Exhibit 10.3


 


CRIIMI
MAE Inc.


11200 Rockville Pike, Suite 400


Rockville, MD 20852


 


August 26, 2003


 


 


Cynthia O. Azzara


 


Re:          Termination of Employment Agreement
Letter


 


Dear Ms. Azzara:


 


Effective as
of August 25, 2003, CRIIMI MAE Inc. (“CRIIMI”) and CRIIMI MAE Management, Inc.
(“Management” and collectively with CRIIMI, the “Company”) and you agree that
any and all previous employment, severance, service or similar agreements
between CRIIMI and/or Management and you (whether written or oral) including,
without limitation, your Employment Agreement, dated July 25, 2001, as amended,
between CRIIMI and you (the “Employment Agreement”) shall be terminated and
cease to have any effect, including without limitation, Section 6.5 of the
Employment Agreement, notwithstanding any survival clauses therein.  You acknowledge and agree that this letter
agreement (the “Agreement”)  provides
adequate consideration for the termination of your Employment Agreement and
this Agreement is the only document which sets forth your rights in
consideration of such termination of the Employment Agreement. As consideration
for the termination of the Employment Agreement and for other good
consideration, including, without limitation, the Company agreeing to enter
into the Offer Letter, between the CRIIMI MAE Inc., CRIIMI MAE Management, Inc.
and you, dated as of August 26, 2003, the receipt and satisfaction of which are
hereby acknowledged, the parties hereto agree as follows:


 


1.                                       You
are due and owed by the Company the amount of $1,086,889, and the Company shall
pay you such amount, less applicable withholding taxes, no later than the close
of business on August 29, 2003.


 


2.                                       The
rights to exercise options to purchase option shares in accordance with the
vesting schedule set forth in the Incentive Stock Option Agreement dated
November 16, 2001, the Nonqualified Stock Option Agreement dated June 5, 2002,
and the Incentive Stock Option Agreement dated June 5, 2002 shall not be
affected by termination of employment for whatever reason; provided, that,
as a matter of law, any options which are intended to qualify as “incentive
stock options” within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the “Code”) which are exercised following the


 


1

















 


90th
day after your termination of employment will cease to qualify as incentive
stock options and will become non-qualified stock options.


 


3.                                       You
shall have the right until September 15, 2003 to purchase the automobile
currently being provided to you by the Company at 90% of such automobile’s fair
market value as reasonably determined by the parties hereto.


 


4.                                       Anything
in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by the Company or any of their
subsidiaries to or for the benefit of 
you, whether paid or payable, pursuant to the terms of this Agreement (a
“Payment”) would be subject to the excise tax imposed by Section 4999 of the
Code or similar section or any interest or penalties with respect to such
excise tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), then you shall be
entitled to receive an additional payment (a “Gross-Up Payment”) in an amount
such that after payment by you of all taxes (including any interest or
penalties imposed with respect to such taxes), including any Excise Tax imposed
upon the Gross-Up Payment, you retain an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Payments.


 


5.                                       If,
with respect to any alleged failure by the Company or any of their subsidiaries
to comply with any of the terms of this Agreement, you hire legal counsel with
respect to this Agreement or institute any negotiations or institute or respond
to legal action to assert or defend the validity of, enforce your rights under,
or recover damages for breach of this Agreement and thereafter the Company or
any of their subsidiaries is found in a judgment no longer subject to review or
appeal to have breached this Agreement in any material respect, then the
Company shall indemnify you for your actual expenses for attorneys’ fees and
disbursements, together with such additional payments, if any, as may be
necessary so that the net after-tax payments to you equal such fees and
disbursements.


 


6.                                       The
provisions of this Agreement are severable, and if any one or more provisions
may be determined to be illegal or otherwise unenforceable, in whole or in
part, the remaining provisions and any partially unenforceable provision to the
extent enforceable nevertheless shall be binding and enforceable.


 


7.                                       The
rights and obligations of the Company, and it subsidiaries and affiliates under
this Agreement shall inure to the benefit or, and shall be binding on, the
Company and its subsidiaries and affiliates, and their respective successors
and assigns.


 


8.                                       The
failure of either party to enforce any provision of this Agreement shall not in
any way be construed as a waiver of any such provision as to any future


 


2

















 


violations
thereof, not prevent that party thereafter from enforcing each and every other
provision of this Agreement.  The rights
granted the parties herein are cumulative and the waiver of any single remedy
shall not constitute a waiver of such party’s right to assert all other legal
remedies available to it under the circumstances.


 


9.                                       This
Agreement supersedes all prior agreements and understandings between the
parties with respect to the subject matter hereof and it may not be modified or
terminated orally.  No modification or
attempted waiver shall be valid unless in writing and signed by the party
against whom the same is sought to be enforced.


 


10.                                 This
Agreement shall be governed by, and construed in accordance with the laws of
the State of Maryland, without reference to provisions that refer a matter to
the law of any other jurisdiction.  Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by
arbitration in Montgomery County, Maryland in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and judgment upon
the award rendered by the arbitrator or arbitrators may be entered in any court
having jurisdiction thereof.  The
arbitrator or arbitrators shall be deemed to possess the powers to issue
mandatory orders and restraining orders in connection with such arbitration.
The expenses of the arbitration shall be borne equally by the parties to the
arbitration, provided that each party shall pay for and bear costs of its own
experts and counsel’s fees.


 


11.                                 All
payments and benefits required to be made by the Company hereunder to you shall
be subject to the withholding of such amounts relating to taxes and other
government assessments as the Company may reasonably determine it should
withhold pursuant to any applicable law, rule or regulation.


 


12.                                 The
parties acknowledge and agree that this Agreement was jointly drafted by the
Company on the one side and by you on the other side and in the case of any
ambiguity contained in this Agreement, such ambiguity shall not be interpreted
against the drafter.  YOU ACKNOWLEDGE
AND AGREE THAT YOU HAVE READ AND UNDERSTAND THE TERMS OF THIS AGREEMENT AND YOU
HAVE VOLUNTARILY AGREED TO THESE TERMS WITHOUT COERCION OR UNDUE PERSUASION BY
THE COMPANY OR ANY OFFICER, DIRECTOR OR OTHER AGENT THEREOF AND THAT YOU HAVE
BEEN ENCOURAGED BY THE COMPANY TO SEEK, AND HAVE SOUGHT AND RECEIVED, AT YOUR
OWN EXPENSE, COMPETENT LEGAL COUNSEL IN YOUR REVIEW AND CONSIDERATION OF THIS
AGREEMENT AND ITS TERMS.


 


3

















 


13.                                 In
consideration of the Company’s agreement to enter into this Agreement and pay
the amounts contemplated hereunder, you agree to the limited release of the
Company and its respective current and former officers, directors,
shareholders, employees, representatives, heirs, attorneys and agents, as well
as its respective predecessors, parent companies, subsidiaries, affiliates
divisions, successors and assigns and their respective current and former
officers, directors, shareholders, employees, representatives, attorneys and
agents (the “Released Parties”) from all claims, liabilities, and causes of
action which you had, now have or may have against the Released Parties related
to your employment prior to the date hereof and arising under: (i) any claim,
tort or cause of action for wrongful or unlawful discharge or demotion,
violation of public policy, invasion of privacy, intentional or negligent
infliction of emotional distress, defamation, unlawful effort to prevent
employment, discrimination on the basis of race, color, sex, national origin,
ancestry, religion, age, disability, handicap, medical condition or marital
status; (ii) Title VII of the Civil Rights Act of 1964, as amended; (iii) The
National Labor Relations Act, as amended; (iv) The Civil Rights Act of 1991;
(v) Sections 1981 through 1988 of Title 42 of the United States Code, as
amended; (vi) The Immigration Reform Control Act, as amended; (vii) The
Americans With Disabilities Act of 1990, as amended; (viii) The Age
Discrimination in Employment Act of 1967, as amended; (iv) The Occupational
Safety and Health Act, as amended; (x) The Family and Medical Leave Act of
1993; (xi) Maryland Occupational Health and Safety Laws; (xii) Maryland Fair
Employment Practice Act; (xiii) Montgomery County Discrimination Laws and (xiv)
any claim relating to your Employment Agreement or the termination thereof.   This release shall not include any claim
arising under any national, state or local statute, law, or ordinance other
than those herein delineated, and shall specifically exclude any claims,
liabilities, causes of action or attorneys’ fees arising from the Company’s obligations
under this Agreement, your rights to accrued benefits under the Employee
Retirement Income Security Act of 1974, as amended, and your rights to receive
all insurance, including indemnification and defense rights and benefits you
are eligible to receive from the Company. This limited release is solely for
the benefit of the Released Parties and shall in no way release any rights or
benefits to which you may be entitled from any other entity or person.


 


[SIGNATURE PAGE NEXT]


 


4

















 


The Company
and you have executed this Agreement, intending to be bound legally as of
August 26, 2003.


 


	
   

  	
  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  CRIIMI MAE
  Inc.

  
	
   

  	
   A Maryland Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barry
  Blattman

  
	
   

  	
  Name:

  	
  Barry
  Blattman

  
	
   

  	
  Its:

  	
  Chairman,
  President and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
  AND

  
	
   

  	
   

  	
   

  
	
   

  	
  CRIIMI MAE
  Management, Inc.

  
	
   

  	
   A Maryland Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barry
  Blattman

  
	
   

  	
  Name:

  	
  Barry
  Blattman

  
	
   

  	
  Its:

  	
  Chairman,
  President and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Cynthia
  O. Azzara

  
	
   

  	
  Cynthia O.
  Azzara

  
					



 


5