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Filed pursuant to 424(b)(3)
Registration File No. 33-54267
CRIIMI MAE Inc.
$200,000,000
Debt Securities, Preferred Shares and Common Shares
CRIIMI MAE Inc. ("CRIIMI MAE") may from time to time offer in one or more
series its unsecured subordinated debt securities (the "Debt Securities"),
shares of its preferred stock, par value $.01 per share (the "Preferred
Shares"), and shares of its common stock, par value $.01 per share (the "Common
Shares"), with an aggregate public offering price of up to $200,000,000 (or its
equivalent based on the exchange rate at the time of sale) in amounts, at prices
and on terms to be determined at the time of offering. The Debt Securities,
Preferred Shares and Common Shares (collectively, the "Securities") may be
offered, separately or together, in separate series in amounts, at prices and on
terms to be set forth in supplements to this Prospectus (a "Prospectus
Supplement").
The Debt Securities will be direct unsecured obligations of CRIIMI MAE
subordinated to existing and future senior indebtedness, as defined. See
"Description of Debt Securities."
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the applicable Prospectus Supplement and
will include, where applicable: (i) in the case of Debt Securities, the specific
title, ranking, aggregate principal amount, currency, form (which may be
registered or bearer, or certificated or global), authorized denominations,
maturity, rate (or manner of calculation thereof) and time of payment of
interest, terms for redemption at the option of CRIIMI MAE or repayment at the
option of the holder, terms for sinking fund payments, terms for conversion into
Preferred Shares or Common Shares, covenants and any initial public offering
price; (ii) in the case of Preferred Shares, the specific title and stated
value, any dividend, liquidation, redemption, conversion, voting and other
rights, and any initial public offering price; and (iii) in the case of Common
Shares, any public offering price. In addition, such specific terms may include
limitations on direct or beneficial ownership and restrictions on transfer of
the Securities, in each case as may be appropriate to preserve the status of
CRIIMI MAE as a real estate investment trust ("REIT") for federal income tax
purposes.
The applicable Prospectus Supplement will also contain information, where
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities covered
by such Prospectus Supplement.
The Securities may be offered directly, through agents designated from time
to time by CRIIMI MAE, or to or through underwriters or dealers. If any agents
or underwriters are involved in the sale of any of the Securities, their names,
and any applicable purchase price, fee, commission or discount arrangement
between or among them, will be set forth, or will be calculable from the
information set forth, in the applicable Prospectus Supplement. See "Plan of
Distribution." No Securities may be sold without delivery of the applicable
Prospectus Supplement describing the method and terms of the offering of such
series of Securities.
CRIIMI MAE's Common Shares are traded on the New York Stock Exchange (the
"NYSE") under the symbol "CMM."
_______________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is July 13, 1994.
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AVAILABLE INFORMATION
CRIIMI MAE and its subsidiary, CRI Liquidating REIT, Inc. ("CRI
Liquidating"), are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith file reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC"). Reports, proxy statements and
other information filed by CRIIMI MAE and CRI Liquidating can be inspected and
copied at the SEC's Public Reference Room, 450 Fifth Street, N.W., Washington,
D.C. 20549 and the SEC's Regional Offices at 7 World Trade Center, 13th Floor,
New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661; and copies of such material can be obtained from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, reports, proxy material and other information
concerning CRIIMI MAE and CRI Liquidating may be inspected at the NYSE, 20 Broad
Street, New York, New York 10005.
This Prospectus constitutes part of a Registration Statement on Form S-3
(together with all amendments and exhibits, the "Registration Statement") filed
by CRIIMI MAE with the SEC under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information
included in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the SEC. Reference is made to the
Registration Statement for further information with respect to CRIIMI MAE and
the Securities. Statements contained in this Prospectus and any accompanying
Prospectus Supplement concerning the provisions or contents of any contract,
agreement or any other document referred to herein are not necessarily complete.
With respect to each such contract, agreement or document filed as an exhibit to
the Registration Statement, reference is made to such exhibit for a more
complete description of the matters involved, and each such statement shall be
deemed qualified in its entirety by such reference to the copy of the applicable
document filed with the Commission. The Registration Statement including the
exhibits and schedules thereto, may be inspected without charge at the
Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. and
copies of it or any part thereof may be obtained from such office, upon payment
of the fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by CRIIMI MAE with the SEC (File
No. 1-10360) are incorporated herein by reference:
1. Annual Report on Form 10-K for the year ended December 31, 1993, as
filed with the SEC on February 16, 1994, and as amended by Amendment on
Form 10-K/A, filed with the SEC on March 11, 1994.
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 1994,
as filed with the SEC on May 16, 1994.
3. Definitive Proxy Statement dated April 6, 1993.
4. Form 8-A, as filed with the SEC on April 8, 1994.
5. Form 8-A, as filed with the SEC on October 16, 1989.
6. Form 8-B, as filed with the SEC on October 27, 1993.
All documents filed by CRIIMI MAE pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Securities offered hereby shall be deemed to
be incorporated by reference in this Prospectus from the date of filing of such
documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
CRIIMI MAE will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered, on the
written or oral request of any such person, a copy of any or all of the
documents referred to above which have been or may be incorporated in this
Prospectus by reference, other than exhibits to such documents, unless such
exhibits are specifically incorporated by reference. Requests for such copies
should be directed to: CRIIMI MAE Inc., Investor Services, The CRI Building,
11200 Rockville Pike, Rockville, Maryland 20852, or telephone (301) 468-9200 or
toll-free (800) 678-1116.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information appearing elsewhere in this
Prospectus. References to CRIIMI MAE appearing in this Prospectus shall not
include CRI Liquidating, unless the context otherwise requires.
CRIIMI MAE
CRIIMI MAE, an infinite-life, actively managed real estate investment trust
("REIT"), is the largest multifamily mortgage REIT. CRIIMI MAE invests
selectively, focusing primarily on high-quality multifamily mortgage
investments, including government insured or guaranteed mortgage investments
secured by multifamily housing complexes ("Government Insured Multifamily
Mortgages") and government-insured or guaranteed multifamily construction loans
located throughout the United States. CRIIMI MAE's principal objectives are to
provide stable or growing quarterly cash distributions to its stockholders while
preserving and protecting its capital. CRIIMI MAE has sought to achieve these
objectives by investing primarily in Government Insured Multifamily Mortgages
using a combination of debt and equity financing.
CRIIMI MAE has invested primarily in two types of Government Insured
Multifamily Mortgages: loans insured by the Federal Housing Administration (the
"FHA") pursuant to provisions of the National Housing Act, which are first or
second liens on residential apartment, nursing home or townhouse complexes
("FHA-Insured Loans"); and mortgage-backed securities which are guaranteed by
the Government National Mortgage Association ("GNMA") as to the monthly payment
of the outstanding principal of, and interest on, the underlying multifamily
mortgages ("GNMA Securities"). As of May 31, 1994, CRIIMI MAE owned directly
165 Government Insured Multifamily Mortgages with an amortized cost of
approximately $666.5 million. As of May 31, 1994, the weighted average coupon
rate of CRIIMI MAE's Government Insured Multifamily Mortgages was approximately
8.1% and the weighted average maturity thereof was approximately 33 years. See
"CRIIMI MAE--Description of Assets."
In addition to its portfolio of Government Insured Multifamily Mortgages and
other assets, CRIIMI MAE also owns approximately 57% of the issued and
outstanding common stock of CRI Liquidating, a finite-life, self-liquidating
REIT which owns Government Insured Multifamily Mortgages. CRI Liquidating's
common stock is listed on the NYSE under the symbol "CFR". As of May 31, 1994,
CRI Liquidating owned 51 Government Insured Multifamily Mortgages with an
amortized cost of approximately $154.4 million. As of May 31, 1994, the
weighted average coupon rate of CRI Liquidating's Government Insured Multifamily
Mortgages was approximately 7.6% and the weighted average maturity thereof was
approximately 27 years. See "CRIIMI MAE--Description of Assets."
In addition to investing in FHA-Insured Loans and GNMA Securities, CRIIMI
MAE's investment policies also permit CRIIMI MAE to invest in Government Insured
Multifamily Mortgages which are not FHA-insured or GNMA-guaranteed ("Other
Insured Mortgages") and in certain other multifamily mortgage investments which
are not federally insured or guaranteed ("Other Multifamily Mortgages"). As of
July 13, 1994, CRIIMI MAE had not invested in any Other Insured Mortgages or
Other Multifamily Mortgages. However, CRIIMI MAE is actively exploring
opportunities to sponsor and/or participate in securitization arrangements
involving the pooling primarily of Other Multifamily Mortgages, and in certain
instances mortgages on commercial properties, to further enhance potential
returns to CRIIMI MAE's stockholders.
CRIIMI MAE may apply all or part of the net proceeds from any offering or
series of offerings of securities made pursuant to this Registration Statement
to acquire additional mortgage investments, including Government Insured
Multifamily Mortgages, Other Insured Mortgages and/or Other Multifamily
Mortgages,
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to sponsor and/or participate in securitized mortgage programs and to make other
investments and/or acquisitions relating to CRIIMI MAE's mortgage business.
CRIIMI MAE's use of leverage carries with it the risk that the cost of its
borrowings could increase relative to the return on its mortgage investments,
which could result in reduced net income or a net loss and thereby reduce the
return to stockholders. CRIIMI MAE has entered into interest rate hedging
agreements which partially limit the adverse effects of rising interest rates.
CRIIMI MAE actively reviews its asset/liability management techniques in an
effort to make optimal use of its borrowing ability based on market conditions
and opportunities. In certain adverse interest rate environments, including a
sustained period of rising interest rates, CRIIMI MAE could be required to
liquidate a portion of its assets at a loss in order to comply with certain
covenants under its financing facilities. CRIIMI MAE's dividends are affected
by numerous other factors, including the dividends which CRIIMI MAE receives on
its shares of CRI Liquidating.
CRIIMI MAE's portfolio and day-to-day operations are managed by an affiliate
of C.R.I., Inc. ("CRI"), an international real estate investment firm which is
currently ranked as the sixth largest real estate asset manager in the United
States. In its 20 years as an investor in, and manager of, debt and equity
investments in multifamily properties, CRI has used its expertise to assemble
one of the largest multifamily portfolios in the United States.
RECENT DEVELOPMENTS
In connection with the settlement of certain class action litigation
involving CRIIMI MAE and certain of its affiliates, CRIIMI MAE entered into a
settlement agreement on September 24, 1993 providing, among other things, for
the issuance of warrants, exercisable for 18 months from issuance, to purchase
Common Shares at an exercise price of $13.17 per share (the "Settlement
Agreement"). Based on proofs of claim submitted as of the submission date
required by the Settlement Agreement (the "Submission Date"), CRIIMI MAE
issued approximately 334,000 warrants pursuant to the Settlement Agreement.
See "Recent Developments."
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CRIIMI MAE
General
CRIIMI MAE, an infinite-life, actively managed REIT, is the largest
multifamily mortgage REIT. CRIIMI MAE invests selectively, focusing primarily
on high-quality multifamily mortgage investments, including Government Insured
Multifamily Mortgages and government-insured or guaranteed multifamily
construction loans. CRIIMI MAE's principal objectives are to provide stable or
growing quarterly cash distributions to its stockholders while preserving and
protecting its capital. CRIIMI MAE has sought to achieve these objectives by
investing primarily in Government Insured Multifamily Mortgages using a
combination of debt and equity financing. CRIIMI MAE and CRI Liquidating are
Maryland corporations. The principal executive offices of CRIIMI MAE and CRI
Liquidating are located at the CRI Building, 11200 Rockville Pike, Rockville,
Maryland 20852, and their telephone number is (301) 468-9200.
Background
CRIIMI MAE and its subsidiary, CRI Liquidating, were formed in 1989 to
effect the merger into CRI Liquidating (the "Merger") of three federally
insured mortgage funds sponsored by CRI: CRI Insured Mortgage Investments
Limited Partnership ("CRIIMI I"); CRI Insured Mortgage Investments II, Inc.
("CRIIMI II"); and CRI Insured Mortgage Investments III Limited Partnership
("CRIIMI III" and together with CRIIMI I and CRIIMI II, the "CRIIMI Funds").
The Merger was effected to provide certain potential benefits to investors in
the CRIIMI Funds, including the elimination of unrelated business taxable
income for certain tax-exempt investors, the diversification of investments,
the reduction of general overhead and administrative costs as a percentage of
assets and total income and the simplification of tax-reporting information.
In the Merger, which was approved by investors in each of the CRIIMI Funds and
subsequently consummated on November 27, 1989, investors in the CRIIMI Funds
received, at their option, shares of CRI Liquidating common stock ("CRI
Liquidating Shares") or CRIIMI MAE Common Shares.
Investors in the CRIIMI Funds that received CRIIMI MAE Common Shares became
stockholders in an infinite-life, actively managed REIT having the potential to
increase the size of its portfolio and enhance the returns to its stockholders.
CRIIMI MAE stockholders retained their economic interests in the assets of the
CRIIMI Funds which were transferred to CRI Liquidating through the issuance of
one CRI Liquidating Share to CRIIMI MAE for each CRIIMI MAE Common Share issued
to investors in the Merger. Upon the completion of the Merger, CRIIMI MAE held
a total of 20,361,807 CRI Liquidating Shares, or approximately 67% of the issued
and outstanding CRI Liquidating Shares. As of the date of this Prospectus,
CRIIMI MAE holds a total of 17,199,307 CRI Liquidating Shares, or approximately
57% of the issued and outstanding CRI Liquidating Shares.
Investors in the CRIIMI Funds that received CRI Liquidating Shares, as well as
CRIIMI MAE, became stockholders in a finite-life, self-liquidating REIT the
assets of which consist primarily of Government Insured Multifamily Mortgages
and other assets formerly held by the CRIIMI Funds. CRI Liquidating intends to
hold, manage and dispose of its mortgage investments in accordance with the
objectives and policies of the CRIIMI Funds, including disposing of any
remaining mortgage investments by 1997 through an orderly liquidation.
On September 6, 1991, CRIIMI MAE, through its wholly owned subsidiary
CRIIMI, Inc., acquired from Integrated Resources, Inc. all of the general
partnership interests in four publicly held limited partnerships known as the
American Insured Mortgage Investors Funds (the "AIM Funds"). The AIM Funds own
mortgage investments which are substantially similar to those owned by CRIIMI
MAE and CRI Liquidating. CRIIMI, Inc. receives the general partner's share of
income, loss and distributions (which ranges among the AIM Funds from 2.9% to
4.9%) from each of the AIM Funds. In addition, CRIIMI MAE owns indirectly a
limited partnership interest in the adviser to the AIM Funds, in respect of
which CRIIMI MAE receives a guaranteed return each year.
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Asset Management
CRIIMI MAE is governed by a board of directors (the "CRIIMI MAE Board"), a
majority of whom are independent directors with extensive industry related
experience. The adviser to CRIIMI MAE and CRI Liquidating is CRI Insured
Mortgage Associates Adviser Limited Partnership (the "Adviser"), the general
partner of which is CRI and the operations of which are conducted by CRI's
employees. The Adviser manages CRIIMI MAE's portfolio of Government Insured
Multifamily Mortgages and other assets with the goal of maximizing CRIIMI MAE's
value, and conducts CRIIMI MAE's day-to-day operations. Under an Advisory
Agreement between CRIIMI MAE and the Adviser, the Adviser and its affiliates
receive certain fees and expense reimbursements.
CRI is an international real estate investment firm which is currently
ranked as the sixth largest real estate asset manager in the United States.
Established in 1974, CRI offers capital, management and investment expertise
to developers, builders and both institutional and individual investors. CRI
has been active in property acquisitions and dispositions, domestic and
foreign debt and equity placements, asset and property management and leasing,
structuring and sponsorship of real estate investment funds, and management of
real estate investment portfolios and REITs.
Investment Policies
CRIIMI MAE's investment policies, which are overseen by the CRIIMI MAE
Board, are intended to foster CRIIMI MAE's objectives of providing stable or
growing quarterly cash distributions to its stockholders while preserving and
protecting its capital. CRIIMI MAE has sought to achieve these objectives by
investing primarily in Government Insured Multifamily Mortgages issued or sold
pursuant to programs sponsored by the FHA and GNMA. CRIIMI MAE's sources of
capital include borrowings, principal distributions received on its CRI
Liquidating Shares, principal proceeds of CRIIMI MAE mortgage dispositions and
proceeds from equity offerings. Beginning in early 1990, CRIIMI MAE commenced
an acquisition program to buy FHA-insured and GNMA-guaranteed construction
loans. Although all periodic disbursements on such loans are FHA-insured or
GNMA-guaranteed, such loans generally carry higher interest rates than
permanent project loans largely because of the special expertise required to
handle many aspects of these loans, such as the dispersal of funds to
borrowers.
In addition to investing in FHA-Insured Loans and GNMA Securities, CRIIMI
MAE's investment policies also permit CRIIMI MAE to invest in Other Insured
Mortgages and in Other Multifamily Mortgages. Pursuant to CRIIMI MAE's policy,
at the time of their acquisition, Other Multifamily Mortgages must have an
expected yield of at least 150 basis points (1.5%) greater than the yield on
Government Insured Multifamily Mortgages which could be acquired in the then
current market and must meet certain other underwriting guidelines. The CRIIMI
MAE Board has adopted a policy limiting Other Multifamily Mortgages to 20% of
CRIIMI MAE's total consolidated assets. As of July 13, 1994, CRIIMI MAE had not
invested in any Other Insured Mortgages or Other Multifamily Mortgages.
CRIIMI MAE is actively exploring opportunities in connection with the
sponsorship of, and/or participation in, securitization arrangements which
involve the pooling primarily of Other Multifamily Mortgages, and in certain
instances mortgages on commercial properties, to further enhance potential
returns to CRIIMI MAE's stockholders. Such sponsorship and/or participation may
include the investment by CRIIMI MAE in non-investment grade or unrated tranches
of mortgage pools having a high current yield. As of July 13, 1994, CRIIMI MAE
had not participated in or sponsored any such transactions. It is anticipated
that CRIIMI MAE will use the underwriting guidelines established by the CRIIMI
MAE Board for Other Multifamily Mortgages in determining the suitability of
investing in securitized mortgages.
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CRIIMI MAE seeks to enhance the return to its stockholders through the use
of leverage. Because CRIIMI MAE's mortgage investments are federally insured
or guaranteed, CRIIMI MAE has been able to arrange secured borrowings at
interest rates which the Adviser believes are attractive. These borrowings
have been invested in Government Insured Multifamily Mortgages with effective
rates which are higher than the interest rates payable on such borrowings. The
Net Positive Spread (as defined below) created by such leverage increases the
return to CRIIMI MAE stockholders. The Adviser continuously monitors CRIIMI
MAE's outstanding borrowings in an effort to ensure that CRIIMI MAE is making
optimal use of its borrowing ability based on market conditions and
opportunities.
CRIIMI MAE expects to continue to use leverage only to the extent that (i)
the proceeds therefrom will be used for investments such as CRIIMI MAE's
current portfolio of Government Insured Multifamily Mortgages or other high
quality assets including Other Insured Mortgages and Other Multifamily
Mortgages; (ii) the risk of adverse changes in interest rates is reduced by
the use of hedging techniques such as those currently employed by CRIIMI MAE;
and (iii) the Adviser believes that after investing all funds from any
specific borrowing, a "Net Positive Spread" (the difference between the yield
on a mortgage investment acquired with borrowings and all incremental
borrowing and operating expenses on a tax basis associated with the
acquisition of such mortgage investment) of at least 40 basis points will be
achievable on such borrowing. However, CRIIMI MAE's use of leverage carries
with it the risk that the cost of its borrowings could increase relative to
the return on CRIIMI MAE's mortgage investments (due to (i) higher borrowing
costs resulting from increased interest rates and/or the expiration or
termination of hedging agreements, and/or (ii) a decrease in the yield on its
mortgage investments because of turnover in the portfolio), which could result
in reduced net income or a net loss and thereby reduce the return to CRIIMI
MAE's stockholders.
CRIIMI MAE's use of leverage carries with it the risk that the cost of its
borrowings could increase relative to the return on its mortgage investments,
which could result in reduced net income or a net loss and thereby reduce the
return to stockholders. To partially limit the adverse effects of rising
interest rates, CRIIMI MAE has entered into a series of interest rate hedging
agreements in an aggregate notional amount approximately equal to all of its
outstanding borrowings and commitments. To the extent CRIIMI MAE has not fully
hedged its portfolio, in periods of rising interest rates CRIIMI MAE's overall
borrowing costs would increase with little or no overall increase in mortgage
investment income, resulting in returns to stockholders that would be lower than
those available if interest rates had remained unchanged.
Although CRIIMI MAE expects the overall life of its mortgage investments to
exceed ten years, CRIIMI MAE's hedging agreements range in maturity from
approximately 3 to 5 years principally because of the high cost of instruments
with maturities greater than 5 years. The average remaining term of these
hedging agreements is approximately 2.7 years. Thus, to the extent CRIIMI MAE
has not completely matched the overall life of its existing mortgage investments
to that of its existing hedging agreements, upon the expiration of these hedging
agreements, CRIIMI MAE would be fully exposed to the adverse effects of rising
interest rates. The Adviser continues to review asset/liability hedging
techniques as CRIIMI MAE's existing hedging agreements approach their expiration
dates and to monitor the life of its hedging agreements relative to its assets.
A reduction in long-term interest rates could increase the level of
prepayments of CRIIMI MAE's Government Insured Multifamily Mortgages. CRIIMI
MAE's yield on mortgage investments will be reduced to the extent CRIIMI MAE
reinvests the proceeds from such prepayments in new mortgage investments with
effective rates which are below the effective rates of the prepaid mortgages.
CRIIMI MAE believes that declining interest rates result in increased
prepayments of single family mortgages to a greater extent than mortgages on
multifamily properties. This is partially due to lockouts (i.e. prepayment
prohibitions), prepayment penalties or difficulties in obtaining refinancing for
multifamily dwellings. Most of CRIIMI MAE's and CRI Liquidating's mortgage
investments are subject to prepayment penalties or prohibitions.
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In addition, the fluctuation of long-term interest rates may affect the
value of CRIIMI MAE's Government Insured Multifamily Mortgages. While
decreases in long-term rates could increase the value of CRIIMI MAE's existing
mortgage investments, increases in long-term rates could decrease the value of
such investments and, in certain circumstances, require CRIIMI MAE to pledge
additional collateral in connection with its borrowing facilities. This would
reduce CRIIMI MAE's borrowing capacity and, in an extreme case, may force
CRIIMI MAE to liquidate a portion of its assets at a loss in order to comply
with certain covenants under its financing facilities.
Description of Assets
CRIIMI MAE has invested primarily in Government Insured Multifamily
Mortgages consisting of (i) FHA-Insured Loans and (ii) GNMA Securities. As of
May 31, 1994, CRIIMI MAE owned directly 165 Government Insured Multifamily
Mortgages with an amortized cost of approximately $666.5 million. As of May
31, 1994, the weighted average coupon rate of CRIIMI MAE's Government Insured
Multifamily Mortgages was approximately 8.1% and the weighted average maturity
thereof was approximately 33 years.
The National Housing Act authorizes the U.S. Department of Housing and Urban
Development ("HUD") to establish mortgage loan programs pursuant to which
mortgage loans on properties are insured in whole or in part by HUD. FHA is a
part of HUD and GNMA is a wholly owned corporate instrumentality of the United
States within HUD. These programs insure that the outstanding principal of, and
interest on, a loan, less certain specified deductions, will be paid by HUD if
the borrower defaults on the loan. The National Housing Act authorizes
different mortgage insurance programs based primarily upon types of real estate
for which mortgage loans may be obtained, maximum loan amounts permissible,
maturities of the mortgage loans, amortization schedules, rights of prepayment,
coinsurance and nature of the borrower.
All of the FHA-Insured Loans in which CRIIMI MAE invests are insured by HUD
effectively for 99% of their current face value. Upon default and subsequent
assignment to HUD, 90% of the face value of the mortgage is received by CRIIMI
MAE within approximately 90 days of assignment and 9% of the face value of the
mortgage is received upon final processing by HUD. In certain circumstances,
CRIIMI MAE may receive HUD debentures rather than cash in an amount equal to 99%
of the face value of such mortgage upon final processing by HUD. The GNMA
Securities in which CRIIMI MAE invests are backed by FHA-Insured Loans. In the
event of a default of an FHA-Insured Loan underlying a GNMA Security, the issuer
or GNMA will make timely payments of principal and interest and pay 100% of the
GNMA Security's principal balance to CRIIMI MAE when such mortgage is assigned
to HUD and the issuer receives the insurance proceeds.
As part of its investment strategy, CRIIMI MAE also invests in GNMA-
guaranteed or HUD-insured construction loans relating to the construction or
rehabilitation of multifamily housing projects, including nursing homes and
intermediate care facilities ("Government Insured Construction Mortgages").
Government Insured Construction Mortgages involve a two-tier financing process
in which a short-term loan covering construction costs is converted into a
permanent loan. CRIIMI MAE also becomes the holder of the permanent loan upon
conversion. The construction loan is funded in HUD-approved draws based upon
the progress of construction. The construction draws are GNMA-guaranteed or
insured by HUD. The construction loan generally does not amortize during the
construction period. Amortization begins upon conversion of the construction
loan into a permanent loan, which generally occurs within 24-months from the
initial endorsement by HUD.
Generally, Government Insured Multifamily Mortgages which are purchased
near, at or above par value ("Near Par or Premium Mortgage Investments") will
result in a loss if the mortgage investment is prepaid or assigned prior to
maturity because the amortized cost of the mortgage investment, including
acquisition costs, is approximately the same as or slightly higher than the
insured amount of the mortgage investment. As of
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May 31, 1994, substantially all of the mortgage investments owned directly by
CRIIMI MAE consisted of Government Insured Multifamily Mortgages that are Near
Par or Premium Mortgage Investments.
CRI Liquidating's mortgage investments consist solely of Government Insured
Multifamily Mortgages acquired from the CRIIMI Funds in the Merger. The CRIIMI
Funds invested primarily in Government Insured Multifamily Mortgages comprising
FHA-Insured Loans and GNMA Securities. As of May 31, 1994, CRI Liquidating
owned 51 Government Insured Multifamily Mortgages with an amortized cost of
approximately $154.4 million. As of May 31, 1994, the weighted average coupon
rate of CRI Liquidating's Government Insured Multifamily Mortgages was
approximately 7.6% and the weighted average maturity thereof was approximately
27 years.
The majority of CRI Liquidating's mortgage investments were acquired by the
CRIIMI Funds at a discount to face value ("Discount Mortgage Investments") on
the belief that based on economic, market, legal and other factors, such
Discount Mortgage Investments might be sold for cash, prepaid as a result of a
conversion to condominium housing or otherwise disposed of or refinanced in a
manner requiring prepayment or permitting other profitable disposition three to
twelve years after acquisition by the CRIIMI Funds. CRI Liquidating's business
plan calls for an orderly liquidation of approximately 33% of its estimated
December 31, 1994 portfolio balance per year through 1997.
RECENT DEVELOPMENTS
On March 22, 1990, a complaint was filed, on behalf of a class comprised of
certain limited partners of CRIIMI III and shareholders of CRIIMI II (the
"Plaintiffs"), in the Circuit Court for Montgomery County, Maryland against
CRIIMI MAE, CRI Liquidating, CRIIMI I and its general partner, CRIIMI II, CRIIMI
III and its general partner, CRI and William B. Dockser, H. William Willoughby
and Martin C. Schwartzberg (the "Defendants"). On November 18, 1993, the Court
entered an order granting final approval of the Settlement Agreement between the
Plaintiffs and the Defendants pursuant to which CRIIMI MAE was to issue to class
members, including certain former limited partners of CRIIMI I, up to 2.5
million warrants, exercisable for 18 months after issuance, to purchase Common
Shares at an exercise price of $13.17 per share. In addition, the settlement
included a payment of $1.4 million for settlement administration costs and the
Plaintiff's attorneys' fees and expenses. Insurance provided $1.15 million of
the $1.4 million cash payment, and the balance was paid by CRIIMI MAE.
The number of warrants which CRIIMI MAE was required to issue was based on
the number of class members who submitted proofs of claim by the Submission
Date. Based on the proofs of claim submitted as of such date, CRIIMI MAE
issued approximately 334,000 warrants pursuant to the Settlement Agreement.
Based on the Adviser's initial estimate that up to 2.5 million warrants
would be issued, CRIIMI MAE accrued a total provision of $1.5 million (which
included the uninsured portion of the cash settlement) in its consolidated
statement of income for the year ended December 31, 1993. Because the actual
number of warrants issued pursuant to the Settlement Agreement significantly
lower than the initial estimate, CRIIMI MAE reduced this provision to
approximately $950,000.
The exercise of the warrants will not result in a charge to CRIIMI MAE's tax
basis income. Further, the Adviser believes that the exercise of the warrants
will not have a material adverse effect on CRIIMI MAE's tax basis income per
share or annualized cash dividends per share because CRIIMI MAE intends to
invest the proceeds from any exercise of the warrants in accordance with its
investment policy to purchase Government Insured Multifamily Mortgages and other
authorized investments. However, in the case of a significant decline in the
yield on mortgage investments and a significant decrease in the Net Positive
Spread which CRIIMI MAE could achieve on its borrowings, the exercise of the
warrants may have a dilutive effect on tax basis income per share and cash
dividends per share. Receipt of the proceeds from the exercise of the warrants
will increase CRIIMI MAE's shareholders' equity.
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USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement for any
offering of Securities, CRIIMI MAE intends to use the majority of the net
proceeds from the sale of Securities (i) to acquire additional mortgage
investments, including Government Insured Multifamily Mortgages, Other Insured
Mortgages and Other Multifamily Mortgages, (ii) to sponsor and/or participate in
securitized mortgage programs, (iii) to make other investments and/or
acquisitions relating to CRIIMI MAE's mortgage business and/or (iv) for other
general corporate purposes, including working capital. Pending their use for
the foregoing purposes, the net proceeds will be invested in short term,
interest-bearing investments.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth CRIIMI MAE's consolidated ratios of
earnings to fixed charges for the periods shown :
<TABLE>
<CAPTION>
Three Months
Years Ended December 31, Ended March 31,
------------------------------------------- ---------------
1989 1990 1991 1992 1993 1993 1994
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
18.20 /(1)/ 1.82 1.61 1.69 1.48 1.74 2.18
</TABLE>
______________________
(1) All financial information of CRIIMI MAE for the periods prior to the Merger
on November 27, 1989 has been presented in a manner similar to a pooling of
interests, which effectively combines the historical results of the CRIIMI
Funds. Therefore, the ratio of earnings to fixed charges for the year ended
December 31, 1989 includes the financial information for the period from
January 1, 1989 through December 31, 1989.
The ratios of earnings to fixed charges were computed by dividing
earnings, as defined below, by fixed charges. For this purpose, earnings
consist of CRIIMI MAE's consolidated net income (including any derived from
the ownership of CRI Liquidating Shares), plus fixed charges, extraordinary
items and loss from investment in limited partnership. Fixed charges consist
of gross interest expense including amortization of debt expense, discount or
premium. To date, CRIIMI MAE has not issued any Preferred Shares; therefore,
the ratios of earnings to combined fixed charges and preferred share dividends
are unchanged from the ratios presented in this section.
DESCRIPTION OF DEBT SECURITIES
General
The Debt Securities are to be issued under an indenture (the "Indenture")
between CRIIMI MAE and a trustee (the "Trustee"). The form of the Indenture is
filed as an exhibit to the Registration Statement of which this Prospectus is a
part. The Indenture is subject to and governed by the Trust Indenture Act of
1939, as amended (the "TIA"). The statements made under this heading relating
to the Debt Securities and the Indenture, as modified or suspended by any
applicable Prospectus Supplement, are summaries of the provisions thereof and do
not purport to be complete and are qualified in their entirety by reference to
the Indenture and such Debt Securities.
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The Debt Securities will be direct, unsecured obligations of CRIIMI MAE and,
as set forth below under "--Subordination," will be subordinate in right of
payment to Senior Debt (as defined below) of CRIIMI MAE. In addition to the
terms of the Indenture and any specific, express terms of the Debt Securities
described below, the issuance of the Debt Securities will be limited by, and
subject to certain terms of, CRIIMI MAE's existing financing facilities.
As of May 31, 1994, CRIIMI MAE had outstanding borrowings of approximately
$560 million under the three financing facilities described below. As of May
31, 1994, CRIIMI MAE owned directly Government Insured Multifamily Mortgages
with an estimated fair market value of approximately $647.1 million, of which
mortgage investments with an aggregate estimated fair market value of
approximately $575.0 million secure borrowings under the Master Repurchase
Agreements and the Revolving Credit Agreement described below. In addition, as
of May 31, 1994, approximately 13,124,000 of the total 17,199,307 CRI
Liquidating Shares held by CRIIMI MAE secure borrowings under the Bank Term
Loan described below.
Master Repurchase Agreements. On April 30, 1993 and November 30, 1993,
CRIIMI MAE entered into master repurchase agreements (the "Master Repurchase
Agreements") with Nomura Securities International, Inc. and Nomura Asset
Capital Corporation (collectively, "Nomura") which provide CRIIMI MAE with an
aggregate of $500.0 million of available financing for three-year terms.
Pursuant to the terms of the Master Repurchase Agreements, CRIIMI MAE's debt-
to-equity ratio may not exceed 2.5:1 and it is required to obtain prior
written approval from Nomura in order to pledge any of its assets as
collateral.
Revolving Credit Agreement. CRIIMI MAE entered into a revolving credit
agreement (the "Revolving Credit Agreement") on February 28, 1994 with a group
of banks under which the banks have agreed to loan CRIIMI MAE an aggregate
principal amount of $110 million. On June 1, 1994, an additional $25 million
was made available for borrowing by CRIIMI MAE under this facility. The terms
of the Revolving Credit Agreement, as amended, prohibit CRIIMI MAE or its
subsidiaries from: (i) creating, incurring, or permitting any lien on any
assets of CRIIMI MAE or its subsidiaries; (ii) incurring, subject to certain
exceptions, any debt not expressly approved by the lending banks; and (iii)
permitting the debt-to-equity ratio to exceed 2.5:1.
Bank Term Loan. On October 23, 1991, CRIIMI MAE entered into a credit
agreement with two banks for a reducing term loan facility (the "Bank Term
Loan") in an aggregate amount not to exceed $85.0 million, subject to certain
terms and conditions. In December 1992, the credit agreement was amended to
increase the Bank Term Loan to $100 million. Certain terms of the Bank Term
Loan prohibit CRIIMI MAE or its subsidiaries from incurring any additional debt
unless expressly approved by the lending banks. The Bank Term Loan also
requires that CRIIMI MAE's debt-to-equity ratio cannot exceed 2.5:1.
Terms
The Indenture will provide that the Debt Securities may be issued without
limit as to aggregate principal amount, in one or more series, in each case as
established from time to time in or pursuant to authority granted by a
resolution of the CRIIMI MAE Board or as established in one or more indentures
supplemental to such Indenture. All Debt Securities of one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the holders of the Debt Securities of such
series, for issuances of additional Debt Securities of such series.
The Indenture will also provide that there may be more than one Trustee
thereunder, each with respect to one or more series of Debt Securities. Any
Trustee under the Indenture may resign or be removed with respect to one or more
series of Debt Securities, and a successor Trustee may be appointed to act with
respect to such series. In the event that two or more persons are acting as
Trustee with respect to different series of Debt Securities, each such Trustee
shall be a Trustee of a trust under the Indenture separate and apart from the
trust administered by any other Trustee, and, except as otherwise indicated
therein, any action described
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therein to be taken by the Trustee may be taken by each such Trustee with
respect to, and only with respect to, the one or more series of Debt Securities
for which it is Trustee under the Indenture.
Reference is made to the Prospectus Supplement relating to the series of
Debt Securities being offered for the specific terms thereof, including:
(1) the title of such Debt Securities;
(2) the aggregate principal amount of such Debt Securities and any limit on
such aggregate principal amount;
(3) the percentage of the principal amount at which such Debt Securities
will be issued and, if other than the principal amount thereof, the portion of
the principal amount thereof payable upon declaration of acceleration of the
maturity thereof, or (if applicable) the portion of the principal amount of
such Debt Securities that is convertible into Common Shares or Preferred
Shares, or the method by which any such portion shall be determined;
(4) if convertible, in connection with the preservation of CRIIMI MAE's
status as a REIT, any applicable limitations on the ownership or transferability
of the Common Shares or Preferred Shares into which such Debt Securities are
convertible;
(5) the date or dates, or the method for determining such date or dates, on
which the principal of such Debt Securities will be payable;
(6) the rate or rates (which may be fixed or variable), or the method by
which such rate or rates shall be determined, at which such Debt Securities will
bear interest, if any;
(7) the date or dates, or the method for determining such date or dates,
from which any such interest will accrue, the interest payment dates on which
any such interest will be payable, the regular record dates for such interest
payment dates, or the method by which such dates shall be determined, the
persons to whom such interest shall be payable, and the basis upon which
interest shall be calculated if other than that of a 360-day year of twelve 30-
day months;
(8) the place or places where the principal of (and premium, if any) and
interest, if any, on such Debt Securities will be payable, where such Debt
Securities may be surrendered for conversion or registration of transfer or
exchange and where notices or demands to or upon CRIIMI MAE in respect of such
Debt Securities and the Indenture may be served;
(9) the period or periods within which, the price or prices at which and
the other terms and conditions upon which such Debt Securities may be
redeemed, as a whole or in part, at the option of CRIIMI MAE, if CRIIMI MAE is
to have such an option;
(10) the obligation, if any, of CRIIMI MAE to redeem, repay or purchase
such Debt Securities pursuant to any sinking fund or analogous provision or at
the option of a holder thereof, and the period or periods within which, the
price or prices at which and the other terms and conditions upon which such
Debt Securities will be redeemed, repaid or purchased, as a whole or in part,
pursuant to such obligation;
(11) if other than U.S. dollars, the currency or currencies in which such
Debt Securities are denominated and payable, which may be a foreign currency or
units of two or more foreign currencies or a composite currency or currencies,
and the terms and conditions relating thereto;
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<PAGE>
(12) whether the amount of payments of principal of (and premium, if any)
or interest, if any, on such Debt Securities may be determined with reference
to an index, formula or other method (which index, formula or method may, but
need not be, based on a currency, currencies, currency unit or units or
composite currency or currencies) and the manner in which such amounts shall
be determined;
(13) whether such Debt Securities will be issued in the form of one or more
global securities and whether such global securities are to be issuable in a
temporary global form or permanent global form;
(14) any additions to, modifications of or deletions from the terms of such
Debt Securities with respect to the events of default or covenants set forth in
the Indenture;
(15) whether such Debt Securities will be issued in certificated or book-
entry form;
(16) whether such Debt Securities will be in registered or bearer form and,
if in registered form, the denominations thereof if other than $1,000 and any
integral multiple thereof and, if in bearer form, the denominations thereof and
terms and conditions relating thereto;
(17) the applicability, if any, of the defeasance and covenant defeasance
provisions of the Indenture;
(18) the terms, if any, upon which such Debt Securities may be convertible
into Common Shares or Preferred Shares and the terms and conditions upon which
such conversion will be effected, including, without limitation, the initial
conversion price or rate and the conversion period;
(19) whether and under what circumstances CRIIMI MAE will pay additional
amounts on such Debt Securities in respect of any tax, assessment or
governmental charge and, if so, whether CRIIMI MAE will have the option to
redeem such Debt Securities in lieu of making such payment; and
(20) any other terms of such Debt Securities not inconsistent with the
provisions of the Indenture.
The Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities") or that the principal amount thereof
payable at their stated maturity may be more or less than the principal amount
thereof at original issuance ("Indexed Securities"). Special U.S. federal
income tax, accounting and other considerations applicable to Original Issue
Discount Securities or Indexed Securities will be described in the applicable
Prospectus Supplement.
Except as may be set forth in any Prospectus Supplement, the Debt Securities
will not contain any provisions that would limit the ability of CRIIMI MAE to
incur indebtedness or that would afford holders of Debt Securities protection in
the event of a highly leveraged or similar transaction involving CRIIMI MAE or
in the event of a change of control. Restrictions on ownership and transfers of
CRIIMI MAE's Common Shares and Preferred Shares are designed to preserve its
status as a REIT and, therefore, may act to prevent or hinder a change of
control. See "Description of Capital Stock." Reference is made to the
applicable Prospectus Supplement for information with respect to any deletions
from, modifications of, or additions to, the events of default or covenants of
CRIIMI MAE that are described below, including any addition of a covenant or
other provision providing event risk or similar protection.
Denominations, Interest, Registration and Transfer
Unless otherwise described in the applicable Prospectus Supplement, the Debt
Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof.
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Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium, if any) and interest on any series of Debt
Securities will be payable at the corporate trust office of the Trustee;
provided that, at the option of CRIIMI MAE, payment of interest may be made by
check mailed to the address of the person entitled thereto as it appears in the
register to be maintained by the Trustee or by wire transfer of funds to such
person at an account maintained within the United States.
Any interest not punctually paid or duly provided for on any interest
payment date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the holder on the applicable record date and
may either be paid to the person in whose name such Debt Security is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
applicable Trustee, notice whereof shall be given to each holder of such Debt
Security not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner, all as more completely described
in the Indenture.
Subject to certain limitations imposed upon Debt Securities issued in book-
entry form, the Debt Securities of any series will be exchangeable for other
Debt Securities of the same series and of a like aggregate principal amount and
tenor of different authorized denominations upon surrender of such Debt
Securities at the corporate trust office of the applicable Trustee. In
addition, subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series may be surrendered for
conversion or registration of transfer thereof at the corporate trust office of
the applicable Trustee. Every Debt Security tendered for conversion,
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer. No service charge will be made for any
registration of transfer or exchange of any Debt Securities, but CRIIMI MAE may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. If the applicable Prospectus Supplement
refers to any transfer agent (in addition to the applicable Trustee) initially
designated by CRIIMI MAE with respect to any series of Debt Securities, CRIIMI
MAE may at any time rescind the designation of any such transfer agent or
approve a change in the location through which any such transfer agent acts,
except that CRIIMI MAE will be required to maintain a transfer agent in each
place of payment for such series. CRIIMI MAE may at any time designate
additional transfer agents with respect to any series of Debt Securities.
To protect CRIIMI MAE's status as a REIT, CRIIMI MAE may refuse to effect a
transfer of Debt Securities if, as a result of such transfer, any person would
beneficially own, either directly or indirectly, more than 9.8% of CRIIMI MAE's
outstanding capital stock. Neither CRIIMI MAE nor any Trustee shall be required
to (i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before any
selection of Debt Securities of that series to be redeemed and ending at the
close of business on the day of mailing of the relevant notice of redemption;
(ii) register the transfer of or exchange any Debt Security, or portion thereof,
called for redemption, except the unredeemed portion of any Debt Security being
redeemed in part; or (iii) issue, register the transfer of or exchange any Debt
Security that has been surrendered for repayment at the option of the holder,
except the portion, if any, of such Debt Security not to be so repaid.
Merger, Consolidation or Sale
The Indenture will provide that CRIIMI MAE may consolidate with, or sell,
lease or convey all or substantially all of its assets to, or merge with or
into, any other corporation or trust or other entity provided that (a) either
CRIIMI MAE shall be the continuing corporation, or the successor corporation (if
other than CRIIMI MAE) formed by or resulting from any such consolidation or
merger or which shall have received the transfer of such assets shall expressly
assume payment of the principal of (and premium, if any) and interest on all of
the Debt Securities and the due and punctual performance and observance of all
of the covenants and conditions contained in the Indenture; (b) immediately
after giving effect to such transaction and treating any indebtedness that
becomes an obligation of CRIIMI MAE or any subsidiary as a result thereof as
having been incurred by CRIIMI MAE or such subsidiary at the time of such
transaction, no event
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of default under the Indenture, and no event which, after notice or the lapse of
time, or both, would become such an event of default, shall have occurred and be
continuing; and (c) an officers' certificate and legal opinion covering such
conditions shall be delivered to each Trustee.
Certain Covenants
Existence. Except as permitted under "--Merger, Consolidation or Sale,"
CRIIMI MAE will do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence, rights (charter and statutory)
and franchises; provided, however, that CRIIMI MAE shall not be required to
preserve any right or franchise if it determines that the preservation thereof
is no longer desirable in the conduct of its business.
Maintenance of Properties. CRIIMI MAE will cause all of its material
properties used or useful in the conduct of its business or the business of any
subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of CRIIMI MAE may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that CRIIMI MAE and its subsidiaries shall not
be prevented from selling or otherwise disposing for value its mortgage
investments and other assets in the ordinary course of business.
Payment of Taxes and Other Claims. CRIIMI MAE will pay or discharge or
cause to be paid or discharged, before the same shall become delinquent, (i) all
taxes, assessments and governmental charges levied or imposed upon it or any
subsidiary or upon the income, profits or property of CRIIMI MAE or any
subsidiary, and (ii) all lawful claims for labor, materials and supplies which,
if unpaid, might by law become a lien upon the property of CRIIMI MAE or any
subsidiary; provided, however, that CRIIMI MAE shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith.
Additional Covenants. Any additional covenants of CRIIMI MAE with respect
to any series of Debt Securities will be set forth in the Prospectus Supplement
relating thereto.
Events of Default, Notice and Waiver
The Indenture will provide that the following events are "Events of Default"
with respect to any series of Debt Securities issued thereunder: (a) default for
30 days in the payment of any installment of interest on any Debt Security of
such series; (b) default in the payment of the principal of (or premium, if any,
on) any Debt Security of such series when due and payable, at maturity, upon
redemption or otherwise which continues for five business days; (c) default in
making any sinking fund payment as required for any Debt Security of such series
which continues for five business days; (d) default in the performance or breach
of any other covenant or warranty of CRIIMI MAE contained in the Indenture
(other than a covenant added to the Indenture solely for the benefit of a series
of Debt Securities issued thereunder other than such series), continued for 60
days after written notice as provided in the Indenture; (e) a default not being
contested in good faith by CRIIMI MAE under any bond, debenture, note or other
evidence of indebtedness for money borrowed by CRIIMI MAE (including obligations
under leases required to be capitalized on the balance sheet of the lessee under
generally accepted accounting principles but not including any indebtedness or
obligations for which recourse is limited to property purchased) in an aggregate
principal amount in excess of $10,000,000 or under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by CRIIMI MAE (including such
leases but not including such indebtedness or obligations for which recourse is
limited to property purchased) in an aggregate principal amount in excess of
$10,000,000 by CRIIMI MAE, whether such indebtedness now exists or shall
hereafter be created which default shall have resulted in such indebtedness
becoming or being declared due and payable
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prior to the date on which it would otherwise have become due and payable or
such obligations being accelerated, without such acceleration having been
rescinded or annulled; (f) certain events of bankruptcy, insolvency or
reorganization, or court appointment of a receiver, liquidator or trustee of
CRIIMI MAE or any Significant Subsidiary or either of its properties; and (g)
any other Event of Default provided with respect to a particular series of Debt
Securities. The term "Significant Subsidiary" means each significant subsidiary
(as defined in Regulation S-X promulgated under the Securities Act) of CRIIMI
MAE.
If an Event of Default under the Indenture with respect to Debt Securities
of any series at the time outstanding occurs and is continuing, then in every
such case the applicable Trustee or the holders of not less than a majority in
principal amount of the outstanding Debt Securities of that series may declare
the principal amount (or, if the Debt Securities of that series are Original
Issue Discount Securities or Indexed Securities, such portion of the principal
amount as may be specified in the terms thereof) of all the Debt Securities of
that series to be due and payable immediately by written notice thereof to
CRIIMI MAE (and to the applicable Trustee if given by the holders). However,
at any time after such a declaration of acceleration with respect to Debt
Securities of such series (or of all Debt Securities then outstanding under
the Indenture, as the case may be) has been made, but before a judgment or
decree for payment of the money due has been obtained by the applicable
Trustee, the holders of not less than a majority in principal amount of
outstanding Debt Securities of such series (or of all Debt Securities then
outstanding under the Indenture, as the case may be) may rescind and annul
such declaration and its consequences if (a) CRIIMI MAE shall have paid or
deposited with the applicable Trustee all required payments of the principal
of (and premium, if any) and interest on the Debt Securities of such series
(or of all Debt Securities then outstanding under the applicable Indenture, as
the case may be), plus certain fees, expenses, disbursements and advances of
the applicable Trustee and (b) all Events of Default, other than the non-
payment of accelerated principal (or specified portion thereof), with respect
to Debt Securities of such series (or of all Debt Securities then outstanding
under the Indenture, as the case may be) have been cured or waived as provided
in the Indenture. The Indenture will also provide that the holders of not less
than a majority in principal amount of the outstanding Debt Securities of any
series (or of all Debt Securities then outstanding under the Indenture, as the
case may be) may waive any past default with respect to such series and its
consequences, except a default (x) in the payment of the principal of (or
premium, if any) or interest on any Debt Security of such series or (y) in
respect of a covenant or provision contained in the Indenture that cannot be
modified or amended without the consent of the holder of each outstanding Debt
Security affected thereby.
Each Trustee will be required to give notice to the holders of Debt
Securities within 90 days of a default under the Indenture unless such default
shall have been cured or waived; provided, however, that such Trustee may
withhold notice to the holders of any series of Debt Securities of any default
with respect to such series (except a default in the payment of the principal
of (or premium, if any) or interest on any Debt Security of such series or in
the payment of any sinking fund installment in respect of any Debt Security of
such series) if designated officers of such Trustee consider such withholding
to be in the interest of such holders.
The right of any holder to institute a proceeding with respect to the
Indenture will be subject to certain conditions precedent including notice and
indemnity to the Trustee, but the holder has an absolute right to receipt of
principal of (and premium, if any) and interest on such holder's Debt Security
on or after the respective due dates expressed in the Debt Security, and to
institute suit for the enforcement of any such payments.
Subject to provisions in the Indenture relating to its duties in case of
default, no Trustee will be under an obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any holders of any
series of Debt Securities then outstanding under the Indenture, unless such
holders shall have offered to the Trustee thereunder reasonable security or
indemnity. The holders of not less than a majority in aggregate principal
amount of the outstanding Debt Securities of any series (or of all Debt
Securities then outstanding under the Indenture, as the case may be) shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the applicable Trustee, or of exercising any trust
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or power conferred upon such Trustee. However, each Trustee may refuse to
follow any direction which is in conflict with any law or the Indenture, which
may involve such Trustee in personal liability or which may be unduly
prejudicial to the holders of Debt Securities of such series not joining
therein.
Within 120 days after the close of each fiscal year, CRIIMI MAE will be
required to deliver to each Trustee a certificate, signed by one of several
specified officers, stating whether or not such officer has knowledge of any
default under the Indenture and, if so, specifying each such default and the
nature and status thereof.
Modification of the Indentures
Modifications and amendments of the Indenture may be made only with the
consent of the holders of not less than a majority in aggregate principal amount
of all outstanding Debt Securities issued under such Indenture which are
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the holder of each such
Debt Security affected thereby, (a) change the stated maturity of the principal
of, or any installment of interest (or premium, if any) on, any such Debt
Security; (b) reduce the principal amount of, or the rate or amount of interest
on, or any premium payable on redemption of, any such Debt Security, or reduce
the amount of principal of an Original Issue Discount Security that would be due
and payable upon declaration of acceleration of the maturity thereof or would be
provable in bankruptcy, or adversely affect any right of repayment of the holder
of any such Debt Security; (c) change the place of payment, or the coin or
currency, for payment of principal of, premium, if any, or interest on any such
Debt Security; (d) impair the right to institute suit for the enforcement of any
payment on or with respect to any such Debt Security; (e) reduce the above-
stated percentage of outstanding Debt Securities of any series necessary to
modify or amend the Indenture, to waive compliance with certain provisions
thereof or certain defaults and consequences thereunder or to reduce the quorum
or voting requirements set forth in the Indenture; or (f) modify any of the
foregoing provisions or any of the provisions relating to the waiver of certain
past defaults or certain covenants, except to increase the required percentage
to effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the holder of such Debt Security.
The holders of not less than a majority in principal amount of outstanding
Debt Securities issued under the Indenture have the right to waive compliance by
CRIIMI MAE with certain covenants in such Indenture.
Modifications and amendments of the Indenture may be made by CRIIMI MAE and
the respective Trustee thereunder without the consent of any holder of Debt
Securities for any of the following purposes: (i) to evidence the succession of
another person to CRIIMI MAE as obligor under such Indenture; (ii) to add to the
covenants of CRIIMI MAE for the benefit of the holders of all or any series of
Debt Securities or to surrender any right or power conferred upon CRIIMI MAE in
such Indenture; (iii) to add Events of Default for the benefit of the holders of
all or any series of Debt Securities; (iv) to add or change any provisions of
the Indenture to facilitate the issuance of, or to liberalize certain terms of,
Debt Securities in bearer form, or to permit or facilitate the issuance of Debt
Securities in uncertificated form, provided that such action shall not adversely
affect the interests of the holders of the Debt Securities of any series in any
material respect; (v) to change or eliminate any provisions of the Indenture,
provided that any such change or elimination shall become effective only when
there are no Debt Securities outstanding of any series created prior thereto
which are entitled to the benefit of such provision; (vi) to secure the Debt
Securities; (vii) to establish the form or terms of Debt Securities of any
series, including the provisions and procedures, if applicable, for the
conversion of such Debt Securities into Common Shares or Preferred Shares;
(viii) to provide for the acceptance of appointment by a successor Trustee or
facilitate the administration of the trusts under the Indenture by more than one
Trustee; (ix) to cure any ambiguity, defect or inconsistency in the Indenture,
provided that such action shall not adversely affect the interests of holders of
Debt Securities of any series issued under such Indenture in any material
respect; or (x) to supplement any of the provisions of the Indenture to the
extent necessary to permit or facilitate defeasance and discharge of any series
of such Debt
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Securities, provided that such action shall not adversely affect the interests
of the holders of the Debt Securities of any series in any material respect.
The Indenture will provide that in determining whether the holders of the
requisite principal amount of outstanding Debt Securities of a series have given
any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security that
shall be deemed to be outstanding shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof, (ii) the principal amount
of a Debt Security denominated in a foreign currency that shall be deemed
outstanding shall be the U.S. dollar equivalent, determined on the issue date
for such Debt Security, of the principal amount (or, in the case of an Original
Issue Discount Security, the U.S. dollar equivalent on the issue date of such
Debt Security of the amount determined as provided in (i) above), (iii) the
principal amount of an Indexed Security that shall be deemed outstanding shall
be the principal face amount of such Indexed Security at original issuance,
unless otherwise provided with respect to such Indexed Security pursuant to the
Indenture, and (iv) Debt Securities owned by CRIIMI MAE or any other obligor
upon the Debt Securities or any affiliate of CRIIMI MAE or of such other obligor
shall be disregarded.
The Indenture will contain provisions for convening meetings of the
holders of Debt Securities of a series. A meeting may be called at any time by
the applicable Trustee, and also, upon request, by CRIIMI MAE or the holders
of at least 25% in principal amount of the outstanding Debt Securities of such
series, in any such case upon notice given as provided in the Indenture.
Except for any consent that must be given by the holder of each Debt Security
affected by certain modifications and amendments of the Indenture, any
resolution presented at a meeting or adjourned meeting duly reconvened at
which a quorum is present may be adopted by the affirmative vote of the
holders of a majority in principal amount of the outstanding Debt Securities
of that series; provided, however, that, except as referred to above, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by
the holders of a specified percentage, which is less than a majority, in
principal amount of the outstanding Debt Securities of a series may be adopted
at a meeting or adjourned meeting duly reconvened at which a quorum is present
by the affirmative vote of the holders of such specified percentage in
principal amount of the outstanding Debt Securities of that series. Any
resolution passed or decision taken at any meeting of holders of Debt
Securities of any series duly held in accordance with the Indenture will be
binding on all holders of Debt Securities of that series. The quorum at any
meeting called to adopt a resolution, and at any reconvened meeting, will be
persons holding or representing a majority in principal amount of the
outstanding Debt Securities of a series; provided, however, that if any action
is to be taken at such meeting with respect to a consent or waiver which may
be given by the holders of not less than a specified percentage in principal
amount of the outstanding Debt Securities of a series, the persons holding or
representing such specified percentage in principal amount of the outstanding
Debt Securities of such series will constitute a quorum.
Notwithstanding the foregoing provisions, if any action is to be taken at a
meeting of holders of Debt Securities of any series with respect to any request,
demand, authorization, direction, notice, consent, waiver or other action that
the Indenture expressly provides may be made, given or taken by the holders of a
specified percentage in principal amount of all outstanding Debt Securities
affected thereby, or of the holders of such series and one or more additional
series: (i) there shall be no minimum quorum requirement for such meeting and
(ii) the principal amount of the outstanding Debt Securities of such series that
vote in favor of such request, demand, authorization, direction, notice,
consent, waiver or other action shall be taken into account in determining
whether such request, demand, authorization, direction, notice, consent, waiver
or other action has been made, given or taken under the Indenture.
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Subordination
Upon any distribution to creditors of CRIIMI MAE in a liquidation,
dissolution or reorganization, the payment of the principal of and interest on
the Debt Securities will be subordinated in right of payment to the prior
payment in full of all "Senior Debt" (as defined below), but the obligation of
CRIIMI MAE to make payment of the principal and interest on the Debt
Securities will not otherwise be affected. No payment of principal or interest
may be made on the Debt Securities at any time if a default on Senior Debt
exists that permits the holders of such Senior Debt to accelerate its maturity
and the default is the subject of judicial proceedings or CRIIMI MAE receives
notice of the default. After all Senior Debt is paid in full and until the
Debt Securities are paid in full, holders will be subrogated to the rights of
holders of Senior Debt to the extent that distributions otherwise payable to
holders have been applied to the payment of Senior Debt. By reason of such
subordination, in the event of a distribution of assets upon insolvency,
certain general creditors of CRIIMI MAE may recover more, ratably, than
holders of the Debt Securities.
"Senior Debt" will be defined in the Indenture as the principal of and
interest on, or substantially similar payments to be made by CRIIMI MAE in
respect of, the following, whether outstanding at the date of execution of the
Indenture or thereafter incurred, created or assumed: (a) indebtedness of CRIIMI
MAE for money borrowed or represented by purchase-money obligations, (b)
indebtedness of CRIIMI MAE evidenced by notes, debentures, or bonds, or other
securities issued under the provisions of an indenture, fiscal agency agreement
or other instrument, (c) obligations of CRIIMI MAE as lessee under leases of
property either made as part of any sale and leaseback transaction to which
CRIIMI MAE is a party or otherwise, (d) indebtedness of any partnerships or
joint ventures which is included in the consolidated financial statements of
CRIIMI MAE, (e) indebtedness, obligations and liabilities of others in respect
of which CRIIMI MAE is liable contingently or otherwise to pay or advance money
or property or as guarantor, endorser or otherwise or which CRIIMI MAE has
agreed to purchase or otherwise acquire, and (f) any binding commitment of
CRIIMI MAE to fund any mortgage investment or to fund any investment in any
entity making such mortgage investment, in each case other than (1) any such
indebtedness, obligation or liability referred to in clauses (a) through (f)
above as to which, in the instrument creating or evidencing the same pursuant to
which the same is outstanding, it is provided that such indebtedness, obligation
or liability is not superior in right of payment to the Debt Securities or rank
pari passu with the Debt Securities, (2) any such indebtedness, obligation or
liability which is subordinated to indebtedness of CRIIMI MAE to substantially
the same extent as or to a greater extent than the Debt Securities are
subordinated, and (3) the Debt Securities. Senior Debt includes indebtedness
arising under the Master Repurchase Agreements, the Revolving Credit Agreement
and the Bank Term Loan. See "--General." There will be no restrictions in the
Indenture upon the creation of additional Senior Debt.
Discharge, Defeasance and Covenant Defeasance
Under the Indenture, CRIIMI MAE will be able to discharge certain
obligations to holders of any series of Debt Securities issued thereunder that
have not already been delivered to the applicable Trustee for cancellation and
that either have become due and payable or will become due and payable within
one year (or scheduled for redemption within one year) by irrevocably
depositing with the applicable Trustee, in trust, funds in such currency or
currencies, currency unit or units or composite currency or currencies in
which such Debt Securities are payable in an amount sufficient to pay the
entire indebtedness on such Debt Securities in respect of principal (and
premium, if any) and interest to the date of such deposit (if such Debt
Securities have become due and payable) or to the stated maturity or
redemption date, as the case may be.
The Indenture will provide that, under certain circumstances, CRIIMI MAE may
elect either (a) to defease and be discharged from any and all obligations with
respect to such Debt Securities (except for the obligation to pay additional
amounts, if any, upon the occurrence of certain events of tax, assessment or
governmental charge with respect to payments on such Debt Securities and the
obligations to register the transfer or exchange of such Debt Securities, to
replace temporary or mutilated, destroyed, lost or stolen Debt Securities,
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to maintain an office or agency in respect of such Debt Securities and to hold
moneys for payment in trust) ("defeasance") or (b) to be released from its
obligations with respect to such Debt Securities under the Indenture or, under
certain circumstances, its obligations with respect to any other covenant, and
any omission to comply with such obligations shall not constitute a default or
an Event of Default with respect to such Debt Securities ("covenant
defeasance"), in either case upon the irrevocable deposit by CRIIMI MAE with the
applicable Trustee, in trust, of an amount, in such currency or currencies,
currency unit or units or composite currency or currencies in which such Debt
Securities are payable at stated maturity, or Government Obligations (as defined
below), or both, applicable to such Debt Securities which through the scheduled
payment of principal and interest in accordance with their terms will provide
money in an amount sufficient to pay the principal of (and premium, if any) and
interest on such Debt Securities, and any mandatory sinking fund or analogous
payments thereon, on the scheduled due dates therefor.
Such a trust may be established only if, among other things, CRIIMI MAE has
delivered to the applicable Trustee an opinion of counsel (as specified in each
Indenture) to the effect that the holders of such Debt Securities will not
recognize income, gain or loss for U.S. federal income tax purposes as a result
of such defeasance or covenant defeasance and will be subject to U.S. federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance or covenant defeasance had not
occurred, and such opinion of counsel, in the case of defeasance, must refer to
and be based upon a ruling of the Internal Revenue Service or a change in
applicable U.S. federal income tax law occurring after the date of the
Indenture.
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government which issued the foreign
currency in which the Debt Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations
of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which
issued the foreign currency in which the Debt Securities of such series are
payable, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America or such other
government, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of any
such Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
Unless otherwise provided in the applicable Prospectus Supplement, if after
CRIIMI MAE has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any series,
(a) the holder of a Debt Security of such series is entitled to, and does, elect
pursuant to the Indenture or the terms of such Debt Security to receive payment
in a currency, currency unit or composite currency other than that in which such
deposit has been made in respect of such Debt Security, or (b) a Conversion
Event (as defined below) occurs in respect of the currency, currency unit or
composite currency in which such deposit has been made, the indebtedness
represented by such Debt Security shall be deemed to have been, and will be,
fully discharged and satisfied through the payment of the principal of (and
premium, if any) and interest on such Debt Security as they become due out of
the proceeds yielded by converting the amount so deposited in respect of such
Debt Security into the currency, currency unit or composite currency in which
such Debt Security becomes payable as a result of such election or such
cessation of usage based on the applicable market exchange rate. "Conversion
Event" means the cessation of use of (i) a currency, currency unit or composite
currency both by the government of the country which issued such currency and
for the settlement of transactions by a central bank or other public
institutions of or within the international banking community, (ii) the European
Currency Unit ("ECU") both within the European Monetary System established by
the Resolution of December 5, 1978 of the council of the European Economic
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Community, European Coal and Steel Community and the European Atomic Energy
Community (collectively, the "European Communities") and for the settlement of
transactions by public institutions of or within the European Communities or
(iii) any currency unit or composite currency other than the ECU for the
purposes for which it was established. Unless otherwise provided in the
applicable Prospectus Supplement, all payments of principal of (and premium, if
any) and interest on any Debt Security that is payable in a foreign currency
that ceases to be used by its government of issuance shall be made in U.S.
dollars.
The applicable Prospectus Supplement may further describe the provisions, if
any, permitting such defeasance or covenant defeasance, including any
modifications of the provisions described above, with respect to the Debt
Securities of or within a particular series.
Conversion Rights
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Shares or Preferred Shares will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include
whether such Debt Securities are convertible into Common Shares or Preferred
Shares, the conversion price (or manner of calculation thereof), the conversion
period, provisions as to whether conversion will be at the option of the holders
or CRIIMI MAE, the events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption of such Debt
Securities.
To protect CRIIMI MAE's status as a REIT, CRIIMI MAE may refuse to effect a
conversion of the Debt Securities if, as a result of such conversion, any person
would beneficially own, either directly or indirectly, more than 9.8% of CRIIMI
MAE's outstanding capital stock. See "Description of Capital Stock -- Common
Shares -- Restrictions on Ownership and Transfer."
Global Securities
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depositary identified in the applicable
Prospectus Supplement relating to such series. Global Securities may be issued
in either registered or bearer form and in either temporary or permanent form.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of CRIIMI MAE comprises 60 million Common
Shares and 25 million Preferred Shares. As of July 13, 1994, there were issued
and outstanding 25,183,533 Common Shares and no Preferred Shares. The Common
Shares are currently listed and are trading on the NYSE, and CRIIMI MAE will
seek to list with the NYSE any Common Shares offered in any Prospectus
Supplement hereto.
Preferred Shares
General. The following description of the Preferred Shares sets forth
certain general terms and provisions of the Preferred Shares to which any
Prospectus Supplement may relate. The statements below describing the
Preferred Shares are in all respects subject to and qualified in their
entirety by reference to the applicable provisions of CRIIMI MAE's Articles of
Incorporation, as amended (the "Articles of Incorporation") and Bylaws and
applicable articles supplementary relating to any offering of Preferred Shares
("Articles Supplementary").
Terms. Subject to the limitations prescribed by the Articles of
Incorporation, the CRIIMI MAE Board is authorized to fix the number of shares
constituting each series of Preferred Shares and the designations and
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powers, preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions thereof, including such
provisions as may be desired concerning voting, redemption, dividends,
dissolution or the distribution of assets, conversion or exchange, and such
other subjects or matters as may be fixed by resolution of the CRIIMI MAE Board.
The Preferred Shares will, when issued, be fully paid and nonassessable by
CRIIMI MAE and will have no preemptive rights.
Reference is made to the Prospectus Supplement relating to the Preferred
Shares offered thereby for specific terms, including:
(1) The title and stated value of such Preferred Shares;
(2) The number of such Preferred Shares offered, the liquidation preference
per share and the offering price of such Preferred Shares;
(3) The dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation thereof applicable to such Preferred Shares;
(4) The date from which dividends on such Preferred Shares shall
accumulate, if applicable;
(5) The procedures for any auction and remarketing, if any, for such
Preferred Shares;
(6) The provision for a sinking fund, if any, for such Preferred Shares;
(7) The provision for redemption, if applicable, of such Preferred Shares;
(8) Any listing of such Preferred Shares on any securities exchange;
(9) The terms and conditions, if applicable, upon which such Preferred
Shares will be convertible into Common Shares, including the conversion price
(or manner of calculation thereof);
(10) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Shares;
(11) A discussion of federal income tax considerations applicable to such
Preferred Shares;
(12) The relative ranking and preferences of such Preferred Shares as to
dividend rights and rights upon liquidation, dissolution or winding up of the
affairs of CRIIMI MAE;
(13) Any limitations on issuance of any series of Preferred Shares ranking
senior to or on a parity with such series of Preferred Shares as to dividend
rights and rights upon liquidation, dissolution or winding up of the affairs of
CRIIMI MAE; and
(14) Any limitations on direct or beneficial ownership and restrictions on
transfer, in each case as may be appropriate to preserve the status of CRIIMI
MAE as a REIT.
Rank. Unless otherwise specified in the Prospectus Supplement, the
Preferred Shares will, with respect to dividend rights and rights upon
liquidation, dissolution or winding up of CRIIMI MAE, rank (i) senior to all
classes or series of Common Shares and to all equity securities ranking junior
to such Preferred Shares with respect to dividend rights or rights upon
liquidation, dissolution or winding up of CRIIMI MAE; (ii) on a parity with
all equity securities issued by CRIIMI MAE the terms of which specifically
provide that such equity securities rank on a parity with the Preferred Shares
with respect to dividend rights or rights upon liquidation, dissolution or
winding up of CRIIMI MAE; and (iii) junior to all equity securities issued by
CRIIMI MAE the terms of which specifically provide that such equity securities
rank senior to the Preferred Shares with
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respect to dividend rights or rights upon liquidation, dissolution or winding up
of CRIIMI MAE. The term "equity securities" does not include convertible debt
securities.
Dividends. Holders of the Preferred Shares of each series will be
entitled to receive, when, as and if declared by the CRIIMI MAE Board, out of
assets of CRIIMI MAE legally available for payment, cash dividends at such
rates and on such dates as will be set forth in the applicable Prospectus
Supplement. Each such dividend shall be payable to holders of record as they
appear on the share transfer books of CRIIMI MAE on such record dates as shall
be fixed by the CRIIMI MAE Board.
Dividends on any series of the Preferred Shares may be cumulative or non-
cumulative, as provided in the applicable Prospectus Supplement. Dividends, if
cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the CRIIMI MAE Board fails to declare a
dividend payable on a dividend payment date on any series of the Preferred
Shares for which dividends are noncumulative, then the holders of such series of
the Preferred Shares will have no right to receive a dividend in respect of the
dividend period ending on such dividend payment date, and CRIIMI MAE will have
no obligation to pay the dividend accrued for such period, whether or not
dividends on such series are declared payable on any future dividend payment
date.
If Preferred Shares of any series are outstanding, no dividends will be
declared or paid or set apart for payment on the Preferred Shares of any other
series ranking, as to dividends, on a parity with or junior to the Preferred
Shares of such series for any period unless (i) if such series of Preferred
Shares has a cumulative dividend, full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on the Preferred Shares of such
series for all past dividend periods and the then current dividend period or
(ii) if such series of Preferred Shares does not have a cumulative dividend,
full dividends for the then current dividend period have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on the Preferred Shares of such
series. When dividends are not paid in full (or a sum sufficient for such full
payment is not so set apart) upon Preferred Shares of any series and the shares
of any other series of Preferred Shares ranking on a parity as to dividends with
the Preferred Shares of such series, all dividends declared upon Preferred
Shares of such series and any other series of Preferred Shares ranking on a
parity as to dividends with such Preferred Shares shall be declared pro rata so
that the amount of dividends declared per Preferred Share of such series and
such other series of Preferred Shares shall in all cases bear to each other the
same ratio that accrued dividends per share on the Preferred Shares of such
series (which shall not include any accumulation in respect of unpaid dividends
for prior dividend periods if such Preferred Shares do not have a cumulative
dividend) and such other series of Preferred Shares bear to each other. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on Preferred Shares of such series which may be
in arrears.
Except as provided in the immediately preceding paragraph, unless (i) if
such series of Preferred Shares has a cumulative dividend, full cumulative
dividends on the Preferred Shares of such series have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for all past dividend periods and
the then current dividend period and (ii) if such series of Preferred Shares
does not have a cumulative dividend, full dividends on the Preferred Shares of
such series have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment for the
then current dividend period, no dividends (other than in Common Shares or
other capital shares ranking junior to the Preferred Shares of such series as
to dividends and upon liquidation) shall be declared or paid or set aside for
payment or other distribution shall be declared or made upon the Common
Shares, or any other capital shares of CRIIMI MAE ranking junior to or on a
parity with the Preferred Shares of such series as to dividends or upon
liquidation, nor shall any Common Shares, or any other capital shares of
CRIIMI MAE ranking junior to or on a parity with the Preferred Shares of such
series as to dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for
a sinking fund for the redemption of any such shares) by CRIIMI
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MAE (except by conversion into or exchange for other capital shares of CRIIMI
MAE ranking junior to the Preferred Shares of such series as to dividends and
upon liquidation).
Any dividend payment made on shares of a series of Preferred Shares shall
first be credited against the earliest accrued but unpaid dividend due with
respect to shares of such series which remains payable.
Redemption. If so provided in the applicable Prospectus Supplement, the
Preferred Shares will be subject to mandatory redemption or redemption at the
option of CRIIMI MAE, as a whole or in part, in each case upon the terms, at the
times and at the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a series of Preferred Shares that is
subject to mandatory redemption will specify the number of such Preferred Shares
that shall be redeemed by CRIIMI MAE in each year commencing after a date to be
specified, at a redemption price per share to be specified, together with an
amount equal to all accrued and unpaid dividends thereon (which shall not, if
such Preferred Shares do not have a cumulative dividend, include any
accumulation in respect of unpaid dividends for prior dividend periods) to the
date of redemption. The redemption price may be payable in cash or other
property, as specified in the applicable Prospectus Supplement. If the
redemption price for Preferred Shares of any series is payable only from the net
proceeds of the issuance of capital shares of CRIIMI MAE, the terms of such
Preferred Shares may provide that, if no such capital shares shall have been
issued or to the extent the net proceeds from any issuance are insufficient to
pay in full the aggregate redemption price then due, such Preferred Shares shall
automatically and mandatorily be converted into the applicable capital shares of
CRIIMI MAE pursuant to conversion provisions specified in the applicable
Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if such series of Preferred Shares
has a cumulative dividend, full cumulative dividends on all shares of any series
of Preferred Shares shall have been or contemporaneously are declared and paid
or declared and a sum sufficient for the payment thereof set apart for payment
for all past dividend periods and the then current dividend period and (ii) if
such series of Preferred Shares does not have a cumulative dividend, full
dividends on the Preferred Shares of any series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for payment for the then current dividend period, no shares of any
series of Preferred Shares shall be redeemed unless all outstanding Preferred
Shares of such series are simultaneously redeemed; provided, however, that the
foregoing shall not prevent the purchase or acquisition of Preferred Shares of
such series to preserve the REIT status of CRIIMI MAE or pursuant to a purchase
or exchange offer made on the same terms to holders of all outstanding Preferred
Shares of such series, and, unless (i) if such series of Preferred Shares has a
cumulative dividend, full cumulative dividends on all outstanding shares of any
series of Preferred Shares have been or contemporaneously are declared and paid
or declared and a sum sufficient for the payment thereof set apart for payment
for all past dividend periods and the then current dividend period and (ii) if
such series of Preferred Shares does not have a cumulative dividend, full
dividends on the Preferred Shares of any series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for payment for the then current dividend period, CRIIMI MAE shall not
purchase or otherwise acquire directly or indirectly any Preferred Shares of
such series (except by conversion into or exchange for capital shares of CRIIMI
MAE ranking junior to the Preferred Shares of such series as to dividends and
upon liquidation); provided, however, that the foregoing shall not prevent the
purchase or acquisition of Preferred Shares of such series to preserve the REIT
status of CRIIMI MAE or pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding Preferred Shares of such series.
If fewer than all of the outstanding Preferred Shares of any series are to
be redeemed, the number of shares to be redeemed will be determined by CRIIMI
MAE and such shares may be redeemed pro rata from the holders of record of
such shares in proportion to the number of such shares held by such holders
(with adjustments to avoid redemption of fractional shares) or any other
equitable method determined by CRIIMI MAE.
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Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of Preferred Shares
of any series to be redeemed at the address shown on the share transfer books
of CRIIMI MAE. Each notice shall state: (i) the redemption date; (ii) the
number of shares and series of the Preferred Shares to be redeemed; (iii) the
redemption price; (iv) the place or places where certificates for such
Preferred Shares are to be surrendered for payment of the redemption price;
(v) that dividends on the shares to be redeemed will cease to accrue on such
redemption date; and (vi) the date upon which the holder's conversion rights,
if any, as to such shares shall terminate. If fewer than all the Preferred
Shares of any series are to be redeemed, the notice mailed to each such holder
thereof shall also specify the number of Preferred Shares to be redeemed from
each such holder. If notice of redemption of any Preferred Shares has been
given and if the funds necessary for such redemption have been set aside by
CRIIMI MAE in trust for the benefit of the holders of any Preferred Shares so
called for redemption, then from and after the redemption date dividends will
cease to accrue on such Preferred Shares, such Preferred Shares shall no
longer be deemed outstanding and all rights of the holders of such shares will
terminate, except the right to receive the redemption price. Any moneys so
deposited which remain unclaimed by the holders of the Preferred Shares at the
end of two years after the redemption date will be returned by such bank or
trust company to CRIIMI MAE.
Liquidation Preference. Upon any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of CRIIMI MAE, then, before any
distribution or payment shall be made to the holders of any Common Shares or any
other class or series of capital shares of CRIIMI MAE ranking junior to the
Preferred Shares in the distribution of assets upon any liquidation, dissolution
or winding up of CRIIMI MAE, the holders of each series of Preferred Shares
shall be entitled to receive out of assets of CRIIMI MAE legally available for
distribution to stockholders, liquidating distributions in the amount of the
liquidation preference per share (set forth in the applicable Prospectus
Supplement), plus an amount equal to all dividends accrued and unpaid thereon
(which shall not include any accumulation in respect of unpaid dividends for
prior dividend periods if such Preferred Shares do not have a cumulative
dividend). After payment of the full amount of the liquidating distributions to
which they are entitled, the holders of Preferred Shares will have no right or
claim to any of the remaining assets of CRIIMI MAE. In the event that, upon any
such voluntary or involuntary liquidation, dissolution or winding up, the
available assets of CRIIMI MAE are insufficient to pay the amount of the
liquidating distributions on all outstanding Preferred Shares and the
corresponding amounts payable on all shares of other classes or series of
capital shares of CRIIMI MAE ranking on a parity with the Preferred Shares in
the distribution of assets upon liquidation, dissolution or winding up, then the
holders of the Preferred Shares and all other such classes or series of capital
shares shall share ratably in any such distribution of assets in proportion to
the full liquidating distributions to which they would otherwise be respectively
entitled.
If liquidating distributions shall have been made in full to all holders of
Preferred Shares, the remaining assets of CRIIMI MAE shall be distributed among
the holders of any other classes or series of capital shares ranking junior to
the Preferred Shares upon liquidation, dissolution or winding up, according to
their respective rights and preferences and in each case according to their
respective number of shares. For such purposes, the consolidation or merger of
CRIIMI MAE with or into any other corporation, trust or entity, or the sale,
lease or conveyance of all or substantially all of the property or business of
CRIIMI MAE, shall not be deemed to constitute a liquidation, dissolution or
winding up of CRIIMI MAE.
Voting Rights. Holders of the Preferred Shares will not have any voting
rights, except as set forth below or as otherwise from time to time required by
law or as indicated in the applicable Prospectus Supplement.
Unless provided otherwise for any series of Preferred Shares, so long as any
Preferred Shares remain outstanding, CRIIMI MAE will not, without the
affirmative vote or consent of the holders of at least a majority of the shares
of each series of Preferred Shares outstanding at the time, given in person or
by proxy, either in writing or at a meeting (such series voting separately as a
class), (i) authorize or create, or increase the authorized or issued amount of,
any class or series of capital shares ranking prior to such series of
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Preferred Shares with respect to payment of dividends or the distribution of
assets upon liquidation, dissolution or winding up or reclassify any authorized
capital shares of CRIIMI MAE into any such shares, or create, authorize or issue
any obligation or security convertible into or evidencing the right to purchase
any such shares; or (ii) amend, alter or repeal the provisions of CRIIMI MAE's
Articles of Incorporation or the Articles Supplementary for such series of
Preferred Shares, whether by merger, consolidation or otherwise (an "Event"), so
as to materially and adversely affect any right, preference, privilege or voting
power of such series of Preferred Shares or the holders thereof; provided,
however, with respect to the occurrence of any of the Events set forth in (ii)
above, so long as the Preferred Shares remain outstanding with the terms thereof
materially unchanged, taking into account that upon the occurrence of an Event,
CRIIMI MAE may not be the surviving entity, the occurrence of any such Event
shall not be deemed to materially and adversely affect such rights, preferences,
privileges or voting power of holders of Preferred Shares, and provided further
that (x) any increase in the amount of the authorized Common Shares or Preferred
Shares or the authorization, creation or issuance of any other series of
Preferred Shares or any other class or series of capital shares, or (y) any
increase in the amount of authorized shares of such series or any other series
of Preferred Shares or any other class or series of capital shares, in each case
ranking on a parity with or junior to the Preferred Shares of such series with
respect to payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of such series of Preferred Shares shall
have been redeemed or called for redemption and sufficient funds shall have been
deposited in trust to effect such redemption.
Conversion Rights. The terms and conditions, if any, upon which any
series of Preferred Shares are convertible into Common Shares will be set
forth in the applicable Prospectus Supplement relating thereto. Such terms
will include the number of Common Shares into which the Preferred Shares are
convertible, the conversion price (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at the option
of the holders of the Preferred Shares or CRIIMI MAE, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of such Preferred Shares.
Restrictions on Ownership and Transfer. As discussed below under "--Common
Shares--Restrictions on Ownership and Transfer," for CRIIMI MAE to qualify as a
REIT under the Internal Revenue Code of 1986, as amended (the "Code"), not more
than 50% in value of its outstanding capital shares may be owned, directly or
constructively, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of a taxable year. To assist CRIIMI MAE
in meeting this requirement, CRIIMI MAE may take certain actions to limit the
beneficial ownership, directly or indirectly, by a single person of more than
9.8% of CRIIMI MAE's outstanding capital stock, including any Preferred Shares
of CRIIMI MAE. Therefore, the Articles Supplementary for each series of
Preferred Shares will contain certain provisions restricting the ownership and
transfer of the Preferred Shares. The applicable Prospectus Supplement will
specify any additional ownership limitation relating to a series of Preferred
Shares.
Common Shares
The following description of the Common Shares is summarized from relevant
portions of CRIIMI MAE's Articles of Incorporation and Bylaws, as amended. A
more complete description of the Common Shares may be obtained by reference to
such documents and to the documents incorporated by reference in this
Prospectus. The following statements are qualified in their entirety by such
reference.
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General. Stockholders are entitled to one vote for each Common Share held
on all matters presented for a vote to stockholders. The CRIIMI MAE Board
serves in staggered three-year terms. Directors may be removed only for cause,
upon the affirmative vote of holders of a majority of the Common Shares voting
together as a single class. Except as otherwise provided in the Articles of
Incorporation, in meetings where a quorum is present, a majority of the votes
cast by stockholders is required to adopt a provision. Stockholders are
entitled to receive all assets available for distribution to the stockholders,
subject to any preferential rights of the holders of any Preferred Shares. The
Common Shares, when issued, will be fully paid and nonassessable and will not
be subject to redemption, except as provided in the Articles of Incorporation,
nor will they have any preference, conversion, exchange, preemptive or
cumulative voting rights.
The transfer agent and register for the Common Shares is Registrar and
Transfer Company.
Restrictions on Ownership and Transfer. The Code provides that a
corporation may not qualify as a REIT if more than 50% in value of the shares
of the corporation are owned, directly or indirectly, by five or fewer
individuals, which for this purpose, includes pension funds and certain other
tax-exempt entities. Provisions of the Articles of Incorporation, intended to
prevent concentrated ownership of the capital stock of CRIIMI MAE that might
jeopardize its qualification as a REIT, authorize the CRIIMI MAE Board to
refuse to effect a transfer of shares of capital stock of CRIIMI MAE to any
person who as a result would own in excess of 9.8% of the outstanding shares
of capital stock of CRIIMI MAE ("Excess Shares") and to redeem such Excess
Shares.
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CERTAIN UNITED STATES TAX CONSIDERATIONS
The following summary of certain federal income tax considerations to CRIIMI
MAE is based on current law, is for general information only, and is not tax
advice. The tax treatment of a holder of any of the Securities will vary
depending upon the terms of the specific Securities acquired by such holder, as
well as his particular situation, and this discussion does not attempt to
address any aspects of federal income taxation relating to holders of
Securities. Certain federal income tax considerations relevant to holders of
the Securities will be provided in the applicable Prospectus Supplement relating
thereto.
This discussion does not consider specific facts and circumstances that
may be relevant to a particular holder's tax position, and does not consider
U.S. state and local or non-U.S. tax consequences. Furthermore, the following
discussion is based on provisions of the Code and administrative and judicial
interpretations, all of which are subject to change, possibly on a retroactive
basis.
EACH INVESTOR IS ADVISED TO CONSULT THE APPLICABLE PROSPECTUS SUPPLEMENT,
AS WELL AS HIS OWN TAX ADVISOR, REGARDING THE TAX CONSEQUENCES TO HIM OF THE
ACQUISITION, OWNERSHIP AND SALE OF THE SECURITIES, INCLUDING THE FEDERAL,
STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF SUCH ACQUISITION,
OWNERSHIP AND SALE AND OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
CRIIMI MAE and CRI Liquidating have qualified, and intend to continue to
qualify, as REITs under the Code. Qualification for treatment as a REIT
requires CRIIMI MAE and CRI Liquidating each to meet certain criteria including
certain requirements regarding the nature of its ownership, assets, income and
distributions of taxable income. A REIT generally is not subject to federal
income tax on that portion of its ordinary income or capital gains that is
distributed currently to stockholders. CRIIMI MAE and CRI Liquidating have
distributed and intend to continue to distribute substantially all of their
taxable income to stockholders and to meet distribution requirements to continue
to qualify as REITs. CRIIMI MAE and CRI Liquidating will each generally be
subject to federal income tax at normal corporate rates on its undistributed
income and to a 4% excise tax under the Code on the amount, if any, by which 85%
of its REIT taxable income (including accrued but unpaid interest income) and
95% of any net capital gain exceed the amount actually distributed to its
stockholders during the year (or declared as a dividend during October, November
or December of a calendar year, if distributed during the following January as
ordinary income dividends). Accrued income for each quarter is generally
received within 30 days after the end of the quarter. CRIIMI MAE and CRI
Liquidating are not aware of any present circumstances that would cause them to
fail to qualify as REITs, nor do they anticipate any such circumstances in the
reasonably foreseeable future. If the U.S. Internal Revenue Service ("IRS")
successfully challenged the tax status of CRIIMI MAE or CRI Liquidating as a
REIT, CRIIMI MAE and CRI Liquidating's earnings would become subject to federal
income tax (including any applicable minimum tax) at corporate rates.
To protect CRIIMI MAE's qualification as a REIT under the Code, CRIIMI MAE's
Articles of Incorporation provide that no person or persons acting as a group
(defined to include partnerships, corporations, trusts and other entities), with
the exception of CRI or its affiliates, shall at any time directly or indirectly
acquire ownership of more than 9.8% of the outstanding shares of CRIIMI MAE's
capital stock.
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PLAN OF DISTRIBUTION
CRIIMI MAE may sell Securities to or through one or more underwriters, and
also may sell Securities directly to other purchasers or through agents.
The distribution of the Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from CRIIMI MAE or from purchasers of Securities, for whom they may
act as agents, in the form of discounts, concessions, or commissions.
Underwriters may sell Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions, or commissions from
the underwriters and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers, and agents that participate in the distribution
of Securities may be deemed to be underwriters, and any discounts or commissions
they receive from CRIIMI MAE, and any profit on the resale of Securities they
realize may be deemed to be underwriting discounts and commissions, under the
Securities Act. Any such underwriter or agent will be identified, and any such
compensation received from CRIIMI MAE will be described, in the Prospectus
Supplement.
Unless otherwise specified in the related Prospectus Supplement, each series
of Securities will be a new issue with no established trading market, other than
the Common Shares which are listed on the NYSE. Any Common Shares sold pursuant
to a Prospectus Supplement are expected to be listed on such exchange, subject
to official notice of issuance. CRIIMI MAE may elect to list any series of Debt
Securities or Preferred Shares on an exchange, but is not obligated to do so.
It is possible that one or more underwriters may make a market in a series of
Securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. Therefore, no assurance can be given as to
the liquidity of the trading market for any Securities.
Under agreements CRIIMI MAE may enter into, underwriters, dealers, and
agents who participate in the distribution of Securities may be entitled to
indemnification by CRIIMI MAE against certain liabilities, including
liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, or be customers of, CRIIMI MAE in the ordinary course of business.
If so indicated in the Prospectus Supplement, CRIIMI MAE will authorize
underwriters or other persons acting as CRIIMI MAE's agents to solicit offers by
certain institutions to purchase Securities from CRIIMI MAE pursuant to
contracts providing for payment and delivery on a future date. Institutions
with which such contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such institutions must be
approved by CRIIMI MAE. The obligations of any purchaser under any such
contract will be subject to the condition that the purchase of the Securities
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject. The underwriters and such
other agents will not have any responsibility in respect of the validity or
performance of such contracts.
LEGAL MATTERS
Certain matters relating to the validity of the Securities will be passed
upon for CRIIMI MAE by Arent Fox Kintner Plotkin & Kahn, Washington, D.C.
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EXPERTS
The financial statements and schedules included in CRIIMI MAE's Annual
Report on Form 10-K, as amended, incorporated herein by reference, have been
audited by Arthur Andersen & Co., independent public accountants, as indicated
in its reports with respect thereto, and have been incorporated by reference
herein in reliance upon the authority of said firm as experts in accounting
and auditing.
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No dealer, salesperson or other person is authorized in connection with any
offering made hereby to give any information or to make any representation other
than those contained or incorporated by reference in this Prospectus or any
Prospectus Supplement and, if given or made, such information or representation
must not be relied upon as having been authorized. This Prospectus and any
Prospectus Supplement do not constitute an offer to sell or a solicitation of an
offer to buy any security other than the securities offered hereby, nor do they
constitute an offer to sell or a solicitation of any offer to buy any of the
securities offered hereby to any person in any jurisdiction in which it is
unlawful to make such an offer or solicitation. Neither the delivery of this
Prospectus or any Prospectus Supplement nor any sale made hereunder and
thereunder shall, under any circumstances, create any implication that the
information contained herein or therein is correct as of any date subsequent
to the date hereof or thereof.
TABLE OF CONTENTS
Page
----
Available Information.................................................... 2
Incorporation of Certain Documents by Reference.......................... 2
Prospectus Summary....................................................... 3
CRIIMI MAE............................................................... 5
Recent Developments...................................................... 9
Use of Proceeds.......................................................... 10
Ratios of Earnings to Fixed Charges...................................... 10
Description of Debt Securities........................................... 10
Description of Capital Stock............................................. 21
Certain United States Tax Considerations................................. 28
Plan of Distribution..................................................... 29
Legal Matters............................................................ 29
Experts.................................................................. 30
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$200,000,000
CRIIMI MAE Inc.
Debt Securities, Preferred Stock,
Common Stock
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PROSPECTUS
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