MUNICIPAL
MORTGAGE & EQUITY, LLC

     

    2010
Share Incentive Plan

     

    Non-Qualified
Stock Option Agreement

     

    THIS OPTION AGREEMENT (this
“Agreement”),
dated as of May 10, 2010 (the “Grant Date”), is made
by and between MUNICIPAL MORTGAGE & EQUITY, LLC, a Delaware limited
liability company (the “Company”), and
Michael L. Falcone (the “Optionee”).

     

    WHEREAS, the Optionee is
currently employed by MMA Financial, Inc., a wholly-owned subsidiary of the
Company (the “Employer”);

     

    WHEREAS, in consideration of
the continued employment of the Optionee with the Employer, the Company desires
to grant to the Optionee the right to purchase the number of common shares, no
par value per share, of the Company (the “Common Shares”),
specified below on the terms and conditions set forth herein; and

     

    WHEREAS, the Company has
reserved Common Shares for such issuance pursuant to its 2010 Share Incentive
Plan (the “Plan”);

     

    NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged:

     

    1. Grant of Option.
Effective as of the Grant Date, the Company hereby grants to the Optionee an
option (the “Option”) to purchase
500,000 Common Shares (the “Option Shares”) under
and pursuant to the Plan at an exercise price of $0.23 per Common Share. The
Option is not intended to constitute an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).

     

    2. Conformity with the
Plan. The Option is being granted to the Optionee under and is intended
to conform in all respects with the Plan, a copy of which is attached hereto as
Exhibit A, and
all of the terms, conditions, and other provisions of the Plan are hereby
incorporated by reference herein. The Optionee hereby acknowledges receipt of
the attached copy of the Plan and agrees to be bound by all the terms and
provisions thereof (as presently in effect or hereafter amended). Capitalized
terms used in this Agreement but not defined herein shall have the meaning
ascribed to such terms in the Plan. In the event of any ambiguity in this
Agreement or any matters as to which the Agreement is silent, the Plan shall
govern including, without limitation, the provisions thereof pursuant to which
the Company’s Board of Directors has the power, among others, to (i) interpret
the Plan and option agreements related thereto, (ii) prescribe, amend and
rescind rules and regulations relating to the Plan and (iii) make all other
determinations deemed necessary or advisable for the administration of the
Plan.

     

    
      3. Exercisability of the
Option.

    

     

    (a) Exercisability of the Option
Generally.
The Option may be exercised only after it has become exercisable, to the
extent that it has become and remains exercisable, as specified in this
Agreement. Subject to forfeiture as provided herein or in the Plan, the Option
will become exercisable cumulatively as follows, so long as the Optionee remains
in the continuous employ of the Employer or a subsidiary of the Employer from
the date hereof to the applicable vesting date set forth in the table below
(each, a “Vesting
Date”):

     

    
      
        
          
            
              	
                      Number of Option Shares Exercisable

                    	 
      	
                      Vesting Date

                    
	
                      166,666
      Common Shares

                    	 
      	
                      May
      10, 2010

                    
	
                      166,667
      Common Shares

                    	 
      	
                      May
      10, 2011

                    
	
                      166,667
      Common Shares

                    	
                        

                    	
                      May
      10, 2012

                    


            

          

        

      

    

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    provided, however, that the
Option shall become fully exercisable upon the death or Disability (defined
below) of the Optionee; provided, further, however, that the
Option shall be exercisable after the Optionee ceases to be employed the
Employer for any reason other than the Optionee’s death or disability only to
the extent that the Option
was exercisable at the date of such cessation of service or has become
exercisable pursuant to this Section 3 within two
months after the date of such cessation of service. The Optionee shall be
considered to have a “Disability” if the
Optionee is unable to perform the duties assigned to the Optionee by the
Employer due to illness, physical or mental disability or other incapacity for a
total of 120 or more business days during any twelve month period.

     

    (b) Acceleration of
Exercisability on a Discretionary Basis and Upon Change in Control. The
provisions of Section
3(a) hereof notwithstanding, the Committee may, in its sole discretion,
at any time, upon written notice to the Optionee, accelerate the exercisability
of all or a specified portion of the Option, as provided in Section 3(b)(iii) of
the Plan. In addition, in the event of a Change in Control of the Company at a
time that the Optionee is employed by the Employer or any of its affiliates, the
Option shall become immediately and full exercisable upon the occurrence of such
Change in Control, as provided in Section 8(a)(i) of the Plan.

     

    (c) Option Cumulatively
Exercisable; Fractional Shares. The number of Option Shares with respect
to which the Option may be exercised shall be cumulative so that if, in any of
the aforementioned periods, the full number of Option Shares shall not have been
purchased, any such unpurchased Shares shall continue to be included in the
number of Option Shares with respect to which the Option shall then be
exercisable along with any other Option Shares as to which the Option may become
exercisable in accordance with the terms hereof. The Option may be exercised
only to purchase whole shares, and no fractional shares will be issued upon
exercise of the Option.

     

    
      4. Exercise and Payment of
Exercise of Price.

    

     

    (a) Notice of Exercisability;
Method of Payment of Exercise Price. The Option shall be exercised by the
delivery of written notice of exercise, in the form attached hereto as Exhibit B (the “Exercise Notice”) or
as otherwise specified by the Company (with appropriate changes if notice is
given by a person other than the Optionee), to the Secretary of the Company,
signed by the Optionee or other person entitled to exercise the Option,
specifying the number of Option Shares to be purchased, the date of grant of the
Option, the method of payment, and other information required by such notice.
The Exercise Notice shall be accompanied by payment in full of the aggregate
exercise price for all such Option Shares being purchased. Such exercise price
shall be payable to the Company either (i) in cash (including by check), (ii) by
the tendering of previously acquired Common Shares owned by the Optionee for
more than six months and having an aggregate Fair Market Value (as defined in
the Plan) at the date of exercise equal to the exercise price being paid
thereby, or (iii) by a combination of (i) and (ii).

     

    (b) Delivery of Option
Shares. An exercise of the Option shall be effective upon receipt by the
Secretary of the Company of both the written notice and payment of the exercise
price (each, an “Exercise Date”).
Within an administratively reasonable amount of time after the Exercise Date,
the Company shall either (i) deliver a certificate or certificates representing
the purchased Option Shares, with any appropriate legend(s) affixed thereto, to
the Optionee or such other person as may be entitled thereto at the principal
office of the Company or such other place as may be mutually agreed upon by the
Company and the Optionee or such other person or deposit or (ii) deliver or
cause to be delivered to the Optionee or Optionee’s designated broker a
certificate or letter of electronic transfer instructions (“DWAC”) for the
purchased Option Shares. The Company agrees to pay all original issue or stock
transfer taxes, if any, on the exercise of the Option and all other fees and
expenses necessarily incurred by the Company in connection therewith; provided, however, that
expenses of the Optionee, including withholding and other tax obligations, shall
not be deemed Company expenses.

     

    5. Expiration of the
Option. The Option will expire at the earlier of (i) 11:59 p.m. Eastern
Standard Time on May 10, 2020, being the tenth anniversary of the Grant Date or
(ii) 12 months after the date on which the Optionee ceases to be employed by the
Employer for any reason.

     

    6. Nontransferability;
Beneficiaries. No right or interest of the Optionee in the Option shall
be pledged, encumbered, or hypothecated to or in favor of any third party or
shall be subject to any lien, obligation, or liability of the Optionee to any
third party. The Option shall not be transferable to any third party by the
Optionee except by will or the laws of descent and distribution, and the Option
shall be exercisable, during the lifetime of the Optionee, only by the Optionee
or his or her guardian or legal representative; provided, however, that,
subject to Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as
amended, and consistent with the registration of the offer and sale of the
Common Shares related thereto on a then-effective registration statement on Form
S-8 covering the offer and sale of Common Shares issued under the Plan filed
with the Securities and Exchange Commission (the “SEC”), the Optionee
will be entitled to transfer the Option (and rights relating thereto) to one or
more trusts or other beneficiaries, designated by the Optionee by filing the
form attached hereto as Exhibit C or such
other form as may be specified by the Company, during the Optionee’s lifetime
for estate planning purposes or upon the Optionee’s death.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    7. Investment Representation;
Legends. Unless, at the time of any exercise of the Option, the offer and
sale of Option Shares hereunder to the Optionee is registered under a
then-effective registration statement under the Securities Act of 1933, as
amended (the “Securities Act”), and
the offer and sale complies with all applicable registration requirements under
state securities laws, the Optionee shall provide to the Company, as a condition
to the valid exercise of the Option and the delivery of any certificates
representing Shares, appropriate evidence, satisfactory in form and substance to
the Company, that the Grantee is acquiring the Option Shares for investment and
not with a view to the distribution of the Option Shares or any interest in the
Option Shares, and a representation to the effect that the Optinee shall make no
sale or other disposition of the Option Shares unless (i) the Company shall have
received an opinion of counsel satisfactory to it in form and substance that
such sale or other disposition may be made without registration under the
then-applicable provisions of the Securities Act, the related rules and
regulations of the SEC, and applicable state securities laws and regulations, or
(ii) the sale or other disposition of the Option Shares shall be registered
under a than-effective registration statement under the Securities Act and
complies with all applicable registration requirements under state securities
laws. The certificates representing the Option Shares may bear an appropriate
legend giving notice of the foregoing restriction on transfer of the Option
Shares and any other restrictive legend deemed necessary or appropriate by the
Company.

     

    8. Compliance with Section
409A. The Option
is not intended to provide deferred compensation subject to Section 409A of the
Code; provided,
however, that
the Company makes no representations as to the tax consequences of the Option to
the Optionee (including, without limitation, under Section 409A of the Code, if
applicable). The Optionee understands and agrees that the Optionee is solely
responsible for any and all income, excise or other taxes imposed on the
Optionee with respect to the Option.

     

    9. No Rights of Holder of
Common Shares. The Optionee shall not have any of the rights of a holder
of Common Shares with respect to the Option Shares that may be issued upon the
exercise of the Option until such Option Shares have been issued upon the due
exercise of the Option.

     

    10. Miscellaneous. This
Agreement shall be binding upon the heirs, executors, administrators, and
successors of the parties. In particular, the Optionee’s heirs, executors,
administrators, and successors shall be subject to the terms and conditions of
the Plan and this Agreement, and the Company may require any such person to
execute an agreement or other documents acknowledging and agreeing to such terms
and conditions as a condition precedent to any transfer of the Option or any
Common Shares purchased upon exercise of the Option into the name of any such
person. This Agreement constitutes the entire agreement between the parties with
respect to the Option and the Option Shares, and supersedes any prior agreements
or documents with respect thereto, and in the event of a conflict between the
provisions of this Agreement and the provisions of the Plan or any other
agreement between the Company and any of its affiliates, on the one hand, and
the Optionee, on the other hand, the provisions of the Plan shall govern. This
Agreement may be amended, but no amendment, alteration, suspension,
discontinuation, or termination of this Agreement which may impose any
additional obligation upon the Company or impair the rights of the Optionee with
respect to the Option shall be valid unless in each instance such amendment,
alteration, suspension, discontinuation, or termination is expressed in a
written instrument duly executed in the name and on behalf of the Company and by
the Optionee.

     

    MUNICIPAL
MORTGAGE & EQUITY, LLC

     

    By: /s/ David Kay

    Name:
David Kay

    Title:
Chief Financial Officer

     

    OPTIONEE:

     

    /s/
Michael L. Falcone

    Michael
L. Falcone