Document:

EX-10.1

 Exhibit 10.1 

SEPARATION AGREEMENT AND RELEASE 

I understand that my employment with Aviv Asset Management, L.L.C. (the “Company”) terminated effective November 8, 2013 (the
“Separation Date”). The Company has agreed that if I choose to sign this Separation Agreement and Release (“Release”), the Company will extend to me a special separation benefit, including: 

(i) severance payments (less standard withholdings and deductions, as required by applicable law) in the gross amount of $162,500 (equal to six
months of my base pay), payable in twelve equal installments in accordance with the Company’s normal payroll practices beginning with the payroll period on December 31, 2013; 

(ii) additional severance payments (less standard withholdings and deductions, as required by applicable law) in the gross amount of $113,750
(equal to one half of your target annual incentive for 2013), payable in two equal installments on February 28, 2014 and May 30, 2014; and 

(iii) extension of the period of time during which you can exercise your vested stock options under the Aviv REIT, Inc. 2010 Management
Incentive Plan through April 19, 2014. 
 I understand that I am not entitled to such separation benefit unless I sign this Release after the
Separation Date and do not revoke it, and return a signed copy of this Release to the Company within 21 days after I receive it. I understand and agree that I am not entitled to, and will not receive, any benefits under any other separation plan,
program, agreement, arrangement or policy of the Company. I understand that, regardless of whether I sign this Release, the Company has paid or will pay me all my accrued but unpaid salary and any other accrued but unpaid amounts through my
Separation Date to which I was entitled by law, including without limitation: (i) my accrued and unused vacation time as of the Separation Date; and (ii) any reasonable business expenses that I incurred in accordance with Company policy
prior to my Separation Date that I submit to the Company for reimbursement no later than December 15, 2013. I agree that I have returned all Company property assigned to me or that otherwise is in my possession. 

In consideration for the separation benefit set forth in this Release, I hereby release the Company and the other Released Parties (defined
below) with respect to any and all claims, whether currently known or unknown, that I now have, have ever had, or may ever have against any of the Released Parties arising from or related to any agreement, act, omission, or thing occurring or
existing at any time on or prior to the date on which I sign this Release, including without limitation all claims related to or arising out of my employment, or the termination of such employment, and all claims under the Age Discrimination in
Employment Act of 1967, the Employee Retirement Income 

 
Security Act of 1974, Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act, the Family and Medical Leave Act, and any other federal, state or local statute, regulation,
ordinance or common law doctrine, each as amended from time to time. I agree that I am not entitled to receive any further recovery of any kind from any of the Released Parties, and in the event of any future proceeding based on any matter released
herein, none of the Released Parties will have any monetary or other obligation to me. 
 “Released Parties” includes the Company
and each of its past, present, and future parents, divisions, subsidiaries, partnerships, affiliates, and other related entities, each of the foregoing entities’ past, present, and future owners, trustees, fiduciaries, administrators,
shareholders, directors, officers, partners, members, associates, agents, representatives, employees, and attorneys, and the predecessors, successors and assigns of each of the foregoing persons and entities. I represent and warrant that I have not
filed any legal or administrative proceeding(s) against any of the Released Parties. I further represent and warrant that I have not had, and currently do not have, any federal, state or local discrimination, workers’ compensation, or other
claims of any kind against any of the Released Parties. 
 In addition, the Company hereby releases me with respect to any and all claims
that the Company should reasonably be expected to have knowledge of as of the Separation Date related to or arising out of my employment or the termination of my employment. For the avoidance of doubt, the Company also acknowledges and agrees that
this Release shall not constitute my waiver of any rights to indemnification or other liability insurance coverage under applicable contracts covering the Company’s officers. 

The Company and I (each, a “Party”) acknowledge and understand that nothing in this Release is intended to or shall be construed as
an admission by the Party that it (or the Released Parties) violated any law, breached any obligation or otherwise engaged in any improper or illegal conduct with respect to my employment, the Company or otherwise. Each Party further acknowledges
and understands that any such such illegal or wrongful conduct is expressly denied. In addition, each Party acknowledges that it is sole owner of the claims it has released herein and that it has not directly or indirectly transferred or assigned
any such claims to anyone else, and that each Party has the full right and power to execute the releases and agreements the Party has made in this Release. 

I also acknowledge and agree that I have no present or future right to employment with any of the Released Parties and agree that I will not
apply or seek consideration for employment or any other engagement with any of them, provided that nothing herein will prevent any of the Released Parties from making an offer to me or my accepting such an offer. I agree to refrain from all conduct,
verbal or otherwise, that disparages or damages or could damage the reputation, goodwill or standing in the community of the Company or any of the other Released Parties. 

 This Release constitutes the entire agreement between the Company and me with regard to the
matters described here and supersedes any and all prior and/or contemporaneous agreements and understandings between us (whether oral or written). This Release is governed by the laws of the State of Illinois. Any provision (or portion thereof) of
this Release found unenforceable by a court shall be severed without affecting the remainder of such provision or any other provision of this Release. 

This Release is intended to be excepted from the requirements of section 409A of the Internal Revenue Code of 1986, as amended, and shall be
interpreted and construed in accordance with such intent. 
 I acknowledge and understand that: (i) this is the full and final
release of all claims against the Released Parties through the date I sign this Release including those under the federal Age Discrimination in Employment Act; and (ii) I knowingly and voluntarily release all claims hereunder for valuable
consideration in addition to anything of value to which I already am entitled; and (iii) I hereby am and have been advised of my right to have my counsel review this Release before signing it; and (iv) I have had a reasonable time period
of 21 days to consider whether to execute this Release; and (v) I may, at my sole option, revoke this Release upon written notice to Aviv REIT, Inc., Attn: General Counsel, 303 West Madison Street, Suite 2400, Chicago, IL 60606 within 7
days after signing it. I understand that this Release will not be effective until this 7-day period has expired and will be null and void if I revoke it and I will not be entitled to any separation benefits under this Release or otherwise. 

			
	AVIV ASSET MANAGEMENT, L.L.C.
		
	Signature:	 	/s/ Craig M. Bernfield
	By:	 	Craig M. Bernfield
	Its:	 	Chief Executive Officer

 Date: December 6, 2013 
  

			
	JAMES H. LYMAN
		
	Print Name:	 	James H. Lyman
		
	Signature:	 	/s/ James H. Lyman

 Date: December 6, 2013EXECUTION VERSION

$50,000,000 

ZAIS FINANCIAL PARTNERS, L.P.

8.0%
Exchangeable Senior Notes due 2016

PURCHASE
AGREEMENT 

November 19, 2013

Credit Suisse Securities (USA) LLC
(“Credit Suisse”)
Eleven Madison Avenue
New York, New York
10010-3629
       As the Purchaser 

Dear Sirs: 

     1. Introductory. ZAIS Financial Partners,
L.P., a Delaware limited partnership (the “Operating Partnership”), agrees with the initial purchaser (the “Purchaser”), subject to the
terms and conditions stated herein, to issue and sell to the Purchaser
$50,000,000 aggregate principal amount of its 8.0% Exchangeable Senior Notes due
2016 (the “Firm Securities”) and also proposes to grant to the Purchaser an option,
exercisable from time to time by the Purchaser, to purchase an aggregate of up
to an additional $7,500,000 principal amount (“Optional Securities”) of its 8.0%
Exchangeable Senior Notes due 2016. The Firm Securities and the Optional
Securities will be guaranteed (the “Guarantee”) by ZAIS Financial Corp., a
Maryland corporation (the “Guarantor”). The Firm Securities, the
Optional Securities and the Guarantee are collectively referred to herein as the
“Offered Securities.” The Offered Securities will be issued under an indenture, to be dated
as of November 25, 2013 (the “Indenture”), to be entered into among
the Operating Partnership, the Guarantor and U.S. Bank National Association, as
trustee (the “Trustee”). For the avoidance of doubt, all references to the
subsidiaries of the Guarantor shall include the Operating
Partnership. 

    
The holders of the Offered Securities will be entitled to the benefits of
a Registration Rights Agreement, to be dated as of November 25, 2013, between
the Guarantor and the Purchaser (the “Registration Rights Agreement”),
pursuant to which the Guarantor agrees to file a registration statement with the
Commission registering the resale of the Underlying Shares, as hereinafter
defined, under the Securities Act (as defined below). 

    
The Operating Partnership, the Guarantor and ZAIS REIT Management, LLC, a
Delaware limited liability company (the “Advisor”), hereby, jointly and
severally, agree with the Purchaser as follows: 

    
2. Representations and Warranties of the Guarantor and the Operating
Partnership and Representations and
Warranties of the Advisor. 

    
(A) The
Operating Partnership and the Guarantor, jointly and severally, represent and
warrant to, and agree with, the Purchaser that: 

     (a) Offering Memoranda; Certain Defined Terms. The Operating Partnership and the Guarantor prepared or will prepare a
Preliminary Offering Memorandum and a Final Offering Memorandum. 

1

    
For purposes of this Agreement: 

     “Applicable Time” means 4:30 pm (Eastern Standard Time) on the date of this
Agreement. 

     “Closing Date” has the meaning set forth in Section 3 hereof.

     “Commission” means the Securities and Exchange Commission. 

     “Exchange Act” means the
United States Securities Exchange Act of 1934. 

    
“Final Offering
Memorandum” means the final offering
memorandum relating to the Offered Securities to be offered by the Purchaser
that discloses the offering price and other final terms of the Offered
Securities and is dated as of the date of this Agreement (even if finalized and
issued subsequent to the date of this Agreement) and includes the documents
incorporated by reference therein (the "Incorporated Documents"). 

    
“Free Writing
Communication” means a written communication
(as such term is defined in Rule 405 of the Securities Act) that constitutes an
offer to sell or a solicitation of an offer to buy the Offered Securities and is
made by means other than the Preliminary Offering Memorandum or the Final
Offering Memorandum. 

    
“General Disclosure
Package” means the Preliminary Offering
Memorandum together with any Issuer Free Writing Communication existing at the
Applicable Time and the information which is intended for general distribution
to prospective investors, as evidenced by its being specified in Schedule A
hereto.

    
“Issuer Free Writing
Communication” means a Free Writing
Communication prepared by or on behalf of the Guarantor or the Operating
Partnership, used or referred to by the Guarantor or the Operating Partnership
or containing a description of the final terms of the Offered Securities or of
their offering, in the form retained in the Guarantor’s or the Operating
Partnership's records. 

    
“Preliminary Offering
Memorandum” means the preliminary offering
memorandum, dated November 18, 2013, as amended or supplemented, relating to the
Offered Securities to be offered by the Purchaser and including the Incorporated
Documents. 

    
“Rules and Regulations” means the rules and regulations of the Commission.

    
“Securities Act” means the United States Securities Act of 1933, as amended.

    
“Securities Laws” means, collectively, the Sarbanes-Oxley Act of 2002
(“Sarbanes-Oxley”), the Securities Act, the Exchange Act, the Rules and Regulations, the
auditing principles, rules, standards and practices applicable to auditors of
“issuers” (as defined in Sarbanes-Oxley) promulgated or approved by the Public
Company Accounting Oversight Board and the rules (the “Exchange Rules”) of the New
York Stock Exchange (the “NYSE”). 

    
“Supplemental Marketing
Material” means any Issuer Free Writing
Communication other than any Issuer Free Writing Communication specified in
Schedule A hereto. Supplemental Marketing Materials include, but are
not limited to, any Issuer Free Writing Communication listed on Schedule B
hereto.

    
“Underlying Shares” shall mean shares of the Guarantor's common stock, par value
$0.0001 per share, for which the Offered Securities are exchangeable.

2

    
Unless otherwise specified, a reference to a “rule” is to the indicated
rule under the Securities Act. 

     (a)
Disclosure.
As of its date, the Final Offering Memorandum does not, and as of each Closing
Date, the Final Offering Memorandum will not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein,
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. At the Applicable Time
neither (i) the General Disclosure Package, (ii) any individual Supplemental
Marketing Material, when considered together with the General Disclosure
Package, nor (iii) any General Solicitation Communication (as defined below),
when considered together with the General Disclosure Package, included any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The preceding two sentences do not apply to statements in or
omissions from the Preliminary or Final Offering Memorandum, the General
Disclosure Package or any Supplemental Marketing Material based upon written
information furnished to the Guarantor by the Purchaser specifically for use
therein, it being understood and agreed that the only such information is that
described as such in Section 8(b) hereof. When considered together with the
General Disclosure Package, on the date of this Agreement, the Guarantor’s
Annual Report on Form 10-K most recently filed with the Commission and all
subsequent reports which have been filed by the Guarantor with the Commission or
sent to shareholders pursuant to the Exchange Act do not include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. Such documents, when they were filed with the
Commission, conformed in all material respects to the requirements of the
Exchange Act and the Rules and Regulations. The information required to be
delivered to holders and the prospective purchasers of the Offered Securities
pursuant to the Indenture in accordance with Rule 144A (d) (4) does not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The preceding sentence does not
apply to statements in or omissions from the Preliminary or Final Offering
Memorandum based upon written information furnished to the Guarantor by the
Purchaser specifically for use therein, it being understood and agreed that the
only such information is that described as such in Section 8(b) hereof.

    
(b) Good Standing of the Operating Partnership and the
Guarantor. The Guarantor has been duly
incorporated and is existing and in good standing under the laws of the State of
Maryland, with power and authority (corporate and other) to own its properties
and conduct its business as described in the General Disclosure Package and the
Final Offering Memorandum; and the Guarantor is duly qualified to do business as
a foreign corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires such
qualification. 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, with power and authority to own its properties and conducts its
business as described in the General Disclosure Package and the Final Offering
Memorandum; and the Operating Partnership is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in which its
ownership or lease of property of the conduct of its business requires such
qualification. 

     (c) Subsidiaries. Each subsidiary of the
Guarantor has been duly incorporated or formed and is existing and in good
standing under the laws of the jurisdiction of its incorporation or formation,
with power and authority (corporate and other) to own its properties and conduct
its business as described in the General Disclosure Package and the Final
Offering Memorandum; and each subsidiary of the Guarantor is duly qualified to
do business as a foreign corporation, limited liability company, limited
partnership or trust in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires such
qualification; all of the issued and outstanding capital stock, membership
interests or partnership interests of each subsidiary of the Guarantor has been
duly authorized and validly issued and is fully paid and nonassessable; and the
capital stock, membership interests or partnership interests of each subsidiary
owned by the Guarantor, directly or through subsidiaries, is owned free from
liens, encumbrances and defects. 

3

     (d)
Indenture, Offered Securities,
Guarantee. The Indenture has been duly authorized by
the Operating Partnership and the Guarantor; the Firm Securities and the
Optional Securities have been duly authorized by the Operating
Partnership; the Guarantee has been duly authorized by the Guarantor; and when
the Firm Securities and the Optional Securities are delivered and paid for
pursuant to this Agreement on each Closing Date, the Indenture will have been
duly executed and delivered by the Operating Partnership and the Guarantor, such
Firm Securities and the Optional Securities will have been duly executed,
authenticated, issued and delivered, the Guarantee will have been duly executed
and delivered and will conform to the description of such Offered Securities
contained in the General Disclosure Package and the Final Offering Memorandum
and the Indenture, and such Firm Securities and Optional Securities will
constitute valid and legally binding obligations of the Operating Partnership
and the Guarantee and the Indenture will constitute valid and legally binding
obligations of the Guarantor, in each case, enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors’ rights and to general equity principles and entitled to the benefits
and security provided by the Indenture. 

     (e) Underlying Securities. When the Firm
Securities and the Optional Securities are delivered and paid for pursuant to
this Agreement on each Closing Date, such Firm Securities and Optional
Securities will be exchangeable for the Underlying Shares of the Guarantor in
accordance with the terms of the Indenture; the Underlying Shares initially
issuable upon exchange of such Offered Securities have been duly authorized and
reserved for issuance upon such exchange and will conform to the description of
such Offered Securities contained in the General Disclosure Package and the
Final Offering Memorandum; the authorized equity capitalization of the Guarantor
is as set forth in the General Disclosure Package and the Final Offering
Memorandum; all outstanding shares of capital stock of the Guarantor are, and
when issued upon exchange the Underlying Shares will be validly issued, fully
paid and nonassessable; the stockholders of the Guarantor have no preemptive
rights with respect to the Offered Securities or the Underlying Shares, and none
of the outstanding shares of capital stock of the Guarantor have been issued in
violation of any preemptive or similar rights of any security holder.

     (f) No Finder’s Fee. Except as disclosed in
the Final Offering Memorandum and the General Disclosure Package, there are no
contracts, agreements or understandings between the Operating Partnership and
the Guarantor and any person that would give rise to a valid claim against such
Operating Partnership and Guarantor or the Purchaser for a brokerage commission,
finder’s fee or other like payment. 

     (g) Authorization of Registration Rights Agreement. The Registration Rights Agreement has been duly authorized by the
Operating Partnership and the Guarantor and, when the Offered Securities are
delivered and paid for pursuant to this Agreement on each Closing Date, the
Registration Rights Agreement will have been duly executed and delivered by the
Operating Partnership and the Guarantor. 

     (h) Absence of Further Requirements. No
consent, approval, authorization, or order of, or filing or registration with,
any person (including any governmental agency or body or any court) is required
for the consummation of the transactions contemplated by this Agreement, the
Indenture and the Registration Rights Agreement in connection with the offering,
issuance and sale of the Offered Securities by the Operating Partnership and the
Guarantor, and the Underlying Shares by the Guarantor except for the order of
the Commission declaring effective the Shelf Registration Statement (as defined
in the Registration Rights Agreement). 

     (i) Accurate Disclosure. The statements in
the General Disclosure Package and the Final Offering Memorandum under the
headings “Description of the Notes,” “Description of ZAIS Financial Corp.
Capital Stock,” “Certain United States Federal Income Tax Consequences,”
“Certain ERISA and Related Considerations” and “Certain Provisions of the
Maryland General Corporation Law and ZAIS Financial Corp.’s Charter and Bylaws”,
insofar as such statements summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate and fair summaries of such legal
matters, agreements, documents or proceedings in all material respects and
present the information required to be shown. 

4

     (j) Absence of Manipulation. None of the
Guarantor or any of its subsidiaries or, to the Guarantor’s and the Operating
Partnership's knowledge, any affiliates of the Guarantor or any of its
subsidiaries, has taken, directly or indirectly, (i) any action that is designed
to or that has constituted or that would reasonably be expected to cause or
result in the stabilization or manipulation of the price of any security of the
Guarantor or the Operating Partnership to facilitate the sale or resale of the
Offered Securities or (ii) any action designed to cause or result in, or which
has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Guarantor or
the Operating Partnership to facilitate the sale or resale of the Underlying
Shares. 

     (k) ZAIS Group-Related Data. Any financial or
other data regarding ZAIS Group, LLC or its direct and indirect subsidiaries,
including but not limited to the Advisor, that is included or incorporated by
reference into the General Disclosure Package and the Final Offering Memorandum
is derived from ZAIS Group, LLC's accounting or other applicable records and is
accurate in all material respects. 

     (l) Litigation. Except as disclosed in the
General Disclosure Package and the Final Offering Memorandum, there are no
pending actions, suits or proceedings (including any inquiries or investigations
by any court or governmental agency or body, domestic or foreign) against or
affecting the Guarantor or any of its subsidiaries that, if determined adversely
to the Guarantor or any of its subsidiaries or their assets, would (A) have,
individually or in the aggregate, a material adverse effect on the earnings,
business, management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Guarantor and of its subsidiaries
taken as a whole or (B) prevent the consummation of the transactions
contemplated hereby (the occurrence of any such effect or any such prevention
described in the foregoing clauses (A) and (B) being referred to as a
(“Material Adverse Effect”), or would materially and adversely affect the ability of the
Guarantor or the Operating Partnership to perform their respective obligations
under the Indenture or this Agreement, or which are otherwise material in the
context of the sale of the Offered Securities; and no such actions, suits or
proceedings (including any inquiries or investigations by any court or
governmental agency or body, domestic or foreign) are threatened or, to the
Guarantor or the Operating Partnership’s knowledge, contemplated.

     (m) Regulations T, U, X. None of the
Guarantor or any of its subsidiaries or any agent thereof acting on their behalf
has taken, and none of them will take, any action that might cause this
Agreement or the issuance or sale of the Offered Securities to violate
Regulation T, Regulation U or Regulation X of the Board of Governors of the
Federal Reserve System. 

     (n) Ratings. No “nationally recognized
statistical rating organization” as such term is defined for purposes of Rule
436(g)(2) (i) has imposed (or has informed the Guarantor or the Operating
Partnership that it is considering imposing) any condition (financial or
otherwise) on the Guarantor’s or the Operating Partnership’s retaining any
rating assigned to the Guarantor or the Operating Partnership or any securities
of the Guarantor or the Operating Partnership or (ii) has indicated to the
Guarantor or the Operating Partnership that it is considering any of the actions
described in Section 7(b)(ii) hereof. 

     (o) Partnership Status. The Operating
Partnership is treated as a partnership for U.S. federal income tax purposes (as
well as for any analogous state or local tax purposes), and the Guarantor and
the Operating Partnership have made any and all necessary elections and filings
for the Operating Partnership to be treated as a partnership for U.S. federal
income tax purposes (as well as for any analogous state or local tax
purposes).

     (p) Class of Securities Not Listed. No
securities of the same class (within the meaning of Rule 144A(d)(3)) as the
Offered Securities are listed on any national securities exchange registered
under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system. 

5

     (q) No Registration. The offer and sale of
the Offered Securities in the manner contemplated by this Agreement will be
exempt from the registration requirements of the Securities Act by reason of
Section 4(a)(2) thereof; and it is not necessary to qualify an indenture in
respect of the Offered Securities under the United States Trust Indenture Act of
1939, as amended. 

     (r) No Directed Selling Efforts. None of the
Guarantor or any of its subsidiaries, or any person acting on its or their
behalf (i) has, within the six-month period prior to the date hereof, offered or
sold in the United States or to any U.S. person (as such terms are defined in
Regulation S under the Securities Act) the Offered Securities or any security of
the same class or series as the Offered Securities or (ii) has offered or will
offer or sell the Offered Securities in the United States by means of any form
of general solicitation or general advertising within the meaning of Rule 502(c)
(any such communication constituting a form of general solicitation or a general
advertising, is referred to herein as a “General
Solicitation Communication”), other than any such
communication consented to in writing by the Purchaser (a “Permitted General Solicitation Communication”) under the Securities Act, by means of any directed selling efforts
within the meaning of Rule 902(c) of Regulation S. Any such General Solicitation
Communications consented to by the Purchaser is identified on Schedule D hereto.
Neither the Guarantor nor the Operating Partnership has entered nor will enter
into any contractual arrangement with respect to the distribution of the Offered
Securities except for this Agreement. 

     (s) OP Units. The OP Units to be issued to
the Guarantor upon the issuance by the Guarantor of any Underlying Shares (the
“Guarantor OP Units”) and
all outstanding OP Units have been duly authorized; and all outstanding OP Units
are, and, when the Guarantor OP Units have been delivered and paid for in
accordance with the Agreement of Limited Partnership, dated as of July 29, 2011,
as amended on August 3, 2011, October 11, 2012, December 13, 2012 and February
13, 2013, the Guarantor OP Units will be validly issued and will conform to the
information in the General Disclosure Package and the Final Offering Memorandum;
and all outstanding OP Units have been and all Guarantor OP Units will be issued
and sold in compliance with all applicable federal and state securities laws.

     (t) Financial Statements. The consolidated
financial statements of the Guarantor and its consolidated subsidiaries,
together with related notes and schedules included or incorporated by reference
in the General Disclosure Package and the Final Offering Memorandum, comply in
all material respects with the applicable requirements of the Securities Act and
present fairly the financial position and the results of operations and cash
flows of the Guarantor and its consolidated subsidiaries, at the indicated dates
and for the indicated periods. Such financial statements and related schedules
have been prepared in accordance with United States generally accepted
accounting principles (“GAAP”), consistently applied throughout the periods involved, except as
disclosed therein, and all adjustments necessary for a fair presentation of
results for such periods have been made. The summary and selected consolidated
financial and statistical data included or incorporated by reference in the
General Disclosure Package and the Final Offering Memorandum present fairly the
information shown therein and such data has been compiled on a basis consistent
with the financial statements presented therein and the books and records of the
Guarantor. All disclosures contained in the General Disclosure Package and the
Final Offering Memorandum regarding “non-GAAP financial measures” (as such term
is defined by the Rules and Regulations) comply with Regulation G of the
Exchange Act and Item 10 of Regulation S-K under the Securities Act, to the
extent applicable. The Guarantor and its subsidiaries do not have any material
liabilities or obligations, direct or contingent (including any off-balance
sheet obligations or any “variable interest entities” within the meaning of
Financial Accounting Standards Board Interpretation No. 46), not disclosed in
the General Disclosure Package and the Final Offering Memorandum. There are no
financial statements (historical or pro forma) that would be required to be
included in the General Disclosure Package or the Final Offering Memorandum, if
such documents pertained to a securities offering registered under the
Securities Act, that are not included as would be required. 

6

     (u) Independent Public Accountant.
PricewaterhouseCoopers LLP, who have certified certain of the financial
statements filed with the Commission included or incorporated by reference into
the General Disclosure Package and the Final Offering Memorandum, is an
independent registered public accounting firm with respect to the Guarantor and
its subsidiaries within the meaning of the Securities Act and the applicable
Rules and Regulations and the Public Company Accounting Oversight Board (United
States) as required by the Securities Act. 

     (v) Sarbanes-Oxley Act of 2002. Solely to the
extent that the Sarbanes-Oxley Act of 2002, as amended, and the rules and
regulations promulgated by the Commission and the NYSE thereunder (collectively,
the “Sarbanes-Oxley Act”)
have been applicable to the Guarantor, there is and has been no failure on the
part of the Guarantor to comply in all material respects with any provision of
the Sarbanes-Oxley Act. The Guarantor has taken all necessary actions to ensure
that it is in compliance in all material respects with the provisions of the
Sarbanes-Oxley Act that are in effect and with which the Guarantor is required
to comply (including Section 402 related to loans) and is actively taking steps
to ensure that it will be in compliance in all material respects with other
provisions of the Sarbanes-Oxley Act not currently in effect or which will
become applicable to the Guarantor. There are no outstanding personal loans
made, directly or indirectly, by the Guarantor to any director or executive
officer of the Guarantor. 

     (w) Compliance. There is no legal,
governmental, administrative or regulatory investigation, action, suit, claim or
proceeding pending or, to the knowledge of the Guarantor or the Operating
Partnership, threatened against the Guarantor or any of its subsidiaries, or to
which any property of the Guarantor or any of its subsidiaries are, or to the
knowledge of the Guarantor or the Operating Partnership, would reasonably be
expected to be, subject, before any court or regulatory or administrative agency
or otherwise which if determined adversely to the Guarantor or any of its
subsidiaries would have a Material Adverse Effect. There are no current or
pending legal, governmental, administrative or regulatory investigations,
actions, suits, claims or proceedings that are required under the Securities Act
to be described in the Registration Statement, the General Disclosure Package or
the Final Offering Memorandum that are not so described in the Registration
Statement, the General Disclosure Package or the Final Offering Memorandum.
There are no statutes, regulations or contracts or other documents that would be
required to be described in the General Disclosure Package or the Final Offering
Memorandum, if this offering were to have been registered under the Securities
Act, that are not so described.

     (x) Marketable Title. The Guarantor and its
subsidiaries have good and marketable title to all of the properties and assets
reflected in the consolidated financial statements included or incorporated by
reference into the General Disclosure Package and the Final Offering Memorandum,
subject to no lien, mortgage, pledge, charge or encumbrance of any kind except
those reflected in such financial statements or described in the General
Disclosure Package and the Final Offering Memorandum or which (i) do not
materially interfere with the use made and proposed to be made of such property
by the Guarantor or any of its subsidiaries or (ii) would not have a Material
Adverse Effect. The Guarantor or any of its subsidiaries occupy their leased
properties, which are material to the business of the Guarantor and its
subsidiaries, under valid and binding leases. 

     (y) Tax Law Compliance. The Guarantor or any
of its subsidiaries (including, for the avoidance of doubt, the Operating
Partnership) have filed all U.S. federal, state, local and foreign tax returns
which have been required to be filed and have paid all taxes indicated by such
returns and all assessments received by them or any of them to the extent that
such taxes have become due and are not being contested in good faith and for
which an adequate reserve or accrual has been established in accordance with
GAAP. All tax liabilities have been adequately provided for in the financial
statements of the Guarantor, and the Guarantor does not know of any actual or
potential additional material tax assessments that have been or are likely to be
asserted. 

7

     (z)
Transfer Taxes. There are
no transfer taxes or other similar fees or charges under federal law or the laws
of any state, or any political subdivision thereof, required to be paid
in connection with the execution and delivery of this Agreement or
the sale by the Guarantor or the Operating Partnership of Offered Securities
under this Agreement. 

     (aa) Real Estate Investment Trust. The
Guarantor has been organized and is operating in conformity with the
requirements for qualification and taxation as a real estate investment trust (a
“REIT”) under the United
States Internal Revenue Code of 1986, as amended (the "Code") and the Guarantor’s actual and
proposed method of operation, as set forth in the General Disclosure Package and
the Final Offering Memorandum, has enabled and will continue to enable it to
meet the requirements for qualification and taxation as a REIT under the Code
for its tax year ended December 31, 2011 and subsequent tax years; and the
Guarantor intends to continue to qualify as a REIT until the Board of Directors
of the Guarantor determines that it is no longer in the best interests of the
Guarantor to continue to qualify as a REIT; neither the Guarantor nor any of its
subsidiaries has taken any action that would cause the Guarantor to fail to
qualify as a REIT for its tax year ended December 31, 2011 and subsequent tax
years. All statements regarding the Guarantor’s qualification and taxation as a
REIT and descriptions of the Guarantor’s organization and proposed method of
operation set forth in the General Disclosure Package and the Final Offering
Memorandum are true, complete and correct in all material respects.

     (bb) No Change. Since the date of the most
recent financial statements included or incorporated by reference into the
General Disclosure Package and the Final Offering Memorandum, (i) there has not
been any material adverse change or any development involving a prospective
material adverse change in or affecting the earnings, business, management,
properties, assets, rights, operations, condition (financial or otherwise), or
prospects of the Guarantor or any of its subsidiaries taken as a whole, whether
or not occurring in the ordinary course of business, (ii) there has not been any
material transaction entered into or any material transaction that is probable
of being entered into by the Guarantor or any of its subsidiaries, other than
transactions in the ordinary course of business and changes and transactions
described in the General Disclosure Package and the Final Offering Memorandum,
as each may be amended or supplemented, and (iii) none of the Guarantor or any
of its subsidiaries have sustained any loss or interference with its business
that is material to the Guarantor or any of its subsidiaries taken as a whole
and that is either from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor disturbance or dispute or any action,
order or decree of any court or arbitrator or governmental or regulatory
authority, except in each case as otherwise disclosed in the General Disclosure
Package and the Final Offering Memorandum.

     (cc) No Conflict. None of the Guarantor or any
of its subsidiaries is or with the giving of notice or lapse of time or both,
will be, (i) in violation of its certificate or articles of incorporation,
charter, by-laws, certificate of formation, limited liability company agreement,
partnership agreement or other organizational documents, as applicable, (ii) in
violation of or in default under any agreement, lease, contract, indenture or
other instrument or obligation to which it is a party or by which it, or any of
its properties, is bound or (iii) in violation of any law, order, rule or
regulation judgment, order, writ or decree applicable to the Guarantor or any of
its subsidiaries of any court or of any government, regulatory body or
administrative agency or other governmental body having jurisdiction over the
Guarantor or any of its subsidiaries, or any of their properties or assets,
except in the case of clauses (ii) and (iii), for such violations or defaults as
would not, individually or in the aggregate, have a Material Adverse Effect (as
defined below). The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated and the fulfillment of the
terms hereof do not and will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust or other agreement or instrument to which the Guarantor
or any of its subsidiaries is a party or by which the Guarantor or any of its
subsidiaries or any of their respective properties is bound, or of the
certificate of incorporation or formation, articles of incorporation or
association, charter, by-laws or other organizational documents, as applicable,
of the Guarantor or Operating Partnership or any law, order, rule or regulation
judgment, order, writ or decree applicable to the Guarantor or any its
subsidiaries of any court or of any government, regulatory body or administrative agency or other governmental body having
jurisdiction over the Guarantor or any of its subsidiaries, or any of their
properties or assets. 

8

     (dd) Authorization of Agreement. The
execution and delivery of, and the performance by each of the Guarantor and the
Operating Partnership of any of their respective obligations under, this
Agreement has been duly and validly authorized by all necessary corporate or
limited partnership action on the part of the Guarantor and the Operating
Partnership, respectively, and this Agreement has been duly executed and
delivered by the Guarantor and the Operating Partnership. 

     (ee) The Management Agreement. The Second
Amended and Restated Investment Advisory Agreement, dated as of December 13,
2012 (the “Management Agreement”), by and among the Guarantor, the Operating Partnership, ZAIS Asset
I, LLC, a Delaware limited liability company, ZAIS Asset II, LLC, a Delaware
limited liability company, ZAIS Asset III, LLC, a Delaware limited liability
company, ZAIS Asset IV, LLC, a Delaware limited liability company, and the
Advisor, has been duly authorized, executed and delivered by each of the
Guarantor and the Operating Partnership, and constitutes a valid and binding
agreement of each of the Guarantor 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; and the OP
Agreement has been duly authorized, executed and delivered by the Guarantor, as
the general partner and a limited partner, and constitutes a valid and binding
agreement of the Guarantor, in each such capacity, 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. 

     (ff) Approvals. Each approval, consent, order,
authorization, designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection with the
execution and delivery by the Guarantor and the Operating Partnership of this
Agreement and the consummation of the transactions herein contemplated has been
obtained or made and is in full force and effect (except such additional steps
as may be required by the Commission, the Financial Industry Regulatory
Authority, Inc. (“FINRA”)
or such additional steps as may be necessary to qualify the Underlying Shares
for exchange with the Offered Securities under state securities or Blue Sky
laws). 

     (gg) Licenses. Except as would not have a
Material Adverse Effect, the Guarantor or any of its subsidiaries (i) hold all
licenses, registrations, certificates and permits from governmental authorities
(collectively, “Governmental Licenses”) which are necessary to the conduct of their business, (ii) are in
compliance with the terms and conditions of all Governmental Licenses, and all
Governmental Licenses are valid and in full force and effect, and (iii) have not
received any written or other notice of proceedings relating to the revocation
or modification of any Governmental License.

     (hh) Intellectual Property. The Guarantor or
any of its subsidiaries own or possess the right to use all patents, inventions,
trademarks, trade names, service marks, logos, trade dress, designs, data,
database rights, Internet domain names, rights of privacy, rights of publicity,
copyrights, works of authorship, license rights, trade secrets, know-how and
proprietary information (including unpatented and unpatentable proprietary or
confidential information, inventions, systems or procedures) and other
industrial property and intellectual property rights, as well as related rights,
such as moral rights and the right to sue for all past, present and future
infringements or misappropriations of any of the foregoing, and registrations
and applications for registration of any of the foregoing (collectively,
“Intellectual Property”)
necessary to conduct their business as presently conducted and currently
contemplated to be conducted in the future. None of the Guarantor or any of its
subsidiaries, whether through their respective products and services or the
conduct of their respective businesses, has infringed, misappropriated,
conflicted with or otherwise violated, or is currently infringing,
misappropriating, conflicting with or otherwise violating, and none of the
Guarantor or any of its subsidiaries have received any communication or notice of infringement of, misappropriation of, conflict
with or violation of, any Intellectual Property of any other person or entity,
which infringement, misappropriation, conflict or other violation would result
in a Material Adverse Effect. None of the Guarantor or any of its subsidiaries
have received any communication or notice alleging that by conducting their
business as set forth in the Registration Statement, the General Disclosure
Package or the Final Offering Memorandum, such parties would infringe,
misappropriate, conflict with, or violate, any of the Intellectual Property of
any other person or entity, which infringement, misappropriation, conflict or
other violation would result in a Material Adverse Effect. The Guarantor and the
Operating Partnership know of no infringement, misappropriation or violation by
others of Intellectual Property owned by or licensed to the Guarantor or any of
its subsidiaries, which infringement, misappropriation or other violation would
result in a Material Adverse Effect. The Guarantor or any of its subsidiaries
have taken all reasonable steps necessary to secure their interests in such
Intellectual Property from their employees and contractors and to protect the
confidentiality of all of their confidential information and trade
secrets.

9

     (ii) IT Systems. None of the Intellectual
Property or technology (including information technology and outsourced
arrangements) employed by the Guarantor or any of its subsidiaries and necessary
to conduct their business as presently conducted and currently contemplated to
be conducted in the future has been obtained or is being used by the Guarantor
or any of its subsidiaries in violation of any contractual obligation binding on
the Guarantor or any of its subsidiaries or any of their respective officers,
directors or employees or otherwise in violation of the rights of any persons.
The Guarantor or any of its subsidiaries own or have a valid right to access and
use all computer systems, networks, hardware, software, databases, websites, and
equipment used to process, store, maintain and operate data, information, and
functions used in connection with the business of the Guarantor or any of its
subsidiaries (the “IT Systems”). The IT Systems are adequate for, and operate and perform
in all material respects as required in connection with, the operation of the
business of the Guarantor or any of its subsidiaries as currently conducted,
except as would not reasonably be expected to have a Material Adverse Effect.
The Guarantor or any of its subsidiaries have implemented commercially
reasonable backup, security and disaster recovery technology consistent in all
material respects with applicable regulatory standards and customary industry
practices. 

     (jj) Sale of Underlying Shares. None of the
Guarantor or any of its subsidiaries is or, after giving effect to the offering
and sale of the Underlying Shares contemplated hereunder and the application of
the net proceeds from such sale as described in the General Disclosure Package
and the Final Offering Memorandum, will be required to register as an
“investment company” or an entity “controlled” by an “investment company” within
the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder (collectively, the “1940 Act”). 

     (kk) Internal Controls. The Guarantor
maintains systems of “internal control over financial reporting” (as defined in
Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the
Exchange Act and have been designed by, or under the supervision of, its
principal executive and principal financial officers, or persons performing
similar functions, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP, including, but not limited to, internal
accounting controls sufficient to provide reasonable assurance that: (i)
transactions are executed in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with GAAP and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. There
are no material weaknesses in the Guarantor’s internal control over financial
reporting, and there has been no change in internal control over financial
reporting that has materially affected, or is reasonably likely to materially
affect, the Guarantor’s internal controls over financial reporting since the
respective dates as of which information is given in the General Disclosure Package and the Final Offering Memorandum. The
Guarantor’s auditors and the Board of Directors of the Guarantor have been
advised of: (i) all significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which have
adversely affected or are reasonably likely to adversely affect the Guarantor's
ability to record, process, summarize and report financial information; and (ii)
any fraud, whether or not material, that involves management or other employees
who have a significant role in the Guarantor’s internal controls over financial
reporting. 

10

     (ll) Disclosure Control Procedures. The
Guarantor has established and maintains “disclosure controls and procedures” (as
defined in Rules 13a-14(c) and 15d-14(c) under the Exchange Act); the
Guarantor’s “disclosure controls and procedures” are reasonably designed to
ensure that all information (both financial and non-financial) required to be
disclosed by the Guarantor in the reports that they file or submit under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the rules and regulations under the Exchange Act, and that
all such information is accumulated and communicated to the Guarantor’s
management as appropriate to allow timely decisions regarding required
disclosure and to make the certifications of the Chief Executive Officer and
Chief Financial Officer of the Guarantor required under the Exchange Act with
respect to such reports. 

     (mm) Accuracy of Offering Data. The
statistical, industry-related and market-related data included or incorporated
by reference into the General Disclosure Package and the Final Offering
Memorandum are based on or derived from sources which the Guarantor and the
Operating Partnership reasonably and in good faith believe are reliable and
accurate, and such data agree with the sources from which they are derived.

     (nn) Anti-Money Laundering Laws. The
operations of the Guarantor and each of its subsidiaries are and have been
conducted at all times in compliance with applicable financial record-keeping
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 applicable money laundering statutes of jurisdictions where the Guarantor or
any of its subsidiaries conduct business, the applicable rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the
“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 Guarantor or any of its
subsidiaries with respect to the Money Laundering Laws is pending or, to the
Guarantor’s or the Operating Partnership’s knowledge, threatened.

     (oo) OFAC Sanctions. None of the Guarantor or
any of its subsidiaries or, to the Guarantor’s or Operating Partnership’s
knowledge, any director, officer, agent, employee, affiliate or representative
of the Guarantor 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”) or any similar
sanctions imposed by any other body, governmental or other, to which the
Guarantor or any of its subsidiaries is subject (collectively, “Other Economic Sanctions”);
and the Guarantor and Operating Partnership will not directly or indirectly use
the proceeds of the offering, or lend, contribute or otherwise make available
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 or Other Economic Sanctions.

     (pp) OECD Convention and FCPA. None of the
Guarantor or any of its subsidiaries nor any director, officer, agent, employee,
affiliate or other person associated with or acting on behalf of the Guarantor
or any of its subsidiaries: (i) has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity: (ii) has made any direct or indirect unlawful contribution
or payment to any official of, or candidate for, or any employee of, any
federal, state or foreign office from corporate funds; (iii) has made any bribe,
unlawful rebate, payoff, influence payment, kickback or other unlawful
payment; or
(iv) is aware of or has taken any action, directly or indirectly, that would
result in a violation by such Persons of the OECD Convention on Bribery of
Foreign Public Officials in International Business Transactions
(“OECD Convention”), the Foreign Corrupt Practices Act of 1977, as amended, and the rules
and regulations thereunder (collectively, the “FCPA”) or any similar law or
regulation to which the Guarantor or any of its subsidiaries, any director,
officer, agent, employee, affiliate or other person associated with or acting on
behalf of the Guarantor or any of its subsidiaries is subject. The Guarantor or
any of its subsidiaries and, to the Guarantor’s and the Operating Partnership’s
knowledge, their affiliates have each conducted their businesses in compliance
with the FCPA and any applicable similar law or regulation and have instituted
and maintain policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance therewith.

11

     (qq) Insurance. The Guarantor or
any of its subsidiaries carry, or are covered by, insurance, from insurers of
recognized financial responsibility, in such amounts and covering such risks as
is adequate for the conduct of their respective businesses and the value of
their respective properties and as is prudent and customary for companies
engaged in similar businesses; none of the Guarantor or any of its subsidiaries
have been refused any coverage under insurance policies sought or applied for;
and neither the Guarantor nor any of its subsidiaries have any reason to believe
that they will not be able to renew their existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue their respective businesses at a cost that would
not have a Material Adverse Effect. 

     (rr)
Employee Benefits. Each “employee benefit plan” (within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder (“ERISA”)) for which the
Guarantor or any member of its “Controlled Group” (defined as any organization
that is a member of a controlled group of corporations within the meaning of
Section 414 of the Code) would have liability (each a “Plan”) is in compliance in
all material respects with all presently applicable statutes, rules and
regulations, including ERISA and the Code; (ii) with respect to each Plan
subject to Title IV of ERISA (a) no “reportable event” (as defined in Section
4043 of ERISA) has occurred for which the Guarantor or any member of its
Controlled Group would have any liability; and (b) neither the Guarantor nor any
member of its Controlled Group has incurred or expects to incur liability under
Title IV of ERISA (other than for contributions to the Plan or premiums payable
to the Pension Benefit Guaranty Corporation, in each case in the ordinary course
and without default); (iii) no Plan which is subject to Section 412 of the Code
or Section 302 of ERISA has failed to satisfy the minimum funding standard
within the meaning of such sections of the Code or ERISA; and (iv) each Plan
that is intended to be qualified under Section 401(a) of the Code is so
qualified and nothing has occurred, whether by action or by failure to act,
which would cause the loss of such qualification. 

     (ss)
Environmental. Except in each case as otherwise disclosed in the General Disclosure
Package and the Final Offering Memorandum: (i) the Guarantor and its
subsidiaries have complied and are in compliance, in all material respects, with
all applicable federal, state, local, foreign and international laws (including
the common law), statutes, rules, regulations, orders, judgments, decrees or
other legally binding requirements of any court, administrative agency or other
governmental authority relating to pollution or to the protection of the
environment, natural resources or human health or safety, or to the manufacture,
use, generation, treatment, storage, disposal, release or threatened release of
hazardous or toxic substances, pollutants, contaminants or wastes, or the
arrangement for such activities (“Environmental Laws”); (ii) the
Guarantor or any of its subsidiaries have obtained and are in compliance, in all
material respects, with all permits, licenses, authorizations or other approvals
required of them under Environmental Laws to conduct their respective businesses
and are not subject to any action to revoke, terminate, cancel, limit, amend or
appeal any such permits, licenses, authorizations or approvals; (iii) none of
the Guarantor or any of its subsidiaries is a party to any judicial or
administrative proceeding (including a notice of violation) under any
Environmental Laws (a) to which a governmental authority is also a party and
which involves potential monetary sanctions, unless it
could reasonably be expected that such proceeding will result in monetary
sanctions of less than $100,000, or (b) which is otherwise material; and no such
proceeding has been threatened or is known to be contemplated; (iv) none of the
Guarantor or any of its subsidiaries has received notice or is otherwise aware
of any pending or threatened material claim or potential liability under
Environmental Laws in respect of its past or present business, operations
(including the disposal of hazardous substances at any off-site location),
facilities or real property (whether owned, leased or operated) or on account of
any predecessor or any person whose liability under any Environmental Laws it
has agreed to assume; and none of the Guarantor or any of its subsidiaries is
aware of any facts or conditions that could reasonably be expected to give rise
to any such claim or liability; and (v) none of the Guarantor or any of its
subsidiaries is aware of any matters regarding compliance with existing or
reasonably anticipated Environmental Laws, or with any liabilities or other
obligations under Environmental Laws (including asset retirement obligations),
that could reasonably be expected to have a material effect on the capital
expenditures, earnings or competitive position of the Guarantor and its
subsidiaries. 

12

     (tt) Listing on the NYSE. The
Underlying Shares up to an aggregate cap of 1,779,560 shares of the Guarantor's
common stock have been approved for listing subject to notice of issuance on the
NYSE. 

     (uu)
No Related Party Transactions. No relationship, direct or indirect, or related party
transactions involving the Guarantor or any of its subsidiaries or any other
person that would be required to be described in the General Disclosure Package
or the Final Offering Memorandum by the rules of the Commission if the offering
of the securities were registered under the Securities Act, have not been
described in such documents. 

     (vv)
Dividends. No subsidiary of the Guarantor or the Operating Partnership is currently
prohibited, directly or indirectly, from paying any dividends to the Guarantor
or the Operating Partnership, from making any other distribution on such
subsidiary’s capital stock, from repaying to the Guarantor or the Operating
Partnership any loans or advances to such subsidiary from the Guarantor or the
Operating Partnership or from transferring any of such subsidiary’s property or
assets to the Guarantor or any other subsidiary of the Guarantor or the
Operating Partnership. 

     (ww)
Labor. No
labor disturbance exists between any officer or other key person of the
Guarantor or the Operating Partnership (each, a “Focused Professional”), on the one
hand, and the employer of each such individual, on the other hand, nor, to the
knowledge of the Guarantor or the Operating Partnership, is such a labor dispute
imminent to the extent that it could have a Material Adverse Effect. 

     (xx)
No Finder's Fee. Neither the Guarantor nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person (other than this Agreement)
that would give rise to a valid claim against the Guarantor or any of its
subsidiaries or the Purchaser for a brokerage commission, finder’s fee or like
payment in connection with the offering and sale of the Offered
Securities.

     (yy)
Underlying Shares Reserve. The Guarantor has reserved for and will make available upon
any exchange of the Offered Securities up to an aggregate cap of 1,779,560
Underlying Shares, which are issuable upon the exchange of such Offered
Securities up to such amount. 

     (zz)
Registration Rights. There are no persons with rights to have any shares of Common Stock
registered by the Company under the Securities Act, except for such rights as
are provided under the Registration Rights Agreement or as are otherwise
disclosed in the General Disclosure Package.

13

(B) The Advisor represents and warrants to, and agrees with, the Purchaser
that: 

     (a)
Advisor-Related Data. Any financial or other information regarding ZAIS Group, LLC,
the Advisor and/or its subsidiaries that is included or incorporated by
reference into the General Disclosure Package or the Final Offering Memorandum
is accurate and complete in all material respects. 

     (b) Good Standing of the Advisor. The
Advisor has been duly organized and is validly existing as a limited liability
company in good standing under the laws of the State of Delaware, with requisite
power and authority to own or lease its properties and conduct its business as
described in the General Disclosure Package and the Final Offering Memorandum.
The Advisor has no subsidiaries. The Advisor is duly qualified to transact
business in all jurisdictions in which the conduct of its business requires such
qualification except where the failure to be so qualified would not (i) have,
individually or in the aggregate, a material adverse effect on the earnings,
business, management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Advisor or (ii) prevent the
consummation of the transactions contemplated hereby (the occurrence of any such
effect or any such prevention described in the foregoing clauses (i) and (ii)
being referred to as an “Advisor Material
Adverse Effect”). 

     (c)
Management Agreement and the Shared Facilities
and Services Agreement. The Advisor has full
right, power and authority to execute and deliver this Agreement and to perform
its obligations under this Agreement, the Management Agreement and the Shared
Facilities and Services Agreement, dated as of October 11, 2012 (the
“Shared Services Agreement”), by and between the Advisor and ZAIS Group, LLC, a Delaware
limited liability company (“ZAIS”). This Agreement has been duly
authorized, executed and delivered by or on behalf of the Advisor. The execution
and delivery of this Agreement and the consummation by the Advisor of the
transactions herein contemplated and the fulfillment by the Advisor of the terms
hereof will not require any consent, approval, authorization, or other order of
any court, regulatory body, administrative agency or other governmental body and
will not result in a breach of any of the terms and provisions of, or constitute
a default, under the certificate of formation or limited liability company
agreement of the Advisor, or any indenture, mortgage, deed of trust or other
agreement or instrument to which the Advisor is a party, or of any order, rule
or regulation applicable to the Advisor of any court or of any regulatory body
or administrative agency or other governmental body having jurisdiction
thereunder. 

     (d)
Absence of Manipulation. Neither the Advisor nor, to the Advisor’s knowledge, any
affiliate of the Advisor, has taken, directly or indirectly any action that is
designed to or that has constituted or that would reasonably be expected to
cause or result in the stabilization or manipulation of the price of any
security of the Company or the Operating Partnership to facilitate the sale or
resale of the Offered Securities. 

     (e)
No Conflict. The Advisor is not and with the giving of notice or lapse of time or
both, will not be, (i) in violation of its certificate of formation or limited
liability company agreement, (ii) in violation of or in default under any
agreement, lease, contract, indenture or other instrument or obligation to which
it is a party or by which it, or any of its properties, is bound or (iii) in
violation of any law, order, rule or regulation judgment, order, writ or decree
applicable to the Advisor of any court or of any government, regulatory body or
administrative agency or other governmental body having jurisdiction over the
Advisor, or any of its properties or assets, except in the case of clauses (ii)
and (iii), for such violations or defaults as would not have an Advisor Material
Adverse Effect. The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated and the fulfillment of the
terms hereof, including the issuance of the Offered Securities and the issuance
of the Underlying Shares upon exchange of the Offered Securities, do not and
will not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Advisor is a party or by which the
Advisor or any of its properties is bound, or of the certificate of formation or
limited liability company agreement of the Advisor or any law, order, rule or
regulation judgment, order, writ or decree applicable to the Advisor of any court or of any government, regulatory body or
administrative agency or other governmental body having jurisdiction over the
Advisor, or any of its properties or assets. 

14

     (f) Licenses. Except as would
not have an Advisor Material Adverse Effect, the Advisor (i) holds all licenses,
registrations, certificates and permits from governmental authorities
(collectively, “Advisor Governmental
Licenses”) which are necessary to the conduct
of its business, (ii) is in compliance with the terms and conditions of all
Advisor Governmental Licenses, and all Advisor Governmental Licenses are valid
and in full force and effect, and (iii) has not received any written or other
notice of proceedings relating to the revocation or modification of any Advisor
Governmental License. 

     (g)
No Change. Since the date of the most recent financial statements included or
incorporated by reference into the General Disclosure Package and the Final
Offering Memorandum, (i) there has not been any material adverse change or any
development involving a prospective material adverse change in or affecting the
earnings, business, management, properties, assets, rights, operations,
condition (financial or otherwise), or prospects of the Advisor, whether or not
occurring in the ordinary course of business, (ii) there has not been any
material transaction entered into or any material transaction that is probable
of being entered into by the Advisor, other than transactions in the ordinary
course of business and transactions described in the General Disclosure Package
and the Final Offering Memorandum, as each may be amended or supplemented, and
(iii) the Advisor has not sustained any loss or interference with its business
that is material to the Advisor and that is either from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
disturbance or dispute or any action, order or decree of any court or arbitrator
or governmental or regulatory authority, except in each case as otherwise
disclosed in the General Disclosure Package and the Final Offering Memorandum.

     (h)
Labor. The
Advisor has not been notified that any Focused Professional, or a significant
number of employees of the Advisor and its affiliates, plan to terminate his,
her or their employment. Neither the Advisor nor, to the Advisor’s knowledge,
any Focused Professional, is subject to any noncompete, nondisclosure,
confidentiality, employment, consulting or similar agreement that would be
violated by the present or proposed business activities of the Guarantor or the
Advisor as described in the General Disclosure Package and the Final Offering
Memorandum. 

     (i)
Access. The
Advisor will have access to the personnel and other resources necessary for the
performance of the duties of the Advisor set forth in the Management Agreement
and as disclosed in the General Disclosure Package and the Final Offering
Memorandum. 

     (j)
No Related Party Transactions.
No relationship, direct or indirect, exists
between or among the Advisor, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Advisor, on the other, that would be
required to be described in the General Disclosure Package or the Final Offering
Memorandum, if such document pertained to a securities offering registered under
the Securities Act that is not so described in such documents.

     (k)
Compliance. There is no legal, governmental, administrative or regulatory
investigation, action, suit, claim or proceeding pending or, to the knowledge of
the Advisor, threatened against the Advisor, or to which any property of the
Advisor is subject before any court or regulatory or administrative agency or
otherwise which, if determined adversely to the Advisor, would have an Advisor
Material Adverse Effect, or would materially and adversely affect the ability of
the Advisor to perform its obligations under this Agreement, the Management
Agreement or the Shared Services Agreement. 

     (l)
Anti-Money Laundering Laws. The operations of the Advisor are and have been conducted at
all times in compliance in all material respects with the 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
Advisor with respect to the Money Laundering Laws is pending or, to the
Advisor’s knowledge, threatened. 

15

     (m) OFAC Sanctions. The Advisor
is not currently subject to any U.S. sanctions administered by OFAC or any Other
Economic Sanctions. 

     (n)
OECD Convention and FCPA. The Advisor: (i) has not used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) has not made any direct or indirect unlawful
contribution or payment to any official of, or candidate for, or any employee
of, any federal, state or foreign office from corporate funds; (iii) has not
made any bribe, unlawful rebate, payoff, influence payment, kickback or other
unlawful payment; and (iv) is not aware of and has not taken any action,
directly or indirectly, that would result in a violation of the OECD Convention,
the FCPA or any similar law or regulation to which the Advisor is subject. The
Advisor has conducted its business in compliance with the FCPA and any
applicable similar law or regulation and has instituted and maintains policies
and procedures designed to ensure, and which are reasonably expected to continue
to ensure, continued compliance therewith. 

     (o)
Insurance. The Advisor carries, or is covered by, insurance, from one or more
insurers of recognized financial responsibility, in such amounts and covering
such risks as is adequate for the conduct of its business and the value of its
properties and as is prudent and customary for companies engaged in similar
businesses; the Advisor has not been refused any coverage under insurance
policies sought or applied for. 

     (p)
Internal Controls. The Advisor maintains a system of internal control in place sufficient to
provide reasonable assurance that: (i) transactions that may be effectuated by
the Advisor under the Management Agreement are executed in accordance with its
management’s general or specific authorization and (ii) access to the
Guarantor’s assets is permitted only in accordance with the internal policies,
controls and procedures of the Advisor. 

     (q)
Free Writing Communication. The Advisor (including its agents and representatives, other
than the Purchaser in its capacity as such) has not prepared or had prepared on
its behalf or used or referred to any Free Writing Communication and has not
distributed any written materials in connection with the offer or sale of the
Shares. 

     (r)
Compliance with Laws. The Advisor is in compliance with all applicable federal,
state, local and foreign laws, rules, regulations, orders, decrees and
judgments, including those relating to transactions with affiliates, except
where the failure to do so would not reasonably be expected to have an Advisor
Material Adverse Effect. 

     (s)
Investment Strategy. The Guarantor’s investment strategy described in the General
Disclosure Package and the Final Offering Memorandum accurately reflects in all
material respects the current intentions of the Advisor with respect to the
operation of the Guarantor’s business, and, to the Advisor’s knowledge, no
material deviation from such investment strategy is currently contemplated.

     (t)
No Prohibitions. The Advisor is not prohibited by any applicable law or regulation,
including, without limitation, the 1940 Act and the rules and regulations
thereunder, from acting under the Management Agreement and the Shared Services
Agreement, as contemplated by the General Disclosure Package and the Final
Offering Memorandum. 

     (u)
Investment Advisers Act. ZAIS Group, LLC is registered with the Commission as an
investment adviser under the Investment Advisers Act of 1940, as amended (the
“Investment Advisers Act”). The Advisor, a subsidiary of ZAIS Group, LLC, relies on
ZAIS Group, LLC's status as a registered investment adviser under the Investment
Advisers Act in order to conduct its business under the Investment Advisory
Agreement. 

16

     (v) 

     Any
certificate signed by any officer of the Guarantor, the Operating Partnership or
the Advisor that is delivered to the Purchaser or to counsel for the Purchaser
shall be deemed a representation and warranty by the Guarantor, the Operating
Partnership or the Advisor, as applicable, to the Purchaser as to the matters
covered thereby. 

     3. Purchase, Sale and
Delivery of Offered Securities. On the basis
of the representations, warranties and agreements and subject to the terms and
conditions set forth herein, the Operating Partnership agrees to sell to the
Purchaser, and the Purchaser agrees to purchase from the Operating Partnership,
at a purchase price of 97% of the principal amount thereof plus accrued interest
from the First Closing Date (as hereinafter defined) $50,000,000 principal
amount of Firm Securities. 

    
The Operating Partnership will deliver against payment of the purchase
price the Firm Securities to be purchased by the Purchaser hereunder and to be
offered and sold by the Purchaser in reliance on Rule 144A in the form of one
permanent global security in definitive form without interest coupons (the
“Firm Global Securities”) deposited with the Trustee as custodian for The Depository
Trust Company (“DTC”) and registered in the name of Cede & Co., as nominee for DTC. The
Firm Global Securities shall include the legend regarding restrictions on
transfer set forth under “Transfer Restrictions” in the Preliminary Offering
Memorandum and the Final Offering Memorandum. Interests in any permanent global
Securities will be held only in book-entry form through DTC, except in the
limited circumstances described in the Preliminary Offering Memorandum and the
Final Offering Memorandum. 

    
Payment for the Firm Securities shall be made by the Purchaser in Federal
(same day) funds by wire transfer to an account at a bank acceptable to the
Purchaser drawn to the order of the Operating Partnership at 10:00 A.M., New
York time, on November 25, 2013, or at such other time not later than seven full
business days thereafter as the Purchaser and the Operating Partnership
determine, such time being herein referred to as the “First Closing Date”, against delivery
to the Trustee as custodian for DTC of the Firm Global Securities representing
all of the Firm Securities. The Firm Global Securities will be made available
for checking at the above office of Skadden, Arps, Slate, Meagher & Flom LLP
(“Skadden”)
at least 24 hours prior to the First Closing Date. 

    
In addition, upon written notice from the Purchaser given to the
Operating Partnership and the Guarantor from time to time not more than 30 days
subsequent to the date of this Agreement, the Purchaser may purchase all or less
than all of the Optional Securities at the purchase price per principal amount
of Offered Securities (including any accrued interest thereon to the related
Optional Closing Date) to be paid for the Firm Securities. The Operating
Partnership agrees to sell to the Purchaser the principal amount of Optional
Securities specified in such notice and the Purchaser agrees to purchase such
Optional Securities. No Optional Securities shall be sold or delivered unless
the Firm Securities previously have been, or simultaneously are, sold and
delivered. The right to purchase the Optional Securities or any portion thereof
may be exercised from time to time and to the extent not previously exercised
may be surrendered and terminated at any time upon notice by the Purchaser to
the Operating Partnership and the Guarantor. 

    
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as the “Optional
Closing Date”, which may be the First Closing
Date (the First Closing Date and each Optional Closing Date, if any, being
sometimes referred to as a “Closing
Date”), shall be determined by the Purchaser
but shall not be later than seven full business days after written notice of
election to purchase Optional Securities is given.

    
Payment for the Optional Securities being purchased on each Optional
Closing Date by the Purchaser hereunder and to be offered and sold by the
Purchaser in reliance on Rule 144A in the form of one permanent global security
in definitive form without interest coupons (“Optional Global Securities”) shall be
made by the Purchaser by in Federal (same day) funds by wire transfer to an
account at a bank acceptable to the Purchaser drawn to the order of the
Operating Partnership against delivery to the Trustee of the Optional Global
Securities representing all of the Optional Securities being purchased on such
Optional Closing Date. 

17

    
4. Representations by Purchaser; Resale by the Purchaser. (a) The Purchaser represents and warrants to the Operating
Partnership and the Guarantor that it is an “accredited investor” within the
meaning of Regulation D under the Securities Act. 

     (b) The Purchaser acknowledges that the Offered Securities have
not been registered under the Securities Act and may not be offered or sold
within the United States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
The Purchaser represents and agrees that it has not sold, and will not sell, any
Offered Securities constituting part of its allotment within the United States,
except in accordance with Rule 144A. Accordingly, neither the Purchaser nor its
affiliates, nor any persons acting on its or their behalf, have engaged or will
engage in any directed selling efforts with respect to the Securities. Terms
used in this subsection (b) have the meanings given to them by Regulation S.

     (c)
The Purchaser agrees that it and each of its
affiliates has not entered and will not enter into any contractual arrangement
with respect to the distribution of the Offered Securities except for any such
arrangements with the other Purchaser or with the prior written consent of the
Operating Partnership. 

     (d) The Purchaser agrees that it and each of its affiliates will not offer or
sell the Offered Securities in the United States by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) other than
a Permitted General Solicitation Communication. The Purchaser agrees, with
respect to resales made in reliance on Rule 144A of any of the Offered
Securities, to deliver either with the confirmation of such resale or otherwise
prior to settlement of such resale a notice to the effect that the resale of
such Offered Securities has been made in reliance upon the exemption from the
registration requirements of the Securities Act provided by Rule 144A.

     5. Certain Agreements of
the Guarantor and the Operating Partnership and Certain Agreements of the Advisor.

     (A) The Guarantor and the Operating Partnership agree with the Purchaser
that: 

     (a) Amendments and Supplements to Offering
Memoranda. The Guarantor and the Operating
Partnership will promptly advise the Purchaser of any proposal to amend or
supplement the Preliminary or Final Offering Memorandum and will not effect such
amendment or supplementation without the Purchaser's consent. If, at any time
prior to the completion of the resale of the Offered Securities by the
Purchaser, there occurs an event or development as a result of which any
document included in the Preliminary or Final Offering Memorandum, the
Disclosure Package, any Supplemental Marketing Material or any General
Solicitation Communication, if republished immediately following such event or
development, included or would include an untrue statement of a material fact or
omitted or would omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any such time to amend or
supplement the Preliminary or Final Offering Memorandum, the General Disclosure
Package, any Supplemental Marketing Material or any General Solicitation
Communication to comply with any applicable law, the Guarantor and the Operating
Partnership promptly will notify the Purchaser of such event and promptly will
prepare and furnish, at its own expense, to the Purchaser and the dealers and to
any other dealers at the request of the Purchaser, an amendment or supplement
which will correct such statement or omission or effect such compliance. The
Purchaser’s consent to or delivery to offerees or investors of, any such
amendment or supplement shall not constitute a waiver of any of the conditions
set forth in Section 7. 

     (b) Furnishing of Offering Memoranda. The Guarantor and the Operating Partnership will furnish to the
Purchaser copies of the Preliminary Offering Memorandum, each other document
comprising a part of the General Disclosure Package, the Final Offering
Memorandum, all amendments and supplements to such documents and each item of
Supplemental Marketing Material, in each case as soon as available and in such
quantities as the Purchaser request, and the Guarantor
and the Operating Partnership will furnish to the Purchaser on the date hereof
copies of each of the foregoing documents signed by a duly authorized officer of
the Guarantor. At any time when the Guarantor or the Operating Partnership is
not subject to Section 13 or Section 15(d) of the Exchange Act, the Guarantor or
the Operating Partnership, as applicable, will promptly furnish or cause to be
furnished to the Purchaser and, upon request of holders and prospective
purchasers of the Offered Securities, to such holders and purchasers, copies of
the information required to be delivered to holders and prospective purchasers
of the Offered Securities pursuant to Rule 144A(d)(4) (or any successor
provision thereto) in order to permit compliance with Rule 144A in connection
with resales by such holders of the Offered Securities. The Guarantor and the
Operating Partnership, will pay the expenses of printing and distributing to the
Purchaser all such documents. 

18

     (c)
Blue Sky Qualifications. The Operating Partnership will arrange for the qualification
of the Offered Securities for sale and the determination of their eligibility
for investment under the laws of such jurisdictions in the United
States and Canada as the Purchaser designates and will continue such
qualifications in effect so long as required for the resale of the Offered
Securities by the Purchaser, provided that the Operating Partnership will not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any such state. 

     (d)
Reporting Requirements. For so long as the Offered Securities remain outstanding,
the Guarantor will furnish to the Purchaser, as soon as practicable after the
end of each fiscal year, a copy of its annual report to shareholders for such
year; and the Guarantor will furnish to the Purchaser (i) as soon as available,
a copy of each report and any definitive proxy statement of the Guarantor filed
with the Commission under the Exchange Act or mailed to shareholders, and (ii)
from time to time, such other information concerning the Guarantor or the
Operating Partnership as the Purchaser may reasonably request. However, so long as the
Guarantor is subject to the reporting requirements of either Section 13 or
Section 15(d) of the Exchange Act and is timely filing reports with the
Commission on its Electronic Data Gathering, Analysis and Retrieval system, it
is not required to furnish such reports or statements to the Purchaser.

     (e)
Transfer Restrictions. During the period of two years after the Closing Date, the
Operating Partnership will, upon request, furnish to the Purchaser and any
holder of Offered Securities a copy of the restrictions on transfer applicable
to the Offered Securities. 

     (f)
No Resales by Affiliates. Neither the Operating Partnership nor the Guarantor will,
nor will they permit any of their affiliates (as defined in Rule 144) to, resell
any of the Offered Securities that have been reacquired by any of them, except
for (i) in a transaction registered under the Securities Act or (ii) in a
transaction exempt from the registration requirements under the Securities Act
if such transaction does not cause the holding periods under Rule 144 under the
Securities Act to be extended for other holders of the Offered Securities.

     (g)
Investment Company. During the period of two years after the Closing Date, neither the
Operating Partnership nor the Guarantor will be or become, an open-end
investment company, unit investment trust or face-amount certificate company
that is or is required to be registered under Section 8 of the 1940 Act.

     (h)
Payment of Expenses. The Guarantor and the Operating Partnership will pay all expenses
incidental to the performance of the obligations of the Guarantor and the
Operating Partnership under this Agreement, the Indenture and the Registration
Rights Agreement, including but not limited to (i) the fees and expenses of the
Trustee and its professional advisers; (ii) all expenses in connection with the
execution, issue, authentication, packaging and initial delivery of the Offered
Securities, the preparation and printing of this Agreement, the Registration
Rights Agreement, the Offered Securities, the Indenture, the Preliminary
Offering Memorandum, the Final Offering Memorandum, all amendments and
supplements thereto, each item of Supplemental Marketing Material and any other
document relating to the issuance, offer, sale and delivery of the Offered Securities; (iii) the cost of any advertising
approved by the Guarantor in connection with the issue of the Offered
Securities; (iv) any expenses (including fees and disbursements of counsel to
the Purchaser) incurred in connection with qualification of the Offered
Securities for sale under the laws of such jurisdictions in the United States
and Canada as the Purchaser designates and the preparation and printing of
memoranda relating thereto; (v) expenses incurred in distributing the
Preliminary Offering Memorandum, the Final Offering Memorandum (including any
amendments and supplements thereto) and any Supplemental Marketing Material to
the Purchaser; and (vi) any expenses of listing the Underlying Shares on the
NYSE. The Guarantor and the Operating Partnership will also pay or reimburse the
Purchaser (to the extent incurred by it) for costs and expenses of the Purchaser
and the Guarantor’s officers and employees and any other expenses of the
Purchaser and the Guarantor relating to investor presentations on any “road
show” in connection with the offering and sale of the Offered Securities
including, without limitation, any travel expenses of the Guarantor’s officers
and employees and any other expenses of the Guarantor including the chartering
of airplanes. 

19

     (i) Use of Proceeds. The
Operating Partnership and the Guarantor will use the net proceeds received in
connection with this offering in the manner described in the “Use of Proceeds”
section of the General Disclosure Package and the Final Offering Memorandum and,
except as disclosed in the General Disclosure Package and the Final Offering
Memorandum, neither the Operating Partnership nor the Guarantor intends to use
any of the proceeds from the sale of the Offered Securities hereunder to repay
any outstanding debt owed to any affiliate of the Purchaser. 

     (j)
Absence of Manipulation. In connection with the offering, until the Purchaser shall
have notified the Operating Partnership and the Guarantor of the completion of
the resale of the Offered Securities, none of the Guarantor, the Operating
Partnership or any of their affiliates will, either alone or with one or more
other persons, bid for or purchase for any account in which it or any of its
affiliates has a beneficial interest any Offered Securities or attempt to induce
any person to purchase any Offered Securities; and neither it nor any of its
affiliates will make bids or purchases for the purpose of creating actual, or
apparent, active trading in, or of raising the price of, the Offered Securities.

     (k)
Restriction on Sale of Securities.
During the Lock-Up Period (as defined below),
neither the Guarantor nor the Operating Partnership will, directly or
indirectly, take any of the following actions with respect to any Lock-Up
Securities (as defined below): (i) offer, sell, issue, contract to sell, pledge
or otherwise dispose of Lock-Up Securities, (ii) offer, sell, issue, contract to
sell, contract to purchase or grant any option, right or warrant to purchase
Lock-Up Securities, (iii) enter into any swap, hedge or any other agreement that
transfers, in whole or in part, the economic consequences of ownership of
Lock-Up Securities, (iv) establish or increase a put equivalent position or
liquidate or decrease a call equivalent position in Lock-Up Securities within
the meaning of Section 16 of the Exchange Act or (v) file with the Commission a
registration statement under the Securities Act relating to Lock-Up Securities
or publicly disclose the intention to take any such action without the prior
written consent of the Purchaser; provided, however, that the Guarantor may file
or have declared effective one or more registration statements with the
Commission in order to satisfy its obligations under the Registration Rights
Agreement, or its obligations under the registration rights agreements entered
into in connection with the Guarantor's formation transactions and certain
subsequent private placements occurring prior to the date hereof. The Guarantor
will not at any time directly or indirectly, take any action referred to in
clauses (i) through (v) above with respect to any securities under circumstances
where such offer, sale, pledge, contract or disposition would cause the
exemption afforded by Section 4(a)(2) of the Securities Act or the safe harbor
of Rule 144A thereunder to cease to be applicable to the offer and sale of the
Offered Securities.

     For purposes of this paragraph (k) of
Section 5,

20

     “Lock-Up Securities” shall mean (1) any
United States dollar-denominated debt securities issued or guaranteed by either
the Guarantor or the Operating Partnership and having a maturity of more than
one year from the date of issue, including, but not limited to any additional
Offered Securities (“Similar Debt
Securities”), (2) securities convertible into
or exchangeable or exercisable for any Similar Debt Securities, (3) any shares
of Guarantor common stock, or (4) any securities convertible into or
exchangeable or exercisable for any shares of Guarantor common stock other than
(a) Similar Debt Securities (which are addressed in clause (1) above), or (b)
shares of Guarantor preferred stock that are only convertible into shares of
Guarantor common stock upon certain change of control events. 

     “Lock-Up Period” shall mean a period of
60 days after the date of this Agreement. 

     (l)
Qualification and Taxation as a
REIT. The Guarantor will use its best efforts
to meet the requirements for qualification and taxation as a REIT under the Code
for its taxable year ending December 31, 2013, and the Guarantor will use its
best efforts to continue to qualify for taxation as a REIT under the Code unless
the Board of Directors of the Guarantor determines that it is no longer in the
best interests of the Guarantor and its shareholders to be so qualified.

     (m)
Underlying Shares Reserve. The Guarantor will reserve for issuance and make available
upon such exchange the Underlying Shares that will conform to the description of
such Underlying Shares contained in the General Disclosure Package and the Final
Offering Memorandum. 

    
(B) The Advisor agrees with the Purchaser that: 

     (a)
Absence of Manipulation. The Advisor will not, and will cause its subsidiaries and
affiliates over which the Advisor exercises control not to, take, directly or
indirectly, any action designed to or that would constitute or that might
reasonably be expected to cause or result in, stabilization or manipulation of
the price of any securities of the Guarantor to facilitate the sale or resale of
the Offered Securities. 

     (b)
Restriction on Sale of
Securities. The Advisor shall abide by the
terms of the letter set forth in Schedule
E to this Agreement. 

    
6.
Free Writing Communications. (a) Issuer Free Writing
Communications. Each of the
Guarantor and the Operating Partnership
represents and agrees that, unless it obtains the prior consent of the
Purchaser, and the Purchaser represents and agrees that, unless it obtains the
prior consent of the Guarantor and the Operating Partnership, it has not made
and will not make any offer relating to the Offered Securities that would
constitute (i) an Issuer Free Writing Communication or (ii) a General
Solicitation Communication other than a Permitted General Solicitation
Communication. 

     (b)
Term Sheets. Each of the Guarantor and the Operating Partnership consents to the use
by the Purchaser of a Free Writing Communication that (i) contains only (A)
information describing the preliminary terms of the Offered Securities or their
offering or (B) information that describes the final terms of the Offered
Securities or their offering and that is included in or is subsequently included
in the Final Offering Memorandum or (ii) does not contain any material
information about the Guarantor or the Operating Partnership or their respective
securities that was provided by or on behalf of the Guarantor and the Operating
Partnership, it being understood and agreed that neither the Guarantor nor the
Operating Partnership shall be responsible to the Purchaser for liability
arising from any inaccuracy in such Free Writing Communications referred to in
clause (i) or (ii) as compared with the information in the Preliminary Offering
Memorandum, the General Disclosure Package or the Final Offering Memorandum.

21

    
7.
Conditions of the Obligations of the
Purchaser. The obligations of the Purchaser
to purchase and pay for the Firm Securities on the First Closing Date and for
the Optional Securities on each Optional Closing Date will be subject to the
accuracy of the representations and warranties of the Guarantor, the Operating
Partnership and the Advisor herein (as though made on the Closing Date), to the
accuracy of the statements of officers of the Guarantor,
the Operating Partnership and the Advisor made pursuant to the provisions
hereof, to the performance by each of the Guarantor, the Operating Partnership
and the Advisor of its obligations hereunder and to the following additional
conditions precedent: 

     (a) Accountants’ Comfort Letter. The Purchaser shall have received letters, dated the date hereof and
each Closing Date, of PricewaterhouseCoopers LLP in form and substance
satisfactory to the Purchaser concerning the financial information with respect
to the Guarantor and the Operating Partnership set forth or incorporated by
reference in the General Disclosure Package and the Final Offering Memorandum.

     (b)
No Material Adverse Change. Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or otherwise),
results of operations, business, properties or prospects of the Guarantor and
its subsidiaries taken as a whole which, in the judgment of the
Purchaser, is material and adverse and makes it impractical or inadvisable to
market the Offered Securities; (ii) any downgrading in the rating of any debt
securities or preferred stock of the Guarantor or the Operating Partnership by
any “nationally recognized statistical rating organization” (as defined for
purposes of Rule 436(g)(2)), or any public announcement that any such
organization has under surveillance or review its rating of any debt securities
of the Guarantor or the Operating Partnership (other than an announcement with
positive implications of a possible upgrading, and no implication of a possible
downgrading, of such rating) or any announcement that the Guarantor or the
Operating Partnership has been placed on negative outlook; (iii) any change in
either U.S. or international financial, political or economic conditions or
currency exchange rates or exchange controls the effect of which is such as to
make it, in the judgment of the Purchaser, impractical to market or to enforce
contracts for the sale of the Offered Securities, whether in the primary market
or in respect of dealings in the secondary market, (iv) any suspension or
material limitation of trading in securities generally on the NYSE, or any
setting of minimum or maximum prices for trading on such exchange; (v) or any
suspension of trading of any securities of the Guarantor or the Operating
Partnership on any exchange or in the over-the-counter market; (vi) any banking
moratorium declared by any U.S. federal or New York authorities; (vii) any major
disruption of settlements of securities, payment, or clearance services in the
United States or any other country where such securities are listed or (viii)
any attack on, outbreak or escalation of hostilities or act of terrorism
involving the United States, any declaration of war by Congress or any other
national or international calamity or emergency if, in the judgment of the
Purchaser, the effect of any such attack, outbreak, escalation, act,
declaration, calamity or emergency is such as to make it impractical or
inadvisable to market the Offered Securities or to enforce contracts for the
sale of the Offered Securities. 

     (c)
Opinions of Counsel for the Operating
Partnership, the Guarantor and the Advisor.
The Purchaser shall have received the following opinions, each dated as of such
Closing Date: 

          (i) An opinion of Clifford Chance US LLP, counsel for the
Operating Partnership and the Guarantor, in substantially the form set forth on
Schedule F
hereto. 

         
(ii) An opinion of Venable LLP, special counsel for the Guarantor, in
substantially the form set forth on Schedule
G hereto. 

         
(iii) A tax opinion of Clifford Chance US LLP, counsel for the Guarantor and
the Operating Partnership, in substantially the form set forth on
Schedule H
hereto. 

         
(iv) An opinion of Clifford Chance US LLP, counsel for the Advisor, in
substantially the form set forth on Schedule
I hereto. 

     (d)
Opinion of Counsel for
Purchaser. The Purchaser shall have received
from Skadden, counsel for the Purchaser, such opinion or opinions, dated such
Closing Date, with respect to such matters as the Purchaser may require, and the
Guarantor and the Operating Partnership
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.

22

     (e) Officers’ Certificate. The Purchaser shall have
received a certificate, dated such Closing Date, of an executive officer of the
Guarantor and the Operating Partnership and a principal financial or accounting
officer of the Guarantor and the Operating Partnership in which such officers
shall state that the representations and warranties of the Guarantor and the
Operating Partnership in this Agreement are true and correct, that each of the
Guarantor and the Operating Partnership has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date, and that, subsequent to the date of the most
recent financial statements incorporated by reference in the General Disclosure
Package and the Final Offering Memorandum there has been no material adverse
change, nor any development or event involving a prospective material adverse
change, in the condition (financial or otherwise), results of operations,
business, properties or prospects of the Guarantor and its subsidiaries taken as
a whole except as set forth in the General Disclosure Package and the Final
Offering Memorandum or as described in such certificate. 

     (f)
Advisor Officers’ Certificate. The Purchaser shall have received a certificate, dated such
Closing Date, of an executive officer of the Advisor and a principal financial
or accounting officer of the Advisor in which such officers shall state that the
representations and warranties of the Advisor in this Agreement are true and
correct, that the Advisor has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date.

     (g) Lockup Letters. On or prior to the
date hereof, the Purchaser shall have received a lockup letter in the form set
forth on Schedule E hereto from (i) each of the executive officers and directors
of the Guarantor and (ii) the Advisor.

     (h) Listing on the NYSE. The Underlying
Shares up to an aggregate cap of 1,779,560 shares of the Guarantor's common
stock will have been approved for listing on the New York Stock
Exchange.

     The Operating Partnership and the
Guarantor will furnish the Purchaser with such conformed copies of such
opinions, certificates, letters and documents as the Purchaser reasonably
request. The Purchaser may in its sole discretion waive on behalf of the
Purchaser compliance with any conditions to the obligations of the Purchaser
hereunder, whether in respect of the Closing Date or otherwise.

23

     8.  Indemnification and Contribution. (a) Indemnification
of Purchaser. The Guarantor and the Operating Partnership will jointly and
severally indemnify and hold harmless the Purchaser, its officers, employees,
agents, partners, members, directors and its affiliates and each person, if any,
who controls the Purchaser within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act (each, an “Indemnified Party”),
against any and all losses, claims, damages or liabilities, joint or several, to
which such Indemnified Party may become subject, under the Securities Act, the
Exchange Act, other Federal or state statutory law or regulation or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Preliminary Offering Memorandum
or the Final Offering Memorandum, in each case as amended or supplemented, any
Issuer Free Writing Communication (including with limitation, any Supplemental
Marketing Material) or any General Solicitation Communication, or arise out of
or are based upon the omission or alleged omission of a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading and
will reimburse each Indemnified Party for any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating, preparing
or defending against any loss, claim, damage, liability, action, litigation,
investigation or proceeding whatsoever (whether or not such Indemnified Party is
a party thereto) whether threatened or commenced and in connection with the
enforcement of this provision with respect to any of the above as such expenses
are incurred; provided, however, that the Guarantor and the Operating
Partnership will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Guarantor and the Operating Partnership by the
Purchaser specifically for use therein, it being understood and agreed that the
only such information consists of the information described as such in
subsection (b) below.

     (b) Indemnification of Guarantor and the Operating
Partnership. The Purchaser will indemnify and
hold harmless the Guarantor and the Operating Partnership, each of their
directors and each of their officers and each person, if any, who controls the
Guarantor and the Operating Partnership within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (each, a “Purchaser Indemnified Party”), against any losses, claims, damages or liabilities to which such
Purchaser Indemnified Party may become subject, under the Securities Act, the
Exchange Act, other Federal or state statutory law or regulation or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Preliminary Offering Memorandum
or the Final Offering Memorandum, in each case as amended or supplemented, or
any Issuer Free Writing Communication or arise out of or are based
upon the omission or the alleged omission of a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Guarantor and
the Operating Partnership by the Purchaser specifically for use therein, and
will reimburse any legal or other expenses reasonably incurred by such Purchaser
Indemnified Party in connection with investigating, preparing or defending
against any such loss, claim, damage, liability, action, litigation,
investigation or proceeding whatsoever (whether or not such Purchaser
Indemnified Party is a party thereto) whether threatened or commenced based upon
any such untrue statement or omission, or any such alleged untrue statement or
omission as such expenses are incurred, it being understood and agreed that the
only such information furnished by the Purchaser consists of (i) the following
information in the Preliminary and the Final Offering Memorandum furnished on
behalf of the Purchaser: under the caption “Plan of Distribution”, the second
sentence of the second paragraph and the second sentence of the ninth paragraph;
provided, however, that the Purchaser shall not be liable for any losses,
claims, damages or liabilities arising out of or based upon the Guarantor’s or
the Operating Partnership's failure to perform their respective obligations
under Section 5(A)(a) of this Agreement. 

     (c)
Actions against Parties; Notification. Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the failure to notify the indemnifying party shall not
relieve it from any liability that it may have under subsection (a) or (b) above
except to the extent that it has been materially prejudiced (through for example
the forfeiture of substantive rights or defenses) by such failure; and provided
further that the failure to notify the indemnifying party shall not relieve it
from any liability that it may have to an indemnified party otherwise than under
subsection (a) or (b) above. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement (i) includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action and (ii) does not include a statement as to or an admission of
fault, culpability or failure to act by or on behalf of any indemnified party.
No indemnifying party shall have any liability hereunder for any settlement of
any claim effective without the consent of the indemnifying party, which consent
will not be unreasonably withheld, but if settled with such consent or if there
be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.  

24

     (d) Contribution. If the indemnification
provided for in this Section is unavailable or insufficient to hold harmless an
indemnified party under subsection (a) or (b) above, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to reflect
the relative benefits received by the Guarantor and the Operating Partnership on
the one hand and the Purchaser on the other from the offering of the Offered
Securities or (ii) 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 Guarantor and the Operating Partnership on the one hand and the
Purchaser on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the
Guarantor and the Operating Partnership on the one hand and the Purchaser on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Guarantor and the
Operating Partnership bear to the total discounts and commissions received by
the Purchaser from the Guarantor and the Operating Partnership under this
Agreement. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Guarantor and the Operating Partnership or the Purchaser and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), the Purchaser shall not be required to contribute any amount in
excess of the amount by which the total price at which the Offered Securities
purchased by it were resold exceeds the amount of any damages which the
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The Guarantor and the
Operating Partnership and the Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) 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 this Section 8(d).

     9.
[Reserved]

     10.
Survival of Certain Representations and
Obligations. The respective indemnities,
agreements, representations, warranties and other statements of the Guarantor
and the Operating Partnership or its officers and of the Purchaser set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of the Purchaser, the Guarantor and the Operating Partnership or
any of their respective representatives, officers or directors or any
controlling person, and will survive delivery of and payment for the Offered
Securities. If the purchase of the Offered Securities by the Purchaser is not
consummated for any reason, the Guarantor will reimburse the Purchaser for all
out-of-pocket expenses (including fees and reasonable disbursements of counsel)
reasonably incurred by them in connection with the offering of the Offered
Securities, and the respective obligations of the Guarantor, the Operating
Partnership and the Purchaser pursuant to Section 8 hereof shall remain in
effect. In addition, if any Offered Securities have been purchased hereunder,
the representations and warranties in Section 2 and all obligations under
Section 5 shall also remain in effect.

 

25

     11. Notices. All communications hereunder
will be in writing and, if sent to the Purchaser, will be mailed, delivered or
telegraphed and confirmed to Credit Suisse Securities (USA) LLC, Eleven Madison
Avenue, New York, N.Y. 10010-3629, Attention: LCD-IBD, or, if sent to the
Guarantor, the Operating Partnership or the Advisor will be mailed, delivered or
telegraphed and confirmed to it at ZAIS Financial Corp., Two Bridge Avenue,
Suite 322, Red Bank, NJ 07701, Attention: Michael Szymanski, with a copy to
Clifford Chance US LLP, 31 West 52nd Street, New York, New York 10019, Attention
Jay L. Bernstein; provided, however, that any notice to the Purchaser pursuant
to Section 8 will be mailed, delivered or telegraphed and confirmed to the
Purchaser.

     12.
Successors. This
Agreement will inure to the benefit of and be binding upon the parties hereto
and their respective successors and the controlling persons referred to in
Section 8, and no other person will have any right or obligation hereunder,
except that holders of Offered Securities shall be entitled to enforce the
agreements for their benefit contained in the second and third sentences of
Section 5(A)(b) hereof against the Guarantor and the Operating Partnership as if
such holders were parties thereto.

     13.
[Reserved]

     14.
Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same Agreement.

     15.
Absence of Fiduciary Relationship. Each of the Guarantor, the Operating Partnership and the
Advisor acknowledges and agrees that:

     (a)
No Other Relationship. The Purchaser has been retained solely to act as initial purchaser in
connection with the initial purchase, offering and resale of the Offered
Securities and that no fiduciary, advisory or agency relationship between the
Guarantor, the Operating Partnership and the Advisor on the one hand and the
Purchaser on the other hand has been created in respect of any of the
transactions contemplated by this Agreement or the Preliminary or Final Offering
Memorandum, irrespective of whether the Purchaser has advised or is advising the
Guarantor, the Operating Partnership or the Advisor on other matters;

     (b)
Arm’s-Length Negotiations. The purchase price of the Offered Securities set forth in this
Agreement was established by the Guarantor and the Operating Partnership
following discussions and arms-length negotiations with the Purchaser and the
Guarantor, the Operating Partnership and the Advisor are capable of evaluating
and understanding and understands and accepts the terms, risks and conditions of
the transactions contemplated by this Agreement;

     (c)
Absence of Obligation to Disclose. The Guarantor, the Operating Partnership and the Advisor
have been advised that the Purchaser and its affiliates are engaged in a broad
range of transactions which may involve interests that differ from those of the
Guarantor, the Operating Partnership and the Advisor and that the Purchaser has
no obligation to disclose such interests and transactions to Guarantor, the
Operating Partnership and the Advisor by virtue of any fiduciary, advisory or
agency relationship; and

     (d)
Waiver. Each of
the Guarantor, the Operating Partnership and the Advisor waives, to the fullest
extent permitted by law, any claims they may have against the Purchaser for
breach of fiduciary duty or alleged breach of fiduciary duty and agree that the
Purchaser shall have no liability (whether direct or indirect) to the Guarantor,
the Operating Partnership or the Advisor in respect of such a fiduciary duty
claim or to any person asserting a fiduciary duty claim on behalf of or in right
of the Guarantor, the Operating Partnership or the Advisor, including
shareholders, employees or creditors of the Guarantor, the Operating Partnership
or the Advisor.

26

     16.
Applicable Law. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.

     Each of the
Guarantor, the Operating Partnership and the Advisor hereby submits to the
non-exclusive jurisdiction of the Federal and state courts in the Borough of
Manhattan in The City of New York in any suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. Each of the
Guarantor, the Operating Partnership and the Advisor irrevocably and
unconditionally waives any objection to the laying of venue of any suit or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby in Federal and state courts in the Borough of Manhattan in
The City of New York and irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such suit or proceeding in any such
court has been brought in an inconvenient forum.

27

     If the
foregoing is in accordance with the Purchaser's understanding of our agreement,
kindly sign and return to the Guarantor, the Operating Partnership and the
Advisor one of the counterparts hereof, whereupon it will become a binding
agreement among the Guarantor, the Operating Partnership and the Advisor and the
Purchaser in accordance with its terms.

	Very truly yours,
			 
	ZAIS FINANCIAL CORP.
			 
	       By: 	/s/ Michael
      Szymanski
		Name: Michael Szymanski
		Title: Chief Executive Officer and President
			 
			 
	ZAIS FINANCIAL PARTNERS, L.P.
	       By: 	ZAIS Financial Corp.,
		       as its General
    Partner
			 
		By: 	/s/ Michael
      Szymanski
			Name: Michael
      Szymanski
			Title: Chief
      Executive Officer and President
			 
			 
	ZAIS REIT MANAGEMENT, LLC
	       By: 	ZAIS Group, LLC
		       as its Managing
    Member
			 
		By:	/s/ Michael
      Szymanski
			Name: Michael
      Szymanski
			Title:
      President

28

	
      The foregoing Purchase Agreement
      is hereby confirmed and accepted as of the date first above
      written.
	
		 	
		 	
	CREDIT SUISSE SECURITIES (USA)	
	LLC	
		 	
		 	
	By: 	/s/ David
      Stolzar	
		Name: David
      Stolzar	
		Title:
      Director	

29

SCHEDULE A

	1.	     	Issuer Free Writing
      Communications
	 
			1. The Operating
      Partnership’s Pricing Term Sheet attached hereto.
	 
	2.		Other Information
      Included in the Final Offering Memorandum
	 
			None.

30

	PRICING TERM
      SHEET	STRICTLY
      CONFIDENTIAL	
	Dated November 19,
      2013		

ZAIS Financial Partners,
L.P.
8.0% Exchangeable Senior Notes due
2016

The information in this pricing term
sheet supplements ZAIS Financial Partners, L.P.’s preliminary offering
memorandum, dated November 18, 2013 (the “Preliminary Offering Memorandum”), and
supersedes the information in the Preliminary Offering Memorandum to the extent
inconsistent with the information in the Preliminary Offering Memorandum. In all
other respects, this term sheet is qualified in its entirety by reference to the
Preliminary Offering Memorandum. Terms used herein but not defined herein shall
have the respective meanings as set forth in the Preliminary Offering
Memorandum. All references to dollar amounts are references to U.S.
dollars.

	Issuer:	      	ZAIS
      Financial Partners, L.P. (“ZAIS OP”)
	Title
      of Notes:		8.0%
      Exchangeable Senior Notes due 2016 (the “Notes”)
	Guarantee:		Payments on
      the Notes will be fully and unconditionally guaranteed on an unsecured and
      unsubordinated basis by ZAIS Financial Corp., ZAIS OP’s parent
      company
	Aggregate principal amount of Notes offered:		$50,000,000
      principal amount of Notes
	Option to purchase additional Notes:		$7,500,000
      principal amount of Notes
	Annual interest rate:		The Notes
      will bear interest at a rate equal to 8.0% per annum from November 25,
      2013.
	Ticker / Exchange for ZAIS Financial Corp.:		ZFC / The
      New York Stock Exchange (“NYSE”)
	NYSE
      Last Reported Sale Price on November 19, 2013:		$16.55 per
      share of ZAIS Financial Corp.’s common stock
	Exchange premium:		Approximately 15% above the NYSE Last Reported Sale Price on
      November 19, 2013
	Initial exchange price:		Approximately $19.03 per share of ZAIS Financial Corp.’s common
      stock
	Initial exchange rate:		52.5417
      shares of ZAIS Financial Corp.’s common stock per $1,000 principal amount
      of Notes.
	Interest payment dates:		May 15 and
      November 15, commencing May 15, 2014
	Maturity date:	 	November 15,
      2016
	Bookrunner:		Credit
      Suisse Securities (USA) LLC
	Trade
      date:		November 20,
      2013
	Settlement date:		November 25,
      2013
	CUSIP:		98886L
      AA4
	ISIN:		US98886LAA44
	Share
      Cap:		To the
      extent the aggregate number of shares ZAIS Financial Corp. would be
      required to deliver upon any exchange, when taken together with shares
      delivered upon previous exchanges, if any, exceeds the “aggregate share
      cap,” which is the maximum number of shares ZAIS Financial Corp. may issue
      without stockholder approval pursuant to NYSE listing requirements and
      which, as of November 19, 2013, was 1,779,560 shares (including, as part
      of outstanding shares of common stock, OP units held by limited partners),
      ZAIS OP will deliver cash in respect of any shares in excess of the
      aggregate share cap based on a daily exchange value calculated on a
      proportionate basis for each trading day of the 40 trading day averaging
      period.

31

	Adjustment to exchange rate upon a make-whole fundamental
      change:	      	The table
      below sets forth the number of additional shares of the ZAIS Financial
      Corp.’s common stock, if any, to be added to the exchange rate per $1,000
      principal amount of Notes that are exchanged in connection with a
      “make-whole fundamental change” as described in the Preliminary Offering
      Memorandum, based on the stock price and effective date of the make-whole
      fundamental change.

		ZFC Common Stock Price
	Effective
      Date	$16.55	$17.00	$17.50	$18.00	$18.50	$19.00	$20.00	$21.00	$22.00	$23.00	$24.00
	November 25,
      2013	7.8812	6.7749	5.6728	4.6941	3.8284	3.0688	1.8361	0.9577	0.4023	0.1108	0.0000
	November 15,
      2014	7.8812	7.1289	5.9654	4.9374	4.0346	3.2477	1.9858	1.0892	0.5039	0.1702	0.0151
	November 15,
      2015	7.8812	6.8434	5.5850	4.4841	3.5324	2.7207	1.4798	0.6838	0.2404	0.0395	0.0000
	November 15,
      2016	7.8812	6.2818	4.6012	3.0139	1.5124	0.0899	0.0000	0.0000	0.0000	0.0000	0.0000

The exact
stock prices and effective dates may not be set forth in the table above, in
which case:

	if the stock price is between two stock prices in
  the table or the effective date is between two effective dates in the table,
  the number of additional shares will be determined by a straight-line
  interpolation between the number of additional shares set forth for the higher
  and lower stock prices and the earlier and later effective dates, as
  applicable, based on a 365-day year;
  
	if the stock price is greater than $24.00 per
  share (subject to adjustment in the same manner as the stock prices set forth
  in the column headings of the table above), no additional shares will be added
  to the exchange rate; or
  
	if the stock price is less than $16.55 per share
  (subject to adjustment in the same manner as the stock prices set forth in the
  column headings of the table above), no additional shares will be added to the
  exchange rate.

Notwithstanding the foregoing, in no
event will the exchange rate be increased on account of a make-whole fundamental
change to exceed 60.4229 shares of ZAIS Financial Corp.’s common stock per
$1,000 principal amount of Notes, subject to adjustment in the same manner as
the exchange rate is required to be adjusted as set forth under “—Exchange
Rights— Exchange Rate Adjustments” in the Preliminary Offering
Memorandum.

General

This communication is intended for the
sole use of the person to whom it is provided by the sender.

This communication shall not
constitute an offer to sell or the solicitation of an offer to buy securities
nor shall there be any sale of these securities in any state in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the laws of any such state.

The Notes and any shares of ZAIS
Financial Corp.’s common stock issuable upon exchange of the Notes have not been, and,
except as described in the Preliminary Offering Memorandum, will not be,
registered under the Securities Act of 1933, as amended (the “Securities Act”),
or any state securities laws. Accordingly, the Notes are being offered and sold
only to “qualified institutional buyers” as defined in Rule 144A promulgated
under the Securities Act. The Notes are not transferable except in accordance
with the restrictions described under “Transfer Restrictions” in the Preliminary
Offering Memorandum.

32

SCHEDULE B

Supplemental Marketing
Materials

None.

33

SCHEDULE D

Permitted General Solicitation
Communications 

34

SCHEDULE E 

Lock-Up Agreement 

	November 19,
2013

	Credit Suisse Securities (USA)
      LLC
Eleven Madison Avenue
New York, New York 10010-3629
	
             As the
      Purchaser

Dear Sirs: 

             
Reference is made to the Purchase Agreement (the “Purchase Agreement”), to be entered
into by and among ZAIS Financial Corp., a Maryland corporation (the
“Company”),
ZAIS Financial Partners, L.P. (the “OP”), ZAIS REIT Management, LLC and
Credit Suisse Securities (USA) LLC, as the Purchaser, relating to an offering of
the OP’s Exchangeable Senior Notes due 2016, which will be exchangeable for
shares of the Company’s common stock, $0.0001 par value (the “Common Stock”). 

             
As an inducement to the Purchaser to execute the Purchase Agreement, the
undersigned hereby agrees that during the period specified in the following
paragraph (the “Lock-Up Period”), the undersigned will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, any shares of the Common
Stock, or securities convertible into or exchangeable or exercisable for the
Common Stock, enter into a transaction which would have the same effect, or
enter into any swap, hedge or other arrangement that transfers, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such aforementioned transaction is to be settled by delivery of Common Stock
or such other securities, in cash or otherwise, or publicly disclose the
intention to make any such offer, sale, pledge or disposition, or to enter into
any such transaction, swap, hedge or other arrangement, without, in each case,
the prior written consent of the Purchaser.

             
The Lock-Up Period will commence on the date of this Lock-Up Agreement and
continue and include the date that is 60 days after the date of the Purchase
Agreement. 

             
Any shares of Common Stock received upon exercise of options granted to the
undersigned will also be subject to this Lock-Up Agreement. A transfer of Common
Stock to a family member of the undersigned or a trust of which the undersigned
is a trustor and the beneficiaries are family members of the undersigned may be
made, provided the transferee agrees to be bound in writing by the terms of this
Lock-Up Agreement prior to such transfer, such transfer shall not involve a
disposition for value and no filing by any party (donor, donee, transferor or
transferee) under the Securities Exchange Act of 1934 (the “Exchange Act”) shall be
required or shall be voluntarily made in connection with such transfer (other
than a filing on a Form 4 or 5 made after the expiration of the Lock-Up
Period).

             
In furtherance of the foregoing, the transfer agent and registrar is hereby
authorized to decline to make any transfer of shares of the Common Stock if such
transfer would constitute a violation or breach of this Lock-Up Agreement.

             
This Lock-Up Agreement shall be binding on the undersigned and the successors,
heirs, personal representative and assigns of the undersigned. This Lock-Up
Agreement shall lapse and become null and void if the Purchase Agreement shall
not have been executed on or before November 30, 2013. This Lock-Up Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York. 

[Signature Page Follows] 

35

	Very truly
  yours,
	  
	Signature of stockholder:	

	  
	  
	Print name of stockholder:	

36

 SCHEDULE F 

37

 SCHEDULE G 

38

 SCHEDULE H 

39

 SCHEDULE I 

40

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