Exhibit 10.1


 


MUNICIPAL MORTGAGE & EQUITY,
LLC


EMPLOYMENT AGREEMENT


 


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


 


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


 


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





 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 






    	 



    	 



    

 


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


 


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


 


7.Termination and Termination
Benefits.


 


(a)Termination by Employer.


 


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


 


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


 


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


 


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


 






    	 



    	 



    

 


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


 


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


 


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


 


8.Covenant Not to Compete.


 


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


 


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


 


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


 






    	 



    	 



    

 


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


 


10.Miscellaneous.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 






    	 



    	 



    

 


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


 





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










 


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


 


 


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


 


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