Exhibit
10.27


 


CHANGE IN
CONTROL AGREEMENT


 


This CHANGE IN CONTROL
AGREEMENT (this “Agreement”) is entered into by and among CRIIMI MAE Inc. (the “Company”),
a Maryland corporation, CRIIMI MAE Management, Inc. (“CM Management”), a
Maryland corporation, and Stephen M. Abelman (the “Executive”) and shall be
effective as of February 1, 2005 (the “Effective Date”).


 


1.                                       Term.  This Agreement shall be effective for the
period commencing on the Effective Date and ending on the third anniversary of
the Effective Date, subject to earlier termination in accordance with the terms
of this Agreement (the “Term”).  The Term
shall be automatically renewed for a three-year period upon the occurrence of a
Change in Control (as defined below).


 


2.                                       Change in Control Benefits.


 


(a)                                  If within two years of a Change in
Control the Executive’s employment with either the Company, CM Management or
CRIIMI MAE Services Limited Partnership (“CMSLP”) is terminated by the Company,
CM Management or CMSLP (as applicable) without Cause (as defined below) or by
the Executive for Good Reason (as defined below), the Company, CM Management
and CMSLP shall be relieved of any further salary or compensation payments to
the Executive other than as expressly provided in this Paragraph 2.  Notwithstanding the preceding sentence, in
return for the execution and delivery by the Executive of a general release and
waiver of claims in favor of the Company and its affiliates, the Executive
shall promptly receive from the Company and/or CM Management a lump sum
severance payment (subject to appropriate payroll and tax withholding and
deductions) equal in amount to $1,000,000.


 


(b)                                 Notwithstanding the preceding paragraph,
immediately upon a Change in Control, any equity awards granted to the
Executive that have not yet become vested, exercisable or unrestricted (as
applicable) as of the date of such Change in Control shall become vested,
exercisable or unrestricted (as applicable, and subject to appropriate
withholding and deductions).


 


(c)                                  The foregoing severance payment and
benefits shall be in lieu of any other severance payment or severance benefit
(other than the payment of accrued but unpaid salary and vacation benefits
through the date of termination and a pro rata portion of any accrued but
unpaid minimum annual bonus for the year of such termination) under any plan,
policy or practice of the Company or under any employment agreement, employment
letter, severance agreement or other understanding between the Company or CM
Management and the Executive (collectively, any “Other Agreement”).  Notwithstanding the preceding sentence,
Executive will continue to be entitled to officer indemnification and shall be
covered by both the Company’s directors and officers insurance and the
indemnification provisions contained in the Certificate of Incorporation and/or
By-laws of the Company irrespective of whether he is employed by the Company or
CM Management at the time of the assertion of any liability against him.  Executive


 


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will also continue to be
entitled only to such other benefits as are required by law to survive his
employment.  If it shall be determined
that any payment or benefit provided to the Executive would constitute an “excess
parachute payment” within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the “Code”), and would be subject to the
excise tax imposed by Section 4999 of the Code, then the cash payment
provided to the Executive hereunder shall be reduced such that, after the
deduction of appropriate payroll and tax withholding (including any such excise
tax) from all “parachute payments” (as defined in the Code) provided to the
Executive, the Executive shall receive aggregate payments and benefits with the
greatest net present value.


 


(d)                                 The termination of the Executive’s
employment with the Company or CM Management shall not affect any of the
obligations of the Executive, the Company or CM Management that may arise under
Paragraph 3 below.


 


3.                                       Nonsolicitation, Developments,
Nondisparagement and Confidentiality.  In
consideration for the benefits provided pursuant to this Agreement, the
Executive agrees:


 


(a)                                  During the Term and for a period of two
years following the termination of the Executive’s employment with the Company
and CM Management, he will not, directly or indirectly, (i) induce or attempt
to induce, any employees or agents of the Company and/or any of its affiliates
to do anything from which the Executive is restricted by reason of this
Agreement, or (ii) offer or aid others to offer employment to any employees or
agents of the Company and/or its any of its affiliates.


 


(b)                                 The Executive, the Company and CM
Management agree that, during the Term and following the termination of the
Term, no party will disparage the other, including the Company’s affiliates,
products, services, customers, clients, counterparties, officers, directors,
employees, former employees, representatives and agents, in any way whatsoever.


 


(c)                                  All data, concepts, ideas, designs,
findings, discoveries, inventions, improvements, advances, methods, formulas,
plans, programs (computer or otherwise), practices, techniques, developments
and relationships with customers and prospective customers relating in any way
to the present products, services, or business of the Company, CM Management
and their affiliates (collectively “Developments”) that the Executive first
conceived, made, invented or suggested during or as a result of his employment
by the Company or CM Management, whether acting alone or in conjunction with
others, shall be the sole and absolute property of the Company and/or CM
Management (as applicable) free of any rights of any kind on the part of the
Executive.  The Executive shall promptly
make full disclosure of all Developments to the Company.  The Executive agrees to do all acts and
things (including, among others, the execution and delivery of patent and
copyright applications and instruments of assignment) deemed by the Company to
be necessary or desirable at any time in order to effect the full assignment to
the Company of his rights, if any, to such Developments.


 


(d)                                 The Executive recognizes that, in
connection with his employment by the Company and CM Management, he may learn
of, and/or it may be desirable or necessary for the Company and CM Management
to disclose to him oral or written confidential information


 


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(“Confidential
Information”).  The Executive understands
that Confidential Information is valuable and proprietary to the Company and CM
Management (or to third parties that have entrusted the Confidential
Information to the Company and CM Management). 
The Executive agrees that, except as required by his employment with the
Company and CM Management or by order of a court of competent jurisdiction, he
will not at any time, directly or indirectly, use, publish, communicate,
describe, disseminate, or otherwise disclose Confidential Information to any
person or entity without the express prior written consent of the Company.  The term Confidential Information shall
include, but shall not be limited to: 
(i) customer and client lists, asset lists, lists of potential
customers, clients or properties and details of agreements with customers or
regarding assets; (ii) acquisition, expansion, marketing, financial and other
business information and plans of the Company and CM Management; (iii) research
and development; (iv) data compiled by the Company and CM Management; (v)
computer programs; (vi) sources of supply; (vii) Confidential Information
developed by specialized consultants or contractors for the Company and CM
Management; (viii) purchasing, operating, servicing and other cost data; (ix)
special customer needs, cost and pricing data; and (x) employee information
(including, but not limited to, personnel, payroll, compensation and benefit
data and plans), including all such information recorded in manuals, memoranda,
projections, minutes, plans, drawings, designs, formula books, specifications,
computer programs and records, whether or not legended or otherwise identified
by the Company or CM Management as Confidential Information, as well as such
information that is the subject of meetings and discussions and not
recorded.  Notwithstanding anything in
this subparagraph 3(d), Confidential Information shall not include the contents
of Executive’s rolodex or his Microsoft contacts file.  Confidential Information also shall not
include such information that is generally available to the public (other than
as a result of a disclosure by the Executive) or that is disclosed to the
Executive by a third party under no obligation to keep such information
confidential.


 


(e)                                  Upon the termination of the Executive’s
employment with the Company and CM Management or upon the Company’s request prior
to such termination, whichever is sooner, the Executive shall immediately
deliver to the Company all plans, designs, listings, manuals, records,
notebooks, and similar repositories of or containing Confidential Information
or other documents and data relating to the Company’s and CM Management’s
products, services, or business then in the Executive’s possession or control
or available from other persons receiving such documents from the Executive,
whether prepared by the Executive or others. 
The Executive shall not retain any copies or abstracts of any such
documents.  Upon the termination of the
Executive’s employment with the Company and CM Management, the Executive shall
immediately deliver to the Company all the property of the Company and CM Management
in his possession or control including, but not limited to, computer(s) and
office equipment.


 


(f)                                    Any substantial or material breach by the
Executive of any of the obligations set forth in this Paragraph 3 shall
terminate any further obligations that the Company or CM Management may have
relative to providing compensation or benefits to the Executive and shall
result in the immediate expiration and voiding of any outstanding options,
rights and other awards, vested or unvested.


 


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4.                                       Definitions.


 


(a)                                  “Cause” shall exist only if, after
reasonable investigation, a majority of the Board of Directors of the Company
(the “Board”), after providing the Executive (and his counsel, if he so
chooses) a reasonable opportunity to be heard, finds that one or more of the
following conditions exists:  (i) an act
or acts of personal dishonesty or misrepresentation made by the Executive and
intended to result in substantial personal enrichment of the Executive at the
expense of the Company or CM Management; (ii) demonstrably willful and
deliberate violations by the Executive of the Executive’s obligations under
this Agreement; (iii) the Executive’s gross neglect (other than any such
failure resulting from incapacity due to physical or mental illness) or gross
misconduct in carrying out his duties resulting, in either case, in material
economic harm to the Company or CM Management; (iv) the final, non-appealable
conviction by a court of law of, or plea of nolo contendere by, the Executive
of a felony.


 


(b)                                 A “Change in Control” shall mean the
occurrence during the Term of any one of the following events:


 


(i)                                     An acquisition (other than directly from
the Company) of any shares of the Common Stock of the Company (“Common Shares”)
or other voting securities of the Company by any “Person” (for purposes of this
Section only, as the term “person” is used for purposes of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”)),
immediately after which such Person has “Beneficial Ownership” (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent
(50%) or more of either (i) the then outstanding Common Shares or (ii) the
combined voting power of the Company’s then outstanding voting securities
entitled to vote for the election of directors, trustees or their equivalent
(the “Voting Securities”); provided, however, that in determining whether a
Change in Control has occurred, Common Shares or Voting Securities which are
acquired in a “Non-Control Acquisition” (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in Control.  A “Non-Control Acquisition” shall mean an
acquisition by (i) an employee benefit plan (or a trust forming a part thereof)
maintained by (A) the Company or (B) any corporation or other Person of which a
majority of its voting power or its voting equity securities or equity interest
is owned, directly or indirectly, by the Company (for purposes of this
definition, a “Related Entity”), (ii) the Company or any Related Entity, or
(iii) any Person in connection with a “Non-Control Transaction” (as hereinafter
defined); or


 


(ii)                                  The individuals who, on the Effective
Date, are members of the Board (the “Incumbent Board”), (i) cease for any
reason (including, without limitation, any increase or decrease in the size of
the Board) to constitute at least a majority of the members of the Board, or
(ii) following a Merger (as hereinafter defined), do not constitute at least a
majority of the Board of Directors or its equivalent of (x) the Surviving
Corporation (as hereinafter defined), if fifty percent (50%) or more of the
combined voting power of the then outstanding voting securities of the
Surviving Corporation is not Beneficially Owned, directly or indirectly by a
Parent Corporation, or (y) if there is one or more Parent Corporations, the
ultimate Parent Corporation (as hereinafter defined); provided, however, that
if the election, or nomination for election by the Company’s common shareholders,
of any new director was approved by a vote of at least a majority of the
Incumbent Board, such new director shall, for purposes of this Plan, be
considered as a member of the Incumbent Board; provided, further, however, that
no individual shall be considered a member of the Incumbent Board if such
individual initially assumed office


 


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as a result of an actual
or threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board of Directors of the Company (a “Proxy Contest”), including
by reason of any agreement intended to avoid or settle any Proxy Contest; or


 


(iii)                               The consummation of:


 


(A)                              A merger, consolidation, reorganization
or joint venture with or into the Company or a direct or indirect subsidiary of
the Company or in which securities of the Company are issued (a “Merger”),
unless the Merger is a “Non-Control Transaction.”  A “Non-Control Transaction” shall mean:


 


(I)                                    the shareholders of the Company
immediately before such Merger own directly or indirectly immediately following
the Merger, in substantially similar proportion as among such shareholders
immediately before the Merger, at least fifty percent (50%) of the outstanding
common shares and the combined voting power of the outstanding voting
securities of (x) the corporation or entity resulting from such Merger
(the “Surviving Corporation”), if fifty percent (50%) or more of the combined
voting power of the then outstanding voting securities of the Surviving Corporation
is not Beneficially Owned, directly or indirectly, by another corporation or
entity (such other corporation or entity, or group of corporations or entities,
being hereinafter called a “Parent Corporation”), or (y) if there is one or
more Parent Corporations, the Parent Corporation;


 


(II)                                the individuals who were members of the
Incumbent Board immediately prior to the execution of the agreement providing
for the Merger constitute at least a majority of the members of the Board of
(x) the Surviving Corporation, if fifty percent (50%) or more of the
combined voting power of the then outstanding voting securities of the
Surviving Corporation is not Beneficially Owned, directly or indirectly, by a
Parent Corporation, or (y) if there is one or more Parent Corporations, the
Parent Corporation; and


 


(III)                            no Person other than (1) the Company or
another corporation that is a party to the agreement of Merger, (2) any Related
Entity, or (3) any employee benefit plan (or any trust forming a part
thereof) that, immediately prior to the Merger, was maintained by the Company
or any Related Entity, or (4) any Person who, immediately prior to the Merger
had Beneficial Ownership of fifty percent (50%) or more of the then outstanding
Common Shares or Voting Securities, has Beneficial Ownership, directly or
indirectly, of fifty percent (50%) or more of the combined voting power of the
outstanding voting securities or common shares of (x) the Surviving
Corporation, if fifty percent (50%) or more of the combined voting power of the
then outstanding voting securities of the Surviving Corporation is not
Beneficially Owned, directly or indirectly by a Parent Corporation, or (y) if
there is one or more Parent Corporations, the Parent Corporation.


 


(B)                                A complete liquidation or dissolution of
the Company; or


 


(C)                                The sale or other disposition of all or
substantially all the assets of the Company and its subsidiaries taken as a
whole to any Person or group of Persons in a single transaction or series of
transactions (other than a transfer to a Related Entity or under


 


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conditions that would
constitute a Non-Control Transaction with the disposition of assets being
regarded as a Merger for this purpose or the distribution to the Company’s
shareholders of the stock of a Related Entity or any other assets); or


 


(iv)                              Any change in the constitution,
capitalization, terms or conditions of the Preferred Stock of the Company that
results in a Change on Control as described in subparagraphs 4(b)(i), (ii) and
(iii) above; or


 


(v)                                 Any transaction or event that causes or
results in the Company becoming an externally managed real estate investment
trust.


 


Notwithstanding the
foregoing, a Change in Control shall not be deemed to occur solely because any
Person (the “Subject Person”) acquired Beneficial Ownership of more than the
permitted amount of the then outstanding Common Shares or Voting Securities as
a result of the acquisition of Common Shares or Voting Securities by the
Company which, by reducing the number of Common Shares or Voting Securities
then outstanding, increases the proportional number of shares Beneficially
Owned by the Subject Persons; provided, that if a Change in Control would occur
(but for the operation of this sentence) as a result of the acquisition of
Common Shares or Voting Securities by the Company, and after such share
acquisition by the Company, the Subject Person becomes the Beneficial Owner of
any additional Common Shares or Voting Securities which increases the percentage
of the then outstanding Common Shares or Voting Securities Beneficially Owned
by the Subject Person, then a Change in Control shall occur.


 


(c)                                  “Good Reason” will exist only upon (i)
any material adverse change in the Executive’s titles, powers, responsibilities,
authorities or reporting relationships, (ii) any material breach by the Company
of any provision of this Agreement or any Other Agreement, (iii) any reduction
in the Executive’s base compensation (including, without limitation, any
guaranteed minimum cash or equity bonuses or awards), or (iv) the relocation of
the Executive’s principal place of performance more than 20 miles from its
location on the date hereof in Rockville, Maryland, in each case which occurs
without the Executive’s prior written consent and which is not fully corrected
by the Company within 30 days of written notice to the Board.


 


5.                                       Full Settlement. 
The obligation of the Company and/or CM Management to make the payments
or grant the benefits provided for in this Agreement and otherwise to perform
its or their obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company or CM Management may have against the Executive or others, except as
otherwise provided in this Agreement.  In
no event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable or benefits granted to
the Executive under any of the provisions of this Agreement and such amounts or
benefits shall not be reduced because the Executive obtains other employment,
except as otherwise provided in this Agreement.


 


6.                                       Applicable Law. 
Any question as to the scope, interpretation and effect of this
Agreement will be resolved under the substantive and procedural laws of the
State of Maryland and the United States.


 


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7.                                       Enforceability. 
All provisions and portions of this Agreement are severable.  If any provision or portion of this Agreement
or the application of any provision or portion of the Agreement shall be
determined to be invalid or unenforceable to any extent or for any reason, all
other provisions and portions of this Agreement shall remain in full force and
effect and shall continue to be enforceable to the fullest and greatest extent
permitted by law.


 


8.                                       No Representations. 
The Executive agrees that no promises, other than the promises in this
Agreement, have been made to him by or on behalf of the Company or CM Management.  He agrees that in executing this Agreement he
is not relying upon any statement or representation, other than those set forth
herein, made by or on behalf of the Company or CM Management concerning his
employment by the Company or CM Management.


 


9.                                       Successors.


 


(a)                                  This Agreement is personal to the
Executive and without the prior written consent of the Company shall not be
assignable by the Executive.  This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
legal representatives.


 


(b)                                 This Agreement shall inure to the benefit
of and be binding upon the Company, CM Management and their successors and
assigns.


 


(c)                                  The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place.


 


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IN WITNESS WHEREOF, the
parties have executed this Agreement effective as of the Effective Date.


 


 


	
   

  	
  CRIIMI MAE INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Libera

  	
   

  
	
   

  	
  Vice President and
  General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CRIIMI MAE MANAGEMENT,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Libera

  	
   

  
	
   

  	
  Vice President and
  General Counsel

  
	
   

  	
  EXECUTIVE 

  
	
   

  	
   

  
	
   

  	
  /s/ Stephen M. Abelman

  	
   

  
	
   

  	
  Stephen M. Abelman

  
						



 


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