Exhibit 10.25

 

EXECUTION COPY

 

 

ARBOR REALTY TRUST, INC.

 

7,500,000 Shares of Common Stock

 

EQUITY DISTRIBUTION AGREEMENT

 

Dated: February 13, 2014

 

 

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TABLE OF CONTENTS

 

SECTION 1.

Description of Securities

1

 

 

 

SECTION 2.

Placements

2

 

 

 

SECTION 3.

Sale of Placement Securities by the Placement Agent

3

 

 

 

SECTION 4.

Suspension of Sales

3

 

 

 

SECTION 5.

Representations and Warranties

4

 

 

 

SECTION 6.

Sale and Delivery to the Placement Agent; Settlement

18

 

 

 

SECTION 7.

Covenants of the Company

19

 

 

 

SECTION 8.

Payment of Expenses

24

 

 

 

SECTION 9.

Conditions of the Placement Agent’s Obligations

25

 

 

 

SECTION 10.

Indemnity and Contribution by the Company, the Operating Partnership and the
Placement Agent

27

 

 

 

SECTION 11.

Representations, Warranties and Agreements to Survive Delivery

29

 

 

 

SECTION 12.

Termination of Agreement

29

 

 

 

SECTION 13.

Notices

30

 

 

 

SECTION 14.

Parties

31

 

 

 

SECTION 15.

Adjustments for Stock Splits

31

 

 

 

SECTION 16.

Governing Law and Time

31

 

 

 

SECTION 17.

Effect of Headings

31

 

 

 

SECTION 18.

Permitted Free Writing Prospectuses

31

 

 

 

SECTION 19.

Absence of Fiduciary Relationship

31

 

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TABLE OF CONTENTS

 

SCHEDULES

 

Schedule I

—

 

Significant Subsidiaries

 

 

 

 

Schedule II

—

 

Joint Ventures

 

 

 

 

EXHIBITS

 

 

 

 

 

 

 

Exhibit A

—

 

Form of Placement Notice

 

 

 

 

Exhibit B

—

 

Authorized Individuals for Placement Notices and Acceptances

 

 

 

 

Exhibit C

—

 

Compensation

 

 

 

 

Exhibit D

—

 

Form of Opinion of Company Maryland Counsel

 

 

 

 

Exhibit E-1

 

 

Form of Opinion of Company Special Counsel

 

 

 

 

Exhibit E-2

—

 

Form of Tax Opinion of Skadden, Arps, Slate, Meagher & Flom LLP

 

 

 

 

Exhibit F

—

 

Form of Opinion of Allen & Overy LLP

 

 

 

 

Exhibit G

—

 

Officer Certificate

 

 

 

 

Exhibit H

—

 

Issuer Free Writing Prospectuses

 

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ARBOR REALTY TRUST, INC.

 

7,500,000 Shares of Common Stock

 

EQUITY DISTRIBUTION AGREEMENT

 

February 13, 2014

 

JMP Securities LLC

600 Montgomery Street, Suite 1100

San Francisco, California 94111

 

Ladies and Gentlemen:

 

Each of Arbor Realty Trust, Inc., a Maryland corporation (the “Company”) and
Arbor Realty Limited Partnership, a Delaware limited partnership (the “Operating
Partnership”) confirms its agreement (this “Agreement”) with JMP Securities LLC
(the “Placement Agent”), as follows:

 

SECTION 1.                            Description of Securities.

 

The Company agrees that, from time to time during the term of this Agreement, on
the terms and subject to the conditions set forth herein, it may issue and sell
through the Placement Agent, acting as agent and/or principal, up to 7,500,000
shares (the “Securities”) of the Company’s common stock, par value $0.01 per
share (the “Common Stock”).  Notwithstanding anything to the contrary contained
herein, except as set forth in a Placement Notice (as defined below) the parties
hereto agree that compliance with the limitations set forth in this Section 1 on
the number of the Securities issued and sold under this Agreement shall be the
sole responsibility of the Company, and the Placement Agent shall have no
obligation in connection with such compliance.  The issuance and sale of the
Securities through the Placement Agent will be effected pursuant to the
Registration Statement (as defined below) filed by the Company and declared
effective by the Securities and Exchange Commission (the “Commission”), although
nothing in this Agreement shall be construed as requiring the Company to use the
Registration Statement to offer, sell or issue the Securities.

 

The Company has filed, in accordance with the provisions of the Securities Act
of 1933, as amended, and the rules and regulations thereunder (collectively, the
“Securities Act”), with the Commission a registration statement on Form S-3
(File No. 333-189532), including a base prospectus, relating to certain
securities, including the Securities to be issued from time to time by the
Company, and which incorporates by reference documents that the Company has
filed or will file in accordance with the provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (collectively,
the “Exchange Act”).  The Company has prepared a prospectus supplement
specifically relating to the Securities (the “Prospectus Supplement”) to the
base prospectus included as part of such registration statement.  The Company
will furnish to the Placement Agent, for use by the Placement Agent, copies of
the prospectus included as part of such registration statement, as supplemented
by the Prospectus Supplement, relating to the Securities.  Except where the
context otherwise requires, such registration statement, as amended when it
became effective, including all documents filed as part thereof or incorporated
by reference therein, and including any information contained in a Prospectus
(as defined below) subsequently filed with the Commission pursuant to
Rule 424(b) under the Securities Act or deemed to be a part of such registration
statement pursuant to Rule 430B of the Securities Act, is herein called the
“Registration Statement.”  The base prospectus, including all documents
incorporated therein by reference, included in the Registration Statement, as it
may be supplemented by the Prospectus Supplement, in the form in which such
prospectus and/or Prospectus Supplement have most recently been filed by the
Company with the Commission pursuant to Rule 424(b) under the Securities Act is
herein

 

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called the “Prospectus.”  Any reference herein to the Registration Statement,
the Prospectus or any amendment or supplement thereto shall be deemed to refer
to and include the documents incorporated by reference therein, and any
reference herein to the terms “amend,” “amendment” or “supplement” with respect
to the Registration Statement or the Prospectus shall be deemed to refer to and
include the filing after the execution hereof of any document with the
Commission deemed to be incorporated by reference therein.  Any reference herein
to financial statements and schedules and other information that is “contained,”
“included” or “stated” in the Registration Statement or the Prospectus (and all
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information that is incorporated by
reference in the Registration Statement or the Prospectus, as the case may be. 
Any reference herein to the Registration Statement, any Rule 462(b) Registration
Statement, the Prospectus or any amendment or supplement to any of the foregoing
shall be deemed to include the copy filed with the Commission pursuant to the
Commission’s Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”);
all references in this Agreement to any Issuer Free Writing Prospectus (other
than any Issuer Free Writing Prospectuses that, pursuant to Rule 433 under the
Securities Act, are not required to be filed with the Commission) shall be
deemed to include the copy thereof filed with the Commission pursuant to EDGAR.

 

SECTION 2.                            Placements.

 

Each time that the Company wishes to issue and sell the Securities hereunder
(each, a “Placement”), it will notify the Placement Agent by email notice (or
other method mutually agreed to in writing by the parties) containing the
parameters in accordance with which it desires the Securities to be sold, which
shall at a minimum include the number of Securities to be issued (the “Placement
Securities”), the time period during which sales are requested to be made, any
limitation on the number of Securities that may be sold in any one day and any
minimum price below which sales may not be made (a “Placement Notice”), a form
of which containing such minimum sales parameters necessary is attached hereto
as Exhibit A.  The Placement Notice shall originate from any of the individuals
from the Company set forth on Exhibit B (with a copy to each of the other
individuals from the Company listed on such schedule), and shall be addressed to
each of the individuals from the Placement Agent set forth on Exhibit B, as such
Exhibit B may be amended from time to time.  If the Placement Agent wishes to
accept such proposed terms included in the Placement Notice (which it may
decline to do so for any reason in its sole discretion) or, following discussion
with the Company, wishes to accept amended terms, the Placement Agent will,
prior to 4:30 p.m. (Eastern time) on the Business Day (as defined below)
following the Business Day on which such Placement Notice is delivered to the
Placement Agent, issue to the Company a notice by email (or other method
mutually agreed to in writing by the parties) addressed to all of the
individuals from the Company and the Placement Agent set forth on Exhibit B)
setting forth the terms that the Placement Agent is willing to accept.  Where
the terms provided in the Placement Notice are amended as provided for in the
immediately preceding sentence, such terms will not be binding on the Company or
the Placement Agent until the Company delivers to the Placement Agent an
acceptance by email (or other method mutually agreed to in writing by the
parties) of all of the terms of such Placement Notice, as amended (the
“Acceptance”), which email shall be addressed to all of the individuals from the
Company and the Placement Agent set forth on Exhibit B.  The Placement Notice
(as amended by the corresponding Acceptance, if applicable) shall be effective
upon receipt by the Company of the Placement Agent’s acceptance of the terms of
the Placement Notice or upon receipt by the Placement Agent of the Company’s
Acceptance, as the case may be, unless and until (i) the entire amount of the
Placement Securities have been sold, (ii) in accordance with the Placement
Notice requirements set forth in the second sentence of this paragraph, the
Company terminates the Placement Notice, (iii) the Company issues a subsequent
Placement Notice with parameters superseding those on the earlier dated
Placement Notice, (iv) the Agreement has been terminated under the provisions of
Section 9 or Section 12 or (v) either party shall have suspended the sale of the
Placement Securities in accordance with Section 3 below.  The amount of any
discount, commission or other compensation to be paid by the Company to the

 

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Placement Agent in connection with the sale of the Placement Securities shall be
calculated in accordance with the terms set forth in Exhibit C.  It is expressly
acknowledged and agreed that neither the Company nor the Placement Agent will
have any obligation whatsoever with respect to a Placement or any Placement
Securities unless and until the Company delivers a Placement Notice to the
Placement Agent and either (i) the Placement Agent accepts the terms of such
Placement Notice or (ii) where the terms of such Placement Notice are amended,
the Company accepts such amended terms by means of an Acceptance pursuant to the
terms set forth above, and then only upon the terms specified in the Placement
Notice (as amended by the corresponding Acceptance, if applicable) and herein. 
In the event of a conflict between the terms of this Agreement and the terms of
a Placement Notice (as amended by the corresponding Acceptance, if applicable),
the terms of the Placement Notice (as amended by the corresponding Acceptance,
if applicable) will control.  The term “Business Day” means each Monday,
Tuesday, Wednesday, Thursday or Friday that is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.

 

SECTION 3.                            Sale of Placement Securities by the
Placement Agent.

 

Subject to the provisions of Section 6(a), the Placement Agent, for the period
specified in the Placement Notice, will use its commercially reasonable efforts
consistent with its normal trading and sales practices to sell the Placement
Securities up to the amount specified, and otherwise in accordance with the
terms of such Placement Notice (as amended by the corresponding Acceptance, if
applicable).  The Placement Agent will provide written confirmation to the
Company no later than the opening of the Trading Day (as defined below)
immediately following the Trading Day on which it has made sales of Placement
Securities hereunder setting forth the number of Placement Securities sold on
such day, the compensation payable by the Company to the Placement Agent
pursuant to Section 2 with respect to such sales, and the Net Proceeds (as
defined below) payable to the Company, with an itemization of the deductions
made by the Placement Agent (as set forth in Section 6(b)) from the gross
proceeds that it receives from such sales.  Subject to the terms of the
Placement Notice (as amended by the corresponding Acceptance, if applicable),
the Placement Agent may sell Placement Securities by any method permitted by law
deemed to be an “at the market” offering as defined in Rule 415 of the
Securities Act, including without limitation sales made directly on the New York
Stock Exchange (“NYSE”), on any other existing trading market for the Common
Stock or to or through a market maker.  If specified in a Placement Notice (as
amended by the corresponding Acceptance, if applicable), the Placement Agent may
also sell Placement Securities by any other method permitted by law, including
but not limited to in privately negotiated transactions.  For the purposes
hereof, “Trading Day” means any day on which shares of Common Stock are
purchased and sold on the principal market on which the Common Stock is listed
or quoted and during which there has been no market disruption of, unscheduled
closing of or suspension of trading on such principal market.

 

SECTION 4.                            Suspension of Sales.  The Company or the
Placement Agent may, upon notice to the other party in writing (including by
email correspondence to each of the individuals of the other party set forth on
Exhibit B, if receipt of such correspondence is actually acknowledged by any of
the individuals to whom the notice is sent, other than via auto-reply) or by
telephone (confirmed immediately by verifiable facsimile transmission or email
correspondence to each of the individuals of the other party set forth on
Exhibit B), suspend any sale of Placement Securities; provided, however, that
such suspension shall not affect or impair either party’s obligations with
respect to any Placement Securities sold hereunder prior to the receipt of such
notice.  Each of the parties agrees that no such notice under this Section 4
shall be effective against the other unless it is made to one of the individuals
named on Exhibit B hereto, as such Exhibit may be amended from time to time.

 

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SECTION 5.                            Representations and Warranties.

 

(a)                                 Representations and Warranties by the
Company and the Operating Partnership.  The Company and the Operating
Partnership, jointly and severally, represent and warrant to the Placement Agent
as of the date hereof and as of each Representation Date (as defined herein) on
which a certificate is required to be delivered pursuant to Section 7(o) of this
Agreement and as of the time of each sale of any Securities or any securities
pursuant to this Agreement (the “Applicable Time”), and agrees with the
Placement Agent, as follows:

 

(1)                                 Compliance with Registration Requirements. 
The Securities have been duly registered under the Securities Act pursuant to
the Registration Statement.  The Registration Statement has become effective
under the Securities Act, and no stop order preventing or suspending the use of
any base prospectus, the Prospectus Supplement, the Prospectus or any Permitted
Free Writing Prospectus (as defined below), or the effectiveness of the
Registration Statement and no proceedings for such purpose have been instituted
or are pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for additional
information has been complied with.

 

At the respective times each of the Registration Statement, any registration
statement filed by the Company to register the offer and sale of the Securities
pursuant to Rule 462(b) under the Securities Act (a “Rule 462(b) Registration
Statement”) and any post-effective amendments thereto became or becomes
effective and as of the date hereof, the Registration Statement, any
Rule 462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of the
Securities Act.  The conditions for the use of Form S-3, as set forth in the
General Instructions thereto, have been complied with and the Registration
Statement meets, and the offering and sale of the Securities as contemplated
hereby complies with, the requirements of Rule 415(a)(1)(x) under the Securities
Act (including without limitation, Rule 415(a)(5)).  The Registration Statement,
as of the date hereof and each effective date with respect thereto, did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.  Neither the Prospectus nor any amendments or
supplements thereto, as of their respective dates, and at each Applicable Time
and Settlement Date (as defined below), as the case may be, included or will
include an untrue statement of a material fact or omitted or will omit to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.

 

The representations and warranties set forth in the immediately preceding
paragraph shall not apply to statements in or omissions from the Registration
Statement or the Prospectus, as amended or supplemented, made in reliance upon
and in conformity with the Agent Information (as hereinafter defined).

 

The copies of the Registration Statement and any Rule 462(b) Registration
Statement and any amendments thereto, any other preliminary prospectus, each
Issuer Free Writing Prospectus (as defined below) that is required to be filed
with the Commission pursuant to Rule 433 under the Securities Act and the
Prospectus and any amendments or supplements thereto delivered and to be
delivered to the Placement Agent (electronically or otherwise) in connection
with the offering of the Securities were and will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.  “Issuer Free Writing
Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433
under the Securities Act, relating to the Securities that (i) is required to be
filed with the Commission by the Company, (ii) is a “road show” that is a
“written

 

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communication” within the meaning of Rule 433(d)(8)(i) under the Securities Act
whether or not required to be filed with the Commission, or (iii) is exempt from
filing pursuant to Rule 433(d)(5)(i) under the Securities Act because it
contains a description of the Securities or of the offering that does not
reflect the final terms, and all free writing prospectuses that are listed in
Exhibit H hereto, in each case in the form furnished (electronically or
otherwise) to the Placement Agent for use in connection with the offering of the
Securities.

 

Each Issuer Free Writing Prospectus relating to the Securities, as of its issue
date and as of each Applicable Time and Settlement Date (as defined below), did
not, does not and will not include any information that conflicted, conflicts or
will conflict with the information contained in the Registration Statement or
the Prospectus, including any incorporated document deemed to be a part thereof
that has not been superseded or modified; each Issuer Free Writing Prospectus,
as supplemented by and taken together with the Prospectus, as of the Applicable
Time and Settlement Date (as defined below), will not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances, prevailing at
that time, not misleading. The foregoing sentence does not apply to statements
in or omissions from any issuer free writing prospectus based upon and in
conformity with the Agent Information.

 

Each document incorporated by reference in the Registration Statement or the
Prospectus heretofore filed, when it was filed (or, if any amendment with
respect to any such document was filed, when such amendment was filed),
conformed in all material respects with the requirements of the Exchange Act,
and any further documents so filed and incorporated after the date of this
Agreement will, when they are filed, conform in all material respects with the
requirements of the Exchange Act; no such document when it was filed (or, if an
amendment with respect to any such document was filed, when such amendment was
filed), contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and no such document, when it is filed, will
contain an untrue statement of a material fact or will omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading.

 

(2)                                 Company Not Ineligible Issuer.  As of the
date of the execution and delivery of this Agreement (with such date being used
as the determination date for purposes of this clause), the Company was not and
is not an “ineligible issuer” (as defined in Rule 405 under the Securities Act),
without taking account of any determination by the Commission pursuant to
Rule 405 Under the Securities Act that it is not necessary that the Company be
considered an ineligible issuer (as defined in Rule 405 under the Securities
Act).

 

(3)                                 Issuer Free Writing Prospectuses.  Each
Issuer Free Writing Prospectus relating to the Securities, as of its issue date
and as of each Applicable Time and Settlement Date (as defined below), did not,
does not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement, including
any document incorporated by reference therein that has not been superseded or
modified. The foregoing sentence does not apply to statements in or omissions
from any Issuer Free Writing Prospectus based upon and in conformity with the
Agent Information.

 

(4)                                 Company Authorization of Agreement.  This
Agreement and the transactions contemplated herein have been duly and validly
authorized by the Company and this Agreement has been duly and validly executed
and delivered by the Company.

 

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(5)                                 Operating Partnership Authorization of
Agreement.  This Agreement and the transactions contemplated herein have been
duly and validly authorized by the Operating Partnership and this Agreement has
been duly and validly executed and delivered by the Operating Partnership.

 

(6)                                 Authorization of Management Agreement and
Services Agreement.  The second amended and restated management and advisory
agreement (the “Management Agreement”), dated as of August 6, 2009, among the
Company, the Operating Partnership, Arbor Commercial Mortgage, LLC (the
“Manager”) and Arbor Realty SR, Inc., a Maryland corporation and a wholly-owned
subsidiary of the Company, has been duly authorized, executed and delivered by
each of the Company and the Operating Partnership and constitutes a valid and
binding agreement of each of the Company and the Operating Partnership
enforceable in accordance with its terms, except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization or other laws
affecting enforcement of creditors’ rights or by general equitable principles. 
The services agreement (the “Services Agreement”), dated as of July 1, 2003,
among the Company, the Operating Partnership and the Manager has been duly
authorized, executed and delivered by each of the Company and the Operating
Partnership and constitutes a valid and binding agreement of each of the Company
and the Operating Partnership enforceable in accordance with its terms, except
to the extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or other laws affecting enforcement of creditors’ rights or by
general equitable principles.

 

(7)                                 Distribution of Offering Material by the
Company.  The Company and its affiliates have not distributed and will not
distribute, prior to the completion of the Placement Agent’s distribution of the
Securities, any written offering material in connection with the offering and
sale of the Securities other than the Prospectus, the Registration Statement or
any Issuer Free Writing Prospectus.

 

(8)                                 Independent Accountants.  Ernst & Young LLP,
who certified the financial statements and supporting schedules incorporated by
reference in the Registration Statement and the Prospectus, is an independent
registered public accounting firm as required by the Securities Act, the
Exchange Act and the Public Company Accounting Oversight Board (United States).

 

(9)                                 Financial Statements; Non-GAAP Financial
Measures.  The financial statements of the Company and its subsidiaries,
together with the related schedules (if any) and notes (the “Company Financial
Statements”), incorporated by reference in the Registration Statement and the
Prospectus, and any financial statements required by Rule 3-14 of Regulation S-X
(the “Acquisition Financial Statements”), incorporated by reference in the
Registration Statement and the Prospectus present fairly the financial position
of the Company and its consolidated subsidiaries at the dates indicated, or, if
applicable, with respect to the Acquisition Financial Statements, the respective
property or tenant; and all such financial statements have been prepared in
conformity with United States generally accepted accounting principles (“GAAP”)
applied on a consistent basis throughout the periods involved and comply with
all applicable accounting requirements under the Securities Act.  The supporting
schedules, if any, incorporated by reference in the Registration Statement and
the Prospectus present fairly, in accordance with GAAP, the information required
to be stated therein.  The selected financial data and the summary financial
information included or incorporated by reference in the Registration Statement
and the Prospectus present fairly in all material respects the information shown
therein and have been compiled on a basis consistent with that of the audited
financial statements included therein.  There are no financial statements or
schedules required to be included in the

 

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Registration Statement or the Prospectus under the Securities Act, which are not
so included.  If applicable, the unaudited pro forma financial information
(including the related notes) incorporated by reference in the Registration
Statement or the Prospectus complies as to form in all material respects with
the applicable accounting requirements of the Securities Act, and management of
the Company believes that the assumptions underlying the pro forma adjustments
are reasonable.  If applicable, such pro forma adjustments have been properly
applied to the historical amounts in the compilation of the information and such
information fairly presents with respect to the Company and its consolidated
subsidiaries, the financial position, results of operations and other
information purported to be shown therein at the respective dates and for the
respective periods specified.  No pro forma financial information is required to
be included in the Registration Statement or the Prospectus, which is not so
included. All disclosures contained in the Registration Statement or the
Prospectus regarding “non-GAAP financial measures” (as such term is defined by
the rules and regulations of the Commission) comply in all material respects
with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the
Securities Act, to the extent applicable. The interactive data in eXtensible
Business Reporting Language incorporated by reference in the Registration
Statement and the Prospectus fairly presents the information called for in all
material respects and has been prepared in accordance with the Commission’s
rules and guidelines applicable thereto.

 

(10)                          No Material Adverse Change in Business.  Since the
respective dates as of which information is given in the Registration Statement
and the Prospectus (in each case exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement), except as otherwise stated
therein, (A) there has been no material adverse change or any development
involving a prospective material adverse change in the operations, condition
(financial or otherwise), or in the earnings, business affairs or business
prospects of the Company and its subsidiaries, including, without limitation,
the Operating Partnership, considered as one enterprise, whether or not arising
in the ordinary course of business (a “Material Adverse Effect”), (B) there have
been no transactions entered into by the Company or any of its subsidiaries that
are material with respect to the Company and its subsidiaries considered as one
enterprise, (C) since the date of the latest balance sheet incorporated by
reference in the Registration Statement and the Prospectus, neither the Company
nor any of its subsidiaries has incurred or undertaken any liabilities or
obligations, direct or contingent, which are material to the Company and its
subsidiaries, including without limitation the Operating Partnership, considered
as one enterprise, except for liabilities or obligations which are described in
the Registration Statement and the Prospectus, and (D) there has been no
dividend or distribution of any kind declared, paid or made by the Company on
any class of its stock.

 

(11)                          Good Standing of the Company and the Operating
Partnership.  The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Maryland and has
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus and to
enter into and perform its obligations under this Agreement; and the Operating
Partnership has been duly formed and is validly existing as a limited
partnership in good standing under the laws of the State of Delaware and has
authority to own, lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus.  Each of the
Company and the Operating Partnership is duly qualified as a foreign corporation
to transact business and is in good standing in the State of New York and in
each other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except (solely in the case of jurisdictions other than the State of New York)
where the failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.

 

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(12)                          The Partnership Agreement.  The Second Amended and
Restated Agreement of Limited Partnership of the Operating Partnership (the
“Partnership Agreement”), dated as of January 18, 2005, among Arbor Realty
GPOP, Inc., a Delaware corporation, Arbor Realty LPOP, Inc., a Delaware
corporation, the Manager and the Company, has been duly and validly authorized,
executed and delivered by the Company (through its direct subsidiaries) and is a
valid and binding agreement, enforceable against the Company in accordance with
its terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization or other laws affecting enforcement of
creditors’ rights or by general equitable principles.

 

(13)                          Good Standing of Subsidiaries.  Each subsidiary of
the Company has been duly organized and is validly existing as a corporation,
limited or general partnership or limited liability company, as the case may be,
in good standing under the laws of the jurisdiction of its organization, has
power and authority to conduct its business as described in the Registration
Statement and the Prospectus and is duly qualified as a foreign corporation,
limited or general partnership or limited liability company, as the case may be,
to transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement and the Prospectus, all of the
issued and outstanding stock of each such subsidiary that is a corporation, all
of the issued and outstanding partnership interests of each such subsidiary that
is a limited or general partnership and all of the issued and outstanding
limited liability company interests, membership interests or other similar
interests of each such subsidiary that is a limited liability company have been
duly authorized and validly issued, and, in the case of each subsidiary that is
a corporation, are fully paid and nonassessable and are owned by the Company or
the Operating Partnership, directly or indirectly, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity (each, a
“Lien”); and none of the outstanding shares of stock, partnership interests or
limited liability company interests, membership interests or other similar
interests of any such subsidiary was issued in violation of any preemptive
rights, rights of first refusal or other similar rights of any securityholder of
such subsidiary or any other person.  The only Significant Subsidiaries (as
defined below) of the Company are the subsidiaries listed on Schedule I hereto
and Schedule I accurately sets forth whether each such Significant Subsidiary is
a corporation, limited or general partnership or limited liability company and
the jurisdiction of organization of each such Significant Subsidiary and, in the
case of any Significant Subsidiary which is a partnership or limited liability
company, its general partners and managing members, respectively.  For purposes
of this Agreement “Significant Subsidiaries” means “significant subsidiaries” as
defined by Rule 1-02 of Regulation S-X, each of which are listed on Schedule I
hereto.

 

(14)                          Capitalization.  The authorized, issued and
outstanding stock of the Company is as set forth in the Company’s quarterly
report on Form 10-Q for the nine months ended September 30, 2013.  The issued
and outstanding shares of stock of the Company have been duly authorized and are
validly issued, fully paid and nonassessable; and none of the outstanding shares
of stock of the Company was issued in violation of any preemptive rights, rights
of first refusal or other similar rights of any securityholder of the Company or
any other person.  The authorized, issued and outstanding units of partnership
interest in the Operating Partnership (the “OP Units”), have been duly
authorized and validly issued; and all of such OP Units have been sold in
compliance with applicable laws (including, without limitation, federal and
state securities laws).

 

8

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(15)                          Authorization of Securities.  The Securities have
been duly authorized for issuance and sale to the Placement Agent pursuant to
this Agreement and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth herein, will be validly
issued, fully paid and nonassessable; no holder of the Securities is or will be
subject to personal liability by reason of being such a holder; and the issuance
of the Securities is not subject to any preemptive right, right of first refusal
or other similar right of any securityholder of the Company or any other person.

 

(16)                          Description of Securities.  The Securities conform
in all material respects to the description thereof contained in the section of
the Prospectus entitled “Description of Capital Stock—Common Stock” and such
description conforms to the rights set forth in the Company’s Articles of
Incorporation and Bylaws.

 

(17)                          Absence of Defaults and Conflicts.  Neither the
Company, the Operating Partnership nor any of their respective subsidiaries is
in violation of its Organizational Documents (as defined below) or in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any Company Document (as defined below), except for such
defaults that would not result in a Material Adverse Effect.  The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein and in the Registration Statement and the
Prospectus (including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectus under
the caption “Use of Proceeds”) and compliance by each of the Company and the
Operating Partnership with its obligations under this Agreement do not and will
not, whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any Lien upon any property or assets of the Company,
the Operating Partnership or any of their respective subsidiaries pursuant to
any Company Documents, nor will such action result in any violation of the
provisions of the Organizational Documents of the Company, the Operating
Partnership or any of their respective subsidiaries or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any of its subsidiaries or any of their respective assets,
properties or operations.  The term “Company Documents” as used herein means any
contracts, indentures, mortgages, deeds of trust, loan or credit agreements,
bonds, notes, debentures, evidences of indebtedness, leases or other instruments
or agreements to which the Company, the Operating Partnership or any of their
respective subsidiaries is a party or by which the Company, the Operating
Partnership or any of their respective subsidiaries is bound or to which any of
the property or assets of the Company, the Operating Partnership or any of their
respective subsidiaries is subject.  The term “Organizational Documents” as use
herein means (a) in the case of a corporation, its charter and by-laws; (b) in
the case of a limited or general partnership, its partnership certificate,
certificate of formation or similar organizational document and its partnership
agreement; (c) in the case of a limited liability company, its articles of
organization, certificate of formation or similar organizational documents and
its operating agreement, limited liability company agreement, membership
agreement or other similar agreement; (d) in the case of a trust, its
certificate of trust, certificate of formation or similar organizational
document and its trust agreement or other similar agreement; and (e) in the case
of any other entity, the organizational and governing documents of such entity.

 

(18)                          Absence of Labor Dispute.  No labor dispute with
the employees of the Company or any subsidiary of the Company exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of the principal
suppliers, manufacturers, customers or contractors of the

 

9

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Company or any of its subsidiaries which, in any such case, may reasonably be
expected to result in a Material Adverse Effect.

 

(19)                          Absence of Proceedings.  Except as described in
the Registration Statement and the Prospectus, there is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, against or
affecting the Company, the Operating Partnership or any of their respective
subsidiaries or which has as a subject thereof, any officer or director of the
Company in their capacity as such or as would otherwise be required to be
disclosed in the Prospectus.  To the knowledge of the Company or the Operating
Partnership, there is no action, suit, proceeding, inquiry or investigation
before or brought by any court or governmental agency or body, domestic or
foreign, threatened, against or affecting the Company, the Operating Partnership
or any of their respective subsidiaries except as would not have a Material
Adverse Effect or which has as a subject thereof, any officer or director of the
Company in their capacity as such or as would otherwise be required to be
disclosed in the Prospectus.

 

(20)                          Accuracy of Descriptions and Exhibits.  The
information in the Prospectus under the captions “Description of Debt
Securities,” “Description of Capital Stock,” “Description of Depositary Shares,”
“Description of Warrants” and “Federal Income Tax Considerations” is correct in
all material respects; all descriptions in the Registration Statement and the
Prospectus of any Company Documents are accurate in all material respects; and
there are no franchises, contracts, indentures, mortgages, deeds of trust, loan
or credit agreements, bonds, notes, debentures, evidences of indebtedness,
leases or other instruments or agreements required to be described or referred
to in the Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement which have not been so described and filed as
required.

 

(21)                          Possession of Intellectual Property.  The Company
and its subsidiaries own or possess or have the right to use on reasonable terms
all patents, patent rights, patent applications, licenses, inventions,
copyrights, know how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names, service names and other intellectual
property (collectively, “Intellectual Property”) necessary to carry on their
respective businesses as described in the Prospectus and as proposed to be
conducted; and neither the Company nor any of its subsidiaries has received any
notice or is otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or inadequate
to protect the interests of the Company or any of its subsidiaries therein, and
which infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, individually or in the
aggregate, might result in a Material Adverse Effect.

 

(22)                          Absence of Further Requirements.  (A) No filing
with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign, (B) no authorization, approval, vote or other consent of
any stockholder or creditor of the Company or the Operating Partnership, (C) no
waiver or consent under any Company Document, and (D) no authorization,
approval, vote or other consent of any other person or entity, is necessary or
required for the performance by the Company or the Operating Partnership of
their respective obligations under this Agreement, for the offering, issuance,
sale or delivery of the Securities hereunder, or for the consummation of any of
the other transactions contemplated by this Agreement, in each case on the terms
contemplated by this Agreement and the Prospectus, except such as have been
already obtained

 

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under the Securities Act, the rules of the NYSE, state securities laws or the
rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”).

 

(23)                          Possession of Licenses and Permits.  The Company,
the Operating Partnership and their respective subsidiaries possess such
permits, licenses, approvals, consents and other authorizations issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
(collectively, “Governmental Licenses”) as are necessary to conduct the business
now operated by them; the Company and its subsidiaries are in compliance with
the terms and conditions of all such Governmental Licenses, except where the
failure so to comply would not, individually or in the aggregate, have a
Material Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental Licenses or
the failure of such Governmental Licenses to be in full force and effect would
not have a Material Adverse Effect; and neither the Company, the Operating
Partnership nor any of their respective subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such Governmental
Licenses which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.

 

(24)                          Investment Company Act.  The Company is not, and
upon the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus, will
not be, an “investment company” or an entity “controlled” by an “investment
company” as such terms are defined the Investment Company Act of 1940, as
amended (the “1940 Act”).

 

(25)                          Absence of Registration Rights.  Except as
disclosed in the Registration Statement and the Prospectus, there are no persons
with registration rights or other similar rights to have any securities (debt or
equity) (A) registered pursuant to the Registration Statement or included in the
offering contemplated by this Agreement or (B) otherwise registered by the
Company under the Securities Act.

 

(26)                          Joint Ventures.  All of the joint ventures in
which the Company or any subsidiary owns any interest (the “Joint Ventures”) are
listed on Schedule II hereto.  The Company’s or subsidiary’s ownership interest
in such Joint Venture is set forth in Schedule II.

 

(27)                          Exchange Act Registration; New York Stock
Exchange.  The Securities have been registered pursuant to Section 12(b) of the
Exchange Act.  The outstanding shares of Common Stock have been, and the
Securities being sold hereunder will have been, approved for listing, subject
only to official notice of issuance, on the NYSE.

 

(28)                          FINRA Matters.  All of the information (including,
but not limited to, information regarding affiliations, security ownership and
trading activity) provided to the Placement Agent or to counsel for the
Placement Agent by the Company, its officers and directors and the holders of
any securities (debt or equity) or options to acquire any securities of the
Company in connection with letters, filings or other supplemental information
provided to FINRA is true, complete and correct.

 

(29)                          Insurance.  The Company, the Operating Partnership
and each of their respective subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which they are engaged; all
policies of insurance and any fidelity or surety bonds insuring the Company, the
Operating Partnership or any of their respective subsidiaries or their
respective businesses,

 

11

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assets, employees, officers and directors are in full force and effect; the
Company, the Operating Partnership and their respective subsidiaries are in
compliance with the terms of such policies and instruments in all material
respects; there are no claims by the Company, the Operating Partnership or any
of their respective subsidiaries under any such policy or instrument as to which
any insurance company is denying liability or defending under a reservation of
rights clause; neither the Company, the Operating Partnership nor any such
subsidiary has been refused any insurance coverage sought or applied for; and
neither the Company, the Operating Partnership nor any such subsidiary has any
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect.  Without limitation to the foregoing
provisions of this Section 5(a)(29), and such exceptions as would not,
individually or in the aggregate, have a Material Adverse Effect, the Company,
the Operating Partnership and their respective subsidiaries have title insurance
on any real property currently leased or owned or controlled by them or to be
leased or owned or to be controlled by them (collectively, the “Real Property”),
in each case in an amount at least equal to the original cost of acquisition,
and the Company, the Operating Partnership and their respective subsidiaries are
entitled to all benefits of the insured thereunder, and each such Real Property
is insured by extended coverage hazard and casualty insurance in amounts and on
such terms as are customarily carried by lessors of properties similar to those
owned by the Company, the Operating Partnership and their respective
subsidiaries (in the markets in which the Company’s and subsidiaries’ respective
Real Properties are located), and the Company, the Operating Partnership and
their respective subsidiaries carry comprehensive general liability insurance
and such other insurance as is customarily carried by lessors of properties
similar to those owned by the Company, the Operating Partnership and their
respective subsidiaries in amounts and on such terms as are customarily carried
by lessors of properties similar to those owned by the Company, the Operating
Partnership and their respective subsidiaries (in the markets in which the
Company’s, the Operating Partnership’s and their respective subsidiaries’
respective Real Properties are located) and the Company, the Operating
Partnership or one of their respective subsidiaries is named as an additional
insured on all policies required under the leases for such properties.  With
respect to mortgage loans extended by the Company and its subsidiaries, the
Company or its subsidiary has one or more lender’s title insurance policies
insuring the lien of the mortgages encumbering the real property underlying such
loans with coverages, in the aggregate, equal to at least the maximum aggregate
principal amount of such loan.

 

(30)                          Disclosure Controls and Procedures.  The Company
and the Operating Partnership have established and maintain disclosure controls
and procedures (as such term is defined in Rule 13a-15(e) under the Exchange
Act) that (i) are designed to ensure that material information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company’s management,
including the Company’s principal executive officer and principal financial
officer, particularly during the preparation of the reports that it files or
submits under the Exchange Act; and (ii) are effective to ensure that
information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the Commission’s rules and forms.

 

(31)                          Accounting Controls.  The Company, the Operating
Partnership and each of their respective subsidiaries maintain a system of
internal control over financial reporting sufficient to provide reasonable
assurance that financial reporting is reliable and financial statements for
external purposes are prepared in accordance with GAAP and includes policies and
procedures that (i) pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and dispositions of the
assets of the Company; (ii) provide

 

12

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reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with GAAP, and to maintain
asset accountability; (iii) access to assets is permitted only in accordance
with management’s general or specific authorization; (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences; and
(v) interactive data in eXtensible Business Reporting Language included or
incorporated by reference in the Registration Statement fairly presents the
information called for in all material respects and is prepared in accordance
with the Commission’s rules and guidelines applicable thereto.  Except as
described in the Registration Statement and the Prospectus, since the end of the
Company’s most recent audited fiscal year, there has been (i) no material
weakness in the Company’s internal control over financial reporting (whether or
not remediated) and (ii) no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting.

 

(32)                          Absence of Manipulation.  Each of the Company and
the Operating Partnership has not taken and will not take, directly or
indirectly, any action designed to or that would constitute or that might
reasonably be expected to cause or result in the stabilization or manipulation
of the price of any security to facilitate the sale or resale of the Securities.

 

(33)                          Statistical and Market-Related Data.  The
statistical and market-related data included in the Registration Statement and
the Prospectus are based on or derived from sources that the Company believes to
be reliable and accurate as of the respective dates of such documents, and the
Company has obtained the written consent to the use of such data from such
sources to the extent required.

 

(34)                          Foreign Corrupt Practices Act.  Neither the
Company nor any of its subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee, affiliate or other person acting on behalf
of the Company or any of its subsidiaries is aware of or has taken any action,
directly or indirectly, that has resulted or would result in a violation by such
persons of the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder (collectively, the “FCPA”), including, without
limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA,  and the Company and its subsidiaries and,
to the knowledge of the Company, its other affiliates have conducted their
businesses in compliance with the FCPA and have instituted and maintain policies
and procedures designed to ensure, and which are reasonably expected to continue
to ensure, continued compliance therewith.

 

(35)                          Money Laundering Laws.  The operations of the
Company and its subsidiaries are and have been conducted at all times in
compliance with applicable financial recordkeeping and reporting requirements,
including those of the Bank Secrecy Act, as amended by Title III of the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001 (USA PATRIOT Act),  the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of
all applicable jurisdictions, the rules and regulations thereunder and any
related or similar applicable rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any

 

13

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of its subsidiaries with respect to the Money Laundering Laws is pending or, to
the knowledge of the Company, threatened.

 

(36)                          OFAC.  Neither the Company nor any of its
subsidiaries nor, to the knowledge of the Company, any director, officer, agent,
employee, affiliate or person acting on behalf of the Company or any of its
subsidiaries is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and
the Company will not directly or indirectly use any of the proceeds received by
the Company from the sale of Securities contemplated by this Agreement, or lend,
contribute or otherwise make available any such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions
administered by OFAC.

 

(37)                          Lending Relationship.  Except as disclosed in the
Registration Statement, and the Prospectus, neither the Company nor any of its
subsidiaries has any outstanding borrowings from, or is a party to any line of
credit, credit agreement or other credit facility or otherwise has a borrowing
relationship with, any bank or other lending institution affiliated with the
Placement Agent, and the Company does not intend to use any of the proceeds from
the sale of the Securities to repay any debt owed to the Placement Agent or any
affiliate of the Placement Agent.

 

(38)                          Transfer Taxes.  There are no stock or other
transfer taxes, stamp duties, capital duties or other similar duties, taxes or
charges payable in connection with the execution or delivery of this Agreement
by the Company or the issuance or sale by the Company of the Securities to be
sold by the Company to the Placement Agent hereunder.

 

(39)                          ERISA.  Except as set forth in the Company’s
financial statements, each of the Company and the Operating Partnership does not
have any material liabilities under the Employee Retirement Income Security Act
of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time.

 

(40)                          REIT Status.  Commencing with the Company’s
taxable year ended December 31, 2003, and the taxable year ended December 31,
2005 of Arbor Realty SR, Inc., a Maryland real estate investment trust (the
“Private REIT”), each of the Company and the Private REIT has been organized and
operated in conformity with the requirements for qualification and taxation as a
real estate investment trust (“REIT”) under the Internal Revenue Code of 1986,
as amended, and the regulations and published interpretations thereunder
(collectively, the “Code”), and each of the Company’s and the Private REIT’s
current and proposed method of operations as described in the Registration
Statement and the Prospectus will enable it to continue to meet the requirements
for qualification and taxation as a REIT under the Code for its taxable year
ending December 31, 2014 and thereafter.  The Company does not know of any event
that would cause or is likely to cause either the Company or the Private REIT to
fail to qualify as a REIT under the Code at any time.

 

(41)                          Tax Opinion.  With respect to the legal opinion as
to federal income tax matters provided to the Placement Agent pursuant to
Section 7(p) hereof, the Company’s representatives have discussed with its tax
counsel, Skadden, Arps, Slate, Meagher & Flom LLP, the officer’s certificate
supporting such opinion, and where representations in such officer’s certificate
involve terms defined in the Code, the Treasury regulations thereunder,
published rulings of the Internal Revenue Service or other relevant authority,
the Company’s representatives

 

14

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are satisfied after their discussions with their counsel in their understanding
of such terms and are capable of making such representations.

 

(42)                          Tax Returns.  All tax returns required to be filed
as of the date hereof by the Company and each of its subsidiaries have been
timely filed (or valid extensions to such filings have been obtained), all such
tax returns are true, correct and complete in all material respects, and all
material taxes and other assessments of a similar nature (whether imposed
directly or through withholding) including any interest, additions to tax or
penalties applicable thereto due or claimed to be due from such entities have
been paid, other than those being contested in good faith and for which adequate
reserves have been provided.

 

(43)                          Related Party Transactions.  There are no business
relationships or related-party transactions involving the Company or the
Operating Partnership required to be described in the Registration Statement and
the Prospectus which have not been so described as required.

 

(44)                          No Unlawful Contributions or Other Payments. 
Neither the Company, the Operating Partnership nor any subsidiary nor, to the
best of the Company’s knowledge, any employee or agent of the Company, the
Operating Partnership or any subsidiary, has made any contribution or other
payment to any official of, or candidate for, any federal, state or foreign
office in violation of any law or of the character required to be disclosed in
the Prospectus.

 

(45)                          Brokers and Finders.  Neither the Company, the
Operating Partnership nor any subsidiary has incurred any liability for a fee,
commission or other compensation on account of the employment of a broker or
finder in connection with the transactions contemplated by this Agreement other
than as contemplated hereby.

 

(46)                          No Prohibition on Subsidiaries from Paying
Dividends or Making Other Distributions.  No subsidiary is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from making
any other distribution on such subsidiary’s capital stock or other equity
interests, from repaying to the Company any loans or advances to such subsidiary
from the Company or from transferring any of such subsidiary’s property or
assets to the Company or any other Subsidiary.

 

(47)                          Title to Real and Personal Property.  (i) The
Company and its subsidiaries, including the Operating Partnership, have (or in
the case of a Joint Venture, such limited partnership, limited liability company
or other joint venture entity has) good and marketable title in fee simple to,
or a valid leasehold interest in, the Real Property and good and marketable
title to any and all personal property owned by the Company or any of its
Subsidiaries that is material to the business of the Company or the Operating
Partnership, in each case free and clear of all Liens, except as described in
the Prospectus or such as would not reasonably be expected to result in a
Material Adverse Effect; and any real property, buildings and equipment held
under lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases (the “Leases”) with such exceptions as are
disclosed in the Prospectus or such as would not reasonably be expected to
result in a Material Adverse Effect; (ii) neither the Company nor any of its
Subsidiaries has received notice of any claim that has been or may be asserted
by anyone adverse to the rights of the Company or any subsidiary with respect to
any such Real Properties, personal property or Leases or affecting or
questioning the rights of the Company to the continued ownership, lease,
possession or occupancy of such Real Properties, personal property or Leases,
except for such claims that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; (iii) no person or
entity,

 

15

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including, without limitation, any tenant under the leases, if any, for the Real
Properties has an option or right of first refusal or any other right to
purchase any of such Real Properties, except as disclosed in the Prospectus;
(iv) each of the Real Properties has access to public rights of way, either
directly or through insured easements, except where the failure to have such
access would not, individually or in the aggregate, have a Material Adverse
Effect; (v) each of the Real Properties is served by all public utilities
necessary for the current operations on such property in sufficient quantities
for such operations, except where the failure to have such public utilities
would not, individually or in the aggregate, have a Material Adverse Effect;
(vi) each of the Real Properties complies with all applicable codes and zoning
and subdivision laws and regulations, except for such failure to comply which
would not, either individually or in the aggregate, have a Material Adverse
Effect; (vii) all of the Leases are in full force and effect, except where the
failure to be in full force or effect would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, and neither
the Company nor any of its subsidiaries is in default in the payment of any
amounts due under any such Leases or in any other default thereunder and neither
the Company nor any of its subsidiaries knows or an event which, with the
passage of time or the giving of notice or both, would constitute a default
under any such Lease, except such defaults that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect; and
(viii) there is no pending or, to the knowledge of the Company or its
subsidiaries, threatened condemnation, zoning change, or other proceeding or
action that would in any manner affect the size of, use of, improvements on,
construction on or access to any Real Property, except such proceedings or
actions that, either individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.

 

(48)                          Compliance with Environmental Laws.  Except as
otherwise disclosed in the Registration Statement and the Prospectus:
(i) neither the Company nor any of its subsidiaries nor, to the knowledge of the
Company, any other owners of the Real Property at any time, or to the knowledge
of the Company, any other party has at any time, handled, stored, treated,
transported, manufactured, spilled, leaked, or discharged, dumped, transferred
or otherwise disposed of or dealt with, Hazardous Materials (as hereinafter
defined) on, to or from any Real Property, other than by any such action taken
in material compliance with all applicable Environmental Statutes (as
hereinafter defined) or by the Company, any of its subsidiaries or any other
party in connection with the ordinary use of residential, retail or commercial
properties owned by the Company or any subsidiary; (ii) the Company and its
subsidiaries do not intend to use the Real Property or any subsequently acquired
properties for the purpose of handling, storing, treating, transporting,
manufacturing, spilling, leaking, discharging, dumping, transferring or
otherwise disposing of or dealing with Hazardous Materials other than by any
such action taken in material compliance with all applicable Environmental
Statues or by the Company, any of its subsidiaries or, to the knowledge of the
Company, any other party in connection with the ordinary use of residential,
retail or commercial properties owned by the Company or any subsidiary;
(iii) the Company and the Operating Partnership do not know of any seepage,
leak, discharge, release, emission, spill, or dumping of Hazardous Materials
from the Real Property into waters on or adjacent to the Real Property or from
the Real Property onto any real property owned or occupied by any other party,
or onto lands from which Hazardous Materials might seep, flow or drain into such
waters other than in material compliance with Environmental Statutes;
(iv) neither the Company nor any of its subsidiaries has received any notice of,
or has knowledge of, any occurrence or circumstance which, with notice or
passage of time or both, would give rise to a claim under or pursuant to any
U.S. federal, state or local environmental statute or regulation or under common
law, pertaining to Hazardous Materials on or originating from any of the Real
Property or arising out of the conduct of the Company or any of its
subsidiaries, including without limitation a claim under or pursuant to any
Environmental Statute (as hereinafter defined); and (v) neither the Real
Property is included nor, to the

 

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Company’s or the Operating Partnership’s knowledge, is proposed for inclusion on
the National Priorities List issued pursuant to CERCLA (as hereinafter defined)
by United States Environmental Protection Agency (the “EPA”) or, to the
Company’s or to the Operating Partnership’s knowledge, proposed for inclusion on
any similar list or inventory issued pursuant to any other Environmental Statute
or issued by any other governmental authority. As used herein, “Hazardous
Materials” shall include, without limitation, any flammable explosives,
radioactive materials, hazardous materials, hazardous wastes, toxic substances,
or related materials, asbestos or any hazardous material as defined by any U.S.
federal, state or local environmental law, ordinance, rule or regulation
including without limitation the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Sections
9601-9675 (“CERCLA”), the Hazardous Materials Transportation Act, as amended, 49
U.S.C. Sections 1801-1819, the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. Sections 6901-6992K, the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. Sections 11001-11050, the Toxic Substances
Control Act, 15 U.S.C. Sections 2601-2671, the Federal Insecticide, Fungicide
and Rodenticide Act, 7 U.S.C. Sections 136-136y, the Clean Air Act, 42 U.S.C.
Sections 7401-7642, the Clean Water Act (Federal Water Pollution Control Act),
33 U.S.C. Sections 1251-1387, the Safe Drinking Water Act, 42 U.S.C. Sections
300f-330j-26, and the Occupational Safety and Health Act, 29 U.S.C. Sections
651-678, as any of the above statutes may be amended from time to time, and in
the regulations promulgated pursuant to each of the foregoing (individually, an
“Environmental Statute”) or by any governmental authority.

 

(49)                          Compliance with ADA. The Company and its
subsidiaries and each Real Property are currently in compliance with all
presently applicable provisions of the Americans with Disabilities Act, as
amended, except for any such non-compliance that would not, individually or in
aggregate, reasonably be expected to have a Material Adverse Effect.

 

(50)                          No Breach or Default under Loans.  To the
Company’s knowledge, there is no breach of, or default under (nor has any event
occurred which with notice, lapse of time, or both would constitute a breach of,
or default under) the loan documents relating to the debt instruments acquired
or originated by the Company as described in the Prospectus (collectively, the
“Loans”) which breach or default, if uncured, would result in a Material Adverse
Effect.  To the Company’s knowledge without due inquiry, there is no breach or
default under (nor has any event occurred which with notice, lapse of time, or
both would constitute a breach of, or default under) the loan documents relating
to any loans senior to the Loans, which breach or default, if uncured, would
result in a Material Adverse Effect.

 

(51)                          Compliance with Sarbanes-Oxley Act.  There is and
has been no failure on the part of the Company or any of the Company’s directors
or officers, in their capacities as such, to comply with any provision of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related
to loans and Sections 302 and 906 related to certifications.

 

(52)                          Proprietary Trading by the Placement Agent.  The
Company acknowledges and agrees that the Placement Agent has informed the
Company that the Placement Agent may, to the extent permitted under the
Securities Act and the Exchange Act, purchase and sell shares of Common Stock
for its own account while this Agreement is in effect, and shall be under no
obligation to purchase Securities on a principal basis pursuant to this
Agreement, except as otherwise agreed by the Placement Agent in the Placement
Notice (as amended by the corresponding Acceptance, if applicable); provided,
that no such purchase or sales shall take place while a Placement Notice is in
effect (except (i) as agreed by the Placement Agent in the

 

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Placement Notice (as amended by the corresponding Acceptance, if applicable) or
(ii) to the extent the Placement Agent may engage in sales of Placement
Securities purchased or deemed purchased from the Company as a “riskless
principal” or in a similar capacity).

 

(b)                                 Certificates.  Any certificate signed by any
officer of the Company or the Operating Partnership delivered to the Placement
Agent or to counsel for the Placement Agent pursuant to the terms or provisions
of this Agreement shall be deemed a representation and warranty by the Company
to the Placement Agent as to the matters covered thereby.

 

SECTION 6.                            Sale and Delivery to the Placement Agent;
Settlement.

 

(a)                                 Sale of Placement Securities.  On the basis
of the representations and warranties herein contained and subject to the terms
and conditions herein set forth, upon the Placement Agent’s acceptance of the
terms of a Placement Notice or upon receipt by the Placement Agent of an
Acceptance, as the case may be, and unless the sale of the Placement Securities
described therein has been declined, suspended, or otherwise terminated in
accordance with the terms of this Agreement, the Placement Agent, for the period
specified in the Placement Notice, will use its commercially reasonable efforts
consistent with its normal trading and sales practices to sell such Placement
Securities up to the amount specified, and otherwise in accordance with the
terms of such Placement Notice.  The Company acknowledges and agrees that
(i) there can be no assurance that the Placement Agent will be successful in
selling Placement Securities, (ii) the Placement Agent will incur no liability
or obligation to the Company or any other person or entity if it does not sell
Placement Securities for any reason other than a failure by the Placement Agent
to use its commercially reasonable efforts consistent with its normal trading
and sales practices to sell such Placement Securities as required under this
Section 6, and (iii) the Placement Agent shall be under no obligation to
purchase Securities on a principal basis pursuant to this Agreement, except as
otherwise agreed by the Placement Agent in the Placement Notice (as amended by
the corresponding Acceptance, if applicable).

 

(b)                                 Settlement of Placement Securities.  Unless
otherwise specified in the applicable Placement Notice, settlement for sales of
Placement Securities will occur on the third (3rd) Trading Day (or such earlier
day as is industry practice for regular-way trading) following the date on which
such sales are made (each, a “Settlement Date”).  The amount of proceeds to be
delivered to the Company on a Settlement Date against receipt of the Placement
Securities sold (the “Net Proceeds”) will be equal to the aggregate sales price
received by the Placement Agent at which such Placement Securities were sold,
after deduction for (i) the Placement Agent’s commission, discount or other
compensation for such sales payable by the Company pursuant to Section 2 hereof
and (ii) any other amounts due and payable by the Company to the Placement Agent
hereunder pursuant to Section 8(a) hereof.

 

(c)                                  Delivery of Placement Securities.  On or
before each Settlement Date, concurrently with the receipt by the Company of the
Net Proceeds due to the Company in respect of such Settlement Date, the Company
will, or will cause its transfer agent to, electronically transfer the Placement
Securities being sold by crediting the Placement Agent’s or its designee’s
account (provided the Placement Agent shall have given the Company written
notice of such designee prior to the Settlement Date) at The Depository Trust
Company through its Deposit and Withdrawal at Custodian System or by such other
means of delivery as may be mutually agreed upon by the parties hereto which in
all cases shall be freely tradable, transferable, registered shares in good
deliverable form.  On each Settlement Date, the Placement Agent will deliver the
related Net Proceeds in same day funds to an account designated by the Company
on, or prior to, the Settlement Date.  The Company agrees that if the Company,
or its transfer agent (if applicable), defaults in its obligation to deliver
Placement Securities on a Settlement Date, the Company agrees that, in addition
to and in no way limiting the rights and obligations set forth in
Section 10(a) hereto, it will (i) hold the Placement Agent harmless against any
loss, claim, damage, or expense

 

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(including reasonable legal fees and expenses), as incurred, arising out of or
in connection with such default by the Company and (ii) pay to the Placement
Agent any commission, discount, or other compensation to which it would
otherwise have been entitled absent such default.

 

(d)                                 Denominations; Registration.  If requested
by the Placement Agent at least two Business Days prior to the Settlement Date,
then in lieu of electronic transfer, certificates for the Securities shall be in
such denominations and registered in such names as the Placement Agent shall
have specified in such request.  The certificates for the Securities will be
made available for examination and packaging by the Placement Agent in The City
of New York not later than noon (New York time) on the Business Day prior to the
Settlement Date.

 

SECTION 7.                            Covenants.

 

The Company covenants with the Placement Agent as follows:

 

(a)                                 Registration Statement Amendment.  After the
date of this Agreement and during any period in which a Prospectus relating to
any Placement Securities is required to be delivered by the Placement Agent
under the Securities Act (including in circumstances where such requirement may
be satisfied pursuant to Rule 172 under the Securities Act), (i) the Company
will notify the Placement Agent promptly of the time when any subsequent
amendment to the Registration Statement, other than documents incorporated by
reference, has been filed with the Commission and/or has become effective or any
subsequent supplement to the Prospectus has been filed and of any comment letter
from the Commission or any request by the Commission for any amendment or
supplement to the Registration Statement or Prospectus or for additional
information; (ii) the Company will prepare and file with the Commission,
promptly upon the Placement Agent’s request, any amendments or supplements to
the Registration Statement or Prospectus that, in the Placement Agent’s
reasonable opinion, may be necessary or advisable in connection with the
distribution of the Placement Securities by the Placement Agent (provided,
however, that the failure of the Placement Agent to make such request shall not
relieve the Company of any obligation or liability hereunder, or affect the
Placement Agent’s right to rely on the representations and warranties made by
the Company in this Agreement); (iii) the Company will not file any amendment or
supplement to the Registration Statement or Prospectus, other than documents
incorporated by reference, relating to the Placement Securities or a security
convertible into the Placement Securities unless a copy thereof has been
submitted to the Placement Agent within a reasonable period of time before the
filing and the Placement Agent has not reasonably objected thereto (provided,
however, that the failure of the Placement Agent to make such objection shall
not relieve the Company of any obligation or liability hereunder, or affect the
Placement Agent’s right to rely on the representations and warranties made by
the Company in this Agreement) and the Company will furnish to the Placement
Agent at the time of filing thereof a copy of any document that upon filing is
deemed to be incorporated by reference into the Registration Statement or
Prospectus, except for those documents available via EDGAR; and (iv) the Company
will cause each amendment or supplement to the Prospectus, other than documents
incorporated by reference, to be filed with the Commission as required pursuant
to the applicable paragraph of Rule 424(b) of the Securities Act (without
reliance on Rule 424(b)(8) of the Securities Act).

 

(b)                                 Notice of Commission Stop Orders.  The
Company will advise the Placement Agent, promptly after it receives notice or
obtains knowledge thereof, of the issuance or threatened issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any other order preventing or suspending the use of the
Prospectus or any Issuer Free Writing Prospectus, or of the suspension of the
qualification of the Placement Securities for offering or sale in any
jurisdiction or of the loss or suspension of any exemption from any such
qualification, or of the initiation or threatening of any proceedings for any of
such purposes, or of any examination pursuant to Section 8(e) of the

 

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Securities Act concerning the Registration Statement or if the Company becomes
the subject of a proceeding under Section 8A of the Securities Act in connection
with the offering of the Securities.  The Company will make every reasonable
effort to prevent the issuance of any stop order, the suspension of any
qualification of the Securities for offering or sale and any loss or suspension
of any exemption from any such qualification, and if any such stop order is
issued or any such suspension or loss occurs, to obtain the lifting thereof at
the earliest possible moment.

 

(c)                                  Delivery of Registration Statement and
Prospectus.  Except to the extent such documents have been publicly filed with
the Commission pursuant to EDGAR, the Company will furnish to the Placement
Agent and its counsel (at the expense of the Company) copies of the Registration
Statement, the Prospectus (including all documents incorporated by reference
therein) and all amendments and supplements to the Registration Statement or
Prospectus, and any Issuer Free Writing Prospectuses, that are filed with the
Commission during any period in which a Prospectus relating to the Placement
Securities is required to be delivered under the Securities Act (including all
documents filed with the Commission during such period that are deemed to be
incorporated by reference therein), in each case as soon as reasonably
practicable and in such quantities and at such locations as the Placement Agent
may from time to time reasonably request.

 

(d)                                 Continued Compliance with Securities Laws.
 If at any time when a Prospectus is required by the Securities Act or the
Exchange Act to be delivered in connection with a pending sale of the Placement
Securities (including, without limitation, pursuant to Rule 172 under the
Securities Act), any event shall occur or condition shall exist as a result of
which it is necessary to amend the Registration Statement together with the
Prospectus in order that the Prospectus will not include any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances existing at
the time it is delivered to a purchaser, or if it shall be necessary at any such
time to amend the Registration Statement together with the Prospectus in order
to comply with the requirements of the Securities Act, the Company will promptly
notify the Placement Agent to suspend the offering of Placement Securities
during such period and the Company will promptly prepare and file with the
Commission such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement and the Prospectus
comply with such requirements, and the Company will furnish to the Placement
Agent such number of copies of such amendment or supplement as the Placement
Agent may reasonably request.  If at any time following the issuance of an
Issuer Free Writing Prospectus there occurred or occurs an event or development
as a result of which such Issuer Free Writing Prospectus conflicted, conflicts
or would conflict with the information contained in the Registration Statement
or the Prospectus or included, includes or would include an untrue statement of
a material fact or together with the Prospectus omitted, omits or would omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances, prevailing at that subsequent time, not misleading,
the Company will promptly notify the Placement Agent to suspend the offering of
Placement Securities during such period and the Company will, subject to
Section 7(a) hereof, promptly amend or supplement such Issuer Free Writing
Prospectus to eliminate or correct such conflict, untrue statement or omission.

 

(e)                                  Blue Sky and Other Qualifications.  The
Company will use its best efforts, in cooperation with the Placement Agent, to
qualify the Placement Securities for offering and sale, or to obtain an
exemption for the Securities to be offered and sold, under the applicable
securities laws of such states and other jurisdictions (domestic or foreign) as
the Placement Agent may designate and to maintain such qualifications and
exemptions in effect for so long as required for the distribution of the
Securities (but in no event for less than one year from the date of this
Agreement); provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.  In each

 

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jurisdiction in which the Placement Securities have been so qualified or exempt,
the Company will file such statements and reports as may be required by the laws
of such jurisdiction to continue such qualification or exemption, as the case
may be, in effect for so long as required for the distribution of the Placement
Securities (but in no event for less than one year from the date of this
Agreement).

 

(f)                                   Rule 158.  The Company will timely file
such reports pursuant to the Exchange Act as are necessary in order to make
generally available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide to the Placement Agent the
benefits contemplated by, the last paragraph of Section 11(a) of the Securities
Act.

 

(g)                                  Use of Proceeds.  The Company will use the
net proceeds received by it from the sale of the Securities in the manner
specified in the Prospectus under “Use of Proceeds.”

 

(h)                                 Listing.  During any period in which the
Prospectus relating to the Placement Securities is required to be delivered by
the Placement Agent under the Securities Act with respect to a pending sale of
the Placement Securities (including in circumstances where such requirement may
be satisfied pursuant to Rule 172 under the Securities Act), the Company will
use its commercially reasonable efforts to cause the Placement Securities to be
listed on the NYSE.

 

(i)                                     Filings with the Exchange.  The Company
will timely seek to file with the NYSE all material documents and notices
required by the NYSE of companies that have securities traded on the NYSE.

 

(j)                                    Reporting Requirements.  The Company,
during any period when the Prospectus is required to be delivered under the
Securities Act and the Exchange Act (including in circumstances where such
requirement may be satisfied pursuant to Rule 172 under the Securities Act),
will file all documents required to be filed with the Commission pursuant to the
Exchange Act within the time periods required by the Exchange Act.

 

(k)                                 Notice of Other Sales.  During the pendency
of any Placement Notice given hereunder, the Company shall provide the Placement
Agent notice as promptly as reasonably possible before it offers to sell,
contracts to sell, sells, grants any option to sell or otherwise disposes of any
shares of Common Stock (other than Placement Securities offered pursuant to the
provisions of this Agreement) or securities convertible into or exchangeable for
Common Stock, warrants or any rights to purchase or acquire Common Stock;
provided, that such notice shall not be required in connection with the
(i) issuance, grant or sale of restricted stock, Common Stock, LTIP units,
options to purchase Common Stock, or Common Stock issuable upon the exercise of
options or other equity awards pursuant to any stock option, stock bonus or
other stock or compensatory plan or arrangement described in the Prospectus,
(ii) the issuance of securities in connection with an acquisition, merger or
sale or purchase of assets described in the Prospectus, or (iii) the issuance or
sale of Common Stock pursuant to any dividend reinvestment plan that the Company
has in effect or may adopt from time to time, provided the implementation of
such new plan is disclosed to the Placement Agent in advance.

 

(l)                                     Change of Circumstances.  The Company
will, at any time during a fiscal quarter in which the Company intends to tender
a Placement Notice or sell Placement Securities, advise the Placement Agent
promptly after it shall have received notice or obtained knowledge thereof, of
any information or fact that would alter or affect in any material respect any
opinion, certificate, letter or other document provided to the Placement Agent
pursuant to this Agreement during such fiscal quarter.

 

(m)                             Due Diligence Cooperation.  The Company will
cooperate with any reasonable due diligence review conducted by the Placement
Agent or its agents in connection with the transactions

 

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contemplated hereby, including, without limitation, providing information and
making available documents and senior officers, during regular business hours
and at the Company’s principal offices, as the Placement Agent may reasonably
request.

 

(n)                                 Disclosure of Sales.  The Company will, if
applicable, disclose in its quarterly reports on Form 10-Q and in its annual
report on Form 10-K the number of Placement Securities sold through the
Placement Agent during the most recent fiscal quarter, the Net Proceeds to the
Company and the compensation paid or payable by the Company to the Placement
Agent with respect to such Placement Securities.  The Company shall also prepare
and file with the Commission pursuant to Rule 424(b) under the Securities Act
not later than 40 days after the completion of such quarter a prospectus
supplement disclosing such sales information, if any.

 

(o)                                 Representation Dates; Certificate.  On or
prior to the date that the Securities are first sold pursuant to the terms of
this Agreement and:

 

(i)                                     each time the Company files the
Prospectus relating to the Placement Securities or amends or supplements the
Registration Statement or the Prospectus relating to the Placement Securities
(other than amendments or supplements that are filed solely to report sales of
the Placement Securities pursuant to this Agreement) by means of a
post-effective amendment, sticker, or supplement but not by means of
incorporation of documents by reference into the Registration Statement or the
Prospectus relating to the Placement Securities;

 

(ii)                                  each time the Company files an annual
report on Form 10-K under the Exchange Act (each date of filing of the Company’s
annual report on Form 10-K shall be a “10-K Representation Date”);

 

(iii)                               each time the Company files its quarterly
reports on Form 10-Q under the Exchange Act; or

 

(iv)                              each time the Company files a report on
Form 8-K containing amended financial information (other than an earnings
release, to “furnish” information pursuant to Items 2.02 or 7.01 of Form 8-K or
to provide disclosure pursuant to Item 8.01 of Form 8-K relating to the
reclassifications of certain properties as discontinued operations in accordance
with Statement of Financial Accounting Standards No. 144) under the Exchange Act
(each date of filing of one or more of the documents referred to in clauses
(i) through (iv) shall be a “Representation Date”);

 

the Company and the Operating Partnership shall furnish the Placement Agent with
a certificate, in the form attached hereto as Exhibit G, within three
(3) Trading Days of any Representation Date.  The requirement to provide a
certificate under this Section 7(o) shall be waived for any Representation Date
occurring at a time at which no Placement Notice is pending, which waiver shall
continue until the earlier to occur of the date the Company delivers a Placement
Notice hereunder (which for such calendar quarter shall be considered a
Representation Date) and the next occurring Representation Date; provided,
however, that such waiver shall not apply for any 10-K Representation Date. 
Notwithstanding the foregoing, if the Company subsequently decides to sell
Placement Securities following a Representation Date when the Company relied on
such waiver and did not provide the Placement Agent with a certificate under
this Section 7(o), then before the Company delivers the Placement Notice or the
Placement Agent sells any Placement Securities, the Company and the Operating
Partnership shall provide the Placement Agent with a certificate, in the form
attached hereto as Exhibit G, dated the date of the Placement Notice.

 

(p)                                 Legal Opinions.  On or prior to the date
that the Securities are first sold pursuant to the terms of this Agreement and
within three (3) Trading Days after each 10-K Representation Date with

 

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respect to which the Company and the Operating Partnership is obligated to
deliver a certificate in the form attached hereto as Exhibit G for which no
waiver is applicable, the Company shall cause to be furnished to the Placement
Agent (i) a written opinion of Venable LLP, Maryland counsel to the Company
(“Company Maryland Counsel”), or other counsel satisfactory to the Placement
Agent, in form and substance reasonably satisfactory to the Placement Agent and
its counsel, dated the date that the opinion is required to be delivered,
substantially similar to the form attached hereto as Exhibit D, (ii)  written
opinions of Skadden, Arps, Slate Meagher and Flom LLP, special counsel to the
Company (“Company Special Counsel”), or other counsel satisfactory to the
Placement Agent, in form and substance reasonably satisfactory to the Placement
Agent and its counsel, dated the date that the opinions are required to be
delivered, substantially similar to the forms attached hereto as Exhibit E-1 and
Exhibit E-2, (iii) the written opinion of Allen & Overy LLP regarding certain
matters pursuant to the 1940 Act, or other counsel satisfactory to the Placement
Agent, in form and substance reasonably satisfactory to the Placement Agent and
its counsel, dated the date that the opinion is required to be delivered,
substantially similar to the form attached hereto as Exhibit F (iv) unless
waived by the Placement Agent, a written opinion of Hunton & Williams LLP,
counsel to the Placement Agent (“Counsel to the Placement Agent”), or other
counsel satisfactory to the Placement Agent, in form and substance reasonably
satisfactory to the Placement Agent, dated the date that the opinion is required
to be delivered; provided, however, that in lieu of such opinions for subsequent
10-K Representation Dates, counsel may furnish the Placement Agent with a letter
(a “Reliance Letter”) to the effect that the Placement Agent may rely on a prior
opinion delivered under this Section 7(p) to the same extent as if it were dated
the date of such letter (except that statements in such prior opinion shall be
deemed to relate to the Registration Statement and the Prospectus as amended or
supplemented at such 10-K Representation Date).

 

(q)                                 Comfort Letter.  On or prior to the date
that the Securities are first sold pursuant to the terms of this Agreement and
within three (3) Trading Days after each 10-K Representation Date with respect
to which the Company is obligated to deliver a certificate in the form attached
hereto as Exhibit F for which no waiver is applicable, the Company shall cause
its independent accountants (and any other independent accountants whose report
is included in the Prospectus) to furnish the Placement Agent letters (the
“Comfort Letters”), dated the date of the Comfort Letter is delivered, in form
and substance satisfactory to the Placement Agent, (i) confirming that they are
an independent registered public accounting firm within the meaning of the
Securities Act, the Exchange Act and the PCAOB, (ii) stating, as of such date,
the conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants’ “comfort
letters” to underwriters in connection with registered public offerings.

 

(r)                                    Market Activities.  The Company will not,
directly or indirectly, (i) take any action designed to cause or result in, or
that constitutes or might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or (ii) sell, bid for, or
purchase the Securities to be issued and sold pursuant to this Agreement, or pay
anyone any compensation for soliciting purchases of the Securities to be issued
and sold pursuant to this Agreement other than the Placement Agent; provided,
however, that the Company may bid for and purchase its Common Stock in
accordance with Rule 10b-18 under the Exchange Act.

 

(s)                                   Investment Company Act.  The Company is
familiar with the Investment Company Act, and the rules and regulations
thereunder, and will in the future conduct its and the Operating Partnership’s
affairs, in such a manner and will use its commercially reasonable best efforts
to ensure that the Company and the Operating Partnership will not be an
“investment company” within the meaning of the Investment Company Act and the
rules and regulations thereunder.

 

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(t)                                    Securities Act and Exchange Act.  The
Company will use its best efforts to comply with all requirements imposed upon
it by the Securities Act and the Exchange Act as from time to time in force, so
far as necessary to permit the continuance of sales of, or dealings in, the
Placement Securities as contemplated by the provisions hereof and the
Prospectus.

 

(u)                                 No Offer to Sell.  Other than a free writing
prospectus (as defined in Rule 405 under the Securities Act) approved in advance
in writing by the Company and the Placement Agent in its capacity as principal
or agent hereunder, the Company (including its agents and representatives, other
than the Placement Agent in its capacity as such) will not, directly or
indirectly, make, use, prepare, authorize, approve or refer to any free writing
prospectus relating to the Securities to be sold by the Placement Agent as
principal or agent hereunder.

 

(v)                                 Sarbanes-Oxley Act.  The Company and its
subsidiaries will use their best efforts to comply with all effective applicable
provisions of the Sarbanes-Oxley Act of 2002.

 

(w)                               Regulation M.  If following the date hereof
the Common Stock qualifies for the exemptive provisions set forth in
Rule 101(c)(1) of Regulation M under the Exchange Act, and subsequent to such
date, the Company has reason to believe that the exemptive provisions set forth
in Rule 101(c)(1) of Regulation M under the Exchange Act are not satisfied with
respect to the Common Stock, it shall promptly notify the Placement Agent and
sales of the Placement Securities under this Agreement shall be suspended until
that or other exemptive provisions have been satisfied in the judgment of each
party.

 

(x)                                 REIT Qualification.  Each of the Company and
the Private REIT will use its best efforts to continue to meet the requirements
to qualify as a “real estate investment trust” under the Code, until the Board
of Directors of the Company determines that it is no longer in the best
interests of the Company to qualify as a REIT.

 

SECTION 8.                            Payment of Expenses.

 

(a)                                 Expenses.  The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment and supplement thereto, (ii) the word processing, printing and
delivery to the Placement Agent of this Agreement and such other documents as
may be required in connection with the offering, purchase, sale, issuance or
delivery of the Placement Securities, (iii) the preparation, issuance and
delivery of the certificates for the Placement Securities to the Placement
Agent, including any stock or other transfer taxes and any capital duties, stamp
duties or other duties or taxes payable upon the sale, issuance or delivery of
the Placement Securities to the Placement Agent, (iii) the fees and
disbursements of the counsel, accountants and other advisors to the Company and
the Operating Partnership, (iv) the qualification or exemption of the Placement
Securities under securities laws in accordance with the provisions of
Section 7(e) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Placement Agent in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplements
thereto, (v) the printing and delivery to the Placement Agent of copies of any
permitted Free Writing Prospectus and the Prospectus and any amendments or
supplements thereto and any costs associated with electronic delivery of any of
the foregoing by the Placement Agent to investors, (vi) the fees and expenses of
the transfer agent and registrar for the Securities, (vii) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
Placement Agent in connection with, the review by FINRA of the terms of the sale
of the Securities and (viii) the fees and expenses incurred in connection with
the listing of the Placement Securities on the NYSE.

 

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(b)                                 Termination of Agreement.  If this Agreement
is terminated by the Placement Agent in accordance with the provisions of
Section 9 or Section 12(a)(i) hereof or by the Company pursuant to
Section 12(b) hereof, the Company shall reimburse the Placement Agent for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Placement Agent.

 

SECTION 9.                            Conditions of the Placement Agent’s
Obligations.  The obligations of the Placement Agent hereunder with respect to a
Placement will be subject to the continuing accuracy and completeness of the
representations and warranties of the Company and the Operating Partnership
contained in this Agreement or in certificates of any officer of the Company,
the Operating Partnership or any of their respective subsidiaries delivered
pursuant to the provisions hereof, to the performance by the Company and the
Operating Partnership of their respective covenants and other obligations
hereunder, and to the following further conditions:

 

(a)                                 Opinions of Company Maryland Counsel,
Company Special Counsel and Counsel to the Placement Agent.  On or prior to the
date that Securities are first sold pursuant to the terms of this Agreement the
Company shall furnish to the Placement Agent the opinions, each addressed to the
Placement Agent, of (i) Venable LLP, Maryland counsel for the Company, or other
counsel satisfactory to the Placement Agent, in form and substance reasonably
satisfactory to the Placement Agent and its counsel, dated the date that the
opinion is required to be delivered, substantially similar to the form attached
hereto as Exhibit D; (ii) Skadden, Arps, Slate, Meagher and Flom LLP, special
counsel for the Company, the Subsidiaries, the Operating Partnership or other
counsel satisfactory to the Placement Agent, in form and substance reasonably
satisfactory to the Placement Agent and its counsel, dated the date that the
opinions are required to be delivered, substantially similar to the forms
attached hereto as Exhibit E-1 and Exhibit E-2; (iii) Allen & Overy LLP, special
1940 Act counsel for the Company and the Subsidiaries, or other counsel
satisfactory to the Placement Agent, in form and substance reasonably
satisfactory to the Placement Agent and its counsel, dated the date that the
opinions are required to be delivered, substantially similar to the forms
attached hereto as Exhibit F; (iv)  unless waived by the Placement Agent,
Hunton & Williams LLP, counsel to the Placement Agent, or other counsel
satisfactory to the Placement Agent, in form and substance reasonably
satisfactory to the Placement Agent, dated the date that the opinion is required
to be delivered.

 

(b)                                 Effectiveness of Registration Statement. 
The Registration Statement and any Rule 462(b) Registration Statement shall have
become effective and shall be available for (i) all sales of Placement
Securities issued pursuant to all prior Placement Notices and (ii) the sale of
all Placement Securities contemplated to be issued by any Placement Notice.

 

(c)                                  No Material Notices.  None of the following
events shall have occurred and be continuing: (i) receipt by the Company or any
of its subsidiaries of any request for additional information from the
Commission or any other federal or state governmental authority during the
period of effectiveness of the Registration Statement, the response to which
would require any post-effective amendments or supplements to the Registration
Statement or the Prospectus; (ii) the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose; (iii) receipt by the Company of any notification with respect
to the suspension of the qualification or exemption from qualification of any of
the Placement Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; (iv) the occurrence of any event
that makes any material statement made in the Registration Statement or the
Prospectus, or any Issuer Free Writing Prospectus, or any material document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires the making of any changes in the Registration
Statement, the Prospectus, or any Issuer Free Writing Prospectus, or such
documents so that, in the case of the Registration Statement, it will not
contain any materially untrue statement of a material fact or omit to

 

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state any material fact required to be stated therein or necessary to make the
statements therein not misleading and, that in the case of the Prospectus and
any Issuer Free Writing Prospectus, it will not contain any materially untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

 

(d)                                 No Misstatement or Material Omission.  The
Placement Agent shall not have advised the Company that the Registration
Statement or Prospectus, or any Issuer Free Writing Prospectus, or any amendment
or supplement thereto, contains an untrue statement of fact that in the
Placement Agent’s reasonable opinion is material, or omits to state a fact that
in the Placement Agent’s opinion is material and is required to be stated
therein or is necessary to make the statements therein not misleading.

 

(e)                                  Material Changes.  Except as contemplated
in the Prospectus, or disclosed in the Company’s reports filed with the
Commission, there shall not have been any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business.

 

(f)                                   Representation Certificate.  The Placement
Agent shall have received the certificate required to be delivered pursuant to
Section 7(o) on or before the date on which delivery of such certificate is
required pursuant to Section 7(o).

 

(g)                                  Accountant’s Comfort Letter.  The Placement
Agent shall have received the Comfort Letter required to be delivered pursuant
Section 7(q) on or before the date on which such delivery of such opinion is
required pursuant to Section 7(q).

 

(h)                                 Approval for Listing.  The Placement
Securities shall either have been (i) approved for listing on the NYSE, subject
only to notice of issuance, or (ii) the Company shall have filed an application
for listing of the Placement Securities on the NYSE at, or prior to, the
issuance of any Placement Notice.

 

(i)                                     No Suspension.  Trading in the
Securities shall not have been suspended on the NYSE.

 

(j)                                    Additional Documents.  On each date on
which the Company is required to deliver a certificate pursuant to Section 7(o),
counsel for the Placement Agent shall have been furnished with such documents
and opinions as they may require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, contained in this Agreement.

 

(k)                                 Securities Act Filings Made.  All filings
with the Commission required by Rule 424 under the Securities Act to have been
filed prior to the issuance of any Placement Notice hereunder shall have been
made within the applicable time period prescribed for such filing by Rule 424
under the Securities Act.

 

(l)                                     Termination of Agreement.  If any
condition specified in this Section 9 shall not have been fulfilled when and as
required to be fulfilled, this Agreement may be terminated by the Placement
Agent by notice to the Company, and such termination shall be without liability
of any party to any other party except as provided in Section 7 hereof and
except that, in the case of any termination of this Agreement, Sections 5, 10,
11 and 19 hereof shall survive such termination and remain in full force and
effect.

 

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SECTION 10.                     Indemnity and Contribution by the Company, the
Operating Partnership and the Placement Agent.

 

(a)                                 Indemnification by the Company and the
Operating Partnership.  The Company and the Operating Partnership, jointly and
severally, agree to indemnify, defend and hold harmless the Placement Agent and
any person who controls the Placement Agent within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against any loss,
expense, liability, damage or claim (including the reasonable cost of
investigation) as incurred which, jointly or severally, the Placement Agent or
any controlling person may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, expense, liability, damage or claim arises out
of or is based upon (1) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereof), any Issuer Free Writing Prospectus that the Company has filed or was
required to file with the Commission or the Prospectus (the term Prospectus for
the purpose of this Section 10 being deemed to include the Prospectus as of its
date and as amended or supplemented by the Company), (2) any omission or alleged
omission to state a material fact required to be stated in any such Registration
Statement, or necessary to make the statements made therein not misleading, or
(3) any omission or alleged omission from any such Issuer Free Writing
Prospectus or Prospectus of a material fact necessary to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading; except, in the case of each of clauses (1), (2) and (3), insofar as
any such loss, expense, liability, damage or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a material fact or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of the Prospectus and any
Issuer Free Writing Prospectus, in the light of the circumstances under which
they were made) not misleading, in each such case, to the extent contained in
and in conformity with the Agent Information.  The indemnity agreement set forth
in this Section 10(a) shall be in addition to any liability which the Company
and the Operating Partnership may otherwise have.  If any action is brought
against the Placement Agent or any controlling person in respect of which
indemnity may be sought against the Company or the Operating Partnership
pursuant to the foregoing paragraph of this Section 10(a), the Placement Agent
shall promptly notify the Company or the Operating Partnership, as the case may
be, in writing of the institution of such action, and the Company or the
Operating Partnership, as the case may be, shall if it so elects, assume the
defense of such action, including the employment of counsel and payment of
expenses; provided, however, that any failure or delay to so notify the Company
or the Operating Partnership, as the case may be, will not relieve the Company
or the Operating Partnership of any obligation hereunder, except to the extent
that their ability to defend is materially prejudiced by such failure or delay. 
The Placement Agent or such controlling person shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Placement Agent or such controlling
person unless the employment of such counsel shall have been authorized in
writing by the Company or the Operating Partnership, as the case may be, in
connection with the defense of such action, or the Company or the Operating
Partnership, as the case may be, shall not have employed counsel reasonably
satisfactory to the Placement Agent or such controlling person, as the case
maybe, to have charge of the defense of such action within a reasonable time or
such indemnified party or parties shall have reasonably concluded (based on the
advice of counsel) that there may be defenses available to it or them which are
different from or additional to those available to the Company or the Operating
Partnership (in which case neither the Company nor the Operating Partnership
shall have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the Company or the Operating Partnership, as the case may be,
and paid as incurred (it being understood, however, that neither the Company nor
the Operating Partnership shall be liable for the expenses of more than one
separate firm of attorneys for the Placement Agent or such controlling persons
in any one action or series of related actions in the same jurisdiction (other
than local counsel in any such jurisdiction) representing the indemnified
parties who are parties to such action).  Anything in this

 

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paragraph to the contrary notwithstanding, neither the Company nor the Operating
Partnership shall be liable for any settlement of any such claim or action
effected without its consent.

 

(b)                                 Indemnification by the Placement Agent. The
Placement Agent agrees to indemnify, defend and hold harmless the Company, the
Operating Partnership, the Company’s directors, the Company’s officers that
signed the Registration Statement, any person who controls the Company and the
Operating Partnership within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any loss, expense, liability,
damage or claim (including the reasonable cost of investigation) as incurred
which, jointly or severally, the Company, the Operating Partnership or any such
person may incur under the Securities Act, the Exchange Act or otherwise,
insofar as such loss, expense, liability, damage or claim arises out of or is
based upon (1) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment thereof), any
Issuer Free Writing Prospectus that the Company has filed or was required to
file with the Commission, the Prospectus, (2) any omission or alleged omission
to state a material fact required to be stated in any such Registration
Statement, or necessary to make the statements made therein not misleading, or
(3) any omission or alleged omission from any such Issuer Free Writing
Prospectus or the Prospectus of a material fact necessary to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading, but in each case only insofar as such untrue statement or alleged
untrue statement or omission or alleged omission was made in such Registration
Statement, Issuer Free Writing Prospectus or Prospectus in reliance upon and in
conformity with information furnished in writing by the Placement Agent to the
Company expressly for use therein.  The statements set forth in the sixth
paragraph under the caption “Plan of Distribution” in the Prospectus Supplement
(to the extent such statements relate to the Placement Agent) constitute the
only information furnished by or on behalf of the Placement Agent to the Company
or the Operating Partnership for the purposes of Section 5(a)(1) and this
Section 10 (the “Agent Information”).  The indemnity agreement set forth in this
Section 10(b) shall be in addition to any liabilities that the Placement Agent
may otherwise have.

 

If any action is brought against the Company, the Operating Partnership, or any
such person in respect of which indemnity may be sought against the Placement
Agent pursuant to the foregoing paragraph, the Company, the Operating
Partnership or such person shall promptly notify the Placement Agent in writing
of the institution of such action and the Placement Agent shall if it so elects
assume the defense of such action, including the employment of counsel and
payment of expenses; provided, however, that any failure or delay to so notify
the Placement Agent will not relieve the Placement Agent of any obligation
hereunder, except to the extent that their ability to defend is materially
prejudiced by such failure or delay.  The Company, the Operating Partnership or
such person shall have the right to employ its own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of the Company,
the Operating Partnership or such person unless the employment of such counsel
shall have been authorized in writing by the Placement Agent in connection with
the defense of such action or the Placement Agent shall not have employed
counsel reasonably satisfactory to the Company, the Operating Partnership or
such person, as the case may be, to have charge of the defense of such action
within a reasonable time or such indemnified party or parties shall have
reasonably concluded (based on the advice of counsel) that there may be defenses
available to it or them which are different from or additional to those
available to (in which case the Placement Agent shall not have the right to
direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
Placement Agent and paid as incurred (it being understood, however, that the
Placement Agent shall not be liable for the expenses of more than one separate
firm of attorneys in any one action or series of related actions in the same
jurisdiction (other than local counsel in any such jurisdiction) representing
the indemnified parties who are parties to such action).  Anything in this
paragraph to the contrary notwithstanding, the Placement Agent shall not be
liable for any settlement of any such claim or action effected without its
written consent.

 

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(c)                                  Contribution.  If the indemnification
provided for in this Section 10 is unavailable or insufficient to hold harmless
an indemnified party under subsections (a) and (b) of this Section 10 in respect
of any losses, expenses, liabilities, damages or claims referred to therein,
then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, expenses, liabilities, damages or
claims (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company, the Operating Partnership and by the Placement Agent,
each from the offering of the Securities, or (ii) if (but only if) the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, the
Operating Partnership and the Placement Agent in connection with the statements
or omissions which resulted in such losses, expenses, liabilities, damages or
claims, as well as any other relevant equitable considerations.  The relative
benefits received by the Company and the Operating Partnership shall be deemed
to be equal to the gross proceeds from the offering of Securities (before
deducting discounts and expenses) received by each of them and benefits received
by the Placement Agent shall be deemed to be equal to the underwriting discounts
and commissions received the Placement Agent.  The relative fault of the
Company, the Operating Partnership and of the Placement Agent shall be
determined by reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission
relates to information supplied by the Company and/or Operating Partnership or
by the Placement Agent and the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission.  The amount paid or payable by a party as a result of the
losses, claims, damages and liabilities referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any claim or action.

 

(d)                                 The Company, the Operating Partnership and
the Placement Agent agree that it would not be just and equitable if
contribution pursuant to this Section 10 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in clause (i) and, if applicable, clause
(ii) of subsection (c) above.  Notwithstanding the provisions of this
Section 10, the Placement Agent shall not be required to contribute any amount
in excess of the underwriting discounts and commissions applicable to the
Securities purchased by the Placement Agent and the liability of the Company
and/or the Operating Partnership pursuant to this Section 10 shall not exceed
the gross proceeds received by the Company and/or the Operating Partnership in
the offering.  No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

 

(e)                                  The provisions of this Section shall not
affect any agreement among the Company and/or the Operating Partnership with
respect to indemnification.

 

SECTION 11.                     Representations, Warranties and Agreements to
Survive Delivery.  All representations, warranties and agreements contained in
this Agreement or in certificates of officers of the Company or the Operating
Partnership or any of their respective subsidiaries submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Placement Agent or controlling person,
or by or on behalf of the Company or the Operating Partnership and shall survive
delivery of the Securities to the Placement Agent.

 

SECTION 12.                     Termination of Agreement.

 

(a)                                 Termination; General.  The Placement Agent
may terminate this Agreement, by notice to the Company, as hereinafter specified
at any time (i) if there has been, since the time of execution of this Agreement
or since the date as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects

 

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of the Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Placement Agent, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in the Placement Securities has been suspended or limited by the
Commission or the NYSE, or if trading generally on the NYSE MKT, the NYSE or the
Nasdaq Global Market has been suspended or limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by order of the Commission, the FINRA or any other
governmental authority, or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States or
in Europe, or (iv) if a banking moratorium has been declared by either Federal
or New York authorities.

 

(b)                                 Termination by the Company.  The Company
shall have the right, by giving one (1) day notice as hereinafter specified to
terminate this Agreement in its sole discretion at any time after the date of
this Agreement.  Upon termination of this Agreement pursuant to this
Section 12(b), any outstanding Placement Notices shall also be terminated.

 

(c)                                  Termination by the Placement Agent.  The
Placement Agent shall have the right, by giving one (1) day notice as
hereinafter specified to terminate this Agreement in its sole discretion at any
time after the date of this Agreement.

 

(d)                                 Automatic Termination.  Unless earlier
terminated pursuant to this Section 12, this Agreement shall automatically
terminate upon the issuance and sale of all of the Placement Securities through
the Placement Agent on the terms and subject to the conditions set forth herein.

 

(e)                                  Continued Force and Effect.  This Agreement
shall remain in full force and effect unless terminated pursuant to
Sections 12(a), (b), (c), or (d) above or otherwise by mutual agreement of the
parties.

 

(f)                                   Effectiveness of Termination.  Any
termination of this Agreement shall be effective on the date specified in such
notice of termination; provided, however, that such termination shall not be
effective until the close of business on the date of receipt of such notice by
the Placement Agent or the Company, as the case may be.  If such termination
shall occur prior to the Settlement Date for any sale of Placement Securities,
such Placement Securities shall settle in accordance with the provisions of this
Agreement.

 

(g)                                  Liabilities.  If this Agreement is
terminated pursuant to this Section 12, such termination shall be without
liability of any party to any other party except as provided in Section 8
hereof, and except that, in the case of any termination of this Agreement,
Section 5, Section 10, Section 11 and Section 19 hereof shall survive such
termination and remain in full force and effect.

 

SECTION 13.                     Notices.  Except as otherwise provided in this
Agreement, all notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or transmitted by any
standard form of telecommunication.  Notices to the Placement Agent shall be
directed to the Placement Agent at JMP Securities LLC, 600 Montgomery Street,
Suite 1100, San Francisco, California 94111, Facsimile:  (415) 835-8920,
Attention:  Equity Securities, with a copy (which shall not constitute notice)
to Hunton & Williams LLP, Riverfront Plaza, East Tower, 951 East Byrd Street,
Richmond, Virginia, 23219-4074, Attention: Daniel M. LeBey, and notices to the
Company and the Operating Partnership shall be directed to them c/o Arbor Realty
Trust, Inc., 333 Earle Ovington

 

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Boulevard, Suite 900, Uniondale, New York 11553, Attention: Paul Elenio, Chief
Financial Officer and Treasurer, with a copy (which shall not constitute notice)
to Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New
York 10036, Attention: David J. Goldschmidt.

 

SECTION 14.                     Parties.  This Agreement shall inure to the
benefit of and be binding upon the Placement Agent, the Company and their
respective successors.  Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Placement Agent, the Company and their respective successors and the
controlling persons and officers and directors referred to in Section 10 and
their heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained. 
This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the Placement Agent, the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation.  No purchaser of Securities from the Placement
Agent shall be deemed to be a successor by reason merely of such purchase.

 

SECTION 15.                     Adjustments for Stock Splits.  The parties
acknowledge and agree that all stock-related numbers contained in this Agreement
shall be adjusted to take into account any stock split, stock dividend or
similar event effected with respect to the Securities.

 

SECTION 16.                     Governing Law and Time.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

 

SECTION 17.                     Effect of Headings.  The Section and
Exhibit headings herein are for convenience only and shall not affect the
construction hereof.

 

SECTION 18.                     Permitted Free Writing Prospectuses.  The
Company represents, warrants and agrees that, unless it obtains the prior
consent of the Placement Agent, and the Placement Agent represents, warrants and
agrees that, unless it obtains the prior consent of the Company, it has not made
and will not make any offer relating to the Securities that would constitute an
Issuer Free Writing Prospectus, or that would otherwise constitute a “free
writing prospectus,” as defined in Rule 405 under the Securities Act, required
to be filed with the Commission.  Any such free writing prospectus consented to
by the Placement Agent or by the Company, as the case may be, is hereinafter
referred to as a “Permitted Free Writing Prospectus.”  The Company represents
and warrants that it has treated and agrees that it will treat each Permitted
Free Writing Prospectus as an “issuer free writing prospectus,” as defined in
Rule 433 under the Securities Act, and has complied and will comply with the
requirements of Rule 433 under the Securities Act applicable to any Permitted
Free Writing Prospectus, including timely filing with the Commission where
required, legending and record keeping.  For the purposes of clarity, the
parties hereto agree that all free writing prospectuses, if any, listed in
Exhibit H hereto are Permitted Free Writing Prospectuses.

 

SECTION 19.                     Absence of Fiduciary Relationship.  Each of the
Company and the Operating Partnership acknowledge and agree that:

 

(a)                                 The Placement Agent is acting solely as
agent and/or principal in connection with the public offering of the Securities
and in connection with each transaction contemplated by this Agreement and the
process leading to such transactions, and no fiduciary or advisory relationship
between the Company, the Operating Partnership or any of their respective
affiliates, stockholders (or other equity holders), creditors or employees or
any other party, on the one hand, and the Placement Agent, on the other hand,
has been or will be created in respect of any of the transactions contemplated
by this

 

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Agreement, irrespective of whether or not the Placement Agent has advised or is
advising the Company, or the Operating Partnership on other matters, and the
Placement Agent has no obligation to the Company or the Operating Partnership
with respect to the transactions contemplated by this Agreement, except the
obligations expressly set forth in this Agreement;

 

(b)                                 the public offering price of the Securities
was not established by the Placement Agent; it is capable of evaluating and
understanding, and understands and accepts, the terms, risks and conditions of
the transactions contemplated by this Agreement;

 

(c)                                  the Placement Agent has not provided any
legal, accounting, regulatory or tax advice with respect to the transactions
contemplated by this Agreement and it has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate;

 

(d)                                 it is aware that the Placement Agent and its
respective affiliates are engaged in a broad range of transactions which may
involve interests that differ from those of the Company and the Operating
Partnership and the Placement Agent has no obligation to disclose such interests
and transactions to the Company or the Operating Partnership by virtue of any
fiduciary, advisory or agency relationship or otherwise; and

 

(e)                                  it waives, to the fullest extent permitted
by law, any claims it may have against the Placement Agent for breach of
fiduciary duty or alleged breach of fiduciary duty and agrees that the Placement
Agent shall not have any liability (whether direct or indirect, in contract,
tort or otherwise) to it in respect of such a fiduciary duty claim or to any
person asserting a fiduciary duty claim on its behalf or in right of it or the
Company, the Operating Partnership, or employees or creditors of the Company or
the Operating Partnership.

 

[Signature Page Follows.]

 

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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement by and
among the Placement Agent, the Company and the Operating Partnership in
accordance with its terms.

 

 

 

Very truly yours,

 

 

 

 

 

 

ARBOR REALTY TRUST, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Paul Elenio

 

 

Name:

Paul Elenio

 

 

Title:

CFO

 

 

 

 

 

 

 

 

 

 

ARBOR REALTY LIMITED PARTNERSHIP

 

 

 

 

 

 

By:

Arbor Realty GPOP, Inc., its

 

 

 

General Partner

 

 

 

 

 

 

By:

/s/ Paul Elenio

 

 

Name:

Paul Elenio

 

 

Title:

CFO

 

 

 

 

 

 

 

 

CONFIRMED AND ACCEPTED, as of the date first above written:

 

 

 

 

JMP SECURITIES LLC

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Kent Ledbetter

 

 

 

 

Authorized Signatory

 

 

 

 

Kent Ledbetter

 

 

 

 

Director of Investment Banking

 

 

 

 

Signature Page to Equity Distribution Agreement

 

--------------------------------------------------------------------------------

 

SCHEDULE I

Significant Subsidiaries of the Company

 

Name

 

Jurisdiction of
Organization

 

Type Of Entity

 

 

 

 

 

SIGNIFICANT SUBSIDIARIES

 

 

 

 

Arbor Realty GPOP, Inc.

 

Delaware

 

Corporation

Arbor Realty Limited Partnership

 

Delaware

 

Limited Partnership (general partner is Arbor Realty GPOP, Inc.)

Arbor Realty SR, Inc.

 

Maryland

 

Corporation

Arbor Realty Funding LLC

 

Delaware

 

Limited Liability Company

Arbor Realty Member LLC

 

Delaware

 

Limited Liability Company

Arbor Realty Mortgage Securities Series 2004-1, Ltd.

 

Cayman Islands

 

Exempted Limited Liability Company

Arbor Realty Mortgage Securities Series 2005-1 Ltd.

 

Cayman Islands

 

Exempted Limited Liability Company

Arbor Realty Mortgage Securities Series 2006-1, Ltd.

 

Cayman Islands

 

Exempted Limited Liability Company

Arbor Realty Collateralized Loan Obligation 2012-1 Ltd.

 

Cayman Islands

 

Exempted Limited Liability Company

Arbor Realty Collateralized Loan Obligation 2013-1 Ltd.

 

Cayman Islands

 

Exempted Limited Liability Company

ARSR Alpine, LLC

 

Delaware

 

Limited Liability Company (TRS)

 

Schedule I-1

--------------------------------------------------------------------------------

 

SCHEDULE II

 

Joint Ventures of the Company

 

Name

 

Jurisdiction of
Organization

 

Type of Entity

 

Percentage
Ownership

 

ATM 450 LLC

 

Delaware

 

Limited Liability Company

 

57.92

%

AC Flushing, LLC

 

New York

 

Limited Liability Company

 

50

%

Richland Terrace Apartments, LLC

 

South Carolina

 

Limited Liability Company

 

25

%

ABT ESI, LLC

 

Delaware

 

Limited Liability Company

 

23.75

%

420 Fifth Associates, LLC

 

Delaware

 

Limited Liability Company

 

80

%

Legacy Equity Investments Group LLC

 

Delaware

 

Limited Liability Company

 

51.33

%

PE 25 LLC

 

Delaware

 

Limited Liability Company

 

43.44

%

AR Prime

 

Delaware

 

Limited Liability Company

 

66.67

%

JT Prime

 

Delaware

 

Limited Liability Company

 

33.37

%

WSC Investors, LLC

 

Delaware

 

Limited Liability Company

 

50

%

Lexford Pools 1/3 LLC

 

Delaware

 

Limited Liability Company

 

49

%

HHC II LLC

 

Delaware

 

Limited Liability Company

 

50

%

78 Bowery Realty LLC

 

Delaware

 

Limited Liability Company

 

50

%

 

Schedule II-1

--------------------------------------------------------------------------------

 

EXHIBIT A

 

FORM OF PLACEMENT NOTICE

 

JMP Securities LLC

600 Montgomery Street, Suite 1100

San Francisco, California 94111

 

Subject:  Equity Distribution—Placement Notice

 

Gentlemen:

 

Pursuant to the terms and subject to the conditions contained in the Equity
Distribution Agreement among Arbor Realty Trust, Inc., a Maryland corporation
(the “Company”), Arbor Realty Limited Partnership, a Delaware limited
partnership (the “Operating Partnership”) and Arbor Commercial Mortgage, LLC, a
New York limited liability company and JMP Securities LLC (the “Placement
Agent”) dated February 13, 2014 (the “Agreement”), I hereby request on behalf of
the Company that the Placement Agent sell up to [·] shares of the Company’s
common stock, par value $0.01 per share, at a minimum market price of $[·] per
share.

 

[ADDITIONAL SALES PARAMETERS MAY BE ADDED, SUCH AS THE MAXIMUM AGGREGATE
OFFERING PRICE, THE TIME PERIOD IN WHICH SALES ARE REQUESTED TO BE MADE,
SPECIFIC DATES THE SHARES MAY NOT BE SOLD ON, THE MANNER IN WHICH SALES ARE TO
BE MADE BY THE PLACEMENT AGENT, AND/OR THE CAPACITY IN WHICH THE PLACEMENT AGENT
MAY ACT IN SELLING SHARES (AS PRINCIPAL, AGENT, OR BOTH)]

 

A-1

--------------------------------------------------------------------------------

 

EXHIBIT B

 

AUTHORIZED INDIVIDUALS FOR PLACEMENT NOTICES AND ACCEPTANCES

 

[INTENTIONALLY OMITTED]

 

B-1

--------------------------------------------------------------------------------

 

EXHIBIT C

 

COMPENSATION

 

The Placement Agent shall be paid compensation which will not exceed, but may be
lower than, 2.0% of the gross proceeds from the sale of Securities pursuant to
the terms of this Agreement.

 

C-1

--------------------------------------------------------------------------------

 

EXHIBIT D

 

FORM OF OPINION OF COMPANY MARYLAND COUNSEL

 

[INTENTIONALLY OMITTED]

 

D-1

--------------------------------------------------------------------------------

 

EXHIBIT E-1

 

FORM OF OPINION OF COMPANY SPECIAL COUNSEL

 

[INTENTIONALLY OMITTED]

 

E-2-1

--------------------------------------------------------------------------------

 

EXHIBIT F

 

FORM OF OPINION OF ALLEN & OVERY LLP

 

[INTENTIONALLY OMITTED]

 

F-1

--------------------------------------------------------------------------------

 

EXHIBIT G

 

OFFICERS’ CERTIFICATE

 

The undersigned                            and                              are
the [CFO/Treasurer] and [General Counsel/Secretary], respectively, of Arbor
Realty Trust, Inc., a Maryland corporation (the “Company”).  The Company is the
sole general partner of Arbor Realty Limited Partnership, a Delaware limited
partnership (the “Operating Partnership”), and as such, each of the undersigned
is authorized to execute and deliver this Certificate in the name of and on
behalf of the Company, in its own capacity, and as the general partner of the
Operating Partnership.  The undersigned hereby execute this Certificate in
connection with the closing held as of the date hereof pursuant to the terms of
that certain Equity Distribution Agreement, dated February 13, 2014 (the “Equity
Distribution Agreement”), among the Company, the Operating Partnership and JMP
Securities LLC.  Capitalized terms used herein without definition shall have the
meanings given to such terms in the Equity Distribution Agreement.

 

The undersigned each hereby further certifies, in their respective capacities as
officers of the Company, in its own capacity, and as the general partner of the
Operating Partnership that:

 

1.              The representations and warranties of the Company and the
Operating Partnership in the Equity Distribution Agreement are true and correct,
as if made on and as of the date hereof, and the Company and the Operating
Partnership have complied with all of their respective obligations thereunder
and satisfied all of the conditions on their part to be performed or satisfied
at or prior to the date hereof;

 

2.              No stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto has been issued and no
proceedings for that purpose have been instituted or are pending or threatened
under the Securities Act of 1933, as amended;

 

3.              Subsequent to the respective dates as of which information is
given in the Registration Statement or the Prospectus, there has not been
(A) any Material Adverse Change, (B) any transaction that is material to the
Company and its subsidiaries taken as a whole, (C) any obligation, direct or
contingent, that is material to the Company and its subsidiaries, taken as a
whole, incurred by the Company or the Subsidiaries, (D) any change in the
capital stock or outstanding indebtedness of the Company or any Subsidiary that
is material to the Company and its subsidiaries, taken as a whole, or (E) any
loss or damage (whether or not insured) to the Properties which has been
sustained or will have been sustained which could reasonably be expected to have
a Material Adverse Effect; and

 

4.              Each of Skadden, Arps, Slate, Meagher & Flom LLP and Hunton &
Williams LLP is entitled to rely on this Officers’ Certificate in connection
with the opinion that each firm is rendering pursuant to the Equity Distribution
Agreement.

 

[Signature Page Follows.]

 

G-1

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the undersigned have signed their names on this             
day of                                , 20    .

 

 

ARBOR REALTY TRUST, INC.

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

ARBOR REALTY LIMITED PARTNERSHIP

 

 

 

 

By:

Arbor Realty GPOP, Inc., its

 

 

General Partner

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

G-2

--------------------------------------------------------------------------------

 

EXHIBIT H

 

ISSUER FREE WRITING PROSPECTUSES

 

None.

 

H-1

--------------------------------------------------------------------------------