EXHIBIT 10.1
SEPARATION AGREEMENT AND RELEASE OF CLAIMS
This Separation Agreement and General Release of Claims (“Agreement”) is made
and entered into between Residential Funding Company, LLC (“RFC” or “Company”)
and Bruce Paradis (“Paradis” or “you”). This Agreement represents our mutual
understanding and agreement concerning your at-will employment with RFC, which
will terminate effective June 1, 2007 (“Separation Date”).
IT IS HEREBY AGREED, by and between Paradis and RFC as follows:
     1. Release Consideration. If you sign this Agreement on or before July 1,
2007 and do not revoke pursuant to Section 17 of this Agreement, RFC will
provide you with the following consideration as set forth in Sections 1(a),
1(b), 1(c) and 1 (d).
a. The sum of $511,271.00 less all applicable federal, state, local, and benefit
withholdings, payable to you within 10 business days following the 15-Day
Revocation Period detailed in Section 17 herein. RFC will issue you an IRS Form
W-2 for this sum. This consideration represents a full and final compromise of
any and all of your claims for compensation and/or damages of any kind as well
as any and all claims for attorney’s fees and costs, and is not something to
which you would be entitled in the event you do not sign this Agreement.
b. The sum of $2,019,750.00 less all applicable, federal, state, local and
benefit withholdings, payable to you on or before February 29, 2008, but only if
you are in compliance with Section 5 (a) through (d) below on that date. RFC
will issue you an IRS Form W-2 for this sum.
c. RFC will reimburse you for six months of office rental expenses in an
aggregate amount not to exceed $22,455.00, to be used within a twelve (12) month
period. This reimbursement shall only be for the actual cost of the office space
itself, no additional business expenses. The reimbursement shall begin effective
on the later of (i) June 1, 2007 or (ii) the commencement of Paradis’ lease,
which will occur no later than December 1, 2007. RFC will issue you an IRS
Form 1099 for this amount.
d. You will be provided with full-time administrative support by Marybeth Sayre
beginning on June 1, 2007 and ending on September 28, 2007. Ms. Sayre will
remain on the payroll of RFC during this time period.
     2. Release and Waiver of Claims by You. Except as described in Sections 2.3
and 2.4 below, you WAIVE AND RELEASE any and all claims, whether or not now
known to you, against RFC and its parent companies, current and former officers,
directors, members, investors, employees, attorneys, agents, predecessors,
successors, affiliates, subsidiaries, assigns and legal representatives
(together, the “Releasees”), arising from or relating to any and all acts,
events and omissions occurring prior to the date you sign this Agreement.

 

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     2.1. Included Claims. The claims being waived and released include, without
limitation,
a. any and all claims arising from or relating to your recruitment, hire,
employment and termination of employment with RFC;
b. any and all claims of wrongful discharge, emotional distress, defamation,
misrepresentation, fraud, detrimental reliance, breach of contractual
obligations, promissory estoppel, negligence, assault and battery, violation of
public policy;
c. any and all claims of unlawful discrimination, harassment and retaliation
under applicable federal, state and local laws and regulations;
d. any and all claims of violation of any federal, state and local law relating
to recruitment, hiring, terms and conditions of employment, and termination of
employment; and
e. any and all claims for monetary damages and any other form of personal
relief.
The claims being waived and released also include claims under the federal Age
Discrimination in Employment Act, as amended (“ADEA”).
     2.2 Unknown Claims. In waiving and releasing any and all claims against the
Company Releasees, whether or not now known to you, you understand that this
means that, if you later discover facts different, from or in addition to those
facts currently known by you, or believed by you to be true, the waivers and
releases of this Agreement will remain effective in all respects — ‘despite such
different or additional facts and your later discovery of such facts, even if
yow would not have agreed to this Agreement if you had prior knowledge of such
facts.
     2.3. Exceptions. The only claims that are not being waived and released by
you under this Section 2 are claims you may have for:
a. unemployment, state disability and/or paid family leave insurance benefits
pursuant to the terms of applicable state law;
b. continuation of existing participation in Company-sponsored group health
benefit plans, at your full expense, under the federal law known as “COBRA”
and/or under an applicable state counterpart law;
c. any benefit entitlements that are vested as of the Separation Date pursuant
to the terms of a Company-sponsored benefit plan governed by the federal law
known as “ERISA;”
d. violation of any federal, state or local statutory and/or public policy right
or entitlement that, by applicable law, is not waivable; and

 

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e. any wrongful act or omission occurring after the date you sign this
Agreement.
     2.4. Government Agency Claims Exception. Nothing in this Section 2, or
elsewhere in this Agreement, prevents or prohibits you from filing a claim with
a government agency, such as the U.S. Equal Employment Opportunity Commission,
that is responsible for enforcing a law on behalf of the government.
     3. Release and Waiver of Claims by Company. The Company waives and releases
any and all claims, whether or not now known to it, against Paradis, arising
from or relating to any and all acts, events and omissions occurring prior to
the date of this Agreement with the exception of claims arising from Paradis’
criminal conduct, fraud, willful and wanton misconduct, breach of fiduciary duty
and/or claims against Paradis arising out of loan transactions, if any, between
Paradis and the Company, its parents, subsidiaries or affiliates.
     4. Waiver of Rights. You understand that by executing this Agreement, you
are waiving any rights that you may have with respect to any plan or agreement
between you and the Company and/or its parents in which you may have eligibility
or entitlement to severance or other compensation, including but not limited to
the GMAC Senior Leadership Severance Plan, the GMAC Long-Term Phantom Interest
Plan, the GMAC LLC 2007 Annual Incentive Plan, the GMAC Mortgage Group Phantom
Stock Plan and the GMAC Management LLC Class C. Membership Interests Plan.
     5. Non-Competition and Non-Solicitation. You acknowledge and recognize the
highly competitive nature of the businesses of Residential Capital, LLC its
affiliates, successors and direct and indirect subsidiaries (collectively
“ResCap”) and accordingly agree that:
a. for 6 months from the date you execute this Agreement you will not engage in
any activity which is competitive with ResCap, including without limitation
becoming an employee, investor (except for passive investments of not more than
five percent (5%) of the outstanding shares of, or any other equity holdings of
a competitor of ResCap’s that is traded on the New York Stock Exchange, Nasdaq
or any other over-the-counter securities market), officer, owner, agent, partner
or director of, consultant or contractor or other participant in, any firm,
person or other entity in any geographic area that either directly or indirectly
competes with ResCap. “Competitive” means any individual or entity engaged in
the business of the origination and/or servicing of mortgage loans, the
securitization of mortgage loans, real estate finance services, business
financing services, including but not limited to resort finance, residential
finance, healthcare finance or acquisition or development and construction
finance. Notwithstanding the foregoing, nothing in this provision is intended to
prohibit you from engaging in personal investments in real estate finance
services, business financing services, including but not limited to resort
finance, residential finance, or development and construction finance.. You
affirm that from June 1, 2007 until the date you execute this Agreement that you
have not engaged in the activities described in this paragraph 5(a).

 

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b. for 6 months from the date you execute this Agreement you will not directly
or indirectly assist others in engaging in any of the activities in which you
are prohibited to engage by clause (a) above. You affirm that from June 1, 2007
until the date you execute this Agreement that you have not engaged’ in the
activities described in this paragraph 5(b).
c. for 18 months from the date you execute this Agreement you will not directly
or indirectly induce any employee of ResCap to terminate his/her employment with
ResCap or employ or offer employment to any person who was employed by ResCap
unless such person shall have ceased to be employed by ResCap for a period of at
least twelve (12) months. You affirm that from June 1, 2007 until the date you
execute this Agreement that you have not the activities described in this
paragraph 5(c).
d. for 6 months from the date you execute this Agreement you will not directly
or indirectly solicit business from any Customer of ResCap, with respect to the
origination and/or servicing of mortgage loans, the securitization of mortgage
loans, real estate finance services, business financing services, including but
not limited to resort finance, residential finance, healthcare finance or
acquisition or development and construction finance. The term “Customer” of
ResCap, as used in this paragraph, shall mean those entities and their
successors or affiliates that, within the twelve (12) month period immediately
preceding your Separation Date, purchased products or services from ResCap. You
specifically agree and understand that the scope of this restriction is
reasonable and tailored to reflect the nature of your work for ResCap. You
affirm that from June 1, 2007 until the date you execute this Agreement that you
have not engaged in the activities described in this paragraph 5(d).
e. It is expressly understood and agreed that (i) although you and ResCap
consider the restrictions contained in this Section 5 to be reasonable, if a
final judicial determination is made by a court of competent jurisdiction that
the time or geographic restrictions or any other restriction contained herein is
unenforceable, this Agreement shall not be rendered void but rather shall be
deemed to be enforceable to such maximum extent as such court may judicially
determine or indicate to be enforceable, and (ii) if any restriction contained
in this Agreement is determined to be unenforceable and such restriction cannot
be amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.
f. Notwithstanding any provision of this Agreement to the contrary, upon RFC’s
good faith determination that you have breached any provision of this Section 5,
RFC’s obligations to make any payments to you under Section 1(b) of this
Agreement shall abate if you are unable to cure such breach, within the
reasonable discretion of the Company, within ten days after written notice to
you detailing which sub-section(s) you breached and the factual basis for the
claim of breach. RFC shall send written notice of breach to you detailing the
factual basis for the claim of breach. Such notice shall be sent to: Bruce
Paradis 12530 Beach

 

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Circle, Eden Prairie, MN 55344. Should you fail to cure the breach within
10 days after receiving the written notice, RFC’s obligations to make any
payments to you under Section 1(b) of this Agreement shall continue to be abated
until the respective claims of the parties related to the breach have been
adjudicated.
g. After payment of the consideration set forth in Section 1(b) has been made,
you agree that upon an arbitrator’s determination under subsection h below, that
you have breached any provision of this Section 5, it will cause irreparable
harm to RFC and you will become immediately liable to RFC for $200,000 if you
are unable to cure such breach, within the sole discretion of the Company,
within ten days after written notice to you detailing which sub-section(s) you
breached and the factual basis for the claim of breach. RFC shall send written
notice of breach to you detailing the factual basis for the claim of breach.
Such notice shall be sent to: Bruce Paradis 12530 Beach Circle, Eden Prairie, MN
55344.
h. Any controversy or claim arising out of or relating to Section 5, or breach
thereof shall be submitted to arbitration in Minneapolis, Minnesota in
accordance with the Rules of the American Arbitration Association relating to
employment disputes. The award rendered in any arbitration proceeding held under
this Paragraph shall be final and binding, and judgment upon the award may be
entered in any court having jurisdiction thereof.
     6. Cooperation. You agree that you will cooperate with reasonable requests
by RFC, its parents, subsidiaries or affiliates for assistance in the transition
of your duties as well as the preparation and defense of claims or litigation
matters involving the Company, its parents, subsidiaries or affiliates at times
that are mutually convenient. Such cooperation shall include, but is not limited
to, being available for interview by Company representatives or its attorneys;
attending administrative or judicial hearings; attending depositions, meetings,
strategy sessions and trial; and assisting in responding to correspondence from
third parties and discovery requests. RFC agrees to reimburse your reasonable
out-of-pocket expenses, excluding attorney’s fees, incurred in providing such
cooperation and, to the extent that your involvement takes more than eight hours
in the aggregate, RFC will compensate you at an hourly rate of $300. All other
requests for cooperation by the Company not involving the preparation and
defense of claims or litigation matters as specifically set forth herein shall
be limited to 12 months from the date you execute this Agreement. All requests
for your cooperation shall not exceed more than 20 hours per month. This time
limitation is exclusive of any activities you are required to participate in by
subpoena or court order.
     7. Confidential Information. You agree and acknowledge that during the
course of your employment with RFC that you had access and were privy to
information, documents and/or materials relating to RFC, its parents,
subsidiaries and affiliates that are of a confidential and/or proprietary nature
or which constitute trade secrets and/or privileged information, the disclosure
of which will cause irreparable harm to RFC, its parents, subsidiaries and
affiliates. As part of this Agreement, you agree to return such information
which is in your possession or which has been given to others, and that you will
not discuss or disclose to any person or entity any trade secret, confidential,
proprietary and/or privileged information without the express permission of RFC.

 

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     8. Confidentiality and Non-Disparagement. You agree that you will not
communicate or disclose the terms of this Agreement, or the circumstances
leading up to this Agreement to any persons other than your spouse, attorney,
accountant and/or tax consultant, or as otherwise required by law. It will be a
material breach of this Agreement to discuss this Agreement with any employee or
former employee of RFC, its parents, subsidiaries and affiliates. You agree that
you will not publicly or privately disparage any of the products, services or
actions of ResCap or GMAC, LLC, their employees, or any related entity, or make
detrimental, harmful or injurious remarks regarding ResCap or GMAC, LLC their
employees, or any related entity. Nothing in this Section 8, or elsewhere in
this Agreement, is intended to prevent or prohibit you from (i) providing
information regarding your former employment relationship. with RFC, as may be
required by law or legal process; or (ii) cooperating, participating or
assisting in any government entity. investigation or proceeding.
     9. You agree that if an arbitrator (as provided below) has determined that
you have breached the terms of Sections 7 or 8, it will cause irreparable harm
to RFC and you will become immediately liable to RFC for $200,000.00 if you are
unable to cure such breach, within the sole discretion of the Company, within
ten days after written notice to you detailing which sub-section(s) you breached
and the factual basis for the claim of breach. RFC shall send written notice of
breach to you detailing the factual basis for the claim of breach. Such notice
shall be sent to: Bruce Paradis 12530 Beach Circle, Eden Prairie, MN 55344. Any
controversy or claim arising out of or relating to Section 9 shall be submitted
to arbitration in Minneapolis, Minnesota in accordance with the Rules of the
American Arbitration Association relating to employment disputes. The award
rendered in any arbitration proceeding held under this Paragraph shall be final
and binding, and judgment upon the award may be entered in any court having
jurisdiction thereof.
     10. Confidentiality and Non-Disparagement. Company agrees that it will not
communicate or disclose the terms of this Agreement, or the circumstances
leading up to this Agreement to any entities or persons other than senior
management of the Company, its attorneys, accountants, tax consultants, and/or
Company personnel based on business necessity or as otherwise required by law.
Nothing in this Section 10, or elsewhere in this Agreement, is intended to
prevent or prohibit Company from (i) providing information which may be required
by law or legal process; or (ii) cooperating, participating or assisting in any
government entity investigation or proceeding.
     11. Construction of Agreement. Should any of the provisions or terms of
this Agreement require judicial interpretation, it is agreed that the Court
interpreting or construing this Agreement shall not apply a presumption that
such provision(s) or term(s) shall be more strictly construed against one party
by reason of the rule of construction that a document is to be construed more
strictly against the party who prepared it, it being agreed that all parties and
their counsel have participated in the review of this Agreement.
     12. Entire Agreement. The undersigned further agree, declare and represent
that no promise, inducement, representation or agreement not herein expressed
has been made to any party or caused them to enter this Agreement. The Agreement
contains the entire agreement between the parties and the terms of the Agreement
are contractual and not a mere recital. This is a fully integrated agreement. It
may not be altered or modified by oral agreement or

 

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representation or otherwise except by a writing of subsequent date hereto signed
by all parties in interest.
     13. Severability. Other than for Sections 1, 2, 2.1 2.4, 4 and 5 herein,
the paragraphs of this Agreement are severable. Finding that any particular
paragraph of this Agreement is invalid and/or unenforceable shall not affect the
validity or enforceability of the remaining provisions of the Agreement.
     14. Facsimile Signatures. This Agreement may be executed in any number of
counterparts, and with facsimile signatures, with the same effect as if all of
the parties hereto had signed the same document. All counterparts shall be
construed together and shall constitute one agreement. Absent an original
signature, it is hereby understood and agreed that a facsimile signature shall
be binding upon the parties and otherwise admissible under the Best Evidence
Rule.
     15. Governing Law. This Agreement is made and entered into in the State of
Minnesota and shall in all respects be interpreted, enforced and governed under
the laws of Minnesota.
     16. Acknowledgement.
               a. You have read the terms of this Agreement and understand its
terms and effects, including the fact that you have agreed to RELEASE AND
FOREVER DISCHARGE RELEASEES from any claims arising out of your employment
relationship with RFC, the terms and conditions of that employment relationship,
and the termination of that employment relationship;
               b. You have signed this Agreement voluntarily and knowingly in
exchange for the consideration provided to you, which you acknowledge is
adequate and satisfactory;
               c. You have been advised by RFC through this document to consult
with an attorney concerning this Agreement prior to signing it;
               d. RFC provided you with a period of at least twenty-one
(21) days in which to consider this Agreement, and decide whether or not to sign
it, and you have signed on the date indicated below after concluding that it is
satisfactory to you;
               e. Neither RFC, nor any of its agents, representatives,
employees, or attorneys, has made any representations to you concerning the
terms or effects of this Agreement other than those contained herein.
     17. Right to Revoke. You also understand you have the right to revoke this
Agreement insofar as it relates to claims or potential claims under the
Minnesota Human Rights Act and/or the Age Discrimination in Employment Act. In
order to revoke this Agreement, you must provide written notice, delivered in
person or sent by certified mail, to the following:

 

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Anne M. Janiczek
Associate General Counsel
GMAC Mortgage, LLC
100 Witmer Road, P. O. Box 963,
Horsham, PA 19044-0963
To be effective, any revocation relating to the Minnesota Human Rights Act must
be delivered within fifteen (15) calendar days following your execution of this
agreement, and any revocation relating to the Age Discrimination in Employment
Act must be delivered within seven calendar (7) days (the “Revocation Periods”).
Because of these Revocation Periods, this Agreement will not become effective or
enforceable until the sixteenth calendar day after you sign it, provided that
you have delivered your signed Agreement to the Company, and you did not revoke
the Agreement as set forth above.
     IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
have executed the foregoing Separation Agreement and Release of Claims this
25 day of July, 2007.

     
WITNESS: /s/ Mary Beth Sayre
  /s/ Bruce Paradis
 
   
 
  Bruce Paradis
 
   
 
  RESIDENTIAL FUNDING COMPANY, LLC
 
   
 
  By: /s/ James G. Jones
 
   
 
  Title: President