable to
          such ARCap Seller if no Claim were made by a Purchaser Indemnitee and
          that are held pursuant to the Escrow Agreement, and no other amounts
          shall be available to Purchasers for reimbursement of any Damages
          payable from such ARCap Seller, other than the Phantom Escrow Cash.

                        (c) With respect to Damages arising solely out of a
          Claim made pursuant to Section 11.2(b), resort to the Escrow Amount
          shall be made solely against the applicable ARCap Seller's portion of
          the Escrow Amount. With respect to all other Damages, resort to the
          Escrow Amount shall be made against the entire Escrow Amount.

                        (d) ARCap Sellers and Purchasers acknowledge and agree
          that an indemnifying party will have no liability (for indemnification
          or otherwise) until (i) in the case of Damages to ARCap Sellers, the
          total of all such Damages, and (ii) in the case of Damages to
          Purchasers, the total of Sellers' Portion of all Damages, in each case
          with respect to such matters exceeds $1,000,000 (the "Threshold
          Amount"), and then such indemnifying party will be liable only to the
          extent such Damages (or, as applicable, Sellers'

                                       75





          Portion thereof) exceed the initial $1,000,000; provided, however,
          that the Threshold Amount shall not apply to any Claim (i) made
          against any ARCap Seller pursuant to Section 11.2(b), (ii) arising
          from the fraud, willful or criminal misconduct of any indemnifying
          party and (iii) regarding Taxes with respect to matters arising from
          or related to ARCap CMBS Fund REIT, Inc., and further provided, that
          the amount of any such Claim shall not be included in the
          determination as to whether the Threshold Amount has been met.

          11.7 Distributions; Voting.
               ---------------------

                        (a) Any Special Common Interests or other equity
          securities issued or distributed by CharterMac or Purchasers
          (including shares issued upon a stock split) ("New Shares") in respect
          of the Escrow Shares that have not been released from the Escrow
          Amount shall be added to the Escrow Amount and become a part thereof.
          When and if cash dividends on Escrow Shares in the Escrow Amount shall
          be declared and paid, they shall not be retained in escrow and shall
          be immediately paid to the record owners of the Escrow Shares. Such
          dividends will not become part of the Escrow Amount and will not be
          available to satisfy Damages. The record owners of the Escrow Shares
          shall pay any taxes on such dividends.

                        (b) Each record holder of Escrow Shares contributed to
          the Escrow Amount on behalf of such holder (and on any voting
          securities added to the Escrow Amount in respect of such Escrow
          Shares) shall have voting rights with respect to such Escrow Shares
          and voting securities so long as such Escrow Shares or other voting
          securities are held in the Escrow Amount. ARCap shall show the Special
          Common Interests contributed to the Escrow Amount as issued and
          outstanding on its balance sheet.

          11.8 Indemnification Claim. A Claim may be asserted by any Purchasers
    Indemnitee in accordance with the terms, conditions and procedures set forth
    in the Escrow Agreement. A Claim may be asserted by any Sellers Indemnitee
    by delivery to CharterMac and Purchasers of a written notice of such Claim
    setting forth (i) the name of such Sellers Indemnitee, (ii) the specific
    representation, warranty or agreement alleged to have been breached by such
    Sellers Indemnitee, (iii) a reasonably detailed description of the facts and
    circumstances giving rise to the alleged breach and (iv) a calculation
    setting forth the amount of such Claim (or if not ascertainable, a
    reasonable good faith estimate of the maximum amount thereof).

          11.9 Release of Escrow Amount. The Escrow Amount shall be released in
    accordance with the terms, conditions and procedures set forth in the Escrow
    Agreement.

          11.10 Contribution. In no event shall any ARCap Seller have any right
    to contribution from ARCap, the Fund Entities or any of their respective
    Subsidiaries with respect to any Claim or Third-Party Claim.

                                       76





          11.11 Adjustment for Insurance. Any indemnification amount payable
    pursuant to this Article 11 shall be net of any amounts actually recovered
    (after deducting related costs and expenses) by the indemnified party for
    the Damages for which such indemnification payment is made, under any
    insurance policy, warranty or indemnity from any third party. CharterMac and
    Purchasers shall use commercially reasonable efforts to recover maximum
    amounts available under any insurance policy, warranty or indemnity from any
    third party prior to making any Claim against the Escrow Amount; provided,
    however, that the parties acknowledge that if any insurance recovery is
    insufficient to cover the Damages in full as of the applicable date the
    Escrow Amount is scheduled to be released in accordance with the terms and
    conditions of the Escrow Agreement, then Purchasers Indemnitees shall be
    entitled to be indemnified pursuant to this Article 11 for the amount of
    such Damages not covered by insurance.

                                   ARTICLE 12

                                  MISCELLANEOUS

          12.1 Notices. All notices and other communications given or made
    pursuant hereto shall be in writing and shall be deemed sufficient upon
    receipt, when delivered personally or by courier, overnight delivery service
    or confirmed facsimile, or forty-eight (48) hours after being deposited in
    the regular mail as certified or registered mail (airmail if sent
    internationally) with postage prepaid, if such notice is addressed to the
    party to be notified at such party's address or facsimile number as set
    forth below, or as subsequently modified by written notice:

                       (a) if to Sellers Representative or any ARCap Seller:
                                            AI Sellers Representative, L.L.C.
                                            c/o ARCap REIT, Inc.
                                            199 Elm Street
                                            New Canaan, CT 06840
                                            Attention: Leonard Cotton
                                            Telecopy No.: 203-972-2987

                           with a copy to:  Orrick, Herrington & Sutcliffe, LLP
                                            666 Fifth Avenue
                                            New York, NY 10013
                                            Attention: Joseph Maloney, Esq.
                                            Telecopy No.: 212-506-5151

                           with a copy to:  ARCap REIT, Inc.
                                            c/o Updike Kelly and Spellacy, P.C.
                                            One State St.
                                            Hartford, CT 06103
                                            Attention: John D'Amico, Esq.
                                            Telecopy No.: (860) 548-2680

                                       77





                       (b) if to ARCap or ARCap REIT:
                                          ARCap Investors, LLC
                                          5221 North O'Connor Boulevard
                                          Suite  600
                                          Irving,  TX 7503
                                          Attention:  Mr.
                                          James L.  Duggins
                                          Telecopy  No.: 972-868-5490

                          with a copy to: ARCap REIT, Inc.
                                          c/o Updike Kelly and Spellacy, P.C.
                                          One State St.
                                          Hartford, CT 06103
                                          Attention: John D'Amico, Esq.
                                          Telecopy No.: (860) 548-2680

                          with a copy to: Orrick, Herrington & Sutcliffe, LLP
                                          666 Fifth Avenue
                                          New York, NY 10013
                                          Attention: Joseph Maloney, Esq.
                                          Telecopy No.: 212-506-5151

                        (c) if to CharterMac or Purchasers:
                                          CharterMac
                                          625 Madison Avenue
                                          New York, NY 10022
                                          Attention: Marc D. Schnitzer
                                          Telecopy No.: (212) 593-5769

                          with a copy to: Paul, Hastings, Janofsky & Walker LLP
                                          75 East 55th Street
                                          New York, NY 10022
                                          Attention:  Michael L. Zuppone
                                          Telecopy No.: (212) 319-4090

          12.2 Severability. If any term or other provision of this Agreement
    is invalid, illegal or incapable of being enforced by any rule of law or
    public policy, all other conditions and provisions of this Agreement shall
    nevertheless remain in full force and effect so long as the economic or
    legal substance of the transactions contemplated hereby is not affected in
    any manner materially adverse to any party. Upon a determination that any
    term or other provision is invalid, illegal or incapable of being enforced,
    Sellers Representative, CharterMac and Purchasers shall negotiate in good
    faith to modify this Agreement (subject to Section 12.4) so as to effect
    their original intent as closely as possible in an acceptable manner to the
    end that the transactions contemplated hereby are fulfilled to the maximum
    extent possible.

                                       78





          12.3 Entire Agreement; No Third-Party Beneficiaries. This Agreement,
    including all exhibits and schedules attached hereto, and the
    Confidentiality Agreement constitute the entire agreement and supersede any
    and all other prior agreements and undertakings, both written and oral,
    among the parties hereto, or any of them, with respect to the subject matter
    hereof. This Agreement does not, and is not intended to, confer upon any
    other Person any right, benefit or remedy hereunder, other than any right,
    benefit or remedy set forth in Sections 7.11(b) and 7.11(c) (which are
    intended to be for the benefit of the Persons covered thereby).

          12.4 Amendment; Waiver. This Agreement maybe amended only in a
    writing signed by all parties hereto; provided, however, that each ARCap
    Seller hereby consents to (and agrees to be bound by) any changes,
    modifications or supplements to any exhibit, annex, appendix, agreement,
    instrument, schedule or other document attached to this Agreement to the
    extent such change, modification or supplement is consented to by Sellers
    Representative in accordance with Section 12.9(e). Any waiver of rights
    hereunder must be set forth in writing. A waiver of any breach or failure to
    enforce any of the terms or conditions of this Agreement shall not in any
    way affect, limit or waive either party's rights at any time to enforce
    strict compliance thereafter with every term or condition of this Agreement.

           12.5 Binding Effect; Assignment. This Agreement shall inure to the
    benefit of and be binding upon the parties hereto and their respective legal
    representatives and successors. Notwithstanding the foregoing, this
    Agreement shall not be assigned by any party hereto by operation of Law or
    otherwise without the express written consent of each of the other parties.

           12.6 Disclosure Schedule. The Disclosure Schedule shall be construed
    with and as an integral part of this Agreement to the same extent as if the
    same had been set forth verbatim herein. Any matter disclosed pursuant to
    the Disclosure Schedule shall not be deemed to be an admission or
    representation as to the materiality of the item so disclosed. In the event
    of any inconsistency between the statements in the body of this Agreement
    and those on the Disclosure Schedule (other than an exception to a
    representation, warranty or covenant set forth on the Disclosure Schedule,
    to the extent that such exception is made with respect to a specific section
    of this Agreement or it is otherwise reasonably apparent, on the face of
    such disclosure, that such exception also applies to another section of the
    Disclosure Schedule or another Section of this Agreement) the statements in
    the body of this Agreement will control.

          12.7 Governing Law. This Agreement shall be governed by and construed
    in accordance with, the laws of the State of New York without regard to the
    conflicts of laws provisions thereof (other than Sections 5-1401 and 5-1402
    of the New York General Obligations Law).

                                       79





          12.8 Dispute Resolution; Mediation; Jurisdiction.
               -------------------------------------------

                        (a) In the event of any dispute, controversy or claim
          arising out of or relating to this Agreement or the breach,
          termination or validity thereof, or the transactions contemplated
          hereby (a "Dispute"), upon the written notice of either party hereto,
          the parties hereto shall attempt to negotiate a resolution of the
          Dispute. If the parties hereto are unable for any reason to resolve a
          Dispute within 30 days after the receipt of such notice, the Dispute
          shall be submitted to mediation in accordance with Section 12.8(b) of
          this Agreement.

                        (b) Any Dispute not resolved pursuant to Section 12.8(a)
          of this Agreement shall, at the request of either party hereto (a
          "Mediation Request"), be submitted to non-binding mediation in
          accordance with the then current International Institute for Conflict
          Prevention and Resolution Mediation Procedure (the "Procedure"),
          except as modified herein. The mediation shall be held in New York,
          New York. The parties shall have 20 days from receipt by a party of a
          Mediation Request to agree on a mediator. If no mediator has been
          agreed upon by the parties within 20 days of receipt by a party (or
          parties) of a Mediation Request, then any party may request (on
          written notice to the other parties), that the International Institute
          for Conflict Prevention and Resolution appoint a mediator in
          accordance with the Procedure. All mediation pursuant to this clause
          shall be confidential and shall be treated as compromise and
          settlement negotiations, and no oral or documentary representations
          made by the parties during such mediation shall be admissible for any
          purpose in any subsequent proceedings. No party hereto shall disclose
          or permit the disclosure of any information about the evidence adduced
          or the documents produced by the other parties in the mediation
          proceedings or about the existence, contents or results of the
          mediation without the prior written consent of such other parties
          except in the course of a judicial or regulatory proceeding or as may
          be required by Law or requested by a Governmental Authority or
          securities exchange. Before making any disclosure permitted by the
          preceding sentence, the party intending to make such disclosure shall
          give the other parties reasonable written notice of the intended
          disclosure and afford the other parties a reasonable opportunity to
          protect its interests. If the Dispute has not been resolved within 60
          days of the appointment of a mediator, or within 90 days of receipt by
          a party of a Mediation Request (whichever occurs sooner), or within
          such longer period as the parties may agree to in writing, then any
          party may file an action on the Dispute in any court having
          jurisdiction in accordance with Section 12.8(c) of this Agreement.

                        (c) Each of the parties hereby irrevocably and
          unconditionally consents to submit to the exclusive jurisdiction of
          the courts of the State of New York and the courts of the United
          States of America located in the City and County of the State of New
          York for any litigation arising out of or relating to this Agreement
          or the transactions contemplated hereby or any of the other
          transactions contemplated hereby (and agrees not to commence any

                                       80





          litigation relating hereto except in such courts), and further agrees
          that service of any process, summons, notice or document by U.S.
          registered mail to its respective address set forth in Section 12.1 of
          this Agreement, shall be effective service of process for any
          litigation brought against it in any such court. Each of the parties
          hereby irrevocably and unconditionally waives any objection to the
          laying of venue of any litigation arising out of this Agreement or the
          transactions contemplated hereby or any of the other transactions
          contemplated hereby in the courts of the State of New York or the
          courts of the United States of America located in the City and County
          of the State of New York and hereby further irrevocably and
          unconditionally waives and agrees not to plead or claim in any such
          court that any such litigation brought in any such court has been
          brought in an inconvenient forum. Each of the parties hereto hereby
          irrevocably and unconditionally waives any right it may have to trial
          by jury in connection with any litigation arising out of or relating
          to this agreement, the transactions contemplated hereby or any of the
          other transactions contemplated hereby.

          12.9 Sellers Representative.
               ----------------------

                        (a) The ARCap Sellers, by executing this Agreement and
          approving the transactions contemplated hereby and thereby, hereby
          irrevocably (i) appoint Sellers Representative as their agent and
          attorney-in-fact, to execute and deliver the Escrow Agreement, deposit
          the Escrow Shares with the Escrow Agent, act jointly for and on behalf
          of the ARCap Sellers in connection with, and to facilitate the
          consummation of the transactions contemplated by this Agreement and
          the Escrow Agreement, and (ii) consent to the taking by Sellers
          Representative of any and all actions and the making of any and all
          decisions required or permitted to be taken by Sellers Representative
          under the Escrow Agreement (including, without limitation, the
          exercise of the power to authorize delivery to Purchasers of the
          Purchaser 2 Escrow Cash and the Escrow Shares out of the Escrow
          Account in satisfaction of Claims by any Purchasers Indemnitees).
          Sellers Representative hereby agrees to negotiate, enter into
          settlements and compromises of Claims and Third-Party Claims to comply
          with orders of courts and awards of arbitrators with respect to such
          Claims and Third-Party Claims, resolve any Claims and Third-Party
          Claims made pursuant to this Agreement, take all actions necessary in
          his judgment for the accomplishment of the foregoing, and hereby
          accepts his appointment as Sellers Representative in connection with,
          and to facilitate the consummation of the transactions contemplated by
          this Agreement. Purchasers shall be entitled to deal exclusively with
          Sellers Representative on all matters relating to this Agreement and
          the Escrow Agreement, including any Claim or Third-Party Claim made
          pursuant to Article 11, and shall be entitled to rely conclusively
          (without further evidence of any kind whatsoever) on any document
          executed or purported to be executed on behalf of ARCap Sellers by
          Sellers Representative, and on any other action taken or purported to
          be taken on behalf of any ARCap Seller by Sellers Representative, as
          fully binding upon such ARCap Seller.

                                       81





                        (b) Sellers Representative shall not be liable for any
          act done or omitted hereunder as Sellers Representative while acting
          in good faith and in the exercise of reasonable judgment. The ARCap
          Sellers shall severally indemnify Sellers Representative and hold
          Sellers Representative harmless against any loss, liability or expense
          incurred without gross negligence, bad faith or willful misconduct on
          the part of Sellers Representative and arising out of or in connection
          with the acceptance or administration of Sellers Representative's
          duties hereunder, including the reasonable fees and expenses of any
          legal counsel retained by Sellers Representative, as set forth in
          Section 12.9(d) below.

                        (c) Sellers Representative shall be entitled to rely
          upon any order, judgment, certificate, demand, notice, instrument or
          other writing delivered to him hereunder without being required to
          investigate the validity, accuracy or content thereof nor shall
          Sellers Representative be responsible for the validity or sufficiency
          of this Agreement. In all questions arising under this Agreement,
          Sellers Representative may rely on the advice of counsel, and for
          anything done, omitted or suffered in good faith by Sellers
          Representative based on such advice, Sellers Representative shall not
          be liable to anyone.

                        (d) The reasonable expenses incurred by Sellers
          Representative while acting on behalf of the ARCap Sellers under the
          authorization granted in this Section 12.9 shall be payable out of the
          Escrow Account in accordance with the Escrow Agreement; provided,
          however, that all payments (other than reimbursements payable pursuant
          to Section 11.4(d)) to Sellers Representative out of the Escrow
          Account pursuant to this Section 12.9(d) shall not exceed $50,000, and
          further provided, that all payments shall be made to Sellers
          Representative on the dates upon which the Escrow Amount is scheduled
          to be distributed to ARCap Sellers in accordance with the terms,
          conditions and procedures set forth in the Escrow Agreement. Sellers
          Representative shall not be obligated to incur any cost or expense
          unless such cost or expense has been advanced to Sellers
          Representative by one or more ARCap Sellers or Sellers Representative
          is otherwise satisfied, as determined by Sellers Representative in its
          sole discretion, that funds available for reimbursement thereof shall
          be available out of the Escrow Amount in accordance with this Section
          12.9(d). Sellers Representative shall not be obligated to take any
          act, whether or not at the direction of one or more ARCap Sellers,
          unless the conditions in this Section 12.9(d) have been satisfied.

                        (e) Each ARCap Seller hereby consents to any changes,
          modifications or supplements determined by Sellers Representative to
          be in the interest of ARCap Sellers as a whole or otherwise required
          by the terms of this Agreement or necessary in order to effect the
          transactions contemplated hereby, with respect to the form and
          substance of any exhibit, annex, appendix, agreement, instrument,
          schedule or other document attached to this Agreement and required
          hereunder to be executed, delivered or completed at or prior to the
          Closing Date; provided, however, that Sellers Representative shall not
          have the

                                       82





          authority to consent to any change, modification or supplement to this
          Agreement or the Escrow Agreement that (i) reduces the Cash
          Consideration, (ii) increases the Escrow Amount, (iii) extends any of
          the dates upon which the Escrow Amount is to be released pursuant to
          the Escrow Agreement or (iv) would result in an increase in the
          maximum liability of any individual ARCap Seller for Damages beyond
          that portion of the Escrow Amount which would otherwise become
          distributable to such ARCap Seller.

          12.10 Construction. The headings of Articles and Sections in this
    Agreement are provided for convenience only and will not affect its
    construction or interpretation. The language used in this Agreement is the
    language chosen by the parties to express their mutual intent, and no rule
    of strict construction shall be applied against any party.

          12.11 Counterparts. This Agreement may be executed simultaneously in
    one or more counterparts (including by facsimile or electronic pdf
    submission), and by the different parties in separate counterparts, each of
    which when executed shall be deemed to be an original, but all of which
    shall constitute one and the same agreement.

                            [Signature Page Follows]








                                       83



         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed  as of the  date  first  written  above by  their  respective  officers
thereunto duly authorized.

                                   CHARTERMAC


                                   By:  /s/ Marc D. Schnitzer
                                       -----------------------------------------
                                   Name: Marc D. Schnitzer
                                   Title: Chief Executive Officer and President





                    [Signatures Continued on Following Page]





                 Signature Page to Securities Purchase Agreement





                                   CHARTER MAC CORPORATION


                                   By:  /s/ Marc D. Schnitzer
                                       -----------------------------------------
                                   Name: Marc D. Schnitzer
                                   Title: Chief Executive Officer and President





                    [Signatures Continued on Following Page]





                 Signature Page to Securities Purchase Agreement





                                   CM ARCAP INVESTORS LLC


                                   By:  /s/ Marc D. Schnitzer
                                       -----------------------------------------
                                   Name: Marc D. Schnitzer
                                   Title: Chief Executive Officer and President





                    [Signatures Continued on Following Page]





                 Signature Page to Securities Purchase Agreement





                                   AI SELLERS REPRESENTATIVE, L.L.C.


                                   By:  /s/ Leonard W. Cotton
                                       -----------------------------------------
                                   Name: Leonard W. Cotton
                                   Title: Sole Member





                    [Signatures Continued on Following Page]





                 Signature Page to Securities Purchase Agreement





                                   ARCAP INVESTORS, LLC


                                   By:  /s/ Leonard W. Cotton
                                       -----------------------------------------
                                   Name: Leonard W. Cotton
                                   Title: Chairman



                    [Signatures Continued on Following Page]





                 Signature Page to Securities Purchase Agreement





                                   ARCAP REIT, INC.


                                   By:  /s/ Leonard W. Cotton
                                       -----------------------------------------
                                   Name: Leonard W. Cotton
                                   Title: Chairman





                    [Signatures Continued on Following Page]





                 Signature Page to Securities Purchase Agreement





                                    [SELLERS]


                                   By: _________________________________________
                                   Name: _______________________________________
                                   Title:  _____________________________________





                    [Signatures Continued on Following Page]





                 Signature Page to Securities Purchase Agreement





                                    [SELLERS]


                                    By: ________________________________________
                                    Name: ______________________________________
                                    Title:  ____________________________________





                    [Signatures Continued on Following Page]





                 Signature Page to Securities Purchase Agreement



                                   [SELLERS]


                                   By: _________________________________________
                                   Name: _______________________________________
                                   Title:  _____________________________________





                    [Signatures Continued on Following Page]





                 Signature Page to Securities Purchase Agreement





                                   [SELLERS]


                                   By: _________________________________________
                                   Name: _______________________________________
                                   Title:  _____________________________________









                 Signature Page to Securities Purchase Agreement








                                TABLE OF CONTENTS

                                                                            Page


                                                                    
ARTICLE 1                      CERTAIN DEFINITIONS; INTERPRETATION.............2

         1.1      Certain defined terms........................................2

         1.2      Other Interpretive Provisions...............................15

ARTICLE 2                      PURCHASE AND SALE OF ASI STOCK AND SELLER
                                 UNITS........................................16

         2.1      Purchase and Sale of ASI Stock and Seller Units.............16

         2.2      Closing Date................................................19

         2.3      Closing Obligations.........................................19

         2.4      Working Capital Adjustment..................................24

ARTICLE 3                      REPRESENTATIONS AND WARRANTIES OF ARCAP
                                 SELLERS RELATING TO  ARCAP SELLERS...........25

         3.1      Authority...................................................25

         3.2      No Conflict; Government Authorizations......................25

         3.3      Ownership...................................................26

         3.4      Legal Proceedings; Orders...................................26

         3.5      Brokers or Finders..........................................27

         3.6      Investment Intent...........................................27

ARTICLE 4                      REPRESENTATIONS AND WARRANTIES of ARCAP........27

         4.1      No Conflict; Government Authorizations......................27

         4.2      Corporate Status............................................28

         4.3      Authority; Binding Effect...................................28

         4.4      Capitalization..............................................29

         4.5      Financial Statements; Projections...........................30

         4.6      Taxes.......................................................31

         4.7      Intellectual Property.......................................33

         4.8      Information Systems.........................................34

         4.9      Legal Proceedings...........................................35

         4.10     Compliance with Laws; Permits...............................36

         4.11     Environmental and Safety and Health Matters.................38

         4.12     Employee Matters and Benefit Plans..........................38

         4.13     Affiliate Arrangements......................................41

                                                                -i-





         4.14     Finder's Fee................................................41

         4.15     Books and Records...........................................41

         4.16     Other Agreements............................................41

         4.17     No Undisclosed Liabilities..................................41

         4.18     Fund Entities...............................................42

         4.19     Investment Company; Investment Advisor......................42

         4.20     Offering Memoranda..........................................42

         4.21     Fund Reports................................................43

         4.22     REIT........................................................43

         4.23     Contracts; No Defaults......................................44

         4.24     Insurance...................................................45

         4.25     Leases......................................................45

         4.26     Partnership Treatment.......................................46

         4.27     Registration................................................46

         4.28     Servicing...................................................46

         4.29     Serviced Loan Schedule......................................47

         4.30     ERISA.......................................................47

         4.31     Disclosure..................................................47

         4.32     No Material Adverse Change..................................47

         4.33     Intercompany Accounts.......................................48

         4.34     Disclaimer of Other Representations and Warranties..........48

         4.35     Disclosure Schedule.........................................48

ARTICLE 5                      REPRESENTATIONS AND WARRANTIES OF ARCAP
                                 REIT.........................................48

         5.1      No Conflict; Government Authorizations......................48

         5.2      Corporate Status............................................49

         5.3      Authority; Binding Effect...................................49

         5.4      Ownership...................................................49

         5.5      Legal Proceedings; Orders...................................50

         5.6      Brokers or Finders..........................................50

                                                               -ii-





         5.7      Disclosure..................................................50

ARTICLE 6                      REPRESENTATIONS AND WARRANTIES OF
                                 CHARTERMAC AND PURCHASERS....................51

         6.1      Corporate Status............................................51

         6.2      Authority...................................................51

         6.3      No Conflict; Required Filings...............................51

         6.4      Legal Proceedings...........................................52

         6.5      Finder's Fee................................................52

         6.6      No Reliance.................................................52

         6.7      Special Common Interests....................................53

         6.8      Restricted Common Shares....................................53

         6.9      SEC Documents; Financial Statements.........................53

         6.10     Absence of Undisclosed Liabilities..........................54

         6.11     Absence of Certain Changes..................................54

         6.12     Investment Intent...........................................55

ARTICLE 7                      COVENANTS......................................55

         7.1      Interim Operations of the Companies.........................55

         7.2      Filings with Governmental Authorities.......................57

         7.3      Consents....................................................58

         7.4      Confidentiality.............................................58

         7.5      Publicity...................................................58

         7.6      Books and Records...........................................59

         7.7      Further Action..............................................59

         7.8      Expenses....................................................59

         7.9      Notification of Certain Matters.............................60

         7.10     Employee Matters and Employee Benefit Plans.................60

         7.11     Insurance Matters...........................................61

         7.12     Access and Information......................................62

         7.13     CharterMac Appointments.....................................63

         7.14     AMAC Appointments...........................................63

                                                              -iii-





         7.15     ARCap REIT Advisory Committee; ARCap REIT Appointments......63

         7.16     Preparation of Financial Statements.........................63

         7.17     Balance Sheet Assets........................................64

         7.18     Specially Serviced Loan Schedule............................64

ARTICLE 8                      CLOSING CONDITIONS.............................64

         8.1      Conditions to Obligations of Sellers and Purchasers.........64

         8.2      Additional Conditions to Obligations of Purchasers..........65

         8.3      Additional Conditions to Obligations of Sellers.............66

ARTICLE 9                      CERTAIN TAX MATTERS............................68

         9.1      Tax Returns.................................................68

         9.2      Certain Taxes...............................................69

ARTICLE 10                     TERMINATION....................................69

         10.1     Termination.................................................69

         10.2     Effect of Termination and Abandonment.......................70

ARTICLE 11                     SURVIVAL; ESCROW; INDEMNIFICATION..............71

         11.1     Survival Limitation.........................................71

         11.2     Indemnification by ARCap Sellers............................71

         11.3     Indemnification by Purchasers...............................73

         11.4     Defense of Third-Party Claims...............................73

         11.5     Exercise of Remedies; Tax Treatment.........................75

         11.6     Exclusive Remedy; Limitations; Threshold Amount.............75

         11.7     Distributions; Voting.......................................76

         11.8     Indemnification Claim.......................................76

         11.9     Release of Escrow Amount....................................76

         11.10    Contribution................................................76

         11.11    Adjustment for Insurance....................................77

ARTICLE 12                     MISCELLANEOUS..................................77

         12.1     Notices.....................................................77

         12.2     Severability................................................78

         12.3     Entire Agreement; No Third-Party Beneficiaries..............79

                                                               -iv-





         12.4     Amendment; Waiver...........................................79

         12.5     Binding Effect; Assignment..................................79

         12.6     Disclosure Schedule.........................................79

         12.7     Governing Law...............................................79

         12.8     Dispute Resolution; Mediation; Jurisdiction.................80

         12.9     Sellers Representative......................................81

         12.10    Construction................................................83

         12.11    Counterparts................................................83







INDEX OF SCHEDULES
Schedule I        ARCap Investors, LLC Member List
Schedule II       CharterMac Units
Schedule III      Cash Units
Schedule IV       Exchange Units
Schedule V        Non-Cash Consideration
Schedule VI       Restricted Common Shares
Schedule VII      Disclosure Schedule
Schedule VIII     Final Fund Documents

                                                               -v-

EX-99

Exhibit 99.1

American Mortgage Acceptance Company Completes the Sale of ARCap Investment

NEW YORK, Aug 15, 2006 (BUSINESS WIRE) -- American Mortgage Acceptance Company ("AMAC" or the "Company") (AMEX:AMC) today announced that the sale of AMAC's interests in ARCap Investors, LLC ("ARCap") to CharterMac (NYSE:CHC) has been completed.

In connection with the sale, AMAC received total proceeds of $41.3 million, including its share of the purchase price and proceeds from a special distribution made by ARCap. Of such amount, approximately $2.5 million will be held back as AMAC's contribution to an overall escrow held as security for indemnification obligations of the sellers, including AMAC, under the securities purchase agreement. As previously announced, in order to comply with REIT distribution rules, AMAC expects that a portion of the proceeds from the sale will be used to make a special distribution to common shareholders, in the range of $1.40 - $1.50 per share, before the end of 2006. The special distribution is subject to the approval of the Board of Trustees and to AMAC achieving its business goals for the year.

About the Company

AMAC is a real estate investment trust that specializes in multifamily and commercial real estate finance. AMAC originates and acquires first mortgage, mezzanine and bridge loans secured by properties throughout the United States. For more information, please visit our website at http://www.americanmortgageco.com or contact the Investor Relations Department directly at (800) 831-4826.

Certain statements in this document may constitute forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties are detailed in AMAC's most recent Annual Report on Form 10-K and in its other filings with the Securities and Exchange Commission and include, among others, risks of investing in uninsured and non-investment grade mortgage assets and subordinated Commercial Mortgage-Backed Securities ("CMBS"); competition in acquiring desirable investments; interest rate fluctuations; risks associated with hedging transactions, which can limit gains and increase exposure to loss; risks associated with investments in real estate generally and the properties which secure many of our investments; general economic conditions, particularly as they affect the value of our assets and the credit status of our borrowers; dependence on our external Advisor for all services necessary for our operations; conflicts which may arise among us and other entities affiliated with our Advisor which have similar investment policies to ours; risks associated with the repurchase agreements we utilize to finance our investments and the availability of financing generally; and risks associated with our contemplated CDO transactions, which include, but are not limited to, the inability to acquire eligible investments for a CDO issuance and the inability to find suitable replacement investments in collateralized debt obligations with reinvestment periods. Such forward-looking statements speak only as of the date of this document. AMAC expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in AMAC's expectations with regard thereto or change in events, conditions, or circumstances on which any such statement is based.