<PAGE>

                                                                     EXHIBIT 4.4

                                WARRANT AGREEMENT

                                 BY AND BETWEEN

                            ARBOR REALTY TRUST, INC.

                                       AND

                     AMERICAN STOCK TRANSFER & TRUST COMPANY

                                AS WARRANT AGENT

                   1,610,000 WARRANTS TO PURCHASE COMMON STOCK

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                                 <C>
ARTICLE 1.......................................................................................................      2
DEFINITIONS.....................................................................................................      2
     Section 1.       Definitions...............................................................................      2
ARTICLE 2.......................................................................................................      4
THE WARRANT AGENT...............................................................................................      4
     Section 2.1      Appointment of Warrant Agent..............................................................      4
     Section 2.2      Duties of Warrant Agent...................................................................      4
     Section 2.3      Compensation; Indemnification.............................................................      6
     Section 2.4      Resignation; Successor Warrant Agents.....................................................      6
ARTICLE 3.......................................................................................................      8
THE WARRANTS....................................................................................................      8
     Section 3.1      Number of Warrants........................................................................      8
     Section 3.2      Issuance of Warrants......................................................................      8
     Section 3.3      Registration of Transfer and Exchange.....................................................      9
     Section 3.4      Execution And Delivery....................................................................     14
     Section 3.5      Destroyed, Lost, Mutilated Or Stolen Warrant Certificates.................................     14
     Section 3.6      Persons Deemed Owners.....................................................................     15
     Section 3.7      Cancellation Of Warrant Certificates......................................................     15
     Section 3.8      No Rights As Stockholders.................................................................     15
ARTICLE 4.......................................................................................................     16
EXERCISE OF WARRANTS............................................................................................     16
     Section 4.1      Exercise Period...........................................................................     16
     Section 4.2      Shares Issuable Upon Exercise; Exercise Price.............................................     16
     Section 4.3      Method Of Exercise........................................................................     16
     Section 4.4      Issuance Of Common Stock..................................................................     17
     Section 4.5      Fractions Of Shares.......................................................................     17
     Section 4.6      Adjustment Of Exercise Price..............................................................     18
     Section 4.7      Notice Of Certain Corporate Action........................................................     20
     Section 4.8      Company To Reserve Common Stock...........................................................     21
     Section 4.9      Taxes On Exercises........................................................................     21
     Section 4.10     Covenant As To Common Stock...............................................................     21
     Section 4.11     Provisions In Case Of Consolidation, Merger Or Sale Of Assets.............................     21
     Section 4.12     No Change Of Warrant Necessary............................................................     22
     Section 4.13     Enforcement Of Rights.....................................................................     22
     Section 4.14     Available Information.....................................................................     22
ARTICLE 5.......................................................................................................     23
AMENDMENTS......................................................................................................     23
     Section 5.1      Amendment Of Agreement....................................................................     23
     Section 5.2.     Record Date...............................................................................     23
ARTICLE 6.......................................................................................................     23
MISCELLANEOUS PROVISIONS........................................................................................     23
     Section 6.1      Counterparts..............................................................................     23
     Section 6.2      Governing Law.............................................................................     24
</TABLE>

                                       i

<PAGE>

<TABLE>
<S>                                                                                                            <C>
Section 6.3      Descriptive Headings......................................................................     24
Section 6.4      Notices...................................................................................     24
Section 6.5      Maintenance Of Office.....................................................................     24
Section 6.6      Successors And Assigns....................................................................     25
Section 6.7      Separability..............................................................................     25
Section 6.8      Persons Having Rights Under Agreement.....................................................     25

EXHIBIT A - FORM OF WARRANT CERTIFICATE....................................................................    A-1
EXHIBIT B - TRANSFER INSTRUCTION...........................................................................    B-1
</TABLE>

                                       ii

<PAGE>

                                WARRANT AGREEMENT

         This Agreement, dated as of the date set forth on the signature page,
by and between Arbor Realty Trust, Inc., a Maryland corporation with an office
at 333 Earle Ovington Boulevard, Suite 900, Uniondale, New York 11553 (the
"Company"), and American Stock Transfer & Trust Company, with an office at 59
Maiden Lane, Plaza Level, New York, NY 10038, Attention: Corporate Department
(the "Warrant Agent").

                                   WITNESSETH

         A. The Company has authorized the issuance of up to 1,400,000 units
("Units") (or 1,610,000 if the Initial Purchaser's over-allotment option is
exercised in full), each Unit consisting of shares of its Common Stock, par
value $0.01 per share, (the "Common Stock"), and one Common Stock purchase
warrant (each a "Warrant," and collectively, the "Warrants"), each Warrant
initially entitling the holders thereof to purchase one additional share of its
Common Stock, which Warrants are to be attached initially to the shares of
Common Stock issued as provided in Paragraph C below;

         B. Such Units are to be offered by the Company pursuant to that certain
Offering Memorandum, dated as of June 26, 2003 (the "Offering Memorandum") and
purchased (i) by the Initial Purchaser named in that certain Purchase/Placement
Agreement (the "Purchase/Placement Agreement") dated as of June 26, 2003 and
thereafter, subject to the terms thereof, offered to (A) Qualified Institutional
Buyers ("QIBs") (as defined in Rule 144A under the Securities Act of 1933, as
amended (the "Securities Act")), and (B) a limited number of institutional
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act), and (ii) by individual "accredited investors" (as defined in
Rule 501(a)(4), (5) or (6) of the Securities Act) (collectively, "Accredited
Investors") pursuant to those certain Subscription Agreements accepted by the
Company as of July 1, 2003;

         C. In accordance with the provisions of Section 3 of this Agreement,
the Warrants will not be detachable from the Common Stock until the shares of
Common Stock underlying the Units are both (i) registered with the Securities
and Exchange Commission (the "Commission") pursuant to the Securities Act and
(ii) listed for trading on a national securities exchange on the Nasdaq Stock
Market, Inc. After the shares of Common Stock underlying the Units are
registered and listed as provided for in the immediately preceding sentence, the
Warrants may be detached and transferred separately from the shares of Common
Stock to which they were attached upon issuance of the Units. The Warrants will
expire on the date that is two years after the date of the Offering Memorandum;
and

         D. The Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance, transfer, exchange, replacement and exercise of the Warrants.

                                       1

<PAGE>

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

SECTION 1. DEFINITIONS

         Capitalized terms used herein shall have the following meanings:

         Accredited Investors. Shall have the meaning set forth in the Recitals.

         Acquiror. Shall have the meaning set forth in Section 4.11.

         Business Day. Each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which banking institutions in the City of New York are
authorized or obligated by federal, state or local law or executive order to
close.

         Commission. Shall have the meaning set forth in the Recitals.

         Common Stock. Shall have the meaning set forth in the Recitals.

         Consideration. Shall have the meaning set forth in Section 4.11.

         Corporate Trust Office. The principal office of the Warrant Agent at 59
Maiden Lane, Plaza Level, New York, NY 10038, Attention: Corporate Department,
or such other address at which at any particular time its corporate trust
business shall be administered.

         Corporation. A corporation, association, company, joint-stock company
or business trust.

         Definitive Warrant Certificates. A Warrant Certificate that is in the
form set forth in Exhibit A to this Agreement and that does not include the
information called for by footnote 1 of Exhibit A to this Agreement.

         Depositary. The Depository Trust Company as the depositary with respect
to the Warrants issuable or issued in whole or in part in global form, until a
successor shall have been appointed and become such pursuant to the applicable
provision of this Agreement, and thereafter "Depositary" shall mean or include
such successor.

         Detachment Date. The date that is when the Common Stock underlying the
Units is both registered with the Commission pursuant to the Securities Act and
listed on a national securities exchange or the Nasdaq Stock Market, Inc.

         Exchange Act. The Securities Exchange Act of 1934, as amended.

         Exchange Period. Shall have the meaning set forth in Section 4.1.

                                       2

<PAGE>

         Exercise Price. Shall have the meaning set forth in Section 4.2.

         Expiration Date. The date that is two years after the date of the
Offering Memorandum.

         Global Warrant Certificate. A Warrant Certificate that is in the form
set forth in Exhibit A to this Agreement and that includes the information
called for by footnote 1 of Exhibit A to this Agreement.

         Holder. A Person in whose name a Warrant Certificate is registered in
the Warrant Register.

         Initial Purchaser. Shall have the meaning set forth in the
Purchase/Placement Agreement.

         NASDAQ. Shall have the meaning set forth in Section 4.6(e).

         Person. An individual, limited or general partnership, Corporation,
joint venture, trust or unincorporated organization, or any other entity,
including a government or agency or political subdivision thereof.

         Purchase/Placement Agreement. Shall have the meaning set forth in the
Recitals.

         Responsible Officers. Shall have the meaning set forth in Section
2.2(c).

         Restricted Global Warrant Certificate. Shall have the meaning set forth
in Section 3.2.

         QIB. Shall have the meaning set forth in the Recitals.

         Registration Rights Agreement. The Registration Rights Agreement, dated
as of the date hereof, among the Company and the Initial Purchasers of the
Units.

         Rule 144. Rule 144 promulgated under the Securities Act.

         Rule 144A. Rule 144A promulgated under the Securities Act.

         Securities Act. Shall have the meaning set forth in the Recitals.

         Trading Day. Any day other than a Saturday or Sunday or a day on which
securities are not traded on any national securities exchange.

         Transaction. Shall have the meaning set forth in Section 4.11.

         Transfer Restricted Warrants. Each Warrant until the date on which such
Warrant (i) has been disposed of pursuant to an effective registration statement
under the Securities Act, (ii) is distributed to the public pursuant to Rule 144
or is freely salable pursuant to Rule 144(k) (or any similar provisions then in
force), (iii) is otherwise freely tradable without registration under the
Securities Act or (iv) has been acquired by the Company.

         Unrestricted Global Warrant Certificate. Shall have the meaning set
forth in Section 3.2.

                                       3

<PAGE>

         Warrant Agent. American Stock Transfer & Trust Company until a
successor Warrant Agent shall have become such pursuant to the applicable
provisions of this Agreement, and thereafter "Warrant Agent" shall mean such
successor Warrant Agent.

         Warrant Certificate. A certificate representing Warrants issued under
this Agreement.

         Warrant Custodian. The Warrant Agent or such other entity that is a
"fast agent" meeting the requirements of the Depositary as the Warrant Agent
shall designate from time to time, to act as custodian with respect to the
Warrants in global form, or any successor entity thereto.

         Warrant Register. Shall have the meaning set forth in Section 3.3(a).

                                    ARTICLE 2

                                THE WARRANT AGENT

SECTION 2.1 APPOINTMENT OF WARRANT AGENT.

         The Company hereby appoints the Warrant Agent as its agent in respect
of the Warrants and the Warrant Certificates, upon the terms and subject to the
conditions set forth herein, and subject to resignation or removal of the
Warrant Agent as provided herein. The Warrant Agent agrees to accept such
appointment, upon the terms and subject to the conditions set forth herein.

         The Warrant Agent shall have the powers and authority granted to it by
this Agreement and such further powers and authority to act on behalf of the
Company as the Company may hereafter grant to or confer upon it.

SECTION 2.2 DUTIES OF WARRANT AGENT.

         The Warrant Agent accepts its obligations set forth herein upon the
terms and conditions hereof, including the following, to all of which the
Company agrees and to all of which the rights hereunder of the Holders from time
to time of the Warrant Certificates shall be subject:

                  (a)      The Warrant Agent shall act hereunder as agent and in
         a ministerial capacity for the Company, and its duties shall be
         determined solely by the provisions hereof. In acting under this
         Agreement and with respect to the Warrant Certificates, the Warrant
         Agent does not assume any obligation or relationship of agency or trust
         for or with any Holder.

                  (b)      The Warrant Agent shall be obligated to perform such
         duties as are specifically set forth herein and in the Warrant
         Certificates and no implied duties or obligations shall be read into
         this Agreement or the Warrant Certificates against the Warrant Agent.
         The Warrant Agent shall have no duty or responsibility in case of any
         default by the Company in the performance of its covenants or
         agreements contained in this Agreement or the Warrant Certificates or
         in the case of the receipt of any written

                                       4

<PAGE>

         demand from any Holder with respect to such default, including, without
         limiting the generality of the foregoing, any duty or responsibility to
         initiate or attempt to initiate any proceeding at law or otherwise, or
         to make any demand upon the Company.

                  (c)      The Warrant Agent is hereby authorized and directed
         to accept written instructions with respect to the performance of its
         duties hereunder from any one of the Chief Executive Officer, the
         President or the Chief Financial Officer of the Company or from any
         other officer of the Company authorized by resolutions duly adopted by
         the Board of Directors of the Company to give such instructions (each a
         "Responsible Officer"), and to apply to such Responsible Officers for
         advice or instructions in connection with its duties, and it shall not
         be liable for any action taken or suffered to be taken by it in good
         faith in accordance with instructions from any Responsible Officer with
         respect to any matter arising in connection with the Warrant Agent's
         duties and obligations arising under this Agreement.

                  (d)      The Warrant Agent shall not be liable for any action
         taken, suffered or omitted to be taken by it in good faith in
         accordance with any notice, statement, instruction, request, direction,
         order or demand of a Responsible Officer of the Company believed by it
         to be genuine. Any such notice, statement, instruction, request,
         direction, order or demand of the Company shall be sufficiently
         evidenced by an instrument signed by a Responsible Officer.

                  (e)      Whenever in the performance of its duties under this
         Agreement, the Warrant Agent shall deem it necessary or desirable that
         any fact or matter be proved or established by the Company prior to
         taking or suffering any action hereunder, such fact or matter (unless
         other evidence in respect thereof be herein specifically prescribed)
         may be deemed to be conclusively proved and established by a
         certificate signed by a Responsible Officer, and such certificate shall
         be full authorization to the Warrant Agent for any action taken or
         suffered in good faith by it under the provisions of this Agreement in
         reliance upon such certificate.

                  (f)      The Warrant Agent, to the extent permitted by
         applicable law, may engage or be interested in any financial or other
         transaction with the Company and may act on, or as depository, trustee
         or agent for, any committee or body of holders of shares or other
         obligations of the Company as freely as if it were not the Warrant
         Agent hereunder. Nothing in this Agreement shall be deemed to prevent
         the Warrant Agent from acting in any other capacity for the Company.

                  (g)      The Warrant Agent shall not, by countersigning or
         delivering Warrant Certificates or by any other act hereunder, be
         deemed to make any representations as to the validity, value or
         authorization of the Warrant Certificates or the Warrants represented
         thereby or of any securities or other property issued or issuable upon
         exercise of any Warrant or whether any stock issued upon exercise of
         any Warrant is fully paid and nonassessable.

                  (h)      The Warrant Agent shall not at any time be under any
         duty or responsibility to any Holder to determine whether any fact
         exists that may require any adjustment to the Exercise Price, or with
         respect to the nature or extent of any adjustment, when made, or with
         respect to the method employed in making any adjustment to the Exercise
         Price.

                                       5

<PAGE>

                  (i)      The Warrant Agent shall not be liable for any act or
         omission in connection with this Agreement except for its own
         negligence or willful misconduct.

                  (j)      The Warrant Agent may at any time consult with
         counsel satisfactory to it and shall incur no liability or
         responsibility in respect of any action taken, suffered or omitted to
         be taken by it in good faith in accordance with the opinion or advice
         of such counsel.

                  (k)      The Company agrees that it will perform, execute,
         acknowledge and deliver, or cause to be performed, executed,
         acknowledged and delivered, all such further and other acts,
         instruments and assurances as may reasonably be required by the Warrant
         Agent for the carrying out or performing by the Warrant Agent of the
         provisions of this Agreement.

                  (l)      The Warrant Agent shall not be required to risk or
         expend its own funds in the performance of its obligations and duties
         hereunder unless it has obtained an indemnity reasonably satisfactory
         to it to reimburse it for such expenditure.

                  (m)      The Warrant Agent shall not be under any liability
         for interest on, and shall not be required to invest, any monies at any
         time received by it pursuant to any of the provisions of this Agreement
         or of the Warrant Certificates. The Warrant Agent shall not be
         accountable for the use or application by the Company of the proceeds
         of the exercise of any Warrant.

SECTION 2.3 COMPENSATION; INDEMNIFICATION.

         The Company agrees to pay the Warrant Agent from time to time such
compensation as shall be agreed upon by the Company and the Warrant Agent, and
the Company agrees to reimburse the Warrant Agent for its reasonable
out-of-pocket expenses and disbursements incurred without negligence, willful
misconduct or bad faith on its part in connection with the services rendered by
it hereunder.

         The Company also agrees to indemnify the Warrant Agent for, and to hold
it harmless against, any loss, liability or expense, including judgments, costs
and reasonable counsel fees, incurred without negligence, willful misconduct or
bad faith on the part of the Warrant Agent, arising out of or in connection with
its acting as Warrant Agent hereunder. The obligations of the Company under this
Section 2.3 shall survive the exercise and the expiration of the Warrants and
the resignation and removal of the Warrant Agent.

SECTION 2.4 RESIGNATION; SUCCESSOR WARRANT AGENTS.

         The Warrant Agent may at any time resign as Warrant Agent and be
discharged from all further duties and liabilities hereunder (except liabilities
arising as a result of the Warrant Agent's own negligence or willful
misconduct), by giving written notice to the Company and each holder of Warrants
of such resignation, specifying the date on which such resignation shall be
effective; provided, that such notice shall be given no less than 90 days prior
to such effective date. Upon receiving such notice of resignation, the Company
shall promptly appoint a successor

                                       6

<PAGE>

Warrant Agent by written instrument in duplicate signed on behalf of the Company
by a Responsible Officer, one copy of which shall be delivered to the resigning
Warrant Agent and one copy to the successor Warrant Agent. Such resignation
shall become effective upon the acceptance of the appointment by the successor
Warrant Agent.

         The Company may, at any time and for any reason, remove the Warrant
Agent and appoint a successor Warrant Agent by written instrument in duplicate,
specifying such removal and the date on which it is to become effective, signed
by a Responsible Officer of the Company, one copy of which shall be delivered to
the Warrant Agent being removed and one copy to the successor Warrant Agent.

         Upon resignation or removal of the Warrant Agent, if the Company shall
fail to appoint a successor Warrant Agent within a period of 90 days after
receipt of such notice of resignation or removal, then any Holder may apply to a
court of competent jurisdiction for the appointment of a successor to the
Warrant Agent. Pending appointment of a successor to the Warrant Agent, either
by the Company or by such a court, the duties of the Warrant Agent shall be
carried out by the Company.

         Any appointment of a successor Warrant Agent shall become effective
upon acceptance of appointment by the successor Warrant Agent as provided in
this Section 2.4. As soon as practicable after the appointment of the successor
Warrant Agent, the Company shall cause written notice of the change in the
Warrant Agent to be given to each of Holder.

         Each successor Warrant Agent shall execute and deliver to its
predecessor and to the Company an instrument accepting such appointment
hereunder and all the provisions of this Agreement, and thereupon such successor
Warrant Agent shall, without any further act, deed or conveyance, become vested
with the same powers, rights, duties and responsibilities of its predecessor
hereunder, with like effect as if it had been originally named herein, and the
Warrant Agent shall thereupon become obligated to transfer, deliver and pay
over, and such successor Warrant Agent shall be entitled to receive, all moneys,
securities, records or other property on deposit with or held by the Warrant
Agent under this Agreement.

         Any Person into which the Warrant Agent may be converted or merged, or
any corporation resulting from any consolidation to which the Warrant Agent
shall be a party, or any corporation succeeding to the trust business of the
Warrant Agent, shall be a successor Warrant Agent under this Agreement without
any further act on the part of any party. Any such successor Warrant Agent shall
promptly cause notice of its succession as Warrant Agent to be mailed to the
Company and to each Holder.

                                       7

<PAGE>

                                    ARTICLE 3

                                  THE WARRANTS

SECTION 3.1 NUMBER OF WARRANTS.

         The number of Warrants that may be issued and delivered under this
Agreement is limited to 1,400,000 Warrants (or 1,610,000 if the Initial
Purchaser's over-allotment option is exercised in full pursuant to Section 1(b)
of the Purchase/Placement Agreement), except for Warrants issued and delivered
in connection with any transfer of, in exchange for, or in lieu of, other
Warrants (which other Warrants shall be canceled) in accordance with the terms
of this Agreement.

SECTION 3.2 ISSUANCE OF WARRANTS.

         Prior to the Detachment Date, beneficial ownership of each Warrant
shall be evidenced by the Unit certificate to which such Warrant relates,
bearing the following legend:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE INCLUDE THE BENEFICIAL
OWNERSHIP IN A STOCK PURCHASE WARRANT FOR ONE SHARE OF COMMON STOCK OF THE
COMPANY, SUBJECT TO ADJUSTMENTS AS SET FORTH IN THE WARRANT AGREEMENT GOVERNING
THE WARRANTS, WHICH STOCK PURCHASE WARRANT IS HELD BY THE WARRANT AGENT AND IS
DEEMED TO BE ATTACHED HERETO AND IS NOT DETACHABLE HEREFROM NOR EXERCISABLE
EXCEPT AS SET FORTH IN THE WARRANT AGREEMENT. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO THE PROVISIONS AND ENTITLED TO THE BENEFITS OF SUCH
WARRANT AGREEMENT, A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE COMPANY AND
WILL BE MADE AVAILABLE TO ANY SHAREHOLDER UPON REQUEST WITHOUT CHARGE. UPON
DETACHMENT OF THE WARRANT FOLLOWING THE DETACHMENT DATE, A SEPARATE COMMON STOCK
CERTIFICATE AND A WARRANT CERTIFICATE REPRESENTING OWNERSHIP OF THE COMMON STOCK
AND THE WARRANTS, RESPECTIVELY, WILL BE ISSUED TO THE REGISTERED HOLDER OF THIS
UNIT CERTIFICATE.

         After the Detachment Date, Warrants offered and sold to QIBs will be,
except as provided in the last paragraph of this Section 3.3, issued in the form
of a single, permanent Global Warrant Certificate in definitive, fully
registered form, in substantially the form set forth in Exhibit A to this
Agreement (including the information called for by footnotes 1, 2, 3 and 4
thereof) (the "Restricted Global Warrant Certificate"), which will be deposited
with the Warrant Custodian and registered in the name of the Depositary or a
nominee of the Depositary.

         Warrants transferred pursuant to an effective registration statement
under the Securities Act or in reliance on Rule 144 (and, in each such case, in
accordance with Section 3.3 of this Agreement) will be, upon request of the
transferor, represented by a single, permanent Global

                                       8

<PAGE>

Warrant Certificate in definitive, fully registered form, in substantially the
form set forth in Exhibit A to this Agreement (including the information called
for by footnotes 1, 3 and 4 thereof) (the "Unrestricted Global Warrant
Certificate"), which will be held by the Warrant Custodian and registered in the
name of the Depositary or a nominee of the Depositary.

         Each Global Warrant Certificate shall represent such of the outstanding
Warrants as shall be specified therein and each shall provide that it shall
represent the aggregate number of outstanding Warrants from time to time
endorsed thereon and that the aggregate amount of outstanding Warrants
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges, transfers and exercises. Any endorsement of a
Global Warrant Certificate to reflect the amount of any increase or decrease in
the amount of outstanding Warrants represented thereby shall be made by the
Warrant Agent or the Warrant Custodian, at the direction of the Warrant Agent,
in accordance with instructions given by the Holder of the Global Warrant
Certificate and in accordance with Section 3.3 of this Agreement.

         After the Detachment Date, Warrants offered and sold (i) to Accredited
Investors who are not QIBs or (ii) to QIBs who elect by written notice to the
Company to take physical delivery of Definitive Warrant Certificates rather than
a beneficial interest in a Global Warrant Certificate, will be issued in the
form of Definitive Warrant Certificates. Definitive Warrant Certificates may
also be issued in accordance with Section 3.3 of this Agreement.

SECTION 3.3 REGISTRATION OF TRANSFER AND EXCHANGE.

                  (a)      General. The Company shall cause to be kept at the
         Corporate Trust Office of the Warrant Agent a register (the register
         maintained in such office and in any other office or agency designated
         pursuant to Section 6.5 of this Agreement being herein collectively
         referred to as the "Warrant Register") in which the Warrant Agent shall
         provide for the registration of Warrant Certificates and of transfers
         and exchanges of Warrants.

                  (b)      Transfer of a Beneficial Interest in a Global Warrant
         Certificate. The transfer and exchange of a beneficial interest in a
         Global Warrant Certificate shall be effected through the Depositary in
         accordance with this Agreement (including the restrictions on transfer
         set forth herein) and the procedures of the Depositary therefor.

                  (c)      Transfer and Exchange of Definitive Warrant
         Certificates. A Holder of a Definitive Warrant Certificate may at any
         time transfer such Definitive Warrant Certificate or exchange such
         Definitive Warrant Certificate for Definitive Warrant Certificates
         representing an equal number of Warrants in accordance with this
         subsection (c). Upon receipt by the Warrant Agent of:

                                    (i)      a Definitive Warrant Certificate,
                           duly endorsed or accompanied by appropriate
                           instruments of transfer, in form reasonably
                           satisfactory to the Warrant Agent, and

                                    (ii)     if such Definitive Warrant
                           Certificate represents Transfer Restricted Warrants,
                           a certificate in substantially the form set forth in

                                       9

<PAGE>

                           Exhibit B to this Agreement from the Holder thereof
                           requesting Definitive Warrant Certificates and
                           stating that such Warrants are being:

                                             (1)      delivered to the Warrant
                                    Agent for registration in the name of such
                                    Holder, without transfer; or

                                             (2)      transferred pursuant to an
                                    effective registration statement under the
                                    Securities Act; or

                                             (3)      transferred to a QIB in
                                    accordance with Rule 144A; or

                                             (4)      transferred in reliance on
                                    an exemption from the registration
                                    requirements of the Securities Act other
                                    than that provided by Rule 144A (in which
                                    case the Definitive Warrant Certificate
                                    surrendered shall also be accompanied by an
                                    opinion of counsel reasonably acceptable to
                                    the Company and the Warrant Agent to the
                                    effect that such transfer is in compliance
                                    with the Securities Act),

then the Warrant Agent will cancel the surrendered Definitive Warrant
Certificate, the Company will execute one or more Definitive Warrant
Certificates representing the amount of Warrants to be transferred or exchanged
and the Warrant Agent will countersign and deliver to the transferee or Holder
such Definitive Warrant Certificates and the Warrant Agent will register such
Definitive Warrant Certificates in the name of the transferee or Holder.

                  (d)      Transfer of a Definitive Warrant Certificate for a
         Beneficial Interest in a Global Warrant Certificate. A Holder of a
         Definitive Warrant Certificate may at any time, subject to the rules
         and procedures of the Depositary, transfer such Definitive Warrant
         Certificate for an equivalent beneficial interest in the appropriate
         Global Warrant Certificate in accordance with this subsection (d). Upon
         receipt by the Warrant Agent of:

                                    (i)      a Definitive Warrant Certificate,
                           duly endorsed or accompanied by appropriate
                           instruments of transfer, in form reasonably
                           satisfactory to the Warrant Agent, together with an
                           instruction of the transferor thereof requesting an
                           equivalent beneficial interest in the appropriate
                           Global Warrant Certificate; and

                                    (ii)     if such Definitive Warrant
                           Certificate represents Transfer Restricted Warrants,
                           a certificate in substantially the form set forth in
                           Exhibit B to this Agreement from the transferor
                           thereof stating that such Warrants are being
                           transferred:

                                             (1)      to a QIB in accordance
                                    with Rule 144A (in which case the
                                    appropriate Global Warrant Certificate shall
                                    be the Restricted Global Warrant
                                    Certificate); or

                                             (2)      pursuant to an effective
                                    registration statement under the Securities
                                    Act or in reliance on Rule 144 (in each of
                                    which cases the appropriate Global Warrant
                                    Certificate shall be the

                                       10

<PAGE>

                                    Unrestricted Global Warrant Certificate and,
                                    in the case of a transfer in reliance on
                                    Rule 144, the Warrant Agent shall also
                                    receive an opinion of counsel reasonably
                                    acceptable to the Company and to the Warrant
                                    Agent to the effect that such transfer is in
                                    compliance with the Securities Act),

then the Warrant Agent will cancel the surrendered Definitive Warrant
Certificate, the Warrant Custodian, in accordance with the standing instructions
and procedures existing among the Depositary and the Warrant Custodian, will
increase the aggregate number of Warrants covered by the appropriate Global
Warrant Certificate in the amount to be transferred and the Depositary will
effect the transfer in accordance with its procedures therefor.

                  (e)      Transfer or Exchange of a Beneficial Interest in a
         Global Warrant Certificate for a Definitive Warrant Certificate. A
         Holder of a beneficial interest in a Global Warrant Certificate may at
         any time, subject to the rules and procedures of the Depositary,
         transfer or exchange such beneficial interest for one or more
         Definitive Warrant Certificates in accordance with this subsection (e).
         Upon receipt by the Warrant Custodian of:

                                    (i)      an instruction given in accordance
                           with the procedures of the Depositary on behalf of a
                           Holder of a beneficial interest in a Global Warrant
                           Certificate to reduce the Global Warrant Certificate
                           by the number of Warrants to be transferred or
                           exchanged; and

                                    (ii)     if such Global Warrant Certificate
                           is the Restricted Global Warrant Certificate, a
                           certificate (which may be submitted by facsimile
                           promptly followed by an original) in substantially
                           the form set forth in Exhibit B to this Agreement
                           from the Holder of such beneficial interest stating
                           that such Warrants are being:

                                             (1)      delivered to the Warrant
                                    Agent for registration in the name of such
                                    Holder, without change of beneficial
                                    ownership; or

                                             (2)      transferred pursuant to an
                                    effective registration statement under the
                                    Securities Act; or

                                             (3)      transferred to a QIB in
                                    accordance with Rule 144A; or

                                             (4)      transferred in reliance on
                                    an exemption from the registration
                                    requirements of the Securities Act other
                                    than that provided by Rule 144A (which case
                                    the Warrant Custodian shall also receive an
                                    opinion of counsel reasonably acceptable to
                                    the Company and to the Warrant Custodian to
                                    the effect that such transfer is in
                                    compliance with the Securities Act),

then the Warrant Custodian, in accordance with the standing instructions and
procedures existing among the Depositary and the Warrant Custodian, will reduce
the amount of Warrants covered

                                       11

<PAGE>

by the appropriate Global Warrant Certificate, the Company will execute one or
more Definitive Warrant Certificates in the aggregate amount of Warrants to be
transferred or exchanged and the Warrant Agent will countersign and deliver to
the transferee or Holder such Definitive Warrant Certificates and the Warrant
Agent shall register the Definitive Warrant Certificates in the name of such
transferee or Holder.

                  (f)      Transfer of a Beneficial Interest in the Restricted
         Global Warrant Certificate for a Beneficial Interest in the
         Unrestricted Global Warrant Certificate. A Holder of a beneficial
         interest in the Restricted Global Warrant Certificate may at any time,
         subject to the rules and procedures of the Depositary, transfer all or
         part of its interest in the Restricted Global Warrant Certificate for
         an equivalent interest in the Unrestricted Global Warrant Certificate
         in accordance with this subsection (f). Upon receipt by the Warrant
         Custodian of:

                                    (i)      an instruction given in accordance
                           with the procedures of the Depositary on behalf of a
                           Holder of a beneficial interest in the Restricted
                           Global Warrant Certificate to reduce such Global
                           Warrant Certificate by the amount of the interest to
                           be transferred and increase the Unrestricted Global
                           Warrant Certificate by a like amount, and

                                    (ii)     a certificate (which may be
                           submitted by facsimile promptly followed by an
                           original) in substantially the form set forth in
                           Exhibit B to this Agreement from the Person
                           designated by the Depositary as such Holder, to the
                           effect that such interest is being transferred in
                           reliance on Rule 144 (in which case the Warrant
                           Custodian shall also receive an opinion of counsel
                           reasonably acceptable to the Company and to the
                           Warrant Custodian to the effect that such transfer is
                           in compliance with the Securities Act) or pursuant to
                           an effective registration statement under the
                           Securities Act,

then the Warrant Custodian, in accordance with the standing instructions and
procedures existing among the Depositary and the Warrant Custodian, will so
reduce the Restricted Global Warrant Certificate and increase the Unrestricted
Global Warrant Certificate, and the transfer and exchange of such beneficial
interest shall be effected through the Warrant Custodian and the Depositary in
accordance with this Agreement and the procedures of the Depositary and the
Warrant Custodian therefor.

                  (g)      Restrictions on Transfer of Global Warrant
         Certificates. Notwithstanding any other provisions of this Agreement
         (other than the provisions set forth in subsection (h) of this Section
         3.3), a Global Warrant Certificate may not be transferred except as a
         whole by the Depositary to a nominee of the Depositary or by a nominee
         of the Depositary to the Depositary or another nominee of the
         Depositary or by the Depositary or any such nominee to a successor
         Depositary or a nominee of such successor Depositary.

                  (h)      Issuance of Definitive Warrant Certificates in the
         Absence of a Depositary. If at any time the Depositary notifies the
         Company that the Depositary is unwilling or unable to continue as
         Depositary for the Global Warrant Certificates and a

                                       12

<PAGE>

         successor Depositary for the Global Warrant Certificates is not
         appointed by the Company within 90 days after delivery of such notice,
         then the Warrant Custodian, in accordance with the standing
         instructions and procedures existing among the Depositary and the
         Warrant Custodian, will cancel the Global Warrant Certificates, the
         Company will execute Definitive Warrant Certificates representing an
         aggregate number of Warrants equal to the aggregate number of Warrants
         evidenced by the Global Warrant Certificates, and the Warrant Agent
         will countersign and deliver to each Person designated by the
         Depositary as a Holder of a beneficial interest in the Global Warrant
         Certificates a Definitive Warrant Certificate evidencing a number of
         Warrants equal to such interest.

                  (i)      Legends. Except as permitted by this subsection (i),
         the Restricted Global Warrant Certificate and the Definitive Warrant
         Certificates (and all Warrant Certificates issued in exchange therefor
         or substitution thereof) shall bear a legend in substantially the form
         set forth in Exhibit A to this Agreement. A Definitive Warrant
         Certificate that does not bear the legends set forth in Exhibit A to
         this Agreement will be executed, countersigned and delivered in the
         case of (i) a transfer pursuant to an effective registration statement
         under the Securities Act of a Transfer Restricted Warrant in accordance
         with subsection (c)(ii)(2) of this Section 3.3, (ii) a transfer in
         reliance on Rule 144 of a Transfer Restricted Warrant in accordance
         with subsection (c)(ii)(4) of this Section 3.3; (iii) a transfer
         pursuant to an effective registration statement under the Securities
         Act of a beneficial interest in the Restricted Global Warrant
         Certificate in accordance with subsection (e)(ii)(2) of this Section
         3.3; (iv) a transfer in reliance on Rule 144 of a beneficial interest
         in the Restricted Global Warrant Certificate in accordance with
         subsection (e)(ii)(4) of this Section 3.3; or (v) a transfer or
         exchange of a beneficial interest in the Unrestricted Global Warrant
         Certificate or of a Warrant represented by a Definitive Warrant
         Certificate that is not a Transfer Restricted Warrant.

                  (j)      Cancellation and/or Adjustment of Global Warrant
         Certificate. At such time as all interests in a Global Warrant
         Certificate have either been exchanged for Definitive Warrant
         Certificates, exercised for shares of Common Stock or canceled, such
         Global Warrant Certificate shall be returned to or retained and
         canceled by the Warrant Agent. At any time prior to such cancellation,
         if any beneficial interest in a Global Warrant Certificate is exchanged
         for Definitive Warrant Certificates, exercised for shares of Common
         Stock or canceled, the number of Warrants represented by such Global
         Warrant Certificate shall be reduced and an endorsement shall be made
         on such Global Warrant Certificate, by the Warrant Agent or the Warrant
         Custodian, at the direction of the Warrant Agent, to reflect such
         reduction.

                  (k)      Taxes. No service charge shall be payable by any
         Holder for any registration of transfer or exchange of Warrant
         Certificates, but the Company may require payment of a sum sufficient
         to cover any tax or other governmental charge that may be imposed in
         connection with any registration of transfer or exchange of Warrant
         Certificates other than exchanges not involving any transfer.

                                       13

<PAGE>

SECTION 3.4 EXECUTION AND DELIVERY.

         The Warrant Certificates shall be executed on behalf of the Company by
its Chief Executive Officer, its President or its Chief Financial Officer, under
its corporate seal reproduced thereon, attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Warrant
Certificates may be manual or facsimile. Warrant Certificates bearing the manual
or facsimile signatures of individuals who were at any time the proper officers
of the Company shall bind the Company, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the delivery of such
Warrant Certificates or the date they are countersigned by the Warrant Agent.

         No Warrant Certificate or the Warrants represented thereby shall be
valid or be entitled to any benefit under this Agreement unless such Warrant
Certificate has been countersigned by an authorized officer of the Warrant Agent
by manual signature. All Warrant Certificates shall be dated the date they are
countersigned by the Warrant Agent.

         At any time and from time to time after the execution and delivery of
this Agreement, the Company shall deliver Warrant Certificates executed by the
Company in accordance with this Section 3.4 to the Warrant Agent. Subject to
Section 3.1 of this Agreement, the Warrant Agent shall, upon the written request
of a Responsible Officer of the Company, countersign and deliver Warrant
Certificates representing such number of Warrants, registered in such names and
bearing such legends as may be specified in such request. The Warrant Agent
shall also countersign and deliver Warrant Certificates as otherwise provided in
this Agreement.

SECTION 3.5 DESTROYED, LOST, MUTILATED OR STOLEN WARRANT CERTIFICATES.

         If there shall be delivered to the Company and the Warrant Agent
evidence to their satisfaction of the destruction, loss, mutilation or theft of
any Warrant Certificate and such security and indemnity as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Warrant Agent that such Warrant
Certificate has been acquired by a bona fide purchaser, and in the case of
mutilation, upon surrender of such Warrant Certificate to the Warrant Agent for
cancellation, the Company shall execute and the Warrant Agent shall countersign
and deliver, in lieu of or exchange for any such destroyed, lost, mutilated or
stolen Warrant Certificate, a new Warrant Certificate for a like number of
Warrants, bearing a number not contemporaneously outstanding.

         Upon the issuance of any new Warrant Certificate under this Section
3.5, the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Warrant Agent) connected
therewith.

         Every substitute Warrant Certificate issued and delivered pursuant to
this Section 3.5 in lieu of any destroyed, lost or stolen Warrant Certificate
shall constitute an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Warrant Certificate shall be at any
time enforceable by anyone, and shall be entitled to all the benefits of,

                                       14

<PAGE>

and be subject to all the limitations of rights set forth in, this Agreement
equally and proportionately with any and all other Warrant Certificates duly
issued and delivered hereunder.

         The provisions of this Section 3.5 are exclusive and shall preclude (to
the extent lawful) any and all other rights and remedies with respect to the
replacement of destroyed, lost, mutilated or stolen Warrant Certificates
notwithstanding any law or statute existing or hereafter enacted to the
contrary.

SECTION 3.6 PERSONS DEEMED OWNERS.

         The Company and the Warrant Agent, and any agent of the Company or the
Warrant Agent, may deem and treat the Person in whose name a Warrant Certificate
is registered in the Warrant Register as the absolute, true and lawful owner of
such Warrant Certificate and the Warrants represented thereby (notwithstanding
any notation of ownership or other writing thereon made by any Person) for all
purposes, and neither the Company nor the Warrant Agent nor any of their
respective agents shall be affected by any notice or knowledge to the contrary.

SECTION 3.7 CANCELLATION OF WARRANT CERTIFICATES.

         All Warrant Certificates surrendered for registration of transfer,
exchange or exercise shall be delivered to the Warrant Agent and shall be
promptly canceled by the Warrant Agent. The Company may at any time deliver to
the Warrant Agent for cancellation any Warrant Certificates previously delivered
hereunder that the Company may have acquired in any manner whatsoever, and all
Warrant Certificates so delivered shall be promptly canceled by the Warrant
Agent. No Warrant Certificates shall be delivered in lieu of or in exchange for
any Warrant Certificates canceled by the Warrant Agent, except as expressly
permitted by this Agreement.

SECTION 3.8 NO RIGHTS AS STOCKHOLDERS.

         Nothing contained in this Agreement or in the Warrant Certificates
shall be construed as conferring upon the Holders or any transferees any of the
rights of stockholders of the Company, including without limitation, the right
to vote or to receive dividends or to receive notice as stockholders in respect
of any meeting of stockholders for the election of directors of the Company or
any other matter. Nothing contained in this Agreement shall be construed as
imposing any liabilities on such holder to purchase any securities or as a
stockholder of the Company, whether such liabilities are assumed by the Company
or by creditors or stockholders of the Company or otherwise.

                                       15

<PAGE>

                                    ARTICLE 4

                              EXERCISE OF WARRANTS

SECTION 4.1 EXERCISE PERIOD.

         Subject to and upon compliance with the provisions of this Agreement,
at the option of the Holder thereof, a Warrant may be exercised at the Exercise
Price in effect at the time of exercise, at any time on any Business Day during
the period (the "Exercise Period") commencing on the Detachment Date and ending
5:00 P.M., New York time, on the Expiration Date, unless the Exercise Period is
extended by the Company. Following the Expiration Date, any Warrant not
previously exercised shall expire and be null and void, and all rights of the
Holder under the Warrant Certificate evidencing such Warrant and under this
Agreement shall cease.

SECTION 4.2 SHARES ISSUABLE UPON EXERCISE; EXERCISE PRICE.

         Subject to and upon compliance with the provisions of this Agreement,
each Warrant shall entitle the Holder thereof to purchase from the Company one
share of Common Stock of the Company at an exercise price (the "Exercise Price")
of $15.00 per share of Common Stock. The Exercise Price and the number and kind
of securities or other property issuable upon exercise of the Warrants shall be
adjusted in certain instances as provided in Section 4.6 of this Agreement.

SECTION 4.3 METHOD OF EXERCISE.

         Each Warrant may be exercised in whole or in part. In order to exercise
any Warrants, the Holder thereof shall present and surrender the Warrant
Certificate evidencing the Warrants to the Warrant Agent at the office or agency
of the Company maintained for that purpose pursuant to Section 6.5, with the
Notice of Exercise on the Warrant Certificate duly completed and executed by the
Holder or by the Holder's legal representative or attorney duly authorized in
writing to the satisfaction of the Warrant Agent, and accompanied by payment in
full of the aggregate Exercise Price for the number of shares of Common Stock
specified in the Notice of Exercise, and of any other amounts required to be
paid in connection with such exercise, (i) by cash or certified or official bank
check, (ii) by surrendering additional Warrants or shares of Common Stock for
cancellation to the extent that the Company may lawfully accept shares of Common
Stock in the Company, or (iii) by such other means as is acceptable to the
Company in the lawful currency of the United States of America which as of the
time of payment is legal tender for payment of public or private debts. In the
event the holder exercising its Warrants holds an interest in a Global Warrant
Certificate, such holder shall exercise Warrants owned of record by such holder
and represented by a Global Warrant Certificate by delivering (i) proof of
record ownership of such Warrants if required by the Company and (ii) a notice
of exercise in substantially the form set forth in the Warrant as appropriately
adjusted. The value per share of Common Stock surrendered in accordance with
this Section 4.3 equals the current market price per share of Common Stock as
defined in Section 4.6(e) of this Agreement as of the business day next

                                       16

<PAGE>

preceding the date the Warrant Certificates are surrendered for exercise and the
value of a Warrant being equal to the difference between such current market
price and the Exercise Price.

         Warrants shall be deemed to have been exercised immediately prior to
the close of business on the date of surrender of the Warrant Certificate
representing such Warrants for exercise in accordance with the foregoing
provisions, and at such time the Person or Persons entitled to receive the
Common Stock issuable upon exercise shall be treated for all purposes as the
record holder or holders of such Common Stock at the close of business on the
date of such surrender, notwithstanding that the stock transfer books of the
Company shall then be closed or that certificates representing such shares of
Common Stock shall not then be actually delivered to such Person or Persons.

         If any Warrant Certificate is surrendered for the exercise of less than
all the Warrants represented thereby, the Company shall execute, and the Warrant
Agent shall countersign and deliver to the Holder thereof, at the expense of the
Company, a new Warrant Certificate, dated the date of such exercise, evidencing
the number of Warrants remaining unexercised unless such Warrants shall have
expired.

SECTION 4.4 ISSUANCE OF COMMON STOCK.

         Upon the exercise of any Warrants, the Warrant Agent shall (i) cause an
amount equal to the amount paid by the Holder upon exercise to be paid to the
Company by depositing the same in an account designated by the Company for that
purpose or delivering such payment in such other manner as is acceptable to the
Company, and (ii) immediately inform the Company in writing of such exercise and
deposit or delivery, including the number of Warrants exercised and the
instructions of the exercising Holder with respect to delivery of the shares of
Common Stock issuable upon such exercise. Within five Business Days of the
Company's receipt of notice from the Warrant Agent pursuant to clause (ii) in
the immediately preceding sentence, the Company shall issue and deliver or cause
to be delivered at such office or agency maintained pursuant to Section 6.5 a
certificate or certificates evidencing the number of full shares of Common Stock
issuable upon exercise of such Warrants, registered in such name or names as may
be directed by such Holder in the Notice of Exercise, together with a check for
payment in lieu of any fractional share, as provided in Section 4.5 of this
Agreement.

SECTION 4.5 FRACTIONS OF SHARES.

         No fractional shares of Common Stock shall be issued upon exercise of
any Warrants. If more than one Warrant shall be exercised at one time by the
same Holder, the number of full shares which shall be issuable upon exercise
thereof shall be computed on the basis of the aggregate number of shares of
Common Stock issuable under the Warrants so exercised. In lieu of any fractional
share of Common Stock that would otherwise be issuable upon exercise of any
Warrant or Warrants, the Company shall pay a cash adjustment in respect of such
fraction in an amount equal to the same fraction of the market price per share
of Common Stock (as determined by the Board of Directors of the Company or in
any manner prescribed by the Board of Directors) at the close of business on the
day such exercise is deemed to have occurred.

                                       17

<PAGE>

SECTION 4.6 ADJUSTMENT OF EXERCISE PRICE.

                  (a)      In the event the Company after the date hereof shall
         (i) pay a dividend or make a distribution on the Company's Common Stock
         in shares of capital stock of the Company, (ii) subdivide its
         outstanding shares of Common Stock, (iii) combine its outstanding
         shares of Common Stock into a smaller number of shares, or (iv) issue
         by reclassification of its shares of Common Stock any shares of capital
         stock of the Company, the exercise right and the Exercise Price in
         effect immediately prior to such action shall be adjusted so that the
         holder of any Warrant thereafter surrendering such Warrant for exercise
         shall be entitled to receive the number of shares of capital stock of
         the Company that such holder would have owned immediately following
         such action had such Warrant been exercised immediately prior to the
         record date for such action or to such action, as appropriate. An
         adjustment made pursuant to this Section 4.6 shall, in the case of a
         subdivision, combination or reclassification become effective
         retroactively immediately after the record date thereof. If, as a
         result of an adjustment made pursuant to this Section 4.6, the holder
         of any Warrant thereafter surrendered for exercise shall become
         entitled to receive shares of two or more classes of capital stock of
         the Company, the Board of Directors of the Company (whose determination
         shall be described in a certificate filed with the Warrant Agent) shall
         in good faith determine the allocation of the adjusted Exercise Price
         between or among shares of such classes of capital stock.

                  (b)      In the event the Company after the date hereof shall
         distribute to all the holders of Common Stock any dividend or other
         distribution (other than a cash distribution made as a dividend payable
         out of earnings or out of any earned surplus legally available for
         dividends under the laws of the jurisdiction of incorporation of the
         Company) or any evidence of indebtedness or any assets in respect of
         the Common Stock, or rights to subscribe or purchase shares of Common
         Stock at a price per share less than the current market price per share
         of Common Stock (as determined in Section 4.6(e) of this Agreement) at
         the record date referenced below, then, and thereafter successively
         upon each such distribution, the Exercise Price in effect immediately
         prior to such distribution shall forthwith be reduced to a price
         determined by multiplying the Exercise Price in effect immediately
         prior to such distribution by a fraction, (i) the numerator of which
         shall be the current market price per share of Common Stock (as
         determined in Section 4.6(e) of this Agreement) at the record date
         referenced below, less the fair market value (as determined in good
         faith by the Board of Directors of the Company, whose determination
         shall be described in a certificate filed with the Warrant Agent) of
         the portion of such evidences of indebtedness or such assets so
         distributed, or of such subscription or purchase rights, applicable to
         one share of Common Stock and (ii) the denominator of which shall be
         such current market price per share of Common Stock. An adjustment made
         pursuant to Section 4.6(b) shall become effective retroactively
         immediately after the record date for the determination of stockholders
         entitled to receive such distribution.

                  (c)      After each adjustment of the Exercise Price pursuant
         to Sections 4.6(a) and 4.6(b) of this Agreement, the total number of
         shares of Common Stock or fractional part thereof purchasable upon the
         exercise of each Warrant shall be proportionately adjusted to the
         product obtained by multiplying the number of shares of Common Stock

                                       18

<PAGE>

         purchasable upon exercise of each Warrant by a fraction, (i) the
         numerator of which shall be the Exercise Price in effect immediately
         prior to the adjustment and (ii) the denominator of which shall be the
         Exercise Price immediately following the adjustment.

                  (d)      The certificate of any independent firm of public
         accountants of recognized national standing selected by the Board of
         Directors of the Company shall be conclusive evidence of the
         correctness of any computations under Sections 4.6(a) and 4.6(b) of
         this Agreement.

                  (e)      For the purposes of Sections 4.3, 4.6(a) and 4.6(b)
         of this Agreement, the current market price per share of Common Stock
         as of any date of determination shall be deemed to be the average of
         the daily closing prices for the consecutive 20 trading days preceding
         the day of determination. The closing price for the day shall be the
         last reported sale price regular way or, in case no such reported sale
         takes place on that day, the average of the reported closing bid and
         asked prices regular way, in either case as officially reported by the
         principal stock exchange on which the Common Stock is listed or
         admitted to trading, or, if the Common Stock is not listed or admitted
         to trading on any national securities exchange, the average of closing
         bid and asked prices as furnished by the National Association of
         Securities Dealers, Inc. through the National Association of Securities
         Dealers, Inc. Automated Quotation System ("NASDAQ") or similar
         organization if NASDAQ is no longer reporting such information.

                  (f)      No adjustment of the Exercise Price shall be required
         under Sections 4.6(a) and 4.6(b) of this Agreement if the amount of
         such adjustment is less than 1%; provided, however, that any
         adjustments that by reason of the foregoing are not required at the
         time to be made shall be carried forward and taken into account and
         included in determining the amount of any subsequent adjustment. If the
         Company shall take a record of holders of Common Stock for the purpose
         of entitling them to receive any dividend or distribution and
         thereafter and before the distribution to stockholders of any such
         dividend or distribution, legally abandon its plan to pay or deliver
         such dividend or distribution, then no adjustment of the Exercise Price
         shall be required by reason of the taking of such record. All
         calculations under this Section 4.6 shall be made to the nearest cent
         or to the nearest one-hundredth of a share, as the case may be.

                  (g)      Whenever the Exercise Price is adjusted pursuant to
         this Section 4.6, the Company shall promptly file with the Warrant
         Agent and with each transfer agent for the Common Stock a certificate
         signed by the Chief Executive Officer, President or Chief Financial
         Officer and by the Treasurer or an Assistant Treasurer or the Secretary
         or an Assistant Secretary of the Company setting forth in reasonable
         detail the events requiring the adjustment, the method by which such
         adjustment was calculated, and specifying the Exercise Price and the
         number or kind or class of shares or other securities or property
         purchasable upon exercise of the Warrants after giving effect to such
         adjustment, and will cause to be mailed, first class, postage prepaid a
         summary thereof to the registered holders of the Warrant Certificates
         at their last addressees as they appear on the registry books of the
         Warrant Agent.

                  (h)      For the purposes of this Section 4.6, the term
         "Common Stock" shall mean (i) the class of stock designated as the
         common stock, par value $0.01 per share, of the

                                       19

<PAGE>

         Company, at the date of this Agreement and (ii) any other class of
         stock resulting from successive changes or reclassifications of such
         Common Stock consisting solely of changes in par value, or from par
         value to no par value, or from no par value to par value. In the event
         that at any time, as a result of an adjustment made pursuant to Section
         4.6(a) of this Agreement, shares of capital stock of the Company other
         than shares of Common Stock are issuable upon exercise of the Warrants,
         thereafter the number of such other shares so issuable shall be subject
         to adjustment from time to time in a manner and on terms as nearly
         equivalent as practicable to the provisions with respect to the Common
         Stock contained in this Section 4.6, and all other provisions of this
         Agreement with respect to Common Stock shall apply on like terms to any
         such other shares. Subject to the foregoing, and unless the context
         requires otherwise, all references to Common Stock in this Agreement
         and in the Warrant Certificates shall, in the event of an adjustment
         pursuant to this Section 4.6, be deemed to refer also to any other
         securities or property then issuable upon exercise of the Warrants as a
         result of such adjustments.

SECTION 4.7 NOTICE OF CERTAIN CORPORATE ACTION.

         In case:

                  (a)      the Company shall declare a dividend (or any other
         distribution) on the Common Stock payable otherwise than exclusively in
         cash; or

                  (b)      the Company shall authorize the granting to the
         holders of the Common Stock of rights, options or warrants to subscribe
         for or purchase any shares of capital stock of any class or of any
         other rights; or

                  (c)      of any reclassification of the Common Stock of the
         Company (other than a merger which is effected solely to change the
         jurisdiction of incorporation of the Company), or of any consolidation
         or merger to which the Company is a party and for which approval of any
         stockholders of the Company is required, or of the sale or transfer of
         all or substantially all of the assets of the Company; or

                  (d)      of the voluntary or involuntary dissolution,
         liquidation or winding up of the Company;

then the Company shall, if notice of such event is sent to the holders of the
Company's Common Stock generally, cause to be filed at each office or agency
maintained pursuant to Section 6.5 of this Agreement for the purpose of
exercising Warrants, and shall cause to be mailed to all Holders at their last
addresses as they shall appear in the Warrant Register, on or prior to the date
information regarding such corporate action is sent to holders of the Company's
Common Stock generally, a notice stating (i) the date on which a record is to be
taken for the purpose of such dividend, distribution, rights, options or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution, rights,
options or warrants are to be determined, or (ii) the date on which such
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding up (or amendment thereto) is expected to become effective, and the date
as of which it is expected that holders of record of such class of Common Stock
shall be entitled to exchange their shares of Common Stock for

                                       20

<PAGE>

securities, cash or other property deliverable upon such reclassification,
consolidation, merger, transfer, dissolution, liquidation or winding up. The
Warrant Agent shall not be responsible for giving such notice or for the
contents of any such notice to the Holders.

SECTION 4.8 COMPANY TO RESERVE COMMON STOCK.

         The Company shall, at all times during the Exercise Period, reserve and
keep available, free from preemptive rights, out of its authorized but unissued
Common Stock, for the purpose of effecting the exercise of Warrants, the full
number of shares of Common Stock then issuable upon the exercise of all
outstanding Warrants.

SECTION 4.9 TAXES ON EXERCISES.

         The Company shall pay any and all taxes that may be payable in respect
of the issue or delivery of shares of Common Stock on exercise of Warrants
pursuant hereto. The Company shall not, however, be required to pay any tax
which may be payable in respect of (i) income of the Holder or (ii) any transfer
involved in the issue and delivery of shares of Common Stock in name other than
that of the Holder of the Warrant or Warrants to be exercised, and no such issue
or delivery shall be made unless and until the Person requesting such issue has
paid to the Company the amount of any such taxes or has established to the
satisfaction of the Company that such tax has been paid.

SECTION 4.10 COVENANT AS TO COMMON STOCK.

         The Company covenants that all shares of Common Stock that may be
issued upon exercise of any Warrants will, upon issue and payment of the
Exercise Price therefor, be validly issued, fully paid and nonassessable and
free and clear from all taxes, liens, charges, security interests, encumbrances
and other restrictions created by or through the Company.

SECTION 4.11 PROVISIONS IN CASE OF CONSOLIDATION, MERGER OR SALE OF ASSETS.

         In case of any consolidation of the Company with, or merger of the
Company into, any other Person, any merger of another Person into the Company
(other than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock of the Company)
or any sale or transfer of all or substantially all of the assets of the Company
(each, a "Transaction"), the Person formed by such Transaction or which acquires
such assets, as the case may be (the "Acquiror"), shall execute and deliver to
the Warrant Agent prior to the consummation of the Transaction a warrant
agreement (or supplement to this Warrant Agreement) providing that the Holder of
each Warrant then outstanding shall have the right thereafter, during the period
such Warrant shall be exercisable in accordance with this Warrant Agreement, to
exercise such Warrant only into the kind and amount of securities, cash and
other property (collectively, the "Consideration") receivable upon such
Transaction by a holder of the number of shares of Common Stock of the Company
into which such Warrant might have been exercised immediately prior to such
Transaction, assuming such holder of

                                       21

<PAGE>

Common Stock of the Company (i) is not a Person with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be (a "constituent
person"), or an affiliate of a constituent person and (ii) failed to exercise
such Holder's rights of election, if any, as to the kind or amount of
Consideration receivable upon such Transaction (provided that if the kind or
amount of Consideration receivable upon such Transaction is not the same for
each share of Common Stock held immediately prior to such Transaction by Persons
other than a constituent person or an affiliate thereof and in respect of which
such rights of election shall not have been exercised ("non-electing share"),
then for the purpose of this Section 4.11 the kind and amount of Consideration
receivable upon such Transaction by each non-electing share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
non-electing shares). Such warrant agreement shall provide for adjustments upon
the occurrence of events with respect to the Acquiror similar to the events
described in Sections 4.6(a) and (b) of this Agreement, which, for events
subsequent to the effective date of such warrant agreement, shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
of this Agreement. The above provisions of this Section shall similarly apply to
successive Transactions.

SECTION 4.12 NO CHANGE OF WARRANT NECESSARY.

         Irrespective of any adjustment in the Exercise Price or in the number
or kind of shares or other property issuable upon exercise of the Warrants, the
Warrant Certificates theretofore or thereafter issued may continue to express
the same Exercise Price and number and kind of shares issuable upon exercise per
Warrant as are stated in the Warrant Certificates initially issued pursuant to
this Agreement.

SECTION 4.13 ENFORCEMENT OF RIGHTS.

         Notwithstanding any of the provisions of this Agreement, any Holder,
without the consent of the Warrant Agent or any other Holder, may enforce, and
may institute and maintain any suit, action or proceeding against the Company to
enforce, such Holder's right to exercise the Warrants evidenced by such Holder's
Warrant Certificate in the manner provided in such Warrant Certificate and this
Agreement.

SECTION 4.14 AVAILABLE INFORMATION.

         The Company shall promptly file with the Warrant Agent (and cause the
Warrant Agent to deliver to the holders of the Warrants upon request to the
Company) copies of its annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may by rules and regulations prescribe) that the Company is required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act.

                                       22

<PAGE>

                                    ARTICLE 5

                                   AMENDMENTS

SECTION 5.1 AMENDMENT OF AGREEMENT.

         The Warrant Agent and the Company may, without the consent of any
Holders, amend this Agreement in such manner as they shall deem appropriate to
cure any ambiguity, to correct any defective or inconsistent provision or
manifest mistake or error herein contained, or in any other manner that they may
deem necessary or desirable and which shall not adversely affect the rights of
the Holders of Warrants. This Agreement shall not otherwise be modified,
supplemented or amended in any respect by the Warrant Agent and the Company,
except with the consent in writing of the Holders of outstanding Warrants
representing not less than a majority of the Warrants then outstanding;
provided, however, that the consent in writing of each and every Holder shall be
required for any such modification, supplement or amendment which (a) changes
the Exercise Period (except to extend the expiration of the Exercise Period to a
later date) or increases the Exercise Price, or (b) reduces the percentage of
Holders of outstanding Warrants the consent of who is required to modify,
supplement or amend this Agreement.

         Any modification, supplement or amendment pursuant to this Section 5.1
shall be binding upon all present and future Holders, whether or not they have
consented to such modification, supplement or amendment, and whether or not
notation of such modification, supplement or amendment is made upon any Warrant
Certificate issued to such Holder.

SECTION 5.2. RECORD DATE.

         The Company may set a record date for purposes of determining the
identity of Holders entitled to consent to any modification, supplement or
amendment to this Agreement. If the Company does not set a record date, the
record date shall be 30 days prior to the first solicitation of such consent.

                                    ARTICLE 6

                            MISCELLANEOUS PROVISIONS

SECTION 6.1 COUNTERPARTS.

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

                                       23

<PAGE>

SECTION 6.2 GOVERNING LAW.

         THIS AGREEMENT AND THE WARRANT CERTIFICATES ISSUED HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF.

SECTION 6.3 DESCRIPTIVE HEADINGS.

         The descriptive headings of this Agreement are for convenience only and
shall not control or affect the meaning or construction of any provision of this
Agreement.

SECTION 6.4 NOTICES.

         Any notice, request or other document permitted or required hereunder
to be given to any Holder shall be sufficiently given if in writing and mailed
first-class postage prepaid, to each Holder affected by such event, at its
address as it appears in the Warrant Register. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holders shall affect the
sufficiency of such notice with respect to other Holders. Any notice required
hereunder to be given to any Holder may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Warrant Agent, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.

         Any notice, request, waiver, consent or other document provided or
permitted by this Agreement to be given to (i) the Warrant Agent by any Holder
or by the Company shall be sufficient for every purpose hereunder if in writing
and mailed, first-class postage prepaid or sent by facsimile, to and received by
the Warrant Agent at its Corporate Trust Office, and (ii) the Company by the
Warrant Agent or by any Holder shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid or sent by facsimile, to the Company at the address
or facsimile number of its principal office specified in the first paragraph of
this Agreement or at any other address or facsimile number previously furnished
in writing to the Warrant Agent by the Company.

         In the event the Warrant Agent shall receive any notice, demand or
other document addressed to the Company by any Holder, the Warrant Agent shall
promptly forward such notice or demand to the Company.

SECTION 6.5 MAINTENANCE OF OFFICE.

         So long as any of the Warrants remain outstanding, the Company shall
designate and maintain in the State of New York an office or agency where
Warrant Certificates may be surrendered for registration of transfer or for
exchange, where Warrants may be surrendered for exercise and where notices and
demands to or upon the Company in respect of the Warrants and

                                       24

<PAGE>

this Warrant Agreement may be served. The Company may from time to time change
or rescind such designation as it may deem desirable or expedient. The Company
will give prompt written notice to the Warrant Agent of the location, and any
change in the location, of such office or agency. The Company hereby designates
the Corporate Trust Office of the Warrant Agent as the initial agency maintained
for each such purpose. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to notify the Warrant Agent of the
location thereof or of any change in the location thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Warrant Agent, and the Company hereby appoints the Warrant Agent
as its agent to receive all such presentations, surrenders, notices and demands.

         The Company may also from time to time designate one or more other
offices or agencies (in or outside the State of New York) where Warrant
Certificates may be presented or surrendered for any or all such purposes and
may from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the State of New York for such
purposes. The Company shall give prompt written notice to the Warrant Agent of
any such designation or rescission, and of any change in the location of, any
such other office or agency.

SECTION 6.6 SUCCESSORS AND ASSIGNS.

         All covenants and agreements in this Agreement by the Company shall
bind its successors and assigns, whether so expressed or not.

SECTION 6.7 SEPARABILITY.

         In case any provision in this Agreement or in the Warrant Certificates
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

SECTION 6.8 PERSONS HAVING RIGHTS UNDER AGREEMENT.

         Nothing in this Agreement or in the Warrant Certificates, expressed or
implied, is intended, or shall be construed, to give any Person, other than the
parties hereto and their successors hereunder, and the Holders of Warrants, any
benefit, right, remedy or claim under or by reason of this Agreement.

                                       25

<PAGE>

         IN WITNESS WHEREOF, the Company and the Warrant Agent have caused this
Agreement to be executed by their duly authorized officers as of the date set
forth below.

                                    ARBOR REALTY TRUST, INC.

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

Witness: Dated: July 1, 2003

By: /s/ Tymour Okasha
    ---------------------------
                                    AMERICAN STOCK TRANSFER & TRUST COMPANY

                                    By: /s/ George Karfunkel
                                        -----------------------------------
                                        Name:  George Karfunkel
                                        Title: Executive Vice President

Witness: Dated: July 1, 2003

By: /s/ Susan Silber
    ---------------------------
Name: Susan Silber
Title: Assistant Secretary

                                       26
<PAGE>

                                    EXHIBIT A

                           FORM OF WARRANT CERTIFICATE

              Certificate Number                          ____________ Warrants

                VOID AND EXPIRED AFTER 5:00 p.m. on July 1, 2005

                              WARRANTS TO PURCHASE
                        __________ SHARES OF COMMON STOCK

                            ARBOR REALTY TRUST, INC.

         (1) UNLESS AND UNTIL EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THE SECURITIES EVIDENCED HEREBY MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF
THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) ("DTC") TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.(1)

         (2) THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED(2) (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THE SECURITIES EVIDENCED HEREBY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE
HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER ANY SECURITY EVIDENCED HEREBY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") THAT IS TWO YEARS

--------------
(1) Paragraph to be included in a Warrant Certificate issued in the form of a
Global Warrant Certificate.

(2) Paragraph to be included in a Warrant Certificate representing Transfer
Restricted Warrants.

                                      A-1

<PAGE>

AFTER THE LATER OF (X) THE ORIGINAL ISSUE DATE HEREOF AND (Y) THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF SUCH
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY, (B)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITY IS ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER," AS SUCH TERM IS DEFINED IN, AND IN COMPLIANCE WITH, RULE 144A
PROMULGATED UNDER THE SECURITIES ACT, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3), (7)
OR (8) OF RULE 501 PROMULGATED UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, (E) TO AN INDIVIDUAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (a)(4), (5) OR (6) OF RULE 501 PROMULGATED UNDER THE SECURITIES
ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE WARRANT
AGENT'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D)
OR (E), TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND
OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

         This Warrant Certificate certifies that ________, or registered
assigns, is the Holder of _________ Warrants (the "Warrants") to purchase shares
of Common Stock, par value $0.01 per share (the "Common Stock"), of Arbor Realty
Trust, Inc., a Maryland corporation (the "Company"). Each Warrant entitles the
Holder, at any time on any Business Day during the Exercise Period (as defined
in the Warrant Agreement), to purchase from the Company one share of Common
Stock of the Company at an Exercise Price of $15.00 per share (as such Exercise
Price may be amended in accordance with this Warrant Certificate or the Warrant
Agreement) upon surrender of this Warrant Certificate and payment of the
Exercise Price at any office or agency maintained for that purpose by the
Company.

         Any Warrants not exercised on or prior to 5:00 p.m., New York City
time, on the Expiration Date shall thereafter be null and void.

         THIS WARRANT CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW PROVISIONS THEREOF.

                                      A-2

<PAGE>

         Reference is hereby made to the further provisions of this Warrant
Certificate on the reverse hereof, which provisions shall for all purposes have
the same effect as though fully set forth at this place.

         This Warrant Certificate shall not be entitled to any benefit under the
Warrant Agreement between the Company and American Stock Transfer & Trust
Company, as Warrant Agent (the "Warrant Agreement") or valid for any purpose
unless countersigned by the Warrant Agent.

         IN WITNESS WHEREOF, the Company has caused this Warrant certificate to
be duly executed and a facsimile of its corporate seal to be imprinted thereon.

                                    Dated:

                                    ARBOR REALTY TRUST, INC.

                                    By: ________________________________
                                        Frederick C. Herbst
                                        Chief Financial Officer

Attest: ___________________

                                    AMERICAN STOCK TRANSFER & TRUST COMPANY,
                                    as Warrant Agent

                                    By: ________________________________
                                        Name:
                                        Title:

Attest: ___________________

                                      A-3

<PAGE>

                                 [Reverse Side]

         The Warrants represented by this Warrant Certificate are part of a duly
authorized issue of Warrants of Arbor Realty Trust, Inc. (the "Company")
expiring 5:00 p.m., New York City time, on the Expiration Date. The Warrants
represented hereby are issued pursuant to and are subject in all respects to the
terms and conditions set forth in the Warrant Agreement (the "Warrant
Agreement"), by and between the Company and American Stock Transfer & Trust
Company (the "Warrant Agent"), which Warrant Agreement and any amendments
thereto are hereby incorporated by reference in and made a part of this
instrument, and to which reference is hereby made for a description of the
respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Company, the Warrant Agent and the Holders of Warrants. A copy
of the Warrant Agreement may be obtained from the Company at 333 Earle Ovington
Boulevard, Suite 900, Uniondale, New York 11553, Attention: Frederick C. Herbst,
or the Warrant Agent at American, Stock Transfer & Trust Company, Attention:
Corporate Department, by a written request from the Holder hereof or which may
be inspected by any Holder or such Holder's agent at the principal office of the
Company or the Warrant Agent. [The Warrants represented hereby are entitled to
the benefits of a Registration Rights Agreement dated as of July 1, 2003.](3)
Subject to and upon compliance with the provisions of the Warrant Agreement,
each Warrant entitles the Holder, at any time on any Business Day during the
Exercise Period to purchase from the Company one share of Common Stock, $0.01
par value ("Common Stock") (or such other number of shares of Common Stock if an
adjustment has been made as provided in the Warrant Agreement), of the Company
at an Exercise Price of $15.00 per share (or at the current adjusted Exercise
Price if an adjustment has been made as provided in the Warrant Agreement). The
Warrants may be exercised upon the presentation and surrender of this Warrant
Certificate to the Company at its office or agency maintained for that purpose,
with the form of Notice of Exercise set forth hereon duly completed and
executed, accompanied by payment of the Exercise Price for each such Warrant
exercised and any other amounts required to be paid, as provided in the Warrant
Agreement. In the event the holder exercising its Warrants holds an interest in
a Global Warrant Certificate, such holder shall exercise Warrants owned of
record by such holder and represented by a Global Warrant Certificate by
delivering (i) proof of record ownership of such Warrants if required by the
Company and (ii) a notice of exercise in substantially the form set forth below
as appropriately adjusted. The Exercise Price shall be payable (i) by cash or
certified or official bank check, (ii) by surrendering additional Warrants or
shares of Common Stock for cancellation to the extent that the Company may
lawfully accept shares of Common Stock in the Company, or (iii) by such other
means as is acceptable to the Company in the lawful currency of the United
States of America which as of the time of payment is legal tender for payment of
public or private debts. The value per share of Common Stock surrendered in
accordance with this provision equals the current market price per share of
Common Stock as defined in the Warrant Agreement as of the business day next
preceding the date the Warrant is surrendered for exercise and the value of this
Warrant being equal to the difference between such current market price and the
Exercise Price. The Exercise Price and the

-------------
(3) Bracketed language to be included if the Warrant Certificate represents
Transfer Restricted Warrants.

                                      A-4

<PAGE>

number and kind of securities or other property issuable upon exercise of each
Warrant is subject to adjustment as provided in the Warrant Agreement.

         Within five Business Days of the Company's receipt of notice from the
Warrant Agent of the exercise of any Warrants, the Company shall issue and
deliver, or cause to be delivered, to the Holder, at such office or agency
maintained for such purpose pursuant to the Warrant Agreement, a certificate or
certificates evidencing the number of full shares of Common Stock to which such
Holder is entitled, registered in such name or names as may be directed by such
Holder pursuant to the Notice of Exercise set forth on this Warrant Certificate.
No fractional shares of Common Stock will be issued upon exercise of any
Warrant, but instead of any fractional interest, the Company shall pay to the
Holder a cash adjustment as provided in the Warrant Agreement.

         In the case of the exercise of less than all the Warrants represented
hereby, this Warrant Certificate shall be canceled upon the surrender hereof and
a new Warrant Certificate or Warrant Certificates shall be issued and delivered
for the balance of such Warrants represented hereby.

         Prior to the exercise of any Warrant represented hereby, the Holder
shall not be entitled to any rights of a stockholder of the Company by reason of
such Person being a Holder, including, without limitation, the right to vote or
to receive dividends or other distributions, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided in the
Warrant Agreement.

         The Warrant Agreement permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of Warrants under the
Warrant Agreement at any time by the Company and the Warrant Agent with the
consent of the Holders of at least a majority of the Warrants at the time
outstanding. Any such consent shall be conclusive and binding upon the Holder of
this Warrant Certificate and upon all future Holders of any Warrant Certificate
issued upon the registration of transfer of the Warrants evidenced hereby, or in
exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made thereon. Notwithstanding the immediately preceding sentence, the
Warrant Agreement provides that the consent in writing of each and every Holder
shall be required for any such modification, supplement or amendment which (a)
changes the Exercise Period (except to extend the expiration of the Exercise
Period to a later date) or increases the Exercise Price, or (b) reduces the
percentage of Holders of outstanding Warrants the consent of who is required to
modify, supplement or amend the Warrant Agreement.

         As provided in the Warrant Agreement and subject to the limitations set
forth therein, transfer of the Warrants represented by this Warrant Certificate
is registrable upon surrender of this Warrant Certificate at the office or
agency of the Company maintained for that purpose, and thereupon one or more new
Warrant Certificates representing the Warrants so transferred will be issued to
the designated transferee or transferees. As provided in the Warrant Agreement
and subject to the limitations set forth therein, this Warrant Certificate is
exchangeable for new Warrant Certificates representing a like number of
Warrants, as requested by the Holder surrendering the same.

                                      A-5

<PAGE>

         No service charge shall be payable by a Holder for any such
registration of transfer or exchange, but the Company shall require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

         Prior to due presentment of this Warrant Certificate for registration
of transfer, the Company and the Warrant Agent and any agent of the Company or
the Warrant Agent may treat the Person in whose name this Warrant Certificate is
registered as the absolute, true and lawful owner hereof and of the Warrants
represented hereby (notwithstanding any notation or ownership or other writing
hereon made by any Person) for all purposes, and shall not be affected by any
notice or knowledge to the contrary.

         All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.

                                      A-6

<PAGE>

                               NOTICE OF EXERCISE

         The undersigned hereby irrevocably elects to exercise ________ of the
Warrants represented by this Warrant Certificate and purchase the whole number
of shares issuable and deliverable upon exercise of such Warrants, and herewith
tenders payment for such shares in accordance with the terms of the Warrant
Agreement. The undersigned hereby directs that the certificate or certificates
for the shares issuable and deliverable upon exercise, together with any check
in payment for fractional shares and any Warrant Certificate representing any
unexercised Warrants represented by this Warrant Certificate, be issued in the
name of and delivered to the undersigned, unless a different name is indicated
below. The undersigned will pay any transfer taxes or other governmental charge
payable with respect to any such shares to be issued in the name of a person
other than the undersigned.

                     INSTRUCTIONS FOR REGISTRATION OF SHARES
                           (please typewrite or print)

Name: _________________________________________________________________
Address: ______________________________________________________________
Social Security or Other Taxpayer Identification Number: ______________
Dated: ____________________

Signature:  ___________________________
Note: Signature must conform to name of Holder appearing on face hereof)

Signature must be guaranteed by a member of an accepted medallion guarantee
program if shares of Common Stock are to be issued, or Warrant Certificate(s)
are to be delivered, other than to and in the name of the Holder.

       ______________________
       Signature Guarantee

                  Fill in for registration of shares of Common Stock and Warrant
Certificate(s) if to be issued otherwise than to the Holder:

       ____________________________________           Social Security or other
                  (Name)               Taxpayer Identification Number:

       ____________________________________       ______________________________
                  (Name)

       ____________________________________       ______________________________
          Please print name and address
          (including zip code)

                                      A-7

<PAGE>

                                    EXHIBIT B

                              TRANSFER INSTRUCTION

                      RE: ARBOR REALTY TRUST, INC. WARRANTS

         Reference is made to the Warrant Agreement dated as of July 1, 2003,
relating to the Warrants (the "Agreement"). This Instruction and Certification
relates to Warrants held by ___________________________ (the
"Transferor/Holder"). Capitalized terms not otherwise defined herein have the
meanings set forth in the Agreement.

                       Instruction of Transfer or Exchange
        (to be completed whether or not the Warrants to be transferred or
                   exchanged are Transfer Restricted Warrants)

         1.       The Transferor/Holder hereby instructs the Warrant Agent to
(check one box):

       [ ] Transfer or exchange one or more Definitive Warrant Certificates in
accordance with Section 3.3(c) of the Agreement; or

       [ ] Transfer one or more Definitive Warrant Certificates for a beneficial
interest in a Global Warrant Certificate in accordance with Section 3.3(d) of
the Agreement; or

       [ ] Transfer or exchange a beneficial interest in a Global Warrant
Certificate for one or more Definitive Warrant Certificates in accordance with
Section 3.3(e) of the Agreement; or

       [ ] Transfer a beneficial interest in the Restricted Global Warrant
Certificate for a beneficial interest in the Unrestricted Global Warrant
Certificate in accordance with Section 3.3(f) of the Agreement.

         2.       The Transferor/Holder has requested Definitive Warrant
Certificates above and hereby further instructs the Warrant Agent to issue such
Definitive Warrant Certificates without the restrictive legends referenced in
Section 3.3(i) of the Agreement (check box if applicable): [ ]

                                  CERTIFICATION

                                      B-1

<PAGE>

  (to be completed for a transfer or exchange of Transfer Restricted Warrants
                                     only)

         3.       In connection with the transfer or exchange requested above,
the Transferor/Holder does hereby certify that (check one box):

       [ ] One or more Definitive Warrant Certificates, or an interest in a
Global Warrant Certificate, is being obtained by the Transferor/Holder, without
transfer or change in beneficial ownership (in accordance with Section
3.3(c)(ii)(1) or Section 3.3(e)(ii)(1) of the Agreement); or

       [ ] one or more Definitive Warrant Certificates, or an interest in a
Global Warrant Certificate, is being transferred pursuant to an effective
registration statement under the Securities Act (in satisfaction of Section
3.3(c)(ii)(2), Section 3.3(d)(ii)(2), Section 3.3(e)(ii)(2) or Section 3.3(f) of
the Agreement).

       [ ] one or more Definitive Warrant Certificates, or an interest in a
Global Warrant Certificate, is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A) in reliance on Rule 144A (in satisfaction of
Section 3.3(c)(ii)(3), Section 3.3(d)(ii)(1) or Section 3.3(e)(ii)(3); or

       [ ] one or more Definitive Warrant Certificates, or an interest in a
Global Warrant Certificate, is being obtained in reliance on and in compliance
with an exemption from the registration requirements of the Securities Act,
other than Rule 144A under the Securities Act, and an opinion of counsel to the
effect that such transfer complies with, and does not require registration
under, the Securities Act accompanies this Instruction and Certification (in
satisfaction of Section 3.3(c)(ii)(4), Section 3.3(d)(ii)(2), Section
3.3(e)(ii)(4) or Section 3.3(f) of the Agreement.

[INSERT NAME OF TRANSFEROR/HOLDER]

Date: _____________________         By: ________________________________

                                      B-2

