Exhibit 10.1


 


EMPLOYMENT AGREEMENT


 


EMPLOYMENT AGREEMENT (the “Agreement”)
entered into on the 8th day of August, 2016, between HML Capital Corp., a New York corporation (the “Company”),
having its principal place of business at 23 Laurel Street, Branford, Connecticut 06405, and Jeffrey C. Villano, with a
business address at 23 Laurel Street, Branford, Connecticut 06405 (the “Executive”). The effective date of this
Agreement shall be the effective date of the Company’s initial public offering pursuant to the Registration Statement on
Form S-11 filed by the Company with the U.S. Securities & Exchange Commission (the “Effective Date”).


 


WITNESSETH


 


WHEREAS, the Executive is a co-founder
of the Company and a member and co-manager of JJV, LLC, the manager of the Company’s predecessor Sachem Capital Partners,
LLC since its inception in 2010; and


 


WHEREAS, the Company, recognizing
the unique skills and abilities of the Executive, wishes to insure that the Executive will continue to be employed by the Company;
and


 


WHEREAS, the Executive desires to
continue in the employment of the Company; and


 


WHEREAS, the parties desire, by this
Agreement, to set forth the terms and conditions of the employment relationship between the Company and the Executive.


 


NOW, THEREFORE, in consideration
of the foregoing and the mutual covenants in this Agreement, the Company and the Executive agree as follows:


 


1. Employment and Duties.


 


(a) The Company hereby employs
the Executive as its Co-Chief Executive Officer, President and Treasurer  on the terms and conditions provided in this
Agreement and Executive agrees to accept such employment subject to the terms and conditions of this Agreement. The Executive
shall be a senior executive officer of the Company and, shall be co-responsible for the overall management and operations of
the Company, shall perform the duties and responsibilities as are customary for the officer of a corporation in such
positions, and shall perform such other duties and responsibilities as are reasonably determined from time to time by the
Company’s Board of Directors (the “Board”).


 


(b) The Executive shall report to
and be supervised by the Board.


 


(c) The Executive shall be based
at the Company’s principal place of business provided that such principal place of business shall be within a fifty (50)
mile radius of 23 Laurel Street, Branford, Connecticut 06405 and, except for business travel incident to his employment under this
Agreement, the Company agrees the Executive shall not be required to relocate.


 


(d) The Executive agrees to devote
substantially all his attention and time during normal business hours to the business and affairs of the Company and to use his
reasonable best efforts to perform faithfully and efficiently the duties and responsibilities of his positions and to accomplish
the goals and objectives of the Company as may be established by the Board. Notwithstanding the foregoing, the Executive may engage
in the following activities (and shall be entitled to retain all economic benefits thereof including fees paid in connection therewith)
as long as they do not interfere in any material respect with the performance of the Executive’s duties and responsibilities
hereunder and, with respect to subsections (i) and (ii) below, that such activity is pre-approved by the Board: (i) serve on corporate,
civic, religious, educational and/or charitable boards or committees, provided that the Executive shall not serve on any board
or committee of any corporation or other business which competes with the Business (as defined in Section 10(a) below); and (ii)
make investments in businesses or enterprises and manage his personal investments; provided that with respect to such activities
Executive shall comply with any business conduct and ethics policy applicable to employees of the Company.


 




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2. Term. The term of this
Agreement shall commence on the Effective Date, and shall terminate on the fifth anniversary of the Effective Date, unless extended
or earlier terminated in accordance with the terms of this Agreement. Commencing on first anniversary of the Effective Date and
continuing on the anniversary of the Effective Date of each year thereafter (each such date an “Anniversary Date”),
this Agreement shall automatically renew for one additional year such that the remaining term shall be five years unless either
party notifies the other in writing at least 180 days prior to the Anniversary Date that such party is electing not to renew the
Agreement, in which case the Agreement shall terminate at the end of the fourth year following the next Anniversary Date. The date
on which this Agreement terminates, would terminate or is terminated by either party is herein referred to as the “Termination
Date”. The period beginning on the Effective Date and ending on the Termination Date is herein sometimes referred to
as the “Employment Term”.


 


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


 


(a) Base Compensation. The
Company shall pay to the Executive an annual salary (“Base Compensation”) of $260,000, payable in equal installments
pursuant to the Company’s customary payroll procedures in effect for its executive personnel at the time of payment, but
in no event less frequently than monthly, subject to withholding for applicable federal, state, and local income and employment
related taxes. The Executive may be entitled to such increases in Base Compensation with respect to each calendar year during the
term of this Agreement, as shall be determined by the Company’s Compensation Committee (the “Committee”),
in its sole and absolute discretion, based on an annual review of the Executive’s performance.


 


(b) Incentive Compensation.
In addition to Base Compensation, for each calendar year ending within the Employment Term, the Executive shall be entitled to
receive additional compensation (“Incentive Compensation”) in an amount as shall be determined by the Committee,
in its sole and absolute discretion, based on the financial performance goals established by the Committee for each such calendar
year (the “Performance Goals”). With the exception of the 2016 calendar year, the Performance Goals shall be set by
the Committee within 30 days of December 31st of each calendar year of the Employment Term.


 


For each calendar year during the Employment
Term, the Executive shall have the opportunity to earn an annual bonus (the “Annual Bonus”) in an amount up to 100%
of his Base Compensation, based upon the Company’s achievement of the applicable the Performance Goals established by the
Board with respect to each such year. Each calendar year during the Employment Term, the Executive shall earn an Annual Bonus equal
to (i) 25% of his then Base Compensation upon the achievement of a minimum threshold level of the Performance Goal set by the Board
with respect to such year (the “Minimum Level”); (ii) 75% of his then Base Compensation upon the achievement of the
target level of the Performance Goal set by the Board with respect to such year (the “Target Level”); and (iii) a maximum
bonus equal to 100% of his then Base Compensation upon the achievement of the maximum level of the Performance Goal set by the
Board with respect to such year (the “Maximum Level”). To the extent the Company’s achievement has exceeded the
Performance Goal set by the Board for the (i) Minimum Level but not the Target Level, the Executive shall be entitled to an Annual
Bonus equal to the percentage of his then Base Compensation determined by the linear interpolation between the Minimum Level and
the Target Level bonus percentages; and (ii) Target Level but not the Maximum Level, the Executive shall be entitled to an Annual
Bonus equal to the percentage of his then Base Compensation determined by the linear interpolation between the Target Level and
the Maximum Level bonus percentages. For the year ending December 31, 2016, the Executive shall be eligible to receive a prorated
Annual Bonus (calculated as the Annual Bonus that would have been paid for the entire calendar year multiplied by a fraction the
numerator of which is equal to the number of days the Executive worked in the applicable calendar year and the denominator of which
is equal to the total number of days in such year).


 


The Annual Bonus, if any, will be paid upon
the earlier of (i) the availability of the Company’s audited financial statements for the applicable fiscal year prepared
in accordance with generally accepted accounting principles consistently applied or (ii) the availability of the definitively determined
financial performance metrics of the Company with respect to the applicable fiscal year.


 


(c) Incentive Compensation for Capital
Transactions. In addition to the achievement of Performance Goals by the Company, the Executive shall earn Incentive Compensation
for certain capital transactions by the Company including, acquisitions of businesses, acquisitions of loan portfolios and other
acquisitions. The amount of any such Incentive Compensation shall be determined by the Committee, in its sole and absolute discretion.


 




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4. Employee Benefits. During
the Employment Term and subject to the limitations set forth in this Section 4, the Executive and his eligible dependents shall
have the right to participate in any retirement plans (qualified and non-qualified), pension, insurance, health, disability or
other benefit plan or program that has been or is hereafter adopted by the Company (or in which the Company participates), according
to the terms of such plan or program, on terms no less favorable than the most favorable terms granted to senior executives of
the Company. In the event the Executive chooses not participate in any such plan or program, he shall be entitled to additional
compensation in an amount equal to the cost of any such plan or program.


 


5. Vacation and Leaves of Absence.
The Executive shall be entitled to the normal and customary amount of paid vacation provided to senior executive officers of the
Company, but in no event less than twenty-five (25) days during each twelve (12) month period, beginning on the Effective Date
of this Agreement. Any vacation days that are not taken in a given twelve (12) month period shall not accrue or carry-over from
year to year. Upon any termination of this Agreement for any reason whatsoever, accrued and unused vacation for the year in which
this Agreement terminates will be paid to the Executive within ten (10) days of such termination based on his annual rate of Base
Compensation in effect on the date of such termination. In addition, the Executive may be granted leaves of absence with or without
pay for such valid and legitimate reasons as the Company in its sole and absolute discretion may determine, and the Executive shall
be entitled to the same sick leave and holidays provided to other senior executives of the Company.


 


6. Expenses.


 


(a)   Business Expenses.
The Executive shall be promptly reimbursed against presentation of vouchers or receipts for all reasonable and necessary expenses
incurred by him in connection with the performance of his duties hereunder including, but not limited to the following:


		·	life insurance;



		·	long term disability policy;



		·	tax assistance services required by the Executive;



		·	obtaining and/or maintaining professional licenses;



		·	cellular/smartphone services; and



		·	work related travel.



 


(b) Automobile Expense. During
the Employment Term, in order to facilitate the performance of the Executive’s duties hereunder, and otherwise for the convenience
of the Company, the Company shall reimburse the Executive for the cost of an automobile not exceeding $1,000 per month or such
greater amount as shall be approved by the Committee in advance and shall pay or reimburse Executive (upon presentation of vouchers
or receipts) for the reasonable cost of fuel, all maintenance, insurance, repairs, and other reasonable expenses related to such
automobile.


 


7. Indemnification.


 


(a) General. The Company
agrees that if the Executive is made a party or is 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, is or was serving at the request of the Company as a director, officer, member, employee 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 or agent while serving as a director, officer, member, employee or agent, the Executive shall be indemnified
and held harmless by the Company to the fullest extent authorized by applicable law (in accordance with the certificate of incorporation
and/or bylaws of the Company), as the same exists or may hereafter be amended, against all Expenses (as defined below) incurred
or suffered by the Executive in connection therewith, and such indemnification shall continue as to the Executive even if the Executive
has ceased to be an officer, director or agent, or is no longer employed by the Company and shall inure to the benefit of his heirs,
executors and administrators.


 




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(b) Expenses. As used in
this Agreement, the term “Expenses” shall include, without limitation, damages, losses, judgments, liabilities,
fines, penalties, excise taxes, settlements and costs, attorneys’ fees, accountants’ fees, and disbursements and costs
of attachment or similar bonds, investigations, and any expenses of establishing a right to indemnification under this Agreement.


 


(c) Enforcement. If a claim
or request under this Agreement is not paid by the Company, or on their behalf, within fifteen days after a written claim or request
has been received by the Company, the Executive may at any time thereafter bring suit against the Company to recover the unpaid
amount of the claim or request and if successful in whole or in part, the Executive shall be entitled to be paid also the expenses
of prosecuting such suit. The burden of proving that the Executive is not entitled to indemnification for any reason shall be upon
the Company.


 


(d) Subrogation. In the event
of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery
of the Executive.


 


(e) Partial Indemnification.
If the Executive is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any
Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify the Executive for the portion
of such Expenses to which the Executive is entitled.


 


(f) Advances of Expenses.
Expenses incurred by the Executive in connection with any Proceeding shall be paid by the Company in advance upon request of the
Executive that the Company pay such Expenses.


 


(g) Notice of Claim. The
Executive shall give to the Company notice of any claim made against his for which indemnity will or could be sought under this
Agreement. In addition, the Executive shall give the Company such information and cooperation as it may reasonably require and
as shall be within the Executive’s power and at such times and places as are convenient for the Executive.


 


(h) Defense of Claim. With
respect to any Proceeding as to which the Executive notifies the Company of the commencement thereof: (i) the Company will be entitled
to participate therein at its own expense; and (ii) except as otherwise provided below, to the extent that it may wish, the Company
jointly with any other indemnifying party similarly notified will be entitled to assume the defense thereof, with counsel reasonably
satisfactory to the Executive. The Company shall not be entitled to assume the defense of any action, suit or proceeding brought
by or on behalf of the Company or as to which the Executive shall have reasonably concluded that there may be a conflict of interest
between the Company and the Executive in the conduct of the defense of such action.


 


The Company shall not be liable to indemnify
the Executive under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent.
The Company shall not settle any action or claim in any manner which would impose any penalty or limitation on the Executive without
Executive’s written consent. Neither the Company nor the Executive shall unreasonably withhold or delay their consent to
any proposed settlement.


 


(i) Non-exclusivity. The
right to indemnification and the payment of expenses incurred in defending a Proceeding in advance of its final disposition conferred
in this Section 7 shall not be exclusive of any other right which the Executive may have or hereafter may acquire under any statute,
provision of the certificate of incorporation, by laws, or other governing documents of the Company, agreement, vote of stockholders,
members or disinterested directors or otherwise.


 


(j) Directors and Officers Liability
Policy. The Company agrees to use reasonable efforts to maintain directors and officers liability insurance covering the
Executive in a reasonable and adequate amount determined by the Company.


 




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8. Termination and Termination Benefits.


 


(a) Termination. (i) For Cause.
Notwithstanding any provision contained herein, the Company may terminate this Agreement at any time during the Employment Term
for “Cause” (as defined in Section 8(f) below). Termination pursuant to this subsection 8(a)(i) shall be effective
immediately upon giving the Executive written notice thereof stating the reason or reasons therefor with respect to clause (2)
above, and thirty (30) days after written notice thereof from the Company to the Executive specifying the acts or omissions constituting
the failure and requesting that they be remedied with respect to clause (1) above, but only if the Executive has not cured such
failure within such thirty (30) day period.


 


(ii) Death and Disability. Notwithstanding
any other provision of this Agreement, this Agreement shall terminate on the date of the Executive’s death. If due to illness,
physical or mental disability, or other incapacity, the Executive shall fail, for a total of any six (6) consecutive months (“Disability”),
to substantially perform the principal duties required by this Agreement, the Company may terminate this Agreement upon thirty
(30) days’ written notice to the Executive.


 


(iii) Without Cause. The Company
may terminate the Executive’s employment hereunder without Cause at any time.


 


(iv) Good Reason. The Executive
may terminate his employment hereunder for “Good Reason”.


 


(b) Termination Benefits.


 


(i) Termination For Cause. In
the event of a termination pursuant to Section 8(a)(i) above, the Executive shall be entitled to payment of his Base Compensation
and the benefits pursuant to Section 4 hereof up to the effective date of such termination and it is also the intention and agreement
of the Company that Executive shall not be deprived by reason of termination for Cause of any payments, options or benefits which
have been vested or have been earned or to which Executive is entitled as of the effective date of such termination.


 


(ii) Termination Without Cause, Upon
Death, For Disability or For Good Reason. If the Company terminates the Executive’s employment hereunder without
Cause or as a result of Disability, or if this Agreement is terminated by reason of the Executive’s death, or if the Executive
terminates his employment for Good Reason, the Executive (or his estate, in the case of death) shall be paid: (i) his Base Compensation
at the rate in effect at the time of termination through the Termination Date; (ii) his Pro Rata Share of any Incentive Compensation
to which he would have been entitled for the year in which such termination occurs; (iii) a lump sum payment equal to the product
of forty-eight (48) times the Monthly Salary Amount (as defined below); (iv) any deferred compensation (including, without limitation,
interest or other credits on the deferred amounts) and any accrued vacation pay; (v) continuation for a period of twelve months
after such termination, of the health and welfare benefits of the Executive and any long-term disability insurance generally provided
to senior executives of the Company (as provided for by Section 4 of this Agreement) (or the Company shall provide the economic
equivalent thereof); provided, however, if the Executive obtains new employment and such employment makes the Executive eligible
for health and welfare or long-term disability benefits which are equal to or greater in scope then the benefits then being offered
by the Company, then the Company shall no longer be required to provide such benefits to the Executive; and (vi) any other compensation
and benefits as may be provided in accordance with the terms and provisions of any applicable plans or programs of the Company.


 


(c) Non-exclusivity of Rights.
Nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation in any benefit, bonus,
incentive or other plan or program provided or maintained by the Company and for which the Executive may qualify, nor shall anything
herein limit or otherwise prejudice such rights as the Executive may have under any other existing or future agreements with the
Company. Except as otherwise expressly provided for in this Agreement, amounts which are vested benefits or which the Executive
is otherwise entitled to receive under any plans or programs of the Company at or subsequent to the date of termination shall be
payable in accordance with such plans or programs.


 




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(d) Vesting of Stock Grants and Stock
Options. In the event of any termination of this Agreement, Executive’s rights with regard to any stock grants, loan
agreements or stock options shall be as set forth in the respective agreement containing the terms and conditions pertaining thereto.
Notwithstanding the foregoing, in the event that the Executive is terminated for reasons other than for “Cause” or
in the event the Executive terminates this Agreement for “Good Reason” or in the event this Agreement is terminated
by reason of Executive’s death, any stock options then held by the Executive shall immediately vest in the Executive and
shall remain exercisable for the period specified in the grant agreement notwithstanding any provision therein to the contrary.


 


(e) Certain Additional Payments by
the Company. Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined that
any payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise would be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the “IRC”), or any interest or penalties with respect to such excise tax (such excise
tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”),
then the Executive shall be entitled to receive an additional payment (an “Excise Gross-Up Payment”) in an amount
such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes),
including any Excise Tax imposed upon the Excise Gross-Up Payment and any ordinary income tax on the Excise Gross-Up Payment in
order to put the Executive in the same net after-tax position as if the payment were not subject to any Excise Tax. Subject to
the provisions of this Section 8(e), all determinations required to be made hereunder, including whether an Excise Gross-Up Payment
is required and the amount of such Excise Gross-Up Payment, shall be made by such accounting firm which at the time audits the
financial statements of the Company (the “Accounting Firm”) at the sole expense of the Company, which shall
provide detailed supporting calculations both to the Company and the Executive within fifteen (15) business days of the date of
termination of the Executive’s employment under this Agreement, if applicable, or such earlier time as is requested by the
Company.


 


If the Accounting Firm determines that no
Excise Tax is payable by the Executive, the Company shall use its reasonable best efforts to cause the Accounting Firm to furnish
the Executive with an opinion that he has substantial authority not to report any Excise Tax on his federal income tax return.
Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible
that Excise Gross-Up Payments, which will not have been made by the Company, should have been made (an “Underpayment”)
consistent with the calculations required to be made hereunder. If the Company exhausts its remedies pursuant hereto and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.


 


The Executive shall notify the Company in
writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Excise
Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive
knows of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to
be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives
such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim,
the Executive shall: (i) give the Company any information reasonably requested by the Company relating to such claim; (ii) take
such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including
(without limitation) accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;
(iii) cooperate with the Company in good faith to contest effectively such claim; and (iv) permit the Company to participate in
any proceedings relating to such claim; provided that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless,
on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result
of such representation and payment of costs and expenses. Without limitation on the foregoing provisions hereof the Company shall
control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option,
either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction
and in one or more appellate courts, as the Company shall determine, provided that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis
and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax, including interest
or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such
advance, and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year
of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore,
the Company’s control of the contest shall be limited to issues with respect to which an Excise Gross-Up Payment would be
payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.


 




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If, after the receipt by the Executive of
an amount advanced by the Company pursuant hereto, the Executive becomes entitled to receive any refund with respect to such claim,
the Executive shall (subject to the Company’s complying with the requirements hereof) promptly pay to the Company the amount
of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant hereto, a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such
denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Excise Gross-Up
Payment required to be paid.


 


(f) Definitions.


 


(i) Cause. For purposes of
this subsection 8(a)(i), “Cause” shall mean (1) the continuing willful failure by the Executive to substantially
perform his duties hereunder for any reason other than total or partial incapacity due to physical or mental illness, or (2) gross
negligence or gross malfeasance on the part of the Executive in the performance of his duties hereunder that causes material harm
to the Company. For purposes of this definition of Cause, no act or failure to act on the part of Executive shall be considered
willful if it is done, or omitted to be done, by Executive in good faith and with a good faith belief that Executive’s act
or omission was in the best interests of the Company.


 


(ii) Pro Rata Share. The Executive’s
“Pro Rata Share” of Incentive Compensation for any calendar year of the Company shall be a fraction whose numerator
shall be equal to the number of months (or parts of months) during which the Executive was actually employed by the Company during
any such calendar year and whose denominator shall be the total number of months in such calendar year.


 


(iii) Monthly Salary Amount.
“Monthly Salary Amount” shall mean an amount equal to one-twelfth of the sum of (w) the Executive’s then
current annual Base Compensation plus (x) the highest Incentive Compensation paid to the Executive during the most recent three
calendar years.


 


(iv) Good Reason. “Good
Reason” means and shall be deemed to exist if, without the prior express written consent of the Executive, (a) the Company
breaches this Agreement in any material respect; (b) the Company fails to obtain the full assumption of this Agreement by a successor;
(c) the Company fails to use its reasonable best efforts to maintain, or cause to be maintained directors and officers liability
insurance coverage for the Executive; (d) the Company purports to terminate the Executive’s employment for Cause and such
purported termination of employment is not effected in accordance with the requirements of this Agreement, or (e) a Change in Control
shall have occurred; provided, however, that with respect to items (a) through (d) above, within thirty (30) days of written
notice of termination by the Executive, the Company has not cured, or commenced to cure, such failure or breach, and with respect
to item (e) above, the Executive shall have provided the Company with 180 days written notice of such termination.


 




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(v) Change in Control. “Change
in Control” shall mean (1) any merger by the Company into another corporation or corporations which results in the stockholders
of the Company immediately prior to such transaction owning less than fifty (50%) percent of the surviving Corporation; (2) any
acquisition (by purchase, lease or otherwise) of all or substantially all of the assets of the Company by any person, corporation
or other entity or group thereof acting jointly in accordance with Section 409A of the IRC; (3) the acquisition of beneficial ownership,
directly or indirectly, of voting securities of the Company (defined as Common Stock of the Company or any securities having voting
rights that the Company may issue in the future) and rights to acquire voting securities of the Company (defined as including,
without limitation, securities that are convertible into voting securities of the Company (as defined above) and rights, options
warrants and other agreements or arrangements to acquire such voting securities) by any person, corporation or other entity or
group thereof acting jointly, in such amount or amounts as would permit such person, corporation or other entity or group thereof
acting jointly to elect a majority of the members of the Board of the Company, as then constituted; or (4) the acquisition of beneficial
ownership, directly or indirectly, of voting securities and rights to acquire voting securities having voting power equal to forty
(40%) percent or more of the combined voting power of the Company’s then outstanding voting securities by any person, corporation
or other entity or group thereof acting jointly unless such acquisition as is described in this clause (4) is expressly approved
by resolution of the Board passed upon affirmative vote of not less than a majority of the Board and adopted at a meeting of the
Board held not later than the date of the next regularly scheduled or special meeting held following the date the Company obtains
actual knowledge of such acquisition (which approval may be limited in purpose and effect solely to affecting the rights of Employee
under this Agreement). Notwithstanding the preceding sentence, any transaction that involves a mere change in identity form or
place of organization within the meaning of Section 368(a)(1)(F) of the IRC, or a transaction of similar effect, shall not constitute
a Change in Control.


 


(g) Payment. Except as otherwise
provided in this Agreement, any payments to which the Executive shall be entitled under this Section 8, including, without limitation,
any economic equivalent of any benefit, shall be made as promptly as possible following the Date of Termination. If the amount
of any payment due to the Executive cannot be finally determined within 90 days after the Date of Termination, such amount shall
be estimated on a good faith basis by the Company and the estimated amount shall be paid no later than ninety (90) days after such
Date of Termination. As soon as practicable hereafter, the final determination of the amount due shall be made and any adjustment
requiring a payment to or from the Executive shall be made as promptly as practicable.


 


(h) No Mitigation. Except
as otherwise specifically provided in this Agreement, the Executive shall not be required to mitigate the amount of any payments
provided for by this Agreement by seeking employment or otherwise, nor shall the amount of any payment or benefit provided in this
Agreement be reduced by any compensation or benefit earned by the Executive after termination of his employment.


 


9. Company Property. All confidential
and proprietary information furnished to the Executive by the Company or developed by the Executive on behalf of the Company or
at the Company’s direction or for the Company’s use or otherwise in connection with the Executive’s employment
hereunder, are and shall remain the sole and confidential property of the Company; if the Company requests the return of such materials
at any time during or at or after the termination of the Executive’s employment, the Executive shall immediately deliver
the same to the Company.


 


10. Covenant Not To Compete.


 


(a) Covenants Against Competition.


 


(i) The Executive acknowledges that
as of the execution of this Employment Agreement (i) the Company is engaged in real estate finance specializing in originating,
servicing and managing a portfolio of first mortgage loans to real estate investors to fund their acquisition, renovation, rehabilitation,
development or improvement of residential or commercial properties located primarily in Connecticut, Massachusetts, Rhode Island
and New York (the “Business”); (ii) the Company’s Business is primarily conducted currently in Connecticut,
Massachusetts, Rhode Island and New York and may be expanded to other locations; (iii) his employment with the Company will have
given him access to confidential information concerning the Company; and (iv) the agreements and covenants contained in this Agreement
are essential to protect the business and goodwill of the Company. Accordingly, the Executive covenants and agrees as follows:


 


(ii) Without the prior written consent
of the Board, the Executive shall not during the Restricted Period (as defined below) within the Restricted Area (as defined below)
(except in the Executive’s capacity as an officer of the Company or any of its affiliates), (a) engage or participate in
the Business; (b) enter the employ of, or render any services (whether or not for a fee or other compensation) to, any person engaged
in the Business; or (c) acquire an equity interest in any such person; provided, that the foregoing restrictions shall not apply
at any time if the Executive’s employment is terminated during the Term by the Executive for Good Reason (as defined in Section
8(b) above) or by the Company other than for “Cause”; provided, further, that during the Restricted Period the Executive
may own, directly or indirectly, solely as a passive investment, securities of any company traded on any national securities exchange
or on the National Association of Securities Dealers Automated Quotation System.


 




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(iii) As used herein: (A) “Restricted
Period” shall mean the period commencing on the Effective Date and ending on the second anniversary of the Executive’s
termination of employment; and (B) “Restricted Area” shall mean any place within Connecticut, Massachusetts,
Rhode Island and New York and any other location in which the Company is then actively considering conducting Business.


 


(b) Confidential Information; Personal
Relationships. The Executive acknowledges that the Company has a legitimate and continuing proprietary interest in the
protection of its confidential information and has invested substantial sums and will continue to invest substantial sums to develop,
maintain and protect confidential information. The Executive agrees that, during and after the Restricted Period, without the prior
written consent of the Board, the Executive shall keep secret and retain in strictest confidence, and shall not knowingly use for
the benefit of himself or others all confidential matters relating to the Company’s Business including, without limitation,
operational methods, marketing or development plans or strategies, business acquisition plans, joint venture proposals or plans,
and new personnel acquisition plans, learned by the Executive heretofore or hereafter (such information shall be referred to herein
collectively as “Confidential Information”); provided, that nothing in this Agreement shall prohibit the Executive
from disclosing or using any Confidential Information (A) in the performance of his duties hereunder, (B) as required by applicable
law, (C) in connection with the enforcement of his rights under this Agreement or any other agreement with the Company, or (D)
in connection with the defense or settlement of any claim, suit or action brought or threatened against the Executive by or in
the right of the Company. Notwithstanding any provision contained herein to the contrary, the term Confidential Information shall
not be deemed to include any general knowledge, skills or experience acquired by the Executive or any knowledge or information
known or available to the public in general. Moreover, the Executive shall be permitted to retain copies of, or have access to,
all such Confidential Information relating to any disagreement, dispute or litigation (pending or threatened) involving the Executive.


 


(c) Employees of the Company and
its Affiliates. During the Restricted Period, without the prior written consent of the Board of the Company, the Executive
shall not, directly or indirectly, hire or solicit, or cause others to hire or solicit, for employment by any person other than
the Company or any affiliate or successor thereof, any employee of, or person employed within the two years preceding the Executive’s
hiring or solicitation of such person by, the Company and its affiliates or successors or encourage any such employee to leave
his employment. For this purpose, any person whose employment has been terminated involuntarily by the Company shall be excluded
from those persons protected by this Section for the benefit of the Company.


 


(d) Business Relationships.
During the Restricted Period, the Executive shall not, directly or indirectly, request or advise a person that has a business relationship
with the Company to curtail or cancel such person’s business relationship with the Company.


 


(e) Rights and Remedies Upon Breach.
If the Executive breaches, threatens to commit a breach of, any of the provisions contained in Section 10 of this Agreement (the
“Restrictive Covenants”), the Company shall have the following rights and remedies, each of which rights and
remedies shall be independent of the others and severally enforceable, and each of which is in addition to, and not in lieu of,
any other rights and remedies available to the Company under law or in equity:


 


(i) Specific Performance. The
right and remedy to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed
that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money
damages would not provide an adequate remedy to the Company.


 


(ii) Accounting. The right and
remedy to require the Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments
or other benefits derived or received by the Executive as the result of any action constituting a breach of Restrictive Covenants.


 




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(f) Severability of Covenants.
The Executive acknowledges and agrees that the Restrictive Covenants are reasonable and valid in duration and geographical scope
and in all other respects. If any court determines that any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable,
the remainder of the Restrictive Covenants shall not thereby be affected and shall be given full effect without regard to the invalid
portions. The provisions set forth in Section 10 above shall be in addition to any other provisions of the business conduct and
ethics policy applicable to employees of the Company and its subsidiaries during the term of Executive’s employment.


 


(g) Saving Clause. If the
period of time or the area specified in subsection (a) above should be adjudged unreasonable in any proceeding, then the period
of time shall be reduced by such number of months or the area shall be reduced by the elimination of such portion thereof or both
so that such restrictions may be enforced in such area and for such time as is adjudged to be reasonable. If the Executive violates
any of the restrictions contained in the foregoing subsection (a), the restrictive period shall not run in favor of the Executive
from the time of the commencement of any such violation until such time as such violation shall be cured by the Executive to the
satisfaction of Company.


 


11. Executive’s Representation
and Warranties. Executive represents and warrants that he has the full right and authority to enter into this Agreement
and fully perform his obligations hereunder, that he is not subject to any non-competition agreement other than with the Company,
and that his past, present and anticipated future activities have not and will not infringe on the proprietary rights of others.
Executive further represents and warrants that he is not obligated under any contract (including, but not limited to, licenses,
covenants or commitments of any nature) or other agreement or subject to any judgment, decree or order of any court or administrative
agency which would conflict with his obligation to use his best efforts to perform his duties hereunder or which would conflict
with the Company’s business and operations as presently conducted or proposed to be conducted. Neither the execution nor
delivery of this Agreement, nor the carrying on of the Company’s business as officer and employee by Executive will conflict
with or result in a breach of the terms, conditions or provisions of or constitute a default under any contract, covenant or instrument
to which Executive is currently a party.


 


12. Miscellaneous.


 


(a) Integration; Amendment.
This Agreement constitutes the entire agreement between the parties hereto with respect to the matters set forth herein and supersedes
and renders of no force and effect all prior understandings and agreements between the parties with respect to the matters set
forth herein. No amendments or additions to this Agreement shall be binding unless in writing and signed by both parties.


 


(b) Severability. If any
part of this Agreement is contrary to, prohibited by, or deemed invalid under applicable law or regulations, such provision shall
be inapplicable and deemed omitted to the extent so contrary, prohibited, or invalid, but the remainder of this Agreement shall
not be invalid and shall be given full force and effect so far as possible.


 


(c) Waivers. The failure
or delay of any party at any time to require performance by the other party of any provision of this Agreement, even if known,
shall not affect the right of such party to require performance of that provision or to exercise any right, power, or remedy hereunder,
and any waiver by any party of any breach of any provision of this Agreement shall not be construed as a waiver of any continuing
or succeeding breach of such provision, a waiver of the provision itself, or a waiver of any right, power, or remedy under this
Agreement. No notice to or demand on any party in any case shall, of itself, entitle such party to other or further notice or demand
in similar or other circumstances.


 


(d) Power and Authority.
The Company represents and warrants to the Executive that it has the requisite corporate power to enter into this Agreement and
perform the terms hereof; that the execution, delivery and performance of this Agreement by it has been duly authorized by all
appropriate corporate action; and that this Agreement represents the valid and legally binding obligation of the Company and is
enforceable against it in accordance with its terms.


 




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(e) Burden and Benefit; Survival.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, personal
and legal representatives, successors and assigns. In addition to, and not in limitation of, anything contained in this Agreement,
it is expressly understood and agreed that the Company’s obligation to pay Termination Compensation as set forth herein shall
survive any termination of this Agreement.


 


(f) Governing Law; Headings.
This Agreement and its construction, performance, and enforceability shall be governed by, and construed in accordance with, the
laws of the State of New York. Headings and titles herein are included solely for convenience and shall not affect, or be used
in connection with, the interpretation of this Agreement.


 


(g) Arbitration; Remedies.
Any dispute or controversy arising under this Agreement or as a result of or in connection with Executive’s employment (other
than disputes arising under Section 10) shall be arbitrated and settled pursuant to the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association which are then in effect in a proceeding held in New York, New York. This provision
shall also apply to any and all claims that may be brought under any federal or state anti-discrimination or employment statute,
rule or regulation, including, but not limited to, claims under: the National Labor Relations Act; Title VII of the Civil Rights
Act; Sections 1981 through 1988 of Title 42 of the United States Code; the Employee Retirement Income Security Act; the Immigration
Reform and Control Act; the Americans With Disabilities Act; the Age Discrimination in Employment Act; the Fair Labor Standards
Act; the Occupational Safety and Health Act; the Family and Medical Leave Act; and the Equal Pay Act. The decision of the arbitrator
and award, if any, is final and binding on the parties and the judgment may be entered in any court having jurisdiction thereof.
The parties will agree upon an arbitrator from the list of labor arbitrators supplied by the American Arbitration Association.
The parties understand and agree, however, that disputes arising under Section 10 of this Agreement may be brought in a court of
law or equity without submission to arbitration.


 


(h) Jurisdiction.
Except as otherwise provided for herein, each of the parties (a) submits to the exclusive jurisdiction of any state court sitting
in New York, New York or federal court sitting in New York County in any action or proceeding arising out of or relating to this
Agreement, (b) agrees that all claims in respect of the action or proceeding may be heard and determined in any such court, (c)
agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other court and (d) waives any
right such party may have to a trial by jury with respect to any action or proceeding arising out of or relating to this Agreement.
Each of the parties waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives
any bond, surety or other security that might be required of any other party with respect thereto. Any party may make service on
another party by sending or delivering a copy of the process to the party to be served at the address and in the manner provided
for giving of notices in Section 12(i). Nothing in this Section, however, shall affect the right of any party to serve legal process
in any other manner permitted by law.


 


(i) Notices. All notices
called for under this Agreement shall be in writing and shall be deemed given upon receipt if delivered personally or by confirmed
facsimile transmission and followed promptly by mail, or mailed by registered or certified mail (return receipt requested), postage
prepaid, to the parties at their respective addresses (or at such other address for a party as shall be specified by like notice;
provided that notices of a change of address shall be effective only upon receipt thereof) as set forth in the preamble to this
Agreement or to any other address or addressee as any party entitled to receive notice under this Agreement shall designate, from
time to time, to others in the manner provided in this subsection 12(i) for the service of notices.


 


Any notice delivered to the party hereto
to whom it is addressed shall be deemed to have been given and received on the day it was received; provided, however, that
if such day is not a business day then the notice shall be deemed to have been given and received on the business day next following
such day. Any notice sent by facsimile transmission shall be deemed to have been given and received on the business day next following
the day of transmission.


 


(j) Number of Days. In computing
the number of days for purposes of this Agreement, all days shall be counted, including Saturdays, Sundays and holidays; provided,
however, that if the final day of any time period falls on a Saturday, Sunday or holiday on which federal banks are or may
elect to be closed, then the final day shall be deemed to be the next day which is not a Saturday, Sunday or such holiday.


 




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


 


	 	HML CAPITAL CORP.,
	 	 	 
	 	By:	/s/ John L. Villano
	 	 	John L. Villano
	 	 	 
	 	 	/s/ Jeffrey C. Villano
	 	 	Jeffrey C. Villano


 




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