Document:

Exhibit 10.1

 

456 North Fifth Street,
Philadelphia, PA  19123

Tel. (215) 873-2200; Fax
(215) 873-0869; Website www.motherswork.com

 

 

 

May 20, 2008

 

 

 

	
  Dan
  W. Matthias  

  Via Hand Delivery

  	
   

  	
  Rebecca
  C. Matthias  

  Via Hand Delivery

  
	
   

  	
   

  	
   

  
	
  Wachovia
  Bank, National Association  

  227 West Trade Street · Suite 1550  

  Charlotte, NC 28202-1675  

  Attn: Dawn S. Puky, Vice President

  	
   

  	
   

  

 

 

Re:          Issuance of
Letters of Credit to Rabbi Trust

 

Dear
Dan, Rebecca and Ms. Puky:

 

Reference
is hereby made to the Supplemental Retirement Agreement between Mothers Work, Inc.
(the “Company”) and Dan Matthias dated March 2, 2007 (the “DM
SERP”), the Supplemental Retirement Agreement between the Company and
Rebecca Matthias dated March 2, 2007 (the “RM SERP” and, together
with the DM SERP, the “SERPs”), the related Trust Agreement for
Supplemental Retirement Agreements between the Company and Wachovia Bank (the “Trustee”)
dated April 27, 2007 (the “Rabbi Trust Agreement”) and the related
grantor trust created by the Rabbi Trust Agreement (the “Rabbi Trust”),
each as supplemented by that certain letter agreement among us dated March 28,
2008.

 

The
purpose of this letter is to permit letters of credit to be substituted for
existing Rabbi Trust assets and future Rabbi Trust contribution obligations, as
below described.  In furtherance of this
purpose:

 

1.             Each of the Company, Mr. Matthias
and Mrs. Matthias agree that Section 4(b) of each of the SERPs
is amended by the addition of the following, immediately at the end thereof:

 

In the alternative, in lieu of
any otherwise required deposit to the grantor trust (or any portion thereof),
the Company may cause to be issued to the trustee of the grantor trust an
irrevocable standby letter of credit in an amount equal to the otherwise
required deposit (or applicable portion thereof) or may cause the size of a
letter of credit already held by the trustee to be increased by the amount of
the otherwise required deposit (or applicable portion thereof).  The issuer of such letter of credit may be
any domestic office of any commercial bank organized

 

 

 

                                    

 

 

 

 

 

under the laws of the United
States of America or any State thereof that has a combined capital surplus and
undivided profits of at least $500,000,000 and a long term senior unsecured
indebtedness rating of at least AA- by S&P or Aa3 by Moody’s.  Such letter of credit will provide that it
may be drawn upon by the trustee of the grantor trust: (i) if Benefits
become payable and are not directly paid by the Company by the latest date for
payment otherwise herein specified (or, if sooner, upon receipt from the
Company of notice of its intention not to pay directly Benefits that have
become payable), (ii) at any time in connection with the Company’s
insolvency, to the extent the trustee of the grantor trust must then make the
assets of the grantor trust available to satisfy the claims of the Company’s
general creditors, or (iii) immediately prior to the expiration of such
letter of credit (unless such letter of credit is then renewed).  The Company may, from time to time at its
sole discretion, elect to reduce the size of any letter of credit issued to the
trustee of the grantor trust provided that the Company simultaneously funds the
grantor trust with an amount of cash equal to the amount of the reduction of
the letter of credit.

 

2.             Notwithstanding any contrary terms
of the SERPs or the Rabbi Trust Agreement, each of the parties hereto consents
to the following:

 

(i)                                     Within five (5) business
days of the execution of this Agreement, the Company will cause an irrevocable
standby letter of credit consistent with the requirements of the second and
third sentences of the second paragraph of Section 4(b) of each of
the SERPs (as amended by paragraph 1, above) to be issued to the Trustee in an
amount equal to the Company’s current funding obligation under the SERPs
($3,885,258) and, immediately after the issuance of the letter of credit, the
Trustee will distribute to the Company the then current assets of the Rabbi
Trust; and

 

(ii)                                  As to any
future assets contributed to the Rabbi Trust by the Company from time to time,
the Trustee shall distribute to the Company up to all the then current assets
of the Rabbi Trust upon request of the Company, which assets may be used by the
Company for any purpose the Company chooses; provided
that, in connection with any such
distribution prior to the termination of the Rabbi Trust, the Company will
cause to be issued to the Rabbi Trust an irrevocable standby letter of credit
consistent with the requirements of the second and third sentences of the
second paragraph of Section 4(b) of each of the SERPs (as amended by
paragraph 1, above) in an amount that, when combined with the amounts of all
other letters of credit then held by the Trustee and all assets then remaining
in the Rabbi Trust, is equal to the estimated obligations of the Company under
the SERPs, determined as of the first day of the then current fiscal year of
the Company.

 

 

 

2

 

 

3.             Upon (i) termination of the
Rabbi Trust, (ii) full satisfaction of the Company’s obligations under the
SERPs, or (iii) any permitted reduction in the size of a letter of credit
as provided herein, the Trustee agrees that it will cooperate with the Company
and the issuer of the letter of credit to cause the termination or reduction of
any letter of credit then held by it under the Rabbi Trust.

 

4.             For avoidance of doubt, Mr. and
Mrs. Matthias’ execution of this letter evidences their specific consent
to actions of the Trustee in accordance with this letter and represents a
complete release of the Trustee (including its successors, officers, employees,
attorneys and agents) from any and all claims, demands, causes of action,
obligations, controversies and liabilities of any kind, in law, equity or
otherwise, arising out of the Trustee’s actions in accordance with this letter.

 

5.             The parties agree and acknowledge
that the effectiveness of this letter agreement is conditioned on the full
execution of an amendment to the Rabbi Trust Agreement, consistent with this
letter agreement, permitting letters of credit to be substituted for existing
Rabbi Trust assets and future Rabbi Trust contribution obligations.

 

[signature page follows]

 

 

 

 

 

 

 

3

 

 

To
acknowledge your consent to and agreement with the foregoing, and your intent
to be legally bound thereby, please execute and date this letter in the spaces
provided below and return the executed copies to me.  This letter may be signed in multiple
counterparts, each of which will be deemed an original, and all of which
together will constitute a single instrument. 
I have been duly authorized to execute this letter on behalf of the
Company.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  MOTHERS WORK, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward M. Krell

  
	
   

  	
   

  	
  Edward M. Krell, Chief Operating Officer &

  
	
   

  	
   

  	
  Chief Financial Officer

  

 

	
  Acknowledged and agreed on this

  
	
  20th day of May, 2008:

  
	
   

  
	
   

  
	
  /s/ Dan W. Matthias

  	
   

  
	
  Dan W. Matthias

  
	
   

  
	
   

  
	
   

  
	
  Acknowledged and agreed on this

  
	
  20th day of May, 2008:

  
	
   

  
	
   

  
	
  /s/ Rebecca C. Matthias

  	
   

  
	
  Rebecca C. Matthias

  
	
   

  
	
   

  
	
   

  
	
  Acknowledged and agreed on this

  
	
  20th day of May, 2008:

  
	
   

  
	
  Wachovia Bank, National Association

  
	
   

  
	
   

  
	
  By: 

  	
  /s/ Dawn S. Puky

  	
   

  
	
  Title: 

  	
  Vice President

  
			

 

 

 

 

 

 

4Exhibit 10.1

 

CONFIDENTIAL
RELEASE AND WAIVER OF CLAIMS (“Release”)

 

1.               Release of Claims.  In
exchange for the benefits described in Paragraph 2 below, I, Brian R. DiDonato, on behalf of myself and the undersigned
trust, hereby release and forever discharge Capmark Investments L.P. (“Capmark”),  Capmark Financial Group Inc. (“Parent”) and
Parent’s subsidiaries and related entities and companies, any and all of their
respective employee benefit plans, fringe benefit plans or programs, and any
and all of their respective present and past officers, directors, shareholders,
employees, agents and representatives, and the successors and assigns of each
(all of the foregoing, collectively and together with Capmark and Parent, the “Capmark
Group”) from any and all manner of claims, suits, demands, actions, causes of
action, administrative claims, liability, claims for damages, class action
claims or other claims made on my behalf or on behalf of the undersigned trusts
whatsoever that I, my heirs, representatives, agents, successors, guardians,
trusts, trustees or assigns ever had, have now or may have, whether known or
unknown, that arise on or before the date of my execution of this Release
(collectively, the “Released Claims”). 
The Released Claims include but are not limited to any claims arising
from or relating to my recruitment or hiring by, or my employment with, Capmark
and/or any entity within the Capmark Group, any contingent or otherwise
discretionary compensation awards or payments of any kind whatsoever, any  Parent common stock (“Common Stock”) or
options to purchase Common Stock issued to me, transferred to the undersigned
trust, and/or repurchased by Parent in connection with the payment described in
Paragraph 2, any provisions of my Amended and Restated Management Stockholder’s
Agreements and Stock Option Agreements with Parent, any pending applications
for employment with Capmark and/or any entity within the Capmark Group, or my
separation of employment from Capmark and/or any entity within the Capmark
Group including, but not limited to: (i) any claim (including any claim
with respect to taxes of any kind) arising under the Employee Retirement Income
Security Act of 1974, Title VII of the Civil Rights Act, 42 U.S.C. § 2000e et
seq., the Pennsylvania Human Relations Act, 43 P.S. § 951 et seq.,
the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq., the
Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., the Age
Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 621 et seq., any
other federal, state or local law, or any law of any jurisdiction outside of
the United States as applicable, (ii) breach of contract claims, (iii) defamation,
wrongful discharge, emotional distress or any other tort claim, (iv) any
common law claim, and (v) any claim for attorneys’ fees and costs, arising
in law or equity.  In addition, to the
extent applicable, I expressly waive and release all rights under California
Civil Code section 1542 which states (language in parentheses added):

 

A general release does not extend to claims which the creditor (e.g.,
employee) does not know or suspect to exist in his or her favor at the time of
executing the release, which, if known by him or her, must have materially
affected his settlement with the debtor (e.g., the employer).

 

Without limiting or modifying my release and waiver of the Released
Claims as set forth herein, the Released Claims do not include any right, claim
or remedy arising after the date on which I sign this Release nor does this
Release prevent me from participating, 

 

1

 

cooperating, initiating or assisting in an investigation or proceeding
conducted within the Capmark Group or by any government agency, oversight
board, commission or other regulatory or investigative body; provided, however,
with respect to any such investigation or proceeding or related charges, I
hereby waive and release all claims for any recovery of monetary damages and
any other form of personal relief attributable to events or omissions occurring
on or before the date on which I sign this Release.

 

2.               Release Consideration.  In
consideration for my execution of this Release, Parent agrees to make a lump
sum payment to me in the total gross amount of $3,822,000, less all applicable
federal, state and local taxes, if applicable, and benefit withholdings, for
the repurchase of my Common Stock (held individually or in trust) upon the
terms and subject to the conditions of Parent’s letter to me dated May 13,
2008 (“Parent’s Letter”). I acknowledge that in the absence of my execution of
this Release, I would not be entitled to the benefits described in this
Paragraph 2.  I acknowledge further that
such benefits are adequate and satisfactory consideration to me.  Parent agrees to make the payment referenced
in this Paragraph in accordance with the terms of Parent’s Letter, provided
there has been no revocation of this Release within the revocation period set
forth in Paragraph 16 below.

 

3.               Participation in Incentive Vehicles.   (a)   I
acknowledge and agree that I have been granted certain membership interests in
Capmark UK Realty Fund Incentive Vehicle, LLC, a Delaware limited liability
company (the “UK Incentive Vehicle”), including specifically: as a Class B
Member, a 3.826% carried interest allocation to me (the “UK Carried Interest
Percentage”).

 

(b)                     I further understand and agree that, in
accordance with the Limited Liability Company Agreement of the UK Incentive
Vehicle, the entire amount of my UK Carried Interest Percentage is unvested and
therefore the entire portion of my Carried Interest Percentage was forfeited to
Capmark Structured Fund Carried Interest, L.P (the “Acquirer”) as of the Separation Date (defined below).

 

(c)                      I acknowledge and agree that I have purchased
and have been granted certain partnership interests in Capmark Structured Real
Estate Fund Incentive Vehicle, L.P., a Delaware limited partnership (the “Partnership”),
including specifically: (i) as a Class A Limited Partner, an employee
capital commitment to the Partnership of One Million Dollars ($1,000,000) (the “Capital
Commitment Interest”), and (ii) as a Class B Limited
Partner,  a 4.459% carried interest
allocation to me (the “Debt Fund Carried Interest Percentage”).

 

(d)                     If Capmark Group is willing to offer to
purchase my Capital Commitment Interest, Capmark Group will send an Agreement
of Assignment and Assumption of Limited Partnership Interest (the “Assignment
Agreement”) to me for my consideration. 
The purchase price shall be an amount in cash equal to the fair value of
my Capital Commitment Interest as of the end of the most recent calendar
quarter as determined by Capmark in its sole discretion.

 

2

 

(e)                      I understand that Capmark Group, in
accordance with its rights pursuant to the Limited Partnership Agreement of the
Partnership (the “Partnership Agreement”), has elected to acquire the vested
portion of my Debt Fund Carried Interest Percentage for the cash equivalent of
its fair value.  Capmark has determined
that the current fair value of the vested portion of my Debt Fund Carried
Interest Percentage is One Dollar ($1.00), and a check in such amount payable
to me will be delivered to me within thirty (30) days of the date of this
Release.

 

(f)                        I further understand and agree that, pursuant
to the Partnership Agreement, the unvested portion of my Debt Fund Carried
Interest Percentage was forfeited to the Acquirer as of the Separation Date
(defined below).

 

4.               Future Payments and Benefits.  I
agree and understand that Capmark does not have and will not have any
obligation to provide me at any time in the future with any payment or benefit
other than those set forth in Paragraph 2, including but not limited to any
bonus, commission or other equity repurchase payment, except for any vested
benefit to which I may be entitled pursuant to the terms of the Capmark Group’s
employee benefit plans.

 

5.               Non-disparagement.  I
agree that I will not make any disparaging comment, orally or in writing, about
any entity within the Capmark Group, or any shareholder, former or current
employee, consultant, advisor, director, service or product of any entity
within the Capmark Group.  I agree and
acknowledge that I will cooperate in the future with Capmark regarding
questions that may arise regarding my duties at Capmark (or any other entity
within the Capmark Group) while I was an employee.

 

6.               End of Employment.  I
agree that my last day of employment by Capmark was March 31, 2008 (the “Separation
Date”) and that Capmark (and any other entity within the Capmark Group) has no
obligation to re-employ or hire me in the future.

 

7.               Resignation.   I hereby tender my
resignation, effective as of the Separation Date, from all positions as an,
employee, officer, director and any other appointment or designation (including
but not limited to that of authorized signer) of or by any and all entities
within the Capmark Group.

 

8.               Assignment.  To the extent, if any, that I
have rights in any invention, improvement, discovery, process, program, product
or system developed by me during my employment with Capmark, I hereby
irrevocably transfer, assign and convey such rights to Capmark and agree that
Capmark shall be and remain the sole and exclusive owner of all right, title
and interest in and to any such invention, improvement, discovery, process,
program, product or system, including, but not limited to, all patent,
copyright, trade secret and other proprietary rights therein that may be
secured in any place under laws now or hereinafter in effect.

 

9.               Non-disclosure.  I
agree and acknowledge that during the course of my employment with Capmark, I
had access and was privy to information, documents and other materials relating
to the business of and entities within the Capmark Group that are confidential
and/or proprietary to entities within the Capmark Group or which constitute or
contain 

 

3

 

	
   

  	
  the
  trade secrets of entities within the Capmark Group (collectively
  “Confidential Information”), the disclosure of which could cause irreparable
  harm to entities within the Capmark Group. 
  Examples of Confidential Information include, but are not limited to,
  borrower contact lists, source code, client information, and any
  deal-specific information.  I agree not
  to discuss or disclose to any person or entity or use any of the Confidential
  Information without prior and specific written permission from Parent’s
  Executive Vice President & Chief Administrative Officer or General
  Counsel.  I further agree that I have
  returned to Capmark all company property, including all Confidential
  Information, in my possession.

  
	
   

  	
   

  
	
  10.

  	
  Non-Solicitation.  I
  acknowledge and agree to remain bound by all of my covenants and obligations
  against soliciting or offering employment to any person employed by Capmark
  or any entity within the Capmark Group as set forth in each of my Amended and
  Restated Management Stockholder’s Agreements with Parent, respectively dated
  March 23, 2006 and June 1, 2007. 
  Such covenants and obligations remain unchanged and survive the
  effective date of this Release in accordance with their terms.

  
	
   

  	
   

  
	
  11.

  	
  Successors
  and Assigns.  Capmark’s rights under this Release shall
  inure to the benefit of and shall be binding upon the successors and assigns
  of Capmark.  I shall not be entitled to
  assign any of my rights or obligations under this Release.

  
	
   

  	
   

  
	
  12.

  	
  No
  Admission.  Nothing about the existence of this Release
  or any of its provisions shall be considered any type of admission of any
  wrongdoing, liability, fault or violation of law attributable to me or the
  Capmark Group.

  
	
   

  	
   

  
	
  13.

  	
  Confidentiality.  I
  understand and agree that I have not and will not reveal, disclose or discuss
  in any fashion the contents or terms of this Release, except to immediate
  family members, tax advisors, legal counsel or as required by law, or to
  enforce this Release without prior express written consent of the Executive
  Vice President & Chief Administrative Officer of Parent or its
  General Counsel.  I understand that
  Capmark will keep this Release confidential, with the exception of those
  people who have a legitimate business reason to know.  I understand further that if Capmark
  receives inquiries from prospective employers or other third parties
  regarding my employment with Capmark, it will disclose only the dates of my
  employment and final job title.  I
  agree to direct such inquires to Parent’s Human Resources Department.

  
	
   

  	
   

  
	
  14.

  	
  Governing
  Law.  This Release is made and entered into in
  the accordance with the laws of the Commonwealth of Pennsylvania and shall in
  all respects be interpreted, enforced and governed under the laws of
  Pennsylvania.

  
	
   

  	
   

  
	
  15.

  	
  Entire
  Agreement.  Except as set forth in Paragraph 10, this
  Release contains the entire agreement of the parties with respect to the
  subject matter hereof and merges all prior negotiations, agreements and
  understandings, if any.  No
  modification, release, discharge or waiver of any provision of this Release
  shall be of any force or effect unless made in writing and signed by me and
  Parent’s Executive Vice President & Chief Administrative Officer or
  General Counsel and specifically identified as a modification, release or
  discharge of this Release.  If any
  term, clause or provision of this Release shall for any

  

 

4

 

reason be adjudged invalid, unenforceable or void, the same shall not
impair or invalidate any of the other provisions of this Release, all of which
shall be performed in accordance with their respective terms.

 

16.  Acknowledgments.  By signing this Release, I acknowledge and
agree that:

 

a.                                       I have carefully read and understood all of
the provisions and terms of this Release;

 

b.                                      I have signed this Release knowingly and
voluntarily;

 

c.                                       Capmark advises me to consult with counsel
prior to signing this release;

 

d.                                      Capmark has provided me twenty one (21)
calendar days from my receipt of this Release to consider its terms (the “Consideration
Period”), and the parties further agree that changes, if any, whether material
or not, will not restart the Consideration Period;

 

e.                                       Capmark’s offer to enter into this Release
shall automatically expire at the end of the Consideration Period without
further action by any party if I have not signed and returned this Release to
Capmark prior to the date thereof, unless Capmark agrees otherwise in writing
signed by either the Executive Vice President & Chief Administrative
Officer or the General Counsel of Parent;

 

f.                                         For the period of seven (7) calendar
days after I sign this Release, I may revoke it by providing written notice of
revocation to Capmark by hand-delivery, facsimile or e-mail transmission (and
retaining proof of successful transmission). 
If I revoke this Release, any letter or other written notice of
revocation shall be delivered, or transmitted by facsimile or by email, no
later than seven (7) calendar days after my execution of this Release,
with arrangements for the letter or other written notice of revocation to be
received by the Capmark Group no later than eight (8) calendar days after
my execution hereof using the following contact information:

 

Capmark Financial Group Inc.

411 Borel Avenue

San Mateo, California  94402

Attention: Executive Vice
President & Chief Administrative Officer

Linda.Pickles@capmark.com

Facsimile: 650-348-3945

 

Because of this seven (7) calendar-day
revocation period, this Release will not become effective or enforceable until
the eighth (8th) calendar day after the date on which I sign
it, provided that I have previously given my signed Release to Capmark, and I
have not revoked it; and

 

5

 

g.                                      In signing this Release, I have not relied on
any representations or statements, whether oral or written, other than the
express language contained herein.

 

I
HAVE CAREFULLY READ THIS ENTIRE RELEASE. 
I UNDERSTAND THAT BY SIGNING THIS RELEASE, I AM WAIVING ALL CLAIMS
AGAINST ANY AND ALL ENTITIES WITHIN THE CAPMARK GROUP RELATING TO MY EMPLOYMENT
WITH CAPMARK AND THE SEPARATION OF MY EMPLOYMENT WITH CAPMARK AND/OR ANY ENTITY
WITHIN THE CAPMARK GROUP.

 

IN
WITNESS WHEREOF, and intending to be legally bound hereby, I have executed the
foregoing Release as of May 14, 2008.

 

 

	
  /s/
  Brian R. DiDonato

  	
   

  
	
  Brian
  R. DiDonato, individually

  	
   

  
	
   

  	
   

  
	
  /s/
  Neil P. Casey

  	
   

  
	
  Witness            (Signature)

  	
   

  
	
   

  	
   

  
	
  Neil
  P. Casey

  	
   

  
	
  Witness
  Name

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  Brian R. DiDonato

  	
   

  
	
  Brian
  R. DiDonato, as Settlor and Trustee

  	
   

  
	
  of
  the Agreement of Trust dated September 7, 2007

  	
   

  
	
  (as
  amended)

  	
   

  
	
   

  	
   

  
	
  /s/
  Neil P. Casey

  	
   

  
	
  Witness            (Signature)

  	
   

  
	
   

  	
   

  
	
  Neil
  P. Casey

  	
   

  
	
  Witness
  Name

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  FOR AND
  ON BEHALF OF

  	
   

  
	
  CAPMARK
  FINANCIAL GROUP INC. AND

  	
   

  
	
  CAPMARK
  INVESTMENTS L.P.:

  	
   

  
	
   

  	
   

  
	
  /s/
  Linda Pickles

  	
   

  
	
  Linda
  Pickles

  	
   

  
	
  Executive
  Vice President & Chief Administrative Officer

  	
   

  

 

6

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