EXHIBIT 10.1

 

SEPARATION AGREEMENT AND GENERAL RELEASE (“Agreement”)

 

I, Stephen M. Abelman, CRIIMI MAE Inc., a Maryland corporation (“CRIIMI MAE”),
and each of its subsidiaries and affiliates, including without limitation CRIIMI
MAE Management, Inc. (“CM Management”), a Maryland corporation, and CRIIMI MAE
Services Limited Partnership, a Maryland limited partnership (“CMSLP”, and with
CRIIMI MAE and CM Management, the “Company”), agree to resolve all issues
between us as follows:

 

Section 1 — Recitals

 

I acknowledge and agree that my employment with the Company and all positions
and offices therewith will terminate effective September 9, 2005 (the
“Termination Date”).

 

Section 2 — Payments and Benefits

 

In General: In consideration for my promises herein, and provided that I do not
revoke this Agreement in accordance with Section 6(b), the Company will provide
the following payments and benefits to me:

 

(a)           Salary Continuation: The Company shall continue to pay me in
accordance with its regular payroll practices my current base salary through and
including the Termination Date, less withholding for federal, state and local
income and employment taxes and any other deductions the Company is required by
law to make from wage payments to employees.

 

(b)           Benefits Continuation: I shall continue to be eligible to
participate in the Company’s regular employee benefit plans and programs through
and including the Termination Date and shall be eligible to elect COBRA health
care continuation coverage under the Company’s group medical plan, in each case
subject to the terms and conditions of such plan or program as in effect from
time to time. If I timely elect COBRA health care continuation coverage, the
Company agrees to pay my portion of the cost of such coverage through and
including June 30, 2006.

 

(c)           Separation Bonus: On the later of the Termination Date or the
Effective Date (as defined in Section 6(b)), the Company shall pay me a
separation bonus of $500,000.00, less withholding for federal, state and local
income and employment taxes and any other deductions the Company is required by
law to make from wage payments to employees.

 

(d)           Vacation Pay: On the later of the Termination Date or the
Effective Date, the Company shall pay me in accordance with its regular payroll
practices any accrued but unpaid vacation pay, less withholding for federal,
state and local income and employment taxes and any other deductions the Company
is required by law to make from wage payments to employees.

 

(e)           Retirement Plans: I will retain my vested benefits in the
Company’s qualified retirement plan and all rights associated with such plan,
subject to the terms and conditions of such plan and applicable law.

 

(f)            Consulting Agreement: The Company will enter into a Consulting
Agreement with me in the form annexed as Exhibit A (the “Consulting Agreement”).

 

(g)           Change in Control Agreement: The Company acknowledges and agrees
that my separation from the Company is a termination without Cause as that term
is defined in the Change in Control Agreement between me and the Company dated
as of February 1, 2005 (the “Change in Control Agreement”).  The parties
acknowledge and agree that it is the intent of this paragraph that in the event
of a

 

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Change in Control of the Company (as that term is defined in the Change in
Control Agreement and as it may be modified hereunder), I will receive the
payment provided for under paragraph 2(a) of the Change in Control Agreement,
provided that I have complied with my obligations under the Change in Control
Agreement, including without limitation paragraph 3 of the Change in Control
Agreement.  If the Change in Control agreement currently in effect for other
CRIIMI MAE employees is modified by the Board of Directors in any respect (other
than an increase in the amount payable) that makes it more favorable to those
employees, or any of them, then my Change in Control Agreement will
automatically be amended to include the same provision or one as nearly
identical as possible, provided, however, that in no event shall the amount
payable to me under my Change in Control Agreement be changed by any such
modification.

 

(h)           Restricted Stock: The Company agrees that all restricted shares of
stock of CRIIMI MAE previously granted to me by the Company shall become vested
and nonforfeitable upon the later of the Termination Date or the Effective Date.

 

(i)            Attorney’s Fees: The Company agrees to pay my reasonable
attorney’s fees incurred in connection herewith.

 

Section 3 — Complete Release

 

(a)           In General: In consideration for the promises made herein by the
Company, I irrevocably and unconditionally release to the greatest extent
permitted by law all the Claims described in 3(b) that I may now have against
the Released Parties listed in Section 3(c).  However, I am not releasing:
(1) my rights to receive the payments and benefits under this Agreement and to
enforce the other terms of this Agreement, any surviving terms in my employment
agreement of October 29, 2003, the Change in Control Agreement or the Consulting
Agreement; (2) any rights or claims that arise after I sign this Agreement under
the Age Discrimination in Employment Act or other laws; (3) my right, if any, to
government-provided unemployment benefits; and (4) my rights under the Company’s
qualified retirement plan, subject to the terms and conditions of such plan.

 

(b)           Claims Released: Except as otherwise set forth in this Agreement,
I am releasing all known and unknown claims, promises, causes of action, or
similar rights of any type (“Claims”) that I may have, in any and all
capacities, with respect to any Released Parties listed in Section 3(c). These
include, but are not limited to, Claims that in any way relate to: (1) my
employment with the Company, or the termination of that employment, such as
Claims for compensation, deferred compensation, bonuses, commissions, lost
wages, or unused accrued vacation or sick pay; (2) the design or administration
of any employee benefit program; (3) any rights I may have to severance or
similar benefits or to post-employment health or group insurance benefits;
(4) any Claims related to the performance, management, or operation of the
Company; or (5) any Claims to attorney’s fees; and I promise never to file or
initiate, nor to encourage, assist or cooperate (except as required by law) with
others to file, initiate, or prosecute any such Claims. I understand that the
Claims I am releasing might arise under many different laws, including, but not
limited to, anti-discrimination statutes (such as the Age Discrimination in
Employment Act, the Civil Rights Act of 1964, the Civil Rights Act of 1866, the
Equal Pay Act, the Americans With Disabilities Act and other federal, state, or
local laws prohibiting employment discrimination), federal employment statutes
(such as the WARN Act, the Fair Labor Standards Act of 1938, and other federal
laws relating to employment, such as veterans reemployment rights laws). I also
release any Claims that I have or ever had from the beginning of time to the
Effective Date of this Agreement arising from other federal, state or local laws
restricting an employer’s right to terminate employees, or otherwise regulating
employment, any federal, state or local law enforcing express or implied
employment contracts or requiring an employer to deal with employees fairly or
in good faith, and any other federal, state, or local laws providing recourse
for alleged wrongful discharge, physical or personal injury, emotional distress,
fraud, breach of contract or fiduciary duty, negligent misrepresentations,
defamation, and similar or related claims, including without limitation the
Sarbanes Oxley Act, and any other federal, state or local statute, regulation or
rule regarding whistle-blower claims. The law referred to in this
subsection include statutes, regulations, other administrative guidance, and
common law doctrines.

 

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(c)           Released Parties: The Released Parties are CRIIMI MAE, CM
Management, CMSLP and all related entities, subsidiaries, affiliates, branches,
partnerships, or joint ventures, and, with respect to each of them, their
predecessors, and successors; and, with respect to each such entity, all of its
past and present employees, officers, partners, directors, members,
representatives, assigns, attorneys, agents, insurers, employee benefit programs
(and the trustees, administrators, fiduciaries, and insurers of such programs),
and any affiliates of the foregoing, and any other persons acting by, through,
under or in concert with any of the persons or entities listed in this
subsection.

 

(d)           Release by the Company: In consideration for the complete release
of claims by me described above, the Company, on its own behalf and on behalf of
its attorneys or representatives, successors and assigns, hereby waives and
releases all claims against me that it ever had, now has, or hereafter can,
shall or may have, from the beginning of time to the date of this Agreement,
including but not limited to all claims relating to, arising out of, by reason
of, or with respect to my employment with the Company and the termination of
that employment. This release and waiver is intended to include all possible
legal theories, including, but not limited to: any tort; the violation of any
express or implied contract; and any claim arising under the statutory and
common laws or rules of the United States or any State or political subdivision
thereof.  The Company further agrees that it will not encourage others to file
or initiate claims against me.

 

Section 4 — Promises

 

(a)           Diligent Performance: I shall diligently, faithfully and in a
timely manner fulfill the duties and responsibilities of my employment with the
Company from the date hereof through and including the Termination Date,
including without limitation performing all of the duties and responsibilities
of my office as Executive Vice President of Asset Management.

 

(b)           Pursuit of Released Claims: I have not filed or caused to be filed
any lawsuit, complaint, or charge with respect to any Claim I am releasing in
this Agreement. I promise never to file or prosecute a lawsuit, and agree not to
seek personal recovery in any forum, based on the claims released by this
Agreement.

 

(c)           Company Property: By the Termination Date, I shall have returned
to the Company all files, memoranda, documents, records, diaries, copies of the
foregoing, computers and computer-related equipment and materials, telephones,
pagers, credit cards, keys, and any other property of the Company or its
affiliates in my possession, and I shall not have taken or destroyed any Company
property, including financial data, records or Confidential Information, as
defined in this Agreement.  However, I shall be entitled to retain any materials
needed to fulfill my obligations under the Consulting Agreement, as well as my
personal copies of my own personnel, employment and payment records and
documents relating to Company benefits in which I participate, provided that by
the Termination Date, I have provided the Company with, or shown the Company
complete copies of, all such documents I propose to retain and the Company has
agreed to such retention for the term of the Consulting Agreement as to the
property designated for use in fulfilling my obligations under the Consulting
Agreement.  I am entitled to keep all other documents indefinitely.  Upon
termination of the Consulting Agreement, I will return all materials retained
for the performance of Consulting Agreement duties in accordance with paragraphs
5 and 7 of the Consulting Agreement.

 

(d)           Taxes: I understand that I am responsible for the payment of
certain income taxes and the employee’s share of certain employment taxes on
payments I receive because I signed this Agreement, even though the Company will
withhold appropriate amounts from such payments and timely deposit such withheld
amounts with the appropriate tax authorities.

 

(e)           Ownership of Claims: I have not assigned or transferred any Claim
I am releasing, nor have I purported to do so. The Company likewise has not
assigned or transferred any Claim it is releasing.

 

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(f)            Non-admission of Liability: I agree not to assert that this
Agreement is an admission of guilt or wrongdoing by the Released Parties. The
Company agrees that it will not assert that the termination of my employment or
the signing of this Agreement is an admission of guilt or wrongdoing or is any
reflection on my performance or character.

 

(g)           No Disparagement or Harm: The parties mutually agree that they
will not directly or indirectly, make, publish, write, or otherwise disseminate
any critical or derogatory remarks, comments or statements that intentionally
disparage each other or any of the Released Parties, including but not limited
to the Company’s or my business, policies, practices, decisions, and the
Company’s officers, directors, shareholders, members and affiliates. This
Agreement does not prohibit me or the Company from giving any statement or
testimony as required by applicable law.

 

(h)           Non-solicitation; Non-disruption: During the period beginning on
the date hereof and ending 18 months after the Termination Date (the “Restricted
Period”), I will not at any time, without the prior written consent of the
Company, directly or indirectly, whether for my own account or as a shareholder,
partner, member, joint venturer, employee, officer, director or agent of, or
consultant to, any person or entity, (i) knowingly solicit or recruit any person
or entity that is an employee, officer, or director of the Company or any of its
affiliates at any time during the Restricted Period (a “Company Service
Provider”), or (ii) encourage or advise any Company Service Provider to
terminate his or her service relationship with the Company or any of its
affiliates, or (iii) knowingly interfere with or disrupt any contractual
relationship between any Company Service Provider, customer, lender or investor
and the Company or any of its affiliates.  The Company agrees that during the
Restricted Period it will not interfere with any business ventures that I may
establish, or of which I may be the principal owner or proprietor, in any manner
described in this paragraph.

 

(i)            Assistance with Defense of Claims: I agree to provide reasonable
assistance to the Company in connection with any pending claim against the
Company or claims or disputes that relate to the period of my employment with
the Company, including offering testimony on behalf of the Company if I am
requested to do so upon reasonable notice, meeting with its attorneys or other
representatives or otherwise cooperate in the investigation, defense or
prosecution of such matters.  In addition, the Company will pay any travel,
lodging, food or similar out-of-pocket expenses I reasonably and necessarily
incur in rendering the requested assistance.  During the Term of the Consulting
Agreement as that term is defined therein, time expended in fulfilling this
obligation (other than time directly related to my appearance as a fact witness)
will be deemed “services” within the meaning of ¶2 of the Consulting Agreement;
thereafter, any further assistance except for fact witness testimony shall be
compensated at the rate of $375 per hour.  If the Company and I agree that I
require independent counsel in order to fulfill this obligation, the Company
will provide that counsel for me at its expense.

 

(j)            Confidential Information: I shall use my best efforts and the
utmost diligence to guard and protect all the Company Confidential Information.
I shall not use for my own benefit or in competition with the Company, or
disclose or otherwise make available, either directly or indirectly, to any
third party, including but not limited to any competitor or potential competitor
of the Company, any Confidential Information unless authorized to do so by the
Company in writing. I shall leave with the Company, and retain no copies
thereof, any and all records and papers and all materials of whatever nature
which contain or otherwise disclose Confidential Information.  For the purpose
of this Agreement, the term “Confidential Information” shall have the same
meaning as in paragraph 3 of the Change in Control Agreement and shall be
construed for purposes of this Agreement as including any such information
relating to the Company.

 

(k)           Reasonableness of Restrictive Promises: The Company and I each
acknowledge and agree that the restrictions contained in the preceding Sections
4(g)-(j) are reasonable and justified in light of the nature of the Company’s
business and customers, as well as my own, and further in light of the
Confidential Information to which I have had exposure and access during the
course of my employment by the Company.

 

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(1)           Severability of Requirements: I acknowledge further that the
provisions pertaining to the scope of the restrictions contained in Sections
4(g)-(j) are severable by their terms. If any provision of those restrictions or
of this Agreement is found to be invalid or void under applicable law, rule or
regulation, the remaining provisions of this Agreement shall not be affected and
shall continue in full force and effect. By executing this Agreement, I agree
that in the event a court of competent jurisdiction determines that any
provision of this Agreement is unreasonable or unenforceable, such court shall
have the right and is authorized by me to modify such provision so as to render
that provision reasonable and enforceable.

 

(m)          Injunctive Relief: The Company and I each acknowledge that any
breach of Sections 4(g)-(j) of this Agreement shall result in irreparable harm
to the Company or to me, respectively, that no remedy at law will be adequate
for such breach and that the Company or I, as appropriate, shall be entitled to
temporary, preliminary and permanent injunctive relief and specific enforcement,
in addition to all other remedies at law or in equity, in the event a material
breach of this Agreement is proven.

 

Section 5 — Consequences of Violating Promises

 

(a)           General Consequences: If any representation either the Company or
I made in this Agreement was false when made, or if either is found to have
breached any of the material provisions of this Agreement, the party who made
the false representation or who committed the breach shall pay the other’s
reasonable attorneys’ fees, expenses and costs and any damages the other may
incur on account of the false representation or breach.

 

(b)           Essential Terms: I acknowledge and agree that this Agreement, the
release of Claims and the covenants set forth in Sections 4(a), 4(b) and
4(f)-(j) are essential and material terms to this Agreement and that without
this Agreement and covenants, no agreement would have been reached by the
parties and no benefits under this Agreement would have been paid. The Company
acknowledges that the payments and benefits set forth in Section 2 and the
promises contained in Sections 4(f), 4(g) and 4(h) are essential and material
terms to this Agreement and that without these provisions no agreement would
have been reached by the parties.

 

Section 6 — Consideration of Release

 

(a)           Opportunity for Review: I acknowledge that I have a period of at
least 21 days in which to consider this Agreement, although I may execute this
Agreement at any time during such 21-day period. I waive any right I might have
to additional time beyond this consideration period within which to consider
this Agreement. I further acknowledge that: (1) I took advantage of this period
to consider this Agreement before signing it; (2) I carefully read this
Agreement; (3) I fully understand it; and (4) I am entering into it voluntarily.
I further acknowledge that the Company strongly encouraged me, and again advises
me, to discuss this Agreement with an attorney before signing it and that I did
so to the extent I deemed appropriate.

 

(b)           Right of Revocation: I have been advised that I may revoke this
Agreement within seven days of signing it. Revocation can be made by delivering
a written notice of revocation to the General Counsel of the Company. For such
revocation to be effective, written notice must be received by the General
Counsel of the Company no later than 5:00 p.m. (EDT) on the seventh day after
the date I sign this Agreement. If I revoke this Agreement, it shall not be
effective or enforceable and I will not receive the payments and benefits
described in Section 2 of this Agreement, nor will the Consulting Agreement be
effective. This Agreement shall not become effective or enforceable until the
Revocation Period has expired (“Effective Date”).

 

Section 7 — Miscellaneous

 

(a)           Entire Agreement: This is the entire agreement between me and the
Company regarding the subject matter hereof. This Agreement may not be modified
or cancelled in any manner

 

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except by a writing signed by both me and an authorized Company official. I
acknowledge that the Company has made no representations or promises to me (such
as that my former position will remain vacant), other than those in this
Agreement. If any provision in this Agreement is found to be unenforceable, all
other provisions will remain fully enforceable.

 

(b)           Successors: This Agreement inures to the benefit of and binds my
heirs, administrators, representatives, executors, successors, and assigns, and
will inure to the benefit of all Released Parties and their respective heirs,
administrators, representatives, executors, successors, and assigns. This
Agreement also binds the Company and its related entities, subsidiaries,
affiliates and successors and will inure to the benefit of my heirs,
administrators, representatives, executors, successors, and assigns.

 

(c)           Interpretation: This Agreement shall be construed as a whole
according to its fair meaning. It shall not be construed strictly for or against
me or any Released Party. Unless the context indicates otherwise, the term “or”
shall be deemed to include the term “and” and the singular or plural number
shall be deemed to include the other. Captions are intended solely for
convenience of reference and shall not be used in the interpretation of this
Agreement. This Agreement shall be governed by the statutes and common law of
the State of Maryland, excluding its choice of laws statutes or common law.

 

(d)           Agreements Superseded: This Agreement supersedes any employment,
severance, retention or other agreement(s) I may have had during my employment
with the Company, except that (i) any agreement regarding confidentiality or
non-disclosure shall be deemed to survive the conclusion of the employment and
is hereby acknowledged, restated and incorporated herein; (ii) the
indemnification and insurance coverage provisions contained in ¶11 of my
October 29, 2003 employment agreement shall survive with respect to any claims
made against me arising from my employment with the Company; and (iii) the
Change in Control Agreement survives, except to the extent specifically modified
herein.

 

(e)           Any action brought with respect to this Agreement shall be brought
only in a court of competent jurisdiction in the State of Maryland.

 

(f)            The Company represents that the person signing this Agreement on
its behalf is legally authorized to do so.

 

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(g)           This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original, but all of which shall constitute
one and the same agreement.

 

TAKE THIS AGREEMENT HOME, READ IT, AND CAREFULLY CONSIDER ALL OF ITS PROVISIONS
BEFORE SIGNING IT: IT INCLUDES A RELEASE OF KNOWN AND UNKNOWN CLAIMS. IF YOU
WISH, YOU SHOULD TAKE ADVANTAGE OF THE FULL CONSIDERATION PERIOD AFFORDED BY
SECTION 6 AND YOU SHOULD CONSULT YOUR ATTORNEY.

 

Executed at Rockville, Maryland this 2nd day of September, 2005.

 

 

/s/ Stephen M. Abelman

 

 

Stephen M. Abelman

 

Executed at New York, New York, this 2nd day of September, 2005.

 

 

CRIIMI MAE Inc.

 

 

 

 

 

BY:

/s/ Mark R. Jarrell

 

 

Name:

Mark R. Jarrell

 

 

President and Chief Operating Officer

 

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