Document:

ESCROW AGREEMENT

 

THIS ESCROW AGREEMENT (this
“Agreement”) is made as of March 28, 2013, by and among Felicia Hess with an address of 11653 Central Parkway,
Jacksonville, FL 32224 (“Seller”), World Surveillance Group Inc., a Delaware corporation with an address at
State Road 405, Building M6-306A, Room 1400, Kennedy Space Center, Florida 32815 (“Buyer”) and Fleming PLLC,
with an address at 49 Front Street, Suite 206, Rockville Centre, NY 11570 (the “Escrow Agent”). Capitalized
terms used in this Agreement, but not defined herein have the meaning ascribed to them in the Stock Purchase Agreement (as defined
below).

 

WITNESSETH:

 

WHEREAS, Lighter Than Air
Systems Corp., a Florida corporation (the “Company”), Seller, Kevin Hess and Buyer are parties to that certain
Stock Purchase Agreement dated as of March 28, 2013 (the “Purchase Agreement”) pursuant to which Buyer, among
other things, agreed to purchase all of the issued and outstanding capital stock of the Company from Seller (the “Shares”);

 

WHEREAS, the parties hereto
desire to provide for the holding in escrow (the “Escrow”) of the Escrow Shares (as defined below) by the Escrow
Agent, on behalf of Buyer and Seller, pursuant to the terms of the Purchase Agreement and this Agreement; and

 

WHEREAS, pursuant to Sections
2.02 and 2.06 of the Purchase Agreement, on the date hereof, Buyer shall deliver to Seller a copy of instructions to its transfer
agent for the issuance of that portion of the Purchase Price consisting of 7,500,000 shares of Buyer Stock (the “Escrow
Shares”) that would otherwise have been paid by Buyer to Seller in connection with the purchase of the Shares to be delivered
to the Escrow Agent and held in escrow for the purposes of funding claims of Buyer Indemnified Parties pursuant to Article X of,
and other payments owing by Seller and Kevin Hess under the terms of, the Purchase Agreement.

 

    	 

    	 

    

 

NOW, THEREFORE, in consideration
of the covenants and mutual promises contained herein and other good and valuable consideration, the receipt and legal sufficiency
of which are hereby acknowledged and intending to be legally bound hereby, the parties agree as follows:

 

Section 1.
Receipt by Escrow Agent and Appointment of Escrow Agent.

 

(a)          The parties hereto
hereby constitute and appoint the Escrow Agent as, and the Escrow Agent hereby agrees to assume and perform the duties of, the
Escrow Agent pursuant to this Agreement.

 

(b)          The
Escrow Agent shall acknowledge receipt from Buyer of the Escrow Shares which will be registered in the name of Seller and which
comprise the shares of Buyer Stock to be held in escrow in accordance with this Agreement. Seller shall deliver to Escrow Agent,
and Escrow Agent will acknowledge receipt of, a medallion guaranteed stock power executed by Seller related to such Escrow Shares
(the “Medallion” and together with the Escrow Shares, the “Escrow Materials”). The Escrow Materials shall
be held by the Escrow Agent in the Escrow in accordance with the provisions of this Agreement and shall not be subject to any lien,
attachment, trustee process or any other judicial process of any creditor of any party hereto.

 

Section 2.
Rights in Escrow Shares.

 

(a)          Except as set
forth below, for so long as the Escrow Shares are held in Escrow by the Escrow Agent and regardless of the Escrow, Seller shall
have all rights of a stockholder of Buyer as relates to the Escrow Shares. In furtherance of the foregoing, Seller shall be entitled
to vote the Escrow Shares on all matters to be voted on by the holders of the issued and outstanding shares of the same class at
any meeting of shareholders of Buyer or pursuant to any written consent of such shareholders. Seller shall have the right to vote
the Escrow Shares in the same manner as if such shares were not held in Escrow hereunder.

 

    	 

    	 

    

 

(b)          Any cash, securities or other
property distributable (whether by way of dividend, stock split or otherwise) in respect of or in exchange for any Escrow Shares
shall not be distributed to Seller, but rather shall be deposited by Buyer with the Escrow Agent to be held in the Escrow. At the
time any Escrow Shares are required to be released from the Escrow to any Person pursuant to this Agreement, any cash, securities
or other property previously distributed in respect of or in exchange for such Escrow Shares shall be released from the Escrow
to such Person at the same time as such Escrow Shares are released.

 

(c)          For
so long as the Escrow Shares are held in Escrow by the Escrow Agent, the interest of Seller in the Escrow Shares shall not be sold,
assigned, pledged, hypothecated, alienated, transferred or otherwise disposed of, in whole or in part, in any manner whatsoever,
other than by operation of law. No transfer of any of such interest by operation of law shall be recognized or given effect until
Buyer shall have received written notice from Seller of such transfer.

 

(d)          
No fractional shares of Buyer Stock shall be retained in or released from the Escrow pursuant to this Agreement. In connection
with any release of Escrow Shares from the Escrow, any Seller or Buyer Indemnified Party who would otherwise be entitled to receive
a fraction of a share of Buyer Stock (after aggregating all fractional shares of Buyer Stock issuable to such Person) shall be
paid by Buyer in cash the dollar amount (rounded to the nearest whole cent), without interest, determined by multiplying such fraction
by the market price of Buyer’s common stock on such date, and such fraction of a share shall be returned to Buyer.

 

Section 3.
Distribution of Escrow Shares.

 

(a)          
The Escrow Agent shall disburse and transfer Escrow Shares (or any portion thereof) only upon (i) joint written instructions signed
by Buyer and Seller (“Joint Instructions”) in accordance with this Agreement, in the form of Exhibit A
hereto, (ii) the Escrow Agent’s receipt of a final, non-appealable court order or arbitration judgment or (iii) as set forth
in Sections 4(a), (g) or (h) of this Agreement.

 

    	 

    	 

    

 

(b)          
Any release of
Escrow Shares to the Seller or Buyer pursuant to the above provisions may be effected by mailing a stock certificate or DRS statement
to such parties, as applicable, by certified mail, return receipt requested, or by a U.S. nationally recognized overnight courier
service, to their respective addresses set forth in Section 6(a) hereof.

 

Section 4. Expenses;
Duties.

 

(a)          
Each of Buyer
and Seller agrees to jointly and severally pay or reimburse the Escrow Agent for any and all reasonable expenses and costs incurred
by the Escrow Agent in connection with this Agreement or the performance of its duties hereunder. Without limiting the joint and
several nature of their obligations pursuant to this paragraph, as between themselves, Buyer and Seller shall each be responsible
for 50% of any and all such expenses and costs of the Escrow Agent and Buyer shall, if Seller does not pay its 50% share of such
expenses and costs, be entitled to reimbursement from the Escrow Shares of Seller’s share of any such expense or cost, the
number of such Escrow Shares to be determined by dividing an amount equal to 50% of such expenses and costs by the market price
of Buyer’s common stock on such date.

 

(b)          The
duties and obligations of the Escrow Agent hereunder shall be determined solely by the express provisions of this Agreement and
no implied duties or obligations shall be read into this Agreement against the Escrow Agent. The Escrow Agent shall be under no
obligation to refer to any documents between or among the parties related in any way to this Agreement, except as expressly provided
for in this Agreement. The Escrow Agent’s duties hereunder may be altered, amended, modified or revoked only by a writing
signed by Seller, Buyer and the Escrow Agent.

 

(c)          The
Escrow Agent shall not be liable to anyone by reason of any act done or step taken or omitted by it in good faith, unless caused
by or arising out of its own gross negligence, fraud or willful misconduct. In no event shall the Escrow Agent be liable for indirect,
special or consequential damages of any kind, even if the Escrow Agent has been advised of the likelihood of such damage and regardless
of the form of the action.

 

    	 

    	 

    

 

(d)          The
Escrow Agent shall be entitled to rely on, and shall be protected in acting or refraining from acting in reliance upon, any writing
or instrument furnished to it by any party hereto in accordance with the terms hereof (copies of which will be provided to Seller
or Buyer, as applicable, if not expressly provided for elsewhere in this Agreement, and shall be entitled to treat as genuine,
and as the document it purports to be, any letter, paper or other document furnished to it by any party hereto and believed by
the Escrow Agent to be genuine and to have been signed by the proper party, and the Escrow Agent shall be entitled to assume in
good faith the genuineness and due authority of any signature on any such document. The Escrow Agent shall not be responsible for
the validity or sufficiency of this Agreement. The Escrow Agent shall not be liable in any respect on account of the identity,
authorization or rights of the parties executing or delivering or purporting to execute or deliver any documents or papers deposited
or called for thereunder in the absence of gross negligence, fraud or willful misconduct.

 

(e)         
The Escrow Agent may consult with counsel and other experts with respect to any question relating to its duties or responsibilities
hereunder and shall not be liable for any action taken or omitted in good faith on advice of counsel or such experts, in the absence
of gross negligence, fraud or willful misconduct.

 

(f)           In
the event of any disagreement or dispute concerning the rights and obligations of the Escrow Agent or with respect to the transfer
and/or ownership or right of possession of the Escrow Materials, the Escrow Agent shall be entitled, at its option upon written
notice to Seller or Buyer, as applicable, to refuse to comply with the claims or demands of any party hereto, and its sole obligation
shall be to keep safely the Escrow Materials, until such disagreement or dispute is finally resolved by the mutual written agreement
of the parties involved or by an arbitration award or a judgment or order of a court of competent jurisdiction (in proceedings
which it or any other party may initiate) pursuant to which the time for appeal of any such arbitration award or final judgment
or order shall have expired without an appeal being made, and in so doing the Escrow Agent shall not be or become liable to any
party.

 

    	 

    	 

    

 

(g)         
Buyer and Seller, jointly and severally, agree to hold harmless and indemnify the Escrow Agent and its partners, employees, agents
and representatives from and against, any loss, liability, obligation, claim, suit, judgment, damage, cost or expense of any kind
or nature, including without limitation, reasonable attorneys’ fees and expenses, which may be imposed on, incurred by or
asserted against the Escrow Agent in connection with or in any way arising out of this Agreement or the Escrow Agent’s duties
hereunder, except as a result of its own gross negligence, fraud or willful misconduct. The foregoing indemnities and agreement
to hold the Escrow Agent harmless shall survive the resignation of the Escrow Agent or the termination of this Agreement. Without
limiting the joint and several nature of their obligations pursuant to this paragraph, as between themselves, each of Buyer and
Seller shall be liable for 50% of such amounts and Buyer shall, if Seller does not pay its 50% share of such amounts, be entitled
to reimbursement from the Escrow Shares of Seller's share of any such loss, liability or expense, the number of such Escrow Shares
to be determined by dividing an amount equal to 50% of such amounts by the market price of Buyer’s common stock on such date.

 

(h)          The
Escrow Agent may resign its duties and be discharged from all further duties and obligations hereunder at any time upon giving
thirty (30) days written notice to Buyer and Seller. Seller and Buyer shall jointly thereupon designate a successor escrow agent
hereunder within said thirty (30) day period, to which the Escrow Agent shall deliver the Escrow Materials. In the absence of such
a designation of a successor escrow agent, the Escrow Agent shall, without further liability or responsibility, retain the Escrow
Materials as custodian thereof until otherwise directed by Buyer and Seller, in writing; provided, however, that if a successor
has not been so designated within sixty (60) days of the Escrow Agent’s notice of resignation, the Escrow Agent shall be
entitled at its option to petition a court of competent jurisdiction to appoint a successor escrow agent.

 

(i)           The
Escrow Agent is hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case the Escrow
Agent obeys or complies with any such order, judgment or decree, the Escrow Agent shall not be liable to any of the parties hereto
or to any other Person, firm or corporation by reason of such decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.

 

    	 

    	 

    

 

(j)          The
Escrow Agent shall be permitted to act as counsel for one or more parties hereto in any transaction and/or dispute including any
dispute between any of the parties, whether or not the Escrow Agent is then holding the Escrow Materials.

 

Section 5. Further
Documents. Each party hereby agrees to do such other acts, and execute such further documents, as the Escrow Agent or any
other party shall reasonably deem necessary to carry out the provisions of this Agreement. Buyer and Seller each agree to provide
all information and documentation as reasonably requested by the Escrow Agent to ensure compliance with all applicable laws.

 

Section 6. Miscellaneous.

 

(a) Any and all notices
or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth below prior to 5:30 p.m. (Eastern Time) on a Business Day, receipt confirmed (ii) the next Business
Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth
below on a day that is not a Business Day or later than 5:30 p.m. (Eastern Time) on any Business Day, receipt confirmed (iii) the
2nd Business Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, receipt acknowledged, or by certified mail, return receipt requested, or (iv) upon actual receipt by
the party to whom such notice or other communication is required to be given. All such notices or communications hereunder shall
be sent to each party at its address or facsimile number, as applicable, set forth herein below:

 

    	 

    	 

    

 

if to Buyer, to:

 

For personal or courier
delivery:

State Road 405, Building
M6-306A, Room 1400

Kennedy Space Center,
FL 32815

Attn: President

 

For mail
delivery:

Mail Code: SWC

Kennedy Space Center,
FL 32899

Attn: President

 

Telecopy: 321-452-8965

 

if to Seller, to:

 

11653 Central Parkway

Jacksonville, FL 32224

Attn: Felicia Hess

Telecopy: 727-388-8361

 

if to Escrow Agent,
to:

 

Fleming PLLC

49 Front Street, Suite
206

Rockville
Centre, NY 11570

Attn: Stephen M. Fleming

Telecopy: 516-977-1209

 

or to such other address or facsimile number
as the party to whom any future notice or communication is given may have previously furnished to the other parties in writing
in the manner set forth above; provided that notice of any change of address shall be effective only upon the receipt thereof.

 

    	 

    	 

    

 

(b)          This
Agreement may not be modified, changed, supplemented or terminated, nor may any obligations hereunder be waived, except by a written
instrument signed by the party or parties to be charged or by their respective agent duly authorized in writing. No course of conduct
shall constitute a waiver of any of the terms and conditions of this Agreement, unless such waiver is specified in writing, and
then only to the extent so specified. No failure on the part of any party to exercise any power, right, privilege or remedy under
this Agreement, and no delay on the part of any party in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy. No waiver of any breach of any covenant or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach thereof or of any other covenant or provision herein contained.
No extension of time for performance of any obligation or act shall be deemed an extension of the time for performance of any other
obligation or act.

 

(c)          This
Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their permitted successors and assigns
of the parties hereto; provided, that Buyer and Seller may not assign, delegate, or otherwise transfer any of their respective
rights or obligations under this Agreement except as permitted by the Purchase Agreement, and the Escrow Agent may not assign,
delegate or otherwise transfer any of its rights or obligations under this Agreement except to a successor Escrow Agent in accordance
with the terms of this Agreement.

 

(d)          This
Agreement is the final expression of, and contains the entire agreement and understanding between, the parties with respect to
the subject matter hereof and thereof and supersedes all prior agreements and understandings among or between any of the parties
relating to the subject matter hereof and thereof. Notwithstanding the foregoing, the parties hereto understand and acknowledge
that the Purchase Agreement contemplates this Agreement and contains certain provisions identifying and governing the indemnification
and other rights and obligations of Buyer and Seller that give rise to this Agreement.

 

    	 

    	 

    

 

(e)          Whenever
required by the context of this Agreement, the singular shall include the plural and masculine shall include the feminine. This
Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if all parties had prepared the
same. Unless otherwise indicated, all references to Sections are to this Agreement.

 

(f)          The
parties hereto expressly agree that this Agreement shall be governed by, interpreted under and construed and enforced in accordance
with the laws of, the State of New York, without regard to the conflicts of law rules of such state. Any action to enforce, arising
out of, or relating in any way to, any provisions of this Agreement shall only be brought in a state or Federal court sitting in
New York, New York.

 

(g)          Nothing
in this Agreement is intended to limit any of Buyer's or any other Buyer Indemnified Parties' rights, or any rights or obligations
of the Seller, under the Purchase Agreement or under any other agreement entered into in connection with the transactions contemplated
by the Purchase Agreement.

 

(h)          This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which together shall
constitute one and the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart,
or facsimile of a counterpart, of this Agreement, signed by each of the other parties hereto.

 

(i)          The
underlined headings or captions contained in this Agreement are for convenience of reference only, shall not be deemed to be a
part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.

 

(j)          In
the event that any provision of this Agreement, or the application of any such provision to any Person or set of circumstances,
shall be determined to be invalid, unlawful, void or unenforceable to any extent, the remainder of this Agreement, and the application
of such provision to Persons or circumstances other than those as to which it is determined to be invalid, unlawful, void or unenforceable,
shall not be impaired or otherwise affected and shall continue to be valid and enforceable to the fullest extent permitted by law.

 

    	 

    	 

    

  

[Remainder of Page Intentionally Left Blank]

 

    	 

    	 

    

  

IN WITNESS WHEREOF, the
parties hereto have executed this Escrow Agreement as of date first written above.

 

	 	SELLER:
	 	 
	 	/s/ Felicia Hess
	 	Felicia Hess
	 	 
	 	BUYER:
	 	 
	 	WORLD SURVEILLANCE GROUP INC.
	 	 	 	 
	 	By: 	/s/ Glenn D. Estrella
	 	 	Name: 	Glenn D. Estrella
	 	 	Title:	President and Chief Executive Officer
	 	 	 	 
	 	ESCROW AGENT:
	 	 
	 	FLEMING PLLC
	 	 
	 	By:	/s/ Stephen M. Fleming
	 	 	Name:	Stephen M. Fleming
	 	 	Title:	Managing Member

 

    	 

    	 

    

 

EXHIBIT A

RELEASE NOTICE

 

The UNDERSIGNED, pursuant
to the Escrow Agreement, dated as of March 28, 2013, among Felicia Hess, World Surveillance Group Inc. and Fleming PLLC, as Escrow
Agent (the “Agreement”; capitalized terms used herein and not defined shall have the meaning ascribed to such
terms in the Agreement), hereby notifies the Escrow Agent that it is authorized and directed to deliver Escrow Shares as set forth
below in accordance with the instructions below.

 

The undersigned hereby authorizes
and directs the Escrow Agent to release (or return to Buyer) Escrow Shares and the Medallion as follows:

 

	No. of Escrow Shares	 	Delivery Instructions
	 	 	 
	 	 	 

  

IN WITNESS WHEREOF, the
undersigned have caused this Release Notice to be duly executed and delivered as of this ____ day of ___________, 201_.

  

	 	WORLD SURVEILLANCE GROUP, INC.
	 	 	 	 
	 	 	By:	 
	 	 	Name: 
	  	 	Title:     Chief Executive Officer
	 	 	 	 
	 	 	 
	 	 	Felicia HessExhibit 10.1

 

MUNICIPAL MORTGAGE & EQUITY,
LLC

EMPLOYMENT AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is effective of the 1st day of January, 2013, by and between Municipal
Mortgage & Equity, LLC, a Delaware limited liability company (“Employer”) and Gary A. Mentesana (“Employee”).

 

WHEREAS, Employer
is engaged in the business of providing real estate finance services, with a particular emphasis on tax exempt bonds for the multi-family
housing segment;

 

WHEREAS, Employee
has particular skill, experience and background in real estate finance services of the type in which the Employer primarily engages;
and

 

WHEREAS, Employer
and Employee desire to enter into an employment relationship, the terms of which are to be set forth in this Agreement.

 

NOW, THEREFORE,
in consideration of the foregoing, the mutual covenants hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Employer and Employee hereby agree as follows:

 

1.Employment and Duties.
Employer agrees to hire Employee, and Employee agrees to be employed by Employer, as Executive Vice President on the terms and
conditions provided in this Agreement. Employee shall perform the duties and responsibilities reasonably determined from time to
time by the Board of Directors (“Board”) of the Employer consistent with the types of duties and responsibilities typically
performed by a person serving as Executive Vice President of businesses similar to that of Employer. Employee agrees to devote
Employee’s best efforts and full time attention and skill in performing the duties of this position. Provided that such activity
shall not violate any provision of this Agreement (including the noncompetition provisions of Section 8 below) or materially
interfere with his/her performance of Employee’s duties hereunder, nothing herein shall prohibit Employee (a) from participating
in any other business activities approved in advance by the (“Board”) in accordance with any terms and conditions of
such approval, such approval not to be unreasonably withheld or delayed, (b) from engaging in charitable, civic, fraternal or trade
group activities, or (c) from investing in other non-competitive entities or business ventures.

 

2.Compensation. As compensation
for performing the services required by this Agreement, and during the term of this Agreement, Employee shall be compensated as
follows:

 

(a)Base Compensation.
Employer shall pay to Employee a salary (“Base Compensation”) at the annual rate of $425,000, payable in accordance
with the general policies and procedures of Employer for payment of salaries to executive personnel, but in any event no less frequently
than every two weeks, in substantially equal installments, subject to withholding for applicable federal, state and local taxes.
Increases in Base Compensation, if any, shall be determined by the Compensation Committee of the Board of Directors (the “Board”).
During the term of this Agreement, Employee’s annual Base Compensation shall not be reduced below the initial Base Compensation
set forth above.

 

(b)Incentive Compensation.
In addition to Employee’s Base Compensation, Employee shall be eligible to receive additional compensation (“Incentive
Compensation”), pursuant to this Agreement payable in cash, shares, options or otherwise as determined by the Compensation
Committee based on individual and company performance.

 

3.Employee Benefits.
During the Term of this Agreement, Employee and his/her eligible dependents shall have the right to participate in any retirement,
pension, insurance, health or other benefit plan or program adopted by Employer (or in which Employer participates) to the same
extent as any other officer of the Employer, subject, in the case of a plan or program, to all of the terms and conditions thereof,
and to any limitations imposed by law.

 

4.Vacation, Sickness and
Leaves of Absence. Employee shall be entitled to the normal and customary amount of paid vacation provided to officers of Employer,
but in any event not more than five (5) weeks paid vacation during each fiscal year. Employee shall provide Employer with reasonable
notice of anticipated vacation dates. Any vacation days not taken in a given year shall not accrue and carryover from year to year.
In addition, Employee shall be entitled to such sick leave and holidays, with pay, as Employer provides to other officers. Unused
sick leave shall not be carried forward or compensated upon termination of employment.

 

    	 

    	 

    

 

5.Expenses. Employee
shall be entitled to receive, within a reasonable period of time after Employee has delivered to Employer an itemized statement
thereof, and after presentation of such invoices or similar records as the Employer may reasonably require, reimbursement for all
necessary and reasonable expenses incurred by Employee in connection with the performance of his/her duties.

 

6.Term. The term of
this Agreement shall be for three (3) years (the “Term”), commencing on January 1, 2013 (the “Effective Date”)
and ending on December 31, 2015. The term of this Agreement in effect at any given time is herein referred to as the “Term”.
Any termination of this Agreement shall be subject to Section 7 below.

 

7.Termination and Termination
Benefits.

 

(a)Termination by Employer.

 

(i)Without Cause. Employer
may terminate this Agreement and Employee’s employment at any time upon ninety (90) days prior written notice to Employee,
during which period Employer shall have the option to require Employee to continue to perform his duties under this Agreement.
Employee shall be paid (at a time consistent with the payment terms for compensation under this Agreement) his Base Compensation
and all other benefits to which he is entitled under this Agreement up through the effective date of termination. In addition,
Employee shall become fully vested in any and all outstanding or deferred share awards, share options or other type of award made
to Employee but not yet vested at the time of such termination under the Employer’s Share Incentive Plans.

 

(ii)With Cause. Employer
may terminate this Agreement with “Cause” upon written notice to Employee. In such event, Employee shall be paid (at
a time consistent with the payment terms for compensation under this Agreement) his/her Base Compensation and all other benefits
to which he/she is entitled under this Agreement up through the effective date of termination. For purposes of this Section, termination
for “Cause” shall mean (A) acts or omissions by the Employee with respect to the Employer which constitute intentional
misconduct or a knowing violation of law; (B) receipt by the Employee, in knowing violation of the law, of more than de minimis
money, property or services from the Employer or from another person dealing with Employer in violation of law or this Agreement,
provided, however that inadvertent expense account errors shall not constitute a violation of this clause, (C) breach by Employee
of the noncompetition provisions of this Agreement, (D) breach by the Employee of his/her duty of loyalty to the Employer as set
forth in the policy statements of Employer, (E) gross negligence by the Employee in the performance of his/her duties, (F) repeated
failure by Employee to perform services that have been reasonably requested of him by the Board and that are ordinarily within
the scope of Employee’s duties, (G) unappealable conviction of a crime (other than traffic violations). Before terminating
Employee’s employment for Cause under clauses (A) – (G) above, Employer will specify in writing to Employee the nature
of the act, omission, refusal or failure that it deems to constitute Cause.

 

(iii)Disability. If
due to illness, physical or mental disability, or other incapacity, Employee shall fail to perform the duties required by this
Agreement, Employer may terminate this Agreement upon 30 days written notice to Employee. In such event, Employee shall be paid
(at a time consistent with the payment terms for compensation under this Agreement) his Base Compensation and receive all benefits
owing to him under this Agreement through the effective date of termination. In addition, Employee shall become fully vested in
any and all outstanding restricted or deferred share awards, share options or other type of award made to Employee, but not yet
vested at the time of such termination under the Employer’s Share Incentive Plans. Employee shall be considered disabled
under this paragraph if he is unable to work due to disability for a total of 120 or more business days during any 12-month period.
Nothing in this paragraph shall be construed to limit Employee’s rights to the benefits of any disability insurance policy
provided by Employer and this Section shall not be construed as varying the terms of any such policy in any manner adverse to Employee.

 

(iv)Change in Control.
Notwithstanding the foregoing, any termination of Employee during the first six (6) months following a Change in Control shall
be deemed to be without Cause for all purposes under this Agreement, unless the reason for such termination is a violation of Section
7(a)(ii)(A), (B), (C) or (G). As used herein, Change in Control shall have the meaning given such term in the Municipal Mortgage
& Equity, LLC 2010 Share Incentive Plan; provided, however, that this Section 7(a)(iv) shall not apply to any Change in Control
approved by the Board of Directors of the Company as constituted immediately prior to the date such Change in Control occurs, or
is deemed to occur (whichever is earlier).

 

    	 

    	 

    

 

(b)Termination by Employee.
Employee may terminate this Agreement for good reason upon 30 days prior written notice to Employer. In such event, Employee shall
be paid (at a time consistent with the payment terms for compensation under this Agreement) his Base Compensation and shall receive
all benefits through the date of termination. Employee shall become fully vested in any and all outstanding restricted or deferred
share awards, share options or other type of award made to Employee, but not yet vested at the time of such termination under the
Employer’s Share Incentive Plans. Employee shall have “good reason” to terminate his employment if (i) Employee’s
Base Compensation, as in effect at any given time, shall be reduced without Employee’s consent, (ii) Employer shall fail
to provide any of the material payments or benefits provided for under this Agreement; (iii) Employer shall require Employee to
take any action which would be a violation of federal, state or local criminal law. Notwithstanding the foregoing provisions of
the definition of “good reason”, (i) good reason shall not be deemed to exist unless the Employee provides notice of
the good reason event or condition within 60 days of the occurrence of such event or condition; and (ii) if there exists (without
regard to this clause (ii)) an event or condition that constitutes good reason, the Employer shall have 30 days from the date that
notice of such a termination is given to cure such event or condition and, if the Employer does so, such event or condition shall
not constitute good reason under the Agreement.

 

(c)Termination Compensation
for Termination Without Cause or for Good Reason. In the event of a termination of this Agreement prior to the end of the Term,
pursuant to Section 7(a)(i), 7(a)(iii) or 7(b), Employer, in addition to the Base Compensation and benefits (if any) payable as
provided in such sections, shall pay to Employee additional compensation (“Termination Compensation”) of $500,000.
Subject to Section 10(f), Termination Compensation shall be paid in four equal quarterly payments beginning on the first day of
the first calendar month following the termination date. In addition, Employee shall become fully vested in any and all outstanding
deferred share awards, share options or any other type of award made to Employee.

 

(d)Death Benefit. Notwithstanding
any other provision of this Agreement, this Agreement shall terminate on the date of Employee’s death. In such event, Employee’s
estate shall be paid $500,000. To the extent of any insurance carried by Employer on Employee’s life, the death benefit shall
be payable in a lump sum within five (5) business days of Employer’s receipt of the insurance proceeds; twenty-five percent
(25%) of any portion of the death benefit not covered by insurance shall be paid immediately upon the Employee’s death, but
in no event later than 90 days following the date of such death, and the remaining seventy-five percent (75%) of the Death Benefit
shall be paid in equal installments payable on the first day of each calendar quarter following Employee’s death. Employer
shall carry as much life insurance on Employee’s life as the Board may from time to time determine. In addition, upon Employee’s
death, all outstanding restricted or deferred share awards, share options or other type of award made to Employee, but not yet
vested at the time of death under the Employer’s Share Incentive Plans shall be considered vested and paid out to Employee’s
estate.

 

8.Covenant Not to Compete.

 

(a)Noncompetition. From
and after the Effective Date and continuing for the longer of (i) twelve (12) months following the expiration or termination of
this Agreement or (ii) the remainder of the Term of this Agreement, Employee shall not without the prior written consent of the
Board (w) become employed by, or undertake to work for, directly or indirectly, whether as an advisor, principal, agent, partner,
officer, director, employee, shareholder, associate or consultant of or to, any person, partnership, corporation or other business
entity which is in the business of investing in or providing Asset Management services on debt and equity investments in multifamily
real estate, (x) solicit any employee of Employer to change employment or (y) solicit any client, customer or investor of Employer
or any of its subsidiaries which closed (in any capacity) a transaction with Employer or any of its subsidiaries during the thirty-six
(36) months preceding Employee’s termination, or (z) disclose proprietary or confidential information of the Employer or
its subsidiaries, including without limitation, tax, deal structuring, pricing, customer, client, revenue, expense, or other similar
information; provided, however, if Employer terminates Employee without cause under Section 7(a)(i) or as a result of a disability
under Section 7(b), clause (w) of this paragraph (a) shall not apply.

 

(b)Reasonable Restrictions.
Employee acknowledges that the restrictions of subparagraph (a) above are reasonable, fair and equitable in scope, term and duration,
are necessary to protect the legitimate business interests of Employer, and are a material inducement to Employer to enter into
this Agreement. Employer and Employee both agree that in the event a court shall determine any portion of the restrictions in subparagraph
(a) are not reasonable, the court may change such restrictions, including without limitation the geographical restrictions and
the duration restrictions, to reflect a restriction which the court will enforce as reasonable.

 

(c)Specific Performance.
Employee acknowledges that the obligations undertaken by him/her pursuant to this Agreement are unique and that if Employee shall
fail to abide by any of the restrictions set forth in subparagraph (a), Employer will suffer harm for which there is no adequate
remedy at law. Employee therefore confirms that Employer shall have the right, in the event of a violation of subparagraph (a),
to injunctive relief to enforce the terms of this Section 8 in addition to any other remedies available at law or in equity.

 

    	 

    	 

    

 

9.Indemnification and Liability
Insurance. Employer hereby agrees to defend, indemnify and hold Employee harmless, to the maximum extent allowed by law, from
any and all liability for acts or omissions of Employee performed in the course of Employee’s employment (or reasonably believed
by Employee to be within the scope of his/her employment). Employer shall at all times carry Director and Officer liability insurance
in commercially reasonable amounts, but in any event not less than Five Million Dollars ($5,000,000).

 

10.Miscellaneous.

 

(a)Complete Agreement.
This Agreement constitutes the entire agreement among the parties with respect to the matters set forth herein and supersedes all
prior understandings and agreements between the parties as to such matters. No amendments or modifications shall be binding unless
set forth in writing and signed by both parties.

 

(b)Successors and Assigns.
Neither party may assign its rights or interest under this Agreement without the prior written consent of the other party, except
that Employer’s interest in this Agreement may be assigned to a successor by operation of law or to a purchaser purchasing
substantially all of Employer’s business, and Employee’s benefits under this Agreement may be assigned by operation
of law to Employee’s heirs, devisees and personal representatives. This Agreement shall be binding upon and shall inure to
the benefit of each of the parties and their respective permitted successors and assigns.

 

(c)Severability. Each
provision of this Agreement is severable, such that if any part of this Agreement shall be deemed invalid or unenforceable, the
balance of this Agreement shall be enforced so as to give effect as to the intent of the parties.

 

(d)Representations of Employer.
Employer represents and warrants to Employee that it has the requisite limited liability company power to enter into this Agreement
and perform the terms hereof and that the execution, delivery and performance of this Agreement have been duly authorized by all
appropriate company action.

 

(e)Construction. This
Agreement shall be governed in all respects by the internal laws of the State of Maryland (excluding reference to principles of
conflicts of law). As used herein, the singular shall include the plural, the plural shall include the singular, and the use of
any pronoun shall be construed to refer to the masculine, feminine or neuter, all as the context may require.

 

(f)Compliance with Section
409A. Notwithstanding any other provision in this Agreement to the contrary, the Employee shall not be entitled to any payment
pursuant to this Agreement prior to the earliest date permitted under Section 409A of the Code. To the extent that any severance
amount payable in this Agreement constitutes deferred compensation that is subject to Section 409A of the Code, payments shall
commence on the first day of the first calendar month following the Employee’s “Separation form Service”, as
defined below. To the extent such payments are required to be delayed six months pursuant to the special rules of Section 409A
of the Code related to “specified employees,” each affected payment shall be delayed until six months after the Employee’s
termination of employment, with the first such payment being a lump sum equal to the aggregate payments the Employee would have
received during such six-month period if no payment delay had been imposed. Any such delayed payments or distributions shall be
paid to the Employee on the first business day of the seventh month following the Employee’s termination of employment. A
“Separation from Service” means an anticipated permanent reduction in the level of services performed by the Employee
to 20% or less of the average level of services performed by the Employee over the immediately preceding 36 month period (or the
full period during which the Employee performed services for the Employer, if that is less than 36 months) (treating all members
of the controlled group of corporations or group of trades or business under common control with the Employer as a single employer
for this purpose).

 

(g)Other Awards, Options
or Equity Based Compensation. To the extent Employee shall become vested in outstanding deferred share awards, options or other
equity-based compensation in connection with certain terminations of employment, unless otherwise specified in this Agreement,
such awards shall remain payable or exercisable under the terms of the applicable award agreement.

 

    	 

    	 

    

 

(h)Notices. All notices
required or permitted under this Agreement shall be in writing and shall be deemed given on the date sent if delivered by hand
or by facsimile, and on the next business day if sent by overnight courier or by United States mail, postage prepaid, to each party
at the following address (or at such other address as a party may specify by notice under this section):

 

	 	If to Employer: 
	 	Municipal Mortgage & Equity, LLC 
	 	621 East Pratt Street, Suite 600 
	 	Baltimore, Maryland 21202 
	 	Facsimile: (410) 727-5387 
	 	Attention: Chairman of the Board 
	 	 
	 	If to Employee: 
	 	Gary A. Mentesana 
	 	180 Rugby Road 
	 	Arnold, Maryland 21012 

 

(i)Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which together
shall constitute one instrument.

 

 

IN
WITNESS WHEREOF, and intending to be legally bound, the parties have executed this Agreement as of the date and year written below.

 

	WITNESS:	 	EMPLOYER:
	 	 	 	 	 
	 	 	MUNICIPAL MORTGAGE & EQUITY, LLC
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:	/s/ Lisa M. Roberts
	 	 	 	Name:	Lisa M. Roberts
	 	 	 	Title:	Chief Financial Officer
	 	 	 	Date:	March 27, 2013
	 	 	 	 	 
	 	 	 	 	 
	 	 	EMPLOYEE:
	 	 	 	 	 
	 	 	 	 	 
	 	 	/s/ Gary A. Mentesana
	 	 	Gary A. Mentesana
	 	 	 	 	 
	 	 	Date:	March 27, 2013

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00215-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00215-of-00352.parquet"}]]