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

Exhibit 10.1
 
PURCHASE AGREEMENT
 
This Purchase Agreement (this “Agreement”), dated as of October 25, 2012, is by
and among UMH Properties, Inc., a Maryland corporation (the “Company”), each
Purchaser listed under the heading “Direct Purchasers” on Schedule A (each, a
“Direct Purchaser”), each Investment Adviser listed under the heading
“Investment Advisers” on the signature pages hereto (each, an “Investment
Adviser”) who is entering into this Agreement on behalf of itself (as to
paragraph 4 of this Agreement) and those Purchasers which are a fund or
individual or other investment advisory client of such Investment Adviser listed
under its respective name on Schedule B (each, a “Client”), and each
Broker-Dealer listed on Schedule C (each, a “Broker-Dealer”) which is entering
into this Agreement on behalf of itself (as to paragraph 5 of this Agreement)
and those Purchasers which are customers for which it has power of attorney to
sign listed under its respective name on Schedule C (each, a “Customer”).  Each
of the Customers, Direct Purchasers and Clients are referred to herein as
individually, a “Purchaser” and collectively, the “Purchasers”.
 
WHEREAS, the Purchasers desire to purchase from the Company (or their Investment
Advisers and Broker-Dealers desire to purchase on their behalf from the
Company), and the Company desires to issue and sell to the Purchasers up to an
aggregate of 1,250,000 shares (such number of shares actually sold pursuant to
this Agreement, the “Preferred Shares”) of the Company’s 8.25% Series A
Cumulative Redeemable Preferred Stock, par value $0.10 per share, having a
liquidation preference equivalent to $25.00 per share (the “Series A Preferred
Stock”), with the number of Preferred Shares acquired by each Purchaser set
forth opposite the name of such Purchaser on Schedule A, Schedule B or Schedule
C, as the case may be.
 
NOW, THEREFORE, in consideration of the mutual promises herein contained, the
parties hereto agree as follows:
 
1.           Purchase and Sale.  Subject to the terms and conditions hereof, the
Investment Advisers and the Broker-Dealers (on behalf of Purchasers which are
Clients and Customers, respectively) and the other Purchasers hereby severally
and not jointly agree to purchase from the Company, and the Company agrees to
issue and sell to the several Purchasers, the number of Preferred Shares set
forth next to such Purchaser’s name on Schedule A, Schedule B or Schedule C, as
the case may be, at a price per share of $25.50, including accrued dividends
from September 1, 2012, for an aggregate purchase amount in an amount as set
forth on Schedule D hereof (the “Purchase Price”) at the Closing (as defined
below).
 
2.           Representations and Warranties of Purchaser.  Each Purchaser
represents and warrants with respect to itself that:
 
(a)         Due Authorization.  Such Purchaser has full power and authority to
enter into this Agreement and is duly authorized to purchase the Preferred
Shares in the amount set forth opposite its name on Schedule A, Schedule B or
Schedule C, as the case may be.  This Agreement has been duly authorized by such
Purchaser and duly executed and delivered by or on behalf of such
Purchaser.  This Agreement constitutes a legal, valid and binding agreement of
such Purchaser, enforceable against such Purchaser in accordance with its terms
except as may be limited by (i) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights or remedies of creditors or (ii) the effect of general principles of
equity, whether enforcement is considered in a proceeding in equity or at law
and the discretion of the court before which any proceeding therefor may be
brought (the “Enforceability Exceptions”).
 
 
 

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

 
 
(b)         Prospectus and Prospectus Supplement. Such Purchaser has received a
copy of the Company’s Basic Prospectus dated January 20, 2011 and Prospectus
Supplement dated October 25, 2012 (each as defined below).
 
(c)         Independent Investment Decision. Such Purchaser has made its
investment decision independently and not as a result of a recommendation of the
Placement Agent.
 
(d)         Ownership of Excess Shares of Capital Stock.  As of the date hereof
and after giving effect to the transaction contemplated hereby, such Purchaser,
together with its subsidiaries and affiliates, does not own directly or
indirectly more than 9.8% in number of shares or value, whichever is more
restrictive, of the issued and outstanding capital stock of the
Company.  Purchaser expressly acknowledges that the provisions of the Company’s
Articles of Incorporation, as amended or supplemented (the “Charter”), contain
limitations on the Purchaser’s ownership of the Company’s capital stock, which,
among other things, prohibit the direct or indirect ownership by Purchaser
(together with its subsidiaries and affiliates) of more than 9.8% in number of
shares or value, whichever is more restrictive, of the Company’s outstanding
capital stock and, in the event the shares of capital stock acquired by
Purchaser pursuant to this Agreement or otherwise exceed such limits, give the
Company certain repurchase rights on the terms set forth in the Company’s
Charter and result in the conversion of certain shares of capital stock held by
the Purchaser into excess stock which will be held for the benefit of a
charitable beneficiary on the terms set forth in the Company’s Charter.
 
3.           Representations and Warranties of Company.  The Company represents
and warrants that:
 
(a)         The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the “Act”) and meets the requirements
pursuant to the standards for such Form as (i) are in effect on the date hereof
and (ii) were in effect immediately prior to October 21, 1992.  The Company’s
Registration Statement (as defined below) was declared effective by the SEC (as
defined below) and the Company has filed such post effective amendments thereto
as may be required under applicable law prior to the execution of this Agreement
and each such post-effective amendment became effective.  The SEC has not
issued, nor to the Company’s knowledge, has the SEC threatened to issue or
intends to issue, a stop order with respect to the Registration Statement, nor
has it otherwise suspended or withdrawn the effectiveness of the Registration
Statement or, to the Company’s knowledge, threatened to do so, either
temporarily or permanently, nor, to the Company’s knowledge, does it intend to
do so.  On the effective date, the Registration Statement complied in all
material respects with the requirements of the Act and the rules and regulations
promulgated under the Act (the “Regulations”); at the effective date the Basic
Prospectus (as defined below) complied, and at the Closing the Prospectus (as
defined below) will comply, in all material respects with the requirements of
the Act and the Regulations; each of the Basic Prospectus and the Prospectus; as
of its date and at the Closing Date did not, does 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;
provided, however, that the representations and warranties in this subsection
shall not apply to statements in or omissions from the Prospectus made in
reliance upon and in conformity with information furnished to the Company in
writing by or on behalf of any of the Purchasers, CSCA Capital Advisors, LLC, in
its capacity as placement agent (“Placement Agent”), any Investment Advisers or
Broker-Dealers, or any of their respective affiliates, expressly for use in the
Prospectus.  As used in this Agreement, the term “Registration Statement” means
the shelf registration statement on Form S-3 (File No. 333-171338) as declared
effective by the Securities and Exchange Commission (the “SEC”), including
exhibits, financial statements, schedules and documents incorporated by
reference therein.  The term “Basic Prospectus” means the prospectus included in
the Registration Statement, as amended, or as supplemented.  The term
“Prospectus Supplement” means the prospectus supplement specifically relating to
the Preferred Shares as to be filed with the SEC pursuant to Rule 424 under the
Act in connection with the sale of the Preferred Shares hereunder.  The term
“Prospectus” means the Basic Prospectus and the Prospectus Supplement taken
together.  The term “Preliminary Prospectus” means any preliminary form of
Prospectus Supplement used in connection with the marketing of the Preferred
Shares.  Any reference in this Agreement to the Registration Statement, the
Prospectus or any Preliminary Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein as of the date hereof or the
date of the Prospectus or any Preliminary Prospectus as the case may be, and any
reference herein to any amendment or supplement to the Registration Statement,
the Prospectus or any Preliminary Prospectus shall be deemed to refer to and
include any documents filed after the date of such documents and through the
date of such amendment or supplement under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and so incorporated by reference.
 
 
-2-

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

 
 
(b)         Since the date as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (i) there has
been no material adverse change or any development which could reasonably be
expected to give rise to a prospective material adverse change in or affecting
the condition, financial or otherwise, or in the earnings, business affairs or,
to the Company’s knowledge, business prospects of the Company and the
subsidiaries of the Company, if any (the “Subsidiaries”), considered as one
enterprise, whether or not arising in the ordinary course of business, (ii)
there have been no transactions entered into by the Company or any of its
Subsidiaries, other than those in the ordinary course of business, which are
material with respect to the Company and its Subsidiaries considered as one
enterprise, and (iii) other than regular quarterly dividends, there has been no
dividend or distribution of any kind declared, paid or made by the Company on
any class of its shares of equity securities.
 
(c)         The Company has been duly organized as a corporation and is validly
existing in good standing under the laws of the State of Maryland.  Each of the
Subsidiaries of the Company has been duly organized and is validly existing in
good standing under the laws of its jurisdiction of organization.  Each of the
Company and its Subsidiaries has the required power and authority to own and
lease its properties and to conduct its business as described in the Prospectus;
and each of the Company and its Subsidiaries is duly qualified to transact
business 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 to so qualify would not have a material adverse effect
on the condition, financial or otherwise, or the earnings, business affairs or,
to the Company’s knowledge, business prospects of the Company and its
Subsidiaries considered as one enterprise.
 
 
-3-

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

 
 
(d)         As of the date hereof, the authorized capital stock of the Company
consists of 35,000,000 shares of Common Stock, par value $0.10 per share (the
“Common Stock”), 3,000,000 shares of excess stock, par value $.10 per share (the
“Excess Stock”), and 2,488,800 shares of Series A Preferred Stock (collectively,
the “Capital Stock”), of which 16,781,876 shares of Common Stock, no shares of
excess stock and 2,413,800 shares of the Series A Preferred Stock are issued and
outstanding and 18,218,124 shares of Common Stock are authorized and unissued
(without giving effect to any Preferred Shares issued or to be issued as
contemplated by this Agreement or any reclassification of any shares of Common
Stock into Shares of Series A Preferred Stock in connection with the transaction
contemplated by this Agreement).  As of the Closing Date (after giving effect to
the filing and effectiveness of the Charter Amendment and the Articles
Supplementary as contemplated by Section 8 hereof), the authorized capital stock
of the Company will consist of 42,000,000 shares of Common Stock, 3,000,000
shares of Excess Stock and 3,663,800 shares of Series A Preferred Stock, of
which, immediately prior to the Closing, 16,781,876 shares of Common Stock, no
shares of excess stock and 2,413,800 shares of the Series A Preferred Stock will
be issued and outstanding and 25,218,124 shares of Common Stock will be
authorized and unissued.  The issued and outstanding shares of the Company have
been duly authorized and validly issued and are fully paid and non-assessable;
the Preferred Shares have been duly authorized, and when issued in accordance
with the terms of the Charter (after giving effect to the filing and
effectiveness of the Charter Amendment and the Articles Supplementary as
contemplated by Section 8 hereof) and delivered as contemplated hereby, will be
validly issued, fully paid and non-assessable and will be listed, subject to
notice of issuance, on the New York Stock Exchange, effective as of the Closing;
the Common Stock, the excess stock and the Series A Preferred Stock of the
Company conform to all statements relating thereto contained in the Prospectus;
and the issuance of the Securities is not subject to preemptive or other similar
rights.
 
(e)         Neither the Company nor any of its Subsidiaries is in violation of
its organizational documents or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any material
contract, indenture, mortgage, loan agreement, note, lease or other instrument
or agreement to which the Company or any of its Subsidiaries is a party or by
which it or any of them are bound, or to which any of the property or assets of
the Company or any of its Subsidiaries is subject, except where such violation
or default would not have a material adverse effect on the condition, financial
or otherwise, or the earnings, business affairs or, to the Company’s knowledge,
business prospects of the Company and its Subsidiaries considered as one
enterprise; and the execution, delivery and performance of this Agreement, and
the issuance and delivery of the Preferred Shares and the consummation of the
transactions contemplated herein have been duly authorized by all necessary
action and will not conflict with or constitute a material breach of, or
material default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any material property or assets of the Company or any
of its Subsidiaries pursuant to, any material contract, indenture, mortgage,
loan agreement, note, lease or other instrument or agreement to which the
Company or any of its Subsidiaries is a party or by which it or any of them are
bound, or to which any of the property or assets of the Company or any of its
Subsidiaries is subject, nor will any such action result in any violation of the
provisions of the Charter, by-laws or other organizational documents of the
Company or any of its Subsidiaries or any law, administrative regulation or
administrative or court decree applicable to the Company.
 
 
-4-

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

 
 
(f)          The Company is organized in conformity with the requirements for
qualification and, as of the date hereof and as of the Closing, operates in a
manner that qualifies it as a “real estate investment trust” under the Internal
Revenue Code of 1986, as amended, and the rules and regulations thereunder and
will be so qualified after giving effect to the sale of the Preferred Shares.
 
(g)         The Company is not required to be registered under the Investment
Company Act of 1940, as amended.
 
(h)         No legal or governmental proceedings are pending to which the
Company or any of its Subsidiaries is a party or to which the property of the
Company or any of its Subsidiaries is subject that are required to be described
in the Registration Statement or the Prospectus and are not described therein,
and to the knowledge of the Company, no such proceedings have been threatened
against the Company or any of its Subsidiaries or with respect to any of their
respective properties that are required to be described in the Registration
Statement or the Prospectus and are not described therein.
 
(i)          No authorization, approval or consent of or filing with any court
or United States federal or state governmental authority or agency is necessary
in connection with the sale of the Preferred Shares hereunder except for the
filing and effectiveness of the Charter Amendment and the Articles Supplementary
as contemplated by Section 8 hereof and except such as may be required under the
Act or the Regulations or state securities laws or real estate syndication laws.
 
(j)          The Company and its Subsidiaries possess such certificates,
authorities or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now conducted by
them, except where the failure to possess such certificates, authority or
permits would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or, to the Company’s knowledge,
business prospects of the Company and its Subsidiaries considered as one
enterprise.  Neither the Company nor any of its Subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would materially and
adversely affect the condition, financial or otherwise, or the earnings,
business affairs or, to the Company’s knowledge, business prospects of the
Company and its Subsidiaries considered as one enterprise, nor, to the knowledge
of the Company, are any such proceedings threatened or contemplated.
 
 
-5-

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

 
 
(k)         The Company has full power and authority to enter into this
Agreement, and this Agreement has been duly authorized, executed and delivered
by the Company and constitutes a legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms except as
may be limited by the Enforceability Exceptions.
 
(l)          As of the dates set forth therein or incorporated by reference, the
Company had good and marketable title to all of the properties and assets
reflected in the audited financial statements contained in the Prospectus,
subject to no lien, mortgage, pledge or encumbrance of any kind except (i) those
reflected in such financial statements, (ii) as are otherwise described in the
Prospectus, (iii) as do not materially adversely affect the value of such
property or interests or interfere with the use made or proposed to be made of
such property or interests by the Company and each of its Subsidiaries or
(iv) those which constitute customary provisions of mortgage loans secured by
the Company’s properties creating obligations of the Company with respect to
proceeds of the properties, environmental liabilities and other customary
protections for the mortgagees.
 
(m)        Neither the issuance, sale and delivery of the Preferred Shares nor
the application of the proceeds thereof by the Company as described in the
Prospectus will cause the Company to violate or be in violation of Regulation T,
U or X of the Board of Governors of the Federal Reserve System or any other
regulation of such Board of Governors.
 
(n)         The statements set forth in the Basic Prospectus under the caption
“Description of Preferred Stock” and the statements set forth in the Prospectus
Supplement under the caption “Description of Series A Preferred Stock,” in so
far as such statements purport to summarize provisions of laws or documents
referred to therein, are correct in all material respects and fairly present the
information required to be presented therein.
 
4.           Representation and Warranties of the Investment Advisers.  To
induce the Company to enter into this Agreement, each of the Investment Advisers
hereby represents and warrants that:
 
(a)         It is an investment adviser duly registered with the SEC under the
Investment Advisers Act of 1940, as amended.
 
(b)         It has been duly authorized to act as investment adviser on behalf
of each Client on whose behalf it is signing this Agreement (as identified under
the name of such Investment Adviser on Schedule B hereto) and has the sole
authority to make the investment decision to purchase Capital Shares hereunder
on behalf of such Client.  An investment in the Series A Preferred Stock is a
suitable investment for each Client.
 
(c)         It has the power and authority to enter into and execute this
Agreement on behalf of each of the Clients listed under its name on Schedule B
hereto.
 
 
-6-

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

 
 
(d)         This Agreement has been duly authorized, executed and delivered by
it and, assuming it has been duly authorized, executed and delivered by the
Company, constitutes a legal, valid and binding agreement of such Investment
Adviser, enforceable against it in accordance with its terms except as may be
limited by the Enforceability Exceptions.
 
(e)         It has received a copy of the Company’s Basic Prospectus dated
January 20, 2011 and Prospectus Supplement dated October 25, 2012.
 
5.           Representation and Warranties of the Broker-Dealers.  To induce the
Company to enter into this Agreement, each Broker-Dealer represents and warrants
that:
 
(a)         It is duly registered and in good standing as a broker-dealer under
the Exchange Act and is licensed or otherwise qualified to do business as a
broker-dealer with the National Association of Securities Dealers, Inc. and in
all states in which it will offer any Preferred Shares pursuant to this
Agreement.
 
(b)         Assuming the Prospectus complies with all relevant provisions of the
Act in connection with the offer and sales of Series A Preferred Stock, each
Broker-Dealer will conduct all offers and sales of Series A Preferred Stock in
compliance with the Act, the Exchange Act and all rules and regulations
promulgated thereunder.
 
(c)         It has delivered a copy of the Prospectus to each Purchaser set
forth under its name on Schedule C hereto.
 
(d)         It has been granted a duly authorized power-of-attorney to execute
and deliver this Agreement on behalf of each Customer on whose behalf it is
signing this Agreement (as identified under the name of such Broker-Dealer on
Schedule C hereto) and such power has not been revoked.
 
(e)         This Agreement has been duly authorized, executed and delivered by
it and, assuming it has been duly authorized, executed and delivered by the
Company, constitutes a legal, valid and binding agreement of such Broker-Dealer,
enforceable against it in accordance with its terms except as may be limited by
the Enforceability Exceptions.
 
6.           Conditions to Obligations of the Parties.
 
(a)         The Purchasers’ several obligations to purchase the Preferred Shares
shall be subject to the following conditions having been met:
 
(i)          the representations and warranties set forth in Section 3 of this
Agreement shall be true and correct with the same force and effect as though
expressly made at and as of the Closing,
 
(ii)         the Placement Agent shall have received an opinion from Venable
LLP, Maryland counsel to the Company, dated as of the date of the Closing,
addressed to the Placement Agent and the Purchasers substantially in the form
attached hereto as Exhibit A,
 
(iii)        the Placement Agent shall have received an opinion from Stroock &
Stroock & Lavan LLP, special securities counsel to the Company, dated as of the
date of the Closing, addressed to the Placement Agent and the Purchasers
substantially in the form attached hereto as Exhibit B,
 
 
-7-

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

 
 
(iv)        the Placement Agent shall have received a comfort letter from PKF
O’Connor Davies, a division of O’Connor Davies, LLP (formerly PKF, LLP), dated
as of the Closing, substantially in the form attached hereto as Exhibit C,
 
(v)        The Charter Amendment and the Articles Supplementary contemplated by
Section 8 hereof shall have been filed and become effective, and
 
(vi)       on the Closing Date, the Company shall have delivered to the
Placement Agent a certificate of the Chief Executive Officer and Chief Financial
Officer of the Company, dated as of the Closing Date, setting forth that each of
the representations and warranties contained in this Agreement shall be true on
and as of the Closing Date as if made as of the Closing Date and each of the
conditions and covenants contained herein shall have been complied with to the
extent compliance is required prior to Closing, and shall have delivered such
other customary certificates as the Placement Agent shall have reasonably
requested.
 
(b)        The Company’s obligation to issue and sell the Preferred Shares shall
be subject to the following conditions having been met:
 
(i)          the representations and warranties set forth in Sections 2, 4 and 5
of this Agreement shall be true and correct with the same force and effect as
though expressly made at and as of the Closing and
 
(ii)         the Settlement Agent (as defined below) shall have received payment
in full for the Purchase Price for the Preferred Shares by federal wire of
immediately available funds, not less than the aggregate amount of $25,000 prior
to the payment of fees and expenses.
 
7.           Closing.  Provided that the conditions set forth in Section 6
hereto and the last sentence of this Section 7 have been met or waived at such
time, the transactions contemplated hereby shall be consummated on October 30,
2012, or at such other time and date as the parties hereto shall agree (each
such time and date of payment and delivery being herein called the
“Closing”).  At the Closing, settlement shall occur through Weeden & Co. LP (the
“Settlement Agent”), or an affiliate thereof, on a delivery versus payment basis
through the DTC ID System.
 
8.           Covenants.  The Company hereby covenants and agrees that (i)
subject to all Purchasers consummating the purchase of the Preferred Shares at
the Closing, the Company will use the proceeds of the offering contemplated
hereby as set forth under the caption “Use of Proceeds” in the Prospectus
Supplement and (ii) prior to the Closing, the Company will file an amendment to
the Charter to increase the Company’s authorized capital stock by 8,175,000
shares of Common Stock (the “Charter Amendment”) and articles supplementary to
reflect the reclassification and designation of 1,175,000 shares of Common Stock
into shares of Series A Preferred Stock (the “Articles Supplementary”) with the
State Department of Assessments and Taxation of Maryland, and will cause the
Charter Amendment and the Articles Supplementary to become effective prior to
the Closing.
 
 
-8-

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

 
 
9.           Termination.  This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned, by written notice promptly
given to the other parties hereto, at any time prior to the Closing by the
Company, on the one hand, or if the Closing shall not have occurred on or prior
to November 7, 2012 by any Purchaser on the other; provided that the Company or
such Purchaser, as the case may be, shall not be entitled to terminate this
Agreement pursuant to this Section 9 if the failure of Closing to occur on or
prior to such dates results primarily from such party itself having materially
breached any representation, warranty or covenant contained in this Agreement.
 
10.         Notices.  Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing and, if to the Purchasers,
shall be sufficient in all respects if delivered or sent by facsimile to
212.446.9181 or by certified mail to CSCA Capital Advisors, LLC, 280 Park
Avenue, New York, NY, 10017, Attention: Bradley Razook, and, if to the Company,
shall be sufficient in all respects if delivered or sent to the Company by
facsimile to 732.577.9980 or by certified mail to the Company at 3499 Route 9
North, Suite 3-C, Freehold, New Jersey 07728, Attention:  Anna Chew, Chief
Financial Officer.
 
11.         Governing Law.  This Agreement shall be construed in accordance with
and governed by the substantive laws of the State of New York, without regard to
conflict of laws principles.
 
12.         Entire Agreement.  This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and may be
amended only in a writing that is executed by each of the parties hereto.
 
13.         Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be the same Agreement.  Executed counterparts may be
delivered by facsimile.
 
14.         Construction.  When used herein, the phrase “to the knowledge of”
the Company or “known to” the Company or any similar phrase means the actual
knowledge of the Chief Executive Officer or the Chief Financial Officer of the
Company and includes the knowledge that such officers would have obtained of the
matter represented after reasonable due and diligent inquiry of those employees
of the Company whom such officers reasonably believe would have actual knowledge
of the matters represented.
 
15.         Free Writing Prospectus Legend.  The Company has filed a
registration statement (including a prospectus) with the SEC for the offering to
which this communication relates. Before you invest, you should read the
prospectus in that registration statement and other documents the Company has
filed with the SEC for more complete information about the Company and this
offering. You may get these documents for free by visiting EDGAR on the SEC Web
site at www.sec.gov. Alternatively, the Company or CSCA Capital Advisors, LLC
will arrange to send you the prospectus if you request it by calling
212.446.9177.
 
 
-9-

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

 
 
IN WITNESS WHEREOF, the parties hereto have caused this Purchase Agreement to be
executed and delivered as of the date first above written.

 
UMH PROPERTIES, INC.
             
By:
     
Name:
   
Title:

 
 
 

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

 
 

 
DIRECT PURCHASERS
         
[                            ]
                 
By:
     
Name:
[                     ]
   
Title:
[                     ]

 
 

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

 
 

 
INVESTMENT ADVISERS
         
[                                ] on behalf of itself (solely with respect to
Section 4) and each Client set forth under its name on Schedule B
                 
By:
     
Name:
[                     ]
   
Title:
[                     ]

 
 
 

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

 
 

 
CUSTOMERS
           
Each of the Several persons or entities listed under the heading “Account Name”
on Attachment [   ] to Schedule C hereto
         
By:
[                    ], as agent and attorney-in-fact
                 
By:
     
Name:
     
Title:
                   
[                  ] on behalf of itself and solely with respect to Section 5
                 
By:
     
Name:
     
Title:
 

 
 
 

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

 

SCHEDULE A

NAME OF DIRECT PURCHASERS
NUMBER OF SHARES
   
[                       ]
[                       ]

 
 
Schedule A - Page 1

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

 

SCHEDULE B

NAME OF INVESTMENT ADVISER
NUMBER OF SHARES
[                      ]
     
CLIENTS
     
[                         ]
 

 
Schedule B - Page 1

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

 
 
SCHEDULE C

NAME OF BROKER DEALER:
NUMBER OF SHARES
   
[                         ]
     
Customers for whom it is signing this Agreement as agent and attorney-in-fact:
   
The amount set forth opposite such name on Attachment [  ] to Schedule C hereto
under the heading “Amount” (in the aggregate [              ])
Each of the several persons or entities set forth under the heading “Account
Name” on Attachment [  ] to Schedule C hereto
 

 
Schedule C - Page 1

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

 

SCHEDULE D

Aggregate Purchase Amount

[                   ]
$[                     ]

 
 
Schedule D - Page 1

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

 
 
EXHIBIT A
 
Opinion of Venable LLP
 
1.           The Company is a corporation duly incorporated and validly existing
under and by virtue of the laws of the State of Maryland and is in good standing
with the State Department of Assessments and Taxation of Maryland (the “SDAT”).
 
2.           The Company has the requisite corporate power to own or lease its
properties and to conduct its business as described in the Basic Prospectus
under the caption “Monmouth Real Estate Investment Corporation”, to enter into
the Purchase Agreement and the Placement Agent Agreement (collectively, the
“Agreements”) and to carry out all the terms and provisions of the Agreements to
be carried out by it.
 
3.           As of [INSERT DATE PRIOR TO FILING OF ARTICLES SUPPLEMENTARY],
2012, the number of shares of authorized stock of the Company was as set forth
in the Preliminary Prospectus under the heading “Description of Series A
Preferred Stock” and, as of such date, consisted of 35,000,000 shares of common
stock, par value $0.10 per share (the “Common Stock”), 3,000,000 shares of
excess stock, par value $0.10 per share (the “Excess Stock”), and 2,488,800
shares of 8.25% Series A Cumulative Redeemable Preferred Stock, par value $0.10
per share (the “Series A Preferred Stock”).  As of the date hereof, the number
of shares of authorized stock of the Company is as set forth in the Prospectus
Supplement under the heading “Description of Series A Preferred Stock” and
consists of 42,000,000 shares of Common Stock, 3,000,000 shares of Excess Stock
and 3,663,800 shares of Series A Preferred Stock.
 
4.           The issuance and sale of the Preferred Shares pursuant to the
Purchase Agreement have been duly authorized by all necessary corporate action
of the Company and, when issued and delivered by the Company against payment of
the agreed consideration therefor in accordance with the provisions of the
Purchase Agreement, the Preferred Shares will be validly issued, fully paid and
nonassessable.
 
5.           No holders of outstanding shares of stock of the Company are
entitled to any preemptive or other similar rights under the Maryland General
Corporation Law (the “MGCL”) or under the Charter or Bylaws of the Company to
subscribe for or purchase any of the Preferred Shares.
 
6.           The execution and delivery of the Agreements have been duly
authorized by all necessary corporate action on the part of the Company.
 
7.           The execution, delivery and performance of the Agreements and the
issuance and delivery of the Preferred Shares in accordance with the Agreements
will not conflict with or result in a violation of the provisions of the Charter
or Bylaws of the Company, the laws of the State of Maryland, or any decree,
judgment or order of any Maryland governmental authority applicable to the
Company or any Maryland Subsidiaries.
 
8.           The Preferred Shares conform in all material respects to the
descriptions of the Series A Preferred Stock of the Company set forth under the
subheadings “General” and “Restrictions on Ownership and Transfer” in the
section of the Basic Prospectus entitled “Description of Capital Stock” and in
the section of the Prospectus Supplement entitled “Description of Series A
Preferred Stock”.
 
 
A-1

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

 
 
9.           The authorized stock of the Company conforms in all materials
respects to the description thereof set forth under the heading “Description of
Capital Stock” in the Basic Prospectus and in the section of the Prospectus
Supplement entitled “Description of Series A Preferred Stock.”
 
10.         The statements in the section of the Basic Prospectus entitled “Risk
Factors” under the heading “We are subject to restrictions that may impede our
ability to effect a change in control”, insofar as such statements purport to
summarize provisions of the Charter or Bylaws of the Company or the MGCL, are
accurate in all material respects.
 
11.         No authorization, approval or consent of any court or governmental
authority of the State of Maryland is necessary in connection with the
consummation of the transactions contemplated by the Agreements, except those,
if any, which have already been obtained or rendered (and except as may be
required under the securities laws of the State of Maryland, as to which we
express no opinion).
 
12.         The Articles Supplementary have been accepted for record by the SDAT
and have become effective in accordance with the MGCL.
 
 
A-2

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

 
 
EXHIBIT B

 
Opinion of Stroock & Stroock & Lavan LLP
 
1.           The Registration Statement has been declared effective under the
Act, and to our knowledge, (a) no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued, and (b) no
proceedings for that purpose have been instituted or are pending or threatened
by the SEC.  The Prospectus has been filed with the SEC.
 
2.           The Registration Statement and the Prospectus (other than the
financial statements and other financial data contained therein, as to which we
express no opinion) comply as to form in all material respects with the
applicable requirements of the Act and the Regulations.
 
3.           The descriptions in the Registration Statement and the Prospectus
of statutes, legal and governmental proceedings, contracts and other legal
documents, insofar as they address legal matters, fairly summarize in all
material respects the information about legal matters required to be disclosed
by the applicable Items of the Registration Statement.
 
4.           Neither the Company nor any of its Subsidiaries is an “investment
company” or entity controlled by an “investment company” within the meaning of
the Act.
 
5.           The execution, delivery and performance of the Placement Agent
Agreement and the Purchase Agreement by the Company, and the issuance and
delivery of the Preferred Shares, will not conflict with or constitute a
material breach of any Material Contract.  For the purposes of this opinion,
“Material Contract” means any agreement or instrument which the Company filed
with the SEC as an exhibit to the Registration Statement.
 
6.           To our knowledge, no authorization, approval or consent of any
court or United States federal or state governmental authority or agency having
jurisdiction over the Company and its Subsidiaries and which govern transactions
such as the Transaction, is necessary in connection with the sale of the
Preferred Shares, except such as may be required under the Act or the
Regulations or under state securities laws and real estate syndication laws as
to which we express no opinion.
 
7.           To our knowledge, no legal or governmental proceedings are pending
to which the Company or any of its Subsidiaries is a party or to which the
property of the Company or any of its Subsidiaries is subject that are required
to be described in the Registration Statement or the Prospectus and are not
described therein, and to our knowledge no such proceedings have been threatened
against the Company or any of its Subsidiaries or with respect to any of their
respective properties that are required to be described in the Registration
Statement or the Prospectus and are not described therein.
 
8.           For its taxable years ended December 31, 2007 through December 31,
2011, the Company has continuously been organized and has operated in conformity
with the requirements for qualification as a “real estate investment trust”
under the Code.
 
 
B-1

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

 
 
9.           The Company’s current organization and method of operation will
permit it to continue to meet the requirements for taxation as a “real estate
investment trust” under the Code for its December 31, 2012 taxable year.
 
10.         The federal income tax discussion described in the Basic Prospectus
and the Prospectus Supplement under the captions “Material United States Federal
Income Tax Consequences” and “Federal Income Tax Considerations”, respectively,
to the extent such discussion constitutes matters of law, summaries of legal
matters or legal conclusions, fairly summarizes in all material respects the
federal income tax laws referred to therein.
 
In connection with our representation of the Company with respect to the
offering of the Preferred Shares, we have reviewed and relied upon certain
corporate records and documents, letters from counsel for the Company and
accountants, and oral and written statements of officers (specifically including
but not limited to the Secretary’s Certificate) and other representatives of the
Company and others as to the existence and consequence of certain factual and
other matters, and have participated in conferences with officers and other
representatives of the Company and representatives of the Placement Agent,
including counsel for the Placement Agent, during which conferences and
conversations the contents of the Registration Statement and the Prospectus and
any amendment or supplement thereto and related matters were discussed; and,
based upon such participation and review, and relying as to materiality in part
upon the factual statements of officers and other representatives of the Company
and representatives of the Placement Agent, nothing has come to our attention
that causes us to believe that the Prospectus (except for the financial
statements and related data and other financial or accounting data contained or
incorporated by reference therein or omitted therefrom, as to which we do not
comment), as of its date and the Closing Date, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
 
 
B-2

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

 
 
EXHIBIT C
 
Comfort Letter
 
__________, 2012

CSCA Capital Advisors, LLC
280 Park Avenue, 10th Floor
New York, NY 10017

Dear Sirs:

We have audited (i) the consolidated balance sheets of UMH Properties, Inc. (the
"Company") as of December 31, 2011 and 2010 and the consolidated statements of
income, comprehensive income (loss), shareholders' equity and cash flows, for
the each of the years ended December 31, 2011, 2010 and 2009, and the related
financial statement schedule, all included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2011, as amended by the Company’s
Annual Report on Form 10-K/A for the year ended December 31, 2011, filed on
March 16, 2012, which is incorporated by reference in the Registration Statement
(No. 333-171338) on Form S-3 filed by the Company under the Securities Act of
1933 as amended (the "Act"); our report with respect thereto is also
incorporated by reference in such Registration Statement in the form in which it
became effective, together with the Prospectus dated December 21, 2010, and the
Preliminary Prospectus Supplement dated October ___, 2012, collectively referred
to herein as the "Registration Statement".

Also, we have audited the effectiveness of the Company's internal controls over
financial reporting as of December 31, 2011, and our report thereon is
incorporated by reference in the Registration Statement.

In connection with the Registration Statement:

1.
We are an independent registered public accounting firm with respect to the
Company within the meaning of the Act and the applicable rules and regulations
adopted by the Securities and Exchange Commission (the “SEC”) and the Public
Company Accounting Oversight Board (United States) (the “PCAOB”)

2.
In our opinion, the consolidated financial statements and financial statement
schedule audited by us and included in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2011, as amended by the Company’s Annual Report
on Form 10-K/A for the year ended December 31, 2011 filed on March 16, 2012, and
incorporated by reference in the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the Act and the
Securities Exchange Act of 1934 (the “Exchange Act”) and the related rules and
regulations adopted by the SEC.

 
C-1

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

 
 
3.
We have not audited any financial statements of the Company as of any date or
for any period subsequent to December 31, 2011; although we have conducted
audits for the years ended December 31, 2011, 2010 and 2009, the purpose, and
therefore the scope, of the audits was to enable us to express our opinion on
the consolidated financial statements as of December 31, 2011 and 2010, and for
each of the three years ended December 31, 2011, 2012 and 2009, but not on the
consolidated financial statements for any interim periods within and subsequent
to those years.  Therefore, we are unable to and do not express any opinion on
results of operations or cash flows for any interim periods within and
subsequent to these years as of any date or for any period subsequent to
December 31, 2011.

4.
For purposes of this letter:

 
a.
We have read all minutes of meetings of the stockholders, the Board of
Directors, the Compensation Committee and Audit Committee of the Company as set
forth in the minute books from January 1, 2012 to [               ], 2012,
officials of the Company having advised us that the minutes of all such meetings
through that date were set forth therein.

 

 
b.
With respect to the three month periods ended March 31, 2012 and 2011 and the
three and six month periods ended June 30, 2012 and 2011 we have:

i.           Performed the procedures specified by the PCAOB for a review of
interim financial information as described in PCAOB Interim Standard AU 722,
Interim Financial Information on (i) the unaudited consolidated balance sheets
at March 31, 2012 and unaudited consolidated statements of operations and cash
flows for the three month periods ended March 31, 2012 and 2011 incorporated by
reference in the Registration Statement from the Company’s Quarterly Report on
Form 10-Q for the quarter ended March 31, 2012 and (ii) the unaudited
consolidated balance sheets at June 30, 2012 and unaudited consolidated
statements of operations for the three and six month periods ended June 30, 2012
and 2011 and cash flows for the six month period ended June 30, 2012 and 2011
incorporated by reference in the Registration Statement from the Company’s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2012.

ii.           Inquired of certain officials of the Company who have
responsibility for financial and accounting matters whether the unaudited
consolidated financial statements referred to in item b.(i) above comply as to
form in all material respects with the applicable accounting requirements of the
Act and Exchange Act and the related rules and regulations adopted by the SEC
and are stated on a basis substantially consistent with that of the audited
consolidated financial statements incorporated by reference in the Registration
Statement.

The foregoing procedures do not constitute an audit conducted in accordance with
the standards of the PCAOB. Also, they would not necessarily reveal matters of
significance with respect to the comments in the following paragraph.
Accordingly, we make no representations regarding the sufficiency of the
foregoing procedures for your purposes.
 
 
C-2

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

 
 
5.
Nothing came to our attention as a result of the foregoing procedures, however,
that caused us to believe that:

 
a.
Any material modifications should be made to the unaudited consolidated
financial statements described in item 4.b(i) above, incorporated by reference
in the Registration Statement, for them to be in conformity with accounting
principles generally accepted in the United States of America.

 
b.
The unaudited consolidated financial statements described in item 4.b.(i) above,
incorporated by reference in the Registration Statement, do not comply as to
form in all material respects with the applicable accounting requirements of the
Act and Exchange Act and the related rules and regulations adopted by the SEC.

6.
Company officials have advised us that no consolidated financial statements as
of any date or for any period subsequent to June 30, 2012, are available;
accordingly, the procedures carried out by us with respect to changes in
financial statement items after June 30, 2012 have, of necessity, been even more
limited.  We have inquired of certain officials of the Company who have
responsibility for financial and accounting matters whether (a) at
[                   ], 2012, there was any change in the capital stock, increase
in long-term debt or any decreases in consolidated shareholders’ equity of the
Company as compared with amounts shown on the June 30, 2012, unaudited
consolidated balance sheet incorporated by reference in the Registration
Statement or (b) for the period from July 1, 2012 to [                ], 2012
there were any decreases, as compared with the corresponding period in the
preceding year, in consolidated rental and sales revenue or in the total or
per-share amounts of net income.  On the basis of these inquiries and our
reading of the minutes as described in item 4, other than the activity, in the
normal course of business from the Dividend Reinvestment and Stock Purchase
Plan, the 2003 Stock Option and Stock Award Plan, as amended and restated,
nothing came to our attention that caused us to believe that there was any such
change, increase, or decrease, except in all instances for changes, increases,
or decreases that the Registration Statement discloses have occurred or may
occur.

7.
Our audits of the consolidated financial statements for the periods referred to
in the introductory paragraph of this letter comprised audit tests and
procedures deemed necessary for the purpose of expressing an opinion on such
financial statements taken as a whole. For none of the periods referred to
therein, or any other period, did we perform audit tests for the purpose of
expressing an opinion on individual balances of accounts or summaries of
selected transactions such as those enumerated below, and, accordingly, we
express no opinion thereon.

8.
However, for purposes of this letter we also read the items identified by you on
the attached copies of selected pages of the Company’s Annual Report on Form
10-K/A for the year ended December 31, 2011, the Company’s Quarterly Reports on
Form 10-Q for the quarterly periods ended March 31, 2012, and June 30, 2012, the
preliminary prospectus supplement dated [               ], 2012, and the
Company’s Current Reports on Form 8-K filed with the SEC on May 9, 2012 and
August 8, 2012 and have performed the additional procedures enumerated below:

 
 
C-3

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

 
 
 
A.
Compared the corresponding amounts or percentage to the Company’s December 31,
2011, 2010 and 2009 audited financial statements incorporated by reference in
the Registration Statement and found them to be in agreement.

 
B.
Compared corresponding amounts or percentages to the Company’s December 31, 2008
audited financial statements not incorporated by reference in the Registration
Statement and found them to be in agreement.

 
C.
Compared the amount or percentage with an agreement, a schedule or report
prepared by the Company from its accounting records and found them to be in
agreement.

 
D.
Recalculated the indicated amount or percentage and found it to be in agreement.

 
E.
Proved the arithmetic accuracy of Funds from Operations (“FFO”). FFO does not
represent cash generated from operating activities in accordance with accounting
principles generally accepted in the United States of America and we make no
comment as to the sufficiency of the individual adjustments included to arrive
at FFO nor do we make any comment as to the sufficiency of the disclosures or
the suitability of this measure for valuation or other purposes.

 
F.
Proved the arithmetic accuracy of the percentages of amounts. No other
conclusions or verifications should be inferred.

 
G.
Compared the amount or percentage with an agreement or statement received by the
Company from a third party.

 
H.
Compared the corresponding rounded amounts to the Company’s December 31, 2011,
2010 and 2009 audited financial statements incorporated by reference in the
Registration Statement and found them to be in agreement.

 
I.
Compared the amount or percentage with a schedule prepared by the Company from
its accounting records and found them to be in agreement. This proforma
information is unaudited.

 
J.
Compared the amount to the Company’s unaudited financial statements included in
the Company’s Form 10-Q filings and found them to be in agreement.

 
K.
Compared the corresponding amounts or percentage in, or amounts or percentages
combined, to the Company’s December 31, 2007 consolidated financial statements
not audited by us, but incorporated by reference in the Registration Statement
and found them to be in agreement. Accordingly, we provide no opinion or any
other assurance on such amounts or percentages.

 
C-4

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

 
 
 
L.
Compared the corresponding rounded amounts to the Company’s unaudited financial
statements included in the Company’s Form 10-Q filings and found them to be in
agreement.

9.
It should be understood that we make no representations regarding questions of
legal interpretation or regarding the sufficiency for your purposes of the
procedures enumerated in the preceding paragraph; also, such procedures would
not necessarily reveal any material misstatement of the amounts or percentages
described above. Further, we have addressed ourselves solely to the foregoing
data as set forth in the Registration Statement and make no representations
regarding the adequacy of disclosure or regarding whether any material facts
have been omitted.

This letter is solely for the information of the addressee and to assist the
placement agent in conducting and documenting its investigation of the affairs
of the Company in connection with the offering of the securities covered by the
Registration Statement, and it is not to be used, circulated, quoted, or
otherwise referred to within or without the placement group for any purpose,
including but not limited to the registration, purchase, or sale of securities,
nor is it to be filed with or referred to in whole or in part in the
Registration Statement or any other document, except that reference may be made
to it in the underwriting agreement or in any list of closing documents
pertaining to the offering of the securities covered by the Registration
Statement.
 
 
C-5

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