EMPLOYMENT  AGREEMENT  (this  "Agreement")  effective  as of June 1,  2007,
between AMBASE CORPORATION,  a Delaware corporation (the "Company"), and RICHARD
A. BIANCO (the "Executive").

                               W I T N E S S E T H


     (1) Term of  Employment.  (a) The Company  hereby  agrees to  continue  its
employment of Executive and Executive  hereby agrees to continue his  employment
as  Chairman,  President  and Chief  Executive  Officer of the  Company,  for an
additional  five-year period commencing June 1, 2007 and ending May 31, 2012, or
for such  shorter  period as may be  mutually  agreed  upon by the  Company  and
Executive (the "Employment Period"), subject to the terms and conditions of this
Agreement. In his capacity as Chairman, President and Chief Executive Officer of
the Company, Executive will be responsible for supervising the operations of the
Company  and its  subsidiaries  and shall  have such  management  and  oversight
responsibilities  and  authority as are  reasonably  customary for such offices.
Executive  shall report  exclusively  to the Company's  Board of Directors  (the
"Board").

     (b) Executive agrees that during the Employment  Period,  he will serve the
Company faithfully and to the best of his abilities,  devoting substantially all
his  time,  energy  and  skill  to  activities  of the  Company  (including  its
subsidiaries and affiliates) and the promotion of their respective interests. It
is expressly understood that Executive may devote a reasonable amount of time to
such  charitable,  civic and personal  affairs as shall not  interfere  with the
obligation set forth in the immediately preceding sentence.

     (2) Compensation and Benefit Plans.  For the Employment  Period,  Executive
shall be compensated as follows:

     (a) He shall  receive an annual base salary for each  12-consecutive  month
period occurring during the Employment Period payable at the rate of (i) for the
first 3 full years occurring  during the Employment  Period,  $625,000 per year,
and (ii) for the fourth and fifth full  years  occurring  during the  Employment
Period, not less than $625,000 per year, subject to any increases awarded by the
Personnel  Committee  (the  "Personnel  Committee")  of the  Board  in its  sole
discretion.

     (b) He  shall  be  eligible  upon  the  completion  of each  calendar  year
occurring  during the  Employment  Period to receive an annual  cash bonus based
upon his  performance  for such calendar year, (i) the amount of which,  if any,
shall be determined in the sole discretion of the Personnel Committee,  and (ii)
which  shall not be with  respect  to any  services  rendered  by  Executive  in
connection with his efforts on the Company's  behalf to obtain a Recovery Amount
(as described in Section 3 hereof).

     (c) He shall be eligible to  participate  in the Company's  401(k)  Savings
Plan.

     (d) Except with  respect to the AmBase  Supplemental  Retirement  Plan (the
"Supplemental  Plan"),  under which Executive hereby  acknowledges and agrees he
shall have no entitlement to accrue any further  benefit for his service for the
Company after May 31, 2007, he shall  participate in all other employee  benefit
programs  of  the  Company,   including,   but  not  limited  to,  any  deferred
compensation or profit sharing plan, group life insurance  coverage in an amount
equal to three times his base  salary,  hospitalization  and  surgical and major
medical  coverages,  dental insurance,  the supplemental  medical  reimbursement
plan, sick leave,  including  salary  continuation  arrangements,  vacations and
holidays,  long-term  disability,  short-term  disability  and such other fringe
benefits and  perquisites  as are or may be made  available from time to time to
senior  executives  of the Company.  Notwithstanding  the  foregoing,  except as
provided  in  the  immediately   preceding   sentence  in  connection  with  the
Supplemental  Plan,  the Company shall not reduce  Executive's  Company-provided
fringe benefits,  perquisites and employee  welfare benefit  coverages to levels
below those which existed as of May 31, 2007.
<PAGE>

     (3) Long - Term Incentive.  Subject to the  requirements of this Section 3,
during the Employment  Period,  the Consulting  Period (as defined below) or any
other period  specified  below in this Section 3, should the Company obtain from
any source any recovery, whether by means of settlement,  judgment of a court of
competent jurisdiction, arbitration award or otherwise (the gross amount of such
recovery,  "Recovery  Amount")  in  connection  with the  current and any future
litigation or  litigations  and/or related  proceedings  regarding the Company's
investment in Carteret Savings Bank, FA, the Company shall pay Executive, within
60 days of its receipt of the  Recovery  Amount,  a lump sum cash  payment  (the
"Long - Term  Incentive  Award"),  the amount of which  shall be  determined  as
follows:

        Long - Term Incentive Award =

     5% of the first $50,000,000 of Recovery Award

     plus

     8% of  Recovery  Amount in  excess  of  $50,000,000  but not  greater  than
     $150,000,000

     plus

     10% of  Recovery  Amount in excess of  $150,000,000  but not  greater  than
     $250,000,000

     plus

     Discretionary  amount (not less than 10%) to be determined by the Board for
     Recovery Amount in excess of $250,000,000.*


     * To illustrate,  should the Company obtain a $200,000,000 Recovery Amount,
the  amount  of  the  Long -  Term  Incentive  Award  would  be 5% of the  first
$50,000,000 of Recovery Amount ($2,500,000), plus 8% of the next $100,000,000 of
Recovery  Amount  ($8,000,000),  plus 10% of the next  $50,000,000  of  Recovery
Amount  ($5,000,000)  $2,500,000 + $8,000,000  +  $5,000,000 =  $15,500,000.  To
illustrate  further,  should  the  Company  subsequently  obtain  an  additional
$50,000,000  Recovery  Amount,  the  amount of the Long - Term  Incentive  Award
(footnote  continued) in connection with the subsequent Recovery Amount would be
calculated utilizing the 10% factor  ($200,000,000  initial Recovery Amount plus
$50,000,000 subsequent Recovery Amount = $250,000,000 for purposes of percentage
to apply under the formula for the subsequent  Recovery Amount),  resulting in a
subsequent  Long - Term  Incentive  Award of $5,000,000  in connection  with the
subsequent $50,000,000 Recovery Amount.

     Executive  and  Company  hereby  agree  that (i) each  subsequent  Recovery
Amount, if any, shall be aggregated with all earlier Recovery  Amounts,  if any,
for purposes of determining the applicable percentage to be used in applying the
above  formula  to any such  subsequent  Recovery  Amount,  and (ii)  should the
Recovery Amount include a non-cash portion,  Executive and the Company shall use
best efforts to  reasonably  agree on a  methodology  for valuing such  non-cash
portion  for  purposes  of  determining  the  Recovery  Amount  and  Executive's
resulting Long - Term Incentive  Award,  and further,  should  Executive and the
Company  be unable  to  reasonably  agree as to the  value of any such  non-cash
portion,  Executive  and the Company  hereby agree to resolve such  disagreement
through  binding  arbitration,  all of the  reasonably  incurred costs of which,
including Executive's reasonable legal fees, shall be borne by the Company.

     The Company  hereby  agrees,  that should it not receive a Recovery  Amount
during the Employment  Period, it will enter into a consulting  arrangement with
Executive,  the terms of which shall be reasonably  agreed to by the Company and
Executive,  pursuant  to which  Executive  shall  during the  period  commencing
immediately  following the Employment  Period and ending on the date the Company
receives  a  Recovery  Amount  (the  "Consulting  Period"),  provide  consulting
services to the Company as an  independent  contractor,  for the sole purpose of
continuing to assist the Company in its efforts to obtain a Recovery Amount.

     Executive  shall be paid a Long - Term Incentive  Award in connection  with
the Company obtaining a Recovery Amount at any time in the future (i.e., whether
during or after the Employment Period and/or the Consulting Period) under all or
any  circumstances  except where Executive  willfully  refuses to cooperate in a
reasonable  fashion  with the Company  and/or the Board in  connection  with the
Company's  efforts to obtain a Recovery  Amount,  in which case he shall forfeit
his otherwise entitlement to receive a Long - Term Incentive Award.

     During the Employment  Period (i) should  Executive (A) voluntarily  resign
his employment  with the Company,  or (B) have his  employment  with the Company
terminated  by the  Company  for cause  (within the meaning set forth in Section
5(a)(i) hereof),  Executive shall thereupon forfeit his otherwise entitlement to
receive the Long - Term Incentive  Award;  (ii) should Executive become disabled
(within the meaning set forth in Section 5(a)(ii)  hereof) or die,  Executive or
his  estate,  as  applicable,  shall  be  entitled  to  receive  the Long - Term
Incentive Award upon the Company's receipt of the Recovery Amount, regardless of
when the Recovery Amount is received by the Company; or (iii) should the Company
terminate  Executive's  employment  with the Company  without  cause (within the
meaning  set forth in Section  5(a)(i)  hereof),  Executive  or his  estate,  as
applicable,  shall be entitled to receive the Long - Term  Incentive  Award upon
the Company's  receipt of the Recovery  Amount,  regardless of when the Recovery
Amount is received by the Company.

     The Company and  Executive  hereby agree that this Section 3 shall  survive
the termination of this Agreement.

     (4) Reimbursement of Expenses.  The Company will, subject to the submission
of appropriate reports, reimburse Executive for all reasonable expenses incurred
by him in  connection  with the conduct of business  for the Company  during the
Employment  Period. In addition,  the Company shall reimburse  Executive (i) for
all of his reasonable  legal fees incurred in connection with the negotiation of
this  Agreement,  and (ii) subject to the  indemnification  provisions  (and any
exclusions thereunder) of the Company's By-Laws, for all of his reasonable legal
expenses incurred in defending any action brought against him in connection with
the current and any future litigation or litigations and/or related  proceedings
regarding the Company's investment in Carteret Savings Bank, FA.

     (5)  Termination of Employment.  (a) The employment of Executive  hereunder
shall  automatically  terminate  if  Executive  shall die during the  Employment
Period and is  terminable  by the  Company at its option for (i) cause,  or (ii)
Executive's inability to engage in any substantial gainful activity by reason of
any medically  determinable  physical or mental impairment which can be expected
to result in death or can be  expected  to last for a  continuous  period of not
less than 12-months ("disability"), in any case by 30 days' prior written notice
to  Executive;  provided,  however,  that if prior  to the  date of  termination
specified  in any  notice  of  termination  given  pursuant  to this  paragraph,
Executive's  disability  shall have  terminated  and he shall have  resumed  his
duties hereunder, Executive shall be entitled to resume his employment hereunder
as though such notice had not been given.  The term "cause" as used herein shall
mean any of the following events:
<PAGE>

     (A) the  conviction of Executive  under state or federal law of a felony or
other crime  involving  moral  turpitude,  or the equivalent  under foreign law;
unless  in any such case  Executive  performed  such act in good  faith and in a
manner reasonably  believed to be in or not opposed to the best interests of the
Company;

     (B) the material  breach by Executive of any  provision of this  Agreement,
after compliance by the Company with the provisions of Section 6 hereof; or

     (C) a final determination by an appropriate  regulatory authority requiring
that  Executive  be removed  or  disqualified  from  acting as an officer of the
Company.

     (b) In  the  event  the  Company  shall  terminate  Executive's  employment
hereunder  for any reason other than those  permitted  by paragraph  (a) of this
Section 5, Executive  shall be entitled to a lump-sum amount equal to the salary
payments  provided  for in  Section  2  hereof  for  the  remaining  term of the
Employment  Period,   said  payment  to  be  deferred  for  the  6-month  period
immediately  following  the  termination  of  Executive's  employment  with  the
Company,  to the extent the  provisions  of  Section  409A(a)(2)(B)(i)  are then
applicable to Executive and the Company.  Executive  shall not be under any duty
to seek alternative  employment or otherwise mitigate his damages as a condition
to the receipt of such amount.

     (6) Notice of Breach.  The Company and Executive  agree that,  prior to the
termination of the Employment  Period,  by reason of any breach of any provision
of this  Agreement,  the  injured  party  will give the party in breach  written
notice  specifying  such breach and  permitting the party in breach to cure such
breach within a period of 30 days after receipt of such notice.

     (7) Disability  Benefits.  In the event  Executive shall have been disabled
for a period of 180 days and the Company shall elect to terminate this Agreement
pursuant to Section 5 hereof, Executive shall be entitled to continue to receive
the salary payments  provided for in Section 2 hereof and shall be provided with
medical insurance and other welfare benefits provided to other officer employees
for a period of six months,  such  payments to be reduced by an amount  equal to
payments received by Executive under any long-term disability plan maintained by
the Company.  The Company's  obligation to pay disability  benefits  pursuant to
this Section 7 shall not be in  diminution  of any  benefits to which  Executive
shall be entitled under any major medical,  supplemental medical  reimbursement,
long-term disability or other employee benefit plan in which he participates.

     (8) Notice.  Any notice  required or  permitted to be given to or by either
party under the terms and provisions of this Agreement shall be in writing,  and
shall be  sufficiently  given when  deposited in a United States post office for
mailing by first  class mail,  addressed  to  Executive  at: 145 Round Hill Road
Greenwich,  CT  06830  or to the  Company  at:  100  Putnam  Green  - 3rd  Floor
Greenwich, CT 06830-6027 Attention: Chief Financial Officer

     (9) Governing  Law. The validity,  interpretation  and  performance of this
Agreement shall be governed by the laws of the State of Connecticut.

     (10) Severability.  If any one or more of the provisions  contained in this
Agreement shall be held to be invalid,  illegal or unenforceable in any respect,
such  invalidity,  illegality  or  unenforceability  shall not  affect any other
provision hereof.

     (11) Successors And Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their personal representatives, and, in
the case of the Company, its successors and assigns.

     (12)  Amendment.  This Agreement may not be amended except by an instrument
in writing duly executed by the parties  hereto.  The parties reserve the right,
without  notice  to or  consent  of any third  person,  at any time to waive any
rights  hereunder or by mutual  agreement to amend this Agreement in any respect
or by mutual agreement to terminate this Agreement.

     (13) Headings.  Headings  contained in this  Agreement are for  convenience
only and shall not limit this Agreement or affect the interpretation thereof.

     (14) Acknowledgment.  Executive hereby acknowledges that all obligations of
the  Company  hereunder  are  obligations  of the  Company  only,  and  are  not
personally the  obligations  of any officer,  director,  shareholder,  employee,
representative, attorney, or agent of the Company.

     (15) Indemnification.  In all cases subject to any applicable provisions of
the Company's  By-Laws,  the Company agrees that if Executive is made a party to
or  threatened  to be made a party to any action,  suit or  proceeding,  whether
civil, criminal,  administrative or investigative (a "Proceeding"), by reason of
the fact that he is or was a  director  or officer  of the  Company,  and/or any
other  affiliate of the  Company,  or is or was serving at the request of any of
such companies as a director,  officer, member, employee,  fiduciary or agent of
another  corporation  or  of  a  partnership,  joint  venture,  trust  or  other
enterprise,  including,  without  limitation,  service  with respect to employee
benefit plans,  whether or not the basis of such Proceeding is alleged action in
an official  capacity  as a  director,  officer,  member,  employee,  fiduciary,
consultant  or agent while  serving as a director,  officer,  member,  employee,
fiduciary or agent,  he shall be indemnified and held harmless by the Company to
the  fullest  extent  authorized  by  Delaware  law,  as the same  exists or may
hereafter be amended,  against all Expenses  (hereinafter  defined)  incurred or
suffered by Executive in connection  therewith,  and such indemnification  shall
continue  as to  Executive  even  if  Executive  has  ceased  to be an  officer,
director,  member,  fiduciary or agent, or is no longer employed by the Company,
and shall inure to the benefit of his heirs,  executors and  administrators.  As
used in this Agreement,  the term "Expenses" shall include,  without limitation,
damages,  losses,  judgments,   liabilities,  fines,  penalties,  excise  taxes,
settlements and costs, reasonable attorneys' fees, reasonable accountants' fees,
and disbursements and costs of attachment or similar bonds, investigations,  and
any expenses of  establishing a right to  indemnification  under this Agreement.
Expenses  incurred by Executive in connection with any Proceeding  shall be paid
by the Company in advance upon request of Executive  and the giving by Executive
of any undertakings required by applicable law. The Company and Executive hereby
agree that this Section 15 shall survive the termination of this Agreement.



<PAGE>




     IN WITNESS  WHEREOF,  the Company has caused this  Agreement to be executed
and Executive has hereunto set his hand as of the day and year set forth below.

                               AMBASE CORPORATION



March 30, 2006            By: /s/ John P. Ferrara
                             --------------------------------------------
                             John P. Ferrara
                             Its: Vice President and Chief Financial Officer


March 30, 2006               /s/ Richard A. Bianco
                             ---------------------------------------------
                             Richard A. Bianco