MIDLAND FINANCIAL HOLDINGS, INC.



                                    AS ISSUER



                                       AND



                        MUNICIPAL MORTGAGE & EQUITY, LLC



                                  AS GUARANTOR



                          FIRST SUPPLEMENTAL INDENTURE



                              DATED AS OF ___, 200_



                            WILMINGTON TRUST COMPANY



                                   AS TRUSTEE



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                                TABLE OF CONTENTS



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ARTICLE I         DEFINITIONS...................................................    1



     Section 1.1    Definition of Terms.........................................    1



ARTICLE II        GENERAL TERMS AND CONDITIONS OF THE DEBENTURES................    3



     Section 2.1    Designation and Principal Amount............................    3



     Section 2.2    Maturity....................................................    3



     Section 2.3    Form and Payment............................................    3



     Section 2.4    Global Debenture............................................    3



     Section 2.5    Interest....................................................    5



     Section 2.6    Denomination................................................    5



ARTICLE III       REDEMPTION OF THE DEBENTURES..................................    5



     Section 3.1    Optional Redemption.........................................    5



     Section 3.2    Redemption Procedures.......................................    6



     Section 3.3    No Sinking Fund.............................................    6



ARTICLE IV        EXTENSION OF INTEREST PAYMENT PERIOD..........................    6



     Section 4.1    Extension of Interest Payment Period........................    6



     Section 4.2    Notice of Extension.........................................    6



     Section 4.3    Limitation of Transactions..................................    7



ARTICLE V         EXPENSES......................................................    7



     Section 5.1    Payment of Expenses.........................................    7



     Section 5.2    Payment Upon Resignation or Removal.........................    8



     Section 5.3    Guarantee of Payment of Expenses............................    8



ARTICLE VI        COVENANT TO LIST ON EXCHANGE..................................    9



     Section 6.1    Listing on an Exchange......................................    9



ARTICLE VII       FORM OF DEBENTURE.............................................    9



     Section 7.1    Form of Debenture...........................................    9



ARTICLE VIII      ORIGINAL ISSUE OF DEBENTURES..................................    9



     Section 8.1    Original Issue of Debentures................................    9



ARTICLE IX        MISCELLANEOUS.................................................    9



     Section 9.1    Ratification of Indenture...................................    9



     Section 9.2    Trustee Not Responsible for Recitals........................    9



     Section 9.3    Governing Law...............................................    9



     Section 9.4    Separability................................................   10



     Section 9.5    Counterparts................................................   10

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         FIRST SUPPLEMENTAL INDENTURE, dated as of _____________, 200_ (the

"FIRST SUPPLEMENTAL INDENTURE"), among Midland Financial Holdings, Inc., a

Florida corporation (hereinafter sometimes called the "COMPANY"), Municipal

Mortgage & Equity, LLC, a Delaware limited liability company (hereinafter

sometimes called the "GUARANTOR"), and Wilmington Trust Company, a Delaware

banking corporation, as trustee (hereinafter sometimes called the "TRUSTEE")

under the Indenture dated as of _____________, 200_ among the Company, the

Guarantor and the Trustee (the "INDENTURE").



         WHEREAS, the Company and the Guarantor executed and delivered the

Indenture to the Trustee to provide for the future issuance of the Company's

unsecured junior subordinated debt securities guaranteed by the Guarantor, to be

issued from time to time in one or more series as might be determined by the

Company and the Guarantor under the Indenture, in an unlimited aggregate

principal amount which may be authenticated and delivered as provided in the

Indenture;



         WHEREAS, pursuant to the terms of the Indenture, the Company desires to

provide for the establishment of a new series of such securities to be known as

its ___% Junior Subordinated Debentures due ___ (the "DEBENTURES"), and the

Guarantor desires to provide for the issuance of a Guarantee of such Debentures

(the "DEBENTURE GUARANTEE"), the form and substance of such Debentures and

Debenture Guarantee and the terms, provisions and conditions thereof to be set

forth as provided in the Indenture and this First Supplemental Indenture;



         WHEREAS, the Company, the Guarantor and MFH Financial Trust ___, a

Delaware statutory business trust (the "TRUST"), propose to offer to the public

up to $___ aggregate liquidation amount of its ___% [___] Securities (the

"PREFERRED SECURITIES"), representing preferred undivided beneficial interests

in the assets of the Trust, and proposes to invest the proceeds from such

offering, together with the proceeds of the issuance and sale by the Trust to

the Company of up to $___ aggregate liquidation amount of its ___% Common

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