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                                                                   Exhibit 10(r)


                    EMPLOYMENT AND NON-COMPETITION AGREEMENT


         THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT (this "Agreement") is
entered into as of the 7th day of October, 1998, between CRIIMI MAE Management,
Inc., a Maryland corporation (the "Company"), and David B. Iannarone (the 
"Executive").

                                 R E C I T A L S

         A.       The Executive has been employed by the Company since July 26, 
1996.

         B. The Company and the Executive wish to enter into an Agreement in the
form set forth herein in order to reflect their current understanding as to the
terms and conditions under which the Executive shall continue to perform
services for the Company and the Company shall continue to employ the Executive.

         For good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company and the Executive agree as follows:

         1        EMPLOYMENT.

                  1.1 POSITION. On October 7, 1998 (the "Effective Time"), the
Company shall employ the Executive as Senior Vice President and General Counsel,
and the Executive hereby accepts such employment for the term of this Agreement
(the "Term"), on the terms and subject to the conditions set forth below.

                  1.2 DUTIES. The Executive shall report directly to the
Company's President and Chairman (the "Chairman") of the Board of Directors (the
"Board"), unless the Chairman, President or the Board instructs his otherwise,
and shall perform such duties consistent with the Company's bylaws and his
position as Senior Vice President and General Counsel as may be reasonably
requested of him by the Chairman, President or by the Board.

                  1.3 ATTENTION AND EFFORT. The Executive shall be required to
devote his full business time, attention and effort to the Company's business
and affairs and perform diligently his duties as are customarily performed by
General Counsels of companies similar in character or size to the Company,
together with such other duties as may be reasonably requested of him by the
Chairman, the President or the Board, which duties shall be consistent with his
positions as set forth above and as provided in Section 1.2. The Executive
agrees to use all of his skills and business judgment and render services to the
best of his ability to serve the interests of the Company. Subject to the terms
of Section 7, this shall not preclude the Executive from serving on community
and civic boards, participating in industry associations, or otherwise engaging
in other business activities which, in the Company's reasonable judgment, do not
unreasonably interfere with his duties to the Company.

                  1.4 SUPPORT SERVICES. The Executive shall be entitled to all
of the administrative, operational and facility support customary for a General
Counsel similarly situated.


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This support shall include, without limitation, a suitably appointed private
office, a secretary or administrative assistant, and payment of or reimbursement
for reasonable cellular telephone expenses, business entertainment expenses,
expenses of the Executive for maintaining his professional license and standing
and any and all other business expenses reasonably incurred on behalf of or in
the course of performing duties for the Company. The Executive agrees to provide
such documentation of these expenses as may be reasonably required.

         2      TERM. Subject to the provisions for termination in Section 5, 
the Term shall begin on the Effective Time and shall continue through the 
third anniversary of the Effective Time.

         3      COMPENSATION. Throughout the Term, the Company shall pay or 
provide, as the case may be, to the Executive, the compensation and other 
benefits and rights set forth in this Section 3.

                  3.1 BASE SALARY. The Company shall pay to the Executive an
initial "Base Salary," payable in accordance with the Company's usual pay
practices (and in any event no less frequently than monthly), of Two Hundred
Twenty Five Thousand Dollars ($225,000) per annum beginning October 16, 1998.

                  3.2 CPI ADJUSTMENTS. The Company shall increase the
Executive's Base Salary during the same month that annual increases are
generally made to the Company's salaried employees by a minimum amount equal to
the Executive's Base Salary in effect during the month (the "Adjustment Month")
immediately prior to the month during which any annual increases are made to the
Company's salaried employees, multiplied by the greater of (i) ten percent (10%)
or (ii) the percentage increase in the Consumer Price Index-United States City
Average Urban Wage Earners and Clerical Workers (1967=100) (the "CPI") for the
Adjustment Month over the CPI for the twelfth (12th) month preceding the
Adjustment Month.

                  3.3 DISCRETIONARY BONUS. The payment of bonuses, if any, to
the Executive shall be determined by the Board in its sole discretion, provided
that in any calendar year, the Executive shall be entitled to a bonus in the
minimum amount of twenty-five percent (25%) of the Executive's Base Salary then
in effect. A bonus shall be prorated for partial calendar years.

                  3.4      STOCK OPTIONS.

                           3.4.1    STOCK OPTIONS.  At the Effective Time and on
the earlier of (i) March 16 of each year covered by this Agreement or (ii) the
date during each such year upon which options (the "Options") are otherwise
granted to the Company's other executives or salaried employees, the Executive
shall be granted Options to purchase at least Twenty Five Thousand (25,000)
Common Shares of CRIIMI MAE Inc. (the "Parent") ("Option Shares"), pursuant and
subject to the terms and conditions of a separate option agreement (the "Option
Agreement") and the Amended and Restated CRIIMI MAE Inc. Stock Option Plan for
Key Employees. To the extent possible, such Options shall qualify as incentive
stock options. The Options are in addition to any other rights and options which
may be granted to the Executive under any qualified, non-qualified, incentive,
bonus and other stock or stock option plans which may be adopted by the Company.


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                           3.4.2    VESTING.  Subject to the provisions of 
Section 6, the Options shall vest in one-third increments on each of the first
three anniversaries of the Effective Time, as provided in the Option Agreement.

                  3.5      LOAN FOR PAYMENT OF WITHHOLDING TAXES ON OPTION 
SHARES. In the event the Company is required to withhold taxes on the 
exercise of an Option by the Executive, the Company hereby agrees to lend an 
amount equal to such taxes to the Executive upon the following terms and 
conditions. The principal amount shall be due within sixty (60) days of the 
first to occur of (i) sale of the Option Shares, (ii) termination of 
employment hereunder or (iii) the tenth (10th) anniversary date of the 
Effective Time, whichever is earlier. Interest on the principal amount shall 
accrue at the appropriate applicable Federal rate, as defined in Section 
1274(d) of the Internal Revenue Code, and shall be payable when the principal 
amount is due. Of the dividends paid on the Option Shares during the term of 
the promissory note, an amount sufficient to pay any income taxes due on such 
dividends by the Executive may be retained by the Executive with the balance 
being paid to the Company, to be applied to curtail the loan, first to 
accrued and unpaid interest, then to reduce the outstanding principal 
balance. The Executive agrees to pledge the Executive's Option Shares to the 
Company as security for any such loan, pursuant to a pledge agreement 
reasonably satisfactory to counsel for the Company.

                  3.6      INSURANCE. The Company shall provide the Executive 
with benefits not less than those provided to him immediately prior to the 
Effective Time with respect to life insurance and disability insurance for 
the Executive, and medical, hospitalization and dental insurance for the 
Executive, his spouse and eligible family members in accordance with the 
policy (collectively, "Insurance Benefits"). The Company shall provide 
Insurance Benefits to the Executive in accordance with its policies.

                  3.7      AUTOMOBILE.  INTENTIONALLY OMITTED.

                  3.8      PARKING SPACE. The Company shall provide a parking 
space (a reserved one if one becomes available) in the garage of the building 
where its headquarters is located (or nearby if no such garage). The 
Executive shall pay the same proportion of the cost of such space as the 
Executive was paying for a parking space immediately prior to the Effective 
Time.

                  3.9      PROFIT SHARING, RETIREMENT AND OTHER BENEFIT 
PLANS. The Executive shall participate in all profit sharing, retirement and 
other benefit plans of the Company generally available from time to time to 
employees of the Company and for which the Executive qualifies under the 
terms thereof (and nothing in this Agreement shall, or shall be deemed to, in 
any way affect the Executive's right and benefits thereunder except as 
expressly provided herein).

                  3.10     VACATION AND SICK LEAVE. At the Effective Time, 
the Company shall provide a vacation and sick leave policy identical to the 
vacation and sick leave policy of the Company immediately prior to the 
Effective Time. The Executive shall be entitled to such periods of vacation 
and sick leave allowance each year as provided under the Company's vacation 
and sick leave policy for executive officers. The Company shall also provide 
to the Executive such additional periods of vacation and sick leave allowance 
which the Company was required to provide to the Executive, but were unused 
and accrued, up to the Effective Time.

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                  3.11      MEMBERSHIP FEES. The Company shall, on the 
Executive's behalf, bear the cost of initiation and regular membership fees 
and dues incurred during the Term for professional associations, and shall 
reimburse the Executive the amount of any charges actually and reasonably 
incurred at such association or associations in the conduct of the Company's 
business.

                  3.12      EXPENSE ALLOWANCE. The Company shall reimburse 
the Executive or provide him with an expense allowance of up to Five Thousand 
Dollars ($5,000) for each year of the Term for financial planning, tax return 
and financial statement preparation services.

                  3.13      USE OF OFFICE AFTER CESSATION OF EMPLOYMENT. 
Beginning on the day after the cessation of the Executive's employment with 
the Company, except in the case of termination of the Executive's employment 
for Cause or death, and continuing until the earlier of (i) the end of the 
third month after such cessation or (ii) the date, if ever, on which the 
Executive begins full time employment with another employer, the Company 
shall provide to the Executive, at no cost to the Executive, for his personal 
use, office space at a location in the Company's headquarters (other than in 
an executive suite of the Company's offices) and reasonable secretarial 
assistance and office support.

         4        PERMANENT DISABILITY.

                  4.1 DETERMINATION. The Executive's "Permanent Disability"
shall be deemed to have occurred one (1) day after (x) one hundred fifty (150)
days in the aggregate during any consecutive twelve (12) month period, or (y)
one hundred five (105) consecutive days that, in either case, the Executive, by
reason of his physical or mental disability or illness, shall have been unable
to discharge fully his duties under this Agreement.

                  4.2 RESOLUTION OF DISAGREEMENT. If either the Company or the
Executive, after receipt of notice of the Executive's Permanent Disability from
the other, disagrees that the Executive's Permanent Disability shall have
occurred, the Executive shall promptly submit to a physical examination by, or
at the direction of, the chief of medicine of any major accredited hospital in
the Washington, D.C. metropolitan area and, unless such physician shall issue a
written statement to the effect that, in such physician's opinion, based on such
physician's diagnosis, the Executive is capable of resuming his employment and
devoting his full time and energy to discharging fully his duties hereunder
within thirty (30) days after the date of such statement, such Permanent
Disability shall be deemed to have occurred on a date determined in accordance
with Section 4.1.

         5      TERMINATION OF EMPLOYMENT. The Executive's employment under 
this Agreement and the Term shall be terminated as provided in Sections 5.1 
through 5.5.

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                  5.1      Immediately upon the death of the Executive.

                  5.2      By the Company at any time after the Permanent 
Disability of the Executive, subject to compliance by the Company with the 
Americans With Disabilities Act, and by the Executive at any time after his 
Permanent Disability.

                  5.3      By the Company at any time for Cause.

                  5.4      By the Company at any time without Cause.

                  5.5      By the Executive's resignation.

                  5.6      For purposes hereof, Cause shall mean:

                           5.6.1    (i) Active participation by the Executive in
fraudulent conduct, (ii) conviction of, or a guilty plea to, a felony, (iii) a
deliberate act or series of deliberate acts which, in the reasonable judgment of
the Company, results or would likely result in material injury to the business,
operations or business reputation of the Company, (iv) an act or series of acts
of dishonesty, recklessness or gross negligence or (v) the Executive's willful
failure to perform any of his material duties under this Agreement; provided,
however, there shall not be Cause in the case of (x) clause (iii), if the
Executive promptly and diligently, after receipt of written notice from the
Company, takes such action which causes the Company, in its reasonable judgment,
to believe that such act would not likely result in material injury to the
business, operations or business reputation of the Company, or that any such
injury, if already incurred, has been rectified, or (y) clause (v), if the
Executive promptly and diligently, after receipt of written notice from the
Company, discontinues his failure to perform and rectifies any injury which
resulted from his failure to perform. Any repetition of any such deliberate, or
substantially similar, act or such willful, or substantially similar, failure to
perform, shall be Cause without any further opportunity to cure.

                           5.6.2    The Executive's material breach of any 
provision of this Agreement, which material breach has not been cured to the
Company's reasonable satisfaction within ten (10) days after the Company gives
written notice thereof to the Executive or within such longer period of time, up
to sixty (60) days after such notice, which is reasonably required to cure the
default if the Executive is acting diligently to cure the default.

                           5.6.3    Excessive absenteeism by the Executive; 
provided that absenteeism (x) related to illness or otherwise covered by Section
4, (y) required to be permitted under applicable federal or state laws, or (z)
permitted under a policy of the Company, shall not deemed to be excessive.

                           5.6.4    The voluntary resignation of the Executive 
without the prior consent of the Board.

                  5.7      Upon any termination of the Executive's employment 
under this Agreement, the Executive shall be deemed to have resigned from all 
offices and directorships held 

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by the Executive in the Company, the Parent, and all entity affiliates of the
Parent, and the Executive shall sign and deliver to the Company, the Parent, and
all entity affiliates of the Parent, as the case may be, written resignations
from all such offices and directorships.

         6        SEVERANCE COMPENSATION.

                  6.1      TERMINATION BY DEATH. If the Executive's 
employment is terminated by death, the Executive's estate shall be entitled 
to receive (x) severance compensation, within ninety (90) days after the date 
of death, in a lump sum payment equal to the total of his Base Salary under 
Section 3.1 for twelve (12) months after the date of death, and a pro rata 
portion of the bonus applicable to the calendar year in which death occurs, 
(y) other benefits under Sections 3.9 and 3.10, payable within ninety (90) 
days after the date of death, accrued by him hereunder up to and including 
the date of the Executive's death and (z) benefits, if any, provided by any 
insurance policies in accordance with their terms. Any rights to purchase 
Option Shares that shall not have vested under the Option Agreement shall 
vest immediately upon the death of the Executive.

                  6.2      TERMINATION FOR CAUSE. If the Executive's 
employment is terminated by the Company for Cause, the Company shall not have 
any other or further obligations to the Executive under this Agreement 
(except (x) as may be provided in accordance with the terms of profit 
sharing, retirement and other benefit plans pursuant to Section 3.9 (y) as to 
that portion of any unpaid Base Salary and other benefits accrued and earned 
under this Agreement through the date of such termination, and (z) as to 
benefits, if any, provided by any insurance policies in accordance with their 
terms). Any rights to purchase Option Shares that shall not have vested under 
the Option Agreement within thirty (30) days following such termination shall 
terminate. Furthermore, all rights to purchase Option Shares that are vested 
must be exercised within one hundred eighty (180) days following such 
termination of employment or such rights shall terminate.

                  6.3      TERMINATION WITHOUT CAUSE OR FOR PERMANENT 
DISABILITY.

                           6.3.1      If the Executive's  employment is 
terminated by the Company without Cause, the Executive shall be entitled to 
receive (x) severance compensation equal to what would have been his Base 
Salary under Section 3.1 for twelve (12) months from the date of such 
termination, payable at such times as his Base Salary would have been paid if 
his employment had not been terminated and a pro rata portion of the bonus 
applicable to the calendar year in which such termination occurs, (y) other 
benefits pursuant to Sections 3.9, 3.10, 3.12 and 3.13, payable within ninety 
(90) days after the date of such termination, accrued by him hereunder up to 
and including the date of such termination and (z) benefits, if any, provided 
by any insurance policies in accordance with their terms. The vesting 
schedules for the rights to purchase Option Shares set forth in the Option 
Agreement shall not be affected by any such termination of employment without 
Cause.

                           6.3.2    If the Executive's employment is terminated 
because of his Permanent Disability, the Executive shall be entitled to receive
(x) severance compensation equal to what would have been his Base Salary under
Section 3.1 for twelve (12) months from the date of such termination, payable at
such times as his Base Salary would have been paid if his employment had not
been terminated, (y) other benefits pursuant to Section 3.9, 3.10, 3.12 and


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3.13, payable within ninety (90) days after the date of such termination,
accrued by him hereunder up to and including the date of such termination and
(z) benefits, if any, provided by any insurance policies in accordance with
their terms. The vesting schedules for the rights to purchase Option Shares set
forth in the Option Agreement shall not be affected by any such termination of
employment for Permanent Disability.

                  6.4      INVOLUNTARY RESIGNATION. If the Executive resigns 
from all offices and directorships of the Company, the Parent, and all entity 
affiliates of the Parent for any of the reasons set forth in Sections 6.4.1 
through 6.4.7, such resignation shall be deemed to be an "Involuntary 
Resignation," and the Executive shall be entitled to receive the same 
severance compensation and other benefits as are provided for in Section 6.3. 
The vesting schedules for the rights to purchase Option Shares set forth in 
the Option Agreement shall not be affected by any such termination of 
employment without Cause, except as set forth in Section 6.4.7, below.

                           6.4.1    The Company materially changes the 
Executive's duties and responsibilities as set forth in Section 1 without his
consent. The Executive shall be deemed to have consented to any written proposal
calling for a material change in his duties and responsibilities as set forth in
Section 1 unless she shall give written notice of his objection thereto to the
Company within thirty (30) days after receipt of such written proposal. If the
Executive shall have given such objection, the Company shall have the
opportunity to withdraw such proposed material change by written notice to the
Executive given within ten (10) days after the end of such fifteen (15) day
period.

                           6.4.2    The Executive's place of employment or the 
principal executive offices of the Company are located more than twenty-five
(25) road miles from 11200 Rockville Pike, Rockville, Montgomery County,
Maryland.

                           6.4.3    The Company, without the Executive's prior 
written consent, reduces the Executive's Base Salary.

                           6.4.4    The Company imposes requirements on the 
Executive, or gives instructions or directions to the Executive, which are: (x)
contrary to or in violation of (i) rules, principles, or codes of professional
responsibility or (ii) law (as set forth in written statutes or regulations
thereunder), which the Executive is obligated to follow; (y) such that
compliance by the Executive with such requirements, instructions or directions
would likely (i) have a material adverse effect on the Executive or (ii) cause
the Executive to suffer substantial liability, and (z) not withdrawn by the
Company after written request by the Executive, which written request sets forth
the Executive's complete explanation as to why she believes the requirements,
instructions or directions should be withdrawn.

                           6.4.5    There occurs a material breach by the 
Company of any of its obligations under this Agreement, which breach has not
been cured in all material respects within thirty (30) days after the Executive
gives written notice thereof to the Company, which notice sets forth in
reasonable detail the nature and circumstances of such breach.


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                           6.4.6    The Company, the Parent, or a entity 
affiliate of the Parent violates a federal or state criminal law involving moral
turpitude, and the Executive was unaware of such unlawful activity at the time
of its occurrence.

                           6.4.7    There occurs a "change in control."  In the 
event of termination within six (6) months following a "change in control," the
Executive shall be entitled to a supplemental payment, in addition to severance
compensation and other benefits set forth in Section 6.3. Such supplemental
payment shall be an amount equal to the Executive's Base Salary (determined at
the time of the Executive's termination of employment) for thirty-six (36)
months. Such supplemental payment shall be paid in a lump sum within ninety (90)
days after the Executive's termination of employment. In addition, all Options
shall become immediately exercisable notwithstanding any vesting schedule that
would otherwise apply and the Executive shall also be entitled to the benefit
set forth in Section 3.5. In no event, however, shall any amount be paid under
Section 6.4.7 which would otherwise constitute an "excess parachute payment" as
defined in Section 280G of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"). The Executive shall be provided with all data utilized
by the Company in the computation of benefits which potentially involve the
application of Sections 280G and 4999 of the Internal Revenue Code. To the
extent that payment of any of the benefits to the Executive is curtailed so as
to avoid triggering the application of Section 4999 of the Internal Revenue
Code, the Executive shall be given the opportunity to select which among the
affected benefits shall be subject to such curtailment.

         The term "change in control" means the first to occur of the following
events:

                                    A.      Any person or group of commonly 
controlled persons owns or controls, directly or indirectly, thirty-five percent
(35%) or more of the voting control of, or beneficial rights to, the voting
capital stock of the Parent.

                                    B.      The Parent's stockholders approve an
agreement to merge or consolidate with another corporation or other entity
resulting (whether separately or in connection with a series of related
transactions) in a change in ownership of twenty percent (20%) or more of the
voting control of, or beneficial rights to, the voting capital stock of the
Parent, or an agreement to sell or otherwise dispose of all or substantially all
of the Parent's assets (including, without limitation, a plan of liquidation or
dissolution), or otherwise approve of a fundamental alteration in the nature of
the Parent's business.

                                    C.      The Parent no longer owns a majority
of the voting stock of the Company.

                                    D.      Notwithstanding the provisions of 
Sections 6.4.7.A. and B., the ownership of Common Shares by the Executive,
William B. Dockser, H. William Willoughby, and their respective affiliates shall
not be taken into account in determining whether there has been a "change in
control" of the Parent.

                  6.5      VOLUNTARY RESIGNATION OR FAILURE TO EXTEND THE 
TERM. If the Executive voluntarily resigns his employment, or is an employee 
of the Company at the third anniversary of the commencement of the Term and 
the Executive and the Company have not reached mutual 

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agreement with respect to the Executive's continued employment by the Company,
the Executive's employment shall be terminated. In the event of a failure to
extend the Term, the Executive shall be entitled to receive (x) severance
compensation equal to what would have been his Base Salary under Section 3.1 for
twelve (12) months after such date, payable at such times as his Base Salary
would have been paid if the Term had not expired and (y) other benefits under
Sections 3.9 and 3.13, payable within ninety (90) days after the date the Term
expired, accrued by him hereunder up to and including the date of such
expiration. In the event of voluntary resignation, the Executive shall not be
entitled to any severance compensation, but shall be entitled to benefits under
Sections 3.9 and 3.13, payable as set forth above.

                           6.5.1    In the event of a voluntary resignation, any
rights to purchase Option Shares that have not vested pursuant to the Option
Agreement shall terminate immediately upon such voluntary resignation.
Furthermore, all rights to purchase Option Shares that are vested must be
exercised within one hundred eighty (180) days following such voluntary
resignation or such rights shall terminate.

                           6.5.2    In the event employment is terminated for a 
failure to extend the Term, the vesting schedules for the rights to purchase
Option Shares set forth in the Option Agreement shall not be affected by any
such termination.

         7        COVENANTS AND CONFIDENTIAL INFORMATION.

                  7.1      AGREEMENT. The Executive acknowledges the 
Company's reliance on and expectation of the Executive's continued commitment 
to performance of his duties and responsibilities during the Term. In light 
of such reliance and expectation on the part of the Company, during the 
periods hereafter specified in Section 7.2, the Executive covenants that she 
shall not, directly or indirectly, do or cause, or allow to be done, any of 
the following:

                           7.1.1  Own,  manage,  control or  participate  in 
the ownership, management or control of, or be employed or engaged by, or 
otherwise affiliated or associated as, a consultant, independent contractor 
or otherwise with, any other corporation, partnership, proprietorship, firm, 
association or other business entity directly or indirectly engaged in the 
business of, or otherwise directly or indirectly engaged in any activities 
that (x) compete with the Company, the Parent, or any entity affiliate of the 
Parent or (y) are of a type which are the same or materially similar to the 
business activities in which during the Term the Company, the Parent, or any 
entity affiliates of the Parent engaged; provided, however, that the 
beneficial and/or record ownership of not more than two and one-half percent 
(2.5%) of any class of publicly traded securities of any such entity shall 
not be deemed a violation of this covenant; or

                           7.1.2    Disclose, divulge, discuss, copy or 
otherwise use or suffer to be used in any manner, other than in accordance with
the Executive's duties hereunder or to the Executive's counsel, any confidential
or proprietary information relating to the Company's business, prospects,
finances, operations, properties or otherwise to its particular business or
other trade secrets of the Company, the Parent, or any entity affiliate of the
Parent, it being acknowledged by the Executive that all such information
regarding the business of the Company, the Parent, or any entity affiliate of
the Parent compiled or obtained by, or furnished to, the Executive while the
Executive shall have been employed by or associated with the Company is


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confidential and/or proprietary information and the exclusive property of the
Company, the Parent, or a entity affiliate of the Parent, as the case may be;
provided, however, that the foregoing restrictions shall not apply to the extent
that such information (x) is clearly obtainable in the public domain; (y)
becomes obtainable in the public domain, except by reason of the breach by the
Executive of the terms hereof; or (z) is required to be disclosed by rule of law
or by order of a court or governmental body or agency.

                  7.2      The applicable periods shall be: (x) for Sections 
7.1.1 and 7.1.2 so long as the Executive is an employee of the Company; and 
(y) for Section 7.1.2 only at any time after the Executive ceases to be an 
employee of the Company but is receiving severance compensation as provided 
in Section 6.

                  7.3      The Executive agrees and understands that the 
remedy at law for any breach by him of this Section 7 will be inadequate and 
that the damages flowing from such breach are not readily susceptible to 
being measured in monetary terms. Accordingly, it is acknowledged that the 
Company, the Parent, and any entity affiliates of the Parent, as the case may 
be, shall be entitled to immediate injunctive relief and may obtain a 
temporary order restraining any threatened or further breach. Nothing in this 
Section 7 shall be deemed to limit the remedies at law or in equity for any 
breach by the Executive of any of the provisions of this Section 7 which may 
be pursued or availed of by the Company, the Parent, or any entity affiliate 
of the Parent.

                  7.4     The Executive has carefully considered the nature 
and extent of the restrictions upon him and the rights and remedies conferred 
upon the Company, the Parent, and any entity affiliates of the Parent under 
this Section 7, and hereby acknowledges and agrees that the same are 
reasonable with respect to time and territory; are designed to eliminate 
competition which otherwise would be unfair to the Company, the Parent, and 
entity affiliates of the Parent; do not stifle the inherent skill and 
experience of the Executive; would not operate as a bar to the Executive's 
sole means of support; are fully required to protect the legitimate interests 
of the Company, the Parent, and entity affiliates of the Parent; and do not 
confer a benefit upon the Company, the Parent or entity affiliates of the 
Parent disproportionate to the detriment to the Executive.

         8        MISCELLANEOUS.

                  8.1      NO RESTRICTIONS. The Executive represents and 
warrants that she is not a party to any agreement, contract or understanding, 
whether employment or otherwise, which would restrict or prohibit him from 
undertaking or performing employment in accordance with the terms and 
conditions of this Agreement.

                  8.2      SEVERABILITY. 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.

                  8.3      SUCCESSORS AND ASSIGNS. The rights and obligations 
of the Company, the Parent, and entity affiliates of the Parent under this 
Agreement shall inure to the benefit of, and shall be binding on, the 
Company, the Parent, and entity affiliates of the Parent, and their 

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respective successors and assigns, and the rights and obligations (other than
obligations to perform services) of the Executive under this Agreement shall
inure to the benefit of, and shall be binding upon, the Executive and his heirs,
personal representatives and assigns. The benefits of the Executive's
obligations to perform services to the Company shall run equally to the Parent
and its entity affiliates as though they are parties to this Agreement.

                  8.4      DISPUTE RESOLUTION. Any controversy (excluding a 
disagreement covered by Section 4.2 (Permanent Disability)) 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 Rules of the American Arbitration Association then pertaining in 
Montgomery County, Maryland, 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; provided, however, that nothing in this Section 8.4 shall be 
construed so as to deny the Company the right and power to seek and obtain 
injunctive relief in a court of equity for any breach or threatened breach by 
the Executive of any of his covenants contained in Section 7 of this 
Agreement.

                  8.5      NOTICES. All notices and other communications 
required or permitted under this Agreement shall be in writing, and shall be 
deemed properly given if delivered personally, mailed by registered or 
certified mail in the United States mail, postage prepaid, return receipt 
requested, sent by facsimile, or sent by Express Mail, Federal Express or 
other nationally recognized express delivery service, as follows:

                  If to the Company or the Board:

                           CRIIMI MAE Management, Inc.
                           11200 Rockville Pike
                           Rockville, MD  20852
                           Attention:  Chairman of the Board
                            Fax Number: 301-231-0399

                  If to the Parent:

                           CRIIMI MAE Inc.
                           11200 Rockville Pike
                           Rockville, MD  20852
                           Attention:  Chairman of the Board
                            Fax Number: 301-231-0399

                  If to the Executive:

                           David B. Iannarone
                           17 Kentbury Way
                           Bethesda, MD 20814


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<PAGE>

Notice given by hand, certified or registered mail, or by Express Mail, Federal
Express or other such express delivery service shall be effective upon actual
receipt. Notice given by facsimile transmission shall be effective upon actual
receipt if received during the recipient's normal business hours, or at the
beginning of the recipient's next business day after receipt if not received
during the recipient's normal business hours. All notices by facsimile
transmission shall be confirmed promptly after transmission in writing by
certified mail or personal delivery. Any party may change any address to which
notice is to be given to it by giving written notice as provided above of such
change of address.

                  8.6      NO WAIVER. The failure of either party to enforce 
any provision or provisions of this Agreement shall not in any way be 
construed as a waiver of any such provision or provisions as to any future 
violations thereof, nor 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.

                  8.7      PRIOR AGREEMENTS. This Agreement supersedes all 
prior agreements and understandings between the parties and 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.

                  8.8      GOVERNING LAW. This Agreement shall be governed 
by, and construed in accordance with the provisions of, the law of the State 
of Maryland, without reference to provisions that refer a matter to the law 
of any other jurisdiction. Each party hereto hereby irrevocably submits 
itself to the non-exclusive personal jurisdiction of the federal and state 
courts sitting in Maryland; accordingly, subject to the provisions for 
arbitration provided in Section 8.4, any justiciable matters arising out of 
or relating to Section 7 of this Agreement may be adjudicated only in a 
federal or state court sitting in Maryland.

                  8.9      TAX WITHHOLDING. All payments required to be made 
by the Company hereunder to the Executive 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.

                  8.10      CAPTIONS. Captions and section headings used 
herein are for convenience and are not a part of this Agreement and shall not 
be used in construing it.

                  8.11      SINGULAR, PLURAL AND GENDER. Where necessary or 
appropriate to the meaning hereof, the singular and plural shall be deemed to 
include each other, and the masculine, feminine and neuter shall be deemed to 
include each other.

                  8.12      INDEMNIFICATION. The Executive shall have the 
full benefit of all indemnifications authorized by the Company's and the 
Parent's articles of incorporation and bylaws applicable to officers and 
directors and the Company shall provide Directors and Officers Insurance for 
the Executive in such amounts and on such terms as is maintained for any 
other officer or director of the Company.

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<PAGE>

                      (SIGNATURES FOLLOW ON FOLLOWING PAGE)


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<PAGE>





         IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement, intending to be bound legally.

                          CRIIMI MAE Management, Inc.,
                             a Maryland corporation

                                    /s/ H. William Willoughby
                           By:      ------------------------------------
                                    H. William Willoughby
                                    President

                                    /s/ David B. Iannarone
                                    ------------------------------------
                                    David B. Iannarone


         In consideration of the services which the Executive is to perform on
behalf of the Company, CRIIMI MAE Inc. agrees that it will provide the Option
Shares required to fulfill the Company's obligations under Section 3.4 of the
Agreement.

         IN WITNESS WHEREOF, CRIIMI MAE Inc. has executed this Agreement this 
_____ day of __________, 1998.

                          CRIIMI MAE Inc.

                                    /s/ William B. Dockser
                           By:      ------------------------------------
                                    William B. Dockser
                                    Chairman of the Board


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