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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) July 1, 1996
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CRIIMI MAE Inc.
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(Exact name of registrant as specified in its charter)
Maryland 1-10360 52-1622022
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(State or other jurisdiction (Commission (I.R.S Employer
of incorporation) File Number) Identification No.)
11200 Rockville Pike, Rockville, Maryland 20852
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(Address of principal executive office) (Zip code)
Registrant's telephone number including area code (301) 816-2300
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(Former name or former address, if changed since last report)
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Exhibit Index on Page 4
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Item 5. Other Events.
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CRIIMI MAE Inc.(the "Company") has issued, pursuant to its registration
statement on Form S-3 filed with the Securities and Exchange Commission on July
13, 1994 (Commission File Number 33-54267), as amended by Post-Effective
Amendment No. 1 thereto dated February 1, 1996 (the "Registration Statement"),
and as supplemented by a Prospectus Supplement thereto dated June 26, 1996 (the
"Prospectus Supplement"), 75,000 shares of Series A Cumulative Convertible
Preferred Stock of the Company, $.01 par value per share (the "Preferred
Shares"), at an aggregate price to public of $7,500,000. The Preferred Shares
were placed with a single European institutional investor pursuant to the terms
of that certain Preferred Stock Purchase Agreement, a copy of which is attached
hereto as Exhibit 10.1, and is incorporated in its entirety by reference in
response to this Item 5. The Company has also acquired a put option to sell up
to an additional 75,000 Preferred Shares, at a price of $100 per share, to such
investor at any time prior to July 1, 1997.
The terms and provisions of the Preferred Shares are set forth in the
Articles Supplementary to the Articles of Incorporation of the Company, a copy
of which is attached hereto as Exhibit 4.1 and is incorporated in its entirety
by reference in response to this Item 5.
Item 7. Financial Statements, Pro Forma Financial Information and exhibits.
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c) Exhibits
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4.1 Form of Articles Supplementary with respect to Preferred Shares
4.2 Form of specimen certificate representing Preferred Shares
10.1 Form of Preferred Stock Purchase Agreement
Page 2
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CRIIMI MAE Inc.
Date: July 1, 1996 By: /s/ H. William Willoughby
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H. William Willoughby
President
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INDEX TO EXHIBITS
FORM 8-K
Item
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4.1 Form of Articles Supplementary with respect to Preferred Shares
4.2 Form of specimen certificate representing Preferred Shares
10.1 Form of Preferred Stock Purchase Agreement
Page 4
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EXHIBIT 4.1
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FORM OF
ARTICLES SUPPLEMENTARY
TO THE
ARTICLES OF INCORPORATION
OF
CRIIMI MAE INC.
CRIIMI MAE INC., a Maryland corporation (the "Corporation"), by and through
its undersigned President, does hereby certify that:
A. On June 26, 1996, the Board of Directors of the Corporation (the "Board
of Directors"), pursuant to Section 2-105 of the Maryland General Corporation
Law (the "GCL") and Article SIXTH of the Articles of Incorporation of the
Corporation duly classified 150,000 unissued shares of the Corporation's
preferred stock, $.01 par value per share ("Preferred Stock"), into a class of
preferred stock designated "Series A Cumulative Convertible Preferred Stock"
(the "Series A Preferred Stock") and established and fixed the preferences,
conversion or other rights, voting powers, restrictions or terms or conditions
of redemption of such shares of stock, and authorized the execution and delivery
of these Articles Supplementary to the Maryland State Department of Assessments
and Taxation for filing pursuant to Section 2-208 of the GCL.
B. The terms of the Series A Preferred Stock, as set by the Board of
Directors, are as follows:
1. Definitions. For the purposes of these Articles Supplementary, the
following terms shall have the meanings indicated:
"Average Closing Trade Price" shall mean the quotient of (a) the sum of the
Closing Trade Prices for all of the Valid Trading Days during the applicable
Conversion Pricing Period divided by (b) the number of Valid Trading Days in
such Conversion Pricing Period.
"Applicable Rate" shall mean, for each Quarterly Dividend Period the sum of
(a) 75 basis points plus (b) LIBOR as of the second LIBOR Market Day preceding
the commencement of such Quarterly Dividend Period.
"Business Day" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in the State of New York or Maryland are authorized
or obligated by law or executive order to close.
"Closing Trade Price" shall mean either (a) the last traded price for the
Common Stock or the Survivor Common Stock, as the case may be, for a given
Trading Day as reported by the New York Stock Exchange or the American Stock
Exchange or and successor thereto or (b) the last reported bid quotation for the
Common Stock or the Survivor Common Stock, as the case may be, for a given
Trading Day as quoted by the NASDAQ National Market System or any successor
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thereto.
"Conversion Pricing Period" shall mean a period of twenty-one (or such
fewer number as shall be mutually agreed upon in writing by the Corporation and
the holder of the Series A Preferred Stock being converted) consecutive Trading
Days immediately preceding the date of delivery of a Holder Conversion Notice or
the Mandatory Conversion Date, as the case may be.
"LIBOR" shall mean the arithmetic mean of the offered rates for 3 month
deposits in United States dollars which appear on the display designated as
"Page 3750" on the Telerate Service (or such other page as may replace Page 3750
on that service for the purpose of displaying London interbank offered rates of
major banks) (the "Telerate Screen Page 3750") as of 11:00 A.M., London time, on
the specified LIBOR Market Day; provided, however, if at the specified time on
the specified LIBOR Market Day fewer than two such offered rates so appear on
the Telerate Screen Page 3750, LIBOR shall mean the arithmetic mean of three
offered rates to prime banks for 3 month deposits in United States dollars by
three major banks in the London interbank market, as selected by the
Corporation, at approximately 11:00 A.M., London time, on the specified LIBOR
Market Day; provided, further, if fewer than three major banks in the London
interbank market are quoting rates to prime banks for 3 month deposits in United
States dollars, LIBOR shall be the LIBOR in effect for the previous Quarterly
Dividend Period.
"LIBOR Market Day" shall mean any day on which commercial banks are open
for business (including dealings in foreign exchange and foreign currency
deposits) in London, England.
"Liquidation Value" with respect to a share of Series A Preferred Stock
shall mean $100.
"Mandatory Conversion Date" shall mean the second yearly anniversary of the
date of issuance of a given share of Series A Preferred Stock.
"Minimum Daily Price" shall mean either (a) 75% of the Closing Trade Price
for the Trading Day immediately preceding either the date of delivery of the
Holder Conversion Notice to the Corporation or the Mandatory Conversion Date, as
the case may be, or (b) such price as shall be mutually agreed in writing by the
Corporation and the holder of the Series A Preferred Stock that has requested
conversion thereof.
"Person" shall mean any individual, firm, corporation or other entity, and
shall include any successor (by merger or otherwise) of such entity.
"Qualified Person" shall mean any Person that, immediately after giving
effect to the applicable Transaction, (i) is a solvent corporation or other
entity organized under the laws of any State of the United States of America
having its common stock or, in the case of an entity other than a corporation,
equivalent equity securities, listed on the New York Stock Exchange or the
American Stock Exchange or quoted by the NASDAQ National Market System or any
successor thereto, and such common stock or equivalent equity security continues
to meet the requirements for such listing or quotation and (ii) is required to
file, and in each of the three fiscal years immediately preceding
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the consummation of the applicable Transaction (or, if shorter, since its
inception) has filed, reports with the Securities and Exchange Commission
pursuant to Section 13 or 15(d) of the Exchange Act.
"Quarterly Dividend Period" shall mean, with respect to any Quarterly
Dividend Payment Date, the period commencing on the day succeeding the prior
Quarterly Dividend Payment Date (or, with respect to the first Quarterly
Dividend Payment Date, the date of issuance of the Series A Preferred Stock) to
and including such Quarterly Dividend Payment Date.
"Subsidiary" of any Person means any corporation or other entity of which a
majority of the voting power of the voting equity securities or equity interest
is owned, directly or indirectly, by such Person.
"Surviving Person" shall mean the continuing or surviving Person of a
merger, consolidation or other corporate combination, the Person receiving a
transfer of all or substantially all of the properties and assets of the
Corporation , or the Person consolidating with or merging into the Corporation
in a merger, consolidation or other corporate combination in which the
Corporation is the continuing or surviving Person, but in connection with which
the Series A Preferred Stock or Common Stock of the Corporation is exchange,
converted or reinstated into the securities of any other Person or cash or any
other property; provided, however, if such Surviving Person is a direct or
indirect Subsidiary of a Qualified Person, the parent entity that is a Qualified
Person shall be the Surviving Person.
"Survivor Common Stock" with respect to any Person shall mean any shares of
such Person of any class or series which has no preference or priority in the
payment of dividends or in the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person and which is
not subject to redemption by such Person; provided, however, that if at any time
there shall be more than one such class or series, the shares of each such class
and series issuable upon conversion of the Series A Preferred Stock then being
converted shall be substantially in the proportion to the total number of shares
of each such class and series.
"Trading Day" shall mean any day on which the principal national securities
exchange on which the Common Stock or Survivor Common Stock, as the case may be,
is listed or admitted to trading is open for the transaction of business or, if
the Common Stock or Survivor Common Stock, as the case may be, is not listed or
admitted to trading on any national securities exchange, a Business Day.
"Valid Trading Day" shall mean any Trading Day during a Conversion Pricing
Period in which either (a) the Closing Trade Price for such Trading Day exceeds
the Minimum Daily Price or (b) the Closing Trade Price for such Trading Day does
not exceed the Minimum Daily Price and the Corporation and the holder of the
Series A Preferred Stock that has requested conversion thereof agree in writing
to include such day as a Valid Trading Day in such Conversion Pricing Period.
2. Designation and Number. (a) The shares of such series of preferred
stock shall be designated as "Series A Cumulative Convertible Preferred Stock"
(the "Series A Preferred Stock"). The number of shares initially constituting
the Series A Preferred Stock shall be 150,000,
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which number may be decreased (but not increased) by the Board of Directors
without a vote of the holders of Series A Preferred Stock; provided, however,
that such number may not be decreased below the number of then outstanding
shares of Series A Preferred Stock.
(b) The Series A Preferred Stock shall, with respect to dividend rights
and rights upon liquidation, dissolution or winding up, rank (i) senior to the
common stock, par value $.01 per share of the Corporation (the "Common Stock")
and to all other capital stock of the Corporation the terms of which
specifically provide that such capital stock ranks junior to the Series A
Preferred Stock with respect to dividend rights or rights upon liquidation,
dissolution or winding up of the Corporation, (ii) on a parity with all capital
stock of the Corporation the terms of which specifically provide that such
capital stock ranks on a parity with the Series A Preferred Stock with respect
to dividend rights or rights upon liquidation, dissolution or winding up of the
Corporation and (iii) junior to all capital stock of the Corporation the terms
of which specifically provide that such capital stock ranks senior to the Series
A Preferred Stock with respect to dividend rights or rights upon liquidation,
dissolution or winding up of the Corporation.
3. Dividends and Distributions. (a) The holders of shares of Series A
Preferred Stock, in preference to the holders of shares of Common Stock and of
any other shares of capital stock of the Corporation ranking junior to the
Series A Preferred Stock as to payment of dividends, shall be entitled to
receive, when, as and if declared by the Board of Directors, out of the assets
of the Corporation legally available therefor, cumulative cash dividends at the
Applicable Rate, payable in quarterly installments on the last business day of
each calendar quarter in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date") commencing on September 30, 1996. Each such
quarterly dividend shall be fully cumulative, to the extent not paid, and shall
accrue (whether or not earned or declared) on a daily basis with additional
cumulative dividends on any accrued but unpaid dividends accruing daily (whether
or not earned or declared) and compounding quarterly at the Applicable Rate,
from the date of issuance of the Series A Preferred Stock, and thereafter from
first day of the quarterly period in which such dividend may be payable as
herein provided.
(b) Dividends paid on the shares of the Series A Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated among all such shares of Series A
Preferred Stock and all other shares of capital stock of the Corporation ranking
on a parity as to dividends with the Series A Preferred Stock ("Dividend Parity
Stock") at the time outstanding pro rata so that the amount of dividends
declared per share of Series A Preferred Stock and the Dividend Parity Stock
shall in all cases bear to each other the same ratio that accrued dividends per
share on the Series A Preferred Stock and the Dividend Parity Stock bear to each
other. The Board of Directors may fix a record date for the determination of
holders of shares of the Series A Preferred Stock entitled to receive payment of
a dividend declared thereon, which record date shall be no more than sixty days
nor less than ten days prior to the date fixed for the payment thereof.
(c) Any dividend payment made on shares of the Series A Preferred Stock
shall first be credited against the earliest accrued but unpaid dividend due
with respect to shares of the Series A Preferred Stock which remains payable.
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(d) The holders of shares of the Series A Preferred Stock shall not be
entitled to receive any dividends or other distributions except as expressly
provided herein.
4. Voting Rights. So long as the Series A Preferred Stock remains
outstanding, the holders of shares of the Series A Preferred Stock shall have
the following voting rights:
(a) The holders of shares of Series A Preferred Stock shall have no voting
rights except as set forth below or as otherwise from time to time required by
law.
(b) The affirmative vote or consent of the holders of at least two-thirds
of the outstanding shares of Series A Preferred Stock, voting separately as a
class, in person or by proxy, in writing or at a special or annual meeting of
stockholders called for the purpose, shall be necessary to, (i) authorize,
create or increase the authorized or issued amount of, any class or series of
the Corporation's capital stock ranking prior to the Series A Preferred Stock
with respect to payment of dividends or distribution of assets upon liquidation,
dissolution or winding up or reclassify any authorized capital stock of the
Corporation into any such capital stock, or create, authorize or issue any
obligation or security convertible into or evidencing the right to purchase any
such capital stock or (ii) amend, alter or repeal any of the provisions of the
Articles of Incorporation or the Articles Supplementary to the Articles of
Incorporation for the Series A Preferred Stock, whether by merger, consolidation
or otherwise (an "Event"), so as to materially and adversely affect any right,
preference, privilege or voting power of the Series A Preferred Stock 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 Series A Preferred Stock remains
outstanding with the terms thereof materially unchanged, taking into account
that upon the occurrence of an Event, the Corporation 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 the Series A Preferred Stock; and provided, further, that (x) any increase in
the amount of authorized Common Stock or Series A Preferred Stock or the
authorization, creation or issuance of any other class or series of capital
stock or (y) any increase in the amount of authorized shares of any other class
or series of capital stock, in each case ranking on a parity with or junior to
the Series A Preferred Stock with respect to the 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.
(c) During any period in which dividends on the Series A Preferred Stock
are cumulatively in arrears for not less than six quarterly dividend payments
(whether or not consecutive), then the number of directors constituting the
Board of Directors shall, without further action, be increased by two and the
holders of shares of the Series A Preferred Stock shall have, in addition to the
other voting rights set forth herein, the exclusive right, voting separately as
a single class, to elect the directors of the Corporation to fill such newly
created directorships, the remaining directors to be elected by the other
classes of stock entitled to vote therefor at each meeting of stockholders held
for the purpose of electing directors. Such additional voting rights shall
continue until such time as all dividends accumulated on the Series A Preferred
Stock shall have been paid in full, at which time such additional directors
shall cease to be directors and such additional voting right of the holders of
Series A Preferred Stock shall terminate subject to revesting in the event of
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each and every subsequent event of the character indicated above. In no event
shall the holders of Series A Preferred Stock voting separately as a class be
entitled to elect a total of more than two directors to the Board of Directors
of the Corporation pursuant to this Section 4(c).
(d)(i) The foregoing rights of holders of shares of Series A Preferred
Stock to take any actions as provided in this Section 4 may be exercised at any
annual meeting of stockholders or at a special meeting of stockholders held for
such purpose as hereinafter provided or at any adjournment thereof, or by the
written consent, delivered to the Secretary of the Corporation, of the holders
of the minimum number of shares required to take such action.
So long as such right to vote continues (and unless such right has been
exercised by written consent of the minimum number of shares required to take
such action), the Chairman of the Board of the Corporation may call, and upon
the written request of holders of record of 20% of the outstanding shares of
Series A Preferred Stock addressed to the Secretary of the Corporation at the
principal office of the Corporation, shall call, a special meeting of the
holders of shares entitled to vote as provided herein. Such meeting shall be
held within 60 days after delivery of such request to the Secretary, at the
place and upon the notice provided by law and in the by-laws of the Corporation
for the holding of meetings of stockholders.
(ii) At each meeting of stockholders at which the holders of shares of
Series A Preferred Stock shall have the right, voting separately as a single
class to elect directors of the Corporation as provided in this Section 4 or to
take any action, the presence in person or by proxy of the holders of record of
a majority of the total number of shares of Series A Preferred Stock then
outstanding and entitled to vote on the matter shall be necessary and sufficient
to constitute a quorum. At any such meeting or at any adjournment thereof:
(A) the absence of a quorum of the holders of shares of Series A
Preferred Stock shall not prevent the election of directors other than
those to be elected by the holders of shares of Series A Preferred Stock
and the absence of a quorum of the holders of shares of any other class or
series of capital stock shall not prevent the election of directors to be
elected by the holders of shares of Series A Preferred Stock or the taking
of any action as provided in this Section 4; and
(B) in the absence of a quorum of the holders of shares of Series A
Preferred Stock, a majority of the holders of such shares present in person
or by proxy shall have the power to adjourn the meeting as to the actions
to be taken by the holders of shares of Series A Preferred Stock from time
to time and place to place without notice other than announcement at the
meeting until a quorum shall be present.
For the taking of any action as provided in paragraphs (b) and (c) of this
Section 4 by the holders of Series A Preferred Stock, each such holder shall
have one vote for each share of such stock standing in such holder's name on the
transfer books of the Corporation as of any record date fixed for such purpose
or, if no such date be fixed, at the close of business on the Business Day next
preceding the day on which notice is given, or if notice is waived, at the close
of business on the Business Day next preceding the day on which the meeting is
held.
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Each director elected by the holders of shares of Series A Preferred Stock
as provided in paragraph (c) of this Section 4 shall, unless his or her term
shall expire earlier upon payment in full by the Corporation of all accumulated
dividends on the Series A Preferred Stock, hold office until the annual meeting
of stockholders next succeeding his election or until his successor, if any, is
elected and qualified.
In case any vacancy shall occur among the directors elected by the holders
of shares of Series A Preferred Stock as provided in paragraph (c) of this
Section 4, such vacancy may be filled for the unexpired portion of the term by
vote of the remaining director theretofore elected by such holders (if there is
a remaining director), or such director's successor in office. If any such
vacancy is not so filled within 20 days after the creation thereof or if both
directors so elected by the holders of Series A Preferred Stock shall cease to
serve as directors before their terms shall expire, the holders of the Series A
Preferred Stock then outstanding and entitled to vote for such directors may, by
written consent as herein provided, or at a special meeting of such holders
called as provided herein, elect successors to hold office for the unexpired
terms of such directors whose places shall be vacant.
Any director elected by the holders of shares of Series A Preferred Stock
voting separately as a single class may be removed from office with or without
cause by the vote or written consent of the holders of at least a majority of
the outstanding shares of Series A Preferred Stock. A special meeting of the
holders of shares of Series A Preferred Stock may be called in accordance with
the procedures set forth in subparagraph (d)(i) of this Section 4.
5. Certain Restrictions. (a) If shares of Series A Preferred Stock are
outstanding, unless 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 Series A Preferred Stock for all past dividend
periods and the then current dividend period, other than pursuant to Section
3(b), the Corporation will not declare, make, pay or set apart for payment or
distribution any dividends or other distributions (other than in Common Stock or
other capital shares ranking junior to the Series A Preferred Stock as to
dividends and upon liquidation, dissolution or winding up) on the Common Stock
or any other series or class of capital stock ranking, as to dividends, on a
parity with or junior to the Series A Preferred Stock for any period.
(b) If shares of Series A Preferred Stock are outstanding, unless 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 Series A Preferred Stock for all past dividend periods and the then
current dividend period, the Corporation shall not redeem, purchase or otherwise
acquire for any consideration (or pay or make available money for a sinking fund
for the redemption of) any Common Stock or any other series or class of capital
stock ranking, as to dividends or upon liquidation, dissolution or winding up,
on a parity with or junior to the Series A Preferred Stock (except by conversion
into or exchange for Common Stock or other capital stock of the Corporation
ranking junior to the Series A Preferred Stock as to dividends and upon
liquidation, dissolution or winding up); provided, however, the foregoing shall
not prevent the purchase or acquisition of any shares of capital stock of the
Corporation by the Corporation (i) in order to preserve the status of the
Corporation as a real estate investment
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trust or (ii) pursuant to a purchase or exchange offer made on the same terms to
all holders of outstanding shares of capital stock of the Corporation.
(c) The Corporation shall not permit any Subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of capital stock of
the Corporation unless the Corporation could, pursuant to paragraph (b) of this
Section 5, purchase or otherwise acquire such shares at such time and in such
manner.
6. Redemption. (a) The Series A Preferred Stock shall not be redeemable
in whole or in part prior to the first yearly anniversary of the date of
issuance of the Series A Preferred Stock. On or after the first yearly
anniversary of the date of issuance of the Series A Preferred Stock, to the
extent the Corporation shall have funds legally available therefor, the Series A
Preferred Stock shall be subject to redemption in whole or in part, in cash, at
the option of the Corporation at any time or from time to time, at $106 per
share (the "Redemption Price"), together in each case with an amount equal to
accrued and unpaid dividends to (and including) the date fixed for redemption.
On and after the date fixed for redemption, provided that the Redemption Price
(including any accrued and unpaid dividends to (and including) the date fixed
for redemption) has been duly paid or deposited in trust for the benefit of the
holders of the Series A Preferred Stock, dividends shall cease to accrue on the
Series A Preferred Stock called for redemption, such shares shall no longer be
deemed to be outstanding and all rights of the holders of such shares as
stockholders of the Corporation shall cease, except the right to receive the
moneys payable upon such redemption, without interest thereon, upon surrender of
the certificates evidencing such shares. Any moneys deposited in trust by the
Corporation which shall not be required for redemption because of the exercise
of any right of conversion by the holders of the Series A Preferred Stock, shall
be repaid to the Corporation forthwith. Any moneys deposited in trust by the
Corporation and unclaimed at the end of two years from the date fixed for such
redemption shall be repaid to the Corporation upon its written request, after
which repayment the holders of the shares of Series A Preferred Stock so called
for redemption shall look only to the Corporation for the payment thereof.
(b) Notice of any redemption pursuant to Section 6(a) shall be given to the
holders of shares of Series A Preferred Stock once not less than 45 or more than
60 days prior to the date fixed for redemption. Notice of redemption shall be
given by first class mail to each such holder's address as shown on the stock
books of the Corporation and will specify (i) the date fixed for redemption,
(ii) the number of shares of Series A Preferred Stock to be redeemed, (iii) the
Redemption Price, (iv) the place or places where certificates for shares of
Series A Preferred Stock are to be surrendered for payment of the Redemption
Price, (v) that dividends on the shares of Series A Preferred Stock to be
redeemed will cease to accrue on the date fixed for redemption, (vi) the date
upon which the holders' conversion rights will terminate (which date shall be
determined in accordance with Section 9(g)). If less than all shares of Series A
Preferred Stock then outstanding are to be redeemed, the shares of Series A
Preferred Stock will be redeemed pro rata from among the holders of shares of
Series A Preferred Stock then outstanding.
7. Reacquired Shares. Any shares of Series A Preferred Stock converted,
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redeemed, purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares of Series A Preferred Stock shall upon their cancellation, and
upon the filing of an appropriate certificate with the Maryland State Department
of Assessments and Taxation, become authorized but unissued shares of Preferred
Stock and may be reissued as part of another series of Preferred Stock subject
to the conditions or restrictions on issuance set forth herein, to the extent
any Series A Preferred Stock remains outstanding.
8. Liquidation, Dissolution or Winding Up. (a) Upon any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation then, before any distribution or payment shall be made to the
holders of any shares of Common Stock or any other class or series of capital
stock of the Corporation ranking junior to the Series A Preferred Stock in the
distribution of assets upon any liquidation, dissolution or winding up of the
Corporation, the holders of Series A Preferred Stock shall be entitled to
receive out of assets of the Corporation legally available for distribution to
stockholders, liquidating distributions in the amount of the Liquidation Value
per share, plus an amount equal to all dividends accrued and unpaid thereon as
of the date of liquidation, dissolution or winding up. After payment of the full
amount of the liquidating distributions to which they are entitled, the holders
of Series A Preferred Stock will have no right or claim to any of the remaining
assets of the Corporation. In the event that, upon any such voluntary or
involuntary liquidation, dissolution or winding up, the available assets of the
Corporation are insufficient to pay the amount of the liquidating distributions
on all outstanding shares of Series A Preferred Stock and the corresponding
amounts payable on all shares of other classes or series of capital stock of the
Corporation ranking on a parity with the Series A Preferred Stock in the
distribution of assets upon liquidation, dissolution or winding up, then the
holders of the Series A Preferred Stock and all other such classes or series of
capital stock shall share ratably in any such distribution of assets in
proportion to the full liquidating distributions to which they would otherwise
be respectively entitled.
(b) Neither the consolidation, merger or other business combination of the
Corporation with or into any other Person, nor the sale, lease or conveyance of
all or substantially all of the property or business of the Corporation shall be
deemed to constitute a liquidation, dissolution or winding up of the Corporation
for purposes of this Section 8.
9. Conversion. (a) Prior to the Mandatory Conversion Date for each share of
Series A Preferred Stock, such share of Series A Preferred Stock shall be
convertible at the option of the holder thereof into fully paid and
nonassessable shares of Common Stock, provided, however, the holders thereof
shall not be permitted to convert (i) more than 25,000 shares of Series A
Preferred Stock in the aggregate during the first 30 calendar days after the
date of initial issuance of the Series A Preferred Stock, (ii) more than 50,000
shares of Series A Preferred Stock in the aggregate during the first 60 calendar
days after the date of initial issuance of the Series A Preferred Stock, (iii)
more than 75,000 shares of Series A Preferred Stock in the aggregate during the
first 90 calendar days after the date of initial issuance of the Series A
Preferred Stock or (iv) less than 10,000 shares of Series A Preferred Stock at
any one time. Determination of which holders shall be entitled to convert during
the first 30, 60 or 90 days
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after the date of issuance of the Series A Preferred Stock shall be based upon
the holders which first deliver to the Corporation the conversion notice and
certificates of Series A Preferred Stock specified in paragraph (d) below, with
any allocation between holders delivering the required conversion notice and
certificates of Series A Preferred Stock on the same day to be made pro rata
based upon the number of shares of Series A Preferred Stock submitted for
conversion. In the event a holder of Series A Preferred Stock cannot effect a
requested conversion of such holder's Series A Preferred Stock at the time
requested, the Corporation shall, without further action on the part of such
holder, convert such shares of Series A Preferred Stock into Common Stock on the
earliest date that such conversion is possible under the terms of these Articles
Supplementary.
(b) On the Mandatory Conversion Date for each share of Series A Preferred
Stock, such share of Series A Preferred Stock shall be automatically converted
into fully paid and nonassessable shares of Common Stock.
(c) The number of shares of Common Stock deliverable upon conversion of a
share of Series A Preferred Stock shall be equal to a fraction (i) the numerator
of which is the Liquidation Value of the Series A Preferred Stock and (ii) the
denominator of which is the product of (A) .94 times (B) the Average Closing
Trade Price for the applicable Conversion Pricing Period.
(d) Prior to the Mandatory Conversion Date, the holders of Series A
Preferred Stock may convert such Series A Preferred Stock into Common Stock by
surrendering to the Corporation at the principal office of the Corporation in
the State of Maryland (the "Transfer Agent") or at the office of any agent or
agents of the Corporation, as may be designated by the Board of Directors of the
Corporation, of the certificate of such Series A Preferred Stock to be converted
accompanied by a written notice stating that such holder elects to convert all
or a specified whole number of such shares in accordance with the provisions of
this Section 9 and specifying the name or names in which such holder wishes the
certificate or certificates for shares of Common Stock to be issued (a "Holder
Conversion Notice"). In case a Holder Conversion Notice shall specify a name or
names other than that of such holder, such Holder Conversion Notice shall be
accompanied by payment of all transfer taxes payable upon the issuance of shares
of Common Stock in such name or names. Other than such taxes, the Corporation
will pay any and all issue and other taxes (other than taxes based on income)
that may be payable in respect of any issue or delivery of shares of Common
Stock on conversion of Series A Preferred Stock pursuant hereto.
(e) After the Mandatory Conversion Date, the holders of Series A Preferred
Stock may exchange certificates representing Series A Preferred Stock for
certificates representing Common Stock by surrendering to the Transfer Agent
such certificates representing Series A Preferred Stock. In case the holder of
Series A Preferred Stock requests the Common Stock to be registered in a name or
names other than that of such holder, the Series A Preferred Stock submitted for
conversion shall be accompanied by payment of all transfer taxes payable upon
the issuance of shares of Common Stock in such name or names. Other than such
taxes, the Corporation will pay any and all issue and other taxes (other than
taxes based on income) that
<PAGE>
may be payable in respect of any issue or delivery of shares of Common Stock on
conversion of Series A Preferred Stock pursuant hereto.
(f) As promptly as practicable, and in any event within two Business Days
after the date of delivery of the shares of Series A Preferred Stock to be
converted (and, if prior to the Mandatory Conversion Date, the Holder Conversion
Notice), the Corporation shall deliver or cause to be delivered (i) certificates
representing the number of validly issued, fully paid and nonassessable full
shares of Common Stock to which the holder of shares of Series A Preferred Stock
being converted shall be entitled and (ii) if less than the full number of
shares of Series A Preferred Stock evidenced by the surrendered certificate or
certificates is being converted, a new certificate or certificates, of like
tenor, for the number of shares evidenced by such surrendered certificate or
certificates less the number of shares being converted. All conversions shall be
deemed to have been made at the close of business on the date of delivery of the
Holder Conversion Notice or the Mandatory Conversion Date, as the case may be,
so that the rights of the holder thereof as to the shares being converted shall
cease except for the right to receive shares of Common Stock in accordance
herewith, and the Person entitled to receive the shares of Common Stock shall be
treated for all purposes as having become the record holder of such shares of
Common Stock at such time. The Corporation shall not be required to convert, and
no surrender of shares of Series A Preferred Stock shall be effective for that
purpose, while the transfer books of the Corporation for the Common Stock are
closed for any purpose (but not for any period in excess of 10 calendar days);
but the surrender of shares of Series A Preferred Stock for conversion during
any period while such books are so closed shall become effective for conversion
immediately upon the reopening of such books, as if the conversion had been made
on the date such shares of Series A Preferred Stock were surrendered, and at a
rate of conversion which assumes the Conversion Pricing Period took place during
the period immediately prior to the closing of such books.
(g) In case any shares of Series A Preferred Stock are to be redeemed
pursuant to Section 6, the right of conversion set forth in this Section 9 shall
cease and terminate as to the shares of Series A Preferred Stock to be redeemed
at the close of business, Washington, D.C. time, on the date of delivery to the
holders of Series A Preferred Stock of notice of redemption in accordance with
Section 6(b), unless (i) the Corporation shall have received a Holder Conversion
Notice in respect of such shares of Series A Preferred Stock prior to such time
or (ii) the Corporation shall default in the payment of the amount payable upon
such redemption.
(h) Upon conversion of any shares of the Series A Preferred Stock, all
accrued and unpaid dividends up to (and including) the date of receipt by the
Corporation of the Holder Conversion Notice or the Mandatory Conversion Date, as
the case may be, whether or not declared, on each share of Series A Preferred
Stock being converted shall become immediately due and payable in cash on the
date of the issuance and delivery by the Corporation of the certificate
representing the shares of Common Stock to which such holder of shares of the
Series A Preferred Stock being converted is entitled. In the event that the
Corporation is legally prohibited from paying such dividends on such date, the
Corporation shall pay such unpaid dividends to the holder of such shares as soon
thereafter as it is legally able to do so.
<PAGE>
(i) In connection with the conversion of any shares of Series A Preferred
Stock, no fractions of shares of Common Stock shall be issued, but in lieu
thereof the Corporation shall pay a cash adjustment in respect of such
fractional interest in an amount equal to such fractional interest multiplied by
the Average Closing Trade Price for the applicable Conversion Pricing Period. If
more than one share of Series A Preferred Stock shall be surrendered for
conversion by the same holder at the same time, the number of full shares of
Common Stock issuable on conversion thereof shall be computed on the basis of
the total number of shares of Series A Preferred Stock so surrendered.
(j) The Corporation shall at all times reserve and keep available for
issuance upon the conversion of the Series A Preferred Stock, such number of its
authorized but unissued shares of Common Stock as will from time to time be
sufficient to permit the conversion of all outstanding shares of Series A
Preferred Stock, and shall take all action required to increase the authorized
number of shares of Common Stock if necessary to permit the conversion of all
outstanding shares of Series A Preferred Stock.
(k) In case of any capital reorganization or reclassification of
outstanding shares of Common Stock, or in the case of any consolidation or
merger of the Corporation with or into another Person or in the case of any sale
or conveyance to another Person of the property of the Corporation as an
entirety or substantially as an entirety (each of the foregoing being referred
to as a "Transaction"), at the option of the holder of any shares of Series A
Preferred Stock, (i) each share of Series A Preferred Stock then outstanding
shall thereafter be convertible into, in lieu of the Common Stock issuable upon
such conversion prior to consummation of such Transaction, the kind and amount
of shares of stock and other securities and property receivable (including cash)
upon the consummation of such Transaction by a holder of that number of shares
of Common Stock into which one share of Series A Preferred Stock was
convertible, assuming that the Conversion Pricing Period related thereto ended
on the day immediately preceding the consummation of such Transaction
(including, on a pro rata basis, the cash, securities or property received by
holders of Common Stock in any tender or exchange offer that is a step in such
Transaction, insofar as receipt of such cash, securities or property in
connection with any step in such Transaction does not result in the holders of
Series A Preferred Stock receiving the aggregate more than such holders would
otherwise be entitled to receive pursuant to this clause (i)) or (ii) each share
of Series A Preferred Stock shall entitle the holder thereof to receive, upon
presentation of the certificate therefor to the Surviving Person subsequent to
the consummation of such Transaction (A) if the Surviving Person is a Qualified
Person, that number of shares of Survivor Common Stock of the Surviving Person
determined by multiplying the number of shares of Common Stock into which such
share of Series A Preferred Stock was convertible, assuming that the Conversion
Pricing Period related thereto ended on the day immediately preceding the
consummation of such Transaction by a fraction, the numerator of which is the
average Closing Trade Price for the Common Stock for twenty-one Trading Days
preceding the date of consummation of such Transaction and the denominator of
which is the average Closing Trade Price for the Survivor Common Stock for the
twenty-one Trading Days preceding the consummation of the Transaction giving
rise to the adjustment in this paragraph (k) or (B) if the Surviving Person is
not a Qualified Person, $106 in cash per share of Series A Preferred Stock,
payable in immediately available funds. In any such case, if necessary,
<PAGE>
appropriate adjustment (as determined by the Board of Directors) shall be made
in the application of the provisions set forth in this Section 9 with respect to
the rights and interests thereafter of the holders of shares of Series A
Preferred Stock to the end that the provisions set forth herein for the
protection of the conversion rights of the Series A Preferred Stock shall
thereafter be applicable, as nearly as reasonably may be, to any such other
shares of stock and other securities and property deliverable upon conversion of
the shares of Series A Preferred Stock remaining outstanding (with such
adjustments in the conversion price and number of shares issuable upon
conversion and such other adjustments in the provisions hereof as the Board of
Directors shall determine to be appropriate). In case securities or property
other than Common Stock shall be issuable or deliverable upon conversion as
aforesaid, then all references to this Section 9 shall be deemed to apply, so
far as appropriate and as nearly as may be, to such other securities or
property.
IN WITNESS WHEREOF, this instrument has been executed for and on behalf and
in the name of the Corporation by its officers thereunto duly authorized on
June __, 1996.
CRIIMI MAE INC.
By:
-----------------------------------
[Seal]
Attest:
- ---------------------------
Name:
Title:
<PAGE>
THE UNDERSIGNED, Executive Vice President of the Corporation, who executed
on behalf of the Corporation Articles Supplementary of which this Certificate is
made a part, hereby acknowledges in the name and on behalf of said Corporation
the foregoing Articles Supplementary to be the corporate act of said Corporation
and hereby certifies that the matters and facts set forth herein with respect to
the authorization and approval thereof are true in all material respects under
the penalties of perjury.
By:
----------------------------------------
<PAGE>
EXHIBIT 4.2
-----------
FORM
[Front]
CRIIMI MAE Inc.
- ------------- -------------
NUMBER CERTIFICATE SHARES
- ------------- -------------
75,000 $100
Series A Cumulative
Convertible Preferred
(Redeemable)
THIS CERTIFIES THAT _________________________________________________ is the
registered holder of ____________________________ fully paid and non-assessable
shares, par value $.01 per share, of the $100.00 Series A Cumulative Convertible
Preferred Stock of CRIIMI MAE Inc., transferable only on the books of the
Corporation by the holder hereof in person or by Attorney upon surrender of this
Certificate properly endorsed.
IN WITNESS WHEREOF, the said Corporation has caused this Certificate to be
signed by its duly authorized officers and its Corporate Seal to be hereunto
affixed this _______ day of ___________, A.D. 19____.
- --------------------------------------------------------------------------------
[Back]
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM -as tenants in common UNIF GIFT MIN ACT-_____ Custodian____
(Cust) (Minor)
TEN ENT -as tenants by the entireties under Uniform Gifts
to Minors
JT TEN -as joint tenants with right of Act ______________
survivorship and not as tenants (State)
in common
Additional abbreviations may also be used though not in the above
list.
For value received, __________ hereby sell, assign and transfer unto
Please insert social security or other
identifying number of assignee
_____________________________
________________________________________________________________________________
________________________________________________________________________________
Please Print or Typewrite Name and Address of Assignee
________________________________________________________________________________
________________________________________________________________________________
_________________________________________________________________________Shares
<PAGE>
represented by the within Certificate, and do hereby irrevocably constitute and
appoint_____________________________________________________________________
____________________________________________________________________________
Attorney to transfer the said shares on the books of the within-named
Corporation with full power of substitution in the premises.
Dated,__________
_____________________________
In presence of
_________________________
Notice: The signature to this Assignment must correspond with the name as
written upon the face of the Certificate in every particular, without alteration
or enlargement, or any change whatever.
CRIIMI MAE INC.
The Corporation will furnish to any shareholder, upon request and without
charge, a full or summary statement of (1) the designations, preferences,
limitations, and relative rights of the shares of each class authorized to be
issued, (2) the variations in the relative rights and preferences between the
shares of each series of preferred stock so far as the same have been fixed and
determined, and (3) the authority of the board of directors to fix and determine
the relative rights and preferences of subsequent series. Such request may be
made to the transfer agent named on the face hereof or to the secretary of the
Corporation.
<PAGE>
Certain Restriction on Transfer
Set forth below is the full text of Article EIGHTEENTH of the Corporation's
Articles of Incorporation.
A. The stockholders shall upon demand disclose to the Board in writing such
information with respect to direct and indirect ownership of shares of the
Corporation's capital stock ("Shares") as the Board deems necessary to
comply with Part II and III of Subchapter M of the Chapter I of Subtitle A
of the Internal Revenue Code of 1986, as amended, relating to Real Estate
Investment Trusts (the "REIT Provisions") or to comply with the requirements
of any taxing authority or governmental agency.
B. Whenever it is deemed by them to be reasonably necessary to protect the tax
status of the Corporation as a Real Estatement Investment Trust ("REIT"),
the Board may require a statement or affidavit from any stockholder or
proposed transferee of Shares setting forth the number of Shares already
owned by him and any related Person (as defined in Article SEVENTEENTH
hereof) specified in the form prescribed by the Board for that purpose. All
contracts for the sale or other transfer of Shares shall be subject to this
provision.
C. Notwithstanding any other provision of this Article EIGHTEENTH to the
contrary and subject to the provisions of subsection E, no Person shall at
any time directly or indirectly acquire ownership in the aggregate of more
than 9.8% of the outstanding Shares of the Corporation (the "Limit"). Shares
owned by a Person in excess of the Limit at any time shall be deemed "Excess
Shares." For the purposes of this Article EIGHTEENTH, the term "ownership"
shall be defined in accordance with or by reference to the qualification
requirements of the REIT Provisions and shall also mean ownership as defined
in Rule 13d-3 promulgated by the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as amended. All Shares which any Person
has the right to acquire upon exercise of outstanding rights, options and
warrants, and upon conversion of any securities convertible into Shares, if
any, shall be considered outstanding for purposes of the Limit if such
inclusion will cause such Person to own more than the Limit.
D. The Board, by notice to the holder thereof, may redeem any or all Shares
that are Excess Shares (including Shares that remain or become Excess Shares
because of the decrease in outstanding Shares resulting from such
redemption); and from and after the date of giving of such notice of
redemption ("Redemption Date") the Shares called for redemption shall cease
to be outstanding and the holder thereof shall cease to be entitled to
dividends, voting rights and other benefits with respect to such Shares
excepting only the right to payment by the Corporation of the redemption
price determined and payable as set forth in the following two sentences.
Shares redeemed by the Corporation pursuant to this Article EIGHTEENTH may
be held as treasury shares or resold, in the discretion of the Board.
Subject to the limitation on payment set forth in the following sentence,
the redemption price of each Excess Share called for redemption shall be
the average of the closing sale prices during the 30-day period ending on
the business day prior to the Redemption Date of a Share on the Composite
Tape for New York Stock Exchange-Listed Stocks, or, if such Share is not
quoted on the Composite Tape, on the New York Stock Exchange, or, if such
Shares is not listed on such Exchange, on the principal United States
securities exchange registered under the Securities Exchange Act of 1934 on
which such Share is listed, or, if such Share is not listed on any such
exchange, the average of the closing bid quotations with respect to a Share
during such 30-day period on the National Association of Securities Dealers,
Inc. Automated Quotations System or any system then in use, or if no such
quotations are available, the fair market value on the date in question of a
Share as determined by the Board in good faith. Payment of such purchase
price shall be made by delivery to the holder of such Share of a promissory
note of the Corporation payable to the holder only to the extent of any
proceeds received by the Corporation from the sale of such Excess Shares by
the Corporation. In the event that within 30 days after the Redemption Date
the Person from whom the Excess Shares have been redeemed sells (and
notifies the Corporation of such sale) a number of the remaining Shares
owned by him at least equal to the number of such Excess Shares (and such
sale is to a Person in whose hands the Shares sold would not be Excess
Shares), then the Corporation shall rescind the redemption of the Excess
Shares if following such rescission such Person would not be the holder of
Excess Shares, except that if the Corporation receives an opinion of its
counsel that such rescission would jeopardize the tax status of the
Corporation as a REIT then the Corporation shall in lieu of rescission make
immediate payment of the redemption price.
E. The Limit set forth in subsection C shall not apply to acquisitions of
Shares by CRI or its Affiliates (subject to REIT qualification rules). In
addition, the Limit shall not apply to acquisitions of shares pursuant to a
cash tender offer made for all Shares (including securities convertible into
Shares) in conformity with applicable federal and state securities laws
where two-thirds of the Shares (not including Shares or securities
convertible into Shares held by the tender offeror and/or any "Affiliates"
or "Associates" thereof (as defined in Article SEVENTEENTH hereof) are duly
tendered and accepted pursuant to the cash tender offer, nor shall the Limit
apply to the acquisition of Shares by an underwriter in a public offering of
Shares, or in any transaction involving the issuance of Shares by the
Corporation, in which a majority of the Board determine that the underwriter
or other Person or party initially acquiring such Shares will make a timely
distribution of such Shares to or among other holders such that, following
such distribution, none of such Shares will be Excess Shares. The Board in
its discretion may exempt from the Limit ownership of certain designated
Shares while owned by a Person who has provided the Board with evidence and
assurance acceptable to the Board that the qualification of the Corporation
as a REIT would not be jeopardized thereby.
F. Notwithstanding any other provision of these Articles of Incorporation to
the contrary, the Board may refuse to effect the transfer of any Shares
which would make the transferee the holder of Excess Shares, and any
purported acquisition of Shares which would result in the disqualification
of the Corporation as a REIT shall be null and void.
G. Nothing contained in this Article EIGHTEENTH or in any other provision of
these Articles of Incorporation shall Limit the authority of the Board to
take such other action as it deems necessary or advisable to protect the
Corporation and the interests of the stockholders by preservation of the
Corporation's qualification as a REIT under the REIT provisions.
H. If any provision of this Article EIGHTEENTH or any application of any such
provision is determined to be invalid by any federal or state court having
jurisdiction over the issues, the validity of the remaining provisions shall
not be affected and other applications of such provisions shall be affected
only to the extent necessary to comply with the determination of such court.
To the extent this Article EIGHTEENTH may be inconsistent with any other
provision of these Articles of Incorporation, this Article EIGHTEENTH shall
be controlling.
<PAGE>
EXHIBIT 10.1
------------
FORM OF
PREFERRED STOCK PURCHASE AGREEMENT
PREFERRED STOCK PURCHASE AGREEMENT, dated as of June 26, 1996 (this
"Agreement"), between CRIIMI MAE Inc., a Maryland corporation (the "Company"),
and MeesPierson Clearing Services B.V., a Netherlands corporation (the
"Investor").
WHEREAS, the Company desires to sell to the Investor, and the Investor
desires to purchase from the Company, up to 150,000 shares of the Company's
Series A Preferred Stock, par value $.01 per share ("Preferred Stock") on the
terms and conditions set forth herein;
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
Purchase and Sale of Preferred Stock
------------------------------------
Section 1.1 Purchase and Sale. Subject to the terms and conditions set
forth in this Agreement, the Company agrees to sell and the Investor agrees to
purchase 75,000 shares of Preferred Stock (the "Shares") for an aggregate
purchase price of $7,500,000 (the "Purchase Price")
Section 1.2 The Put Option. (a) In addition to the foregoing, the
Investor hereby grants to the Company the right to sell to the Investor at the
Company's election in whole or in part from time to time up to an additional
75,000 shares of Preferred Stock (the "Option Shares"). Any election to sell
the Option Shares may be exercised by written notice from the Company to the
Investor (an "Option Notice"), delivered to the Investor at any time from 9:00
A.M., Amsterdam, Netherlands time on the day following the Closing Date (as
hereinafter defined) for the purchase of the Shares until 5:00 P.M., Amsterdam,
Netherlands time on June 1, 1997. The Company may not exercise its put option
pursuant to this Section 1.2, (i) for less than 10,000 Option Shares at any one
time, (ii) if upon exercise of the put option the Investor would beneficially
own more than 75,000 shares of the Preferred Stock or (iii) if the sale of the
Option Shares would result in the Investor, together with its affiliates (as
such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) beneficially owning 5% or more of the Company's
common stock, par value $.01 per share ("Common Stock"), assuming the immediate
conversion of all outstanding Preferred Stock into Common Stock at the then
applicable rate of conversion.
(b) The aggregate purchase price for the Option Shares (the "Option
Purchase Price") shall equal the product of (i) the number of Option Shares
being purchased multiplied by (ii) $100.
Section 1.3 The Closings. (a) The purchase and sale of the Shares or the
Option Shares, as the case may be, shall take place at the offices of the
Company at 11200 Rockville Pike, Rockville, Maryland 20852, at 10:00 a.m. on
the third business day after the date of this Agreement or the delivery to the
Investor of an Option Notice, as the case may be, or at such other time and
place as the Company and the Investor may mutually agree. Each such time and
date for delivery of the
<PAGE>
Shares and the Purchase Price therefor, or the Option Shares and the Option
Purchase Price therefor, as the case may be, is herein called the "Closing" and
the date of such Closing is herein called the "Closing Date".
(b) At the Closing for the sale and purchase of the Shares, (i) the
Company shall deliver to the Investor (A) one or more stock certificates
representing the Shares, registered in the name of the Investor or its nominee
and (B) a purchase price of $75,000 for the put option set forth in Section 1.2
in immediately available funds by wire transfer to such account as shall be
designated in writing by the Investor and (ii) the Investor shall deliver to the
Company the Purchase Price in immediately available funds by wire transfer to
such account as shall be designated in writing by the Company.
(c) At each Closing for the sale and purchase of the Option Shares,
(i) the Company shall deliver to the Investor (A) one or more stock certificates
representing the Option Shares, registered in the name of the Investor or its
nominee and (B) a put option exercise price equal to (x) the number of Option
Shares being purchased and sold at such Closing multiplied by (y) $1, in
immediately available funds by wire transfer to such account as shall be
designated in writing by the Investor and (ii) the Investor shall deliver to the
Company the Purchase Price in immediately available funds by wire transfer to
such account as shall be designated in writing by the Company.
ARTICLE II
Representations and Warranties
------------------------------
Section 2.1 Representations and Warranties of the Company. The Company
hereby makes the following representations and warranties to the Investor:
(a) The Company meets the requirements for the use of Form S-3 under
the Securities Act of 1933, as amended (the "Securities Act") and has filed with
the Securities and Exchange Commission (the "SEC") a registration statement on
such Form (File No. 33-54267), which has become effective, for the registration
under the Securities Act of the Shares and the Option Shares. Such registration
statement, as amended at the date of this Agreement, meets the requirements set
forth in Rule 415(a)(1)(x) under the Securities Act and complies in all other
material respects with said Rule. The Company proposes to file with the SEC
pursuant to Rule 424 under the Securities Act a supplement to the form of
prospectus included in such registration statement relating to the Shares and
the Option Shares and the plan of distribution thereof and has previously
advised the Investor of all further information (financial and other) with
respect to the Company to be set forth therein. Such registration statement,
including the exhibits thereto, as amended at the date of this Agreement, is
hereinafter called the "Registration Statement"; such prospectus in the form in
which it appears in the Registration Statement is hereinafter called the "Basic
Prospectus" and supplemented form of prospectus, in the form in which it shall
be filed with the SEC pursuant to Rule 424(b) (including the Basic Prospectus as
so supplemented) is hereinafter called the "Final Prospectus". Any reference
herein to the Registration Statement, the Basic
<PAGE>
Prospectus or the Final Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the date of this Agreement,
or the issue date of the Basic Prospectus or the Final Prospectus, as the case
may be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, the Basic Prospectus or
the Final Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the date of this Agreement, or the issue
date of the Basic Prospectus or the Final Prospectus, as the case may be, and
deemed to be incorporated therein by reference.
(b) As of the date hereof, when the Final Prospectus is first filed
pursuant to Rule 424(b) under the Securities Act, when, prior to any Closing
Date, any amendment to the Registration Statement becomes effective (including
the filing of any document incorporated by reference in the Registration
Statement), when any supplement to the Final Prospectus is filed with the SEC
and at each Closing Date, (i) the Registration Statement, as amended as of any
such time and the Final Prospectus, as amended or supplemented as of any such
time, complies or will comply in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and the respective rules
thereunder and (ii) neither the Registration Statement, as amended as of any
such time, nor the Final Prospectus, as amended or supplemented as of any such
time, will contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading.
(c) The accountants who certified the financial statements and
supporting schedules included in the Registration Statement are independent
public accountants as required by the Securities Act and the rules thereunder.
(d) The financial statements included in the Registration Statement
and the Final Prospectus present fairly the financial position of the Company
and any entity with respect to which the Company has the power to vote or direct
the voting of sufficient securities or interests to elect a majority of the
directors or management committee or similar governing body (each a
"Subsidiary"), which is required to be consolidated with the Company by
generally accepted accounting principles, as at the dates indicated and the
results of their operations for the periods specified; except as otherwise
stated in the Registration Statement, said audited financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis; and the supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein.
(e) As of the date hereof, since the respective dates as of which
information is given in the Registration Statement and the Final Prospectus,
except as otherwise stated therein, (i) there has been no event or condition
that would have a material adverse effect on the business, operations,
properties, assets, financial condition or results of operations of the Company
and its Subsidiaries, taken as a whole, or on the Company's ability to
consummate this Agreement in accordance with its terms (a "Material Adverse
Effect"), (ii) there have been no transactions entered into by the Company or
any of its Subsidiaries, other than in the ordinary course of business, which
are material
<PAGE>
with respect to the Company and its Subsidiaries considered as one enterprise
and (iii) except for regular quarterly dividends on the Common Stock, there has
been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(f) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Maryland with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Final Prospectus and to enter into and
perform its obligations under this Agreement; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify would not have a Material Adverse Effect.
(g) Each Subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Final Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not have a Material Adverse Effect; all of the issued and outstanding
capital stock of each such Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company, directly
or through Subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity, except as set forth in the Final
Prospectus or otherwise disclosed to the Investor in writing prior to the date
of this Agreement.
(h) As of June 25, 1996, the authorized capital stock of the Company
consists of (i) 25,000,000 shares of preferred stock, par value $.01 per share,
none of which are issued or outstanding and (ii) 60,000,000 shares of Common
Stock, of which as of the close of business on June 25, 1996, 30,407,024 shares
were issued and outstanding and 528,594 shares were held in its treasury. All
of such outstanding shares of Common Stock have been duly authorized, validly
issued and are fully paid and non-assessable. The Shares and the Option Shares
have been duly authorized for issuance and sale to the Investor pursuant to this
Agreement and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth herein, will be validly
issued and fully paid and non-assessable. The shares of Common Stock issuable
upon conversion of the Shares and the Option Shares have been duly authorized
and reserved on the books of the Company for such issuance and, when issued and
delivered in accordance with the terms of the Articles Supplementary to the
Articles of Incorporation of the Company for the Preferred Stock, will be
validly issued and fully paid and non-assessable. The Preferred Stock and the
Common Stock conform to all statements relating thereto contained in the Final
Prospectus and the issuance of the Shares, the Option Shares and any Common
Stock upon the conversion of the Shares and the Option Shares is not subject to
preemptive or other similar rights.
(i) Neither the Company nor any of its Subsidiaries is in violation
of its charter or in default in the performance or observance of any obligation,
agreement, covenant or condition
<PAGE>
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or any of its Subsidiaries is a party or
by which it or any of them may be bound, or to which any of the property or
assets of the Company or any of its Subsidiaries is subject, other than
violations or defaults which do not individually or in the aggregate have a
Material Adverse Effect. The execution, delivery and performance of this
Agreement, the consummation of the transactions contemplated herein and
compliance by the Company with its obligations hereunder have been duly
authorized by all necessary corporate action and will not (i) result in any
violation of the provisions of the charter or by-laws of the Company or any
Subsidiary, (ii) conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its Subsidiaries pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other instrument
to which the Company or any of its Subsidiaries is a party or by which it or any
of them may be bound, or to which any of the property or assets of the Company
or any of its Subsidiaries is subject or (iii) violate any applicable law,
administrative regulation or administrative or court decree, other than, in the
case of clauses (ii) and (iii) above, those conflicts, breaches, defaults and
violations which do not individually or in the aggregate have a Material Adverse
Effect.
(j) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company or any of
its Subsidiaries, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might have a Material
Adverse Effect. There are no contracts or documents of the Company or any of
its Subsidiaries which are required to be filed as exhibits to the Registration
Statement by the Securities Act or the regulations thereunder which have not
been so filed.
(k) No authorization, approval or consent of any court or
governmental authority or agency is necessary in connection with the offering,
issuance or sale of the Shares and Option Shares hereunder, except such as may
be required under the Securities Act or the regulations thereunder or state
securities laws.
(l) The Company and its Subsidiaries possess such certificates,
authorizations or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now operated by
them, except where the failure to possess such certificates, authorizations or
permits would not have, individually or in the aggregate, a Material Adverse
Effect, and neither the Company nor any of its Subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect.
(m) This Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, liquidation or similar laws
relating
<PAGE>
to, or affecting generally the enforcement of, rights and remedies of creditors
and other obligees or by other equitable principles of general application.
(n) Except as set forth on Exhibit A attached hereto, there are no
persons with registration or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise registered by the
Company under the Securities Act.
Any certificate signed by an executive officer of the Company and
delivered to the Investor shall be deemed a representation and warranty by the
Company to the Investor as to the nature of the matters covered thereby.
Section 2.2 Representations and Warranties of the Investor. The Investor
hereby makes the following representations and warranties to the Company:
(a) (i) The Investor has been duly organized and is in good standing
under the laws of The Netherlands, (ii) the Investor is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required for the Investor to perform
its obligations under this Agreement, (iii) the Investor has the requisite
corporate power and authority to enter into and perform this Agreement, (iv) the
execution and delivery of this Agreement by the Investor and performance by it
of its obligations hereunder have been duly authorized, (v) this Agreement has
been duly executed and delivered by the Investor and (vi) this Agreement
constitutes a valid and binding obligation of the Investor enforceable against
the Investor in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium, liquidation or similar laws relating to, or affecting
generally the enforcement of, rights and remedies of creditors and other
obligees or by other equitable principles of general application.
(b) No authorization, approval or consent of any court or
governmental authority or agency is necessary to be obtained by the Investor in
connection with the purchase of the Shares and Option Shares hereunder.
(c) The execution, delivery and performance of this Agreement, the
consummation of the transactions contemplated herein and compliance by the
Investor with its obligations hereunder have been duly authorized by all
necessary corporate action and will not (i) result in any violation of the
provisions of the charter or by-laws of the Investor, (ii) conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Investor pursuant to, any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Investor is a party or by which it may be
bound, or to which any of the property or assets of the Investor is subject or
(iii) violate any applicable law, administrative regulation or administrative or
court decree, other than, in the case of clauses (ii) and (iii) above, those
conflicts, breaches, defaults and violations which do not individually or in the
aggregate have a material adverse effect on the Investors' ability to consummate
this Agreement in accordance with its terms.
<PAGE>
(d) The Investor understands and has evaluated the risks of a
purchase of the Shares and the Option Shares, has been provided an opportunity
to obtain any additional information concerning the offering, the Company and
all other information to the extent the Company possesses such information or
can acquire it without unreasonable effort or expense, and has been given the
opportunity to ask questions of, and receive answers from, the Company and its
management concerning the terms and conditions of the offering and other matters
pertaining to this investment.
ARTICLE III
Covenants
---------
Section 3.1 Covenants of the Company. The Company covenants with the
Investor that, prior to the termination of the sale of the Shares and the Option
Shares, the Company will not file any amendment of the Registration Statement or
supplement to the Basic Prospectus which relates to the Preferred Stock unless
the Company has furnished the Investor a copy for the Investor's review prior to
filing and will not file any such proposed amendment or supplement to which the
Investor reasonably objects. Subject to the foregoing sentence, the Company
will cause the Final Prospectus to be filed pursuant to Rule 424(b) under the
Securities Act not later than the close of business on the second business day
following the execution and delivery of this Agreement. The Company will
promptly advise the Investor (i) when the Final Prospectus shall have been filed
with the SEC pursuant to Rule 424(b), (ii) when any amendment to the
Registration Statement relating to the Shares or the Option Shares shall have
become effective, (iii) of any request received by the Company from the SEC for
any amendment of the Registration Statement or amendment of or supplement to the
Final Prospectus or for any additional information, (iv) of the issuance by the
SEC of any stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceeding for that purpose of which
the Company has knowledge and (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Shares
or Option Shares in any jurisdiction or the initiation or threatening of any
proceeding for such purpose of which the Company has knowledge.
ARTICLE IV
Conditions
----------
Section 4.1 Company Conditions Precedent. The obligation hereunder of the
Company to sell the Shares and the Option Shares to the Investor is subject to
the satisfaction, at or before each Closing, of each of the following conditions
set forth below. These conditions are for the Company's sole benefit and may be
waived by the Company at any time in its sole discretion.
(a) Accuracy of Investor's Representations and Warranties. The
representations and warranties of the Investor shall be true and correct as of
the date when made and as of each Closing Date as though made at that time
(except for representations and warranties that speak as of a
<PAGE>
particular date).
(b) Performance by Investor. The Investor shall have performed,
satisfied and complied with all covenants, agreements and conditions required to
be performed, satisfied or complied with by the Investor at or prior to each
Closing.
(c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority having competent jurisdiction
which prohibits or materially impairs the consummation of any of the
transactions contemplated by this Agreement.
Section 4.2 Investor Conditions Precedent. The obligation of the Investor
to acquire and pay for the Shares and the Option Shares is subject to the
satisfaction, at or before each Closing, of each of the following conditions set
forth below. These conditions are for the Investor's sole benefit and may be
waived by the Investor at any time in its sole discretion.
(a) Accuracy of Company's Representations and Warranties. The
representations and warranties of the Company shall be true and correct as of
the date when made and as of each Closing Date as though made at that time
(except for representations and warranties that speak as of a particular date).
(b) Performance by Company. The Company shall have performed,
satisfied and complied with all covenants, agreements and conditions required to
be performed, satisfied or complied with by the Company at or prior to each
Closing.
(c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority having competent jurisdiction
which prohibits or materially impairs the consummation of any of the
transactions contemplated by this Agreement.
(d) No Stop Order. No stop order suspending the effectiveness of the
Registration Amendment shall have been issued and no proceedings for that
purpose shall have been instituted or threatened; and the Final Prospectus shall
have been filed with the SEC pursuant to Rule 424(b) not later than the close of
business on the second business day following the execution and delivery of this
Agreement.
(e) Officers' Certificate. The Company shall have furnished to the
Investor a certificate, signed by two executive officers of the Company, to the
effect that the signers of such certificate have carefully examined the
Registration Statement, the Final Prospectus and this Agreement and that, to
their best knowledge: (i) the representations and warranties of the Company in
this Agreement are true and correct on and as of the Closing Date with the same
effect as if made on the Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date; (ii) no stop order
<PAGE>
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or threatened; and (iii)
since the date of the most recent financial statements incorporated by reference
in the Final Prospectus, there has been no event or condition causing a Material
Adverse Effect.
(f) Opinion. The Company shall have furnished to the Investor an
opinion of Swidler & Berlin, substantially in the form attached hereto as
Exhibit B.
(g) Articles Supplementary. The Company shall have filed with the
Maryland State Department of Assessments and Taxation Articles Supplementary to
the Articles of Incorporation of the Company for the Preferred Stock, which
Articles Supplementary shall be substantially in the form attached hereto as
Exhibit C.
(h) Subsequent Events. On or after the date of execution of this
Agreement there shall not have occurred any of the following: (i) any event or
condition that has had or would have a Material Adverse Effect; (ii) a
suspension or material limitation in the trading of the Common Stock on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading or in securities generally on the principal national
securities exchange on which the Common Stock is listed or admitted to trading;
(iii) a general moratorium on commercial banking activities in Amsterdam
declared by the relevant authorities; (iv) the outbreak or escalation of any
hostilities involving the United States or The Netherlands or the declaration by
the United States or The Netherlands of a national emergency or war; or (v) the
public announcement of (A) a tender offer or exchange offer for the Common
Stock, (B) a merger, consolidation or sale of all or substantially all of the
assets of the Company, (C) the acquisition by a third party (other than H.
William Willoughby or William B. Dockser) of more than 5% of the Common Stock,
(D) a proxy solicitation by any person other than management (other than
proposals of securityholders included in the Company's proxy statement pursuant
to Rule 14a-8 under the Exchange Act) or (E) the occurrence of any other
material event or events signifying an imminent change in control or potential
imminent change in control of the Company.
ARTICLE V
Miscellaneous
-------------
Section 5.1 Fees and Expenses. Each party shall pay the fees and expenses
of its advisers, counsel, accountants and other experts, if any, and all other
expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement. Each party hereto
represents to the other party that it neither is nor will be obligated for any
finders' fee or commission in connection with this transaction. Each party
hereto agrees to indemnify and to hold harmless the other party for any
commission or compensation in the nature of a finders' fee (and the costs and
expenses of defending against such liability or asserted liability) for which
such party or any of its officers, partners, employees or representatives is
responsible.
<PAGE>
Section 5.2 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect.
Section 5.3 Consent to Jurisdiction. Each of the Company and the Investor
(i) hereby irrevocably submits to the exclusive jurisdiction of the courts of
the State of Maryland or the United States of America in the State of Maryland
for the purposes of any suit, action or proceeding arising out of or relating to
this Agreement and (ii) hereby waives, and agrees not to assert in any such
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of such court, that the suit, action or proceeding is brought in an
inconvenient forum or that the venue of the suit, action or proceeding is
improper. Each of the Company and the Investor consents to process being served
in any such suit, action or proceeding by mailing a copy thereof to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing in this paragraph shall affect or limit any right to service
of process in any other manner permitted by law.
Section 5.4 Trial by Jury. Each of the Company and the Investor hereby
irrevocably waives all right of trial by jury in any action, proceeding or
counterclaim arising out of or in connection with this Agreement or any matter
arising hereunder.
Section 5.5 Entire Agreement; Amendments. This Agreement contains the
entire understanding of the parties with respect to the matters covered hereby
and, except as specifically set forth herein, neither the Company nor the
Investor makes any representation, warranty covenant or undertaking with respect
to such matters. No provision of this Agreement may be waived, amended or
otherwise modified other than by a written instrument signed by each of the
parties hereto.
Section 5.6 Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be effective (a)
upon hand delivery or facsimile at the address or number designated below, (b)
on the third business day in the country of receipt following the date of
mailing by international express courier service, fully prepaid, addressed to
such address or (c) upon actual receipt of any other form of delivery. The
addresses for such communications shall be:
If to the Company
MeesPierson Clearing Services B.V.
St. Pietershalsteeg 5
1012 Amsterdam
The Netherlands
Attention: Frans Demmenie
Facsimile: 31-20-627-7566
<PAGE>
If to the Investor:
CRIIMI MAE Inc.
11200 Rockville Pike
Rockville, Maryland 20852
Attention: Cynthia O. Azzara
Facsimile: 301-231-0334
Either party hereto may from time to time change its address for notices
under this Section 5.6 by giving at least 10 days' prior written notice of such
changed address to the other party hereto.
Section 5.7 Headings. The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
Section 5.8 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their successors and
permitted assigns. Neither party hereto shall assign this Agreement or any
rights or obligations hereunder without the prior written consent of the other
party hereto, which consent shall not be unreasonably withheld.
Section 5.9 No Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
Section 5.10 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Maryland without regard to the principles of conflict of laws.
Section 5.11 Counterparts. This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
Section 5.12 Publicity. The Company and the Investor shall consult with
each other prior to issuing any press releases or otherwise making public
statements with respect to transactions contemplated hereby.
Section 5.13. Termination. This Agreement may be terminated at any time
by the mutual consent of the Company and the Investor.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date hereof.
CRIIMI MAE INC. MEESPIERSON CLEARING
SERVICES B.V.
By: By:
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Name: Name:
Title: Title:
By:
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Name:
Title:
