Exhibit 10.1

     
 
     

STOCK PURCHASE AGREEMENT

dated as of June 8, 2005

by and among

MMA MORTGAGE INVESTMENT CORPORATION

and

MUNICIPAL MORTGAGE & EQUITY, LLC

and

DAVID WILLIAMS

and

KEVIN FILTER

     
 
     

 

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

 

TABLE OF CONTENTS

         
ARTICLE I — DEFINITIONS
    1  
1.01. Definitions
    1  
ARTICLE II – SALE OF SHARES AND CLOSING
    11  
2.01. Purchase and Sale
    11  
2.02. Consideration
    11  
2.03. Closing
    11  
2.04. Deferred Purchase Price
    12  
2.05. Earn-out Amount
    13  
2.06. Adjustment to Purchase Price
    15  
2.07. Transfer Restrictions
    17  
2.08. Withholding Taxes
    17  
2.09. Certain Transaction Adjustments
    17  
ARTICLE III — REPRESENTATIONS AND WARRANTIES OF SELLERS
    18  
3.01. Sellers
    19  
3.02. Due Execution
    19  
3.03. Organization of the Company
    19  
3.04. Capital Stock
    19  
3.05. Subsidiaries
    19  
3.06. No Conflicts; Consents and Approvals
    20  
3.07. Governmental Approvals and Filings
    20  
3.08. Financial Statements
    20  
3.09. Absence of Changes
    21  
3.10. Taxes
    22  
3.11. Legal Proceedings
    24  
3.12. Compliance With Laws and Orders
    25  
3.13. Benefit Plans; ERISA
    25  
3.14. Real Property
    27  
3.15. Tangible Personal Property
    28  
3.16. Intellectual Property Rights
    28  

i

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

 

         
3.17. Contracts
    28  
3.18. Licenses
    30  
3.19. Insurance
    30  
3.20. Employees; Labor Relations
    31  
3.21. Substantial Business Relationships
    31  
3.22. No Powers of Attorney
    32  
3.23. Defaults
    32  
3.24. Brokers
    32  
3.25. Status of Outstanding Loans
    32  
3.26. No Undisclosed Liabilities
    33  
3.27. Affiliate Transactions
    34  
3.28. Books and Records
    34  
3.29. Environmental Matters
    34  
3.30 Securities Restrictions
    34  
3.31. Accredited Investor Status
    35  
3.32. No Implied Representations
    35  
ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF PURCHASER AND MUNIMAE
    35  
4.01. Organization
    35  
4.02. Authority
    35  
4.03. No Conflicts
    36  
4.04. Governmental Approvals and Filings
    36  
4.05. Legal Proceedings
    36  
4.06. Financial Capability
    36  
4.07. Investigation; Forecasts
    37  
4.08. Purchase for Investment
    37  
4.09. Brokers
    37  
ARTICLE V — COVENANTS OF SELLERS
    37  
5.01. Regulatory and Other Approvals
    37  
5.02. Books and Records
    38  
5.03. Notice and Cure
    38  
5.04. Continued Access
    38  

ii

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

 

         
5.05. Operation of the Business Prior to Closing
    38  
5.06. Tax Matters
    39  
5.07. No Solicitation, Etc.
    39  
5.08. Affiliate Transactions
    40  
ARTICLE VI — COVENANTS OF PURCHASER AND MUNIMAE
    41  
6.01. Regulatory and Other Approvals
    41  
6.02. Notice and Cure
    41  
6.03. Employees and Benefit Plans
    42  
6.04. Rule 144 Undertaking
    42  
6.05. Company Loan Officers
    43  
ARTICLE VII — TAX MATTERS AND POST-CLOSING TAXES
    43  
7.01. Pre-Closing Tax Returns
    43  
7.02. Transfer Taxes
    44  
7.03. Post-Closing Taxes and Sellers’ Post-Closing Taxes
    44  
7.04. Notification of Audits
    45  
7.05. Maintenance of Records
    45  
7.06. Purchase Price Adjustment
    45  
7.07. Tax Sharing Agreements
    46  
7.08. S Corporation Status
    46  
7.09. Section 338 Election
    46  
ARTICLE VIII — CONDITIONS TO CLOSING
    46  
8.01. Conditions to Obligations of Each Party
    46  
8.02. Additional Conditions to Purchaser’s Performance
    46  
8.03. Additional Conditions to Sellers’ Performance
    48  
ARTICLE IX — SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
    48  
9.01. Survival of Representations, Warranties, Covenants and Agreements
    48  
9.02. Closing Certificate
    49  
ARTICLE X — TERMINATION
    49  
10.01. Termination
    49  
10.02. Effect of Termination
    50  
ARTICLE XI — INDEMNIFICATION
    50  

iii

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

 

         
11.01. Tax Indemnifications
    50  
11.02. Other Indemnification
    50  
11.03. Method of Asserting Claims
    52  
11.04. Indemnity Payments
    53  
11.05. Subrogation.
    54  
11.06. Exclusive Remedy
    54  
ARTICLE XII — MISCELLANEOUS
    54  
12.01. Notices
    54  
12.02. Entire Agreement
    55  
12.03. Expenses
    55  
12.04. Public Announcements
    56  
12.05. Confidentiality
    56  
12.06. Further Assurances; Post-Closing Cooperation
    57  
12.07. Waiver
    57  
12.08. Amendment
    58  
12.09. No Third Party Beneficiary
    58  
12.10. No Assignment; Binding Effect
    58  
12.11. Headings; Exhibits
    58  
12.12. Breach; Abandonment
    58  
12.13 Waiver of Trial by Jury
    58  
12.14. Consent to Jurisdiction and Service of Process
    59  
12.15. Severability
    59  
12.16. Governing Law
    59  
12.17. Counterparts
    59  
12.18 Representation by Counsel
    59  

      Exhibits    
A
  —      Primary Calculation Amount Examples
B
  —      Form of Employment Agreements
C
  —      Representations and Warranties of MuniMae
D
  —      Form of Landlord Estoppel Certificate
E
  —      Form of Glaser Estoppel Certificate
F
  —      Installment Amount Examples
G
  —      Assignment of Loans
H
  —      Permitted Actions

iv

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

 

     
I
  —      Additional Required Consents
J
  —      Form of Lease
K
  —      Form of Seller’s Certification

v

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

 

STOCK PURCHASE AGREEMENT

     This STOCK PURCHASE AGREEMENT dated as of June 8, 2005, is made and entered
into by and among MMA MORTGAGE INVESTMENT CORPORATION, a Florida corporation
(“Purchaser”), MUNICIPAL MORTGAGE & EQUITY, LLC, a Delaware limited liability
company (“MuniMae”), and DAVID WILLIAMS, a resident of the State of Minnesota,
and KEVIN FILTER, a resident of the State of Minnesota (together with David
Williams, “Sellers”).

Recitals

     Sellers own or on the Closing Date will own in the aggregate all of the
issued and outstanding shares of stock of Glaser Financial Group, Inc., a
Minnesota corporation (the “Company”).

     Sellers desire to sell, and Purchaser desires to purchase, all of the
issued and outstanding shares of stock of the Company (the “Glaser Shares”) on
the terms and subject to the conditions set forth in this Agreement.

     Now, therefore, in consideration of the mutual representations, warranties,
covenants and agreements set forth in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS

     1.01. Definitions.

          (a) As used in this Agreement, the following defined terms shall have
the meanings indicated below:

     “1934 Act” shall have the meaning set forth in item 4 of Exhibit C.

     “Actions or Proceedings” means any action, suit, administrative proceeding,
arbitration or Governmental or Regulatory Authority audit or investigation.

     “Affiliate” means any Person that directly, or indirectly through one of
more intermediaries, controls or is controlled by or is under common control
with the Person specified. For purposes of this definition, control of a Person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person whether by Contract or otherwise.

     “Agreement” means this Stock Purchase Agreement and the Exhibits, together
with the Disclosure Schedule and the Schedules attached thereto.

K-1

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

 

     “Annual Origination Fee and Premium Income” means the origination fees and
premium income earned on all products by the Company Loan Officers during any
twelve-month period ending on the day immediately preceding an anniversary of
the Closing Date. For the avoidance of doubt, Annual Origination Fee and Premium
Income includes (i) the portion of origination fees and premiums earned through
referrals from MuniMae or its other Subsidiaries and (ii) any and all broker
fees, consulting fees, referral fees and any other fees related to the
origination of a loan. Annual origination fees and premium income will be
calculated so that the Company Loan Officers receive credit for origination fees
collected at the closing of a loan during the Earn-out Period and associated
premium income collected during the Earn-out Period or to be collected after the
Earn-out Period, but subject to adjustment for any such premium income that is
not actually collected by the Company.

     “Assets and Properties” of any Person means all assets and properties of
every kind, nature, character and description (whether real, personal or mixed,
whether tangible or intangible, whether absolute, accrued, contingent, fixed or
otherwise and wherever situated), including the goodwill related thereto,
operated, owned or leased by such Person, including, without limitation, cash,
cash equivalents, Investment Assets, accounts and notes receivable, chattel
paper, documents, instruments, general intangibles, real estate, equipment,
inventory, goods and Intellectual Property.

     “Assigned Transactions” shall have the meaning set forth in
Section 2.09(a).

     “Associate” means, with respect to any Person, any corporation or other
business organization of which such Person is an officer, member or partner or
is the beneficial owner, directly or indirectly, of ten percent (10%) or more of
any class of equity securities, any trust or estate in which such Person has a
substantial beneficial interest or as to which such Person serves as a trustee
or in a similar capacity and any relative or spouse of such Person, or any
relative of such spouse, who has the same home as such Person.

     “Audited Financial Statement Date” means December 31, 2004.

     “Audited Financial Statements” means the Financial Statements for the
fiscal year of the Company ended December 31, 2004.

     “Benefit Plan” means any Plan existing at any time prior to or on the date
hereof, which the Company or any ERISA Affiliate sponsors, maintains,
contributes to, or has any liability under as of the date hereof.

     “Bond Indemnity Agreement” means that Agreement of Indemnity dated June 3,
2002, among the Company, Sellers and their respective spouses, Curt D. Glaser
and his spouse, and Great American Insurance Company.

     “Books and Records” means all files, documents, instruments, papers, books
and records relating to the Business or Condition of the Company, including,
without limitation, financial statements, Tax Returns and related work papers
and letters from accountants, budgets, pricing

2

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

 

guidelines, ledgers, journals, deeds, title policies, minute books, stock
certificates and books, stock transfer ledgers, Contracts, Licenses, customer
lists, computer files and programs, retrieval programs, operating data and plans
and environmental studies and plans.

     “Borrower” means the borrower on any loan which the Company originated,
holds, or services, or which the Company has sold under any arrangement wherein
the Company retains any risk of loss.

     “Business Combination” means with respect to any Person any merger,
consolidation or combination to which such Person is a party, any sale, or other
disposition of all or substantially all of the capital stock or other equity
interests of such Person or any sale, dividend or other disposition of all or
substantially all of the Assets and Properties of such Person.

     “Business Day” means a day other than Saturday, Sunday or any day on which
banks located in any of the States of Maryland, Minnesota and New York are
authorized or obligated to close.

     “Business Employee” shall have the meaning set forth in Section 3.20(a).

     “Business or Condition of the Company” means the business, condition
(financial or otherwise), results of operations, Assets and Properties of the
Company.

     “Cash Closing Payment” shall have the meaning set forth in Section 2.03.

     “Change in Control” shall be deemed to have occurred if the event set forth
in any one of the following paragraphs shall have occurred:

          (i) the sale, lease, exchange or other transfer, directly or
indirectly, of substantially all of the assets of MuniMae or Purchaser (in one
transaction or in a series of related transactions) to a person or entity that
is not controlled, directly or indirectly, by MuniMae or Purchaser;

          (ii) the approval by the stockholders of MuniMae or Purchaser of any
plan or proposal for the liquidation or dissolution of MuniMae or Purchaser;

          (iii) any one person other than an Affiliate of MuniMae becomes after
the Closing Date the “beneficial owner” (as defined in Rule 13d-3 under the 1934
Act), directly or indirectly, of twenty-five percent (25%)) or more of the
combined voting power of MuniMae’s or Purchaser’s outstanding securities
ordinarily having the right to vote at elections of directors; or

          (iv) a merger or consolidation to which MuniMae or Purchaser is a
party if the stockholders of MuniMae or Purchaser immediately prior to the
closing date of such merger or consolidation do not have “beneficial ownership”
(as defined in Rule 13d-3 under the 1934 Act), immediately following the closing
date of such merger or consolidation, of securities of the surviving corporation
representing at least fifty percent (50%) of the combined voting power of

3

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

 

the surviving corporation’s then outstanding securities ordinarily having the
right to vote at elections of directors.

     “Claim Notice” means written notification pursuant to Section 11.03(a) of a
Third Party Claim as to which indemnity under Section 11.02 is sought by an
Indemnified Party, enclosing a copy of all papers served, if any, and specifying
the nature of and basis for such Third Party Claim and for the Indemnified
Party’s claim against the Indemnifying Party under Section 11.02, together with
the amount or, if not then reasonably ascertainable, the estimated amount,
determined in good faith, of such Third Party Claim.

     “Closing” means the closing of the transactions contemplated by Section
2.03.

     “Closing Agreement” means a written and legally binding agreement with a
Governmental or Regulatory Authority relating to Taxes.

     “Closing Audit” shall have the meaning set forth in Section 2.06.

     “Closing Date” means the date and time as of which the Closing actually
takes place.

     “Closing Date Average Share Price” means the average of the closing prices
per share of MuniMae Common Shares on the New York Stock Exchange for the thirty
(30) trading days immediately preceding the Closing Date.

     “COBRA” shall have the meaning set forth in Section 3.13(c).

     “Code” means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.

     “Company” shall have the meaning set forth in the first recital of this
Agreement.

     “Company Loan Officers” means the Company’s six (6) loan officers existing
on the date of this Agreement and each of Sellers.

     “Confidentiality Agreements” has the meaning given to such term in
Section 12.05.

     “Contract” means any agreement, lease, evidence of Indebtedness, mortgage,
indenture, security agreement or other contract (whether written or oral);
provided, however, that the term “Contract” shall not be deemed to include any
evidence of Indebtedness related to loans made in the ordinary course of
business to Borrowers that are not Associates or Affiliates of the Company or
Sellers or any other documents or agreements related thereto.

     “Deferred Purchase Price” shall have the meaning set forth in Section
2.04(a).

     “Defined Benefit Plan” means each Pension Benefit Plan which is subject to
Part 3 of Title 1 of ERISA, Section 412 of the Code or Title IV of ERISA.

4

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

 

     “Delivery Date Average Share Price” means the average of the closing prices
per share of MuniMae Common Shares on the New York Stock Exchange for the thirty
(30) trading days ending on (and including) the trading day immediately
preceding (i) the relevant Installment Payment Date, in the case of payment of
any Deferred Purchase Price, or (ii) the third anniversary of the Closing Date,
in the case of payment of any Earn-out Amount.

     “Disclosure Schedule” shall have the meaning set forth in Article III.

     “Dispute Period” means the period ending thirty calendar days following
receipt by an Indemnifying Party of either a Claim Notice or an Indemnity
Notice.

     “DUS” means the Delegated Underwriting and Servicing relationships, status
and guidelines as defined by Fannie Mae in its agreements and guidelines.

     “Earn-out Amount” shall have the meaning set forth in Section 2.05(c).

     “Earn-out Period” means the period commencing on the Closing Date and
ending on the day immediately prior to the third anniversary of the Closing
Date.

     “Employment Agreements” shall have the meaning set forth in Section 8.02.

     “Environmental Law” means any Law relating to human health, safety or
protection of the environment or to emissions, discharges, releases or
threatened releases of pollutants, contaminants or Hazardous Materials in the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), or otherwise relating to the
treatment, storage or disposal of any Hazardous Material.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.

     “ERISA Affiliate” means any Person who is in the same controlled group of
corporations or who is under common control, or is otherwise deemed to be a
single employer, with Sellers or, before the Closing Date, the Company, pursuant
to Sections 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.

     “Fannie Mae” means the Federal National Mortgage Association.

     “Financial Statements” means the financial statements of the Company
delivered to Purchaser pursuant to Section 3.08.

     “Firm” shall have the meaning set forth in Section 2.06(b).

     “Freddie Mac” means the Federal Home Loan Mortgage Corporation.

5

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

 

     “GAAP” means United States generally accepted accounting principles,
consistently applied throughout the specified period and in the immediately
prior comparable period.

     “Glaser Redemption Debt” means the outstanding principal amount plus all
accrued interest of the Company Indebtedness as of the Closing Date owing to
Curt Glaser pursuant to a promissory note dated March 31, 2005.

     “Glaser Shares” shall have the meaning set forth in the second recital of
this Agreement.

     “GNMA” means the Government National Mortgage Association.

     “Governmental or Regulatory Authority” means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision or any self-regulatory body of any stock
exchange.

     “Hazardous Material” means (i) any chemicals, materials, substances or
wastes which are now or hereafter become defined as or included in the
definition of “ hazardous substances,” “ hazardous wastes,” “ hazardous
materials,” “ extremely hazardous wastes,” “ restricted hazardous wastes,” “
toxic substances,” “ toxic pollutants” or words of similar import, under any
Environmental Law, including, without limitation, any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation and transformers or other equipment
that contain dielectric fluid containing levels of polychlorinated biphenyls
(PCBs); and (ii) any other chemical, material, substance or waste, exposure to
which is now or hereafter prohibited, limited or regulated by any Governmental
or Regulatory Authority.

     “HSR Act” means Section 7A of the Clayton Act (Title II of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) and the rules
and regulations promulgated thereunder.

     “HUD” means the United States Department of Housing and Urban Development.

     “Indebtedness” of any Person means all obligations of such Person (i) for
borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(iv) under capital leases, (v) incurred pursuant to or as a result of Liens
granted on the Company’s Assets and Properties, and (vi) in the nature of
guarantees of the obligations described in clauses (i) through (v) above of any
other Person.

     “Indemnified Party” means any Person claiming indemnification under any
provision of Article XI.

     “Indemnifying Party” means any Person against whom a claim for
indemnification is being asserted under any provision of Article XI.

6

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

 

     “Indemnity Notice” means written notification pursuant to Section 11.03(b)
of a claim for indemnity under Article XI by an Indemnified Party, specifying
the nature of and basis for such claim, together with the amount or, if not then
reasonably ascertainable, the estimated amount, determined in good faith, of
such claim.

     “Independent Accountant” shall have the meaning set forth in
Section 2.05(d).

     “Installment Amount” shall have the meaning set forth in Section 2.04(c).

     “Installment Payment Date” shall have the meaning set forth in Section
2.04(b).

     “Intellectual Property” means all patents, patent applications, trademarks
(whether registered or not), trademark applications, service mark registrations
and service mark applications, trade names, trade dress, logos, slogans, tag
lines, uniform resource locators, Internet domain names, Internet domain name
applications, corporate names, copyright applications, registered copyrighted
works and commercially significant unregistered copyrightable works (including
proprietary software, books, written materials, prerecorded video or audio
tapes, and other copyrightable works), technology, software, trade secrets,
know-how, technical documentation, specifications, data, designs and other
intellectual property and proprietary rights, including without limitation the
right to sue for past infringements thereof.

     “Investment Assets” means all debentures, notes and other evidences of
Indebtedness, stocks, securities (including rights to purchase and securities
convertible into or exchangeable for other securities), interests in joint
ventures and general and limited partnerships, mortgage loans and other
investment or portfolio assets owned of record or beneficially by the Company.

     “IRS” means the United States Internal Revenue Service.

     “Knowledge” means, with respect to the knowledge of a specified individual
as to a particular fact or other matter, that (i) the specified individual is
actually aware of such fact or other matter, or (ii) a prudent individual could
be expected to have otherwise become aware of such fact or other matter in the
course of conducting a reasonable investigation concerning the existence of such
fact or other matter. The terms “Knowledge of Sellers,” “Sellers’ Knowledge” or
words of similar import shall mean the Knowledge of Sellers and of Julieanne M.
Campbell; and, with respect to Sections 3.11(a), 3.21 and 3.26 only, shall mean
the Knowledge of Sellers, Julieanne M. Campbell, Stephen F. Nohava and Albert W.
Libke.

     “Laws” means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.

     “Liabilities” means all Indebtedness, obligations and other liabilities of
a Person (whether absolute, accrued, contingent, fixed or otherwise, or whether
due or to become due).

7

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

 

     “Licenses” means all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental or Regulatory Authority.

     “Liens” means any mortgage, pledge, assessment, security interest, lease,
lien, adverse claim, levy, charge or other encumbrance of any kind, or any
conditional sale Contract, title retention Contract or other Contract to give
any of the foregoing.

     “Loss” means any and all claims, liabilities, damages, fines, fees,
penalties, deficiencies, losses and expenses (including, without limitation,
interest, court costs, reasonable fees of attorneys, accountants and other
experts or other expenses of litigation or other proceedings or of any claim,
default or assessment). For purposes of Article XI, the term “ Loss” shall mean
a Loss as defined in the preceding sentence but net of insurance proceeds and
net of any tax benefits actually received by an Indemnified Party as a result of
the events giving rise thereto or thereof.

     “Material Adverse Effect” means any change, event, violation, inaccuracy,
circumstance or effect, individually or when aggregated with such other changes,
events, violations, inaccuracies, circumstances or effects, that is materially
adverse to the business, financial condition, Assets and Properties, or results
of operations of the Company; provided, however, that none of the following
shall be deemed to constitute a Material Adverse Effect: (i) any change, event,
violation, inaccuracy, circumstance or effect to the extent resulting from
general business or economic conditions that do not have a disproportionate
effect on the business of the Company; (ii) any change, event, violation,
inaccuracy, circumstance or effect to the extent resulting from conditions
generally affecting the industry in which the Sellers operate the business of
the Company (other than any change, event, violation, inaccuracy, circumstance
or effect resulting directly from any action or inaction taken by or on behalf
of the Sellers); (iii) any change, event, violation, inaccuracy, circumstance or
effect resulting from any breach by Purchaser of any provision of this
Agreement; or (iv) any change, event, violation, inaccuracy, circumstance or
effect resulting from the announcement of the transactions contemplated hereby.

     “Measurement Shares” means that number of MuniMae Common Shares as is equal
to the quotient of Four Million Dollars ($4,000,000) divided by the Closing Date
Average Share Price.

     “MuniMae Common Shares” means the common shares, no par value, of MuniMae.

     “MuniMae” shall have the meaning set forth in the introductory paragraph of
this Agreement.

     “MuniMae SEC Reports” shall have the meaning set forth in item 4 of
Exhibit C.

     “Notice of Disagreement” shall have the meaning set forth in Section
2.05(d).

     “Operative Agreements” means the Employment Agreements and any other
agreements to be entered into in connection with the transactions contemplated
herein.

8

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

 

     “Option” with respect to any Person means any security, right,
subscription, warrant, option, “phantom” stock right or other Contract that
gives the right to (i) purchase or otherwise receive or be issued any shares of
capital stock of such Person or any security of any kind convertible into or
exchangeable or exercisable for any shares of capital stock of such Person or
(ii) receive any benefits or rights similar to any rights enjoyed by or accruing
to the holder of shares of capital stock of such Person, including any rights to
participate in the equity, income or election of directors or officers of such
Person.

     “Order” means any writ, judgment, decree, injunction or similar order of
any Governmental or Regulatory Authority (in each such case whether preliminary
or final).

     “Pension Benefit Plan” means each Benefit Plan which is a pension benefit
plan within the meaning of Section 3(2) of ERISA, whether or not subject to
ERISA.

     “Permitted Lien” means (i) any Lien for Taxes not yet due and payable or
which is being contested in good faith by appropriate proceedings if adequate
reserves with respect thereto have been established on the Company’s books in
accordance with GAAP, (ii) any statutory Lien arising in the ordinary course of
business by operation of Law with respect to a Liability that is not yet due and
payable or which is being contested in good faith by appropriate proceedings if
adequate reserves with respect thereto have been established on the Company’s
books in accordance with GAAP, and (iii) any other Lien which individually or in
the aggregate with other such Liens would not reasonably be expected to have a
Material Adverse Effect.

     “Person” means any natural person, corporation, partnership, limited
liability company, proprietorship, trust, union, association, organization or
other entity or Governmental or Regulatory Authority.

     “Plan” means any employment, consulting, bonus, incentive compensation,
deferred compensation, pension, profit sharing, retirement, stock purchase,
stock option, stock ownership, stock appreciation rights, phantom stock, leave
of absence, layoff, vacation, day or dependent care, legal services, cafeteria,
life, health, accident, disability or other insurance, severance, separation,
change of control, or other employee benefit plan, agreement, practice, policy
or arrangement of any kind, whether written or oral, and whether or not subject
to ERISA including, but not limited to, any “employee benefit plan” within the
meaning of Section 3(3) of ERISA.

     “Post-Closing Taxes” shall have the meaning set forth in Section 7.03(a).

     “Post-Closing Tax Returns” shall have the meaning set forth in Section
7.03(a).

     “Pre-Closing Taxes” shall have the meaning set forth in Section 7.01.

     “Pre-Closing Tax Returns” shall have the meaning set forth in Section 7.01.

9

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

 

     “Primary Calculation Amount” shall have the meaning set forth in Section
2.05(c).

     “Purchase Price” shall have the meaning set forth in Section 2.02.

     “Purchaser” shall have the meaning set forth in the introductory paragraph
of this Agreement.

     “Purchaser’s Benefit Plans” shall have the meaning set forth in Section
6.03.

     “Qualified Plan” means each Benefit Plan which is intended to qualify under
Section 401(a)of the Code.

     “Representatives” means the officers, directors, employees, agents,
counsel, accountants, financial advisors, consultants, and other representatives
of a Person.

     “SEC” shall have the meaning set forth in item 4 of Exhibit C.

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

     “Sellers” shall have the meaning set forth in the introductory paragraph of
this Agreement.

     “Sellers’ Post-Closing Taxes” shall have the meaning set forth in
Section 7.03(b).

     “Subsidiary” means, with respect to any Person (the “Owner”), any other
Person in which the Owner, directly or indirectly through one or more
Subsidiaries or otherwise, beneficially owns more than fifty percent of either
the equity interests in, or the voting control of, such other Person.

     “Tax or Taxes” means any federal, state, county, local or foreign taxes,
charges, fees, levies, or other assessments, including all net income, gross
income, sales and use, ad valorem, transfer, gains, profits, excise, franchise,
real and personal property, gross receipt, capital stock, production, business
and occupation, disability, employment, unemployment, payroll, license,
estimated, stamp, custom duties, severance or withholding taxes or charges
imposed by any governmental entity, and includes any interest and penalties
(civil or criminal) on or additions to any such taxes and including any
obligation to indemnify or otherwise assume or succeed to the Tax liability of
any other person.

     “Tax Ruling” means a written ruling of a Governmental or Regulatory
Authority relating to Taxes.

     “Tax Return” means a report, return or other information required to be
supplied to a governmental entity with respect to Taxes including, if
applicable, combined or consolidated returns for any group of entities that
includes the Company.

10

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

 

     “Third Party Claim” shall have the meaning set forth in Section 11.03(a).

     “Transaction” means the acquisition by Purchaser from Sellers of the Glaser
Shares as contemplated by this Agreement.

     “Transfer Taxes” shall have the meaning set forth in Section 7.02.

     “Unaudited Financial Statement Date” means March 31, 2005.

     “Unaudited Financial Statements” means the Financial Statements for the
most recent fiscal quarter of the Company ended March 31, 2005, and for the
period ended April 30, 2005.

          (b) Unless the context of this Agreement otherwise requires, (i) words
of any gender include each other gender; (ii) words using the singular or plural
number also include the plural or singular number, respectively; (iii) the terms
“hereof,” “herein,” “hereby” and derivative or similar words refer to this
entire Agreement; (iv) the terms “Article” or “Section” refer to the specified
Article or Section of this Agreement; (v) the phrases “ordinary course of
business” and “ordinary course of business consistent with past practice” refer
to the business and practice of the Company; and (vi) the words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.” All accounting terms used herein and not expressly defined herein
shall have the meanings given to them under GAAP.

ARTICLE II
SALE OF SHARES AND CLOSING

     2.01. Purchase and Sale. Sellers shall sell to Purchaser, and Purchaser
shall purchase from Sellers, all of the Glaser Shares at Closing on the terms
and subject to the conditions set forth in this Agreement.

     2.02. Consideration. The aggregate consideration for the Glaser Shares is
the Cash Closing Payment, plus the right to receive, in the future, (a) the
Deferred Purchase Price described in Section 2.04, and (b) the Earn-out Amount
as described in Section 2.05 below (collectively, the “Purchase Price”). The
Purchase Price shall be payable in the manner provided in Sections 2.03, 2.04
and 2.05. The Purchase Price is subject to adjustment, and a portion of the
Purchase Price is subject to deferral, as provided in Sections 2.03, 2.04, 2.05,
2.06 and 2.09.

     2.03. Closing.

          (a) The Closing will take place at the offices of Gallagher Evelius &
Jones LLP, 218 N. Charles Street, Suite 400, Baltimore, Maryland 21201 at
10:00 a.m. eastern time on the third Business Day following the date on which
all conditions to Closing set forth in Article VIII have been satisfied or
waived (other than conditions that by their terms are to be satisfied at the
Closing but subject to the satisfaction or waiver of such conditions), or at
such other time and place as Purchaser and Sellers mutually agree.

11

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

 

          (b) At the Closing, Purchaser will pay an amount (the “Cash Closing
Payment”) equal to Fifty Million ($50,000,000) less the amount of the Glaser
Redemption Debt as of the Closing Date. The Cash Closing Payment shall be paid
by wire transfer in immediately available funds to such accounts as Sellers may
reasonably direct by written notice delivered to Purchaser at least three
(3) Business Days prior to Closing.

          (c) Simultaneously with the payment of the Cash Closing Payment,
Sellers will assign and transfer to Purchaser good and valid title in and to the
Glaser Shares, free and clear of all Liens, by delivering to Purchaser a
certificate or certificates representing the Glaser Shares, in genuine and
unaltered form, duly endorsed in blank or accompanied by duly executed stock
powers endorsed in blank, with requisite stock transfer tax stamps, if any,
attached.

          (d) All payments of cash and all issuances of MuniMae Common Shares to
Sellers, or their designees, pursuant to this Article II shall be made fifty
percent (50%) to David Williams and fifty percent (50%) to Kevin Filter.

          (e) Purchaser intends that, immediately after its acquisition of the
Glaser Shares, the Company and Purchaser shall merge. On the Closing Date,
immediately following such merger, the surviving corporation shall pay in full
the Glaser Redemption Debt against delivery to the surviving corporation of
(i) the promissory note evidencing the Glaser Redemption Debt, marked “Paid in
Full” and (ii) all stock certificates representing treasury shares of the
Company pledged to secure payment of the Glaser Redemption Debt, which treasury
shares shall have been released from any and all Liens thereon. If for any
reason the merger does not occur immediately after Purchaser’s acquisition of
the Glaser Shares, then, immediately after its acquisition of the Glaser Shares,
Purchaser shall cause the Company to pay in full on the Closing Date the Glaser
Redemption Debt against the same deliveries.

     2.04. Deferred Purchase Price.

          (a) The payment of a portion of the Purchase Price (the “Deferred
Purchase Price”) shall be deferred and shall be paid by Purchaser at such times,
in such manner and in such amounts as are set forth in this Section 2.04.

          (b) Purchaser shall pay the Deferred Purchase Price in three annual
installments, on the fifth Business Day after each of the first, second and
third anniversaries of the Closing Date (each such payment date being an
“Installment Payment Date”).

          (c) On each Installment Payment Date, Purchaser shall pay to Sellers,
in payment of the installment of the Deferred Purchase Price then due, an amount
(the “Installment Amount”) equal to the greater of (i) $4,000,000 or (ii) the
value of the Measurement Shares based on the related Delivery Date Average Share
Price.

          (d) If the value of the Measurement Shares is equal to or greater than
Four Million Dollars ($4,000,000), based on the related Delivery Date Average
Share Price for a given Installment Payment Date, then Purchaser shall deliver
to Sellers the Measurement Shares

12

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

 

in payment of the Installment Amount due on that Installment Payment Date. If
the value of the Measurement Shares is less than Four Million Dollars
($4,000,000), based on the related Delivery Date Average Share Price for a given
Installment Payment Date, then Purchaser, at its sole option and discretion, may
pay the related Installment Amount (i) in cash, (ii) by delivering to Sellers
that number of MuniMae Common Shares as is equal to or most nearly exceeding the
quotient of Four Million Dollars ($4,000,000) divided by the related Delivery
Date Average Share Price, or (iii) in any combination of (i) and (ii) above. If
on any given Installment Payment Date MuniMae Common Shares are no longer listed
or traded on a national securities exchange or the NASDAQ stock market,
Purchaser shall pay the related Installment Amount in cash. Purchaser shall pay
the Installment Amount (i) if in cash, by wire transfer in immediately available
funds, and (ii) if in MuniMae Common Shares, by transfer, in each case, to such
accounts as Sellers shall designate in writing to Purchaser at least two
(2) Business Days prior to the applicable Installment Payment Date. Exhibit F
attached hereto sets forth an example, by way of illustration only, of the
application of the provisions of this Section 2.04(d).

     2.05. Earn-out Amount.

          (a) Within ninety (90) days after the third anniversary of the Closing
Date, Purchaser shall pay to Sellers, as part of the Purchase Price, the
Earn-out Amount, if any. The Earn-out Amount shall be that amount determined in
accordance with the provisions of Section 2.05(c).

          (b) Except as provided in this paragraph (b), the Earn-out Amount
shall be payable by the assignment and transfer to Sellers of MuniMae Common
Shares having a value based on the Delivery Date Average Share Price equal to or
most nearly exceeding the Earn-out Amount then due. If the Delivery Date Average
Share Price is less than the Closing Date Average Share Price, then Purchaser,
at its sole option and discretion, may pay the Earn-out Amount (i) in cash,
(ii) by delivering to Sellers that number of MuniMae Common Shares as has a
value based on the Delivery Date Average Share Price as is equal to or most
nearly exceeds the Earn-out Amount, or (iii) in any combination of (i) and
(ii) above. If on the third anniversary of the Closing Date MuniMae Common
Shares are not listed or traded on a national securities exchange or the NASDAQ
stock market, Purchaser shall pay the Earn-out Amount in cash. Purchaser shall
pay any Earn-out Amount (i) if in cash, by wire transfer in immediately
available funds, and (ii) if in MuniMae Common Shares, by transfer, in each
case, to such accounts as Sellers shall designate in writing to Purchaser not
later than the date which is eighty (80) days after the third anniversary of the
Closing Date.

          (c) The Earn-out Amount shall be the greater of the amounts calculated
in accordance with clauses (i) and (ii) below; provided, however, that for
purposes of this Agreement the Earn-Out Amount shall never be less than zero.

          (i) Five Million Dollars ($5,000,000) plus the product of (A) (1) the
average annual amount of Annual Origination Fee and Premium Income for the
Earn-out Period (such average amount not to exceed Five Million Five Hundred
Thousand Dollars ($5,500,000)) minus (2) Five Million Five Hundred

13

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

 

Thousand Dollars ($5,500,000); and (B) two (2) (the “Primary Calculation
Amount”);

          (ii) the product of (A) the Primary Calculation Amount and (B) a
fraction, the numerator of which is the average of the closing prices per share
of MuniMae Common Shares on the New York Stock Exchange for the thirty
(30) trading days immediately preceding the third anniversary of the Closing
Date and the denominator of which is the Closing Date Average Share Price.

          (d) Exhibit A attached hereto sets forth an example, by way of
illustration only, of the calculation of the Primary Calculation Amount. The
Primary Calculation Amount shall be calculated based upon internally prepared
statements of the Annual Origination Fee and Premium Income for the three-year
period ending on the third anniversary of the Closing Date, which statements
shall be delivered by Purchaser to Sellers not later than ninety (90) days after
each anniversary of the Closing Date. If after review of any such statements
Sellers reasonably disagree with Purchaser’s calculation of the Annual
Origination Fee or Premium Income, Sellers will notify Purchaser in writing (the
“Notice of Disagreement”) of such disagreement within thirty (30) days after
delivery of the statement. The Notice of Disagreement will set forth in
reasonable detail the basis for the disagreement. Thereafter, Purchaser and
Sellers will attempt in good faith to resolve and finally determine the Annual
Origination Fee and Premium Income. If Purchaser and Sellers are unable to
resolve the disagreement within twenty (20) days after the delivery of the
Notice of Disagreement, Purchaser and Sellers will appoint
PricewaterhouseCoopers LLP or another nationally recognized independent
accounting firm as mutually agreed upon by Purchaser and Sellers (the
“Independent Accountant”), to resolve the disputed items and make a
determination with respect thereto. Promptly, but not later than thirty
(30) business days after the acceptance of its appointment, the Independent
Accountant will determine (based solely on presentations by Purchaser and
Sellers to the Independent Accountant and not by independent review) only those
items in dispute and shall render a report as to its resolution of such items
and the resulting calculation of the Annual Origination Fee and Premium Income.
In resolving any disputed item, the Independent Accountant may not assign a
value to such item greater than the greatest value for such item claimed by
either party or less than the lowest value for such item claimed by either
party. The determination by the Independent Accountant will be final, binding
and conclusive upon the parties hereto. The fees, costs and expenses payable to
the Independent Accountant incurred in the resolution of such dispute shall be
borne by the parties in such proportion as is appropriate to reflect the
relative benefits received by Sellers, on the one hand, and Purchaser, on the
other hand, from the resolution of the dispute. For example, if Sellers
challenge Purchaser’s calculation of the Annual Origination Fee by an amount of
One Hundred Thousand Dollars ($100,000) but the Independent Accountant
determines that Sellers have a valid claim for only Forty Thousand Dollars
($40,000), Sellers shall bear sixty percent (60%) of the fees and expenses of
the Independent Accountant and Purchaser shall bear forty percent (40%) of the
fees and expenses of the Independent Accountant.

14

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

 

          (e) If Sellers do not timely give a Notice of Disagreement,
Purchaser’s calculation of the Annual Origination Fee and Premium Income shall
be deemed conclusive and binding on Sellers and Purchaser.

          (f) If, prior to the third anniversary of the Closing Date, any of the
six (6) existing Company Loan Officers other than Sellers ceases to be employed
by the Company for any reason, for purposes of determining Annual Origination
Fee and Premium Income, the departed loan officer may be replaced by Sellers, on
terms and at compensation levels consistent with the Company’s past practices,
subject to the approval of Purchaser, which approval will not be unreasonably
withheld.

          (g) If prior to the third anniversary of the Closing Date there shall
be a Change in Control which results, or is likely to result, in a material
impairment of Sellers’ ability to generate Annual Origination Fee and Premium
Income, the Earn-Out Amount shall be fixed at Five Million Dollars ($5,000,000)
and shall be immediately due and payable. Such accelerated Earn-Out Amount shall
be paid, at the sole option and discretion of Sellers, (i) in cash, (ii) by
delivering to Sellers that number of shares of the capital stock of MuniMae or
the Person that acquires control of the Company as has a fair market value equal
to or most nearly exceeding Five Million Dollars ($5,000,000), or (iii) in any
combination of (i) and (ii) above.

          (h) Each of Purchaser and MuniMae hereby agrees to conduct the
business and to permit Sellers to conduct the business of the Company so as not
to unreasonably interfere with Sellers’ ability to maximize the amount of the
Earn-Out Amount paid to Sellers under this Section 2.05. In furtherance of and
without limiting the foregoing, Purchaser agrees that, during the Earn-out
Period, Sellers shall have the general right to set the pricing of all products
included in the calculation of the amount of the Annual Origination Fee and
Premium Income, subject to and consistent with market conditions and Purchaser’s
pricing of similar products to those offered by the Company.

     2.06. Adjustment to Purchase Price.

          (a) The Purchase Price shall be reduced by the amount, if any, by
which the Company’s working capital is less than Five Hundred Thousand Dollars
($500,000) as of the Closing Date. The Purchase Price shall be increased by the
amount, if any, by which the Company’s working capital is greater than Five
Hundred Thousand Dollars as of the Closing Date, provided that in no event shall
such increase in the Purchase Price be greater than Two Hundred Thousand Dollars
($200,000) even if the amount of working capital as of the Closing Date is
greater than Seven Hundred Thousand Dollars ($700,000). For purposes of this
Agreement, the Company’s working capital shall be determined as follows: cash
and cash equivalents, notes receivable from Sherman Associates, Inc. and
Plymouth Leased Housing Associates, Limited Partnership, accounts receivable and
prepaid expenses less accounts payable, accrued expenses and accrued
compensation and withholding. The amount of working capital as of the Closing
Date shall be determined by an audit of the Company’s financial condition as of
the Closing Date (the “Closing Audit”). Such audit shall be conducted at
Purchaser’s sole expense by PricewaterhouseCoopers LLP in accordance with GAAP.
Purchaser

15

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

 

shall initiate the Closing Audit immediately after Closing and shall use
commercially reasonable efforts to have the Closing Audit completed as soon as
possible but in any event not later than one hundred twenty (120) days after the
Closing Date.

          (b) Unless Sellers notify Purchaser in writing that Sellers disagree
with any aspect of the Closing Audit (such notice to include Sellers’ objections
and reasonably detailed proposed revisions to said audit and in reasonable
detail the basis therefor) within thirty (30) days after receipt thereof, the
Closing Audit shall be conclusive and binding on Purchaser and Sellers. If
Sellers so notify Purchaser in writing within such thirty (30) day period, then
Purchaser and Sellers shall attempt to resolve their differences with respect
thereto within fifteen (15) days after Purchaser’s receipt of Sellers’ written
notice of disagreement. If Purchaser and Sellers resolve their differences with
respect to the Closing Audit within such fifteen (15) day period, then the
Closing Audit, with such modifications necessary to reflect such agreement of
Purchaser and Sellers, shall be conclusive and binding on Purchaser and Sellers.
Any disputes not resolved by Sellers and Purchaser within such fifteen (15) day
period regarding the Closing Audit will be resolved by a nationally recognized
independent accounting firm jointly retained by Sellers and Purchaser (the
“Firm”). The Firm shall make a determination on the disputes so submitted as
well as such modifications, if any, to the Closing Audit as reflect such
determination, and the same shall be conclusive and binding upon the parties.
The determination of the Firm for any item in dispute cannot, however, be in
excess of, nor less than, the greatest or lowest value, respectively, claimed
for that particular item in the Closing Audit, in the case of Purchaser, or in
the notice described in the first sentence of this paragraph, in the case of
Sellers. The fees and expenses of the Firm shall be borne by the parties in such
proportion as is appropriate to reflect the relative benefits received by
Sellers, on the one hand, and Purchaser, on the other hand, from the
determination of the Firm. For example, if the Closing Audit finds the amount of
working capital as of the Closing Date is Four Hundred Thousand Dollars
($400,000), Sellers state in their notice of disagreement that such amount is
Six Hundred Thousand Dollars ($600,000), and the Firm determines that such
amount is Four Hundred Fifty Thousand Dollars ($450,000) with Sellers having a
valid claim for only Fifty Thousand Dollars ($50,000) of the additional Two
Hundred Thousand Dollars ($200,000) claimed by them, then Sellers shall bear
seventy-five percent (75%) of the fees and expenses of the Firm and Purchaser
shall bear twenty-five percent (25%) of the fees and expenses of the Firm. The
Firm shall be instructed to render its decision in accordance with the terms
hereof, and such decision shall be conclusive and binding upon Purchaser and
Sellers.

          (c) Not later than thirty (30) days after the engagement of the Firm
(as evidenced by its written acceptance by facsimile or otherwise to the
parties), the parties shall submit simultaneous briefs to the Firm (with a copy
to the other parties) setting forth their respective positions regarding the
issues in dispute, and not later than thirty (30) days after the submission of
such briefs the parties shall submit simultaneous reply briefs (with a copy to
the other parties). The Firm shall render its decision resolving the dispute as
soon as practicable after submission of the reply briefs. If additional
briefing, a hearing, or other information is required by the Firm, the Firm
shall give notice thereof to the parties as soon as practicable, and the parties
shall promptly respond with a view to minimizing any delay in the decision date.
The procedures of this Section 2.06 are exclusive and the decision rendered
pursuant to this Section 2.06

16

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

 

may be filed as a judgment in any court of competent jurisdiction. Either party
may seek specific enforcement or take other necessary legal action to enforce
any determination made by the Firm under this Section 2.06. The other party’s
only defense to such a request for specific enforcement or other legal action
shall be fraud by or on the part of the Firm.

          (d) The amount of any increase or reduction in the Purchase Price as a
result of this Section 2.06 shall be payable by Purchaser (in the case of an
increase in the Purchase Price) or Sellers (in the case of a decrease in the
Purchase Price) within thirty (30) days after the date that the Closing Audit is
deemed conclusive and binding upon Purchaser and Sellers pursuant to
Section 2.06(b). Notwithstanding any provision of this Agreement to the
contrary, Purchaser, at its sole option and discretion, may set off the amount
of any Purchase Price reduction pursuant to this Section 2.06 against any
payment by it of any installment of the Deferred Purchase Price or any payment
by it of the Earn-out Amount.

     2.07. Transfer Restrictions. Sellers shall not assign, convey, pledge or
otherwise transfer or encumber their right to the Deferred Purchase Price or the
Earn-out Amount except between each other and, for estate planning purposes, to
members of their immediate families or trusts the sole beneficiaries of which
are members of their immediate families.

     2.08 Withholding Taxes. Purchaser shall be entitled to deduct and withhold
from any amounts otherwise payable pursuant to this Agreement to any Person such
amounts as Purchaser is required to deduct and withhold with respect to the
making of such payment under the Code or any provision of state, local or
foreign Tax law. To the extent that amounts are so withheld, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
by Purchaser to the Person with respect to whom such deduction and withholding
was made by Purchaser. Purchaser hereby represents to Sellers that it is not
aware of any withholding obligation applicable to the acquisition of the Glaser
Shares from Sellers in exchange for the Purchase Price provided that Sellers, at
the request of Purchaser, provide a properly completed IRS Form W-9
demonstrating their exemption from backup withholding under Code Section 3406.

     2.09. Certain Transaction Adjustments.

          (a) Sellers shall cause the Company to assign to Purchaser all of the
Company’s right to make the two loans known as the Sunrise Portfolio and the
Village at Waterman Lake (collectively, the “Assigned Transactions”), including
all of the Company’s right, title and interest in any origination, premium or
other fees associated therewith, at least one (1) Business Day prior to the date
on which the Company reasonably expects that all conditions precedent to the
closing of the Assigned Transaction will be met and the associated loan is
reasonably expected to be funded. This assignment shall be effectuated by the
delivery by the Company of the assignment in the form attached hereto as
Exhibit G. The Purchaser hereby appoints Sellers as its duly authorized agents
for all purposes in effectuating the closing of these two transactions in
Purchaser’s name.

          (b) The Purchase Price shall be increased by Five Hundred Sixty-Two
Thousand Five Hundred Dollars ($562,500) if the Sunrise Portfolio closes on or
before August

17

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

 

15, 2005, and by One Hundred Eighty Seven Thousand Five Hundred Dollars
($187,500) if the Village at Waterman Lake transaction closes on or before
August 1, 2005. Any such increase shall be paid or provided for as part of the
purchase price adjustment process under Section 2.06. To the extent either of
such transactions closes on or before the respective dates set forth, and the
Purchase Price is thereby increased, the origination fees associated with such
transaction shall not be included in Annual Origination Fee and Premium Income
for purposes of Section 2.05. To the extent either of such transactions does not
close on or before its respective date, this paragraph (b) shall not apply to
such transaction.

          (c) If Closing under this Agreement does not occur by August 1, 2005,
with respect to the Village at Waterman Lake transaction, or by August 15, 2005,
with respect to the Sunrise Portfolio, Purchaser shall by the respective date
for each Assigned Transaction (i) assign to the Company all of Purchaser’s right
to close such Assigned Transaction if it has not yet closed, including all of
Purchaser’s right, title and interest in any origination, premium, or other fees
associated therewith, and paragraph (b) above shall no longer apply to such
Assigned Transaction; or (ii) if such Assigned Transaction has closed, sell to
the Company all of the Purchaser’s right, title and interest in any loan
resulting from such closing at a sale price of par minus all origination and
other fees actually collected by Purchaser in connection with the closing of
such Assigned Transaction.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS

     Subject to the specific exceptions disclosed in the disclosure schedules
delivered by Sellers to Purchaser and dated as of the date hereof (the
“Disclosure Schedule”), Sellers, jointly and severally, represent and warrant to
Purchaser on the date hereof, and as of the Closing as though made at Closing,
as follows below. Each item disclosed in the Disclosure Schedule as an exception
to a given representation and warranty shall constitute an exception to the
given representation and warranty and shall be deemed to be disclosed with
respect to each section of the Disclosure Schedule (i) that is specifically
identified (by cross reference or otherwise) in the Disclosure Schedule as being
qualified by such exception, or (ii) with respect to which the relevance of such
exception is reasonably apparent on the face of the disclosure of such exception
set forth in the Disclosure Schedule, so long as such item is fairly described
with reasonable particularity and detail.

     If the disclosure provided by Sellers in the Disclosure Schedule is in
greater detail than is required by the particular representation and warranty of
Sellers: (i) such disclosure is not an admission by Sellers that the disclosed
information is material; and (ii) no representation or warranty is made with
respect to information contained in the Disclosure Schedule to the extent such
information is not required to be disclosed because it is clearly below specific
dollar thresholds specified in the representations and warranties contained in
this Agreement. Furthermore, a threshold of materiality being provided by
Sellers on a particular section of the Disclosure Schedule is not intended to be
an indication of the threshold of materiality for any other section of the
Disclosure Schedule. Nothing in the Disclosure Schedule constitutes an admission
of any liability or obligation of Sellers to any third party or an admission
against the

18

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

 

Seller’s interest. Terms defined in this Agreement are used with the same
meaning in the Disclosure Schedule.

     3.01. Sellers. Sellers are individuals residing in the State of Minnesota.
No consent or approval on the part of any spouse of the any Seller is required
in connection with the execution, delivery and performance of this Agreement or
any of the Operative Agreements to which any Seller is a party of the
consummation of the transactions contemplated hereby or thereby.

     3.02. Due Execution. This Agreement has been duly and validly executed and
delivered by Sellers and constitutes the legal, valid and binding obligation of
Sellers enforceable against Sellers in accordance with its terms, except as may
be limited by applicable bankruptcy, insolvency, reorganization,
recharacterization or other similar laws affecting creditor’s rights generally
and by general equitable principles (regardless of whether considered in a
proceeding in equity or at law).

     3.03. Organization of the Company. The Company is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Minnesota, and has full corporate power and authority to conduct its business as
and to the extent now conducted and to own, use and lease its Assets and
Properties. The Company is duly qualified, licensed or admitted to do business
and is in good standing in those jurisdictions specified in Schedule 3.03. The
Company is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each state or other jurisdiction in which either the
ownership or use of the Assets and Properties owned or used by it, or the nature
of the activities conducted by it, requires such qualification, except where the
failure to be so qualified would not have a Material Adverse Effect. The name of
each director and officer of the Company on the date hereof, and the position
with the Company held by each, are listed in Schedule 3.03. Sellers have prior
to the execution of this Agreement delivered to Purchaser true and complete
copies of the articles of incorporation and by-laws of the Company as in effect
on the date hereof.

     3.04. Capital Stock. The authorized capital stock of the Company consists
solely of 25,000 shares of common stock, $0.01 par value per share, of which
only 11,180 shares of common stock are issued and outstanding and 5,590 are held
in treasury. The Glaser Shares constitute all of the issued and outstanding
capital stock of the Company and are duly authorized, validly issued, fully paid
and nonassessable. Sellers will, immediately prior to the Closing, own the
Glaser Shares, beneficially and of record, subject only to those Liens listed on
Schedule 3.04. The treasury shares are held by the Company subject only to those
Liens listed on Schedule 3.04. There are no outstanding Options with respect to
the Company. At Closing, Sellers will deliver to Purchaser a certificate or
certificates representing the Glaser Shares in the manner provided in
Section 2.03 and will transfer to Purchaser good and valid title to the Glaser
Shares, free and clear of all Liens (other than normal restrictions on transfer
under applicable federal and state securities laws).

     3.05. Subsidiaries. The Company has no Subsidiaries.

19

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

 

     3.06. No Conflicts; Consents and Approvals. The execution and delivery by
Sellers of this Agreement does not, and the execution and delivery by Sellers of
the Operative Agreements to which they are a party, the performance by Sellers
of their obligations under this Agreement and such Operative Agreements and the
consummation of the transactions contemplated hereby and thereby will not:

          (a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the certificate or articles of incorporation
or by-laws (or other comparable corporate charter documents) of the Company;

          (b) subject to obtaining the consents, approvals and actions, making
the filings and giving the notices disclosed in Schedule 3.06(b), conflict with
or result in a violation or breach of any term or provision of any Law or Order
applicable to Sellers or the Company or any of its Assets and Properties; or

          (c) except as disclosed in Schedule 3.06(c), (i) conflict with or
result in a violation or breach of, (ii) constitute (with or without notice or
lapse of time or both) a default under, (iii) require Sellers or the Company to
obtain any consent, approval or action of, make any filing with or give any
notice to any Person as a result or under the terms of, (iv) result in or give
to any Person any right of termination, cancellation, acceleration or
modification in or with respect to, (v) result in or give to any Person any
additional rights or entitlement to increased, additional, accelerated or
guaranteed payments under, or (vi) result in the creation or imposition of any
Lien upon the Glaser Shares, Sellers or the Company or any of its Assets and
Properties under, any Contract or License to which Sellers or the Company is a
party or by which any of the Company’s Assets and Properties is bound.

     3.07. Governmental Approvals and Filings. Except as disclosed in Schedule
3.07, no consent, approval or action of, filing with or notice to any
Governmental or Regulatory Authority on the part of Sellers or the Company is
required in connection with the execution, delivery and performance of this
Agreement or any of the Operative Agreements to which they are a party or the
consummation of the transactions contemplated hereby or thereby.

     3.08. Financial Statements. Prior to the execution of this Agreement,
Sellers have delivered to Purchaser true and complete copies of the following
financial statements:

          (a) the audited balance sheets of the Company as of December 31, 2002,
2003 and 2004, and the related audited statements of earnings and comprehensive
earnings, stockholders’ equity and cash flows for each of the fiscal years then
ended, together with a true and correct copy of the report on such audited
information by Deloitte & Touche, LLP and all letters from such accountants with
respect to the results of such audits; and

          (b) the unaudited balance sheets and statements of earnings of the
Company as of the fiscal quarter ended March 31, 2005, and the unaudited balance
sheets and statements of earnings of the Company as of the periods ended
April 30, 2005.

20

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

 

Except as set forth in the notes thereto or in Schedule 3.08, all such financial
statements were prepared in accordance with GAAP and fairly present the
consolidated financial condition and results of operations of the Company as of
the respective dates thereof and for the respective periods covered thereby,
subject, in the case of such Unaudited Financial Statements, to normal year-end
adjustments (the effect of which will not, individually or in the aggregate,
have a Material Adverse Effect) and the absence of notes that, if presented,
would not differ materially from those included in the Audited Financial
Statements for the fiscal year ended December 31, 2004.

     3.09. Absence of Changes. Except for the execution and delivery of this
Agreement and the transactions to take place pursuant hereto, since the Audited
Financial Statement Date, there has not been any material adverse change, or any
event or development which, individually or together with other such events,
could reasonably be expected to result in a Material Adverse Effect. Without
limiting the foregoing, except as disclosed in Schedule 3.09(b), there has not
occurred since the Audited Financial Statement Date:

          (i) any declaration, setting aside or payment of any dividend or other
distribution in respect of the capital stock of the Company or any direct or
indirect redemption, purchase or other acquisition by the Company of any such
capital stock of or any Option with respect to the Company;

          (ii) any authorization, issuance, sale or other disposition by the
Company of any shares of capital stock of or Option with respect to the Company,
or any modification or amendment of any right of any holder of any outstanding
shares of capital stock of or Option with respect to the Company relating to
such capital stock or Option;

          (iii) (x) any increase in the salary, wages or other compensation of
any officer or employee of the Company whose total compensation is, or after
giving effect to such change would be, $100,000 or more; (y) any establishment
or modification of (A) targets, goals, pools or similar provisions in respect of
any fiscal year under any Benefit Plan, employment Contract or other employee
compensation arrangement or (B) salary ranges, increase guidelines or similar
provisions in respect of any Benefit Plan, employment Contract or other employee
compensation arrangement; or (z) any adoption, entering into, amendment,
modification or termination (partial or complete) of any Benefit Plan except to
the extent required by applicable Law;

          (iv) any incurrence by the Company of Indebtedness in an aggregate
principal amount exceeding $100,000, other than Indebtedness used to fund loans
to Borrowers which has been incurred in the ordinary course of business in
accordance with past practices;

          (v) any physical damage, destruction or other casualty loss not
covered by insurance affecting any of the plant, real or personal property or
equipment of the Company in an aggregate amount exceeding or expected to exceed
$100,000;

21

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

 

          (vi) any acquisition or disposition of, or incurrence of a Lien (other
than a Permitted Lien) on, any Assets and Properties of the Company, other than
in the ordinary course of business consistent with past practice;

          (vii) any (x) amendment of the certificate or articles of
incorporation or by-laws (or other comparable corporate charter documents) of
the Company, (y) reorganization, liquidation or dissolution of the Company or
(z) Business Combination involving the Company and any other Person;

          (viii) any commencement or termination by the Company of any line of
business;

          (ix) any transaction by the Company with Sellers, any officer,
director, Affiliate or Associate of Sellers or any Associate of any such
officer, director or Affiliate (other than the Company) (A) outside the ordinary
course of business consistent with past practice or (B) other than on an
arm’s-length basis, or (C) other than pursuant to any Contract in effect on the
Audited Financial Statement Date and disclosed to Purchaser pursuant to
Section 3.17(a)(vii);

          (x) any lease of real property;

          (xi) any notice by Fannie Mae, Freddie Mac or HUD of the termination
of, or of an intent to terminate or discontinue, any business relationship;

          (xii) any departure by, or termination of, any key employees of the
Company, including any of the Company Loan Officers or any of the directors or
officers of the Company listed in Schedule 3.03 or any of the senior management
employees of the Company listed in Schedule 3.20(a) other than the departure of
Curt Glaser; or the hiring of any additional senior management employees;

          (xiii) any material change in the accounting methods used by the
Company; or

          (xiv) to Sellers’ Knowledge, any change in law, statute or regulation
applicable to the Company or affecting the Company’s business or Assets and
Properties which would reasonably be expected to have a Material Adverse Effect.

     3.10. Taxes. Except as disclosed in Schedule 3.10 (with paragraph
references corresponding to those set forth below):

          (a) The Company has timely filed, after giving effect to any
applicable extensions, all state and federal income Tax Returns, and all other
material Tax Returns, required to be filed by applicable Law, maintained all
documents and records relating to Taxes as are required to be made or provided
by it and has complied in all material respects with all legislation relating to
Taxes applicable to it, and all such Tax Returns were true, complete and

22

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

 

correct in all material respects. The Company has, within the time and in the
manner prescribed by law, paid all Taxes shown to be due and payable on its Tax
Returns.

          (b) The Company has not received written notice of any claim, and to
Sellers’ Knowledge no claim has ever been made, by any authority of a
jurisdiction where the Company does not file Tax Returns that the Company is or
may be subject to taxation by the jurisdiction.

          (c) There are no Liens for any Taxes with respect to any Assets and
Properties of the Company except Permitted Liens.

          (d) The Company has not requested any extension of time within which
to file any Tax Return, which Tax Return has not since been filed.

          (e) The Company has not executed any outstanding waivers or comparable
consents regarding the application of the statute of limitations with respect to
any Taxes or Tax Returns.

          (f) No deficiency for any Taxes has been proposed, asserted or
assessed against the Company that has not been resolved and paid in full.

          (g) No audits or other administrative proceedings or court proceedings
are currently pending with regard to any Taxes or Tax Returns of the Company;
neither Sellers nor the Company has received written notice from any
Governmental Authority (i) indicating that it intends to audit the Company Tax
affairs or (ii) requesting information related to Tax Matters. To Sellers’
Knowledge no Governmental Authority intends to audit the Company’s Tax affairs
or has requested information related to Tax matters.

          (h) The Company has not received a Tax Ruling or entered into a
Closing Agreement with any Governmental Authority that would have a Material
Adverse Effect upon the Company after the Closing Date.

          (i) Sellers have no Knowledge that would lead them to reasonably
expect that any Governmental or Regulatory Authority will assess any additional
Taxes for any period for which Tax Returns have been filed.

          (j) Sellers have no Knowledge of any event, transaction, act or
omission has occurred which could result in the Company becoming liable to pay
or to bear any Tax as a transferee, successor or otherwise which is primarily or
directly chargeable or attributable to any other Person.

          (k) The Company has complied (and until the Closing Date will comply)
with the provisions of the Code relating to the payment and withholding of
Taxes, including, without limitation, the withholding and reporting requirements
under Code §§1441 through 1446, 3401 through 3606, and 6041 and 6049, as well as
similar provisions under any other applicable Laws, and has, within the time and
in the manner prescribed by Law, withheld and paid over to the

23

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

 

proper Governmental Authorities all amounts required in connection with amounts
paid or owing to any employee.

          (l) The Company is not a party to any agreement, contract, or
arrangement that would result, separately or in the aggregate, in the payment of
any “ excess parachute payments” within the meaning of Code §280G.

          (m) The Company has not filed a consent pursuant to Code §341(f) or
agreed to have Code §341(f)(2) apply to any disposition of a subsection
(f) asset (as that term is defined in Code §341(f)(4)) owned by the Company.

          (n) The Company is not required to include in income any adjustment
pursuant to Code §481(a) by reason of a voluntary change in accounting method
initiated by the Company, and the IRS has not proposed any such adjustment or
change in accounting method.

          (o) No election under Code §338 (or any predecessor provisions) has
been made with respect to any of the Assets and Properties of the Company.

          (p) The Company is not subject to any Tax allocation or sharing or
similar agreements under which the Company or Purchaser may have liability for
Taxes of any other Person.

          (q) Sellers have delivered to Purchaser for calendar years 2001, 2002
and 2003 complete and accurate copies of (i) all state and federal income tax
returns, and any amendments thereto, filed by the Company, (ii) all audit
reports received from any Governmental Authority relating to any state or
federal income tax return and (iii) all Closing Agreements entered into by the
Company with any Governmental Authority.

          (r) Sellers have provided Purchaser with a schedule that sets forth,
as of the most recent practicable date, the basis of the Company in its Assets
and Properties.

          (s) The Company (and any predecessor to the Company) has been a
validly electing S corporation within the meaning of Code §§1361 and 1362 at all
times since November 1, 1997, and the Company will be an S Corporation up to and
including the day before the Closing Date.

          (t) The Company elected S corporation status effective November 1,
1997, and has potential liability for Tax under Code §1374. For purposes of this
Agreement all Taxes under Code §1374 in respect of any period ending prior to
the Closing Date, whether or not shown on Schedule 3.10, shall be deemed to be
Pre-Closing Taxes. The Company has not, in the past 10 years, (A) acquired
assets from another corporation in a transaction in which the Company’s Tax
basis for the acquired assets was determined, in whole or in part, by reference
to the Tax basis of the acquired assets (or any other property) in the hands of
the transferor or (B) acquired the stock of any corporation that is a qualified
subchapter S subsidiary.

     3.11. Legal Proceedings. Except as disclosed in Schedule 3.11:

24

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

 

          (a) there are no Actions or Proceedings pending or, to the Knowledge
of Sellers, threatened against, Sellers or the Company or any of its Assets and
Properties which (i) could reasonably be expected to result in the issuance of
an Order restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or any of
the Operative Agreements or otherwise result in a material diminution of the
benefits contemplated by this Agreement or any of the Operative Agreements to
Purchaser, or (ii) if determined adversely to Sellers or the Company, could
reasonably be expected to result in (x) any injunction or other equitable relief
against the Company that would interfere in any material respect with its
business or operations or could otherwise be reasonably expected to have a
Material Adverse Effect or (y) Losses by the Company, individually or in the
aggregate exceeding $100,000; and

          (b) there are no Orders outstanding against the Company.

Prior to the execution of this Agreement, Sellers have delivered to Purchaser
all responses of counsel for the Company to auditors’ requests for information
delivered in connection with the Audited Financial Statements (together with any
updates provided by such counsel) regarding Actions or Proceedings pending or
threatened against the Company.

     3.12. Compliance With Laws and Orders. Except as disclosed in
Schedule 3.12, the Company is not, in any material respect, in violation of any
applicable federal, state or local law, statute, rule, regulation or ordinance.
Since December 31, 2003, the Company has not received any written notice that it
is in violation of or in default under any Law or Order applicable to the
Company or any of its Assets and Properties. Neither the Company nor, to the
Knowledge of Sellers, any director, officer, agent, employee or other Person
associated with or acting on behalf of the Company has used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate funds; or
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.

     3.13. Benefit Plans; ERISA.

          (a) Schedule 3.13(a) (i) contains a true and complete list and
description of each Benefit Plan, (ii) identifies each Benefit Plan that is a
Qualified Plan, (iii) identifies each Benefit Plan that is fully insured, and
(iv) identifies each Benefit Plan in respect of which the Company has relied on
a prototype or volume submitter Plan. Except as set forth on Schedule 3.13(a),
the Company has not scheduled or agreed upon future increases of benefit levels
(or creations of new benefits) with respect to any Benefit Plan, and no such
increases or creation of benefits have been proposed, made the subject of
representations to employees or requested or demanded by Business Employees
under circumstances which make it reasonable to expect that such increases will
be granted.

25

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

 

          (b) Neither the Company nor any ERISA Affiliate, or any predecessor
thereof, has at any time during the five-year period preceding the date of this
Agreement, maintained or contributed to a Defined Benefit Plan.

          (c) The Company does not maintain and is not obligated to provide
welfare benefits under any life, medical or health Benefit Plan (other than as
an incidental benefit under a Qualified Plan) which provides benefits to
retirees or other terminated employees other than benefit continuation rights
under the Consolidated Omnibus Budget Reconciliation Act of 1985 ( “COBRA”), as
amended or any comparable state law.

          (d) Neither the Company nor any ERISA Affiliate has at any time
contributed to any “multiemployer plan” as that term is defined in Section 3(37)
of ERISA and in Section 4001(a)(3) of ERISA.

          (e) Each Benefit Plan is, and its administration is and has been since
inception, in all material respects in compliance with, and the Company has not
received any claim or notice that any such Benefit Plan is not in compliance
with, all applicable Laws and Orders, (including all tax rules for which
favorable tax treatment is intended), without limitation, the requirements of
ERISA, the Code, the Age Discrimination in Employment Act (to the extent
applicable), the Equal Pay Act (to the extent applicable) and Title VII of the
Civil Rights Act of 1964 (to the extent applicable). Each Qualified Plan has met
the requirements for qualification under Section 401(a) of the Code. Each
Qualified Plan has been determined by the IRS to be so qualified (unless the
Company relies on the Opinion Letter issued to the sponsor or a prototype or
volume submitter plan with respect to such Qualified Plan) and such
determination has not been modified, revoked or limited, and to the Knowledge of
Sellers, no circumstances have occurred that would adversely affect the
tax-qualified status of any such Qualified Plan.

          (f) Neither Sellers nor the Company is in default in performing any of
its contractual obligations under any Benefit Plan or any related trust
agreement or insurance contract, (ii) all contributions and other payments
required to be made by Sellers or the Company to any Benefit Plan with respect
to any period ending on the date hereof have been made or reserves adequate for
such contributions or other payments have been or will be set aside therefor and
have been or will be reflected in Financial Statements in accordance with GAAP,
and (iii) there are no material Liabilities of or under any Benefit Plan other
than Liabilities for benefits to be paid to participants in such Benefit Plan
and their beneficiaries in accordance with the terms of such Benefit Plan.

          (g) To the Knowledge of Sellers, except as set forth on
Schedule 3.13(g), no event has occurred, and there exists no condition or set of
circumstances in connection with any Benefit Plan, under which the Company or
any Benefit Plan could reasonably be expected to be subject to any risk of
material liability (including, without limitation, liability under Sections 406,
409 or 502(i) of ERISA, Title IV of ERISA or Section 4975 of the Code) other
than to make contributions or to pay benefits in the ordinary course.

26

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

 

          (h) There is no suit, action, dispute, claim, arbitration or legal,
administrative or other proceeding or governmental investigation pending, or to
the Knowledge of Sellers, threatened, alleging any breach of the terms of any
such Benefit Plan or of any fiduciary duties thereunder or violation of any
applicable law with respect to any such Benefit Plan.

          (i) No employer securities, employer real property or other employer
property is included in the assets of any Benefit Plan.

          (j) Except as set forth on Schedule 3.13(j), no Benefit Plan will
result in the payment of money or any other property or rights, or accelerate or
provide any other rights or benefits, to any current or former employee of the
Company (or other current or former service provider thereto) that would not
have been required but for the transactions provided for herein. The Company
does not maintain any Benefit Plan which provides severance or similar benefits
to current or former employees or other service providers.

          (k) The Company has not originated any loan with respect to any
Benefit Plan.

          (l) Except as set forth on Schedule 3.13(l) the Company has properly
classified for all purposes (including for all Tax purposes and for purposes of
determining eligibility to participate in any Benefit Plan) all employees,
leased employees, consultants and independent contractors.

          (m) With respect to each such Benefit Plan, true, correct and complete
copies of the applicable following documents have been delivered to Purchaser:
(i) all current Plan documents and related trust documents, and any amendment
thereto; (ii) Forms 5500, financial statements, and actuarial reports for the
last three Plan years; (iii) the most recently issued IRS determination letter;
(iv) summary plan descriptions and all summaries of material modifications; and
(v) all written material communications to employees relating to such Plans.

          (n) Each Benefit Plan may be amended and terminated in accordance with
its terms and applicable Law.

          (o) Schedule 3.13(o) contains the following information, as of May 31,
2005, with respect to the Medical and Dependent Care Flexible Spending Accounts
under the Glaser Financial Group, Inc. Section 125 Cafeteria Plan: total 2005
medical flexible spending account elections, salary reductions from
participant’s paychecks for medical flexible spending account contributions,
total claims paid for medical flexible spending account reimbursements, total
2005 dependent care flexible spending account elections, salary reductions from
participant’s paychecks for dependent care flexible spending account
contributions and total claims paid for dependent care flexible spending account
reimbursements.

     3.14. Real Property.

          (a) The Company does not own any real property. Schedule 3.14(a)
contains a true and correct list of each parcel of real property leased by the
Company (as lessee).

27

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

 

          (b) The Company has a valid and subsisting leasehold estate in and the
right to quiet enjoyment of the real properties leased by it for the full term
of the lease thereof. Each lease referred to in paragraph (a) above is a legal,
valid and binding agreement, enforceable in accordance with its terms, of the
Company and, except as set forth in Schedule 3.14(b), the Company has not
received written notice of any, default thereunder. The Company does not owe any
brokerage commissions with respect to any such leased space.

          (c) Sellers have delivered to Purchaser prior to the execution of this
Agreement true and complete copies of all leases (including any amendments and
renewal letters) with respect to the real property listed in Schedule 3.14(a).

     3.15. Tangible Personal Property. The Company is in possession of and has
good title to, or has valid leasehold interests in or valid rights under
Contract to use, all tangible personal property used in the conduct of its
business, including all tangible personal property reflected on the balance
sheet included in the Unaudited Financial Statements for the period ended on the
Unaudited Financial Statement Date and tangible personal property acquired since
the Unaudited Financial Statement Date other than property disposed of since
such date in the ordinary course of business consistent with past practice. All
such tangible personal property is free and clear of all Liens, other than
Permitted Liens and Liens disclosed in Schedule 3.15.

     3.16. Intellectual Property Rights. Schedule 3.16 lists all of the rights
of the Company in Intellectual Property (other than know-how) that: (i) is owned
by, licensed to or otherwise controlled by the Company; or (ii) is used in the
conduct of the business of the Company. Except as disclosed in Schedule 3.16, in
shrink-wrap licenses, in “click to accept” licenses or in other Contracts listed
in the Disclosure Schedule, (i) to Sellers’ Knowledge, there are no restrictions
on such Intellectual Property that would prevent or impair the continued use of
such Intellectual Property upon the consummation of the Closing or the merger of
the Company into Purchaser, (ii) Sellers have delivered or made available to
Purchaser prior to the execution of this Agreement all material documentation in
Sellers’ possession with respect to any invention, process, design, computer
program or other know-how or trade secret included in such Intellectual
Property, (iii) the Company has not received any written notice that it is in
default under any license to use such Intellectual Property, and (iv) to the
Knowledge of Sellers, such Intellectual Property is not being infringed by any
other Person. Neither Sellers nor the Company has received written notice that
the Company is infringing any Intellectual Property of any other Person.

     3.17. Contracts.

          (a) Schedule 3.17(a) (with paragraph references corresponding to those
set forth below) contains a true and complete list of each of the following
Contracts or other arrangements (true and complete copies or, if none,
reasonably complete and accurate written descriptions of which, together with
all amendments and supplements thereto and all waivers of any terms thereof,
have been delivered to Purchaser prior to the execution of this Agreement), to
which the Company is a party or by which any of their respective Assets and
Properties is bound:

28

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

 

               (i) all Contracts (excluding Benefit Plans) providing for a
commitment of employment or consultation services for a specified or unspecified
term, the name, position and rate of compensation of each Person party to such a
Contract and the expiration date of each such Contract.

               (ii) all Contracts with any Person containing any provision or
covenant prohibiting or limiting the ability of the Company to engage in any
business activity or compete with any Person or prohibiting or limiting the
ability of any Person to compete with the Company;

               (iii) all partnership, joint venture, shareholders’ or other
similar Contracts with any Person;

               (iv) all Contracts relating to Indebtedness of the Company in
excess of $100,000;

               (v) all collective bargaining or similar labor Contracts;

               (vi) all Contracts that (A) limit or contain restrictions on the
ability of the Company to declare or pay dividends on, to make any other
distribution in respect of or to issue or purchase, redeem or otherwise acquire
its capital stock, to incur Indebtedness, to incur or suffer to exist any Lien,
to purchase or sell any Assets and Properties, to change the lines of business
in which it participates or engages or to engage in any Business Combination or
(B) require the Company to maintain specified financial ratios or levels of net
worth or other indicia of financial condition;

               (vii) all Contracts between or among the Company on the one hand
and any of Sellers or Sellers’ Associates or any employees of the Company on the
other hand (other than Benefit Plans and employment contracts already disclosed
in Schedule 3.17(a) and described in (i) above);

               (viii) all other Contracts that (A) involve the payment or
potential payment, pursuant to the terms of any such Contract, by or to the
Company of more than $100,000 and (B) cannot be terminated within thirty
(30) calendar days after giving notice of termination without resulting in any
material cost or penalty to the Company; and

               (ix) to the extent not otherwise covered by clauses (i) to
(viii) above, and except for Contracts related to the actual assignment and sale
of individual loans made by the Company to Borrowers in the ordinary course of
business in accordance with past practices, all written Contracts with Fannie
Mae, HUD, GNMA, or Freddie Mac and all other Contracts pursuant to which the
Company originates, sells or services mortgage loans.

          (b) Each Contract required to be disclosed in Schedule 3.17(a) is in
full force and effect and constitutes a legal, valid and binding agreement,
enforceable against the Company

29

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

 

to the extent a party thereto in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, recharacterization
or other similar laws affecting creditor’s rights generally and by general
equitable principles (regardless of whether considered in a proceeding in equity
or at law); and except as disclosed in Schedule 3.17(b), (i) the Company is not
in violation or breach of or default under any such Contract (and with notice or
lapse of time or both, would not be in violation or breach of or default under
any such Contract), and (ii) neither Sellers nor the Company has received
written notice that any other party to a Contract claims that such Contract is
not its legal, valid and binding obligation or is unenforceable against such
other party or that the Company is in default under such Contract.

          (c) The surety under the Bond Indemnity Agreement has not made any
claim or demand against any other party to such agreement; to the Knowledge of
Sellers the surety has not threatened to make any claim or demand against any
party to such agreement; and to the Knowledge of Sellers no event has occurred
or circumstance exists that is reasonably likely to give rise to or serve as the
basis for any claim or demand by the surety under the Bond Indemnity Agreement.

     3.18. Licenses. Schedule 3.18 contains a true and complete list of all
Licenses of the Company used in and material to the business or operations of
the Company. Prior to the execution of this Agreement, Sellers have delivered to
Purchaser true and complete copies of all such Licenses. Except as disclosed in
Schedule 3.18:

          (i) each License listed in Schedule 3.18 is valid, binding and in full
force and effect;

          (ii) the Company holds all Licenses necessary or desirable to the
conduct of its business, as currently being conducted; and

          (iii) the Company is not, and has not received any written notice that
it is, in default under any such License.

     3.19. Insurance. Schedule 3.19 contains a true and complete list of all
liability, property, workers’ compensation, directors’ and officers’ liability
and other insurance policies currently in effect that insure the business,
operations or employees of the Company. The insurance coverage provided by such
policies will not terminate or lapse by reason of the transactions contemplated
by this Agreement. The Company has not received notice that any insurer under
any policy referred to in this Section is (a) not renewing any such policy on
substantially similar terms, or (b) denying liability with respect to a claim
thereunder or defending under a reservation of rights clause. All premiums due
on such insurance policies have been prepaid or paid when due. Except as noted
on Schedule 3.19, the insurance coverage provided by the policies listed on
Schedule 3.19 is sufficient for compliance with all Contracts to which the
Company is a party or by which it is bound and with all requirements of any Law
applicable to the Company.

30

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

 

     3.20. Employees; Labor Relations.

          (a) Schedule 3.20(a) contains a list of the name of each officer and
employee of the Company at the date hereof, together with each such person’s
position or function, annual base salary or wages and any incentive or bonus
arrangement with respect to such person in effect on such date (each a “Business
Employee”).

          (b) (i) The Company is not subject to any collective bargaining
agreements or any agreements, contracts, decrees or orders requiring the Company
to recognize, deal with or employ any persons organized as a collective
bargaining unit or other form of organized labor and there are no threatened or
contemplated attempts to organize for collective bargaining purposes any of the
employees of the Company; and (ii) the Company has complied in all material
respects with all applicable Laws respecting employment and employment
practices, terms and conditions of employment, wages and hours, and the Company
is not liable for any material arrears of wages of any Taxes or penalties for
failure to comply with any such law, and, except as set forth in Schedule
3.20(b), no unfair labor practice complaint, sex or age discrimination claim, or
claim under the Americans with Disabilities Act is pending against the Company
before the National Labor Relations Board or any other Governmental or
Regulatory Authority. There never has been any work stoppage or strike by
employees of the Company. Since January 1, 2002, the Company has not received
any written notice of noncompliance with applicable Laws relating to the
employment of labor, including without limitation those relating to wages, hours
and collective bargaining.

          (c) Except for Business Employees who are parties to employment
Contracts listed on Schedule 3.17(a), all Business Employees are “at-will”
employees.

     3.21. Substantial Business Relationships.

          (a) Schedule 3.21(a) lists all Persons for whose benefit or at whose
request the Company has made loans which are presently outstanding which in the
aggregate exceed Five Million Dollars ($5,000,000). Except as disclosed in
Schedule 3.21(a), to the Knowledge of Sellers, no such Person is threatened with
bankruptcy or insolvency.

          (b) The Company is in compliance in all material respects with all
agreements with any of Fannie Mae, GNMA, HUD or Freddie Mac, and neither Sellers
nor the Company has received written notice of any material noncompliance with
the handbooks, manuals and guidelines applicable to Fannie Mae DUS lenders or
seller/servicers, GNMA lenders or seller/services, HUD lenders or
seller/servicers or Freddie Mac lenders or seller/servicers.

          (c) Since December 31, 2000, neither Sellers nor the Company has
received any written notice from Fannie Mae, GNMA, HUD or Freddie Mac,
respectively, stating or indicating that the Company was or is in default in its
obligations to or agreements with Fannie Mae, GNMA, HUD or Freddie Mac,
respectively; and Sellers have no Knowledge of any facts or events which would
entitle or give Fannie Mae, GNMA, HUD or Freddie Mac, respectively,

31

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

 

cause to terminate the Company as an approved DUS lender or GNMA, HUD or Freddie
Mac lender or seller/servicer, respectively.

          (d) Since December 31, 2000, and except as listed on Schedule 3.21(d),
the Company has not received any written notice from Fannie Mae of any default
or deficiency in the Company’s performance as a DUS lender or Fannie Mae
approved seller/servicer. Except as listed on Schedule 3.21(d), neither GNMA,
HUD nor Freddie Mac has sent the Company written notice of any default or
deficiency in the Company’s performance as a lender or seller/servicer. The
Company is in full compliance with each net worth, reserve, liquidity and other
financial conditions required by Fannie Mae, GNMA, HUD or Freddie Mac.

     3.22. No Powers of Attorney. Except as set forth in Schedule 3.22, the
Company does not have any powers of attorney or comparable delegations of
authority outstanding.

     3.23. Defaults. Except as set forth on Schedule 3.23, the Company is not in
default or violation (and with notice or lapse of time or both would not be in
default or violation) in respect of any loans made to Borrowers in the ordinary
course of business.

     3.24. Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by Sellers directly with
Purchaser without the intervention of any Person on behalf of Sellers in such
manner as to give rise to any valid claim by any Person against Purchaser or the
Company for a finder’s fee, brokerage commission or similar payment.

     3.25. Status of Outstanding Loans.

          (a) Schedule 3.25(a) is a complete list as of April 30, 2005 of all
loans (other than construction loans) being serviced by the Company and
indicates for each such loan the name of the party which owns such loan (or a
participation interest therein) and the type of the loan (i.e., permanent,
mezzanine, developer, etc.).

          (b) Schedule 3.25(b) is a complete list as of April 30, 2005 of all
outstanding construction loans which have been closed (i.e., loan documents have
been executed and a mortgage or deed of trust has been recorded) by the Company
and indicates in each case the party providing the funds from which such loan
was funded.

          (c) Schedule 3.25(c) is a complete list of all outstanding commitments
for construction loans as of April 30, 2005 issued by the Company and indicates
in each case the party from whom the funds will be obtained to fund such loan.

          (d) Schedule 3.25(d) is a complete list of all outstanding commitments
for permanent loans as of April 30, 2005 issued by the Company (whether on its
own behalf or on behalf of another party) and indicates in each case the
proposed permanent lender and the intended disposition of such loan (e.g., sale
to Fannie Mae, etc.).

32

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

 

          (e) Schedule 3.25(e) is a complete list of all loans originated or
serviced by the Company which as of April 30, 2005 are identified as a
non-performing, “watch list” or other similarly classified loans, and includes a
narrative of the issues and action plan for each such loan, together with the
criteria used to determine if loans should be so classified and identification
of the criteria that resulted in each such loan’s classification.

          (f) Schedule 3.25(f) is a complete list of all permanent loans owned
or serviced by the Company for which the underlying borrower or project has a
debt service coverage ratio of less than 1.10 to 1.0, based upon the most recent
financial reporting available to the Company as of April 30, 2005.

          (g) Schedule 3.25(g) is a complete list of all loans owned or serviced
by the Company for which, in Sellers’ reasonable and good faith judgment, based
on information currently available to Sellers, the Company may be required to
make delinquency or servicing advances, including tax advances, during the next
12 months, or which may be unable to meet scheduled debt service requirements
during such period.

          (h) Schedule 3.25(h) lists all construction loans owned or serviced by
the Company (i) for which Sellers or the Company has reason to believe that the
remaining loan proceeds will not be sufficient to complete the construction of
the project free and clear of all liens, claims and encumbrances, or (ii) that
are projected to have inadequate reserves, including interest, taxes and
insurance, to reach conversion or stabilization.

          (i) Schedule 3.25(i) lists all construction loans where the project is
currently encumbered by Liens, including identification of construction loans
where the borrower has not provided a bond or other collateral in an amount
equal to at least 100% of the aggregate amount of all such Liens.

          (j) Except as disclosed in Schedule 3.25(j), the Company received a
lender’s policy of title insurance in connection with all loans made by the
Company and secured by real property, in an amount not less than the loan
amount.

          (k) All claims of the Company with GNMA in respect of that loan known
as Pennock Place Apts. have been fully paid or accrued on the Company’s balance
sheet, and neither the Company nor the Sellers have any reason to expect any
further losses in excess of Three Thousand Dollars ($3,000) per month in respect
of such loan.

     3.26. No Undisclosed Liabilities. To Sellers’ Knowledge, except as
reflected or reserved against in the balance sheet included in the Audited
Financial Statements or in the notes thereto or as disclosed in Schedule 3.26,
there are no Liabilities or contingent liabilities (including guarantees) of,
against, relating to or affecting the Company or any of its Assets and
Properties, other than Liabilities which are incurred in the ordinary course of
business consistent with past practice and which in the aggregate would not have
a Material Adverse Effect.

33

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

 

     3.27. Affiliate Transactions. Except as disclosed in Schedule 3.27, as of
the date of this Agreement, (i) there are no (a) Liabilities of the Company owed
to any of Sellers or Sellers’ Associates, or (b) Liabilities of any of Sellers
or Sellers’ Associates owed to the Company, in each case, which would survive
Closing, and (ii) the Company has not, directly or indirectly, extended credit,
arranged to extend credit, or renewed any extension of credit, in the form of a
personal loan, to or for any director or executive officer of the Company, or to
or for any family member or affiliate of any director or executive officer of
the Company. Except as disclosed on Schedule 3.27, Oak Grove Realty Services,
Inc., the property management company owned and controlled by David Williams,
does not provide property management services to any property or project for
which the Company has provided or arranged any financing.

     3.28. Books and Records. The books of account, minute books, stock record
books and other Books and Records of the Company are complete and correct in all
material respects and have been maintained in accordance with reasonable
business practices. All Books and Records of the Company which have been
delivered or otherwise made available to Purchaser are true, complete and
accurate copies of the Company’s records.

     3.29. Environmental Matters. Except as shown on Schedule 3.29(a), neither
Sellers nor the Company has received written notice that any property with
respect to which the Company has made a loan is in violation of any
Environmental Law. Except as shown on Schedule 3.29(b), the Company has obtained
a Phase I Environmental Assessment for each property with respect to which it
has made a loan.

     3.30 Securities Restrictions. Each of Sellers acknowledges that the MuniMae
Common Shares, if and when issued, will not be registered under the Securities
Act as of the date of issue, and therefore may not be resold without compliance
with the Securities Act and any applicable state securities laws. The MuniMae
Common Shares are being or will be acquired by each of Sellers solely for his
own account and without a view to distribution within the meaning of the
Securities Act. Each of Sellers covenants, warrants and represents that none of
the MuniMae Common Shares will be, directly or indirectly, offered, sold,
assigned, pledged, hypothecated, transferred or otherwise disposed of except
after full compliance with all of the applicable provisions of the Securities
Act and applicable state securities laws and the rules and regulations
thereunder. Certificates representing the MuniMae Common Shares shall bear a
legend in substantially the following language:

THE SHARES REPRESENTED BY THIS CERTIFICATE WERE NOT ISSUED IN A TRANSACTION
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ( “1933 ACT”), OR ANY
APPLICABLE STATE SECURITIES LAWS. THE SHARES REPRESENTED HEREBY HAVE BEEN
ACQUIRED WITHOUT A VIEW TO DISTRIBUTION WITHIN THE MEANING OF THE 1933 ACT AND
MAY NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS COVERED BY AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT AND APPLICABLE STATE
SECURITIES LAWS OR, IN THE OPINION OF

34

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

 

COUNSEL TO THE COMPANY, IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE 1933
ACT AND SUCH LAWS.

     3.31. Accredited Investor Status. Each Seller is able to bear the economic
risk of an investment in the MuniMae Common Shares and can afford to sustain a
total loss of such investment. Each Seller represents to MuniMae and Purchaser
that such Seller is an “accredited investor,” as that term is defined in
Regulation D under the Securities Act for the reasons specified on such Seller’s
Certification, the form of which is attached hereto as Exhibit K.

     3.32. No Implied Representations. PURCHASER, MUNIMAE AND SELLERS
ACKNOWLEDGE AND AGREE THAT SELLERS ARE NOT MAKING, WHETHER CONTAINED IN OR
REFERRED TO IN ANY MATERIALS THAT HAVE BEEN OR SHALL HEREAFTER BE PROVIDED TO
PURCHASER OR ANY OF ITS AFFILIATES, AGENTS OR REPRESENTATIVES, ANY
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING, WITHOUT
LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE),
BEYOND THOSE EXPRESSLY GIVEN IN THIS AGREEMENT.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND MUNIMAE

     MuniMae hereby represents and warrants to Sellers as set forth in Exhibit C
attached hereto and incorporated herein by this reference. Purchaser hereby
represents and warrants to Sellers as follows:

     4.01. Organization. Purchaser is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Florida. Purchaser
has full corporate power and authority to execute and deliver this Agreement and
the Operative Agreements to which it is a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. Purchaser is duly qualified, licensed or admitted to do business
and is in good standing in all jurisdictions in which the ownership, use or
leasing of its Assets and Properties, or the conduct or nature of its business,
makes such qualification, licensing or admission necessary and in which the
failure to be so qualified, licensed or admitted and in good standing could
reasonably be expected to have an adverse effect on the validity or
enforceability of this Agreement or any of the Operative Agreements to which it
is a party or on the ability of Purchaser to perform its obligations hereunder
or thereunder.

     4.02. Authority. The execution and delivery by Purchaser of this Agreement
and the Operative Agreements to which it is a party, and the performance by
Purchaser of its obligations hereunder and thereunder, have been duly and
validly authorized by the Board of Directors of Purchaser and no other corporate
action on the part of Purchaser or its stockholder is necessary. This Agreement
has been duly and validly executed and delivered by Purchaser and constitutes,
and upon the execution and delivery by Purchaser of the Operative Agreements to
which it is a party, such Operative Agreements will constitute, legal, valid and
binding obligations of

35

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

 

Purchaser enforceable against Purchaser in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, recharacterization or other similar Laws affecting creditor’s
rights generally and by general equitable principles (regardless of whether
considered in a proceeding in equity or at Law).

     4.03. No Conflicts. The execution and delivery by Purchaser of this
Agreement do not, and the execution and delivery by Purchaser of the Operative
Agreements to which it is a party, the performance by Purchaser of its
obligations under this Agreement and such Operative Agreements and the
consummation of the transactions contemplated hereby and thereby will not:

          (a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the Articles of Incorporation or by-laws of
Purchaser;

          (b) subject to obtaining the consents, approvals and actions, making
the filings and giving the notices required under the HSR Act, conflict with or
result in a violation or breach of any term or provision of any Law or Order
applicable to Purchaser or any of its Assets and Properties; or

          (c) except for the filing and processes required under the HSR Act,
(i) conflict with or result in a violation or breach of, (ii) constitute (with
or without notice or lapse of time or both) a default under, (iii) require
Purchaser to obtain any consent, approval or action of, make any filing with or
give any notice to any Person as a result or under the terms of, or (iv) result
in the creation or imposition of any Lien upon Purchaser or any of its Assets
and Properties under, any Contract or License to which Purchaser is a party or
by which any of its Assets and Properties is bound.

     4.04. Governmental Approvals and Filings. Except for the filing and
processes required under the HSR Act, no consent, approval or action of, filing
with or notice to any Governmental or Regulatory Authority on the part of
Purchaser is required in connection with the execution, delivery and performance
of this Agreement or the Operative Agreements to which it is a party or the
consummation of the transactions contemplated hereby or thereby.

     4.05. Legal Proceedings. There are no Actions or Proceedings pending or, to
the knowledge of Purchaser, threatened against, relating to or affecting
Purchaser or any of its Assets and Properties which could reasonably be expected
to result in the issuance of an Order restraining, enjoining or otherwise
prohibiting or making illegal the consummation of any of the transactions
contemplated by this Agreement or any of the Operative Agreements.

     4.06. Financial Capability. Purchaser will have available sufficient funds
to pay the Cash Closing Payment on the Closing Date, and will have sufficient
funds to pay when due any other part of the Purchase Price (including the
Deferred Purchase Price and the Earn-Out Amount) and consummate the transactions
contemplated by this Agreement. After giving effect to the transactions
contemplated by this Agreement and to any indebtedness being incurred by
Purchaser on the Closing Date in connection therewith, on the Closing Date and
on the dates on which any other parts of the Purchase Price are due, Purchaser
will not (a) be insolvent (either

36

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

 

because its financial condition is such that the sum of its debts is greater
than the fair value of its assets or because the present fair salable value of
its assets will be less than the amount required to pay its probable liability
on its debts as they become absolute and matured), (b) have unreasonably small
capital with which to engage in its business or (c) have incurred or plan to
incur debts beyond its ability to pay as they become absolute and matured.

     4.07. Investigation; Forecasts. Purchaser is an informed and sophisticated
participant in the transactions contemplated by this Agreement and has
undertaken such investigation as it deems necessary and has been provided with
and has evaluated certain documents and information in connection with the
execution, delivery and performance of this Agreement and the Operative
Agreements. With respect to any financial projection or forecast delivered on
behalf of Sellers to Purchaser, Purchaser acknowledges that there are
uncertainties inherent in attempting to make such projections and forecasts,
that it is familiar with such uncertainties and that Sellers have made no
representations or warranties with respect thereto.

     4.08. Purchase for Investment. The Glaser Shares will be acquired by
Purchaser (or, if applicable, its assignee pursuant to Section 12.10) for its
own account for the purpose of investment, it being understood that the right to
dispose of such Glaser Shares shall be entirely within the discretion of
Purchaser (or such assignee, as the case may be). Purchaser (or such assignee,
as the case may be) will refrain from transferring or otherwise disposing of any
of the Glaser Shares, or any interest therein, in such manner as to cause
Sellers to be in violation of the registration requirements of the Securities
Act or applicable state securities or blue sky laws.

     4.09. Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by Purchaser directly
with Sellers without the intervention of any Person on behalf of Purchaser in
such manner as to give rise to any valid claim by any Person against Sellers or
the Company for a finder’s fee, brokerage commission or similar payment.

ARTICLE V
COVENANTS OF SELLERS

     Sellers, jointly and severally, covenant and agree with Purchaser that, at
all times from and after the date hereof, for the period specified herein or, if
no period is specified herein, indefinitely, Sellers will comply with all
covenants and provisions of this Article V, except to the extent Purchaser may
otherwise give its prior consent in writing.

     5.01. Regulatory and Other Approvals. Sellers will, and will cause the
Company to, (a) prior to the Closing, use commercially reasonable efforts, to
obtain as promptly as practicable all consents, approvals or actions of, to make
all filings with and to give all notices to Governmental or Regulatory
Authorities or any other Person required of Sellers or the Company to consummate
the transactions contemplated hereby, including those described in Schedules
3.06 or 3.07, (b) provide such other information and communications to such
Governmental or Regulatory Authorities or other Persons as Purchaser or such
Governmental or Regulatory Authorities or

37

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

 

other Persons may reasonably request and (c) cooperate with Purchaser as
promptly as practicable in obtaining all consents, approvals or actions of,
making all filings with and giving all notices to Governmental or Regulatory
Authorities or other Persons required of Purchaser to consummate the
transactions contemplated hereby. Sellers will provide prompt notification to
Purchaser when any such consent, approval, action, filing or notice referred to
in clause (a) above is obtained, taken, made or given, as applicable, and will
advise Purchaser of any communications (and, unless precluded by Law, provide
copies of any such communications that are in writing) with any Governmental or
Regulatory Authority or other Person regarding any of the transactions
contemplated by this Agreement or any of the Operative Agreements.

     5.02. Books and Records. At Closing, Sellers will deliver or make available
to Purchaser at the offices of the Company all of the Books and Records, and if
at any time after the Closing Sellers discover in their possession or under
their control any other Books and Records, they will forthwith deliver such
Books and Records to Purchaser.

     5.03. Notice and Cure. From and after the date of this Agreement until the
Closing, Sellers will notify Purchaser promptly in writing of, and
contemporaneously will provide Purchaser with true and complete copies of any
and all information or documents relating to, and will use commercially
reasonable efforts to cure, any event, transaction or circumstance occurring
after the date of this Agreement that causes or will cause any covenant or
agreement of Sellers under this Agreement to be breached or that renders or will
render untrue any representation or warranty of Sellers contained in this
Agreement as if the same were made on or as of the date of such event,
transaction or circumstance. Notice given pursuant to this Section 5.03 which
relates to facts existing or circumstances occurring prior to the date of this
Agreement shall not cure or otherwise have any effect on the representations,
warranties, covenants or agreements contained in this Agreement for purposes of
determining satisfaction of any condition contained herein nor shall such notice
in any way limit Purchaser’s right to seek indemnity under Article XI. Notice
given pursuant to this Section 5.03 with respect to matters first occurring
after the date of this Agreement shall not cure or otherwise have any effect on
any representations, warranties, covenants, or agreements for purposes of
determining whether the conditions of Section 8.02(b) have been satisfied, but
shall cure the related breach of any representation or warranty for all other
purposes under this Agreement.

     5.04. Continued Access. Between the date of this Agreement and the Closing
Date, Sellers will afford Purchaser and its advisors reasonable access to the
personnel, properties, Contracts, Books and Records, and other documents and
data of the Company. Any such access will be provided, and all such inspections
will be conducted, at reasonable times and in such a manner as not to interfere
with the operations of the Company.

     5.05. Operation of the Business Prior to Closing.

     (a) Between the date of this Agreement and the Closing Date, Sellers will,
and will cause the Company to, (i) conduct the business of the Company in the
ordinary course of business, and preserve the Company’s Assets and Properties,
in each case, in substantially the same manner as heretofore conducted or
preserved consistent with past practice, (ii) use

38

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

 

reasonable efforts to preserve intact the current business organization of the
Company, keep available the services of the current officers and employees of
the Company, and maintain the contractual relations and goodwill of the Company
with, Fannie Mae, GNMA, HUD, Freddie Mac, borrowers, landlords, creditors and
others having business relationships with the Company, (iii) not cause or permit
any amendment, supplement, waiver or modification to or of its articles of
incorporation or bylaws or create any Subsidiaries; (iv) not declare, set aside,
make or pay dividends or other distributions on or in respect of, or redeem or
repurchase, directly or indirectly, any shares of capital stock of the Company,
or issue or sell any shares of capital stock of the Company, or any securities
convertible or exchangeable for any such shares; (v) not take any action or omit
to take any action, which action or omission would result in a breach of any of
the representations and warranties set forth in Article III; (vi) not change in
any respect its accounting practices, policies or principles, except as may be
required by applicable law or GAAP; (vii) pay down existing Indebtedness, and
not incur new or increased Indebtedness, except in the ordinary course of
business consistent with past practices; and (viii) not undertake any matters
outside the ordinary course of business without the prior written consent of
Purchaser which consent shall not be unreasonably withheld or delayed and if not
withheld or given within ten (10) days of notice of such undertaking shall be
deemed given. An action shall be deemed to be in the ordinary course of business
only if it is consistent with past practice.

          (b) Notwithstanding any provision of Section 5.05(a)(iv) to the
contrary, the Company may make distributions of cash and cash equivalents to
Sellers prior to the Closing Date, including the assignment of that promissory
note identified on Schedule 3.27 payable by Southview Senior Living LLC to the
Company; provided, however, that after giving effect to such distributions the
Company shall have working capital (as determined in accordance with Section
2.06) of at least Five Hundred Thousand Dollars ($500,000) and shall be in full
compliance with each net worth, reserve, liquidity and other financial condition
required by Fannie Mae, GNMA, HUD or Freddie Mac; and provided further, however,
that the Company shall not incur any Indebtedness in order to make any such
distribution.

          (c) Notwithstanding any provision of Section 5.05(a) to the contrary,
the Company may take those actions that are described on Exhibit H attached
hereto.

     5.06. Tax Matters. Without the prior written consent of Purchaser, neither
the Company nor Sellers shall make or change any election, change an annual
accounting period, adopt or change any accounting method, file any amended Tax
Return, enter into any closing agreement, settle any Tax claim or assessment
relating to the Company, surrender any right to claim a refund of Taxes, consent
to any extension or waiver of the limitation period applicable to any Tax claim
or assessment relating to the Company, or take any other similar action relating
to the filing of any Tax Return or the payment of any Tax, if such election,
adoption, change, amendment, agreement, settlement, surrender, consent or other
action would have the effect of increasing the Tax liability of the Company for
any period ending on or after the Closing Date or decreasing any Tax attribute
of the Company existing on the Closing Date.

     5.07. No Solicitation, Etc. From and after the date of this Agreement until
the earlier to occur of the Closing or termination of this Agreement pursuant to
Article X, Sellers will not, and

39

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

 

shall cause the Company not to, directly or indirectly, solicit, initiate, or
encourage any inquiries or proposals from, or discuss or negotiate with, any
Person relating to any transaction involving the sale of the business or Assets
or Properties of the Company or the capital stock of the Company.

     5.08. Affiliate Transactions.

          (a) Beginning on the date of this Agreement, Sellers shall not enter
into any transactions between Sellers and the Company and Sellers shall cause
the Company to refrain from entering into any transactions between the Company
and Sellers’ Associates and Sellers shall refrain from entering into any
transactions involving the acquisition or disposition of MuniMae Common Shares.
In addition, during the term of their respective employment agreements, (i) each
Seller shall give the employer under such employment agreements at least five
(5) Business Days notice of any proposed transactions involving the disposition
of 5,000 or more MuniMae Common Shares and shall conduct all transactions so as
to comply with all applicable securities laws and (ii) each Seller shall comply
with the terms of their respective employment agreements which will contain
restrictions which are generally applicable to all members of senior management
of Purchaser and MuniMae.

          (b) Notwithstanding Section 5.08(a) to the contrary, no later than the
Business Day immediately preceding the Closing Date, Sellers will cause the
Company, on the one hand, and Sellers and their family members, family trusts
and related persons, on the other hand, to repay in full or duly forgive the
repayment of all debt owed by either to the other, including those promissory
notes identified on Schedule 3.27 payable by GFW Lamplighter Village, LLC, GFW
Properties, LLC, and David Williams, respectively. For purposes of this
Agreement, all such repayments and any forgiveness shall be treated as having
occurred immediately prior to the Closing Date.

     5.09. Termination of Certain Contracts. At or prior to Closing, Sellers
shall cause the parties to the Amended and Restated Shareholders Agreement
described in Schedule 3.17(a) and the parties to the Pledge and Escrow Agreement
described in Schedule 3.04, respectively, to terminate those Contracts and to
release one another with respect to any obligations and liabilities under the
applicable Contract; provided, however, that, for purposes of the Stock
Redemption Agreement dated as of January 31, 2005, between the Company and
Curtis D. Glaser, Section 5 of the Amended and Restated Shareholders Agreement
shall survive the termination of such shareholders agreement as provided
therein. All such terminations and releases will be in form and substance
reasonably satisfactory to Purchaser, and Sellers shall furnish to Purchaser, at
or prior to Closing, a complete copy of each such termination and release.

     5.10. Glaser Resignation. At or prior to Closing, Sellers shall cause Curt
Glaser to resign from all positions with the Company.

40

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

 

ARTICLE VI
COVENANTS OF PURCHASER AND MUNIMAE

     Purchaser, as to itself, and MuniMae, as to itself, covenant and agree with
Sellers that, at all times from and after the date hereof, Purchaser or MuniMae,
as the case may be, will comply with all covenants and provisions of this
Article VI applicable to it, except to the extent Sellers may otherwise consent
in writing.

     6.01. Regulatory and Other Approvals. Purchaser will (a) prior to the
Closing, use commercially reasonable efforts, to obtain as promptly as
practicable all consents, approvals or actions of, to make all filings with and
to give all notices to Governmental or Regulatory Authorities or any other
Person required of it to consummate the transactions contemplated hereby,
including, without limitation, those described in Schedule 4.04, (b) provide
such other information and communications to such Governmental or Regulatory
Authorities or other Persons as Sellers or such Governmental or Regulatory
Authorities or other Persons may reasonably request and (c) cooperate with
Sellers and the Company as promptly as practicable in obtaining all consents,
approvals or actions of, making all filings with and giving all notices to
Governmental or Regulatory Authorities or other Persons required of Sellers or
the Company to consummate the transactions contemplated hereby and by the
Operative Agreements. Purchaser will provide prompt notification to Sellers when
any such consent, approval, action, filing or notice referred to in clause
(a) above is obtained, taken, made or given, as applicable, and will advise
Sellers of any communications (and, unless precluded by Law, provide copies of
any such communications that are in writing) with any Governmental or Regulatory
Authority or other Person regarding any of the transactions contemplated by this
Agreement.

     6.02. Notice and Cure. From and after the date of this Agreement until the
Closing, Purchaser or MuniMae, as the case may be, will notify Sellers promptly
in writing of, and contemporaneously will provide Sellers with true and complete
copies of any and all information or documents relating to, and will use
commercially reasonable efforts to cure, any event, transaction or circumstance
occurring after the date of this Agreement that causes or will cause any
covenant or agreement of Purchaser or MuniMae, respectively, under this
Agreement to be breached or that renders or will render untrue any
representation or warranty of Purchaser or MuniMae, respectively, contained in
this Agreement as if the same were made on or as of the date of such event,
transaction or circumstance. Notice given pursuant to this Section 6.02 which
relates to facts existing or circumstances occurring prior to the date of this
Agreement shall not cure or otherwise have any effect on the representations,
warranties, covenants or agreements contained in this Agreement for purposed of
determining satisfaction of any condition contained herein nor shall such notice
in any way limit Sellers’ right to seek indemnity under Article XI. Notice given
pursuant to this Section 6.02 with respect to matters first occurring after the
date of this Agreement shall not cure or otherwise have any effect on any
representations, warranties, covenants, or agreements for purposes of
determining whether the conditions of Section 8.03(b) have been satisfied, but
shall cure the related breach of any representation or warranty for all other
purposes under this Agreement.

41

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

 

     6.03. Employees and Benefit Plans.

          (a) As of the Closing Date, Purchaser will provide (or will cause the
Company or another Affiliate of Purchaser that employs each Business Employee to
provide) each Business Employee with the same (or substantially comparable)
employee pension, welfare and benefit plans, programs and arrangements as
MuniMae (or MMA Financial, LLC) offers, as of the Closing Date, to similarly
situated employees ( “Purchaser’s Benefit Plans”). Purchaser will take the
necessary actions so that each Business Employee will receive full credit for
(i) years of past service with the Company and its Affiliates for purposes of
any length of service requirements (including eligibility waiting periods,
vesting service periods and pre-existing condition exclusions) and for purposes
of calculating severance, sick leave, vacation leave and paid-time off under
Purchaser’s Benefit Plans and (ii) deductibles and co-payments made under a
Company Benefit Plan for the plan year in which the Closing Date occurs under
Purchaser’s Benefit Plans to the same extent Business Employees received such
credit under any Company Benefit Plan. If the Company 401(k) Plan terminates,
Purchaser will take the necessary actions so that each Business Employee will be
allowed to rollover such individual’s “eligible rollover distribution,” within
the meaning of Section 402(a)c)(4) of the Code, (if any) from a Company
Qualified Plan directly to a Purchaser’s Benefit Plan that is a Qualified Plan
and will, if the individual so elects, accept a direct rollover of the
individual’s plan loan account from the Company’s Qualified Plan.

          (b) If the Company, Purchaser or another Affiliate of Purchaser that
employs a Business Employee terminates the employment of any Business Employee
without cause (as determined by Purchaser in its reasonable discretion) within
three (3) months after the Closing Date and provided the Business Employee signs
a general waiver and release of claims in a form acceptable to Purchaser, then
Purchaser will provide (or cause the Company or another Affiliate of Purchaser
to provide) any such Business Employee with severance benefits of no less than
one (1) week of base pay for each full year of service with the Company up to a
maximum of sixteen (16) weeks; provided, however, that Purchaser is not
obligated to provide such severance payments to any Business Employee who is
entitled to receive severance benefits pursuant to an individual agreement with
the Company, Purchaser or any Affiliate of Purchaser.

          (c) Sellers and Purchaser, and their respective Affiliates, will
cooperate with each other in all reasonable respects (including the adoption of
any necessary Plan amendments) relating to the actions to be taken pursuant to
this Section 6.03.

     6.04. Rule 144 Undertaking.

          (a) For a period of four (4) years after the Closing Date, or until
such time as Sellers may resell all MuniMae Common Shares issued under this
Agreement without registration under the Securities Act and without the
necessity of complying with Rule 144 under the Securities Act, whichever period
is shorter, MuniMae shall:

               (i) make available and keep current public information as
contemplated by Rule 144 under the Securities Act with respect to MuniMae;

42

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

 

               (ii) file with the SEC in a timely manner all reports and other
documents required of MuniMae under the Securities Act and the 1934 Act; and

               (iii) furnish to each Seller upon written request a written
statement by MuniMae as to its compliance with the reporting requirements of
Rule 144, the Securities Act and the 1934 Act, a copy of the most recent annual
or quarterly report of MuniMae, and such other reports and documents so filed as
Seller reasonably may request in order to avail himself of any rule or
regulation of the SEC allowing Seller to resell any such MuniMae Common Shares
issued hereunder without registration under the Securities Act.

          (b) Nothing herein shall be construed so as to preclude MuniMae from
entering into any acquisition, merger, or other business arrangement or to
require MuniMae to remain publicly held or subject to the reporting requirements
of the 1934 Act.

     6.05. Company Loan Officers. Until at least the third anniversary of the
Closing Date, as long as they are employed by Purchaser (or an Affiliate), the
six (6) existing Company Loan Officers (other than Sellers) shall continue to
receive base and bonus compensation on terms no less favorable than their
compensation by the Company prior to the Closing Date; provided, however,
nothing in this Section 6.05 shall be deemed to create an employment agreement
or any other employment or compensation rights in such employees, this
Section 6.05 being for the sole benefit of the parties hereto.

ARTICLE VII
TAX MATTERS AND POST-CLOSING TAXES

     7.01. Pre-Closing Tax Returns. Sellers shall prepare or cause to be
prepared, and file or cause to be filed all Tax Returns or claims for refund of
the Company for all taxable periods of the Company ending on or prior to the
Closing Date ( “Pre-Closing Tax Returns”). For clarification, the Company’s
final Federal form 1120S for the taxable period ended the day prior to the
Closing Date will be considered a Pre-Closing Tax Return to be filed by Sellers.
With respect to any such Pre-Closing Tax Returns required to be filed by Sellers
and not filed before the Closing Date, Sellers shall provide Purchaser and its
authorized representatives with copies of any such completed Tax Return at least
fifteen Business Days prior to the due date for filing of such Tax Return and
Purchaser and its representatives shall have the right to review (but not to
require any change to) such Tax Return prior to the filing of such Tax Return,
which each Seller is hereby irrevocably authorized to sign on behalf of the
Company. All Taxes with respect to such Tax Returns ( “Pre-Closing Taxes”) which
are less than or equal to the accruals therefor as shown on the Closing Audit
shall be paid by Purchaser and all Pre-Closing Taxes which exceed the accruals
therefor as shown on the Closing Audit shall be paid as follows. All such Taxes
which are federal income taxes or are Taxes which are otherwise imposed on
Sellers directly shall be paid by Sellers; all other such Taxes shall be paid by
Purchaser or the Company and shall constitute a Loss to Purchaser for purposes
of Section 11.02. Purchaser shall not amend any Pre-Closing Tax Returns without
Sellers’ consent. Sellers shall not amend any such

43

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

 

Tax Return without the written approval of Purchaser, which approval may not be
unreasonably withheld. To the extent permitted by applicable law, Sellers shall
include any income, gain, loss, deduction or other tax items for such periods on
their Tax Returns in a manner consistent with the Schedule K-1s furnished by the
Company to Sellers for such period.

     7.02. Transfer Taxes. Purchaser shall pay one-half and Sellers shall pay
one-half of any and all sales, use, transfer, real property transfer, recording,
gains, stamp stock transfer and other similar taxes and fees ( “Transfer Taxes”)
arising out of or in connection with the transactions effected pursuant to this
Agreement, and each shall indemnify, defend, and hold harmless the other with
respect to its proportionate share of such Transfer Taxes. The party required by
law to file all necessary documentation and Tax Returns with respect to such
Transfer Taxes shall do so.

     7.03. Post-Closing Taxes and Sellers’ Post-Closing Taxes.

          (a) Purchaser shall timely prepare and file (or cause to be prepared
and filed) all Tax Returns required by law for all Taxes covering the Company
for periods ending after the Closing Date, including periods which include a
period prior to the Closing Date ( “Post-Closing Tax Returns”). For
clarification, pursuant to Section 1.1502-76(b)(1)(ii)(A)(2) of the Treasury
Regulations, the Company will become a member of Purchaser’s or its affiliates
consolidated group at the beginning of the Closing Date, with any Closing Date
income of the Company included in the applicable Federal Form 1120 of Purchaser
or its common parent and any applicable State Income Tax Returns adopting a
similar cutoff period. Purchaser will determine in good faith the basis on which
all Post-Closing Tax Returns are to be filed. Purchaser shall timely pay or
cause to be paid all Taxes relating to Post-Closing Tax Returns ( “Post-Closing
Taxes”).

          (b) For purposes of determining the adequacy of the accruals for Taxes
on the Company’s balance sheets as of the date of the Closing Audit (prepared in
accordance with GAAP), the amount of any Taxes for a period beginning before and
ending after the date of the Closing Audit which shall be deemed to have accrued
on or before the date of the Closing Audit ( “Sellers’ Post-Closing Taxes”)
shall be:

               (i) in the case of any real or personal property Tax, an amount
equal to the Tax for the Assets and Properties owned by the Company on the date
of the Closing Audit for the entire taxable period multiplied by a fraction the
numerator of which is the number of days in the entire taxable period ending on
the date of the Closing Audit and the denominator of which is the number of days
in the entire taxable period;

               (ii) in the case of any other Tax, other than income Tax for
income generated on the Closing Date included in Purchaser’s or its affiliated
consolidated group or similar state return as described in Section 7.03(a) which
shall be the responsibility of Purchaser, the amount that would be payable by
the Company if its taxable year ended on the date of the Closing Audit.

44

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

 

At least thirty (30) days prior to the filing of any Post-Closing Tax Return
which includes any Sellers’ Post-Closing Taxes, Purchaser shall provide Sellers
with a copy of the return along with Purchaser’s calculation of Sellers’
Post-Closing Taxes related thereto and shall, at the request of Sellers, during
the following thirty (30) days consult with Sellers concerning such Post-Closing
Tax Return.

          (c) Upon the filing of the Post-Closing Tax Returns, Sellers shall pay
to Purchaser any of Sellers’ Post-Closing Taxes which constitute federal income
taxes to the extent such Taxes are not payable directly by Sellers and exceed
the accruals therefor as shown on the Closing Audit, except as otherwise
provided in Section 7.03(b); all of Sellers’ Post- Closing Taxes which are not
federal income taxes shall be paid by Purchaser or the Company and, to the
extent such Taxes exceed the accruals therefor as shown in the Closing Audit,
except as otherwise provided in Section 7.03(b), shall constitute a Loss to
Purchaser for purposes of Section 11.02.

     7.04. Notification of Audits. Purchaser shall promptly notify Sellers in
writing upon receipt by Purchaser of notice of (i) any pending or threatened
federal, state, local or foreign Tax audits or assessments of the Company, so
long as any period relating to Pre-Closing Taxes remains open, and (ii) any
pending or threatened federal, state, local or foreign Tax audits or assessments
of Purchaser which may affect the Tax liabilities of the Company, in each case
for periods relating to Pre-Closing Taxes only. To the extent that any such
audits or assessments relate exclusively to Pre-Closing Taxes for which Sellers
are required to indemnify Purchasers hereunder, Sellers will have the right to
control the contest of any such audit or assessment, at Sellers’ own expense,
and Purchaser may participate in any such audit or expense at its own cost which
costs of Purchaser will not be indemnified hereunder.

     7.05. Maintenance of Records. After the Closing Date, Purchaser and Sellers
shall make available to the other, as reasonably requested, all information,
records or documents relating to Tax liabilities or potential Tax liabilities of
Sellers, any Affiliate of Sellers or the Company for any period commencing
before the Closing Date and for the portion of any period allocated to Sellers
under Section 7.03, and shall preserve all such information, records and
documents until the expiration of any applicable statute of limitations,
including extensions thereof, or such other period as required by Law. Purchaser
and Sellers shall also make available to each other as reasonably requested by
Purchaser or Sellers, as the case may be, personnel responsible for preparing or
maintaining information, records and documents, in connection with Tax matters.
In case at any time after the Closing Date any further action is necessary to
carry out the purposes of this Agreement, the parties hereto shall take all such
necessary action.

     7.06. Purchase Price Adjustment Any payments made to Sellers, the Company
or Purchaser pursuant to this Article VII shall constitute an adjustment of the
Purchase Price with respect to the Glaser Shares acquired in exchange for the
Cash Closing Payment for Tax purposes and shall be treated as such by Purchaser
and Sellers on their Tax Returns to the extent permitted by law.

45

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

 

     7.07. Tax Sharing Agreements. All Tax sharing or similar agreements, if
any, to which the Company is a party will be cancelled at or prior to the
Closing and neither the Company nor Purchaser shall not be bound thereby or have
any obligation thereunder.

     7.08. S Corporation Status. The Company and Sellers shall not revoke the
Company’s election to be taxed as an S corporation within the meaning of Code §§
1361 and 1362. The Company and Sellers shall not take or allow any action other
than the sale of the Company’s stock pursuant to this Agreement that would
result in the termination of the Company’s status as a validly electing S
corporation within the meaning of Code §§ 1361 and 1362.

     7.09. Section 338 Election. Neither Purchaser nor any of its Affiliates
will make an election under Section 338(g) of the Code in connection with
Purchaser’s acquisition of the Glaser Shares.

ARTICLE VIII
CONDITIONS TO CLOSING

     8.01. Conditions to Obligations of Each Party. The respective obligations
of Purchaser and Sellers to effect the transactions contemplated hereby shall be
subject to the satisfaction, at or prior to the Closing, of the following
conditions, any of which may be waived in a writing executed by each of
Purchaser and Sellers:

          (a) No Order. No Governmental or Regulatory Authority shall have
enacted, issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and which has the effect of making
the transactions contemplated hereby illegal or otherwise prohibiting the
consummation of the transactions contemplated hereby.

          (b) No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the transactions contemplated hereby shall be in effect, nor
shall any proceeding brought by a Governmental or Regulatory Authority seeking
any of the foregoing be pending.

          (c) HSR Act. All notice periods shall have elapsed or otherwise been
terminated under the HSR Act.

     8.02. Additional Conditions to Purchaser’s Performance. Purchaser’s
obligation to proceed to Closing shall be conditioned upon the satisfaction (or
the waiver in writing by Purchaser) of each of the following:

          (a) Sellers shall have obtained and delivered to Purchaser written
consent to the Transaction of Fannie Mae, HUD, GNMA, Freddie Mac and each other
Person listed on Exhibit I attached hereto, all in form and substance reasonably
satisfactory to Purchaser.

46

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

 

          (b) Each of Sellers’ representations and warranties set forth in
Article III shall be true and correct in all material respects, except that
those representations and warranties already qualified by any materiality
standard shall be true and correct in all respects; and Sellers shall so certify
in writing at Closing.

          (c) Sellers shall deliver to Purchaser certificates evidencing the
Glaser Shares and good and valid title to the Glaser Shares, free and clear of
all Liens (except for normal restrictions on transfer under applicable
securities laws).

          (d) Sellers shall have performed in all material respects all
obligations and agreements and complied with all covenants in this Agreement or
in any Operative Agreement to be performed and complied with by any of Sellers
at or before Closing and Sellers shall so certify in writing at Closing.

          (e) Each of Sellers shall have executed and delivered to Purchaser
that employment agreement in the form attached hereto as Exhibit B and intended
to be executed by him (collectively, the “Employment Agreements”).

          (f) Purchaser shall have received certificates of good standing for
the Company for the State of Minnesota and each other state listed on
Schedule 3.03, each such certificate of good standing to be dated as of a date
not more than thirty days prior to the Closing Date.

          (g) Purchaser shall have received an estoppel certificate from the
lessor under the real property lease for the Company’s St. Paul, Minnesota
offices, substantially in the form attached hereto as Exhibit D; such lessor
shall have executed and delivered to Purchaser a lease with respect to the
Company’s St. Paul offices in the form of Exhibit J attached hereto; and Seller
shall have obtained and delivered to Purchaser the written consent of Wells
Fargo Bank, National Association, to the lease in the form of Exhibit J.

          (h) Purchaser shall have received a release and estoppel certificate
from Curt Glaser in the form attached hereto as Exhibit E.

          (i) No Material Adverse Effect shall have occurred since the date of
this Agreement, and, with respect to the Indebtedness of the Company, there
shall have been no payment default and no occurrence which if not waived would
remain a default.

          (j) There shall not have been made or threatened by any Person any
claim that, in the judgment of Purchaser, reasonably asserts that such Person
(i) is a holder or a beneficial owner of, or has any Option with respect to, any
of the stock, or any other voting, equity or ownership interest in, the Company
or (ii) is entitled to all or any portion of the Purchase Price.

          (k) Each of Sellers shall have executed and delivered to Purchaser a
duly completed Seller’s Certification in the form of Exhibit K attached hereto.

47

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

 

     8.03. Additional Conditions to Sellers’ Performance. Sellers’ obligation to
proceed to Closing shall be conditioned upon the satisfaction (or the waiver in
writing by Sellers) of each of the following:

          (a) Purchaser shall have obtained and delivered to Sellers the written
consent to the Transaction of each of the following: (i) each Person whose
consent to the Transaction is required by any Contract, Order or Law by which
Purchaser is bound or to which it is subject and (ii) the Board of Directors of
Purchaser.

          (b) Each of Purchaser’s representations and warranties set forth in
Article IV of this Agreement shall be true and correct in all material respects
and Purchaser shall so certify in writing at Closing; and each of MuniMae’s
representations and warranties set forth in Exhibit C to this Agreement shall be
true and correct in all material respects and MuniMae shall so certify in
writing at Closing;

          (c) Purchaser shall have performed in all material respects all
obligations and agreements and complied with all covenants in this Agreement or
in any Operative Agreement to be performed and complied with by Purchaser at or
before Closing and Purchaser shall so certify in writing at Closing.

          (d) The employer under the Employment Agreements shall have executed
and delivered to Sellers the Employment Agreements.

ARTICLE IX
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS

     9.01. Survival of Representations, Warranties, Covenants and Agreements.
Notwithstanding any right of Purchaser (whether or not exercised) to investigate
the affairs of the Company or any right of any party (whether or not exercised)
to investigate the accuracy of the representations and warranties of the other
parties contained in this Agreement, but subject to Sections 5.03, 6.02 and
9.02, Sellers and Purchaser have the right to rely fully upon the
representations, warranties, covenants and agreements of the other contained in
this Agreement. The representations, warranties, covenants and agreements of
Sellers and Purchaser contained in this Agreement will survive the Closing
(a) indefinitely with respect to the representations and warranties contained in
Sections 3.01 (Sellers), 3.02 (Due Execution), 3.03 (Organization of the
Company), 3.04 (Capital Stock), 3.05 (Subsidiaries), 3.24 (Brokers), 4.02
(Authority), 4.06 (Financial Capability), 4.08 (Purchase for Investment), 4.09
(Brokers), and in Exhibit C, items 1 (Organization), 2 (Authority), and 3
(Issuance of MuniMae Shares), (b) with respect to the representations and
warranties contained in Section 3.10 (Taxes), until thirty (30) days following
the expiration of all applicable statutes of limitations with respect to the
subject matter thereof, (c) until eighteen (18) months after the Closing Date in
the case of all other representations and warranties and any covenant or
agreement to be performed in whole or in part on or prior to the

48

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

 

Closing and (d) with respect to each other covenant or agreement contained in
this Agreement, for a period comparable to that used in clause (c) following the
last date on which such covenant or agreement is to be performed or, if no such
date is specified, indefinitely, except that any representation, warranty,
covenant or agreement that would otherwise terminate in accordance with clause
(b), (c) or (d) above will continue to survive if a Claim Notice or Indemnity
Notice (as applicable) shall have been timely given under Article XI on or prior
to such termination date, until the related claim for indemnification has been
satisfied or otherwise resolved as provided in Article XI.

     9.02. Closing Certificate At Closing, Sellers and Purchaser shall certify
to each other that neither has any actual knowledge of the breach or violation
of any representation, warranty, covenant or agreement of the other which could
reasonably be expected to give rise to a Loss, except as specifically stated in
such Certificate. Notwithstanding any provision of this Agreement to the
contrary, to the extent a party had actual knowledge prior to the Closing Date
of any matter required to be disclosed on such Certificate and such party fails
to disclose such actual knowledge, such party shall not be entitled to claim a
Loss based thereon.

ARTICLE X
TERMINATION

     10.01. Termination. This Agreement may be terminated:

          (a) at any time prior to the Closing Date by mutual written consent of
Purchaser and Sellers; or

          (b) by Purchaser or Seller, if (i) the Closing shall not have taken
place on or before August 15, 2005, or such later date as the parties may have
agreed to in writing, provided that the non-occurrence of the Closing is not
attributable to a breach of the terms hereof by the party seeking termination,
(ii) there shall be in effect a final nonappealable order, decree or ruling of a
federal or state court preventing consummation of the transactions contemplated
hereby, or (iii) there shall be any legal requirement enacted, promulgated or
issued or deemed applicable to the transactions contemplated hereby by any
Governmental or Regulatory Authority that would make the consummation of the
transactions contemplated hereby illegal;

          (c) by Purchaser, if Purchaser is not in material breach of its
obligations under this Agreement and there has been a material breach of any
representation, warranty, covenant or agreement contained in this Agreement on
the part of Sellers and (i) Sellers have not cured such breach within ten
(10) days after notice of such breach has been given by Purchaser to Seller in
accordance with Section 12.01 (provided, however, that, no cure period shall be
required for any such breach which by its nature cannot be cured) and (ii) if
not cured within the timeframe in clause (i), one or more of the conditions set
forth in Section 8.01 or Section 8.02 would not be satisfied at or prior to the
Closing; or

          (d) by Sellers, if Sellers are not in material breach of their
obligations under this Agreement and there has been a material breach of any
representation, warranty, covenant or

49

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

 

agreement contained in this Agreement on the part of Purchaser and (i) Purchaser
has not cured such breach within ten (10) days after notice of such breach has
been given by Sellers to Purchaser in accordance with Section 12.01 (provided,
however, that, no cure period shall be required for any such breach which by its
nature cannot be cured) and (ii) if not cured within the timeframe in clause
(i), one or more of the conditions set forth in Section 8.01 or Section 8.03
would not be satisfied at or prior to the Closing.

     10.02. Effect of Termination. Subject to Sections 5.03 and 6.02, in the
event of the termination of this Agreement prior to the Closing pursuant to the
provisions of Section 10.01, this Agreement shall become void and have no
effect, without any Liability to any Person in respect hereof or of the
transactions contemplated hereby on the part of any party hereto, or any of its
directors, officers, representatives, stockholders, members or Affiliates,
except for any Liability resulting from such party’s breach of this Agreement
occurring prior to termination of this Agreement and any resulting remedies
therefor available at law or equity. This Section 10.02 and Article XII
(Miscellaneous) shall survive such termination and shall remain in full force
and effect. No termination of this Agreement shall affect the obligations of the
parties to the Confidentiality Agreements or under the provisions of
Section 2.09, all of which obligations shall survive termination of this
Agreement. In addition, upon any termination pursuant to Section 10.01 Purchaser
shall immediately return to Sellers or destroy any Confidential Information (as
defined in the Confidentiality Agreements) relating to the Company in the
possession of Purchaser, its Affiliates or their respective agents.

ARTICLE XI
INDEMNIFICATION

     11.01. Tax Indemnifications.

          (a) Sellers will indemnify and hold harmless Purchaser and the Company
from and against liability for all Pre-Closing Taxes and all Sellers’
Post-Closing Taxes in accordance with Sections 7.01 and 7.03(c); in each case
such indemnification will apply only to the extent such Taxes exceed the
accruals therefor as shown on the Closing Audit.

          (b) Purchaser and the Company will indemnify and hold harmless Sellers
from and against liability for Post-Closing Taxes other than Sellers’
Post-Closing Taxes, required to be paid by or reimbursed by Sellers under
Section 7.03(c).

     11.02. Other Indemnification.

          (a) Sellers shall, jointly and severally, indemnify Purchaser and its
members, officers, directors, employees, agents and Affiliates in respect of,
and hold each of them harmless from and against, any and all Losses suffered,
incurred or sustained by any of them or to which any of them becomes subject,
resulting from, arising out of or relating to (i) any inaccuracy of any
representation or a breach of any warranty made by any of Sellers to Purchaser
in this Agreement or any Disclosure Schedule or any instrument or other document
delivered pursuant to this Agreement, or (ii) failure to duly and timely perform
any covenant or agreement on the

50

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

 

part of Sellers contained in this Agreement or any instrument or other document
delivered pursuant to this Agreement.

          (b) Purchaser and MuniMae shall, jointly and severally, indemnify
Sellers in respect of, and hold each of them harmless from and against, any and
all Losses suffered, incurred or sustained by any of them or to which any of
them becomes subject, resulting from, arising out of or relating to (i) any
inaccuracy of any representation or a breach of any warranty made by Purchaser
or MuniMae to Sellers in this Agreement or any Schedule delivered by Purchaser
or MuniMae to Sellers on the date of this Agreement or any instrument or other
document delivered pursuant to this Agreement; (ii) failure to duly and timely
perform any covenant or agreement on the part of Purchaser or MuniMae contained
in this Agreement or any instrument or other document delivered pursuant to this
Agreement; or (iii) any Liability arising out of the ownership or operation of,
or the business or activities of, the Company on or after the Closing Date,
except to the extent resulting from, arising out of or relating to (x) fraud,
gross negligence or knowing, willful and intentional misconduct on the part of
either of Sellers or (y) any act or omission of either Seller in material
violation of his Employment Agreement. In addition, Purchaser and MuniMae shall,
jointly and severally, indemnify Sellers and their respective spouses in respect
of, and hold each of them harmless from and against, any and all Losses
suffered, incurred or sustained by any of them or to which any of them becomes
subject after the Closing Date, resulting from, arising out of or relating to
the Bond Indemnity Agreement, except to the extent resulting from, arising out
of or relating to fraud, gross negligence or knowing, willful and intentional
misconduct on the part of either of Sellers and provided, however, that there
shall not be any inaccuracy in Sellers representation set forth in
Section 3.17(c) or any breach of any warranty made by Sellers in such section.

          (c) No amounts shall be payable as a result of any claim arising under
this Section 11.02 unless and until the Indemnified Parties thereunder have
suffered, incurred, sustained or become subject to Losses referred to in such
Section in excess of Five Hundred Thousand Dollars ($500,000) in the aggregate,
in which event the Indemnified Parties shall be entitled to seek indemnity from
the Indemnifying Parties for only Losses in excess of Five Hundred Thousand
Dollars ($500,000), provided that (i) the aggregate joint and several liability
of Sellers pursuant to Section 11.02(a) or otherwise in connection with the
transactions contemplated by this Agreement shall not exceed Thirteen Million
Four Hundred Thousand Dollars ($13,400,000) and (ii) the aggregate liability of
Purchaser pursuant to Section 11.02(b) or otherwise in connection with the
transactions contemplated by this Agreement shall not exceed Thirteen Million
Four Hundred Thousand Dollars ($13,400,000). Notwithstanding the foregoing,
nothing in this paragraph (c) shall limit (A) Purchaser’s right to indemnity for
all Losses resulting from any inaccuracy of any representation or a breach of
any warranty by Sellers contained in Section 3.01 (Sellers,), 3.02 (Due
Execution), 3.03 (Organization of the Company), 3.04 (Capital Stock), 3.10
(Taxes), or 3.24 (Brokers) or any of the covenants in Section 11.01 or
Article VII (Tax Matters and Post-Closing Taxes), (B) Sellers’ right to
indemnity for all Losses resulting from any inaccuracy of any representation or
a breach of any warranty by Purchaser contained in Section 4.02 (Authority) or
4.09 (Brokers) or by MuniMae contained in item 1 (Organization), 2 (Authority)
or 3 (Issuance of MuniMae Common Shares) of Exhibit C, any of the covenants in
Section 6.04 (Rule 144 Undertaking), Section 11.01,

51

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

 

Article VII (Tax Matters and Post-Closing Taxes) or as provided in clause (iii)
of Section 11.02(b), or (C) Purchaser’s or Sellers’ right to indemnity for all
Losses resulting from fraud.

          (d) Sellers shall have no liability or obligation to Purchaser for any
Loss to the extent the liability attributable to such Loss is reflected or
reserved for in the Closing Date net working capital calculation that is made
pursuant to Section 2.06.

          (e) Notwithstanding any other provisions of this Agreement to the
contrary, neither Sellers nor Purchaser shall be required to indemnify or
otherwise protect the Indemnified Parties for damage to reputation, lost
business opportunities, lost profits, mental or emotional distress, incidental,
special, exemplary, indirect or consequential damages, interference with
business operations or diminution of the value of property, except to the extent
any such matters arise out of fraud, gross negligence or knowing, willful and
intentional misconduct on the part of the Indemnifying Party.

     11.03. Method of Asserting Claims. All claims for indemnification by any
Indemnified Party under Section 11.02 will be asserted as follows:

          (a) In the event any claim or demand in respect of which an
Indemnifying Party might seek indemnity under Section 11.02 is asserted against
or sought to be collected from such Indemnified Party by a Person other than
Sellers, the Company, Purchaser, MuniMae or any Affiliate of Sellers, Purchaser,
or MuniMae (a “Third Party Claim”), the Indemnified Party shall promptly deliver
a Claim Notice to the Indemnifying Party after the Indemnified Party’s learning
of such Third Party Claim. If the Indemnified Party fails to provide the Claim
Notice with reasonable promptness after the Indemnified Party receives notice of
such Third Party Claim, the Indemnifying Party will not be obligated to
indemnify the Indemnified Party with respect to such Third Party Claim to the
extent that the Indemnifying Party’s ability to defend has been prejudiced by
such failure of the Indemnified Party.

               (i) The Indemnifying Party will have the right upon notice to the
Indemnified Party to defend, at the sole cost and expense of the Indemnifying
Party, such Third Party Claim by all appropriate proceedings, which proceedings
will be prosecuted by the Indemnifying Party to a final conclusion or will be
settled at the discretion of the Indemnifying Party; provided, however, that,
without the written consent of the Indemnified Party, the Indemnifying Party
will not consent to the entry of any judgment or enter into any settlement that
(A) does not include as an unconditional term thereof the giving by each
claimant or plaintiff to the Indemnified Party of a release from all liability
in respect of such claim, or (B) if pursuant to or as a result of such consent
or settlement, injunctive or other equitable relief would be imposed against the
Indemnified Party or such judgment or settlement could materially interfere with
the business, operations or assets of the Indemnified Party. Except as provided
in the preceding sentence, the Indemnifying Party will have full control of such
defense and proceedings, including any compromise or settlement thereof;
provided, however, that if requested by the Indemnifying Party, the Indemnified
Party will, at the sole cost and expense of the Indemnifying Party, provide
reasonable cooperation to the Indemnifying Party in contesting any Third Party
Claim that the Indemnifying Party elects to contest. The Indemnified Party may
participate in,

52

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

 

but not control, any defense or settlement of any Third Party Claim controlled
by the Indemnifying Party pursuant to this clause (i), and except as provided in
the preceding sentence, the Indemnified Party will bear its own costs and
expenses with respect to such participation. Notwithstanding the foregoing, the
Indemnified Party may take over the control of the defense or settlement of a
Third Party Claim at any time if it irrevocably waives its right to indemnity
under Section 11.02 with respect to such Third Party Claim and agrees to
indemnify and hold the Indemnifying Party harmless from any Losses resulting
from such Third Party Claim.

               (ii) If the Indemnifying Party fails to assume and prosecute
reasonably diligently the Third Party Claim, then the Indemnified Party will
have the right to defend, at the sole cost and expense of the Indemnifying
Party, the Third Party Claim by all appropriate proceedings, which proceedings
will be prosecuted by the Indemnified Party in a diligent manner and in good
faith and may be settled at the discretion of the Indemnified Party; provided,
however, that, without the consent of the Indemnifying Party, the Indemnified
Party will not enter into any settlement that (A) does not include as an
unconditional term thereof the giving by each claimant or plaintiff to the
Indemnifying Party of a release from all liability in respect of such claim, or
(B) if pursuant to or as a result of such consent or settlement, injunctive or
other equitable relief would be imposed against the Indemnifying Party or such
judgment or settlement could materially interfere with the business, operations
or assets of the Indemnifying Party. Except as provided in the preceding
sentence, the Indemnified Party will have full control of such defense and
proceedings, including any compromise or settlement thereof; provided, however,
that if requested by the Indemnified Party, the Indemnifying Party will, at the
sole cost and expense of the Indemnifying Party, provide reasonable cooperation
to the Indemnified Party and its counsel in contesting any Third Party Claim
which the Indemnified Party is contesting. The Indemnifying Party may
participate in, but not control, any defense or settlement controlled by the
Indemnified Party pursuant to this clause (ii), and the Indemnifying Party will
bear its own costs and expenses with respect to such participation.

          (b) If any Indemnified Party should have a claim under Section 11.02
against any Indemnifying Party that does not involve a Third Party Claim, the
Indemnified Party shall deliver an Indemnity Notice with reasonable promptness
to the Indemnifying Party. The failure by any Indemnified Party to give the
Indemnity Notice shall not impair such party’s rights hereunder except to the
extent that any Indemnifying Party has been irreparably prejudiced thereby.

     11.04. Indemnity Payments.

          (a) Each of Sellers, Purchaser and MuniMae agrees to treat any
indemnity payment (including any indemnity payment made by means of set-off as
described in (b) below) made under this Article XI as an adjustment to the
Purchase Price for all Tax purposes.

          (b) Any amounts which may be payable by Sellers to Purchaser pursuant
to Article XI may, at Purchaser’s election, upon notice to Sellers, be satisfied
in whole or in part by set-off against amounts owed to Sellers under
Sections 2.04 and 2.05. Neither the exercise of nor the failure to exercise such
right of set-off will constitute an election of remedies or limit Purchaser in
any manner in the enforcement of any other remedies that may be available to it.

53

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

 

          (c) Notwithstanding any other provision hereof, Sellers shall first
satisfy any obligation for Losses by transferring shares of MuniMae Common
Shares that Sellers have received hereunder (or such shares into which any of
the foregoing may be converted or exchanged) to Purchaser (or its designee). For
purposes of determining the number of shares to be so transferred, each share of
MuniMae Common Shares so transferred by Sellers shall be deemed to have a value,
on the date of transfer, equal to the Delivery Date Average Share Price for the
returned Shares, using a “first in/first out” methodology (i.e., shares are
deemed to be returned in the order they were originally delivered). If the
Losses exceed the value of Sellers’ MuniMae Common Shares as so computed,
Sellers shall pay the balance in cash.

     11.05. Subrogation. In the event that an Indemnifying Party shall be
obligated to indemnify any Indemnified Party pursuant to this Agreement, the
Indemnifying Party shall, upon payment of such indemnity in full, be subrogated
to all rights of such Indemnified Party with respect to any third-party claim to
which the indemnification relates.

     11.06. Exclusive Remedy. Except for (i) any action based upon allegations
of fraud with respect to the other in connection with this Agreement or any
certificate delivered hereunder, and (ii) any equitable relief expressly
provided for in this Agreement, from and after the Closing the parties’ sole
remedy with respect to any and all claims arising under this Agreement or in
connection with the transactions contemplated hereby, shall be pursuant to this
Article XI, and, in furtherance of the foregoing, each of the parties hereby
waives, from and after the Closing, to the fullest extent permitted by law, any
and all other rights, claims and causes of action they may have against one
another under this Agreement and in connection with the transactions
contemplated hereby.

ARTICLE XII
MISCELLANEOUS

     12.01. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given upon receipt or refusal if delivered
personally or by commercial delivery service, or upon receipt or refusal of
delivery if mailed by registered or certified mail (return receipt requested) or
sent via facsimile (with acknowledgment of complete transmission from the
recipient of such facsimile) to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):

If to Purchaser or MuniMae, to:

MMA Mortgage Investment Corporation
c/o Municipal Mortgage & Equity LLC
The Pier IV Building
621 East Pratt Street, 3rd Floor
Baltimore, MD 21202
Facsimile No.: 410-727-5387
Attn: Gary Mentesana

54

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

 

with a copy (which shall not constitute notice) to:

Gallagher Evelius & Jones LLP
218 N. Charles Street, Suite 400
Baltimore, Maryland 21201
Facsimile No.: 410-837-3085
Attn: Stephen A. Goldberg

If to Sellers, to:

David Williams
18870 Brookwood Road
Prior Lake, Minnesota

and

Kevin Filter
1665 Hillcrest
St. Paul, Minnesota

with a copy (which shall not constitute notice) to:

Oppenheimer Wolff & Donnelly LLP
Plaza VII, Suite 3300
45 South Seventh Street
Minneapolis, Minnesota 55402
Facsimile No.: 612-607-7100
Attn: Timothy J. Scallen

Any party from time to time may change its address, facsimile number or other
information for purposes of notices to that party by giving notice specifying
such change to the other parties hereto.

     12.02. Entire Agreement. With the exception of the Confidentiality
Agreements, which shall survive the execution and delivery of this Agreement and
shall remain in effect in accordance with their respective terms, this Agreement
and the Operative Agreements supersede all prior discussions and agreements
between the parties with respect to the subject matter hereof and thereof,
including, without limitation, that certain expression of interest between the
parties dated March 9, 2005, and contains the sole and entire agreement between
the parties hereto with respect to the subject matter hereof and thereof.

     12.03. Expenses. Except as otherwise expressly provided in this Agreement,
whether or not the transactions contemplated hereby are consummated, each party
will pay its own costs and expenses, and Sellers shall pay the costs and
expenses of the Company, incurred in connection with the negotiation, execution
and closing of this Agreement and the transactions contemplated

55

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

 

hereby. Notwithstanding the foregoing, (i) Purchaser shall pay any fee required
to be paid to the Federal Trade Commission in connection with any filing under
the HSR Act required in order to consummate the transactions contemplated by
this Agreement, (ii) Purchaser and Sellers shall share equally all other fees
required to be paid in connection with the obtaining of any consent or approval,
the making of any filing, or the giving of any notice necessary to consummate
the transactions contemplated by this Agreement, including fees paid to Fannie
Mae, Freddie Mac, GNMA and HUD, and (iii) Seller shall pay any Taxes or fees
assessed upon or payable in order to validly effectuate the transfer of the
Glaser Shares from Sellers to Purchaser.

     12.04. Public Announcements. Prior to the Closing: (i) neither Sellers,
Purchaser nor MuniMae will issue or make any reports, statements or releases to
the public or generally to the employees, customers, suppliers or other Persons
to whom the Company sells goods or provide services or with whom the Company
otherwise has significant business relationships with respect to this Agreement
or the transactions contemplated hereby without the consent of the other, which
consent shall not be unreasonably withheld; and (ii) if either party is unable
to obtain the approval of any such public report, statement or release from the
other party and such report, statement or release is, in the opinion of legal
counsel to such party, required by Law in order to discharge such party’s
disclosure obligations, then such party may make or issue the legally required
report, statement or release and promptly furnish the other party with a copy
thereof. Sellers and Purchaser will also obtain the other party’s prior approval
of any press release to be issued immediately following the execution of this
Agreement and upon Closing. Sellers acknowledge that such press releases will
include a statement of the amount of the Purchase Price.

     12.05. Confidentiality. Each party hereto will hold, and will use its best
efforts to cause its Affiliates and their respective Representatives to hold, in
strict confidence from any Person (other than any such Affiliate or
Representative), unless (i) compelled to disclose by judicial or administrative
process (including in connection with obtaining the necessary approvals of this
Agreement and the transactions contemplated hereby of Governmental or Regulatory
Authorities) or by other requirements of Law or (ii) disclosed in an Action or
Proceeding brought by a party hereto in pursuit of its rights or in the exercise
of its remedies hereunder, all documents and information concerning the other
party or any of its Affiliates furnished to it by the other party or such other
party’s Representatives in connection with this Agreement or the transactions
contemplated hereby, except to the extent that such documents or information can
be shown to have been (a) previously known by the party receiving such documents
or information, (b) in the public domain (either prior to or after the
furnishing of such documents or information hereunder) through no fault of such
receiving party or (c) later acquired by the receiving party from another source
if the receiving party is not aware that such source is under an obligation to
another party hereto to keep such documents and information confidential;
provided that after the Closing, the foregoing restrictions will not apply to
Purchaser’s use of documents and information concerning the Company furnished by
Sellers hereunder. The provisions of this Section 12.05 are in addition to, and
not in limitation of, the provisions of (i) the Confidentiality Agreement dated
November 10, 2004 by and between the Company and MMA Financial, LLC, and
(ii) the Confidentiality Agreement dated January 13, 2005 by and between MMA
Financial, LLC and the Company (the “Confidentiality Agreements”), which
Confidentiality Agreements

56

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

 

shall remain in effect in accordance with their terms. Purchaser hereby agrees
to be a party to, and shall be bound by, such Confidentiality Agreements, to the
same extent as MMA Financial, LLC.

     12.06. Further Assurances; Post-Closing Cooperation.

          (a) For a period of five (5) years after the Closing, Sellers and
Purchaser shall execute and deliver to Purchaser or Sellers, as the case may be,
such other documents and instruments, provide such materials and information and
take such other actions as Purchaser or Sellers may reasonably request (i) more
effectively to vest title to the Glaser Shares in Purchaser or (ii) for the
purpose of carrying out the intent of this Agreement.

          (b) Following the Closing, each party will afford the other party, its
counsel and its accountants, during normal business hours, reasonable access to
the books, records and other data relating to the Business or Condition of the
Company in its possession with respect to periods prior to the Closing and the
right to make copies and extracts therefrom, to the extent that such access may
be reasonably required by the requesting party in connection with (i) the
preparation of Tax Returns, (ii) the determination or enforcement of rights and
obligations under this Agreement, (iii) compliance with the requirements of any
Governmental or Regulatory Authority, (iv) the determination or enforcement of
the rights and obligations of any Indemnified Party or (v) in connection with
any actual or threatened Action or Proceeding. Further, each party agrees for a
period extending six years (or such longer period as such records may be
required to be maintained by law or by Contract) after the Closing not to
destroy or otherwise dispose of any such books, records and other data unless
such party shall first offer in writing to surrender such books, records and
other data to the other party and such other party shall not agree in writing to
take possession thereof during the ten day period after such offer is made.

          (c) If, in order properly to prepare its Tax Returns, other documents
or reports required to be filed with Governmental or Regulatory Authorities or
its financial statements or to fulfill its obligations hereunder, it is
necessary that a party be furnished with additional information, documents or
records relating to the Business or Condition of the Company not referred to in
paragraph (b) above, and such information, documents or records are in the
possession or control of the other party, such other party shall use its best
efforts to furnish or make available such information, documents or records (or
copies thereof) at the recipient’s request, cost and expense. Any information
obtained by Sellers in accordance with this paragraph shall be held confidential
by Sellers in accordance with Section 12.05.

          (d) Notwithstanding anything to the contrary contained in paragraphs
(b) and (c) of this Section, if the parties are in an adversarial relationship
in litigation or arbitration, the furnishing of information, documents or
records in accordance with any provision of this Section shall be subject to
applicable rules relating to discovery.

     12.07. Waiver. Any term or condition of this Agreement may be waived at any
time by the party that is entitled to the benefit thereof, but no such waiver
shall be effective unless set forth in a written instrument duly executed by or
on behalf of the party waiving such term or

57

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

 

condition. No waiver by any party of any term or condition of this Agreement, in
any one or more instances, shall be deemed to be or construed as a waiver of the
same or any other term or condition of this Agreement on any future occasion.
All remedies, either under this Agreement or by Law or otherwise afforded, will
be cumulative and not alternative.

     12.08. Amendment. This Agreement may be amended, supplemented or modified
only by a written instrument duly executed by or on behalf of each party hereto.

     12.09. No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnity under Article XI.

     12.10. No Assignment; Binding Effect. Neither this Agreement nor any right,
interest or obligation hereunder may be assigned by any party hereto without the
prior written consent of the other party hereto and any attempt to do so will be
void, except that Purchaser may assign any or all of its rights, interests and
obligations hereunder (including its rights under Article XI) to an Affiliate,
provided that any such Affiliate agrees in writing to be bound by all of the
terms, conditions and provisions contained herein, but no such assignment shall
relieve Purchaser of its obligations hereunder. Subject to the preceding
sentence, this Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective successors and assigns.

     12.11. Headings; Exhibits. The headings used in this Agreement or in any
Exhibits have been inserted for convenience of reference only and do not define
or limit the provisions hereof or thereof. Reference herein to Exhibits, unless
indicated, shall refer to the Exhibits attached to this Agreement, which hereby
are incorporated in and constitute a part of this Agreement.

     12.12. Breach; Abandonment. If any party shall fail to fulfill its
obligations hereunder, including without limitation its obligations to close and
to satisfy those conditions to Closing which are its responsibility, the other
parties shall have all remedies available to them at law or in equity, including
the right to specific performance.

     12.13. Waiver of Trial by Jury. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION (INCLUDING COUNTERCLAIMS AND CROSS-CLAIMS)
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT
(a) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE

58

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

 

EITHER OF THE FOREGOING WAIVERS, (b) IT UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF SUCH WAIVERS, (c) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (d) IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION

     12.14. Consent to Jurisdiction and Service of Process. Each party hereby
irrevocably submits to the jurisdiction of the United States District Court for
the District of Minnesota or any state court located in St. Paul, Minnesota, in
any action, suit or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Agreement, and agrees that any such action, suit
or proceeding shall be brought only in such court (and waives any objection
based on forum non conveniens or any other objection to venue therein).

     12.15. Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future Law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.

     12.16. Governing Law. This Agreement shall be governed by and construed in
accordance with the Laws of the State of Minnesota applicable to a Contract
executed and performed in such State without giving effect to the conflicts of
laws principles thereof.

     12.17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

     12.18 Representation by Counsel. Each party hereto represents and agrees
that it has been represented by counsel of its own choosing during the
negotiation and execution of this Agreement and, therefore, waives the
application of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document will be construed against the
party drafting such agreement or documents. Each party to this Agreement has
carefully read and fully understands this Agreement in its entirety, has had it
fully explained to them by such party’s respective counsel, and is fully aware
of the contents and meaning, intent and legal effect of this Agreement.

[signatures are on following page]

59

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

 

     IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
each party hereto as of the date first above written.

                  SELLERS:
 
                /s/ David Williams           David Williams
 
                /s/ Kevin Filter           Kevin Filter
 
                PURCHASER:
 
                MMA MORTGAGE INVESTMENT
CORPORATION
 
                By:   /s/ Gary A. Mentesana               Name:   Gary A.
Mentesana

                Title:   Executive Vice President

           
 
                MUNIMAE:
 
                MUNICIPAL MORTGAGE & EQUITY, LLC
 
                By:   /s/ Gary A. Mentesana               Name:   Gary A.
Mentesana

                Title:   Executive Vice President