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                                                                   EXHIBIT 4.14

                FORM OF PREFERRED SECURITIES GUARANTEE AGREEMENT

                             MFH FINANCIAL TRUST [-]

                                 DATED AS OF [-]

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                                TABLE OF CONTENTS

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                                                                                                                   PAGE
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ARTICLE I             DEFINITIONS AND INTERPRETATION.............................................................    1

         Section 1.1       Definitions and Interpretation........................................................    1

ARTICLE II            TRUST INDENTURE ACT........................................................................    4

         Section 2.1       Trust Indenture Act; Application......................................................    4

         Section 2.2       Lists of Holders of Securities........................................................    4

         Section 2.3       Reports by the Preferred Guarantee Trustee............................................    5

         Section 2.4       Periodic Reports to Preferred Guarantee Trustee.......................................    5

         Section 2.5       Evidence of Compliance with Conditions Precedent......................................    5

         Section 2.6       Events of Default; Waiver.............................................................    5

         Section 2.7       Event of Default; Notice..............................................................    5

         Section 2.8       Conflicting Interests.................................................................    6

ARTICLE III           POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE...................................    6

         Section 3.1       Powers and Duties of the Preferred Guarantee Trustee..................................    6

         Section 3.2       Certain Rights of Preferred Guarantee Trustee.........................................    7

         Section 3.3       Not Responsible for Recitals or Issuance of Preferred Securities Guarantee............    9

ARTICLE IV            PREFERRED GUARANTEE TRUSTEE................................................................    9

         Section 4.1       Preferred Guarantee Trustee; Eligibility..............................................    9

         Section 4.2       Appointment, Removal and Resignation of Preferred Guarantee Trustee..................    10

ARTICLE V             GUARANTEE.................................................................................    10

         Section 5.1       Guarantee............................................................................    10

         Section 5.2       Waiver of Notice and Demand..........................................................    11

         Section 5.3       Obligations Not Affected.............................................................    11

         Section 5.4       Enforcement of Guarantee; Rights of Holders..........................................    12

         Section 5.5       Guarantee of Payment.................................................................    12

         Section 5.6       Subrogation..........................................................................    12

         Section 5.7       Independent Obligations..............................................................    12

ARTICLE VI            LIMITATION OF TRANSACTIONS; SUBORDINATION.................................................    13

         Section 6.1       Limitation of Transactions...........................................................    13

         Section 6.2       Ranking..............................................................................    13

ARTICLE VII           TERMINATION...............................................................................    14

         Section 7.1       Termination..........................................................................    14

ARTICLE VIII          INDEMNIFICATION...........................................................................    14

         Section 8.1       Exculpation..........................................................................    14
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                                TABLE OF CONTENTS
                                  (CONTINUED)

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         Section 8.2       Indemnification......................................................................    14

ARTICLE IX            MISCELLANEOUS.............................................................................    15

         Section 9.1       Successors and Assigns...............................................................    15

         Section 9.2       Amendments...........................................................................    15

         Section 9.3       Notices..............................................................................    15

         Section 9.4       Benefit..............................................................................    16

         Section 9.5       Governing Law........................................................................    16

         Section 9.6       Genders..............................................................................    16

         Section 9.7       Counterparts.........................................................................    16
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                                     - ii -

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                    PREFERRED SECURITIES GUARANTEE AGREEMENT

         This PREFERRED SECURITIES GUARANTEE AGREEMENT (the "PREFERRED
SECURITIES GUARANTEE"), dated as of [-], is executed and delivered by Municipal
Mortgage & Equity, LLC, a Delaware limited liability company (the "GUARANTOR"),
and Wilmington Trust Company, a Delaware banking corporation, as trustee (the
"PREFERRED GUARANTEE TRUSTEE"), for the benefit of the Holders (as defined
herein) of MFH Financial Trust [-], a Delaware statutory business trust (the
"ISSUER").

         WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"DECLARATION"), dated as of [-], among the trustees of the Issuer named therein,
the Guarantor, as sponsor, the Debenture [Issuer OR Guarantor] and the holders
from time to time of undivided beneficial interests in the assets of the Issuer,
the Issuer is issuing on the Closing Date up to [-] preferred securities, having
an aggregate liquidation amount of up to $[-] designated as the [-]% Preferred
Securities (the "PREFERRED SECURITIES"); and

         WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein.

         WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "COMMON SECURITIES GUARANTEE") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Event of Default (as
defined in the Indenture), has occurred and is continuing, the rights of holders
of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders to receive
Guarantee Payments under this Preferred Securities Guarantee.

         NOW, THEREFORE, in consideration of the purchase by each Holder, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor
executes and delivers this Preferred Securities Guarantee for the benefit of the
Holders.

                                   ARTICLE I
                         DEFINITIONS AND INTERPRETATION

         Section 1.1 Definitions and Interpretation.

         In this Preferred Securities Guarantee, unless the context otherwise
requires:

         (a)      capitalized terms used in this Preferred Securities Guarantee
but not defined in the preamble above have the respective meanings assigned to
them in this Section 1.1;

         (b)      any capitalized term not defined in either the preamble above
or this Section 1.1 shall have the respective meaning assigned to it in the
Declaration in effect as of the date hereof;

         (c)      a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;

         (d)      all references to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this Preferred Securities Guarantee
as modified, supplemented or amended from time to time;

<PAGE>

         (e)      all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this Preferred Securities
Guarantee, unless otherwise specified;

         (f)      a term defined in the Trust Indenture Act of 1939, as amended,
has the same meaning when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or unless the context
otherwise requires; and

         (g)      a reference to the singular includes the plural and vice
versa.

         "AFFILIATE" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.

         "AUTHORIZED OFFICER" of a Person means any executive officer,
president, vice-president, assistant vice-president, treasurer, assistant
treasurer, secretary, assistant secretary or other officer of such Person
generally authorized to bind such Person.

         "BUSINESS DAY" has the meaning set forth in the Indenture.

         "CLOSING DATE" has the meaning set forth in the Underwriting Agreement.

         "COMMON SECURITIES" means the securities representing common undivided
beneficial interests in the assets of the Issuer.

         "CORPORATE TRUST OFFICE" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890-0001.

         "COVERED PERSON" means any Holder or beneficial owner of Preferred
Securities.

         "DEBENTURE GUARANTOR" has the meaning set forth in the Declaration.

         "DEBENTURE ISSUER" has the meaning set forth in the Declaration.

         "DEBENTURES" means the [-]% Junior Subordinated Debentures due [-]
issued by the Debenture Issuer to the Issuer.

         "EVENT OF DEFAULT" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.

         "GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such Preferred Securities,
to the extent the Issuer shall have funds available therefor, (ii) the
redemption price, including all accrued and unpaid Distributions to the date of
redemption (the "REDEMPTION PRICE"), to the extent the Issuer has funds
available therefor, with respect to any Preferred Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders or the redemption of all of the
Preferred Securities as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid Distributions on
the Preferred Securities to the date of payment, to the extent the Issuer shall
have funds available therefor, and (b) the amount of assets of the Issuer
remaining

                                     - 2 -

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available for distribution to Holders in liquidation of the Issuer (in
either case, the "LIQUIDATION DISTRIBUTION"). If an event of default under the
Indenture has occurred and is continuing, the rights of holders of the Common
Securities to receive payments under the Common Securities Guarantee Agreement
are subordinated to the rights of Holders to receive Guarantee Payments.

         "HOLDER" means any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor, but only to the extent
that the Issuer has actual knowledge of such ownership.

         "INDEMNIFIED PERSON" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.

         "INDENTURE" means the Indenture dated as of [-], among the Debenture
Issuer, the Debenture Guarantor and Wilmington Trust Company, as trustee, and
any indenture supplemental thereto pursuant to which certain subordinated debt
securities of the Debenture Issuer are to be issued to the Institutional Trustee
of the Issuer.

         "MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided by the Trust Indenture Act, a vote by Holder(s), voting separately as a
class, of more than 50% of the liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Preferred Securities.

         "OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:

         (a)      a statement that each Authorized Officer signing the Officers'
                  Certificate has read the covenant or condition and the
                  definition relating thereto;

         (b)      a brief statement of the nature and scope of the examination
                  or investigation undertaken by each Authorized Officer in
                  rendering the Officers' Certificate;

         (c)      a statement that each such Authorized Officer has made such
                  examination or investigation as, in such Authorized Officer's
                  opinion, is necessary to enable such Authorized Officer to
                  express an informed opinion as to whether or not such covenant
                  or condition has been complied with; and

         (d)      a statement as to whether, in the opinion of each such
                  Authorized Officer, such condition or covenant has been
                  complied with.

         "PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.

         "PREFERRED GUARANTEE TRUSTEE" means Wilmington Trust Company, a
Delaware banking corporation, until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such

                                     - 3 -

<PAGE>

appointment pursuant to the terms of this Preferred Securities Guarantee and
thereafter means each such Successor Preferred Guarantee Trustee.

         "RESIGNATION REQUEST" has the meaning set forth in Section 4.2(c).

         "RESPONSIBLE OFFICER" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee with direct responsibility for the administration of this
Preferred Securities Guarantee and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.

         "SUCCESSOR PREFERRED GUARANTEE TRUSTEE" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.

         "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended.

         "UNDERWRITING AGREEMENT" means the Underwriting Agreement for the offer
and sale of Preferred Securities substantially in the form of Exhibit C to the
Declaration.

                                   ARTICLE II
                               TRUST INDENTURE ACT

         Section 2.1 Trust Indenture Act; Application.

         (a)      This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be governed
by such provisions.

         (b)      If and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.

         (c)      The application of the Trust Indenture Act to this Preferred
Securities Guarantee shall not affect the nature of the Preferred Securities as
equity securities representing undivided beneficial interests in the assets of
the Issuer.

         Section 2.2 Lists of Holders of Securities.

         (a)      The Guarantor shall provide the Preferred Guarantee Trustee
with a list, in such form as the Preferred Guarantee Trustee may reasonably
require, of the names and addresses of the Holders ("LIST OF HOLDERS") as of
such date, (i) within one Business Day after [-] and [-] of each year, and (ii)
at any other time within 30 days of receipt by the Guarantor of a written
request for a List of Holders. Such list shall be as of a date no more than 14
days before such List of Holders is given to the Preferred Guarantee Trustee.
The Guarantor shall not be obligated to provide such List of Holders if at any
time the List of Holders does not differ from the most recent List of Holders
given to the Preferred Guarantee Trustee by the Guarantor. The Preferred
Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.

         (b)      The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.

                                     - 4 -

<PAGE>

         Section 2.3 Reports by the Preferred Guarantee Trustee.

         Within 60 days after May 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The Preferred Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.

         Section 2.4 Periodic Reports to Preferred Guarantee Trustee.

         The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.

         Section 2.5 Evidence of Compliance with Conditions Precedent.

         The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.

         Section 2.6 Events of Default; Waiver.

         (a)      The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of all of the Holders waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Preferred Securities Guarantee, but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.

         (b)      Notwithstanding the provisions of subsection (a) of this
Section 2.6, the right of any Holder of Preferred Securities to receive payment
of the Guarantee Payments in accordance with this Preferred Securities
Guarantee, or to institute suit for the enforcement of any such payment, shall
not be impaired without the consent of each such Holder.

         Section 2.7 Event of Default; Notice.

         (a)      The Preferred Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee, unless such defaults
have been cured before the giving of such notice, provided, that, the Preferred
Guarantee Trustee shall be protected in withholding such notice if and so long
as a Responsible Officer in good faith determines that the withholding of such
notice is in the interests of the Holders of the Preferred Securities.

         (b)      The Preferred Guarantee Trustee shall not be deemed to have
actual knowledge of any Event of Default unless the Preferred Guarantee Trustee
shall have received written notice, or of which a Responsible Officer charged
with the administration of this Preferred Securities Guarantee shall have
obtained actual knowledge.

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         Section 2.8 Conflicting Interests.

         The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.

                                  ARTICLE III
                     POWERS, DUTIES AND RIGHTS OF PREFERRED
                                GUARANTEE TRUSTEE

         Section 3.1 Powers and Duties of the Preferred Guarantee Trustee.

         (a)      This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee in trust for the benefit of the Holders, and the
Preferred Guarantee Trustee shall not transfer its right, title and interest in
this Preferred Securities Guarantee to any Person except a Holder exercising his
or her rights pursuant to Section 5.4(d) or to a Successor Preferred Guarantee
Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Preferred Guarantee
Trustee.

         (b)      If an Event of Default actually known to a Responsible Officer
has occurred and is continuing, the Preferred Guarantee Trustee shall enforce
this Preferred Securities Guarantee for the benefit of the Holders.

         (c)      This Preferred Securities Guarantee and all moneys received by
the Preferred Guarantee Trustee hereunder in respect of the Guarantee Payments
will not be subject to any right, charge, security interest, lien or claim of
any kind in favor of, or for the benefit of, the Preferred Guarantee Trustee or
its agents or their creditors.

         (d)      The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants or
obligations shall be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.6) and is actually known to a
Responsible Officer of the Preferred Guarantee Trustee, the Preferred Guarantee
Trustee shall exercise such of the rights and powers vested in it by this
Preferred Securities Guarantee, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.

         (e)      No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

                  (i)      prior to the occurrence of any Event of Default and
         after the curing or waiving of all such Events of Default that may have
         occurred:

                           (A)      the duties and obligations of the Preferred
                  Guarantee Trustee shall be determined solely by the express
                  provisions of this Preferred Securities Guarantee, and the
                  Preferred Guarantee Trustee shall not be liable except for the
                  performance of such

                                     - 6 -

<PAGE>

                  duties and obligations as are specifically set forth in this
                  Preferred Securities Guarantee, and no implied covenants or
                  obligations shall be read into this Preferred Securities
                  Guarantee against the Preferred Guarantee Trustee; and

                           (B)      in the absence of bad faith on the part of
                  the Preferred Guarantee Trustee, the Preferred Guarantee
                  Trustee may conclusively rely, as to the truth of the
                  statements and the correctness of the opinions expressed
                  therein, upon any certificates or opinions furnished to the
                  Preferred Guarantee Trustee and conforming to the requirements
                  of this Preferred Securities Guarantee; but in the case of any
                  such certificates or opinions that by any provision hereof are
                  specifically required to be furnished to the Preferred
                  Guarantee Trustee, the Preferred Guarantee Trustee shall be
                  under a duty to examine the same to determine whether or not
                  they conform to the requirements of this Preferred Securities
                  Guarantee;

                  (ii)     the Preferred Guarantee Trustee shall not be liable
         for any error of judgment made in good faith by a Responsible Officer,
         unless it shall be proved that the Preferred Guarantee Trustee was
         negligent in ascertaining the pertinent facts upon which such judgment
         was made;

                  (iii)    the Preferred Guarantee Trustee shall not be liable
         with respect to any action taken or omitted to be taken by it in good
         faith in accordance with the direction of the Holders of not less than
         a Majority in liquidation amount of the Preferred Securities relating
         to the time, method and place of conducting any proceeding for any
         remedy available to the Preferred Guarantee Trustee, or exercising any
         trust or power conferred upon the Preferred Guarantee Trustee under
         this Preferred Securities Guarantee; and

                  (iv)     no provision of this Preferred Securities Guarantee
         shall require the Preferred Guarantee Trustee to expend or risk its own
         funds or otherwise incur personal financial liability in the
         performance of any of its duties or in the exercise of any of its
         rights or powers, if the Preferred Guarantee Trustee shall have
         reasonable grounds for believing that the repayment of such funds or
         liability is not reasonably assured to it under the terms of this
         Preferred Securities Guarantee or indemnity, reasonably satisfactory to
         the Preferred Guarantee Trustee, against such risk or liability is not
         reasonably assured to it.

         Section 3.2 Certain Rights of Preferred Guarantee Trustee.

         (a)      Subject to the provisions of Section 3.1:

                  (i)      The Preferred Guarantee Trustee may conclusively
         rely, and shall be fully protected in acting or refraining from acting
         upon, any resolution, certificate, statement, instrument, opinion,
         report, notice, request, direction, consent, order, bond, debenture,
         note, other evidence of indebtedness or other paper or document
         believed by it in good faith to be genuine and to have been signed,
         sent or presented by the proper party or parties.

                  (ii)     Any direction or act of the Guarantor contemplated by
         this Preferred Securities Guarantee shall be sufficiently evidenced by
         an Officers' Certificate.

                  (iii)    Whenever, in the administration of this Preferred
         Securities Guarantee, the Preferred Guarantee Trustee shall deem it
         desirable that a matter be proved or established before taking,
         suffering or omitting any action hereunder, the Preferred Guarantee
         Trustee (unless other evidence is herein specifically prescribed) may,
         in the absence of bad faith on its part, request and

                                     - 7 -

<PAGE>

         conclusively rely upon an Officers' Certificate which, upon receipt of
         such request, shall be promptly delivered by the Guarantor.

                  (iv)     The Preferred Guarantee Trustee shall have no duty to
         see to any recording, filing or registration of any instrument (or any
         rerecording, refiling or registration thereof).

                  (v)      The Preferred Guarantee Trustee may consult with
         counsel of its selection, and the written advice or opinion of such
         counsel with respect to legal matters shall be full and complete
         authorization and protection in respect of any action taken, suffered
         or omitted by it hereunder in good faith and in accordance with such
         advice or opinion. Such counsel may be counsel to the Guarantor or any
         of its Affiliates and may include any of its employees. The Preferred
         Guarantee Trustee shall have the right at any time to seek instructions
         concerning the administration of this Preferred Securities Guarantee
         from any court of competent jurisdiction.

                  (vi)     The Preferred Guarantee Trustee shall be under no
         obligation to exercise any of the rights or powers vested in it by this
         Preferred Securities Guarantee at the request or direction of any
         Holder, unless such Holder shall have provided to the Preferred
         Guarantee Trustee such security and indemnity, reasonably satisfactory
         to the Preferred Guarantee Trustee, against the costs, expenses
         (including attorneys' fees and expenses and the expenses of the
         Preferred Guarantee Trustee's agents, nominees or custodians) and
         liabilities that might be incurred by it in complying with such request
         or direction, including such reasonable advances as may be requested by
         the Preferred Guarantee Trustee; provided that, nothing contained in
         this Section 3.2(a)(vi) shall relieve the Preferred Guarantee Trustee,
         upon the occurrence of an Event of Default which has not been cured or
         waived, of its obligation to exercise the rights and powers vested in
         it by this Preferred Securities Guarantee and to use the same degree of
         care and skill in this exercise, as a prudent person would exercise or
         use under the circumstances in the conduct of his or her own affairs.

                  (vii)    The Preferred Guarantee Trustee shall not be bound to
         make any investigation into the facts or matters stated in any
         resolution, certificate, statement, instrument, opinion, report,
         notice, request, direction, consent, order, bond, debenture, note,
         other evidence of indebtedness or other paper or document, but the
         Preferred Guarantee Trustee, in its discretion, may make such further
         inquiry or investigation into such facts or matters as it may see fit
         at the sole cost of the Guarantor and shall incur no liability or
         additional liability of any kind by reason of such inquiry or
         investigation.

                  (viii)   The Preferred Guarantee Trustee may execute any of
         the trusts or powers hereunder or perform any duties hereunder either
         directly or through agents, nominees, custodians or attorneys, and the
         Preferred Guarantee Trustee shall not be responsible for any misconduct
         or negligence on the part of any agent or attorney appointed with due
         care by it hereunder.

                  (ix)     Any action taken by the Preferred Guarantee Trustee
         or its agents hereunder shall bind the Holders, and the signature of
         the Preferred Guarantee Trustee or its agents alone shall be sufficient
         and effective to perform any such action. No third party shall be
         required to inquire as to the authority of the Preferred Guarantee
         Trustee to so act or as to its compliance with any of the terms and
         provisions of this Preferred Securities Guarantee, both of which shall
         be conclusively evidenced by the Preferred Guarantee Trustee's or its
         agent's taking such action.

                  (x)      Whenever in the administration of this Preferred
         Securities Guarantee the Preferred Guarantee Trustee shall deem it
         desirable to receive instructions with respect to enforcing any remedy
         or right or taking any other action hereunder, the Preferred Guarantee

                                     - 8 -

<PAGE>

         Trustee (i) may request instructions from the Holders of a Majority in
         liquidation amount of the Preferred Securities, (ii) may refrain from
         enforcing such remedy or right or taking such other action until such
         instructions are received, and (iii) shall be protected in conclusively
         relying on or acting in accordance with such instructions.

                  (xi)     Except as otherwise expressly provided by this
         Preferred Securities Guarantee, the Preferred Guarantee Trustee shall
         not be under any obligation to take any action that is discretionary
         under the provisions of this Preferred Securities Guarantee.

                  (xii)    The rights, privileges, protections, immunities and
         benefits given to the Preferred Guarantee Trustee, including, without
         limitation, its rights to be indemnified, are extended to, and shall be
         enforceable by, the Preferred Guarantee Trustee in each of its
         capacities hereunder, and to each agent, custodian or other Person
         employed by it to act hereunder.

         (b)      No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.

         Section 3.3 Not Responsible for Recitals or Issuance of Preferred
Securities Guarantee.

         The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.

                                   ARTICLE IV
                           PREFERRED GUARANTEE TRUSTEE

         Section 4.1 Preferred Guarantee Trustee; Eligibility.

         (a)      There shall at all times be a Preferred Guarantee Trustee
which shall:

                  (i)      not be an Affiliate of the Guarantor; and

                  (ii)     be a corporation organized and doing business under
         the laws of the United States of America or any State or territory
         thereof or of the District of Columbia, or a corporation or Person
         permitted by the Securities and Exchange Commission to act as an
         institutional trustee under the Trust Indenture Act, authorized under
         such laws to exercise corporate trust powers, having a combined capital
         and surplus of at least 50 million U.S. dollars ($50,000,000), and
         subject to supervision or examination by federal, state, territorial or
         District of Columbia authority. If such corporation publishes reports
         of condition at least annually, pursuant to law or to the requirements
         of the supervising or examining authority referred to above, then, for
         the purposes of this Section 4.1(a)(ii), the combined capital and
         surplus of such corporation shall be deemed to be its combined capital
         and surplus as set forth in its most recent report of condition so
         published.

                                     - 9 -

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                  (b)      If at any time the Preferred Guarantee Trustee shall
         cease to be eligible to so act under Section 4.1(a), the Preferred
         Guarantee Trustee shall immediately resign in the manner and with the
         effect set out in Section 4.2(c).

                  (c)      If the Preferred Guarantee Trustee has or shall
         acquire any "conflicting interest" within the meaning of Section 310(b)
         of the Trust Indenture Act, the Preferred Guarantee Trustee and
         Guarantor shall in all respects comply with the provisions of Section
         310(b) of the Trust Indenture Act.

         Section 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustee.

                  (a)      Subject to Section 4.2(b), the Preferred Guarantee
         Trustee may be appointed or removed without cause at any time by the
         Guarantor.

                  (b)      The Preferred Guarantee Trustee shall not be removed
         in accordance with Section 4.2(a) until a Successor Preferred Guarantee
         Trustee has been appointed and has accepted such appointment by written
         instrument executed by such Successor Preferred Guarantee Trustee and
         delivered to the Guarantor and to the Preferred Guarantee Trustee being
         removed.

                  (c)      The Preferred Guarantee Trustee appointed to office
         shall hold office until a Successor Preferred Guarantee Trustee shall
         have been appointed or until its removal or resignation. The Preferred
         Guarantee Trustee may resign from office (without need for prior or
         subsequent accounting) by an instrument (a "RESIGNATION REQUEST") in
         writing executed by the Preferred Guarantee Trustee and delivered to
         the Guarantor which resignation shall take effect upon such delivery or
         upon such later date as is specified therein; provided, however, that
         no such resignation of the Preferred Guarantee Trustee shall be
         effective until a Successor Preferred Guarantee Trustee has been
         appointed and has accepted such appointment by instrument in writing
         executed by such Successor Preferred Guarantee Trustee and delivered to
         the Guarantor and the resigning Preferred Guarantee Trustee.

                  (d)      If no Successor Preferred Guarantee Trustee shall
         have been appointed and accepted appointment as provided in this
         Section 4.2 within 60 days after delivery to the Guarantor of a
         Resignation Request, the resigning Preferred Guarantee Trustee may
         petition at the expense of the Company any court of competent
         jurisdiction for appointment of a Successor Preferred Guarantee
         Trustee. Such court may thereupon, after prescribing such notice, if
         any, as it may deem proper, appoint a Successor Preferred Guarantee
         Trustee.

                  (e)      No Preferred Guarantee Trustee shall be liable for
         the acts or omissions to act of any Successor Preferred Guarantee
         Trustee.

                  (f)      Upon termination of this Preferred Securities
         Guarantee or removal or resignation of the Preferred Guarantee Trustee
         pursuant to this Section 4.2, the Guarantor shall pay to the Preferred
         Guarantee Trustee all amounts accrued to the date of such termination,
         removal or resignation.

                                    ARTICLE V
                                    GUARANTEE

         Section 5.1 Guarantee.

         The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert, other than the
defense of payment. The Guarantor's obligation to make a Guarantee Payment may
be satisfied by direct payment

                                     - 10 -

<PAGE>

of the required amounts by the Guarantor to the Holders or by causing the
Issuer to pay such amounts to the Holders.

         Section 5.2 Waiver of Notice and Demand.

         The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.

         Section 5.3 Obligations Not Affected.

         The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:

         (a)      the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;

         (b)      the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Preferred Securities (other than an extension of
time for payment of Distributions, Redemption Price, Liquidation Distribution or
other sum payable that results from the extension of any interest payment period
on the Debentures or any extension of the maturity date of the Debentures
permitted by the Indenture);

         (c)      any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;

         (d)      the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;

         (e)      any invalidity of, or defect or deficiency in, the Preferred
Securities;

         (f)      the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or

         (g)      any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.

         There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.

                                     - 11 -

<PAGE>

         Section 5.4 Enforcement of Guarantee; Rights of Holders.

         The Guarantor and the Preferred Guarantee Trustee expressly acknowledge
that:

         (a)      this Preferred Securities Guarantee will be deposited with the
Preferred Guarantee Trustee to be held for the benefit of the Holders;

         (b)      the Preferred Guarantee Trustee has the right to enforce this
Preferred Securities Guarantee on behalf of the Holders;

         (c)      the Holders of a Majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Preferred Guarantee
Trustee in respect of this Preferred Securities Guarantee or exercising any
trust or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee; and

         (d)      any Holder may institute a legal proceeding directly against
the Guarantor to enforce the Preferred Guarantee Trustee's rights and the
obligations of the Guarantor under this Preferred Securities Guarantee, without
first instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity, and the Guarantor waives any right or
remedy to require that any action be brought first against the Issuer or any
other person or entity before proceeding directly against the Guarantor.

         Section 5.5 Guarantee of Payment.

         This Preferred Securities Guarantee creates a guarantee of payment and
not of collection. This Preferred Securities Guarantee will not be discharged
except by payment of the Guarantee Payments in full (without duplication of
amounts therefor paid by the Issuer).

         Section 5.6      Subrogation.

         The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Preferred Securities Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Preferred Securities Guarantee, if, at the time
of any such payment, any amounts are due and unpaid under this Preferred
Securities Guarantee. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.

         Section 5.7      Independent Obligations.

         The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.

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<PAGE>

                                   ARTICLE VI
                    LIMITATION OF TRANSACTIONS; SUBORDINATION

         Section 6.1 Limitation of Transactions.

         So long as any Preferred Securities remain outstanding, if (a) there
shall have occurred an Event of Default, (b) there shall have occurred an Event
of Default (as defined under the Indenture) or (c) the Debenture Issuer has
exercised its option to defer interest payments on the Debentures by extending
the interest payment period as provided in Article IV of the First Supplemental
Indenture to the Indenture, and such period or extension thereof shall be
continuing, then (i) the Guarantor shall not, and shall not permit the Debenture
[Issuer OR Guarantor] to declare or pay any dividend on, make any distribution
relating to, or redeem, purchase, acquire, or make a liquidation payment
relating to, any of its capital stock or make any guarantee payments with
respect thereto (other than (A) repurchases, redemptions or other acquisitions
of shares of capital stock of the Guarantor in connection with the satisfaction
by the Guarantor of its obligations under any employee benefit plans or any
other contractual obligation of the Guarantor (other than a contractual
obligation ranking pari passu with or junior to the Debentures), (B) as a result
of a reclassification of the capital stock of the Guarantor or the Debenture
[Issuer OR Guarantor] or the exchange or conversion of one class or series of
the capital stock of the Guarantor or the Debenture [Issuer OR Guarantor] for
another class or series of the capital stock of the Guarantor or the Debenture
[Issuer OR Guarantor], (C) the purchase of fractional interests in shares of the
capital stock of the Guarantor or the Debenture [Issuer OR Guarantor] pursuant
to the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, or (D) dividends and distributions made upon the
capital stock of the Guarantor or the Debenture [Issuer OR Guarantor] or rights
to acquire that capital stock with the Guarantor's or the Debenture [Issuer OR
Guarantor]'s capital stock or rights to acquire that capital stock), (ii) the
Guarantor shall not and shall not permit the Debenture [Issuer OR Guarantor] to
make any payment of interest, principal or premium, if any, on, or repay,
repurchase or redeem any debt securities issued by the Guarantor or the
Debenture [Issuer OR Guarantor] that rank pari passu with or junior to the
Debentures and (iii) the Guarantor shall not make, and shall not permit the
Debenture [Issuer OR Guarantor] to make any guarantee payments with respect to
the foregoing (other than pursuant to this Preferred Securities Guarantee or the
guarantee under the Indenture).

         In addition, so long as any Preferred Securities remain outstanding,
the Guarantor (i) will remain the sole direct or indirect owner of all of the
outstanding Common Securities; provided that any permitted successor of the
Guarantor under the Indenture may succeed to the Guarantor's ownership of the
Common Securities and (ii) will not take any action which would cause the Issuer
to cease to be treated as a grantor trust for United States federal income tax
purposes except in connection with a distribution of Debentures as provided in
the Declaration.

         Section 6.2 Ranking.

         This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, except those made pari passu
or subordinate by their terms, (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by the Guarantor and with any guarantee
now or hereafter entered into by the Guarantor in respect of any preferred or
preference stock of any Affiliate of the Guarantor, and (iii) senior to the
Guarantor's common stock.

                                     - 13 -

<PAGE>

                                  ARTICLE VII
                                  TERMINATION

         Section 7.1 Termination.

         This Preferred Securities Guarantee shall terminate and be of no
further force and effect upon (i) full payment of the Redemption Price of all
Preferred Securities, (ii) upon the distribution of the Debentures to all of the
Holders or (iii) upon full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this
Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder must restore payment
of any sums paid under the Preferred Securities or under this Preferred
Securities Guarantee.

                                   ARTICLE VIII
                                 INDEMNIFICATION

         Section 8.1 Exculpation.

         (a)      No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this
Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.

         (b)      An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders might properly be paid.

         Section 8.2 Indemnification.

         To the fullest extent permitted by applicable law, the Guarantor agrees
to indemnify each Indemnified Person for, and to hold each Indemnified Person
harmless against, any loss, liability or expense incurred by such Indemnified
Person by reason of any act or omission performed or omitted by such Indemnified
Person without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.2 shall
survive the resignation or removal of the Preferred Guarantee Trustee and the
termination of this Preferred Securities Guarantee.

                                     - 14 -

<PAGE>

                                   ARTICLE IX
                                 MISCELLANEOUS

         Section 9.1      Successors and Assigns.

         All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding. Except in connection with any
merger or consolidation of the Guarantor with or into another entity or any
sale, transfer or lease of the Guarantor's assets to another entity, each as
permitted by the Indenture, the Guarantor may not assign its rights or delegate
its obligations under this Preferred Securities Guarantee without the prior
approval of the Holders of at least a Majority in liquidation amount of the
Preferred Securities then outstanding.

         Section 9.2 Amendments.

         Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation amount of all the outstanding
Preferred Securities. The provisions of Section 12.2 of the Declaration with
respect to meetings of Holders apply to the giving of such approval.

         Section 9.3 Notices.

         All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:

         (a)      If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders):

                           Wilmington Trust Company
                           Rodney Square North
                           1100 North Market Street
                           Wilmington, Delaware 19890-0001

         (b)      If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders):

                           Municipal Mortgage & Equity, LLC
                           218 North Charles Street
                           Suite 500
                           Baltimore, Maryland 21201

         (c)      If given to any Holder, at the address set forth on the books
and records of the Issuer.

         All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.

                                     - 15 -

<PAGE>

         Section 9.4 Benefit.

         This Preferred Securities Guarantee is solely for the benefit of the
Holders and, subject to Section 3.1(a), is not separately transferable from the
Preferred Securities.

         Section 9.5 Governing Law.

         THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS.

         Section 9.6 Genders.

         The masculine, feminine and neuter genders used herein shall include
the masculine, feminine and neuter genders.

         Section 9.7 Counterparts.

         This Preferred Securities Guarantee may be executed in counterparts,
each of which shall be an original, but such counterparts shall together
constitute one and the same instrument.

                                     - 16 -
<PAGE>

         THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.

MUNICIPAL MORTGAGE & EQUITY, LLC,
as Guarantor

By: __________________________________
    Name:
    Title:

WILMINGTON TRUST COMPANY,
as Preferred Guarantee Trustee

By: __________________________________
    Name:
    Title: