Document:

Exhibit

Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of March 15, 2019, by and between VSE Corporation, a Delaware corporation (“Employer” or “VSE”), and John A. Cuomo (“Executive”).  (Employer (or VSE) and Executive are sometimes referenced herein individually as a “Party” and collectively as the “Parties”).
Recital
A.    VSE wishes to employ Executive as VSE’s chief executive officer and president and Executive wishes to serve as VSE’s chief executive officer and president, upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises contained herein, and for other good and valuable consideration, the adequacy of which is hereby acknowledged, Employer and Executive, each intending to be legally bound, agree as follows:
1.Employment and Duties.  
(a)    Employment and Term.  VSE hereby employs Executive as VSE’s chief executive officer and president, and Executive hereby accepts such employment, upon the terms and conditions set forth herein.  The term of Executive’s employment hereunder shall commence on April 15, 2019 (the “Effective Date”) and, unless terminated earlier pursuant to Section 6, shall continue until April 14, 2022, except that if, as of April 14, 2022, neither Party has provided the other Party with at least 90 days prior written notice of its or his exercise of the right hereunder to cause the term of Executive’s employment hereunder to expire as of April 14, 2022, such term shall continue until April 14, 2023 (whatever is the actual term of Executive’s employment hereunder is referred herein as the “Term”).  If the Term is extended to April 14, 2023 because neither Party has exercised its or his right to cause the Term to expire as of April 14, 2022 pursuant to the immediately preceding sentence, all terms and conditions herein shall remain the same, provided, however, that such terms and conditions may be modified or amended pursuant to Section 13.
(b)    Offices.  During the Term, Executive shall serve as VSE’s chief executive officer and president.  Executive will be assigned only duties and obligations of the type, nature and dignity normally assigned to someone in comparable positions at a corporation of the size, stature and nature of Employer.  During the Term, Executive shall report to VSE’s board of directors (the “Board”) in respect of all operational and administrative matters regarding VSE or any of its subsidiaries (collectively with VSE, “Covered Company”).

AFDOCS/17819011.4

2.    Compensation.
(a)    Salary.  During the Term, as compensation for services rendered by Executive hereunder, Employer shall pay to Executive a minimum base salary at the rate of $685,000 per annum, payable in installments consistent with the Company's normal payroll schedule (“Base Salary”).  Each December commencing with December 2019, or on such other annual date as shall be determined by the Board, Executive’s total compensation hereunder will be subject to review by the Board’s Compensation Committee (the “Compensation Committee”) and the Board.  Such review will include, among other things, consideration of corporate and individual performance and industry benchmarks.  While the Base Salary will be subject to adjustments during the Term, in no event shall it be decreased below $685,000.
(b)    Performance Bonus.  Except as otherwise provided in Section 6, for each fiscal year during the Term of this Agreement, in addition to the Base Salary, Executive shall be eligible to receive an annual performance bonus under VSE’s Executive Officer Incentive Compensation Plan as it may be amended from time to time (“Annual Incentive Plan”).  Except as may be otherwise provided herein, Executive shall have a bonus grant opportunity (the “Performance Bonus”) under such Annual Incentive Plan up to a maximum amount of  not less than 100% of his the current Base Salary for the respective fiscal year, based on satisfaction of performance criteria to be established by the Compensation Committee, upon consultation with Executive, within the first 30 days of each fiscal year that begins during the Term.  The Performance Bonus payable to Executive pursuant to this Section 2(b) shall be paid in cash in the immediately following fiscal year of the Company, as soon as practicable after the audited financial statements for the Company for the year for which the Performance Bonus is earned have been released but in no event later than 30 days thereafter. Notwithstanding the foregoing, for the fiscal year ending December 31, 2019, Executive shall be eligible for a Performance Bonus in an amount, if any, up to a maximum of $856,250 (125% of Base Salary for satisfying the applicable maximum target of return on stockholders’ equity), as determined by the Board based on VSE achieving certain financial results in excess of the financial thresholds established by the Compensation Committee and approved by the Board and as set forth on Appendix 1 attached hereto and incorporated herein, in respect of 2019. Any above-referenced Performance Bonus payable to Executive in respect of 2019 will not be prorated based on the fact that the Term commenced in April 2019.
(c)    Inducement Bonus and VSE Stock Award.  To induce Executive to become VSE’s chief executive officer and president hereunder, VSE is, concurrently with the execution hereof, granting Executive a restricted stock unit award (the “RSUs”) with respect to 57,801 shares of VSE’s common stock, par value $0.05 per share, with subsequent vesting and issuance dates, subject to the Term not having terminated before such respective dates, as follows: 19,267 of such shares being vested and issued to Executive on each of April 14, of 2020, April 14, 2021 and April 14, 2022. 

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(d)    Deferred Supplemental Compensation Plan and 2006 Restricted Stock Plan.  During the Term, Executive shall also be eligible to participate in all other currently existing or subsequently implemented compensation or benefit plans or arrangements available generally to Employer’s senior officers, including VSE’s Deferred Supplemental Compensation Plan, as it may be amended from time to time (the “DSCP”) and VSE’s 2006 Restricted Stock Plan, as it may be amended from time to time (the “RSP”).  Any participation of Executive in the DSCP and RSP will not be prorated based on the fact that the Term commenced in April 2019.  Notwithstanding anything herein to the contrary, Executive shall not be eligible to participate in VSE’s Performance Bonus Plan (because of his participation in VSE’s Executive Officer Incentive Compensation Plan).  For each the fiscal year during the Term commencing with the fiscal year ending December 31, 2019, Executive shall be eligible to receive (i) pursuant to the DSCP,  an amount, if any, up to a maximum of 32% of his Base Salary ($219,000 for 2019) and (ii) pursuant to the RSP,  an amount, if any, up to a maximum of 120% of his Base Salary ($822,000 for 2019) (based on satisfying the applicable maximum target of return on stockholders’ equity), as determined by the Compensation Committee and approved by the Board based on VSE achieving certain financial results in excess of the financial thresholds established by the Compensation Committee and approved by the Board is respect of the applicable fiscal year.
(e)    Signing Bonus.  Upon execution of this Agreement, the Company shall pay to Executive a one-time signing bonus in an amount equal to $25,000, payable in a lump sum cash payment on the first payroll date after the Effective Date.
(f)    Tax Withholdings.  Notwithstanding anything herein to the contrary, Employer shall be entitled to withhold from Executive’s compensation hereunder and pay over to the appropriate governmental agencies all payroll and similar taxes, including income, social security and unemployment compensation taxes required by the federal, state and local governments with jurisdiction over Employer.
3.    Benefits.  During the Term, Executive shall be entitled to such vacation benefits and comparable fringe benefits and perquisites as may be provided generally to Employer’s senior officers pursuant to policies established from time to time by Employer. These fringe benefits and perquisites will include holidays, group health insurance, short-term and long-term disability insurance, life insurance and retirement plan contributions.  Executive shall be entitled to paid vacation for 30 days during each year of the Term, subject to Employer’s applicable vacation policies.  
4.    Expenses and Other Perquisites.  Employer shall reimburse Executive for all reasonable and proper business expenses that Executive incurs during the Term in the performance of Executive’s duties and obligations hereunder, in accordance with Employer’s customary practices for senior officers, and provided that such business expenses are reasonably documented in accordance with Employer’s related policies.  Also, during the Term, Employer shall provide Executive with an office and suitable office fixtures, telephone and computer services, and administrative assistant services of a 

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nature appropriate to Executive’s position and status hereunder and with first class or business class air travel when engaged in air travel and a private car service when engaged in ground transportation, in each case when performing services on Employer’s behalf hereunder.
5.    Exclusive Services, Confidential Information, Business Opportunities and Non-Solicitation.
(a)    Full Time and Exclusive Services.
		
	(i)
	During the Term, Executive shall at all times devote his full-time attention, energies, efforts and skills to his employment hereunder and, without the Board’s prior consent, Executive shall not, directly or indirectly, engage in any other business activity, whether or not for profit, gain or other pecuniary advantages, and whether or not such pursuit presented a conflict of interest with the interest of any Covered Company, provided that such Board’s consent shall not be required with respect to (1) business interests that neither compete with any one or more Covered Companies nor interfere with Executive’s duties and obligations hereunder, and (2) Executive’s part-time charitable, eleemosynary, philanthropic or professional association activities that do not interfere with Executive’s duties and obligations hereunder.

		
	(ii)
	During the Term, Executive shall not, without the Board’s prior consent, directly or indirectly, either as an officer, director, agent, advisor, consultant, principal, equity holder, partner, member, owner or in any other capacity, on Executive’s own behalf or otherwise, in any way engage in, represent, be connected with or have a financial interest in, any business or Person that is, or to Executive’s knowledge is about to become, engaged in the business of providing engineering, logistic, management, technical, information technology, law enforcement, energy, supply chain, maintenance, repair and overhaul (“MRO”) services in respect of vehicles or aircraft or environmental related services or products to any Person with which any Covered Company is currently doing or has previously done business or any subsequent line of business developed by Executive or any Covered Company during the Term. Notwithstanding the foregoing, Executive shall be permitted to own passive investments in publicly held companies provided that such investments do not exceed one-half of one percent of any such company’s outstanding equity.

(b)    Confidential Information.  During the Term and the period commencing on the date of any expiration or termination thereof and ending on the second anniversary of such expiration or termination date (“Two-Year Post-Term Period”), Executive shall 

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not disclose or use, directly or indirectly, any Confidential Information (as defined below). For the purposes of this Agreement, “Confidential Information” shall mean all information disclosed to Executive, or known by him as a consequence of or through his employment with Employer, where such information is not generally known in the trade or industry or was regarded or treated as confidential by any Covered Company, and where such information refers or relates in any manner whatsoever to the business activities, processes, services or products of any Covered Company. Confidential Information shall include business and development plans (whether contemplated, initiated or completed), information with respect to the development of technical and management services, business contacts, methods of operation, results of analysis, business forecasts, financial data, costs, revenues and similar information.  Upon any expiration or termination of the Term, Executive shall immediately return to Employer all property of any Covered Company and all Confidential Information that is in tangible form, including all copies thereof.
(c)    Business Opportunities.
		
	(i)
	During the Term, Executive shall promptly disclose to Employer each business opportunity of a type that, based upon its prospects and relationship to the existing businesses of any Covered Company, Employer or any other Covered Company might reasonably consider pursuing.  Upon any expiration or termination of the Term, Employer or such other Covered Company shall have the exclusive right to participate in or undertake any such opportunity on its own behalf without any direct or indirect involvement of Executive.

		
	(ii)
	During the Term, Executive shall refrain from engaging in any activity, practice or act that conflicts with, or has the potential to conflict with, the interests of any Covered Company, and Executive shall avoid any acts or omissions to act that are or would reasonably be expected to be disloyal to, or competitive with, any Covered Company.

(d)    Non-Solicitation of Employees.  During the Term and the Two-Year Post Term Period, Executive shall not, except in the course of his duties and obligations hereunder, directly or indirectly, induce or attempt to induce or otherwise counsel, advise, ask or encourage any individual to leave the employ of any Covered Company, or employ or solicit or offer employment to any individual who was employed by any Covered Company at any time during the 365-day period preceding the solicitation or offer.
(e)    Covenant Not To Compete.
		
	(i)
	Upon any expiration or termination of the Term, except pursuant to Section 6(a)(ii)(1) or Section 6(c)(ii), Executive shall not, during the Two-Year Post Term Period, engage, directly or indirectly, in 

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competition with any Covered Company, or solicit, directly or indirectly, from any Person who purchased any then existing product or service from any Covered Company during the Term, the purchase of any then existing product or service in competition with then existing products or services of any Covered Company.
		
	(ii)
	For purposes of this Agreement, Executive shall be deemed to engage in competition with a Covered Company if Executive shall, directly or indirectly, either individually or as an equity holder, director, officer, partner, consultant, owner, Executive, agent, or in any other capacity, consult with or otherwise assist any Person engaged in providing engineering, logistic, management, technical, information technology, law enforcement, energy, supply chain, MRO services in respect of vehicles or aircraft or environmental related services or products to any Person to whom any Covered Company, during the Term, has provided or was seeking to provide any such services or products.

(f)    Executive Acknowledgment.  Executive hereby agrees and acknowledges that the restrictions imposed upon Executive by this Section 5 are fair and reasonable considering the nature of the business of each Covered Company, and are reasonably required for each Covered Company’s protection.
(g)    Invalidity.  If a court of competent jurisdiction or an arbitrator shall declare any provision or restriction contained in this Section 5 as unenforceable or void, the provisions of this Section 5 shall remain in full force and effect to the extent not so declared to be unenforceable or void, and the court or arbitrator may modify the invalid provision to make it enforceable to the maximum extent permitted by law.
(h)    Specific Performance.  Executive agrees that if Executive breaches any of the provisions of this Section 5, the remedies available at law to Employer would be inadequate and in lieu thereof, or in addition thereto, Employer shall be entitled to appropriate equitable remedies, including specific performance and injunctive relief. Executive agrees not to enter into any agreement, either written or oral, which may conflict with this Agreement, and Executive authorizes Employer to make known the terms of Sections 5 and 6 to any Person, including future or prospective employers of Executive.
6.    Termination of Term
(a)    By Employer.
		
	(i)
	Termination for Cause. 

Employer may terminate the Term for Cause at any time by notice to Executive.  For purposes of this Agreement, the term “Cause” 

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shall mean any one or more of the following: (1) a conviction of the Executive, or a plea of nolo contendere, to a felony involving moral turpitude; (2) a material breach by Executive of this Agreement, provided that Executive must first be given notice by the chairman of the Board (the “Chairman”) or Board of the alleged breach, and if such breach can reasonably be expected to be cured within 30 days, 30 days to cure said alleged breach; (3) Executive’s use of illegal drugs or abuse of alcohol or authorized drugs that significantly impairs Executive’s ability to perform his duties or obligations hereunder, provided that Executive must be given notice by the Board of such impairment and 60 days to cure the impairment; and (4) Executive’s knowing and willful neglect of duties or obligation hereunder or gross negligence in the performance of duties or obligations hereunder that results in material economic harm to the business of any Covered Company, provided that Executive must first be given notice by the Chairman or Board of such alleged neglect or gross negligence and 30 days to cure said alleged neglect or gross negligence.  “Cause” shall in no event be deemed to exist except upon a decision made by the Board, at a meeting, duly called and noticed, to which Executive shall be invited upon proper notice.  If a termination occurs pursuant to clause (1) above, the date on which the Term is terminated (the “Termination Date”) shall be the date Executive receives notice of termination and, if a termination occurs pursuant to clauses (2), (3) or (4) above, the Termination Date shall be the date on which, if applicable, the specified cure period expires.  In any event, as of the Termination Date (in the absence of curing the alleged breach within the applicable cure period), Executive shall be relieved of all positions, duties and obligations hereunder and if he is a Board member he shall be relieved of such position, and Executive shall not be entitled to the accrual or provision of any compensation or other benefit hereunder after the Termination Date, but Executive shall be entitled to the provision of all compensation and other benefits that shall have accrued hereunder as of the Termination Date, including Base Salary, Performance Bonus, paid leave benefits and reimbursement of incurred business expenses.

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	(ii)
	Termination Without Cause.

		
	(1)
	Employer may, in its sole discretion, without Cause, terminate the Term at any time by providing Executive with 30 days’ prior notice thereof.  

		
	(2)
	If Employer terminates the Term without Cause pursuant to Section 6 (a)(ii)(1) and the Termination Date is not during a Change of Control Period (as defined below), Employer shall pay Executive on or prior to the Termination Date a lump sum equal to 150% of (A) Executive's Base Salary in effect as of the Termination Date and (B) the Annualized Performance Bonus.  In the event of any such termination of the Term by Employer without Cause pursuant to Section 6(a)(ii)(1), Executive shall not be entitled to the accrual or provision of any other compensation or other benefit hereunder after the Termination Date other than (A) employer-paid medical and hospitalization benefits for the first 18 months after the Termination Date; (B) the provision of all compensation and other benefits that shall have accrued hereunder as of the Termination Date, including Base Salary, Performance Bonus, paid leave benefits, and reimbursements of incurred expenses; (C) all restricted stock, RSUs or similar rights to acquire capital stock granted by VSE to Executive shall automatically become vested in full; and (D) all unvested rights of Executive under the DSCP shall automatically become vested in full.  

		
	(3)
	If, prior to January 1, 2022, Employer terminates the Term without Cause pursuant to Section 6(a)(ii)(1) during a Change of Control Period, Executive shall be entitled to (A) payment on or prior to the Termination Date of a lump sum severance compensation payment equal to the lesser of (x) 2.5 times the sum of Executive’s Base Salary in effect as of the Termination Date and the Annualized Performance Bonus or (y) such amount as would not trigger the application of Section 280G of the Internal Revenue Code of 1986, as amended (the “Section 280G Limitation”); (B)  employer-paid continued medical and hospitalization benefits for the first 18 months after the Termination Date and payment of all compensation and other benefits that shall have accrued hereunder as of the Termination Date, including Base Salary, Performance Bonus, paid leave benefits, and reimbursement of incurred expenses; (C) the 

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automatic vesting of all restricted stock, RSUs or similar rights to acquire capital stock of VSE granted by VSE to Executive in full; and (D) the automatic vesting of all unvested rights of Executive under the DSCP in full; provided that Executive shall not be entitled, after the Termination Date, to the accrual or provision of any other compensation or other benefits payable hereunder.  For purposes of this Agreement, the 280G Limitation shall be applied after first giving due effect to, inter alia, the rights and benefits provided to Executive pursuant to clauses (B),(C) and (D) of the immediately preceding sentence.
		
	(4)
	If, on or after January 1, 2022, Employer terminates the Term without Cause pursuant to Section 6(a)(ii)(1) during a Change of Control Period, Executive shall be entitled to (A) payment on or prior to the Termination Date of a lump sum severance compensation payment equal to 2.5 times, except that, notwithstanding anything herein to the contrary, if it is a termination of the Term without Cause pursuant to Section 6(a)(ii)(5), one times, the sum of Executive’s Base Salary in effect as of the Termination Date and the Annualized Performance; (B)  employer-paid continued medical and hospitalization benefits for the first 18 months after the Termination Date and payment of all compensation and other benefits that shall have accrued hereunder as of the Termination Date, including Base Salary, Performance Bonus, paid leave benefits, and reimbursement of incurred expenses; (C) the automatic vesting of all restricted stock, RSUs or similar rights to acquire capital stock of VSE granted by VSE to Executive in full; and (D) the automatic vesting of all unvested rights of Executive under the DSCP in full; provided that Executive shall not be entitled, after the Termination Date, to the accrual or provision of any other compensation or other benefits payable hereunder.  

		
	(5)
	Notwithstanding anything herein to the contrary, (A) if the Company elects not to extend the Term for a fourth year pursuant to Section 1(a) for any reason other than for Cause or Executive’s death or Disability, such election shall be treated as a termination by Employer without Cause for all purposes of this Agreement, and (B) except as provided in subsection (A) in this Section 6(a)(ii)(5), any other expiration or termination of the Term pursuant to Section 1 or Section 6(b) shall not be considered a termination by 

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Employer without Cause for the purposes of this Agreement, including this Section 6(a)(ii).
(b)    Death or Disability.  The Term shall be terminated immediately and automatically upon Executive’s death or “Disability.”  The term “Disability” shall mean Executive’s inability to perform his duties or obligations hereunder for an aggregate of 90 work days during any period of 365 consecutive days by reason of illness, accident or any other physical or mental incapacity, as may be permitted by applicable law. Executive’s capability to continue performance of Executive’s duties or obligations hereunder shall be determined by a panel composed of two independent medical doctors appointed by VSE and one appointed by Executive or designated representative. If such panel is unable to reach a decision, the matter will be referred to arbitration in accordance with Section 7. In the event of Executive’s death or Disability during the Term , Executive (or his surviving spouse or estate) will be paid (i) his Base Salary then in effect for 365 days following the date of death or Disability and (ii) a lump sum equal to the Annualized Performance Bonus for the year of termination.  Such 365 days of Base Salary shall be payable in installments in accordance with Employer’s policy governing salary payment to senior officers generally; however, the completion of the obligation to pay 365 days of Base Salary shall be paid by no later than March 15 of the calendar year following the calendar year in which Executive dies or incurs a Disability.

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(c)    By Executive.
		
	(i)
	Executive may, in his sole discretion, without Good Reason, terminate the Term at any time upon 60 days’ notice to the Chairman or the Board. If Executive exercises such termination right, Employer may, at its option, at any time after receiving such notice from Executive, relieve Executive of all positions, duties and obligations hereunder and terminate the Term at any time prior to the expiration of said notice period, and such termination shall not constitute a termination without Cause pursuant to this Agreement, including Section 6(a)(ii). If the Term is terminated by Executive or Employer pursuant to this Section 6(c)(i), Executive shall not be entitled to any further Base Salary or the accrual or provision of any compensation or other benefits hereunder after the Termination Date, except standard medical and hospitalization benefits in accordance with Employer’s policy.  

		
	(ii)
	Executive may terminate the Term for Good Reason upon 30 days’ notice to Employer. If Executive exercises such termination right, Employer may, at its option, at any time after receiving such notice from Executive, relieve Executive of all positions, duties and obligations hereunder and terminate the Term at any time prior to the expiration of said notice period, and such termination shall not constitute a termination without Cause pursuant to this Agreement, including Section 6(a)(ii).  

(x)  If, prior to January 1, 2022, the Term is terminated by Executive or Employer pursuant to this Section 6 (c)(ii) Executive shall be entitled to (A) payment on or prior to the Termination Date of a lump sum severance compensation payment equal to the lesser of (x) two times the sum of Executive’s Base Salary in effect as of the Termination Date and the Annualized Performance Bonus or (y) the 280G Limitation; (B) company-paid continued medical and hospitalization benefits for the first 18 months after the Termination Date and payment of all compensation and other benefits that shall have accrued hereunder as of the Termination Date, including Base Salary, Performance Bonus, paid leave benefits and reimbursement of incurred expenses; (C) the automatic vesting of all restricted stock, RSUs or similar rights to acquire capital stock of VSE granted by VSE to Executive in full; and (D) the automatic vesting of all unvested rights of Executive under DSCP in full; provided that Executive shall not be entitled, after the Termination Date, to the accrual or provision of any other compensation or benefits payable hereunder.  For all purposes of this Agreement, the 280G Limitation shall be applied after first 

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giving due effect to, inter alia, the rights and benefits provided to Executive pursuant to clauses (B), (C) and (D) of the immediately preceding sentence.
(y)     If, on or after January 1, 2022, the Term is terminated by Executive or Employer pursuant to this Section 6 (c)(ii), Executive shall be entitled to (A) payment on or prior to the Termination Date of a lump sum severance compensation payment equal to two times the sum of Executive’s Base Salary in effect as of the Termination Date and the Annualized Performance Bonus; (B) company-paid continued medical and hospitalization benefits for the first 18 months after the Termination Date and payment of all compensation and other benefits that shall have accrued hereunder as of the Termination Date, including Base Salary, Performance Bonus, paid leave benefits and reimbursement of incurred expenses; (C) the automatic vesting of all restricted stock, RSUs or similar rights to acquire capital stock of VSE granted by VSE to Executive in full; and (D) the automatic vesting of all unvested rights of Executive under DSCP in full; provided that Executive shall not be entitled, after the Termination Date, to the accrual or provision of any other compensation or benefits payable hereunder.  
(d)    Expiration of the Term Pursuant to Section 1.  Notwithstanding anything in this Agreement to the contrary, (i) if the Company elects not to extend the Term for a fourth year pursuant to Section 1(a) for any reason other than for Cause or Executive’s death or Disability, such election shall be treated as a termination by Employer without Cause for all purposes of this Agreement, and (ii) except as provided in subsection (i) in this Section 6(d), any other expiration or termination of the Term pursuant to Section 1 or Section 6(b) shall not be considered a termination by Employer without Cause for the purposes of this Agreement, including Section 6(a)(ii).  If the Term expires on April 14, 2022 pursuant to Section 1(a) because the Company elected not to extend the Term for a fourth year, as opposed to Executive’s refusal to such extension of the Term, all of Executive’s unvested rights under DSCP shall automatically vest in full.  Upon any expiration of the Term pursuant to Section 1(a) all unvested restricted stock, RSUs or similar rights to acquire capital stock of VSE granted by VSE to Executive shall automatically vest in full.
(e)    Certain Defined Terms.  For purposes of this Section 6: 
		
	(i)
	“Affiliate” of a Person shall mean a Person that directly or indirectly controls, is controlled by, or is under common control with the Person specified.

		
	(ii)
	“Annualized Performance Bonus” means an annual bonus amount for the year in which any Termination Date occurs, based on an 

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estimate of VSE’s performance for the period before the Termination Date, as determined by the Compensation Committee and approved by the Board, and the terms and conditions of the VSE’s Executive Officer Incentive Compensation Plan, and prorated to reflect the number of days out of 365 during which Executive was employed by VSE during the year of the Termination Date, including the Termination Date; provided that the estimate of VSE’s performance for the period before the Termination Date shall be reconciled with VSE’s actual performance for the entire year in which the Termination Date occurs and the Board shall make any necessary adjustment in the amount payable.  In the event of an underpayment or overpayment to Executive hereunder based on such above-mentioned reconciliation of the Annualized Performance Bonus, VSE shall promptly pay to Executive (or Executive’s legal representatives in the event of his death) the amount of any underpayment or, as the case may be, Executive (or Executive’s legal representatives in the event of his death) shall promptly pay to VSE the amount of any overpayment.
		
	(iii)
	“Change of Control” shall be deemed to have occurred upon the happening of any of the following events:

		
	(1)
	any “person,” including a “group,” as such terms are defined in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder (collectively the “Exchange Act”), other than a trustee or other fiduciary holding voting securities of VSE (“Voting Securities”) under any VSE-sponsored benefit plan, becomes the beneficial owner, as defined under the Exchange Act, directly or indirectly, whether by purchase or acquisition or agreement to act in concert or otherwise, of 45% or more of the outstanding Voting Securities;

		
	(2)
	a cash tender or exchange offer is completed for such amount of Voting Securities that, together with the Voting Securities then beneficially owned, directly or indirectly, by the offeror (and affiliates thereof) constitutes 45% or more of the outstanding Voting Securities;

		
	(3)
	except in the case of a merger or consolidation in which (x) VSE is the surviving corporation and (y) the holders of Voting Securities immediately prior to such merger or consolidation beneficially own, directly or indirectly, more 

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than 50% of the outstanding Voting Securities immediately after such merger or consolidation (there being excluded from the number of Voting Securities held by such holders, but not from the outstanding Voting Securities, any Voting Securities received by Affiliates of the other constituent corporation(s) in the merger or consolidation in exchange for stock of such other corporation), VSE’s stockholders approve an agreement to merge, consolidate, liquidate or sell all or substantially all of VSE’s assets; or
		
	(4)
	a majority of VSE’s directors are elected to the Board without having previously been nominated and approved by the members of the Board incumbent on the day immediately preceding such election.

		
	(iv)
	“Change of Control Period” means the period beginning on the 90th day preceding any Change of Control and ending on the earlier of the first anniversary of the date on which the Change of Control occurred and the date, if any, the Term expires pursuant to Section 1(a).

		
	(v)
	“Good Reason” shall mean that any one or more of the following events has occurred:

		
	(1)
	a material diminishment in the nature of Executive’s authorities, duties, responsibilities or status (including offices and titles) from those in effect on the Effective Date; provided that any transaction or series of related transactions that result in VSE’s common stock no longer being registered under the Exchange Act shall not in and of itself constitute “Good Reason” under this Section 6(e)(v)(1).

		
	(2)
	the relocation of Executive’s place of employment to a location in excess of 75 miles from the place of Executive’s employment on the Effective Date, except for required travel on Employer’s business; or

		
	(3)
	Employer’s material breach of any obligation hereunder, but in each case only if Executive has provided written notice to Employer within 90 days after the condition providing the basis for such Good Reason first exists and if such Good Reason has not been corrected or cured by Employer (if curable) within 30 days after Employer has received written notice from Executive of Executive’s intent to terminate Executive’s employment for Good 

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Reason and specifying in detail the basis for such termination.
(f)    Parachute Payments.  
(i) Notwithstanding anything herein to the contrary, if the Term is terminated pursuant to Sections 6(a)(ii)(3) or 6(c)(ii)(x) the total value of all payments and other benefits thereunder that are subject to Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) as a result of such termination of the Term would otherwise cause any of such payments and other benefits to constitute ‘parachute payments” under Code Section 280G(b)(2), Employer shall reduce the amount of such payments and other benefits to avoid their characterization as “parachute payments.”  The selection of the particular payments and other benefits to eliminate to achieve the objective in the immediately preceding sentence will be made in Employer’s discretion.
(ii) Notwithstanding anything herein to the contrary, if the Term is terminated pursuant to Sections 6(a)(ii)(4) or 6(c)(ii)(y) and it is determined that any payment, distribution or other action by the Company to or for the benefit of Executive thereunder (whether paid or payable or distributed or distributable) (a “Payment”), would result in an “excess parachute payment” within the meaning of Code Section 280G(b)(i) as a result of such termination of Term but that no portion of the Payments would be treated as excess parachute payments if the aggregate amount of the Payments pursuant to Sections 6(a)(ii)(4) or, as the case may be, 6(c)(ii)(y) (the “Covered Payments”) were reduced by not more 15% of the aggregate present value of all of the Payments, the Covered Payments shall be reduced to the “Reduced Amount.”  The “Reduced Amount” shall be an amount expressed in present value that maximizes the aggregate present value of Covered Payments without causing any Payment to be an excess parachute payment under Code Section 280G(b)(i).  For purposes of this Section 6(f), present value shall be determined in accordance with Code Section 280G(d)(4).  If and to the extent necessary to avoid a violation of Code Section 409A, no amounts payable under any “nonqualified deferred compensation plan” subject to Section 409A shall be reduced until after all other Payments have been reduced.  All determinations required to be made under this Section 6(f), including the amount of any Reduced Amount and the Payments that are to be reduced, shall be made by Grant Thornton LLP (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and  Executive within 15 

- 15 -

business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company.  The Accounting Firm’s decision as to which Payments are to be reduced shall be made in consultation with Executive and shall be subject to the Executive’s consent, which shall not be unreasonably withheld, delayed or conditioned.  All fees and expenses of the Accounting Firm shall be borne solely by the Company.
(g)    No Duty to Mitigate.  If Executive is entitled to the compensation and other benefits provided under Sections 6(a)(ii)(1) or 6(c)(ii), Executive shall have no obligation to seek employment to mitigate damages hereunder.
(h)    No Reduction in Executive’s Benefits Upon Change in Control.  Employer shall not reduce Executive’s Base Salary or materially reduce Executive’s incentive benefits from those in effect immediately prior to a Change in Control.
7.    Arbitration.  Whenever a dispute arises between the Parties concerning this Agreement or any of the obligations hereunder, or Executive’s employment with VSE generally, Employer and Executive shall use their best efforts to resolve the dispute by mutual agreement. If any dispute cannot be resolved by Employer and Executive, such dispute shall be submitted to arbitration to the exclusion of all other avenues of relief and adjudicated pursuant to the American Arbitration Association’s Rules for Employment Dispute Resolution then in effect. The decision of the arbitrator must be in writing and shall be final and binding on the Parties, and judgment may be entered on the arbitrator’s award in any court having jurisdiction thereof. The arbitrator’s authority in granting relief to Executive shall be limited to an award of compensation, severance, benefits and unreimbursed expenses as described in Sections 3, 4, 5 and 6 and to the release of Executive from the provisions of Section 6, and the arbitrator shall have no authority to award other types of damages or relief to Executive, including consequential or punitive damages. The arbitrator shall also have no authority to award consequential or punitive damages to Employer for breaches of this Agreement by Executive.  The expenses of the arbitration shall be borne by the losing Party to the arbitration and the prevailing Party shall be entitled to recover from the losing Party all of its or his own costs and attorneys’ fees with respect to the arbitration.  Nothing in this Section 7 shall be construed to derogate from Employer’s rights to seek legal and equitable relief in a court of competent jurisdiction as contemplated by Section 5(h).
8.    Non-Waiver.  A Party’s failure at any time to require the performance by the other Party of any of the terms, provisions, covenants or conditions hereof shall in no way affect the first Party’s right thereafter to enforce the same, nor shall the waiver by either Party of the breach of any term, provision, covenant or condition hereof be taken or held to be a waiver of any succeeding breach.
9.    Severability.  If any provision of this Agreement conflicts with the law under which this Agreement is to be construed, or if any such provision is held invalid or 

- 16 -

unenforceable by a court of competent jurisdiction or any arbitrator, such provision shall be deleted from this Agreement and the Agreement shall be construed to give full effect to the remaining provision thereof.
10.    Survivability.  Unless otherwise provided herein, upon expiration or termination of the Term, the provisions of Sections 5(b), (d), (e), (f), (g) and (h) shall nevertheless remain in full force and effect.
11.    Governing Law.  This Agreement shall be interpreted, construed, and governed according to the laws of the Commonwealth of Virginia, without regard to the conflict of law provisions thereof, and all claims relating to or arising out of this Agreement, or the breach or asserted breach thereof, whether sounding in contract, tort or otherwise, shall likewise be interpreted, construed and governed according to the laws of the Commonwealth of Virginia, without regard to the conflict of law provisions thereof.
12.    Construction of this Agreement and Certain Terms and Phrases.
(a)    The section headings contained in this Agreement are inserted for purposes of convenience of reference only and shall not affect the meaning or interpretation hereof.
(b)    Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) the terms “hereof,” “herein,” “hereunder,” “hereby” and derivative or similar words refer to this entire Agreement; and (iv) the term “Section” refers to the specified Section of this Agreement.
(c)    The word “including” is not exclusive; if exclusion is intended, the word “comprising” is used instead.
(d)    The word “or” shall be construed to mean “and/or” unless the context clearly prohibits that construction.
(e)    The word “Person” shall mean any individual, corporation, partnership, limited liability company, trust, joint venture, United States, state, local or foreign governmental department, agency or other instrumentality thereof, or any other entity.
(f)    Employer and Executive have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by Employer and Executive and no presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of the authorship of any of the provisions of this Agreement.
13.    Entire Agreement.  This Agreement contains and represents the entire agreement of Employer and Executive and supersedes all prior agreements, representations or understandings, oral or written, express or implied, with respect to the subject matter 

- 17 -

hereof.  This Agreement may not be modified or amended in any way unless in writing signed by each of Employer and Executive. No representation, promise or inducement has been made by either Employer or Executive that is not embodied in this Agreement, and neither Employer nor Executive shall be bound by or liable for any alleged representation, promise or inducement not specifically set forth herein.
14.    Assignability.  Neither this Agreement nor any rights or obligations of Employer or Executive hereunder may be assigned by Employer or Executive without the other Party’s prior consent. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of Employer, Executive, Employer’s successors and assigns and Executive’s estate herein, beneficiaries and personal representative.
15.    Notices.  All notices, approvals, consents and other communications required or permitted hereunder shall be in writing and shall be deemed properly given if delivered personally or sent by certified or registered mail, postage prepaid, return receipt requested, or sent by telegram, telex, telecopy or similar form of telecommunication, and shall be deemed to have been given when received. Any such notice or communication shall be addressed: (a) if to Employer, to Chairman, VSE Corporation, 6348 Walker Lane, Alexandria, VA 22310; or (b) if to Executive, to the last known home address on file with Employer, or to such other address as Employer or Executive shall have furnished to the other in writing.

- 18 -

16.    Code Section 409A.  
(a)    Code Section 409A. To the extent that such requirements are applicable, this Agreement is intended to comply with the requirements of Code Section 409A and shall be interpreted and administered in accordance with that intent.  If any provision of this Agreement would otherwise conflict with or frustrate this intent, that provision shall be interpreted and deemed amended so as to avoid the conflict.  The nature of any such amendment shall be determined by the Board.  Notwithstanding the above, if Executive qualifies as a ‘specified employee,’ as defined in Treas. Reg. Section 1.409A-1(i), incurs a “separation from service,” as defined in Treas. Reg. Section 1.409A-1(h), for any reason other than death and becomes entitled to a payment or distribution under the Agreement, then to the extent required by Code Section 409A, no payment or distribution otherwise payable to Executive during the first six months after the date of such separation from service, shall be paid to Executive until the date that is one day after the date which is six months after the date of such separation from service (or, if earlier, the date of Executive’s death).
(b)    Acceleration of Benefits.  Notwithstanding the above, the payment of any benefits under this Agreement that is subject to Code Section 409A may not be accelerated except in compliance with the provisions of Treas. Reg. Section 1.409A-3(j)(4)(ix) or such other events and conditions that may be permitted in generally applicable guidelines published in the Internal Revenue Bulletin.  The Board reserves any discretion to distribute benefits in accordance with the requirements of such regulations or such guidelines
17.    Counterparts.  This Agreement may be executed in one or two counterparts, all of which together shall constitute one and the same Agreement.

                             {Signature Page Follows This Page}

- 19 -

IN WITNESS WHEREOF, Employer and Executive have duly executed this Agreement, to be effective and in full force and effect as of the Effective Date.  
                                                       EMPLOYER
VSE CORPORATION, a Delaware corporation

By:  /s/Calvin S. Koonce                        
Calvin S. Koonce,
Chairman of the Board of Directors

                                                                    EXECUTIVE

/s/ John A. Cuomo                                    
John A. Cuomo

- 20 -

Appendix 1
2019 Bonus Table 
	
					
	Admin Staff
	Admin Officers
	Admin Executives CFO & GC
	CEO
	 ROE

	% of Salary
	% of Salary
	% of Salary
	% of Salary
	 

	8%
	15%
	20
	20%
	10.8%

	10%
	25%
	35%
	40%
	11.3%

	11%
	35%
	50%
	60%
	11.8%

	13%
	45%
	70%
	80%
	12.3%

	15%
	60%
	 90%
	100%
	12.8%

	17%
	70%
	100%
	105%
	13.5%

	19%
	75%
	110%
	110%
	14.3%

	21%
	80%
	120%
	120%
	15.0%

	22% 
	85%
	125%
	125%
	16.0%

- 21 -Exhibit 10.1

    

    COOPERATION AGREEMENT

    This Cooperation Agreement (this “Agreement”), effective as of March 14, 2019 (the “Effective Date”), is entered into
        by and among Owens Realty Mortgage, Inc., a Maryland corporation (the “Company”), Eric D. Hovde, Steven D. Hovde, Hovde Capital Ltd.,
        Hovde Capital Advisors, LLC, Financial Institution Partners III, LP, James P. Hua, Opal Capital Partners, LP, Opal Advisors, LLC (collectively, the “Hovde Group”), and other Affiliates of the Hovde Group that are or hereafter become beneficial owners of any shares of Common Stock (as defined below) (each member or Affiliate of the Hovde Group is referred to herein as a “Hovde Party” and collectively, the “Hovde

          Parties”). The Company and the Hovde Parties are together referred to herein as the “Parties,” and each, a “Party.”

    WHEREAS, the Hovde Parties beneficially own 246,904 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), as of the date of this Agreement;

    WHEREAS, on August 20, 2018, the Hovde Group submitted a request for expense reimbursement (the “Reimbursement
          Request”) in connection with its proxy contest to elect Steven Hovde and James Hua to the Company’s board of directors (the “Board”)

        at the Company’s 2018 annual meeting of stockholders (the “2018 Annual Meeting”); and

    WHEREAS, the Company has reached an agreement with the Hovde Parties with respect to the Reimbursement Request and certain other matters, as provided for in this Agreement.

    NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
        Parties hereby agree as follows:

    1. Voting.  From the Effective Date until the Termination Date (as defined
          below) (the “Standstill Period”), each of
          the Hovde Parties agrees that it will appear in person or by proxy at each annual or special meeting of stockholders of the Company (including any postponement, adjournment, rescheduling or continuation thereof), whether such meeting is held at a
          physical location or virtually by means of remote communications, and vote (or execute a consent with respect to) all shares of Common Stock beneficially owned by such Hovde Party in accordance with the Board’s recommendations with respect to (i)
          the election of directors, (ii) the ratification of the appointment of the Company’s independent registered public accounting firm, and (iii) any other proposal to be submitted to the stockholders of the Company by either the Company or any
          stockholders of the Company, other than proposals relating to the removal of Steven Hovde as director; provided, however, that in
          the event that both Institutional Shareholder Services Inc. (“ISS”) and Glass Lewis & Co., LLC (“Glass Lewis”) recommend otherwise with respect to any proposal submitted by the Company or any of its stockholders (other than proposals relating to the election of directors), each of the Hovde Parties will be permitted, if
          they so choose, to vote in accordance with the ISS and Glass Lewis recommendations; provided, however, that each of the Hovde Parties
          shall be permitted to vote in its discretion on any proposal of the Company in respect of any Extraordinary Transaction (as defined below). During the Standstill Period, each of the Hovde Parties agrees that it will not engage in any course of
          conduct with the purpose of causing stockholders of the Company to vote contrary to the recommendation of the Board on any matter presented to the Company’s stockholders for their vote at any meeting of the Company’s stockholders or by written
          consent.

    
      
        

    

    
    2. Mutual Non-Disparagement. 

    
      	
              (a)

            	
              Subject to Section 4, each Hovde Party agrees that, during the Standstill Period, neither it nor any of its
                  Representatives (as defined below) shall, and it shall cause each of its Representatives not to, directly or indirectly, in any capacity or manner, make, express, transmit, speak, write, verbalize or otherwise communicate in any way (or
                  cause, further, assist, solicit, encourage, support or participate in any of the foregoing), any remark, comment, message, information, declaration, communication or other statement of any kind, whether verbal, in writing, electronically
                  transferred or otherwise, that might reasonably be construed to be derogatory or critical of, or negative toward, the Company or any of its Representatives, or that might reasonably be construed to malign, harm, disparage, defame or
                  damage the reputation or good name of the Company, its business or any of its Representatives.

            

    

    
      	
              (b)

            	
              The Company hereby agrees that, during the Standstill Period, neither it nor any of
                  its Representatives shall, and it shall cause each of its Representatives not to, directly or indirectly, in any capacity or manner, make, express, transmit, speak, write, verbalize or otherwise communicate in any way (or cause, further,
                  assist, solicit, encourage, support or participate in any of the foregoing), any remark, comment, message, information, declaration, communication or other statement of any kind, whether verbal, in writing, electronically transferred or
                  otherwise, that might reasonably be construed to be derogatory or critical of, or negative toward, any Hovde Party or its Representatives, or that might reasonably be construed to malign, harm, disparage, defame or damage the reputation
                  or good name of any Hovde Party, its business or any of its Representatives.

            

    

    
      	
              (c)

            	
              Notwithstanding the foregoing, nothing in this Section 2 or elsewhere in this Agreement shall prohibit any Party from
                  making any statement or disclosure required under the federal securities laws or other applicable laws (including to comply with any subpoena or other legal process from any governmental or regulatory authority with competent jurisdiction
                  over the relevant Party hereto) or stock exchange regulations; provided, however, that, unless prohibited under applicable law, such Party must provide written notice to the other Party at least two (2) business days prior to making any such statement or disclosure
                  required under the federal securities laws or other applicable laws or stock exchange regulations that would otherwise be prohibited by the provisions of this Section 2, and reasonably consider any comments of such other Party.

            

    

    
      	
              (d)

            	
              The limitations set forth in Section 2(a) and 2(b) shall not prevent any Party from responding to any public statement made by the other Party of the nature described in Section 2(a) and 2(b)
                  if such statement by the other Party was made in breach of this Agreement.

            

    

    
      2

      
        

    

    3. No Litigation.

    
      	
              (a)

            	
              The Hovde Parties covenant and agree that, during the Standstill Period, they shall
                  not, and shall not permit any of their Representatives to, alone or in concert with others, knowingly encourage or pursue, or knowingly assist any other person to threaten, initiate or pursue, any lawsuit, claim or proceeding before any
                  court or governmental, administrative or regulatory body (collectively, a “Legal Proceeding”) against the Company or any of its
                  Representatives, except for any Legal Proceeding initiated solely to remedy a breach of or to enforce this Agreement; provided, however, that the foregoing shall not prevent the Hovde Parties or any of their respective Representatives from responding to oral questions,
                  interrogatories, requests for information or documents, subpoenas, civil investigative demands or similar processes (a “Legal
                    Requirement”) in connection with any Legal Proceeding if such Legal Proceeding has not been initiated by, or on behalf of, or with the material assistance of, the Hovde Parties or any of their Representatives; provided, further, that in the event that
                  any of the Hovde Parties or any of their Representatives receives such Legal Requirement, the Hovde Parties shall, unless prohibited by applicable law, give prompt written notice of such Legal Requirement to the Company.

            

    

    
      	
              (b)

            	
              The Company covenants and agrees that, during the Standstill Period, it shall not,
                  and shall not permit any of its Representatives to, alone or in concert with others, knowingly encourage or pursue, or knowingly support or assist any other person to threaten, initiate or pursue, any Legal Proceedings against any of the
                  Hovde Parties or any of their respective Representatives, except for any Legal Proceeding initiated solely to remedy a breach of or to enforce this Agreement; provided, however, that the foregoing shall not prevent the Company or any of its
                  Representatives from responding to a Legal Requirement in connection with any Legal Proceeding if such Legal Proceeding has not been initiated by, or on behalf of, the Company or any of its Representatives; provided, further, that in the event the Company or any of its
                  Representatives receives such a Legal Requirement, the Company shall, unless prohibited by applicable law, give prompt written notice of such Legal Requirement to the Hovde Parties.

            

    

    
      	
              (c)

            	
              To the extent permitted by law, the Hovde Parties, on behalf of themselves and for
                  all of their Affiliates, Associates, parent and subsidiary entities, joint ventures and partnerships, successors, assigns, and the respective owners, officers, directors, partners, members, managers, principals, parents, subsidiaries,
                  predecessor entities, agents, Representatives, employees, stockholders, advisors, consultants, attorneys, heirs, executors, administrators, successors and assigns of any such person or entity irrevocably and unconditionally release,
                  settle, acquit and forever discharge the Company and its Representatives, from any and all causes of action, claims, actions, rights, judgments, obligations, damages, amounts, demands, losses, controversies, contentions, complaints,
                  promises, accountings, bonds, bills, debts, dues, sums of money, expenses, specialties and fees and costs (whether direct, indirect or consequential, incidental or otherwise including, without limitation, attorney’s fees or court costs,
                  of whatever nature) incurred in connection therewith of any kind whatsoever, in their own right, representatively, derivatively or in any other capacity, in law or in equity or liabilities of whatever kind or character, arising under
                  federal, state, foreign, or common law or the laws of any other relevant jurisdiction from the beginning of time to the date of this Agreement (the “Claims”); provided, however,
                  that this release and waiver of the Claims shall not include (i) claims to enforce the terms of this Agreement or (ii) claims that the Company, on the one hand, or the Hovde Parties, on the other hand, have no knowledge of as of the date
                  of this Agreement.

            

    

    
      3

      
        

    

    4. Standstill.

    
      	
              (a)

            	
              During the Standstill Period, each Hovde Party shall not, and shall cause its
                  Representatives not to, directly or indirectly:

            

    

    
      	
              (i)

            	
              make any announcement or proposal with respect to, or offer, seek, propose or
                  indicate an interest in, (A) any form of business combination or acquisition or other transaction relating to a material amount of assets or securities of the Company or any of its subsidiaries, (B) any form of restructuring,
                  recapitalization or similar transaction with respect to the Company or any of its subsidiaries or (C) any form of tender or exchange offer for shares of Common Stock, whether or not such transaction involves a Change of Control (as
                  defined below) of the Company; it being understood that the foregoing shall not prohibit the Hovde Parties or their Affiliates from acquiring Common Stock within the limitations set forth in Section 4(a)(iii);

            

    

    
      	
              (ii)

            	
              engage in any solicitation of proxies or written consents to vote any voting
                  securities of the Company, or conduct any type of binding or nonbinding referendum with respect to any voting securities of the Company, or assist or participate in any other way, directly or indirectly, in any solicitation of proxies (or
                  written consents) with respect to, or from the holders of, any voting securities of the Company, or otherwise become a “participant” in a “solicitation,” as such terms are defined in Instruction 3 of Item 4 of Schedule 14A and Rule 14a-1
                  of Regulation 14A, respectively, under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to vote any
                  securities of the Company (including by initiating, encouraging or participating in any “withhold” or similar campaign);

            

    

    
      	
              (iii)

            	
              purchase or otherwise acquire, or offer, seek, propose or agree to acquire,
                  ownership (including beneficial ownership) of (A) any securities of the Company or its successor, and/or (B) any direct or indirect rights or options to acquire any such securities, any derivative securities or contracts or instruments in
                  any way related to the price of shares of Common Stock or any assets or liabilities of the Company or its successor, beyond, as solely related to (A) the 246,904 shares of voting securities of the Company and 355,788.664 shares of voting
                  securities of Ready Capital Corporation, each inclusive of any securities convertible into, or exchangeable or exercisable for, any voting securities of the Company or its successors, as applicable, that the Hovde Parties and their
                  Affiliates, in the aggregate, beneficially own as of the Effective Date; provided, however, that the foregoing shall not prevent any Hovde Party from purchasing securities that the Hovde Parties are contractually obligated to purchase pursuant to any short agreements and/or
                  arrangements in effect as of the Effective Date;

            

    

    
      
         

            

        
          4

          
            

        

        

          	
                  (iv)

                	
                  seek to advise, encourage or influence any person with respect to the voting of
                      (or execution of a written consent in respect of) or disposition of any securities of the Company;

                

        

      

    

    
      	
              (v)

            	
              participate in, or agree to participate in, any sales, other than through open
                  market transactions, or block trades of the securities of the Company or any rights decoupled from the underlying securities held by any of the Hovde Parties to any person without the Company’s written consent;

            

    

    
      	
              (vi)

            	
              take any action in support of or make any proposal or request that constitutes: (A)
                  advising, controlling, changing or influencing any director or the management of the Company, including, but not limited to, any plans or proposals, and/or consenting to the calling of any special meeting of stockholders to effect such
                  plans or proposals, to change the number or term of directors or to fill any vacancies on the Board, except as set forth in this Agreement, (B) any material change in the capitalization, stock repurchase programs and practices or dividend
                  policy of the Company, (C) any other material change in the Company’s management, business or corporate structure, (D) seeking to have the Company waive or make amendments or modifications to the Articles of Amendment and Restatement, as
                  amended and corrected, and/or the Bylaws of the Company, as amended (together, the “Governing Materials”) or other actions that
                  may impede or facilitate the acquisition of control of the Company by any person, (E) causing a class of securities of the Company to be delisted from, or to cease to be authorized to be quoted on, any securities exchange or (F) causing a
                  class of securities of the Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; provided,
                  however, notwithstanding the foregoing, nothing in this Section 4(a)(vi) shall prevent the Hovde Parties from engaging in private communications with the Company as stockholders of the Company;

            

    

    
      	
              (vii)

            	
              communicate with stockholders of the Company or others pursuant to Rule
                  14a-1(l)(2)(iv) under the Exchange Act;

            

    

    
      	
              (viii)

            	
              act, including by making public announcements or speaking to reporters or members
                  of the media (whether “on the record” or on “background” or “off the record”), to seek to influence the Company’s stockholders, management or the Board with respect to the Company’s policies, operations, balance sheet, capital allocation,
                  marketing approach, business configuration, Extraordinary Transactions or strategy or to obtain representation on the Board or seek the removal of any director in any manner, except as expressly permitted by this Agreement;

            

    

    
      

      

      
        5

        
          

      

      
        

          	
                  (ix)

                	
                  call or seek to call, or request the call of, alone or in concert with others,
                      any meeting of stockholders, whether or not such a meeting is permitted by the Governing Materials, including a “town hall meeting”;

                

        

      

    

    
      	
              (x)

            	
              deposit any shares of Common Stock in any voting trust or subject any shares of
                  Common Stock to any arrangement or agreement with respect to the voting of any shares of Common Stock (other than any such voting trust, arrangement or agreement solely among the Hovde Parties that is otherwise in accordance with this
                  Agreement);

            

    

    
      	
              (xi)

            	
              form, join or in any other way participate in any “group” (within the meaning of
                  Section 13(d)(3) of the Exchange Act) with respect to the Common Stock; provided, however, that nothing herein shall limit the ability of an Affiliate of a Hovde Party to join the “group” with any other Hovde Party or Affiliate thereof following the execution of this
                  Agreement, so long as any such Affiliate agrees in writing to be subject to, and bound by, the terms and conditions of this Agreement and, if required under the Exchange Act, files a Schedule 13D or an amendment thereof, as applicable,
                  within two (2) business days after disclosing that the Hovde Party has formed a group with such Affiliate;

            

    

    
      	
              (xii)

            	
              demand a copy of the Company’s list of stockholders or its other books and records
                  or make any request under any statutory or regulatory provisions of Maryland providing for stockholder access to books and records (including lists of stockholders) of the Company or otherwise;

            

    

    
      	
              (xiii)

            	
              commence, encourage or support any derivative action in the name of the Company or
                  any class action against the Company or any of its officers or directors, in each case with the intent of circumventing the provisions of this Section
                    4, or take any action challenging the validity or enforceability of any of the provisions of this Section 4; provided, however, that the foregoing shall not prevent any Hovde Party from (A) bringing
                  litigation to enforce the provisions of this Agreement, (B) making counterclaims with respect to any proceeding initiated by, or on behalf of, the Company against a Hovde Party or (C) responding to or complying with a validly issued legal
                  process that neither the Hovde Parties nor any of their Affiliates initiated, encouraged or facilitated;

            

    

    
      	
              (xiv)

            	
              make any request or submit any proposal to amend or waive the terms of this Section 4 other than through non-public
                  communications with the Company that would not be reasonably likely to trigger public disclosure obligations for any Party;

            

    

    
      	
              (xv)

            	
              engage any private investigations firm or other person to investigate any of the
                  Company’s directors or officers;

            

    

    
      	
              (xvi)

            	
              comment publicly about or disclose in a manner that could reasonably be expected to
                  become public any intent, purpose, plan or proposal with respect to any transactions involving the Company or any of its subsidiaries, any director or the Company’s management, policies, strategy, operations, financial results or affairs,
                  any of its securities or assets, or this Agreement that is inconsistent with the provisions of this Agreement; or

            

    

    
      

      

      
        6

        
          

      

      
        	
                (xvii)

              	
                enter into any discussions, negotiations, agreements or understandings with any
                    person with respect to any action the Hovde Parties are prohibited from taking pursuant to this Section 4, or advise, assist, knowingly encourage or seek to persuade any person to take any action or make any statement with respect to any such action, or otherwise take
                    or cause any action or make any statement inconsistent with any of the foregoing.

              

      

    

    Notwithstanding anything to the contrary contained in this Agreement and/or the Company’s
        Corporate Governance Guidelines, Code of Business Conduct and Ethics, Investor Relations Policy, Insider Trading Policy, Stock Ownership Guidelines, Anti-Hedging Policy, Clawback Policy and any other policies on stock ownership, public disclosures
        and confidentiality (collectively, the “Company Policies”), none of the Hovde Parties have been provided any Confidential Information (as
        defined below) of the Company by Steven Hovde that he has learned in his capacity as a director of the Company, including, but not limited to, discussions or matters considered in meetings of the Board or Board committees (such Confidential
        Information, “Company Confidential Information”); provided, however, that if any Company Confidential Information is shared with any
        Hovde Party, such Hovde Party shall not analyze, request or use such Company Confidential Information and, the Hovde Parties shall promptly (and in every instance within two (2) business days following any sharing of or attempt to share Company
        Confidential Information by Steven Hovde with any other Hovde Party) inform the Company, in the manner set forth for communicating with the Company in the Company Policies, if Steven Hovde shares or attempts to share Company Confidential
        Information with any other Hovde Party; provided, however,
        that the Hovde Parties shall not be prohibited or restricted from: (A) communicating privately with the Board or any officer or director of the Company, in the manner set forth for communicating with the Company in the Company Policies regarding
        any matter, so long as such communications are not intended to, and would not reasonably be expected to, require any public disclosure of such communications by any of the Hovde Parties or their respective Affiliates, the Company or its Affiliates
        or any person that is not (1) a party to this Agreement, (2) a member of the Board, (3) an officer of the Company or (4) an Affiliate of any Party (any person not set forth in clauses (1) through (4) shall be referred to as a “Third Party”), subject in any case to any confidentiality obligations to the Company of any such director or officer under applicable law,
        rules or regulations; or (B) taking any action necessary to comply with any law, rule or regulation or any action required by any governmental or regulatory authority or stock exchange that has, or may have, jurisdiction over any Hovde Party, provided that a breach by any Hovde Party of this Agreement is not the cause of the applicable requirement.

    
      7

      
        

    

    
      	
              (b)

            	
              The provisions of this Section 4 shall not limit in any respect the actions of any director of the Company acting in his or her
                  capacity as such, recognizing that such actions are subject to such director’s duties to the Company and the Company Policies (it being understood and agreed that neither the Hovde Parties nor any of their Affiliates shall seek to do
                  indirectly through Steven Hovde anything that would be prohibited if done by any of the Hovde Parties or their Affiliates). The provisions of this Section 4 shall not prevent the Hovde Parties from freely voting their shares of Common Stock (except as otherwise provided in Section 1 hereto).

            

    

    
      	
              (c)

            	
              During the Standstill Period, each Hovde Party shall refrain from taking any
                  actions which could have the effect of encouraging, assisting or influencing other stockholders of the Company or any other persons to engage in actions which, if taken by any Hovde Party, would violate this Agreement.

            

    

    
      	
              (d)

            	
              Notwithstanding anything contained in this Agreement to the contrary, the
                  provisions of Section 2 of this Agreement
                  shall automatically terminate upon the occurrence of a Change of Control transaction (as defined below) involving the Company if the acquiring party or counterparty to the Change of Control transaction has conditioned the closing of the
                  transaction on the termination of such section.

            

    

    
      	
              (e)

            	
              At any time during the Standstill Period, upon reasonable written notice from the
                  Company pursuant to Section 15 hereof, the
                  applicable Hovde Party shall promptly provide the Company with information regarding the amount of the securities of the Company beneficially owned by each such entity or individual. This ownership information provided to the Company will
                  be kept strictly confidential unless required to be disclosed pursuant to applicable laws and regulations, any subpoena, legal process or other legal requirement or in connection with any litigation or similar proceedings in connection
                  with this Agreement.

            

    

    5. Representations and Warranties of the Company.  The Company represents and
          warrants to the Hovde Parties that (i) the Company has the corporate power and authority to execute this Agreement and to bind it thereto, (ii) this Agreement has been duly and validly authorized, executed and delivered by the Company,
          constitutes a valid and binding obligation and agreement of the Company, and is enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization,
          moratorium, fraudulent conveyance or similar laws generally affecting the rights and remedies of creditors and subject to general equity principles, and (iii) the execution, delivery and performance of this Agreement by the Company does not and
          will not violate or conflict with (A) any law, rule, regulation, order, judgment or decree applicable to it, or (B) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become
          a default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, or any material agreement, contract, commitment,
          understanding or arrangement to which the Company is a party or by which it is bound.

    
      8

      
        

    

    6. Representations and Warranties of the Hovde Parties.  Each Hovde Party
          jointly and severally represents and warrants to the Company that (i) this Agreement has been duly and validly authorized, executed and delivered by such Hovde Party, and constitutes a valid and binding obligation and agreement of such Hovde
          Party, enforceable against such Hovde Party in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the
          rights and remedies of creditors and subject to general equity principles, (ii) such Hovde Party has the power and authority to execute this Agreement and any other documents or agreements entered into in connection with this Agreement on behalf
          of itself and the applicable Hovde Party associated with that signatory’s name, and to bind such Hovde Party to the terms hereof and thereof and (iii) the execution, delivery and performance of this Agreement by such Hovde Party does not and will
          not violate or conflict with (A) any law, rule, regulation, order, judgment or decree applicable to it, or (B) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a
          default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or
          arrangement to which such member is a party or by which it is bound.

    7. SEC Filings.  No later than two (2) business days following the date of this Agreement, the Company shall file with the Securities and Exchange Commission (the “SEC”) a Current Report on Form 8-K reporting its entry into this Agreement and appending this Agreement as an
          exhibit thereto (the “Form 8-K”). The Form
          8-K shall be consistent with the terms of this Agreement. The Company shall provide the Hovde Parties with a reasonable opportunity to review and comment on the Form 8-K prior to the filing with the SEC and consider in good faith any comments of
          the Hovde Parties.

    8. Term; Termination.  The term of this Agreement shall commence on the
          Effective Date and shall continue until ten (10) business days prior to the deadline under the Bylaws in effect on the Effective Date for director nominations and stockholder proposals for the Company’s 2021 annual meeting of stockholders (the “Termination Date”). Termination of this Agreement shall
          not relieve any Party from its responsibilities in respect of any breach of this Agreement prior to such termination.

    9. Expenses.  Each Party shall be responsible for its own fees and
        expenses incurred in connection with the negotiation, execution and effectuation of this Agreement and the transactions contemplated hereby; provided,
        however, that five (5) business days after the Effective Date,
          the Company shall reimburse the Hovde Group for its reasonable, documented out-of-pocket fees and expenses, including such fees and expenses of counsel for the Hovde Group, incurred in connection with the 2018 Annual Meeting, up to $150,069.06
        in the aggregate.

     

    10. No Other Discussions or Arrangements. 
          The Hovde Parties represent and warrant that, as of the date of this Agreement, (i) the Hovde Parties beneficially own 246,904 shares of voting securities of the Company, and 355,788.664 shares of voting securities of Ready Capital Corporation,
          each inclusive of any securities convertible into, or exchangeable or exercisable for, any voting securities of the Company or its successors, as applicable, and (ii) except as described herein and/or specifically disclosed to the Company in
          writing prior to the Effective Date, the Hovde Parties have not entered into, directly or indirectly, any agreements or understandings with any person (other than their own Representatives) with respect to any potential transaction involving the
          Company or the voting or disposition of any securities of the Company.

    
      9

      
        

    

    11. Governing Law; Jurisdiction.  This
          Agreement shall be governed by and construed in accordance with the internal laws of the State of Maryland without giving effect to any choice or conflict of law provision or rule that would cause the application of laws of any jurisdiction other
          than those of the State of Maryland. Each Party agrees that it shall bring any suit, action or other proceeding in respect of any claim arising out of or related to this Agreement (each, an “Action”) exclusively in (A) the Circuit Court for Baltimore City, Maryland, or (B) in the
          event (but only in the event) that such court does not have subject matter jurisdiction over such Action, the United States District Court for the District of Maryland, Baltimore Division (collectively, the “Chosen Courts”), and, solely in connection with an Action, (i) irrevocably
          submits to the exclusive jurisdiction of the Chosen Courts, (ii) irrevocably submits to the exclusive venue of any such Action in the Chosen Courts and waives any objection to laying venue in any such Action in the Chosen Courts, (iii) waives any
          objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any Party hereto, (iv) consents to the assignment of any Action in the Circuit Court for Baltimore City, Maryland to the Business and Technology Case
          Management Program pursuant to Maryland Rule 16-205 (or any successor thereof) and (v) agrees that service of process upon such Party in any such Action shall be effective if notice is given in accordance with Section 15 of this Agreement. Each Party agrees that a final judgment in any
          Action brought in the Chosen Courts shall be conclusive and binding upon each of the Parties and may be enforced in any other courts the jurisdiction of which each of the Parties is or may be subject, by suit upon such judgment.

    12. Waiver of Jury Trial. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER
          THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
          ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE OF ANY OTHER PARTY HERETO HAS REPRESENTED,
          EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (II) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (IV)
          SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.

    13. Specific Performance.  Each of the
          Parties acknowledges and agrees that irreparable injury to the other Parties would occur in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached and that such injury
          would not be adequately compensable by the remedies available at law (including the payment of money damages). It is accordingly agreed that each of the Parties (the “Moving Party”) shall be entitled to specific enforcement of, and injunctive or other equitable relief as a
          remedy for any such breach or to prevent any violation or threatened violation of, the terms hereof, and the other Parties will not take action, directly or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any
          other remedy or relief is available at law or in equity. The Parties further agree to waive any requirement for the security or posting of any bond in connection with any such relief. The remedies available pursuant to this Section 13 shall not be deemed to be the exclusive remedies for a breach of
          this Agreement but shall be in addition to all other remedies available at law or equity.

    
      10

      
        

    

    14. Certain Definitions. As used in this
            Agreement:

    
      	
              (a)

            	
              “Affiliate” shall mean any “Affiliate” as defined in Rule 12b-2
                  promulgated by the SEC under the Exchange Act, including, for the avoidance of doubt, persons who become Affiliates subsequent to the date of this Agreement;

            

    

    
      	
              (b)

            	
              “Associate” shall mean any “Associate” as defined in Rule 12b-2
                  promulgated by the SEC under the Exchange Act, including, for the avoidance of doubt, persons who become Associates subsequent to the date of this Agreement;

            

    

    
      	
              (c)

            	
              “beneficial owner”, “beneficial ownership” and “beneficially own” shall have the same meanings as set forth in Rule 13d-3 promulgated by the SEC under the Exchange Act;

            

    

    
      	
              (d)

            	
              “business day” shall mean any day other than a Saturday, Sunday or day on which the commercial banks in the State of New York are authorized or obligated to be closed by applicable law;

            

    

    
      	
              (e)

            	
              a “Change of Control” transaction shall be deemed to have taken place if (A) any person is or becomes a beneficial owner, directly or indirectly, of securities of the Company representing
                  more than fifty percent (50%) of the equity interests and voting power of the Company’s then-outstanding equity securities or (B) the Company enters into a stock-for-stock transaction whereby immediately after the consummation of the
                  transaction the Company’s stockholders retain less than fifty percent (50%) of the equity interests and voting power of the surviving entity’s then-outstanding equity securities;

            

    

    
      	
              (f)

            	
              “Confidential Information” shall mean all information that is understood to be confidential by a reasonable person by the context of its disclosure and/or its content, scope or nature
                  that is entrusted to or obtained by a director of the Company by reason of his or her position as a director of the Company; provided, however, Confidential Information shall not include information that (A) at the time of disclosure is, or as of and at such time such
                  disclosure thereafter becomes, generally available to the public other than as a result of any material breach of this Agreement by the Hovde Parties or any of their Representatives or any director’s noncompliance with the Company
                  Policies; (B) at the time of disclosure is, or as of and at such time such disclosure thereafter becomes, available to the Hovde Parties or their Representatives on a non-confidential basis from a third-party source, provided that, to the
                  Hovde Parties’ or their Representatives’ knowledge, such third-party is not and was not prohibited from disclosing such Confidential Information to the Hovde Parties or their Representative by any applicable law or contractual obligation;
                  (C) was legally obtained by the Hovde Parties or their Representatives prior to being disclosed by or on behalf of a director of the Company; or (D) was or is independently developed by the Hovde Parties or any of their Representatives
                  without reliance on, or reference to, any Confidential Information.

            

    

    
      

      

      
        11

        
          

      

      
        

          
          	
                  (g)

                	
                  “Extraordinary Transaction” shall mean any equity tender offer, equity exchange offer, merger, acquisition, business combination, or other transaction with a Third Party that, in
                      each case, would result in a Change of Control of the Company,liquidation, dissolution or other extraordinary transaction involving a majority of its equity securities or a majority of its assets, and, for the avoidance of doubt,
                      including any such transaction with a Third Party that is submitted for a vote of the Company’s stockholders;

                

        

      

    

    
      	
              (h)

            	
              “person” or “persons” shall mean any individual, corporation (including
                  not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization or other entity of any kind, structure or nature; and

            

    

    
      	
              (i)

            	
              “Representative” shall mean a person’s Affiliates and Associates and its and their respective directors, officers, employees, partners, members, managers, consultants, legal or other
                  advisors, agents and other representatives.

            

    

    15. Notices. All notices, requests, consents,
          claims, demands, waivers, and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally
          recognized overnight courier (receipt requested); (c) on the date sent by facsimile or email (with confirmation of transmission) if sent during normal business hours of the Company, and on the next business day if sent after normal business hours
          of the Company; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective Parties at the addresses set forth in this Section 15 (or to such other address that may be designated by a Party from
          time to time in accordance with this Section 15).

    If to the Company, to its address at:

    Owens Realty Mortgage, Inc.

    2221 Olympic Blvd

    Walnut Creek, CA 94595

    Attention: Daniel J. Worley

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

    Vinson & Elkins L.L.P.

    666 Fifth Avenue, 26th Floor

    New York, NY 10103

    Attention: Greg Cope

     Lawrence S. Elbaum

     Patrick Gadson

    

    

    
      12

      
        

    

    If to a Hovde Party, to the address at:

    Hovde Capital Advisors, LLC

    122 W. Washington Ave, Suite 350

    Madison, WI 53703

    Attention: Eric D. Hovde

    16. Entire Agreement. This Agreement
          constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, with
          respect to such subject matter. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each Party.

    17. Severability. If any term or provision of
          this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision
          in any other jurisdiction.

    18. Counterparts. This Agreement may be
          executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, email or other means of electronic
          transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

    19. Assignment. None of the Hovde Parties may
          assign any of its rights or delegate any of its obligations hereunder without the prior written consent of the Company, and the Company may not assign any of its rights or delegate any of its obligations hereunder without prior written consent of
          Eric Hovde (the “Hovde Representative”),
          provided that each Party may assign any of its rights and delegate any of its obligations hereunder to any person or entity that acquires substantially all of that Party’s assets, whether by stock sale, merger, asset sale or otherwise. Any
          purported assignment or delegation in violation of this Section 19 shall be null and void. No assignment or delegation shall relieve the assigning or delegating Party of any of its obligations hereunder. This Agreement is binding upon, and inures to the benefit of, the Parties and
          their respective successors and permitted assigns, and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason
          of this Agreement.

    20. Waivers. No waiver by any Party of any of
          the provisions hereof shall be effective unless explicitly set forth in writing and signed by the Party so waiving. No waiver by any Party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly
          identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement
          shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or
          privilege.

     

        

    
      13

      
        

    

    [Remainder

          of Page Intentionally Left Blank]

    
      14

      
        

      

    

    
    IN WITNESS WHEREOF, the Parties have executed this Agreement to be effective as of the Effective Date.

    

    

    THE COMPANY:

    OWENS REALTY MORTGAGE, INC.

     

      

    
      	By:      /s/ Daniel J. Worley

            	
               

            
	Name: Daniel J. Worley

            	
               

            
	Title: Senior Vice President and

            	
               

            
	          Corporate Secretary

            	 

       

    

    

    

     

      

    Signature Page to 

      Cooperation Agreement

    

    
      

      
        

      

      

      

    

    HOVDE PARTIES:

    ERIC D. HOVDE

    /s/ Eric D. Hovde 

    

    

    

    STEVEN D. HOVDE

    /s/ Steven D. Hovde 

    

    

    

    HOVDE CAPITAL LTD.

    By:  /s/ Eric D. Hovde

     Name: Eric. D. Hovde

    

     Title: Managing Member

      

    

    

    HOVDE CAPITAL ADVISORS, LLC

    

    
      	By:      /s/ Eric D. Hovde

            	
               

            
	Name: Eric D. Hovde

            	
               

            
	Title: Chief Executive Officer

            	
               

            

       

    

    

    FINANCIAL INSTITUTION PARTNERS III, LP

    

    
      	By:      /s/ Eric D. Hovde

            	
               

            
	Name: Eric D. Hovde

            	
               

            
	Title: Managing Member of Hovde Capital Ltd.

            	
               

            

       

    

    

    JAMES P. HUA

    /s/ James P. Hua

    

    

    OPAL CAPITAL PARTNERS, LP

    

    
      	By:      /s/ James P. Hua

            	
               

            
	Name: James P. Hua

            	
               

            
	Title: Portfolio Manager

            	
               

            

       

     

      

     

      

    Signature Page to 

      Cooperation Agreement

     

      

    
      

      
        

      

    

    OPAL ADVISORS, LLC

    

    
      	By:      /s/ James P. Hua

            	
               

            
	Name: James P. Hua

            	
               

            
	Title: Managing Member

            	
               

            

       

    

    

    

    

    Signature Page to 

      Cooperation Agreement

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