Document:

exv10w1

 

Exhibit 10.1

	 	 	 
	 
	 	 
	 

STOCK PURCHASE AGREEMENT

dated as of June 8, 2005

by and among

MMA MORTGAGE INVESTMENT CORPORATION

and

MUNICIPAL MORTGAGE & EQUITY, LLC

and

DAVID WILLIAMS

and

KEVIN FILTER

	 	 	 
	 
	 	 
	 

 

 

TABLE OF CONTENTS

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

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

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

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

	 	 	 
	Exhibits	 	 
	A

	 	—      Primary Calculation Amount Examples
	B

	 	—      Form of Employment Agreements
	C

	 	—      Representations and Warranties of MuniMae
	D

	 	—      Form of Landlord Estoppel Certificate
	E

	 	—      Form of Glaser Estoppel Certificate
	F

	 	—      Installment Amount Examples
	G

	 	—      Assignment of Loans
	H

	 	—      Permitted Actions

iv

 

	 	 	 
	I

	 	—      Additional Required Consents
	J

	 	—      Form of Lease
	K

	 	—      Form of Seller’s Certification

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STOCK PURCHASE AGREEMENT

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

Recitals

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

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

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

ARTICLE I

DEFINITIONS

     1.01. Definitions.

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

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

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

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

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

K-1

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

4

 

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

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

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

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

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

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

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

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

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

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

     “Fannie Mae” means the Federal National Mortgage Association.

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

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

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

5

 

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

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

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

     “GNMA” means the Government National Mortgage Association.

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

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

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

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

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

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

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

6

 

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

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

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

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

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

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

     “IRS” means the United States Internal Revenue Service.

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

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

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

7

 

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

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

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

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

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

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

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

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

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

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

8

 

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

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

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

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

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

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

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

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

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

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

9

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE II

SALE OF SHARES AND CLOSING 

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

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

     2.03. Closing.

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

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

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

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

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

     2.04. Deferred Purchase Price.

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

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

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

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

12

 

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

     2.05. Earn-out Amount.

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

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

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

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

13

 

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

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

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

14

 

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

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

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

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

     2.06. Adjustment to Purchase Price.

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

15

 

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

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

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

16

 

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

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

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

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

     2.09. Certain Transaction Adjustments.

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

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

17

 

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

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

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLERS

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

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

18

 

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

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

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

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

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

     3.05. Subsidiaries. The Company has no Subsidiaries.

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

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

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

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

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

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

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

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

20

 

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

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

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

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

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

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

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

21

 

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

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

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

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

          (x) any lease of real property;

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

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

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

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

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

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

22

 

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

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

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

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

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

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

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

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

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

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

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

23

 

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

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

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

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

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

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

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

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

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

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

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

24

 

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

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

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

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

     3.13. Benefit Plans; ERISA.

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

25

 

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

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

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

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

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

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

26

 

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

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

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

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

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

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

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

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

     3.14. Real Property.

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

27

 

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

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

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

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

     3.17. Contracts.

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

28

 

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

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

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

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

               (v) all collective bargaining or similar labor Contracts;

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

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

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

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

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

29

 

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

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

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

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

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

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

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

30

 

     3.20. Employees; Labor Relations.

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

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

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

     3.21. Substantial Business Relationships.

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

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

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

31

 

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

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

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

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

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

     3.25. Status of Outstanding Loans.

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

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

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

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

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

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

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

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

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

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

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

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

33

 

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

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

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

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

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

34

 

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

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

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

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER AND MUNIMAE

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

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

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

35

 

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

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

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

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

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

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

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

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

36

 

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

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

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

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

ARTICLE V

COVENANTS OF SELLERS

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

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

37

 

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

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

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

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

     5.05. Operation of the Business Prior to Closing.

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

38

 

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

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

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

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

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

39

 

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

     5.08. Affiliate Transactions.

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

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

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

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

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ARTICLE VI

COVENANTS OF PURCHASER AND MUNIMAE

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

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

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

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     6.03. Employees and Benefit Plans.

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

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

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

     6.04. Rule 144 Undertaking.

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

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

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

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

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

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

ARTICLE VII

TAX MATTERS AND POST-CLOSING TAXES 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE VIII

CONDITIONS TO CLOSING

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE IX

SURVIVAL OF REPRESENTATIONS, WARRANTIES,

COVENANTS AND AGREEMENTS

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

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

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

ARTICLE X

TERMINATION 

     10.01. Termination. This Agreement may be terminated:

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

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

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

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

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

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

ARTICLE XI

INDEMNIFICATION 

     11.01. Tax Indemnifications.

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

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

     11.02. Other Indemnification.

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

50

 

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

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

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

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

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

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

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

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

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

52

 

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

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

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

     11.04. Indemnity Payments.

          (a) Each of Sellers, Purchaser and MuniMae agrees to treat any indemnity payment (including
any indemnity payment made by means of set-off as described in (b) below) made under this

Article XI as an adjustment to the Purchase Price for all Tax purposes.

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

53

 

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

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

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

ARTICLE XII

MISCELLANEOUS

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

If to Purchaser or MuniMae, to:

MMA Mortgage Investment Corporation

c/o Municipal Mortgage & Equity LLC

The Pier IV Building

621 East Pratt Street, 3rd Floor

Baltimore, MD 21202

Facsimile No.: 410-727-5387

Attn: Gary Mentesana

54

 

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

Gallagher Evelius & Jones LLP

218 N. Charles Street, Suite 400

Baltimore, Maryland 21201

Facsimile No.: 410-837-3085

Attn: Stephen A. Goldberg

If to Sellers, to:

David Williams

18870 Brookwood Road

Prior Lake, Minnesota

and

Kevin Filter

1665 Hillcrest

St. Paul, Minnesota

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

Oppenheimer Wolff & Donnelly LLP

Plaza VII, Suite 3300

45 South Seventh Street

Minneapolis, Minnesota 55402

Facsimile No.: 612-607-7100

Attn: Timothy J. Scallen

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

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

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

55

 

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

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

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

56

 

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

     12.06. Further Assurances; Post-Closing Cooperation.

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

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

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

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

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

57

 

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

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

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

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

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

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

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

58

 

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

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

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

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

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

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

[signatures are on following page]

59

 

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

	 	 	 	 	 	 	 
	 	 	SELLERS:
	 
	 	 	 	 	 	 
	 	 	/s/ David Williams
	 	 	 
	 	 	David Williams
	 
	 	 	 	 	 	 
	 	 	/s/ Kevin Filter
	 	 	 
	 	 	Kevin Filter
	 
	 	 	 	 	 	 
	 	 	PURCHASER:
	 
	 	 	 	 	 	 
	 	 	MMA MORTGAGE INVESTMENT

CORPORATION
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Gary A. Mentesana
	 	 	 	 	 
	 	 	Name:	 	Gary A. Mentesana
	

	 	 	 	 	 	 
	 	 	Title:	 	Executive Vice President
	

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

	 	 	 	 	 	 
	 	 	Title:	 	Executive Vice Presidentexv10w8

 

Exhibit 10.8

EMPLOYMENT CONTRACT

     This Employment Agreement, made and entered into as of the 28th day of February,
2004 by and between Educational Development Corporation (“EDC”) and Randall W. White (“White”);

     WITNESSETH:

     WHEREAS, EDC wishes to employ White as its President and Chief Executive Office to serve
during EDC’s fiscal year (“FY”) 2005 on the terms and conditions herinafter set forth; and

     WHEREAS, White wishes to accept such employment and use his best skills, experience and effort
as EDC’s President and Chief Executive Office to enhance the profitability and performance of EDC.

     NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements contained
herein, EDC and White agree as follows:

     1. Term. The term of this Agreement commences March 1, 2004 and terminates March 1,
2007.

     2. Position and Duties. White shall serve EDC in an executive capacity as President
and Chief Executive Officer of EDC and shall report to the EDC Board of Directors. Subject to the
general direction and control of the Board of Directors of EDC (the “Board”) and its Executive
Committee, if any, White shall have full authority and responsibility for formulating and
implementing goals, budgets and policies and administering the personnel, financial and business
affairs of EDC in all respects and shall have such other responsibilities and authority shall be
superior to those of any officer or employee of EDC or any subsidiary thereof.

     3. Extent of Services. White shall devote his best efforts and full business time
(with allowances for vacations and sick leave) and attention to furthering the business of EDC.
White is not prohibited from maintaining or making investments, or engaging, in

1

 

Exhibit 10.8

other business or
enterprises, provided such investments, business or enterprises do not require services on the part
of White which would materially impair the performance of his duties under this Agreement or which,
by virtue of White’s investments or participation, would result in such business or enterprise
engaging in material competition with the Company.

     4. FY 2005 Compensation. EDC shall compensate White as follows during FY 2005:

     a. Base Salary. EDC shall pay White a base salary of $150,000, payable in twelve
equal monthly installments, commencing March 1, 2004; provided, however, that said base
salary shall be reviewed by the Board of Directors of EDC annually and may be adjusted upward at
the discretion of said Board at that time.

     b. Additional Salary. EDC shall pay White additional salary equal to $22,000 if
profit before taxes (“PBT”) exceeds $3,200,000 in each fiscal year. PBT as used in this Agreement
means net operating income before taxes, excluding extraordinary gains or losses from the sale or
conversion of capital assets. Such additional salary shall be payable within 90 days following end
of each FY upon receipt of the annual Auditor’s Certificate.

     c. Automobile Allowance. EDC shall provide an automobile used by White in connection
with his duties and pay of business related operational expenses incurred by White in connection
with operating such automobile.

     5. Termination by EDC.

     a. Termination for Cause. In the event EDC terminates White for cause, White shall
have the same rights with respect to the salary provided for herein as if he had voluntarily
terminated his employment under Paragraph 6 below. Provided, that cause includes, but is
not limited to, one or more acts of dishonesty; provided further, that in the event White
is terminated for dishonesty, his unexercised stock options shall become null and void upon such
termination and shall thereupon be deemed to have been reconveyed to EDC by White. An “act of
dishonesty” as used herein shall mean and include without

2

 

Exhibit 10.8

limitation (I) any illegal conduct in
connections with EDC affairs and (ii) any action by White in connection with his employment duties
at EDC involving deceit or fraud.

     b. Termination Without Cause. If EDC terminated White without cause, EDC shall pay
White the balance of the base salary provided herein in subparagraph 4, by not in any case to be
less that twelve months base salary.

     6. Termination By White. If White voluntarily terminates his employment with EDC
during FY 2005, 2006 or 2007, EDC shall pay White all earned by unpaid base salary, plus all
Additional Salary earned to the date of such termination. White shall have 90 days following such
voluntary termination in which to exercise any options which are then exercisable. All stock
options which are not yet exercisable as of the date of such voluntary termination shall be null
and void and such options shall thereupon be deemed to have been reconveyed to EDC by White.

     7. Termination by White in Event of Change of Control. “Change of Control” as used
in this Agreement shall mean either (i) the acquisition of by third party of all or substantially
all of EDC’s assets of (ii) the acquisition or effective control by any third party of 30% or more
of EDC’s outstanding common stock. In the event the acquiring party terminated White’s employment
with EDC, EDC shall cause the acquiring party to compensate White in accordance with subparagraphs
1 and 4.

     8. Death of White. In the event of White’s death, this Agreement shall be deemed to
have been terminated pursuant to Paragraph 6 hereof, and EDC shall pay any compensation to which
White would have been entitled pursuant to Paragraph 6 to the executor or administrator of White’s
estate, plus an amount equal to 25% of White’s annual base salary as then in effect for the three
months subsequent to his death.

     9. Post Employment Obligations of White.

     a. Confidential Information. By his execution of this Agreement, White acknowledges
that he will in the course of his employment by EDC obtain “Confidential Information” (as
hereinafter defined” and that his relationship with EDC will be one of trust and confidence with
regard to such Confidential Information. White recognizes that

3

 

Exhibit 10.8

EDC is entitled to protect its
investment in that knowledge and training. White agrees that he will not at any time, after the
termination of his employment with EDC, in any manner, either directly or indirectly, whether for
himself or another, disclose to any person, firm or corporation, other then EDC, any confidential
information acquired, learned, obtained or developed by White alone or in conjunction with others
in connection with his employment with EDC. “Confidential Information” as herein used means all
trade secrets and other confidential information relating to the business of EDC, otherwise
affecting White’s duties and obligations contained in subparagraph 9.

     b. Non-Solicitation of EDC Customers. Without in any way limiting or otherwise
affecting White’s duties and obligations contained in subparagraph 9 immediately about, White
agrees that during the period of two (2) years immediately following the terminations of his
employment with EDC, he will not in any manner, either directly or indirectly, for himself or on
behalf of any other person, firm or corporation other then EDC solicit any customer of EDC or
divert or take away or attempt to divert or take away from EDC any of the business or patronage of
such customers, it being the general intent hereof that until the expiration of two years after
such termination of his employment, White shall maintain a “hands off” policy with regard to EDC’s
customers in respect of sales or services of the types furnished to such customers during or at the
time of termination of White’s employment with EDC; provided that in the event that EDC
terminates White’s employment under subparagraph 5b of this Agreement, this subparagraph 9b shall
be thereby rendered null and void and of no further effect; provided further, however, that
if, in connection with new employment obtained by White, White does any of the acts prohibited by
this Paragraph 9, any amount due White pursuant to subparagraph 5b hereof shall be reduced by the
amount of any compensation, regardless of the form of such compensation, paid to White by any other
person, natural or corporate, in respect such employment.

     c. Injunctive Relief in the Event of Violation. EDC and White agree that a violation
by White of any covenant or agreement in the preceding two subparagraphs of

4

 

Exhibit 10.8

this Paragraph 9 would
adversely affect
the successful conduct of EDC’s business and its goodwill and would cause such damage to EDC as
would be irreparable, the exact amount of which would be impossible to ascertain, and for that
reason White further agrees that in the event of such violation or threatened violation EDC shall
be entitled to a restraining order and/or injunction from any court of competent jurisdiction,
restraining such violation or any further violation of such covenants and agreements by White,
without prejudice to any other legal equitable remedies available to EDC.

     10. Assignment. Subject to White’s rights under Paragraph 7 of this Agreement with
respect to changes of control, EDC may assign its rights and delegate its duties hereunder to any
person, natural or corporate, to whom it might sell all or substantially all of its assets. White
may not assign his rights nor delegate his duties hereunder to any person.

     11. Divisibility. This Agreement is divisible and in the event any clause,
subparagraph or provision of this Agreement shall be held to be invalid, the same shall not affect
the validity of enforceability of the remaining portions of this Agreement.

     12. Binding Effect. This Agreement shall bind White, his heirs, executors,
administrators and assigns and shall bind and inure to the benefit of EDC, its successors and
assigns.

     13. Entire Agreement; Modification, Waiver. This Agreement constitutes the entire
agreement between the parties pertaining to the subject matter contained in it and supersedes all
prior and contemporaneous agreements, representations and understandings of the parties, whether
written or oral. No supplement, modification, or amendment of this Agreement shall be binding
unless executed in writing by all the parties. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver. Not waiver shall be binding unless
executed in writing by the party making the waiver.

5

 

Exhibit 10.8

     14. Multiple Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

     15. Governing Law. This Agreement shall be construed in accordance with, and
governed by the laws of the Sate of Oklahoma.

     IN WITNESS WHEREOF, the parties to this Agreement have duly executed it on the day of year
first above written.

	 	 	 	 	 
	 	 	EDUCATIONAL DEVELOPMENT CORPORATION
	 
	 	 	 	 
	

	 	By	 	 
	

	 	 	 	 

	 	 	 
	ATTEST:
	 	 
	 
	 	 
	 	 	 
	 
	 	 
	Secretary
	 	 
	 
	 	 
	(Corporate Seal)
	 	 

	 	 	 
	

	 	 
	 
	 	 
	

	 	RANDALL W. WHITE

6

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