Document:

exv10w1

 

EXHIBIT 10.1

SEPARATION AGREEMENT AND RELEASE OF ALL CLAIMS

          This Separation Agreement and Release of All Claims is entered into between AMB Property
Corporation, its affiliates and subsidiaries (collectively, “Company”) and David S. Fries
(“Employee”). The purpose of this Agreement is to arrange a severance of Employee’s employment
with Company on a basis that is satisfactory both to the Company and to the Employee. For purposes
of this Agreement, the term “Termination Date” shall mean October 1, 2005.

          1.     Effective as of the Termination Date, Employee’s employment will end as a result of his
resignation from Company. The resignation by Employee of his employment shall not affect any
benefits or entitlements due Employee under this Agreement. Employee’s residence is in
Massachusetts, and Employee presently works in Massachusetts.

          2.     Both Employee and Company are entering into this Agreement as a way of concluding the
employment relationship between them and of settling voluntarily any dispute or potential dispute
that Employee has or might have with Company as of the date this Agreement is signed.

          3.     In return for Employee agreeing to this Agreement, Company agrees to provide Employee the
following, subject to Paragraph 13 of this Agreement.

                    a.     Salary. Company will continue Employee’s base salary through the Termination Date,
and will pay Employee’s base salary from the Termination Date through December 31, 2005 to Employee
in a lump sum, less all applicable deductions, on the Termination Date.

                    b.     Bonus. Provided that Employee is not in Default (as hereafter defined) of this
Agreement as of January 1, 2006, Company will pay Employee a prorated target bonus, based on 8
months’ employment through August 31, 2005, in the amount of $218,041,

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less all applicable deductions. Company will pay Employee this bonus at the same time Company
pays other employees their bonuses with respect to 2005, or by March 31, 2006, whichever is
earlier. As used herein, the term “Default” shall mean a material breach by Employee of its
obligations under Paragraphs 8, 9, 10 and 15 below, which breach is not cured by Employee within a
reasonable period of time following delivery by Company to Employee of written notice describing
such breach.

                    c.     Benefits. Company, at its sole cost and expense, will continue Employee’s full
benefits, including those provided under the Change in Control Agreement (as described in Paragraph
4), and including direct and matching contributions to Employee’s 401(k) plan consistent with
current practice, through December 31, 2005, provided, that (A) with respect to all health benefits
presently afforded to Employee and his family (medical, dental and vision), Company, at its sole
cost and expense, will continue Employee’s full benefits until the earlier of (1) December 31, 2006
and (2) the effective date that Employee (and his family) are afforded substantially similar health
benefits by another employer, and (B) with respect to Employee’s 401(k) plan, any direct and
matching contributions for the period from the Termination Date through December 31, 2005 shall be
effectuated in an equivalent lump sum manner on the Termination Date. Employee shall promptly
notify Company of the occurrence of the date described in clause (A)(2) above if such occurs prior
to December 31, 2006.

                    d.     Unvested Restricted Stock/Stock Options. Immediately upon the occurrence of the
Termination Date, Employee shall be entitled to the:

	 	 	 	    l     Vesting of all “annual” incentive restricted
stock grants that are scheduled to vest on January 1, 2006 (15,320
shares).

	 	 	 	    l     Vesting of all currently unvested shares of
“bonus elected” restricted stock (4,705 shares).

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	 	 	 	    l     Vesting of all “annual” incentive stock option
grants that are scheduled to vest on January 1, 2006 (34,202 option
            shares).

	 	 	 	    l     Vesting of all currently unvested “bonus
elected” stock option grants (4,274 option shares).

          4.     In the event that Company enters into a binding agreement, prior to December 31, 2005,
involving the sale or any other “Change in Control” of the Company or its assets, and such
transaction is ultimately consummated (whether before or after December 31, 2005), Employee shall
be entitled to all benefits he would have been afforded under Employee’s Amended and Restated
Change in Control and Non-Competition Agreement dated December 9, 2004 (the “Change in Control
Agreement”), as if Employee had remained in the employ of Company through the closing date of such
sale or other transaction constituting a change in control, including, without limitation, the full
vesting of all unvested shares and options (including all such unvested shares and options not
vested pursuant to Paragraph 3.d above) and the severance pay described in Section 3.3(b) thereof
and the gross-up payment described in Section 3.4 thereof; provided, however, that any amount paid
pursuant to this Paragraph 4 shall be reduced by any amounts paid to Employee pursuant to Paragraph
3.b. of this Agreement.

          5.     Effective as of August 31, 2005, Employee will resign his positions as an Officer of AMB
Property Corporation and as an Officer and/or Director of any affiliates and subsidiaries thereof.
The resignation by Employee of his officer title and responsibilities shall not affect any benefits
or entitlements due Employee under this Agreement.

          6.     Following the mutual execution of this Agreement and continuing through the Termination
Date, and to the extent requested by the Company, Employee agrees to make himself reasonably
available to the Company to provide assistance with respect to effecting an

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orderly transition of his past and current responsibilities and for such other matters that
may reasonably be requested by the Company, provided that Employee shall not be required to devote
a material amount of time to such efforts and shall not be required to be physically present at a
Company office. Employee’s obligation to provide any services to, or perform any work on behalf
of, Company following the mutual execution of this Agreement shall be limited to Employee’s
obligations under this Paragraph 6. During this transition period, Employee will act in the
capacity as a senior advisor to the Chairman and CEO, Hamid R. Moghadam, and the President, W.
Blake Baird.

          7.     Nothing contained in Paragraph 6 or elsewhere in this Agreement or otherwise shall in any
manner preclude Employee from accepting, after August 31, 2005, consulting or other self-employment
that is not in violation of Paragraph 8 below, and the taking of any such assignments (and
receiving remuneration there from) shall not in any manner limit or impair any of Employee’s rights
or benefits hereunder.

          8.     For one (1) year after the Termination Date, Employee shall not, without the prior consent
of the Company, in any geographic area where Company does business or is planning to do business as
of the Termination Date, become employed by, or retained as a consultant of, or provide services
for compensation of any kind in any capacity, to any Competitive Entity (as hereafter defined). As
used herein, the term “Competitive Entity” shall mean a public or private business that focuses
primarily on the ownership, development or operation of distribution, warehouse, air cargo or
logistic-oriented properties (“Industrial Properties”).

          9.     For two (2) years after the Termination Date, Employee shall not, without the prior written
consent of the Company, directly or indirectly recruit, solicit, or attempt to hire any person who
is or was employed by Company or is or was a consultant of Company (i) as of

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the Termination Date, or (ii) at any time within the year prior to the Termination Date.
Notwithstanding the foregoing, (i) Employee shall not be considered to have violated this Paragraph
9 if a subsequent employer of Employee engages in any activity prohibited by this paragraph without
Employee’s participation, and (ii) Employee shall not be prohibited in engaging in an activity
otherwise prohibited by this paragraph with respect to any employee whose employment with the
Company has been terminated prior to Employee engaging in any such activity.

          10.     Except in connection with any proceedings between Employee and Company pursuant to
Paragraph 20 of this Agreement, Employee agrees that he will not make any negative or disparaging
comments concerning Company or its operations, or his employment with and/or departure from Company
to any individual or entity. Except in connection with any proceedings between Employee and
Company pursuant to Paragraph 20 of this Agreement, Company agrees that neither it nor any of its
executive officers will make, and Company agrees that it shall use its reasonable best efforts to
prevent all of its other officers, directors and employees from making, directly or through
inference, orally or in writing, any negative or disparaging comments concerning Employee or his
employment with and/or departure from Company to any individual or entity.

          11.     In return for the foregoing payments and benefits in Paragraphs 3 and 4, but without in
any manner impairing Employee’s right to seek indemnification from Company as described in
Paragraph 24 below, Employee, for himself and his spouse, heirs, executors, representative and
assigns, forever releases Company and Company’s officers, directors, managers, employees, agents
and representatives from any and all claims, actions, and causes of action which Employee has or
might have concerning his employment with Company or the termination of employment, up to the date
of the signing of this Agreement. All such claims are

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forever barred by this Agreement and without regard as to whether those claims are based upon
any alleged breach of contract or covenant of good faith and fair dealing; any alleged employment
discrimination or other unlawful discriminatory acts, including claims under Title VII, the
California Fair Employment and Housing Act, the Americans with Disabilities Act, the California
Labor Code, the Massachusetts Fair Employment Practices law (Mass. Gen. Laws Ch. 15B, § 1, et
seq.), the Massachusetts Law on Age Discrimination (Mass. Gen. Laws, Ch. 149, § 24A), the Family
and Medical Leave Act, the Employee Retirement Income Security Act and the Age Discrimination in
Employment Act; any alleged tortious act resulting in physical injury, emotional distress, or
damage to reputation or other damages; or any other claim or cause of action as of the date of the
signing of this Agreement. Nothing in this Agreement shall prohibit Employee from filing a charge,
including a challenge to the validity of this Agreement, with the Equal Employment Opportunity
Commission (EEOC) or participating in any investigation or proceeding conducted by the EEOC.

          12.     Employee agrees that the payments and benefits in Paragraphs 3 and 4 shall constitute the
entire amount of monetary consideration provided to him under this Agreement and that he will not
seek any further compensation for any other claimed damages, costs or attorneys fees in connection
with the matters encompassed by this Agreement.

          13.     Employee understands that:

                       a.     He has twenty-one days in which to consider signing this Agreement;

                       b.     He has carefully read and fully understands all of the terms of the Agreement;

                       c.     He is, through this Agreement, releasing Company from any and all claims he may have
against it;

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                       d.     He knowingly and voluntarily agrees to all of the terms set forth in this Agreement;

                       e.     He knowingly and voluntarily intends to be legally bound by this Agreement;

	 	 	                  f.     He was advised and hereby is advised in writing to consult with an attorney of his choice
prior to signing this Agreement;

                       g.     He understands that rights or claims under the Age Discrimination in Employment Act of 1967
that may arise after the date this Agreement is signed are not waived; and

                       h.     He has a full seven days following the signing of this Agreement to revoke it and he has
been and hereby is advised in writing that this Agreement will not become effective or enforceable
until that seven day revocation period has expired and Employee has not revoked the Agreement.

     14.     This Agreement is in full satisfaction of disputed claims and by entering into this
Agreement, Company is in no way admitting liability of any sort. This Agreement, therefore, does
not constitute an admission of liability of any kind.

     15.     Employee has had access to non-public confidential, proprietary and/or trade secret
information relating to Company’s business which was acquired or disclosed to Employee during the
course of his employment with Company (“Confidential Information”). Such Confidential Information
may include, but is not limited to, business strategies, financial reports, litigation matters,
computer programs and software, customer information, business plans and operations, and other
information and records which are owned by Company and are regularly used in the operation of its
business. Prior to and at all times after the Termination Date, Employee shall not, directly or
indirectly, disclose or make available to any third party any

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Confidential Information, except to the extent required by law or necessary for legitimate law
enforcement or compliance purposes. In such a situation, Employee shall promptly notify Company in
writing of his intended disclosure(s), and will not disclose such Confidential Information until
Company has had a reasonable amount of time to prevent such disclosure(s). “Confidential
Information” does not include any information that (a) is or becomes generally available to the
public other than as a result of disclosure or actions by any party hereto in violation of this
agreement, (b) is or becomes available to any party hereto on a nonconfidential basis from a source
(other than any other party hereto) which such party reasonably believes is not prohibited from
disclosing such information to such party by a contractual legal or fiduciary obligation to such
other party hereto or (c) was in such party’s possession prior to the date of this Agreement and
was obtained on a nonconfidential basis from a source (other than any other party hereto) that such
party reasonably believes was not prohibited by a contractual, legal or fiduciary obligation to
such other party hereto from disclosing such information to such party.

          16.     Should any provision of this Agreement be determined by any court or arbitrator to be
wholly or partially illegal, invalid or unenforceable, the legality, validity and enforceability of
the remaining provisions shall not be affected, and said illegal, unenforceable or invalid
provisions shall be deemed not to be a part of this Agreement.

          17.     The parties agree that this document contains their complete and final agreement and that
there are no representations, statements, or agreements which have not been included within this
document.

          18.     The parties acknowledge that in signing this Agreement, they do not rely upon and have not
relied upon any representation or statement made by any of the parties or their

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agents with respect to the subject matter, basis or effect of this Agreement, other than those
specifically stated in this Agreement.

          19.     This Agreement shall be binding upon the parties and upon their heirs, administrators,
representatives, executors and assigns. Employee expressly warrants that he has not transferred to
any person or entity any rights, causes of action or claims released in this Agreement.

          20.     The parties agree that any dispute regarding the application and interpretation or alleged
breach of this Agreement shall be subject to final and binding arbitration before a neutral
arbitrator referred by the Judicial Arbitration and Mediation Service (JAMS). That arbitrator
shall be selected by the parties from the list of proposed arbitrators referred by JAMS. The
arbitrator shall have the right, but not the obligation, to grant costs and attorneys fees to the
losing party to the arbitration.

          21.     This Agreement may be executed in counterparts, and each counterpart shall have the same
force and effect as an original and shall constitute an effective binding agreement on the part of
each of the undersigned. For purposes of promoting timely compliance under this Agreement,
facsimile transmission of executed documents shall be deemed sufficient evidence of execution to
warrant commensurate performance. The fully executed original(s) shall nevertheless be delivered
by mail or by hand.

          22.     Massachusetts law shall govern the validity and interpretation of this Agreement.

          23.     For purposes of this Agreement, the parties warrant that they respectively have the
authority to sign this Agreement on behalf of Employee and Company. Employee has signed this
Agreement in Boston, Massachusetts.

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          24.     Nothing contained in this Agreement shall impair or affect any of Employee’s rights to
indemnification afforded or provided to Employee under Company’s organizational documents, Section
5.10 of the Change in Control Agreement, or by law or otherwise, relating in any manner to matters
arising out of or relating to Employee’s employment with Company or Employee discharging his duties
on behalf of Company, the parties expressly acknowledging and agreeing that all such rights shall
survive both execution of this Agreement and the Termination Date.

	 	 	 	 	 	 	 
	 

	 	 	 	 
	 	DAVID S. FRIES
	 
	 	 	 	 	 	 
	 

	 	Date: August 17, 2005
	 	 	 	/s/ David S. Fries
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	AMB PROPERTY CORPORATION
	 
	 	 	 	 	 	 
	 

	 	Date: August 17, 2005
	 	 	 	By: /s/ Nancy J. Hemmenway
	 

	 	 
	 	 	 	 

10<PAGE>
                                                                    EXHIBIT 10.1

                                (SOVEREIGN LOGO)

                           SOVEREIGN BANK NEW ENGLAND

                                                                   June 30, 2005

Mr. Thomas P. Kealy
Vice President
BTU International, Inc.
23 Esquire Road
North Billerica, MA 01862

Dear Mr. Kealy:

     As you know, BTU International, Inc. ("BTU") is indebted to Sovereign Bank
(the "Bank") in the principal amount of up to $14,000,000 (the "Loan") pursuant
to the terms of a certain Loan Agreement between BTU and the Bank, dated June
26, 2002, which Loan Agreement was as modified on January 28, 2004 (together
with all of the other documents that evidence or pertain to the Loan, the "Loan
Documents").

     BTU has stated to the Bank that it is in default of the Maximum Leverage
Ratio (as defined in Schedule A of the Loan Agreement) for the period ending
October 3, 2004. The Bank has agreed to waive this default subject to
modifications in the terms of the Loan and the conditions set forth on the Term
Sheet that is attached hereto and made a part hereof.

     Please be advised that this waiver is applicable to this particular
circumstance and is not, and should not be construed as, a waiver of any other
Loan covenant or term of the Loan Documents or a waiver of the subject covenant
for any other period of time. The Bank retains all of its rights and remedies
under the Loan Documents, in equity, and under applicable law.

     Please sign below, and initial the Term Sheet, to indicate BTU's acceptance
of the conditions of this waiver. This acknowledgement will also authorize the
Bank to debit the main operating deposit account of the Borrower in payment for
the fee referenced in the Term Sheet. Once received, legal documentation will be
prepared to reflect the revised terms and conditions as described herein.

     Please do not hesitate to contact the undersigned with any questions, at
781-376-1613.

                                        Very truly yours,

                                        SOVEREIGN BANK

                                        By:
                                            ------------------------------------
                                            Michael S. Tager, SVP

Agreed to and accepted this ____ day of ____________, 2005:

BTU INTERNATIONAL, INC.

By:
    ---------------------------------
Title:
       ------------------------------

<PAGE>

                          Revised Terms and Conditions
                             BTU International, Inc.
                                  July 12, 2005

-    Borrowing Base and supporting A/R aging reports to be submitted monthly.

-    Reduce the inventory cap from $3.5MM to $0 MM for the remainder of FY 2005.
     If the Borrower meets 90% or better of its stated goals for FYE 12/31/05,
     as confirmed by the CPA Audited statements, the Bank will undertake to
     obtain credit approval to reinstate the cap to the $3.5MM limit in the
     borrowing base.

-    Advances on domestic and Foreign A/R to remain unchanged, at 80% of
     eligible A/R.

-    The cross aging provision to remain at the existing limit of 50% of total
     A/R due to be excluded.

-    Without reducing our commitment, reduce the maximum level of advances under
     the line to be $12MM for direct advances and for letters of credit. If the
     Company meets by 90% or better its stated profitability goals for Q1 and Q2
     2005, the maximum level to increase to $13MM. If the Company meets by 90%
     or better its profitability goals for FYE 12/31/05, the maximum level will
     increase to the committed amount of $14MM. All advances, including L/C's,
     to be governed by the borrowing base. The profitability goals are those as
     presented to the Bank on March 18, 2005.

-    A field examination to be conducted twice annually for FY 2005, in mid 2005
     and at FYE. If the Company meets or exceeds its projections for FYE
     12/31/05, field examinations will be reduced to once annually.

-    Require a pro forma balance sheet and income statement for FYE 12/31/05, to
     be presented on a quarterly basis.

-    Interest rate on the Line to be increased to Prime + 0.25% or LIBOR +
     2.50%. If the Company meets by 90% or better its profitability goals for
     YTD 6/30/05; the rate will reduce to the original rates of Prime or LIBOR +
     2.25%. The profitability goals are those as presented to the Bank on March
     18, 2005.

-    A one-time covenant waiver fee of $10,000 to be charged. In addition, the
     Borrower shall pay for all costs and expenses related to this modification
     of terms, including but not limited to reasonable legal fees and expenses.

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