<PAGE>
THIS REGISTRATION STATEMENT ALSO CONSTITUTES POST EFFECTIVE AMENDMENT NO. 2 TO
REGISTRATION STATEMENT NO. 33-54267
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 6, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
CRIIMI MAE INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 52-1622022
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
WILLIAM B. DOCKSER
CHAIRMAN OF THE BOARD
11200 ROCKVILLE PIKE 11200 ROCKVILLE PIKE
ROCKVILLE, MARYLAND 20852 ROCKVILLE, MARYLAND 20852
(301) 816-2300 (301) 816-2300
(ADDRESS, INCLUDING ZIP CODE, AND (NAME, ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER,INCLUDING AREA TELEPHONE NUMBER, INCLUDING AREA CODE,
CODE, OF REGISTRANT'S PRINCIPAL OF AGENT FOR SERVICE)
EXECUTIVE OFFICES)
COPY TO:
MORRIS F. DEFEO, JR., ESQ.
SWIDLER & BERLIN, CHARTERED
3000 K STREET, N.W., SUITE 300
WASHINGTON, DC 20007
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable on or after the effective date of this Registration Statement.
---------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
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If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED(1) REGISTERED(2) PER UNIT(2) PRICE(2)(3) FEE
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<S> <C> <C> <C> <C>
Debt Securities,
Preferred Stock, par
value $.01 per share,
Common Stock, par
value $.01 per share
and Warrants......(4) (5) (5) $272,645,000 $82,620(6)
</TABLE>
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(1) This Registration Statement also covers delayed delivery contracts which
may be issued by the Registrant under which the counterparty may be
required to purchase Debt Securities, Preferred Stock, Common Stock or
Warrants. Such contracts would be issued with the Debt Securities,
Preferred Stock, Common Stock and/or Warrants. In addition, any securities
registered hereunder may be sold separately or as units with other
securities registered hereunder.
(2) In no event will the aggregate maximum offering price of all securities
issued under this Registration Statement exceed $272,645,000 or the
equivalent thereof in one or more foreign currencies or composite
currencies or, if any Debt Securities are issued with original issue
discount, such greater amount as shall result in proceeds of not more than
$272,645,000 to the Registrant.
(3) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(o) of the Securities Act of 1933, as amended.
(4) There is also being registered hereunder (i) an indeterminable number of
shares of Common Stock and Preferred Stock as may be issued upon the
exercise of the Warrants, (ii) indeterminate number of shares of Common
Stock and Preferred Stock as may be issued in exchange for, or upon
conversion of, the Debt Securities and an indeterminate number of shares
of Common Stock as may be issued in exchange for, or upon conversion of,
the Preferred Stock. No separate consideration will be received for any
securities registered hereunder that are issued in exchange for, or upon
conversion of, as the case may be, Debt Securities, Preferred Stock and/or
Warrants registered hereunder.
(5) Not applicable pursuant to General Instruction II.D. of Form S-3 under the
Securities Act of 1933, as amended.
(6) In addition to the securities registered hereby, pursuant to Rule 429 of
the Securities Act of 1933, as amended, the Prospectus included herein
also covers $27,355,000 of Debt Securities, Preferred Stock and Common
Stock from a previous Registration Statement (No. 33-54267), as to which a
registration fee has previously been paid.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THE
PROSPECTUS INCLUDED HEREIN ALSO RELATES TO $27,355,000 AGGREGATE PRINCIPAL
AMOUNT OF DEBT SECURITIES, PREFERRED STOCK AND COMMON STOCK OF THE REGISTRANT
REGISTERED UNDER REGISTRATION STATEMENT NO. 33-54267, AS AMENDED BY POST-
EFFECTIVE AMENDMENT NO. 1 FILED ON FEBRUARY 1, 1996. IN THE EVENT ANY OF SUCH
PREVIOUSLY REGISTERED DEBT SECURITIES, PREFERRED STOCK AND/OR COMMON STOCK OF
THE REGISTRANT ARE OFFERED PRIOR TO THE EFFECTIVE DATE OF THIS REGISTRATION
STATEMENT, THEY WILL NOT BE INCLUDED IN ANY PROSPECTUS HEREUNDER. THE AMOUNT
OF DEBT SECURITIES, PREFERRED STOCK, COMMON STOCK AND WARRANTS OF THE
REGISTRANT BEING REGISTERED HEREBY, TOGETHER WITH THE DEBT SECURITIES,
PREFERRED STOCK AND COMMON STOCK OF THE REGISTRANT REGISTERED UNDER
REGISTRATION STATEMENT NO. 33-54267, REPRESENTS THE MAXIMUM AMOUNT OF DEBT
SECURITIES, PREFERRED STOCK, COMMON STOCK AND WARRANTS OF THE REGISTRANT WHICH
IS EXPECTED TO BE OFFERED FOR SALE.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 , AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JUNE 6, 1997
PROSPECTUS
CRIIMI MAE INC.
$300,000,000
DEBT SECURITIES, PREFERRED SHARES, COMMON SHARES AND WARRANTS
CRIIMI MAE Inc. ("CRIIMI MAE") may from time to time offer in one or more
series its unsecured subordinated debt securities (the "Debt Securities"),
shares of its preferred stock, par value $.01 per share (the "Preferred
Shares"), shares of its common stock, par value $.01 per share (the "Common
Shares"), and warrants to purchase Preferred Shares or Common Shares (the
"Warrants"), with an aggregate public offering price of up to $300,000,000 (or
its foreign currency equivalent based on the exchange rate at the time of sale)
in amounts, at prices and on terms to be determined at the time of offering.
The Debt Securities, Preferred Shares, Common Shares and Warrants
(collectively, the "Securities") may be offered, separately or together, in
separate series in amounts, at prices and on terms to be set forth in one or
more supplements to this Prospectus (each, a "Prospectus Supplement").
The Debt Securities will be direct unsecured obligations of CRIIMI MAE
subordinated to existing and future senior indebtedness, as defined. See
"Description of Debt Securities."
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the applicable Prospectus Supplement and
will include, where applicable: (i) in the case of Debt Securities, the
specific title, ranking, aggregate principal amount, currency, form (which may
be registered or bearer, or certificated or global), authorized denominations,
maturity, rate (or manner of calculation thereof) and time of payment of
interest, terms for redemption at the option of CRIIMI MAE or repayment at the
option of the holder, terms for sinking fund payments, terms for conversion
into Preferred Shares or Common Shares, covenants and any initial public
offering price; (ii) in the case of Preferred Shares, the specific title and
stated value, any dividend, liquidation, redemption, conversion, voting and
other rights, and any initial public offering price; (iii) in the case of
Common Shares, any public offering price; and (iv) in the case of Warrants, the
number and terms thereof, the designation and number or amount of Preferred
Shares or Common Shares issuable upon their exercise, the exercise price, the
terms of the offering and sale thereof and, where applicable, the duration and
detachability thereof. In addition, such specific terms may include limitations
on direct or beneficial ownership and restrictions on transfer of the
Securities, in each case as may be appropriate to preserve the status of CRIIMI
MAE as a real estate investment trust ("REIT") for federal income tax purposes.
See "Certain United States Federal Income Tax Considerations."
The applicable Prospectus Supplement will also contain information, where
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities
covered by such Prospectus Supplement.
The Securities may be offered directly, through agents designated from time
to time by CRIIMI MAE, or to or through underwriters or dealers. If any agents
or underwriters are involved in the sale of any of the Securities, their names,
and any applicable purchase price, fee, commission or discount arrangement
between or among them, will be set forth, or will be calculable from the
information set forth, in the applicable Prospectus Supplement. See "Plan of
Distribution." No Securities may be sold without delivery of the applicable
Prospectus Supplement describing the method and terms of the offering of such
Securities.
CRIIMI MAE's Common Shares, and shares of its Series B Cumulative Convertible
Preferred Stock, par value $.01 per share (the "Series B Preferred Shares"),
are traded on the New York Stock Exchange (the "NYSE") under the symbol "CMM"
and "CMM-PrB," respectively.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF THE SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
------------
THE DATE OF THIS PROSPECTUS IS , 1997.
<PAGE>
AVAILABLE INFORMATION
CRIIMI MAE and its subsidiaries, CRI Liquidating REIT, Inc. ("CRI
Liquidating") and CRIIMI MAE Financial Corporation, are subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith file reports, proxy
statements and other information with the Securities and Exchange Commission
(the "SEC" or "Commission"). Reports, proxy statements and other information
filed by CRIIMI MAE, CRI Liquidating and CRIIMI MAE Financial Corporation can
be inspected and copied at the SEC's Public Reference Room, 450 Fifth Street,
N.W., Washington, D.C. 20549 and the SEC's Regional Offices at 7 World Trade
Center, Suite 1300, New York, New York 10048 and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661; and copies of such material can be
obtained from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, reports, proxy
material and other information concerning CRIIMI MAE, CRI Liquidating and
CRIIMI MAE Financial Corporation may be inspected at the NYSE, 20 Broad
Street, New York, New York 10005 or reviewed through the Commission's
Electronic Data Gathering Analysis and Retrieval System, which is publicly
available through the Commission's Web site (http://www.sec.gov).
This Prospectus constitutes part of a Registration Statement on Form S-3
(together with all amendments and exhibits, the "Registration Statement")
filed by CRIIMI MAE with the SEC under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus does not contain all of the
information included in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the SEC. Reference is
made to the Registration Statement for further information with respect to
CRIIMI MAE and the Securities. Statements contained in this Prospectus and any
accompanying Prospectus Supplement concerning the provisions or contents of
any contract, agreement or any other document referred to herein are not
necessarily complete. With respect to each such contract, agreement or
document filed as an exhibit to the Registration Statement, reference is made
to such exhibit for a more complete description of the matters involved, and
each such statement shall be deemed qualified in its entirety by such
reference to the copy of the applicable document filed with the Commission.
The Registration Statement including the exhibits and schedules thereto, may
be inspected without charge at the Commission's principal office at 450 Fifth
Street, N.W., Washington, D.C. and copies of it or any part thereof may be
obtained from such office, upon payment of the fees prescribed by the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by CRIIMI MAE with the SEC (File
No. 1-10360) are incorporated herein by reference (collectively, the
"Incorporated Information"):
1. Annual Report on Form 10-K for the year ended December 31, 1996.
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 1997.
3. Definitive Proxy Statements dated March 26, 1997, April 28, 1995 and
April 6, 1993.
4. Form 8-K, as filed with the SEC on May 23, 1997.
5. Form 8-K, as filed with the SEC on March 25, 1997.
6. Form 8-K, as filed with the SEC on June 30, 1995.
7. Form 8-A, as filed with the SEC on October 16, 1989.
8. Form 8-B, as filed with the SEC on October 27, 1993.
The Prospectus should be read in conjunction with the Incorporated
Information and any applicable Prospectus Supplement, which are incorporated
by reference into the Prospectus. All documents filed by CRIIMI MAE pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to the termination of the offering of the Securities
offered hereby shall be deemed to be incorporated by reference in this
Prospectus from the date of filing of such documents. Any statement contained
herein or in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
CRIIMI MAE will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered, on the
written or oral request of any such person, a copy of any or all of the
documents referred to above which have been or may be incorporated in this
Prospectus by reference, other than exhibits to such documents, unless such
exhibits are specifically incorporated by reference. Requests for such copies
should be directed to CRIIMI MAE's principal executive offices: CRIIMI MAE
Inc., Investor Services, 11200 Rockville Pike, Rockville, Maryland 20852, or
telephone (301) 816-2300 or toll-free (800) 266-0535.
2
<PAGE>
CRIIMI MAE
CRIIMI MAE is a full service commercial mortgage company structured as a
self-administered real estate investment trust ("REIT"). CRIIMI MAE's
portfolio of assets consists primarily of non-investment grade subordinated
securities backed by first mortgage loans on multifamily and other commercial
real estate ("Subordinated CMBS") and interests in government insured or
guaranteed mortgages secured by multifamily housing complexes located
throughout the United States. CRIIMI MAE believes that its concentration on
acquiring Subordinated CMBS, together with its expertise as an underwriter and
servicer of commercial mortgage loans, enables CRIIMI MAE to take advantage of
the rapid growth in the securitization of debt backed by income-producing
commercial real estate. CRIIMI MAE is one of the largest publicly traded REITs
focused primarily on the acquisition of Subordinated CMBS. In addition, CRIIMI
MAE provides certain servicing functions with respect to commercial mortgage
assets, including acting as the special servicer for the commercial mortgage
loans underlying its Subordinated CMBS portfolio.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement for any
offering of Securities, CRIIMI MAE intends to use the majority of the net
proceeds from the sale of Securities (i) to acquire additional mortgage
assets, including Subordinated CMBSs, (ii) to sponsor and/or participate in
collateralized mortgage obligation programs, (iii) to make other acquisitions
relating to CRIIMI MAE's mortgage business and/or (iv) for other general
corporate purposes, including working capital. Pending their use for the
foregoing purposes, the net proceeds may be invested in short term, interest-
bearing accounts and/or used to pay down debt on a temporary basis.
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The following table sets forth CRIIMI MAE's consolidated ratios of (i)
earnings to fixed charges and (ii) earnings to combined fixed charges and
preferred stock dividends for the periods shown:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
------------------------ -------------
1992 1993 1994 1995 1996 1996 1997
---- ---- ---- ---- ---- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges... 1.69 1.48 1.66 1.35 1.50 1.74 1.94
Ratio of earnings to combined fixed
charges and preferred stock
dividends*.......................... 1.69 1.48 1.66 1.35 1.47 1.74 1.86
</TABLE>
- --------
* Prior to the offering of Series A Cumulative Convertible Preferred Stock on
July 1, 1996, CRIIMI MAE did not have any issued or outstanding Preferred
Shares.
For purposes of computing these ratios, earnings consist of CRIIMI MAE's
consolidated net income, plus fixed charges, extraordinary items, loss from
investment in limited partnerships and dividends on Preferred Shares. Fixed
charges and Preferred Share dividends consist of gross interest cost,
including amortization of debt cost, discount or premium and adjustment to
hedges for valuation and sales, and dividends on Preferred Shares.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Debt Securities are to be issued under an indenture (the "Indenture")
between CRIIMI MAE and a trustee (the "Trustee"). The form of the Indenture is
filed as an exhibit to the Registration Statement of which
3
<PAGE>
this Prospectus is a part. The Indenture is subject to and governed by the
Trust Indenture Act of 1939, as amended (the "TIA"). The statements made under
this heading relating to the Debt Securities and the Indenture, as modified or
superseded by any applicable Prospectus Supplement, are summaries of the
provisions thereof and do not purport to be complete and are qualified in
their entirety by reference to the Indenture and such Debt Securities. If Debt
Securities are to be issued, a description of their terms (as well as the form
of Debt Securities) will be filed by CRIIMI MAE as an exhibit to a current
report on Form 8-K and incorporated herein by reference.
When issued, the Debt Securities will be direct, unsecured obligations of
CRIIMI MAE and, as set forth below under "--Subordination," will be
subordinate in right of payment to Senior Debt (as defined below) of CRIIMI
MAE. In addition to the terms of the Indenture and any specific, express terms
of the Debt Securities described below, the issuance of the Debt Securities
will be limited by, and subject to certain terms of, CRIIMI MAE's existing
financing facilities.
TERMS
The Indenture may provide that the Debt Securities may be issued without
limit as to aggregate principal amount, in one or more series, in each case as
established from time to time in or pursuant to authority granted by a
resolution of the Board of Directors of CRIIMI MAE (the "Board") or as
established in one or more indentures supplemental to such Indenture. All Debt
Securities of one series need not be issued at the same time and, unless
otherwise provided, a series may be reopened, without the consent of the
holders of the Debt Securities of such series, for issuances of additional
Debt Securities of such series.
The Indenture may also provide that there may be more than one Trustee
thereunder, each with respect to one or more series of Debt Securities. Any
Trustee under the Indenture may resign or be removed with respect to one or
more series of Debt Securities, and a successor Trustee may be appointed to
act with respect to such series. In the event that two or more persons are
acting as Trustee with respect to different series of Debt Securities, each
such Trustee shall be a Trustee of a trust under the Indenture separate and
apart from the trust administered by any other Trustee, and, except as
otherwise indicated therein, any action described therein to be taken by the
Trustee may be taken by each such Trustee with respect to, and only with
respect to, the one or more series of Debt Securities for which it is Trustee
under the Indenture.
Reference is made to the Prospectus Supplement relating to the series of
Debt Securities being offered for the specific terms thereof, including:
(1) the title of such Debt Securities;
(2) the aggregate principal amount of such Debt Securities and any limit
on such aggregate principal amount;
(3) the percentage of the principal amount at which such Debt Securities
will be issued and, if other than the principal amount thereof, the portion
of the principal amount thereof payable upon declaration of acceleration of
the maturity thereof, or (if applicable) the portion of the principal
amount of such Debt Securities that is convertible into Common Shares
and/or Preferred Shares, or the method by which any such portion shall be
determined;
(4) if convertible, in connection with the preservation of CRIIMI MAE's
status as a REIT, any applicable limitations on the ownership or
transferability of the Common Shares and/or Preferred Shares into which
such Debt Securities are convertible;
(5) the date or dates, or the method for determining such date or dates,
on which the principal of such Debt Securities will be payable;
(6) the rate or rates (which may be fixed or variable), or the method by
which such rate or rates shall be determined, at which such Debt Securities
will bear interest, if any;
(7) the date or dates, or the method for determining such date or dates,
from which any such interest will accrue, the interest payment dates on
which any such interest will be payable, the regular record dates for such
interest payment dates, or the method by which such dates shall be
determined, the persons to
4
<PAGE>
whom such interest shall be payable, and the basis upon which interest
shall be calculated if other than that of a 360-day year of twelve 30-day
months;
(8) the place or places where the principal of (and premium, if any) and
interest, if any, on such Debt Securities will be payable, where such Debt
Securities may be surrendered for conversion or registration of transfer or
exchange and where notices or demands to or upon CRIIMI MAE in respect of
such Debt Securities and the Indenture may be served;
(9) the period or periods within which, the price or prices at which and
the other terms and conditions upon which such Debt Securities may be
redeemed, as a whole or in part, at the option of CRIIMI MAE, if CRIIMI MAE
is to have such an option;
(10) the obligation, if any, of CRIIMI MAE to redeem, repay or purchase
such Debt Securities pursuant to any sinking fund or analogous provision or
at the option of a holder thereof, and the period or periods within which,
the price or prices at which and the other terms and conditions upon which
such Debt Securities will be redeemed, repaid or purchased, as a whole or
in part, pursuant to such obligation;
(11) if other than U.S. dollars, the currency or currencies in which such
Debt Securities are denominated and payable, which may be a foreign
currency or units of two or more foreign currencies or a composite currency
or currencies, and the terms and conditions relating thereto;
(12) whether the amount of payments of principal of (and premium, if any)
or interest, if any, on such Debt Securities may be determined with
reference to an index, formula or other method (which index, formula or
method may, but need not be, based on a currency, currencies, currency unit
or units or composite currency or currencies) and the manner in which such
amounts shall be determined;
(13) whether such Debt Securities will be issued in the form of one or
more global securities and whether such global securities are to be
issuable in a temporary global form or permanent global form;
(14) any additions to, modifications of or deletions from the terms of
such Debt Securities with respect to the events of default or covenants set
forth in the Indenture;
(15) whether such Debt Securities will be issued in certificated or book-
entry form;
(16) whether such Debt Securities will be in registered or bearer form
and, if in registered form, the denominations thereof if other than $1,000
and any integral multiple thereof and, if in bearer form, the denominations
thereof and terms and conditions relating thereto;
(17) the applicability, if any, of the defeasance and covenant defeasance
provisions of the Indenture;
(18) the terms, if any, upon which such Debt Securities may be
convertible into Common Shares and/or Preferred Shares and the terms and
conditions upon which such conversion will be effected, including, without
limitation, the initial conversion price or rate and the conversion period;
(19) whether and under what circumstances CRIIMI MAE will pay additional
amounts on such Debt Securities in respect of any tax, assessment or
governmental charge and, if so, whether CRIIMI MAE will have the option to
redeem such Debt Securities in lieu of making such payment; and
(20) any other terms of such Debt Securities not inconsistent with the
provisions of the Indenture.
The Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities") or that the principal amount thereof
payable at their stated maturity may be more or less than the principal amount
thereof at original issuance ("Indexed Securities"). Special U.S. federal
income tax, accounting and other considerations applicable to Original Issue
Discount Securities or Indexed Securities will be described in the applicable
Prospectus Supplement.
Except as may be set forth in any Prospectus Supplement, the Debt Securities
will not contain any provisions that would limit the ability of CRIIMI MAE to
incur indebtedness or that would afford holders of Debt Securities protection
in the event of a highly leveraged or similar transaction involving CRIIMI MAE
or in the event of a change of control. Restrictions on ownership and
transfers of CRIIMI MAE's Common Shares
5
<PAGE>
and Preferred Shares are designed to preserve its status as a REIT and,
therefore, may act to prevent or hinder a change of control. See "Description
of Capital Stock." Reference is made to the applicable Prospectus Supplement
for information with respect to any deletions from, modifications of, or
additions to, the events of default or covenants of CRIIMI MAE that are
described below, including any addition of a covenant or other provision
providing event risk or similar protection.
DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the Debt
Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof.
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium, if any) and interest on any series of
Debt Securities will be payable at the corporate trust office of the Trustee;
provided that, at the option of CRIIMI MAE, payment of interest may be made by
check mailed to the address of the person entitled thereto as it appears in
the register to be maintained by the Trustee or by wire transfer of funds to
such person at an account maintained within the United States.
Any interest not punctually paid or duly provided for on any interest
payment date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the holder thereof on the applicable record
date and may either be paid to the person in whose name such Debt Security is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
applicable Trustee, notice whereof shall be given to each holder of such Debt
Security not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner, all as more completely described
in the Indenture.
Subject to certain limitations imposed upon Debt Securities issued in book-
entry form, the Debt Securities of any series will be exchangeable for other
Debt Securities of the same series and of a like aggregate principal amount
and tenor of different authorized denominations upon surrender of such Debt
Securities at the corporate trust office of the applicable Trustee. In
addition, subject to certain limitations imposed upon Debt Securities issued
in book-entry form, the Debt Securities of any series may be surrendered for
conversion or registration of transfer thereof at the corporate trust office
of the applicable Trustee. Every Debt Security tendered for conversion,
registration of transfer or exchange shall be duly endorsed or accompanied by
a written instrument of transfer. No service charge will be made for any
registration of transfer or exchange of any Debt Securities, but CRIIMI MAE
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. If the applicable Prospectus
Supplement refers to any transfer agent (in addition to the applicable
Trustee) initially designated by CRIIMI MAE with respect to any series of Debt
Securities, CRIIMI MAE may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, except that CRIIMI MAE will be required to maintain a
transfer agent in each place of payment for such series of Debt Securities.
CRIIMI MAE may at any time designate additional transfer agents with respect
to any series of Debt Securities.
To protect CRIIMI MAE's status as a REIT, CRIIMI MAE may refuse to effect a
transfer of Debt Securities if, as a result of such transfer, any person would
beneficially own, either directly or indirectly, more than 9.8% of CRIIMI
MAE's outstanding capital stock. Neither CRIIMI MAE nor any Trustee shall be
required to (i) issue, register the transfer of or exchange Debt Securities of
any series during a period beginning at the opening of business 15 days before
any selection of Debt Securities of that series to be redeemed and ending at
the close of business on the day of mailing of the relevant notice of
redemption; (ii) register the transfer of or exchange any Debt Security, or
portion thereof, called for redemption, except the unredeemed portion of any
Debt Security being redeemed in part; or (iii) for Debt Securities repayable
at the option of the holder, issue, register the transfer of or exchange any
Debt Security that has been surrendered for repayment at the option of the
holder, except the portion, if any, of such Debt Security not to be so repaid.
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MERGER, CONSOLIDATION OR SALE
The Indenture will provide that CRIIMI MAE may consolidate with, or sell,
lease or convey all or substantially all of its assets to, or merge with or
into, any other corporation or trust or other entity provided that (a) either
CRIIMI MAE shall be the continuing corporation, or the successor corporation
(if other than CRIIMI MAE) formed by or resulting from any such consolidation
or merger or which shall have received the transfer of such assets shall
expressly assume payment of the principal of (and premium, if any) and
interest on all of the Debt Securities and the due and punctual performance
and observance of all of the covenants and conditions contained in the
Indenture; (b) immediately after giving effect to such transaction and
treating any indebtedness that becomes an obligation of CRIIMI MAE or any
subsidiary as a result thereof as having been incurred by CRIIMI MAE or such
subsidiary at the time of such transaction, no event of default under the
Indenture, and no event which, after notice or the lapse of time, or both,
would become such an event of default, shall have occurred and be continuing;
and (c) an officers' certificate and legal opinion covering such conditions
shall be delivered to each Trustee.
CERTAIN COVENANTS
Existence. Except as permitted under "--Merger, Consolidation or Sale,"
CRIIMI MAE will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence, rights (charter and
statutory) and franchises; provided, however, that CRIIMI MAE shall not be
required to preserve any right or franchise if it determines that the
preservation thereof is no longer desirable in the conduct of its business.
Maintenance of Properties. CRIIMI MAE will cause all of its material
properties used or useful in the conduct of its business or the business of
any subsidiary to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of CRIIMI MAE may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that CRIIMI MAE and its
subsidiaries shall not be prevented from selling or otherwise disposing for
value its mortgage investments and other assets in the ordinary course of
business.
Payment of Taxes and Other Claims. CRIIMI MAE will pay or discharge or cause
to be paid or discharged, before the same shall become delinquent, (i) all
taxes, assessments and governmental charges levied or imposed upon it or any
subsidiary or upon the income, profits or property of CRIIMI MAE or any
subsidiary, and (ii) all lawful claims for labor, materials and supplies
which, if unpaid, might by law become a lien upon the property of CRIIMI MAE
or any subsidiary; provided, however, that CRIIMI MAE shall not be required to
pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith.
Additional Covenants. Any additional covenants of CRIIMI MAE with respect to
any series of Debt Securities will be set forth in the Prospectus Supplement
relating thereto.
EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture will provide that the following events are "Events of Default"
with respect to any series of Debt Securities issued thereunder: (a) default
for 30 days in the payment of any installment of interest on any Debt Security
of such series; (b) default in the payment of the principal of (or premium, if
any, on) any Debt Security of such series when due and payable, at maturity,
upon redemption or otherwise which continues for five business days; (c)
default in making any sinking fund payment as required for any Debt Security
of such series which continues for five business days; (d) default in the
performance or breach of any other covenant or warranty of CRIIMI MAE
contained in the Indenture (other than a covenant added to the Indenture
solely for the benefit of a series of Debt Securities issued thereunder other
than such series), continued for 60 days after written notice as provided in
the Indenture; (e) a default not being contested in good faith by CRIIMI MAE
under any bond, debenture, note or other evidence of indebtedness for money
borrowed by CRIIMI MAE (including obligations under leases required to be
capitalized on the balance sheet of the lessee under generally
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accepted accounting principles but not including any indebtedness or
obligations for which recourse is limited to property purchased) in an
aggregate principal amount in excess of $10,000,000 or under any mortgage,
indenture or instrument under which there may be issued or by which there may
be secured or evidenced any indebtedness for money borrowed by CRIIMI MAE
(including such leases but not including such indebtedness or obligations for
which recourse is limited to property purchased) in an aggregate principal
amount in excess of $10,000,000 by CRIIMI MAE, whether such indebtedness now
exists or shall hereafter be created which default shall have resulted in such
indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable or such obligations being
accelerated, without such acceleration having been rescinded or annulled; (f)
certain events of bankruptcy, insolvency or reorganization, or court
appointment of a receiver, liquidator or trustee of CRIIMI MAE or any
Significant Subsidiary or either of its properties; and (g) any other Event of
Default provided with respect to a particular series of Debt Securities. The
term "Significant Subsidiary" means each significant subsidiary (as defined in
Regulation S-X promulgated under the Securities Act) of CRIIMI MAE.
If an Event of Default under the Indenture with respect to Debt Securities
of any series at the time outstanding occurs and is continuing, then in every
such case the applicable Trustee or the holders of not less than a majority in
principal amount of the outstanding Debt Securities of that series may declare
the principal amount (or, if the Debt Securities of that series are Original
Issue Discount Securities or Indexed Securities, such portion of the principal
amount as may be specified in the terms thereof) of all the Debt Securities of
that series to be due and payable immediately by written notice thereof to
CRIIMI MAE (and to the applicable Trustee if given by the holders). However,
at any time after such a declaration of acceleration with respect to Debt
Securities of such series (or of all Debt Securities then outstanding under
the Indenture, as the case may be) has been made, but before a judgment or
decree for payment of the money due has been obtained by the applicable
Trustee, the holders of not less than a majority in principal amount of
outstanding Debt Securities of such series (or of all Debt Securities then
outstanding under the Indenture, as the case may be) may rescind and annul
such declaration and its consequences if (a) CRIIMI MAE shall have paid or
deposited with the applicable Trustee all required payments of the principal
of (and premium, if any) and interest on the Debt Securities of such series
(or of all Debt Securities then outstanding under the applicable Indenture, as
the case may be), plus certain fees, expenses, disbursements and advances of
the applicable Trustee and (b) all Events of Default, other than the non-
payment of accelerated principal (or specified portion thereof), with respect
to Debt Securities of such series (or of all Debt Securities then outstanding
under the Indenture, as the case may be) have been cured or waived as provided
in the Indenture. The Indenture will also provide that the holders of not less
than a majority in principal amount of the outstanding Debt Securities of any
series (or of all Debt Securities then outstanding under the Indenture, as the
case may be) may waive any past default with respect to such series and its
consequences, except a default (x) in the payment of the principal of (or
premium, if any) or interest on any Debt Security of such series or (y) in
respect of a covenant or provision contained in the Indenture that cannot be
modified or amended without the consent of the holder of each outstanding Debt
Security affected thereby.
Each Trustee will be required to give notice to the holders of Debt
Securities within 90 days of a default under the Indenture unless such default
shall have been cured or waived; provided, however, that such Trustee may
withhold notice to the holders of any series of Debt Securities of any default
with respect to such series (except a default in the payment of the principal
of (or premium, if any) or interest on any Debt Security of such series or in
the payment of any sinking fund installment in respect of any Debt Security of
such series) if designated officers of such Trustee consider such withholding
to be in the interest of such holders.
The right of any holder to institute a proceeding with respect to the
Indenture will be subject to certain conditions precedent including notice and
indemnity to the Trustee, but the holder has an absolute right to receipt of
principal of (and premium, if any) and interest on such holder's Debt Security
on or after the respective due dates expressed in the Debt Security, and to
institute suit for the enforcement of any such payments.
Subject to provisions in the Indenture relating to its duties in case of
default, no Trustee will be under an obligation to exercise any of its rights
or powers under the Indenture at the request or direction of any holders of
any series of Debt Securities then outstanding under the Indenture, unless
such holders shall have offered to the
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Trustee thereunder reasonable security or indemnity. The holders of not less
than a majority in aggregate principal amount of the outstanding Debt
Securities of any series (or of all Debt Securities then outstanding under the
Indenture, as the case may be) shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
applicable Trustee, or of exercising any trust or power conferred upon such
Trustee. However, each Trustee may refuse to follow any direction which is in
conflict with any law or the Indenture, which may involve such Trustee in
personal liability or which may be unduly prejudicial to the holders of Debt
Securities of such series not joining therein.
Within 120 days after the close of each fiscal year, CRIIMI MAE will be
required to deliver to each Trustee a certificate, signed by one of several
specified officers, stating whether or not such officer has knowledge of any
default under the Indenture and, if so, specifying each such default and the
nature and status thereof.
MODIFICATION OF THE INDENTURE
Modifications and amendments of the Indenture may be made only with the
consent of the holders of not less than a majority in aggregate principal
amount of all outstanding Debt Securities issued under such Indenture which
are affected by such modification or amendment; provided, however, that no
such modification or amendment may, without the consent of the holder of each
such Debt Security affected thereby, (a) change the stated maturity of the
principal of, or any installment of interest (or premium, if any) on, any such
Debt Security; (b) reduce the principal amount of, or the rate or amount of
interest on, or any premium payable on redemption of, any such Debt Security,
or reduce the amount of principal of an Original Issue Discount Security that
would be due and payable upon declaration of acceleration of the maturity
thereof or would be provable in bankruptcy, or adversely affect any right of
repayment of the holder of any such Debt Security; (c) change the place of
payment, or the coin or currency, for payment of principal of, premium, if
any, or interest on any such Debt Security; (d) impair the right to institute
suit for the enforcement of any payment on or with respect to any such Debt
Security; (e) reduce the above-stated percentage of outstanding Debt
Securities of any series necessary to modify or amend the Indenture, to waive
compliance with certain provisions thereof or certain defaults and
consequences thereunder or to reduce the quorum or voting requirements set
forth in the Indenture; or (f) modify any of the foregoing provisions or any
of the provisions relating to the waiver of certain past defaults or certain
covenants, except to increase the required percentage to effect such action or
to provide that certain other provisions may not be modified or waived without
the consent of the holder of such Debt Security.
The holders of not less than a majority in principal amount of outstanding
Debt Securities issued under the Indenture have the right to waive compliance
by CRIIMI MAE with certain covenants in such Indenture.
Modifications and amendments of the Indenture may be made by CRIIMI MAE and
the respective Trustee thereunder without the consent of any holder of Debt
Securities for any of the following purposes: (i) to evidence the succession
of another person to CRIIMI MAE as obligor under such Indenture; (ii) to add
to the covenants of CRIIMI MAE for the benefit of the holders of all or any
series of Debt Securities or to surrender any right or power conferred upon
CRIIMI MAE in such Indenture; (iii) to add Events of Default for the benefit
of the holders of all or any series of Debt Securities; (iv) to add or change
any provisions of the Indenture to facilitate the issuance of, or to
liberalize certain terms of, Debt Securities in bearer form, or to permit or
facilitate the issuance of Debt Securities in uncertificated form, provided
that such action shall not adversely affect the interests of the holders of
the Debt Securities of any series in any material respect; (v) to change or
eliminate any provisions of the Indenture, provided that any such change or
elimination shall become effective only when there are no Debt Securities
outstanding of any series created prior thereto which are entitled to the
benefit of such provision; (vi) to secure the Debt Securities; (vii) to
establish the form or terms of Debt Securities of any series, including the
provisions and procedures, if applicable, for the conversion of such Debt
Securities into Common Shares and/or Preferred Shares; (viii) to provide for
the acceptance of appointment by a successor Trustee or facilitate the
administration of the trusts under the Indenture by more than one Trustee;
(ix) to cure any ambiguity, defect or inconsistency in the Indenture, provided
that such action shall not adversely affect the interests of holders of Debt
Securities of any series issued under such Indenture in any material respect;
or (x) to supplement any of the provisions of the Indenture to the extent
necessary to permit or facilitate defeasance and
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discharge of any series of such Debt Securities, provided that such action
shall not adversely affect the interests of the holders of the Debt Securities
of any series in any material respect.
The Indenture will provide that in determining whether the holders of the
requisite principal amount of outstanding Debt Securities of a series have
given any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination
upon declaration of acceleration of the maturity thereof, (ii) the principal
amount of a Debt Security denominated in a foreign currency that shall be
deemed outstanding shall be the U.S. dollar equivalent, determined on the
issue date for such Debt Security, of the principal amount (or, in the case of
an Original Issue Discount Security, the U.S. dollar equivalent on the issue
date of such Debt Security of the amount determined as provided in (i) above),
(iii) the principal amount of an Indexed Security that shall be deemed
outstanding shall be the principal face amount of such Indexed Security at
original issuance, unless otherwise provided with respect to such Indexed
Security pursuant to the Indenture, and (iv) Debt Securities owned by CRIIMI
MAE or any other obligor upon the Debt Securities or any affiliate of CRIIMI
MAE or of such other obligor shall be disregarded.
The Indenture will contain provisions for convening meetings of the holders
of Debt Securities of a series. A meeting may be called at any time by the
applicable Trustee, and also, upon request, by CRIIMI MAE or the holders of at
least 25% in principal amount of the outstanding Debt Securities of such
series, in any such case upon notice given as provided in the Indenture.
Except for any consent that must be given by the holder of each Debt Security
affected by certain modifications and amendments of the Indenture, any
resolution presented at a meeting or adjourned meeting duly reconvened at
which a quorum is present may be adopted by the affirmative vote of the
holders of a majority in principal amount of the outstanding Debt Securities
of that series; provided, however, that, except as referred to above, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by
the holders of a specified percentage, which is less than a majority, in
principal amount of the outstanding Debt Securities of a series may be adopted
at a meeting or adjourned meeting duly reconvened at which a quorum is present
by the affirmative vote of the holders of such specified percentage in
principal amount of the outstanding Debt Securities of that series. Any
resolution passed or decision taken at any meeting of holders of Debt
Securities of any series duly held in accordance with the Indenture will be
binding on all holders of Debt Securities of that series. The quorum at any
meeting called to adopt a resolution, and at any reconvened meeting, will be
persons holding or representing a majority in principal amount of the
outstanding Debt Securities of a series; provided, however, that if any action
is to be taken at such meeting with respect to a consent or waiver which may
be given by the holders of not less than a specified percentage in principal
amount of the outstanding Debt Securities of a series, the persons holding or
representing such specified percentage in principal amount of the outstanding
Debt Securities of such series will constitute a quorum.
Notwithstanding the foregoing provisions, if any action is to be taken at a
meeting of holders of Debt Securities of any series with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action that the Indenture expressly provides may be made, given or taken by
the holders of a specified percentage in principal amount of all outstanding
Debt Securities affected thereby, or of the holders of such series and one or
more additional series: (i) there shall be no minimum quorum requirement for
such meeting and (ii) the principal amount of the outstanding Debt Securities
of such series that vote in favor of such request, demand, authorization,
direction, notice, consent, waiver or other action shall be taken into account
in determining whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under the
Indenture.
SUBORDINATION
Upon any distribution to creditors of CRIIMI MAE in a liquidation,
dissolution or reorganization, the payment of the principal of and interest on
the Debt Securities will be subordinated in right of payment to the prior
payment in full of all "Senior Debt" (as defined below), but the obligation of
CRIIMI MAE to make
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payment of the principal of (or premium, if any) and interest on the Debt
Securities will not otherwise be affected. No payment of principal or interest
may be made on the Debt Securities at any time if a default on Senior Debt
exists that permits the holders of such Senior Debt to accelerate its maturity
and the default is the subject of judicial proceedings or CRIIMI MAE receives
notice of the default. After all Senior Debt is paid in full and until the
Debt Securities are paid in full, holders will be subrogated to the rights of
holders of Senior Debt to the extent that distributions otherwise payable to
holders of the Debt Securities have been applied to the payment of Senior
Debt. By reason of such subordination, in the event of a distribution of
assets upon insolvency, certain general creditors of CRIIMI MAE may recover
more, ratably, than holders of the Debt Securities.
"Senior Debt" will be defined in the Indenture as the principal of and
interest on, or substantially similar payments to be made by CRIIMI MAE in
respect of, the following, whether outstanding at the date of execution of the
Indenture or thereafter incurred, created or assumed: (a) indebtedness of
CRIIMI MAE for money borrowed or represented by purchase-money obligations or
obligations arising under repurchase agreements, (b) indebtedness of CRIIMI
MAE evidenced by notes, debentures, or bonds, or other securities issued under
the provisions of an indenture, fiscal agency agreement or other instrument,
(c) obligations of CRIIMI MAE as lessee under leases of property either made
as part of any sale and leaseback transaction to which CRIIMI MAE is a party
or otherwise, (d) indebtedness of any partnerships or joint ventures which is
included in the consolidated financial statements of CRIIMI MAE, (e)
indebtedness, obligations and liabilities of others in respect of which CRIIMI
MAE is liable contingently or otherwise to pay or advance money or property or
as guarantor, endorser or otherwise or which CRIIMI MAE has agreed to purchase
or otherwise acquire, and (f) any binding commitment of CRIIMI MAE to fund any
mortgage investment or to fund any investment in any entity making such
mortgage investment, in each case other than (1) any such indebtedness,
obligation or liability referred to in clauses (a) through (f) above as to
which, in the instrument creating or evidencing the same pursuant to which the
same is outstanding, it is provided that such indebtedness, obligation or
liability is not superior in right of payment to the Debt Securities or rank
pari passu with the Debt Securities, (2) any such indebtedness, obligation or
liability which is subordinated to indebtedness of CRIIMI MAE to substantially
the same extent as or to a greater extent than the Debt Securities are
subordinated, and (3) the Debt Securities. There will be no restrictions in
the Indenture upon the creation of additional Senior Debt.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Under the Indenture, CRIIMI MAE will be able to discharge certain
obligations to holders of any series of Debt Securities issued thereunder that
have not already been delivered to the applicable Trustee for cancellation and
that either have become due and payable or will become due and payable within
one year (or scheduled for redemption within one year) by irrevocably
depositing with the applicable Trustee, in trust, funds in such currency or
currencies, currency unit or units or composite currency or currencies in
which such Debt Securities are payable in an amount sufficient to pay the
entire indebtedness on such Debt Securities in respect of principal (and
premium, if any) and interest to the date of such deposit (if such Debt
Securities have become due and payable) or to the stated maturity or
redemption date, as the case may be.
The Indenture will provide that, under certain circumstances, CRIIMI MAE may
elect either (a) to defease and be discharged from any and all obligations
with respect to such Debt Securities (except for the obligation to pay
additional amounts, if any, upon the occurrence of certain events of tax,
assessment or governmental charge with respect to payments on such Debt
Securities and the obligations to register the transfer or exchange of such
Debt Securities, to replace temporary or mutilated, destroyed, lost or stolen
Debt Securities, to maintain an office or agency in respect of such Debt
Securities and to hold moneys for payment in trust) ("defeasance") or (b) to
be released from its obligations with respect to such Debt Securities under
the Indenture or, under certain circumstances, its obligations with respect to
any other covenant, and any omission to comply with such obligations shall not
constitute a default or an Event of Default with respect to such Debt
Securities ("covenant defeasance"), in either case upon the irrevocable
deposit by CRIIMI MAE with the applicable Trustee, in trust, of an amount, in
such currency or currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are payable at stated maturity, or
Government Obligations (as defined below), or both, applicable to such Debt
Securities which through the scheduled payment of principal and interest in
accordance
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with their terms will provide money in an amount sufficient to pay the
principal of (and premium, if any) and interest on such Debt Securities, and
any mandatory sinking fund or analogous payments thereon, on the scheduled due
dates therefor.
Such a trust may be established only if, among other things, CRIIMI MAE has
delivered to the applicable Trustee an opinion of counsel (as specified in
each Indenture) to the effect that the holders of such Debt Securities will
not recognize income, gain or loss for U.S. federal income tax purposes as a
result of such defeasance or covenant defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance or covenant defeasance
had not occurred, and such opinion of counsel, in the case of defeasance, must
refer to and be based upon a ruling of the Internal Revenue Service or a
change in applicable U.S. federal income tax law occurring after the date of
the Indenture.
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government which issued the foreign
currency in which the Debt Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations
of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which
issued the foreign currency in which the Debt Securities of such series are
payable, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America or such other
government, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of any
such Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
Unless otherwise provided in the applicable Prospectus Supplement, if after
CRIIMI MAE has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any
series, (a) the holder of a Debt Security of such series is entitled to, and
does, elect pursuant to the Indenture or the terms of such Debt Security to
receive payment in a currency, currency unit or composite currency other than
that in which such deposit has been made in respect of such Debt Security, or
(b) a Conversion Event (as defined below) occurs in respect of the currency,
currency unit or composite currency in which such deposit has been made, the
indebtedness represented by such Debt Security shall be deemed to have been,
and will be, fully discharged and satisfied through the payment of the
principal of (and premium, if any) and interest on such Debt Security as they
become due out of the proceeds yielded by converting the amount so deposited
in respect of such Debt Security into the currency, currency unit or composite
currency in which such Debt Security becomes payable as a result of such
election or such cessation of usage based on the applicable market exchange
rate. "Conversion Event" means the cessation of use of (i) a currency,
currency unit or composite currency both by the government of the country
which issued such currency and for the settlement of transactions by a central
bank or other public institutions of or within the international banking
community, (ii) the European Currency Unit ("ECU") both within the European
Monetary System established by the Resolution of December 5, 1978 of the
council of the European Economic Community, European Coal and Steel Community
and the European Atomic Energy Community (collectively, the "European
Communities") and for the settlement of transactions by public institutions of
or within the European Communities or (iii) any currency unit or composite
currency other than the ECU for the purposes for which it was established.
Unless otherwise provided in the applicable Prospectus Supplement, all
payments of principal of (and premium, if any) and interest on any Debt
Security that is payable in a foreign currency that ceases to be used by its
government of issuance shall be made in U.S. dollars.
The applicable Prospectus Supplement may further describe the provisions, if
any, permitting such defeasance or covenant defeasance, including any
modifications of the provisions described above, with respect to the Debt
Securities of or within a particular series.
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CONVERSION RIGHTS
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Shares or Preferred Shares will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include
whether such Debt Securities are convertible into Common Shares and/or
Preferred Shares, the conversion price (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at the option
of the holders or CRIIMI MAE, the events requiring an adjustment of the
conversion price and provisions affecting conversion in the event of the
redemption of such Debt Securities.
To protect CRIIMI MAE's status as a REIT, CRIIMI MAE may refuse to effect a
conversion of the Debt Securities if, as a result of such conversion, any
person would beneficially own, either directly or indirectly, more than 9.8%
of CRIIMI MAE's outstanding capital stock. See "Description of Capital Stock--
Common Shares--Restrictions on Ownership and Transfer."
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depositary identified in the applicable
Prospectus Supplement relating to such series. Global Securities may be issued
in either registered or bearer form and in either temporary or permanent form.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of CRIIMI MAE comprises 60 million Common
Shares and 25 million Preferred Shares.
PREFERRED SHARES
General. The following description of the Preferred Shares sets forth
certain general terms and provisions of the Preferred Shares to which any
Prospectus Supplement may relate. The statements below describing the
Preferred Shares are in all respects subject to and qualified in their
entirety by reference to the applicable provisions of CRIIMI MAE's Articles of
Incorporation, as amended (the "Articles of Incorporation") and Bylaws and
applicable articles supplementary relating to any offering of Preferred Shares
("Articles Supplementary"). If Preferred Shares are to be issued, a
description of the terms of such Preferred Shares (as well as the form of
Preferred Share certificate) will be filed by CRIIMI MAE as an exhibit to a
current report on Form 8-K and incorporated by reference.
Terms. Subject to the limitations prescribed by the Articles of
Incorporation, the Board is authorized to fix the number of shares
constituting each series of Preferred Shares and the designations and powers,
preferences and relative, participating, optional or other special rights and
qualifications, limitations or restrictions thereof, including such provisions
as may be desired concerning voting, redemption, dividends, dissolution or the
distribution of assets, conversion or exchange, and such other subjects or
matters as may be fixed by resolution of the Board. The Preferred Shares will,
when issued, be fully paid and nonassessable by CRIIMI MAE and will have no
preemptive rights.
Reference is made to the Prospectus Supplement relating to the Preferred
Shares offered thereby for specific terms, including:
(1) The title and stated value of such Preferred Shares;
(2) The number of such Preferred Shares offered, the liquidation
preference per share and the offering price of such Preferred Shares;
(3) The dividend rate(s), period(s) and/or payment date(s) or method(s)
of calculation thereof applicable to such Preferred Shares;
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(4) The date from which dividends on such Preferred Shares shall
accumulate, if applicable;
(5) The procedures for any auction and remarketing, if any, for such
Preferred Shares;
(6) The provision for a sinking fund, if any, for such Preferred Shares;
(7) The provision for redemption, if applicable, of such Preferred
Shares;
(8) Any listing of such Preferred Shares on any securities exchange;
(9) The terms and conditions, if applicable, upon which such Preferred
Shares will be convertible into Common Shares, including the conversion
price (or manner of calculation thereof);
(10) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Shares;
(11) A discussion of federal income tax considerations applicable to such
Preferred Shares;
(12) The relative ranking and preferences of such Preferred Shares as to
dividend rights and rights upon liquidation, dissolution or winding up of
the affairs of CRIIMI MAE;
(13) Any limitations on issuance of any series of Preferred Shares
ranking senior to or on a parity with such series of Preferred Shares as to
dividend rights and rights upon liquidation, dissolution or winding up of
the affairs of CRIIMI MAE; and
(14) Any limitations on direct or beneficial ownership and restrictions
on transfer, in each case as may be appropriate to preserve the status of
CRIIMI MAE as a REIT.
Rank. Unless otherwise specified in the Prospectus Supplement, the Preferred
Shares will, with respect to dividend rights and rights upon liquidation,
dissolution or winding up of CRIIMI MAE, rank (i) senior to all classes or
series of Common Shares and to all equity securities ranking junior to such
Preferred Shares with respect to dividend rights or rights upon liquidation,
dissolution or winding up of CRIIMI MAE; (ii) on a parity with all equity
securities issued by CRIIMI MAE the terms of which specifically provide that
such equity securities rank on a parity with the Preferred Shares with respect
to dividend rights or rights upon liquidation, dissolution or winding up of
CRIIMI MAE; and (iii) junior to all equity securities issued by CRIIMI MAE the
terms of which specifically provide that such equity securities rank senior to
the Preferred Shares with respect to dividend rights or rights upon
liquidation, dissolution or winding up of CRIIMI MAE. The term "equity
securities" does not include convertible debt securities.
Dividends. Holders of the Preferred Shares of each series will be entitled
to receive, when, as and if declared by the Board, out of assets of CRIIMI MAE
legally available for payment, cash dividends at such rates and on such dates
as will be set forth in the applicable Prospectus Supplement. Each such
dividend shall be payable to holders of record as they appear on the share
transfer books of CRIIMI MAE on such record dates as shall be fixed by the
Board.
Dividends on any series of the Preferred Shares may be cumulative or non-
cumulative, as provided in the applicable Prospectus Supplement. Dividends, if
cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the Board fails to declare a dividend
payable on a dividend payment date on any series of the Preferred Shares for
which dividends are noncumulative, then the holders of such series of the
Preferred Shares will have no right to receive a dividend in respect of the
dividend period ending on such dividend payment date, and CRIIMI MAE will have
no obligation to pay the dividend accrued for such period, whether or not
dividends on such series are declared payable on any future dividend payment
date.
If Preferred Shares of any series are outstanding, full dividends will not
be declared or paid or set apart for payment on the Preferred Shares of any
other series ranking, as to dividends, on a parity with the Preferred Shares
of such series, and no dividends will be declared or paid or set apart for
payment on the Preferred Shares of any other series ranking, as to dividends,
junior to the Preferred Shares of such series for any period unless (i) if
such series of Preferred Shares has a cumulative dividend, full cumulative
dividends have been or contemporaneously are declared and paid or declared and
a sum sufficient for the payment thereof set apart for such payment on the
Preferred Shares of such series for all past dividend periods and the then
current dividend
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period or (ii) if such series of Preferred Shares does not have a cumulative
dividend, full dividends for the then current dividend period have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for such payment on the Preferred Shares of such
series. When dividends are not paid in full (or a sum sufficient for such full
payment is not so set apart) upon Preferred Shares of any series and the
shares of any other series of Preferred Shares ranking on a parity as to
dividends with the Preferred Shares of such series, all dividends declared
upon Preferred Shares of such series and any other series of Preferred Shares
ranking on a parity as to dividends with such Preferred Shares shall be
declared pro rata so that the amount of dividends declared per Preferred Share
of such series and such other series of Preferred Shares shall in all cases
bear to each other the same ratio that accrued dividends per share on the
Preferred Shares of such series (which shall not include any accumulation in
respect of unpaid dividends for prior dividend periods if such Preferred
Shares do not have a cumulative dividend) and such other series of Preferred
Shares bear to each other.
Except as provided in the immediately preceding paragraph, unless (i) if
such series of Preferred Shares has a cumulative dividend, full cumulative
dividends on the Preferred Shares of such series have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for all past dividend periods and
the then current dividend period and (ii) if such series of Preferred Shares
does not have a cumulative dividend, full dividends on the Preferred Shares of
such series have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment for the
then current dividend period, no dividends (other than in Common Shares or
other capital shares ranking junior to the Preferred Shares of such series as
to dividends and upon liquidation) shall be declared or paid or set aside for
payment or other distribution shall be declared or made upon the Common
Shares, or any other capital shares of CRIIMI MAE ranking junior to or on a
parity with the Preferred Shares of such series as to dividends or upon
liquidation, nor shall any Common Shares, or any other capital shares of
CRIIMI MAE ranking junior to or on a parity with the Preferred Shares of such
series as to dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for
a sinking fund for the redemption of any such shares) by CRIIMI MAE (except by
conversion into or exchange for other capital shares of CRIIMI MAE ranking
junior to the Preferred Shares of such series as to dividends and upon
liquidation).
Any dividend payment made on shares of a series of Preferred Shares shall
first be credited against the earliest accrued but unpaid dividend due with
respect to shares of such series which remains payable.
Redemption. If so provided in the applicable Prospectus Supplement, the
Preferred Shares will be subject to mandatory redemption or redemption at the
option of CRIIMI MAE, as a whole or in part, in each case upon the terms, at
the times and at the redemption prices set forth in such Prospectus
Supplement.
The Prospectus Supplement relating to a series of Preferred Shares that is
subject to mandatory redemption will specify the number of such Preferred
Shares that shall be redeemed by CRIIMI MAE in each year commencing after a
date to be specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid dividends thereon
(which shall not, if such Preferred Shares do not have a cumulative dividend,
include any accumulation in respect of unpaid dividends for prior dividend
periods) to the date of redemption. The redemption price may be payable in
cash or other property, as specified in the applicable Prospectus Supplement.
If the redemption price for Preferred Shares of any series is payable only
from the net proceeds of the issuance of capital shares of CRIIMI MAE, the
terms of such Preferred Shares may provide that, if no such capital shares
shall have been issued or to the extent the net proceeds from any issuance are
insufficient to pay in full the aggregate redemption price then due, such
Preferred Shares shall automatically and mandatorily be converted into the
applicable capital shares of CRIIMI MAE pursuant to conversion provisions
specified in the applicable Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if such series of Preferred Shares
has a cumulative dividend, full cumulative dividends on all shares of any
series of Preferred Shares shall have been or contemporaneously are declared
and paid or declared and a sum sufficient for the payment thereof set apart
for payment for all past
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dividend periods and the then current dividend period and (ii) if such series
of Preferred Shares does not have a cumulative dividend, full dividends on the
Preferred Shares of any series have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
payment for the then current dividend period, no shares of any series of
Preferred Shares shall be redeemed (unless all outstanding Preferred Shares of
such series are simultaneously redeemed) or directly or indirectly purchased
or acquired (except by conversion into or exchange for capital shares of
CRIIMI MAE ranking junior to the Preferred Shares of such series as to
dividends and upon liquidation); provided, however, that the foregoing shall
not prevent the purchase or acquisition of Preferred Shares of such series to
preserve the REIT status of CRIIMI MAE or pursuant to a purchase or exchange
offer made on comparable terms to holders of all outstanding Preferred Shares
of such series.
If fewer than all of the outstanding Preferred Shares of any series are to
be redeemed, the number of shares to be redeemed will be determined by the
Board and such shares may be redeemed pro rata from the holders of record of
such shares in proportion to the number of such shares held by such holders
(with adjustments to avoid redemption of fractional shares) or any other
equitable method determined by the Board.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of Preferred Shares
of any series to be redeemed at the address shown on the share transfer books
of CRIIMI MAE. Each notice shall state: (i) the redemption date; (ii) the
number of shares and series of the Preferred Shares to be redeemed; (iii) the
redemption price; (iv) the place or places where certificates for such
Preferred Shares are to be surrendered for payment of the redemption price;
(v) that dividends on the shares to be redeemed will cease to accrue on such
redemption date; and (vi) the date upon which the holder's conversion rights,
if any, as to such shares shall terminate. If fewer than all the Preferred
Shares of any series are to be redeemed, the notice mailed to each such holder
thereof shall also specify the number of Preferred Shares to be redeemed from
each such holder. If notice of redemption of any Preferred Shares has been
given and if the funds necessary for such redemption have been set aside by
CRIIMI MAE in trust for the benefit of the holders of any Preferred Shares so
called for redemption, then from and after the redemption date dividends will
cease to accrue on such Preferred Shares, such Preferred Shares shall no
longer be deemed outstanding and all rights of the holders of such shares will
terminate, except the right to receive the redemption price. Any moneys so
deposited which remain unclaimed by the holders of the Preferred Shares at the
end of two years after the redemption date will be returned by such bank or
trust company to CRIIMI MAE.
Liquidation Preference. Upon any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of CRIIMI MAE, then, before any
distribution or payment shall be made to the holders of any Common Shares or
any other class or series of capital shares of CRIIMI MAE ranking junior to
the Preferred Shares in the distribution of assets upon any liquidation,
dissolution or winding up of CRIIMI MAE, the holders of each series of
Preferred Shares shall be entitled to receive out of assets of CRIIMI MAE
legally available for distribution to stockholders, liquidating distributions
in the amount of the liquidation preference per share (set forth in the
applicable Prospectus Supplement), plus an amount equal to all dividends
accrued and unpaid thereon (which shall not include any accumulation in
respect of unpaid dividends for prior dividend periods if such Preferred
Shares do not have a cumulative dividend). After payment of the full amount of
the liquidating distributions to which they are entitled, the holders of
Preferred Shares will have no right or claim to any of the remaining assets of
CRIIMI MAE. In the event that, upon any such voluntary or involuntary
liquidation, dissolution or winding up, the available assets of CRIIMI MAE are
insufficient to pay the amount of the liquidating distributions on all
outstanding Preferred Shares and the corresponding amounts payable on all
shares of other classes or series of capital shares of CRIIMI MAE ranking on a
parity with the Preferred Shares in the distribution of assets upon
liquidation, dissolution or winding up, then the holders of the Preferred
Shares and all other such classes or series of capital shares shall share
ratably in any such distribution of assets in proportion to the full
liquidating distributions to which they would otherwise be respectively
entitled.
If liquidating distributions shall have been made in full to all holders of
Preferred Shares, the remaining assets of CRIIMI MAE shall be distributed
among the holders of any other classes or series of capital shares ranking
junior to the Preferred Shares upon liquidation, dissolution or winding up,
according to their respective
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rights and preferences and in each case according to their respective number
of shares. For such purposes, the consolidation or merger of CRIIMI MAE with
or into any other corporation, trust or entity, or the sale, lease or
conveyance of all or substantially all of the property or business of CRIIMI
MAE, shall not be deemed to constitute a liquidation, dissolution or winding
up of CRIIMI MAE.
Voting Rights. Holders of the Preferred Shares will not have any voting
rights, except as set forth below or as otherwise from time to time required
by law or as indicated in the applicable Prospectus Supplement.
Unless provided otherwise for any series of Preferred Shares, so long as any
Preferred Shares remain outstanding, CRIIMI MAE will not, without the
affirmative vote or consent of the holders of at least a majority of the
shares of each series of Preferred Shares outstanding at the time, given in
person or by proxy, either in writing or at a meeting (such series voting
separately as a class), (i) authorize or create, or increase the authorized or
issued amount of, any class or series of capital shares ranking prior to such
series of Preferred Shares with respect to payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up or
reclassify any authorized capital shares of CRIIMI MAE into any such shares,
or create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such shares; or (ii) amend, alter or
repeal the provisions of CRIIMI MAE's Articles of Incorporation or the
Articles Supplementary for such series of Preferred Shares, whether by merger,
consolidation or otherwise (each, an "Event"), so as to materially and
adversely affect any right, preference, privilege or voting power of such
series of Preferred Shares or the holders thereof; provided, however, with
respect to the occurrence of any of the Events set forth in (ii) above, so
long as the Preferred Shares remain outstanding with the terms thereof
materially unchanged, taking into account that upon the occurrence of an
Event, CRIIMI MAE may not be the surviving entity, the occurrence of any such
Event shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting power of holders of Preferred Shares, and
provided further that (x) any increase in the amount of the authorized Common
Shares or Preferred Shares or the authorization, creation or issuance of any
other series of Preferred Shares or any other class or series of capital
shares, or (y) any increase in the amount of authorized shares of such series
or any other series of Preferred Shares or any other class or series of
capital shares, in each case ranking on a parity with or junior to the
Preferred Shares of such series with respect to payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up, shall not
be deemed to materially and adversely affect such rights, preferences,
privileges or voting powers.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of such series of Preferred Shares shall
have been redeemed or called for redemption and sufficient funds shall have
been deposited in trust to effect such redemption.
Conversion Rights. The terms and conditions, if any, upon which any series
of Preferred Shares are convertible into Common Shares will be set forth in
the applicable Prospectus Supplement relating thereto. Such terms will include
the number of Common Shares into which the Preferred Shares are convertible,
the conversion price (or manner of calculation thereof), the conversion
period, provisions as to whether conversion will be at the option of the
holders of the Preferred Shares or CRIIMI MAE, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of such Preferred Shares.
Restrictions on Ownership and Transfer. As discussed below under "--Common
Shares--Restrictions on Ownership and Transfer," for CRIIMI MAE to qualify as
a REIT under the Internal Revenue Code of 1986, as amended (the "Code"), not
more than 50% in value of its outstanding capital shares may be owned,
directly or constructively, by five or fewer individuals (as defined in the
Code to include certain entities) during the last half of a taxable year. To
assist CRIIMI MAE in meeting this requirement, CRIIMI MAE may take certain
actions to limit the beneficial ownership, directly or indirectly, by a single
person of more than 9.8% of CRIIMI MAE's outstanding capital stock, including
any Preferred Shares of CRIIMI MAE. Therefore, the Articles Supplementary for
each series of Preferred Shares may contain certain provisions restricting the
ownership and transfer of the Preferred Shares. The applicable Prospectus
Supplement will specify any additional ownership limitation relating to a
series of Preferred Shares.
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COMMON SHARES
The following description of the Common Shares is summarized from relevant
portions of CRIIMI MAE's Articles of Incorporation and Bylaws, as amended. A
more complete description of the Common Shares may be obtained by reference to
such documents and to the documents incorporated by reference in this
Prospectus. The following statements are qualified in their entirety by such
reference.
General. Stockholders are entitled to one vote for each Common Share held on
all matters presented for a vote to stockholders. The Board serves in
staggered three-year terms. Directors may be removed only for cause, upon the
affirmative vote of holders of a majority of the Common Shares voting together
as a single class. Except as otherwise provided in the Articles of
Incorporation, in meetings where a quorum is present, a majority of the votes
cast by stockholders is required to adopt a provision. Stockholders are
entitled to receive all assets available for distribution to the stockholders,
subject to any preferential rights of the holders of any Preferred Shares. The
Common Shares, when issued, will be fully paid and nonassessable and will not
be subject to redemption, except as provided in the Articles of Incorporation,
nor will they have any preference, conversion, exchange, preemptive or
cumulative voting rights.
The transfer agent and register for the Common Shares is Registrar and
Transfer Company.
Restrictions on Ownership and Transfer. The Code provides that a corporation
may not qualify as a REIT if more than 50% in value of the shares of the
corporation are owned, directly or indirectly, by five or fewer individuals,
which for this purpose includes pension funds and certain other tax-exempt
entities. Provisions of the Articles of Incorporation, intended to prevent
concentrated ownership of the capital stock of CRIIMI MAE that might
jeopardize its qualification as a REIT, authorize the Board to refuse to
effect a transfer of shares of capital stock of CRIIMI MAE to any person who
as a result would own in excess of 9.8% of the outstanding shares of capital
stock of CRIIMI MAE ("Excess Shares") and to redeem such Excess Shares.
DESCRIPTION OF WARRANTS
CRIIMI MAE may issue Warrants for the purchase of Preferred Shares or Common
Shares. Warrants may be issued independently or together with any Debt
Securities, Preferred Shares or Common Shares, offered by any Prospectus
Supplement and may be attached to or separate from such Debt Securities,
Preferred Shares or Common Shares. Each series of Warrants will be issued
under a separate warrant agreement (a "Warrant Agreement") to be entered into
between CRIIMI MAE and a bank or trust company, as warrant agent (the "Warrant
Agent"), all as set forth in the Prospectus Supplement relating to the
particular issue of Warrants. The Warrant Agent will act solely as an agent of
CRIIMI MAE in connection with the Warrants and will not assume any obligation
or relationship of agency or trust for or with any holders of Warrants or
beneficial owners of Warrants. If Warrants are to be issued, a copy of the
form of Warrant Agreement will be filed by CRIIMI MAE as an exhibit to a
current report on Form 8-K and incorporated herein by reference. The following
summary of certain provisions of the form of Warrant Agreement does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, all the provisions of the applicable Warrant Agreement.
General. If Warrants are offered, the related Prospectus Supplement will
describe the Warrant Agreement and the terms of the Warrants, including the
following: (i) the title of such Warrants; (ii) the aggregate number of such
Warrants; (iii) the price or prices at which such Warrants will be issued;
(iv) the currencies in which the price or prices of such Warrants may be
payable; (v) the designation, amount and terms of the Preferred Shares and/or
Common Shares purchasable upon exercise of such Warrants; (vi) the designation
and terms of the Debt Securities, Preferred Shares and/or Common Shares, if
any, with which such Warrants are issued and the number of such Warrants
issued with each such Security; (vii) if applicable, the date on and after
which such Warrants and the Preferred Shares and/or Common Shares purchasable
upon exercise of such Warrants will be separately transferable; (viii) the
price or prices at which and the currency or currencies in which the Preferred
Shares and/or Common Shares purchasable upon exercise of such Warrants may be
purchased; (ix) the date on which the right to exercise such Warrants shall
commence and the date on which such right shall expire; (x) the minimum and
maximum amount of such Warrants which may be exercised at any one time; (xi)
information with respect to
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book-entry procedures, if any; (xii) a discussion of certain United States
federal income tax considerations; and (xiii) any other material terms of such
Warrants, including terms, procedures and limitations relating to exchange or
exercise of such Warrants.
Exercise. Prior to the exercise of any Warrants to purchase Preferred Shares
and/or Common Shares, holders of such Warrants will not have any of the rights
of holders of Preferred Shares or Common Shares, as the case may be,
purchasable upon such exercise, including the right to receive payments of
dividends, if any, on the Preferred Shares or Common Shares purchasable upon
such exercise, or to exercise any applicable right to vote.
Each Warrant will entitle the holder to purchase Preferred Shares and/or
Common Shares at such exercise price as shall in each case be set forth in, or
calculable from, the Prospectus Supplement relating to the Warrants. Warrants
may be exercised at any time up to 5:00 P.M. New York time on the expiration
date set forth in the Prospectus Supplement relating to such Warrants. After
the close of business on the expiration date (or such later date to which such
expiration date may be extended by CRIIMI MAE), unexercised Warrants will
become void.
Restrictions on Ownership and Transfer. As discussed above under "--Common
Shares--Restrictions on Ownership and Transfer," for CRIIMI MAE to qualify as
a REIT under the Code, not more than 50% in value of its outstanding capital
shares may be owned, directly or constructively, by five or fewer individuals
(as defined in the Code to include certain entities) during the last half of a
taxable year. To assist CRIIMI MAE in meeting this requirement, CRIIMI MAE may
take certain actions to limit the beneficial ownership, directly or
indirectly, by a single person of more than 9.8% of CRIIMI MAE's outstanding
capital stock. An individual or entity that owns Warrants to acquire Common
Shares and/or Preferred Shares will be deemed to own such Common Shares or
Preferred Shares for purposes of meeting the ownership requirement. Therefore,
the terms of any Warrant Agreement entered into in connection with the
issuance of Warrants may contain certain provisions restricting the ownership
and transfer of the Warrants. The applicable Prospectus Supplement will
specify any additional ownership limitation relating to the Warrants.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary of certain United States federal income tax
considerations to CRIIMI MAE is based on current law, is for general
information only, and is not tax advice. The tax treatment of a holder of any
of the Securities will vary depending upon the terms of the specific
Securities acquired by such holder, as well as such holder's particular
situation, and this discussion does not attempt to address any aspects of
United States federal income taxation relating to holders of Securities.
Certain United States federal income tax considerations relevant to holders of
the Securities will be provided in the applicable Prospectus Supplement
relating thereto.
This discussion does not consider specific facts and circumstances that may
be relevant to a particular holder's tax position, and does not consider U.S.
state and local or non-U.S. tax consequences. Furthermore, the following
discussion is based on provisions of the Code and administrative and judicial
interpretations, all of which are subject to change, possibly on a retroactive
basis.
EACH INVESTOR IS ADVISED TO CONSULT THE APPLICABLE PROSPECTUS SUPPLEMENT, AS
WELL AS HIS OWN TAX ADVISOR, REGARDING THE TAX CONSEQUENCES TO HIM OF THE
ACQUISITION, OWNERSHIP AND SALE OF THE SECURITIES, INCLUDING THE FEDERAL,
STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF SUCH ACQUISITION,
OWNERSHIP AND SALE AND OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
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CRIIMI MAE has qualified, and intends to continue to qualify, as a REIT
under the Code. Qualification for treatment as a REIT requires CRIIMI MAE to
meet certain criteria including certain requirements regarding the nature of
its ownership, assets, income and distributions of taxable income. A REIT
generally is not subject to federal income tax on that portion of its ordinary
income or capital gains that is distributed currently to stockholders. CRIIMI
MAE has distributed and intends to continue to distribute substantially all of
its taxable income to stockholders and to meet distribution requirements to
continue to qualify as a REIT. CRIIMI MAE will generally be subject to federal
income tax at normal corporate rates on its undistributed income and to a 4%
excise tax under the Code on the amount, if any, by which 85% of its REIT
taxable income (including accrued but unpaid interest income) and 95% of any
net capital gain exceed the amount actually distributed to its stockholders
during the year (or declared as a dividend during October, November or
December of a calendar year, if distributed during the following January as
ordinary income dividends). Accrued income for the last month of each quarter
is generally received within 30 days after the end of the quarter. CRIIMI MAE
is not aware of any present circumstances that would cause it to fail to
qualify as a REIT, nor does it anticipate any such circumstances in the
reasonably foreseeable future. If the U.S. Internal Revenue Service ("IRS")
successfully challenged the tax status of CRIIMI MAE as a REIT, CRIIMI MAE's
earnings would become subject to federal income tax (including any applicable
minimum tax) at corporate rates.
To assist in maintaining CRIIMI MAE's qualification as a REIT under the
Code, CRIIMI MAE's Articles of Incorporation provide that no person or persons
acting as a group (defined to include partnerships, corporations, trusts and
other entities), with the exception of C.R.I., Inc. or its affiliates, shall
at any time directly or indirectly acquire ownership of more than 9.8% of the
outstanding shares of CRIIMI MAE's capital stock.
PLAN OF DISTRIBUTION
CRIIMI MAE may sell Securities to or through one or more underwriters, and
also may sell Securities directly to other purchasers or through agents. The
distribution of the Securities may be effected from time to time in one or
more transactions, at a fixed price or prices which may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. If underwriters are used in the sale of
Securities, the Securities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more transactions,
including negotiated transactions. If the Securities are sold through one or
more agents, as designated by CRIIMI MAE from time to time, any such agent
will be acting on a best efforts basis for the period of its appointment.
In connection with the sale of Securities, underwriters may receive
compensation from CRIIMI MAE or from purchasers of Securities, for whom they
may act as agents, in the form of discounts, concessions, or commissions.
Underwriters may sell Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions, or commissions
from the underwriters (which may be all or a portion of the discount to be
received by such underwriter from CRIIMI MAE) and/or commissions from the
purchasers for whom they may act as agents. Underwriters, dealers, and agents
that participate in the distribution of Securities may be deemed to be
underwriters, and any discounts or commissions they receive from CRIIMI MAE,
and any profit on the resale of Securities they realize may be deemed to be
underwriting discounts and commissions, under the Securities Act. Any such
underwriter or agent will be identified, and any such compensation received
from CRIIMI MAE will be described, in the Prospectus Supplement.
Unless otherwise specified in the related Prospectus Supplement, each series
of Securities will be a new issue with no established trading market, other
than the Common Shares which are listed on the NYSE. Any Common Shares sold
pursuant to a Prospectus Supplement are expected to be listed on such
exchange, subject to official notice of issuance. CRIIMI MAE may elect to list
any series of Debt Securities, Preferred Shares or Warrants on a securities
exchange, but is not obligated to do so. It is possible that one or more
underwriters may make a market in a series of Securities, but will not be
obligated to do so and may discontinue any market making at any time without
notice. Therefore, no assurance can be given as to the liquidity of the
trading market for any Securities (other than Common Shares).
20
<PAGE>
Under agreements CRIIMI MAE may enter into, underwriters, dealers, and
agents who participate in the distribution of Securities may be entitled to
indemnification by CRIIMI MAE against certain liabilities, including
liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, or be customers of, CRIIMI MAE in the ordinary course of
business. In connection with any particular issue of Debt Securities, CRIIMI
MAE may enter into hedging transactions with an underwriter, dealer or agent
participating in such transaction or an affiliate thereof.
If so indicated in the Prospectus Supplement, CRIIMI MAE will authorize
underwriters or other persons acting as CRIIMI MAE's agents to solicit offers
by certain institutions to purchase Securities from CRIIMI MAE pursuant to
contracts providing for payment and delivery on a future date. Institutions
with which such contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such institutions must be
approved by CRIIMI MAE. The obligations of any purchaser under any such
contract will be subject to the condition that the purchase of the Securities
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject. The underwriters and such
other agents will not have any responsibility in respect of the validity or
performance of such contracts.
LEGAL MATTERS
Certain matters relating to the validity of the Securities will be passed
upon for CRIIMI MAE by Swidler & Berlin, Chartered, Washington, D.C.
EXPERTS
The financial statements and schedules included in CRIIMI MAE's Annual
Report on Form 10-K, as amended, incorporated herein by reference, have been
audited by Arthur Andersen LLP, independent public accountants, as indicated
in its reports with respect thereto, and have been incorporated by reference
herein in reliance upon the authority of said firm as experts in accounting
and auditing.
21
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED IN CONNECTION WITH ANY
OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION
OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHO-
RIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES OFFERED HEREBY, NOR
DO THEY CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY
OF THE SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT
IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE INFORMATION
CONTAINED HEREIN OR IN THE AFFAIRS OF CRIIMI MAE SINCE THE DATE HEREOF.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
CRIIMI MAE................................................................ 3
Use of Proceeds........................................................... 3
Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges
and Preferred Stock Dividends............................................ 3
Description of Debt Securities............................................ 3
Description of Capital Stock.............................................. 13
Description of Warrants................................................... 18
Certain United States Federal Income Tax Considerations................... 19
Plan of Distribution...................................................... 20
Legal Matters............................................................. 21
Experts................................................................... 21
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CRIIMI MAE INC.
$300,000,000
DEBT SECURITIES, PREFERRED SHARES,
COMMON SHARES AND WARRANTS
----------------
PROSPECTUS
----------------
, 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
All of the expenses set forth below, except the SEC registration fee, are
estimated.
<TABLE>
<S> <C>
SEC registration fee............................................. $82,620
New York Stock Exchange listing fee.............................. *
Rating Agency fees............................................... *
Printing and engraving expenses.................................. *
Accounting fees and expenses..................................... *
Legal fees and expenses.......................................... *
Blue Sky fees and expenses (including legal fees)................ *
Transfer agent and registrar fees................................ *
Trustees fees.................................................... *
Miscellaneous.................................................... *
-------
Total........................................................ $ *
=======
</TABLE>
- --------
* To be furnished by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Maryland law, a corporation formed under Maryland law is permitted to
limit, by provisions in its articles of incorporation, the liability of its
directors and officers to the corporation or its stockholders for money
damages except for (i) actual receipt of an improper benefit or profit in
money, property or services or (ii) active and deliberate dishonesty
established by a final judgment as being material to the cause of action.
CRIIMI MAE's Articles of Incorporation include such a provision which limits
such liability to the fullest extent permitted by Maryland law.
CRIIMI MAE's Amended and Restated Bylaws provide that CRIIMI MAE shall
indemnify its directors, officers and advisers, and may indemnify other
persons who may be indemnified, to the fullest extent permitted by Maryland
law against any liability and related expenses (including attorneys' fees)
incurred in conjunction with any proceeding or threatened proceeding in which
any of them may be involved, or threatened to be involved, as a party or
otherwise, arising out of or incidental to CRIIMI MAE's business. CRIIMI MAE
has purchased and maintains liability insurance against liabilities that may
be asserted against such persons in connection with CRIIMI MAE, whether or not
indemnification against such liabilities would be permitted under the
provisions of CRIIMI MAE's Articles of Incorporation.
Section 2-418 of the General Corporation Law of the State of Maryland
provides, together with the Amended and Restated Bylaws described above, for
the indemnification of directors, officers and other corporate agents in terms
sufficiently broad to indemnify such persons, under certain circumstances, for
liabilities (including reimbursements of expenses incurred) arising under the
Securities Act.
II-1
<PAGE>
ITEM 16. EXHIBITS
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 --Form of Underwriting Agreement for Common Shares and Preferred
Shares(1)
1.2 --Form of Underwriting Agreement for Debt Securities(1)
4.1 --Articles of Incorporation, as amended, of CRIIMI MAE Inc.(2)
4.2 --Amended and Restated Bylaws of CRIIMI MAE Inc.
4.3 --Form of Indenture for Debt Securities(3)
4.4 --Form of Articles Supplementary with respect to Preferred Shares(1)
4.4.1 --Form of Articles Supplementary with respect to Series A Preferred
Shares(4)
4.4.2 --Form of Articles Supplementary with respect to Series B Preferred
Shares(5)
4.5 --Form of specimen certificate representing Preferred Shares(1)
4.5.1 --Form of specimen certificate representing Series A Preferred
Shares(4)
4.5.2 --Form of specimen certificate representing Series B Preferred
Shares(5)
4.6 --Form of specimen certificate representing Common Shares(2)
4.7 --Form of Warrant Agreement, including form of specimen warrant
certificate(1)
5.1 --Opinion of Swidler & Berlin, Chartered regarding validity of
Securities being registered
8.1 --Tax Opinion of Swidler & Berlin, Chartered(1)
12.1 --Computation of Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred Dividends of CRIIMI
MAE
23.1 --Consent of Arthur Andersen LLP
23.2 --Consent of Swidler & Berlin, Chartered (included in Exhibit 5.1)
23.3 --Consent of Swidler & Berlin, Chartered re: Tax Opinion(1)
24.1 --Power of Attorney (see signature page)
25.1 --Statement of Eligibility of Trustee on Form T-1(1)
25.2 --Statement of Eligibility of Trustee on Form T-2(1)
</TABLE>
- --------
(1) To be filed by amendment or incorporated by reference in connection with
the offering of Securities.
(2) Incorporated herein by reference to CRIIMI MAE's Registration Statement on
Form S-3 (File No. 33-50679), as amended.
(3) Incorporated herein by reference to CRIIMI MAE's Registration Statement on
Form S-3 (File No. 33-54267), as amended.
(4) Incorporated herein by reference to CRIIMI MAE's Current Report on Form 8-
K dated July 1, 1996.
(5) Incorporated herein by reference to CRIIMI MAE's Current Report on Form 8-
K dated August 7, 1996.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes: (1) To file, during any period
in which offers or sales are being made, a post-effective amendment to this
registration statement to include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement; and (2)
To remove from registration by means of a post-effective amendment any of the
Securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant also hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 15, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore,
II-2
<PAGE>
unenforceable. If a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the Securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the Trustee to act under subsection
(a) of section 310 of the Trust Indenture Act (the "TIA") in accordance with
the rules and regulations prescribed by the Commission under section 305(b)(2)
of the TIA.
The undersigned registrant hereby further undertakes that: (1) For purposes
of determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this Registration
Statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this Registration Statement as of
the time it was declared effective; and (2) For the purpose of determining any
liability under the Securities Act, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF ROCKVILLE, STATE OF MARYLAND, ON THE SIXTH DAY OF
JUNE, 1997.
CRIIMI MAE INC.
/s/ William B. Dockser
By: __________________________________
WILLIAM B. DOCKSER Chairman of
the Board
KNOW ALL PERSONS BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS
BELOW CONSTITUTES AND APPOINTS WILLIAM B. DOCKSER AND H. WILLIAM WILLOUGHBY,
AND EACH OF THEM SEVERALLY, AS HIS OR HER TRUE AND LAWFUL ATTORNEYS-IN-FACT AND
AGENTS, WITH FULL POWER OF SUBSTITUTION AND RESUBSTITUTION, FOR HIM OR HER AND
IN HIS OR HER NAME, PLACE, AND STEAD, IN ANY AND ALL CAPACITIES, TO SIGN ANY
AND ALL AMENDMENTS (INCLUDING POST-EFFECTIVE AMENDMENTS) TO THIS REGISTRATION
STATEMENT, AND TO FILE THE SAME, WITH ALL EXHIBITS THERETO, AND OTHER DOCUMENTS
IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE COMMISSION, GRANTING
UNTO SAID ATTORNEYS-IN-FACT AND AGENTS, FULL POWER AND AUTHORITY TO DO AND
PERFORM EACH AND EVERY ACT AND THING REQUISITE AND NECESSARY TO BE DONE IN
CONNECTION THEREWITH, AS FULLY TO ALL INTENTS AND PURPOSES AS HE OR SHE MIGHT
OR COULD DO IN PERSON, HEREBY RATIFYING AND CONFIRMING ALL THAT SAID ATTORNEYS-
IN-FACT AND AGENTS OR ANY OF THEM, OR OF HIS OR HER SUBSTITUTE OR SUBSTITUTES,
MAY LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES INDICATED.
/s/ William B. Dockser Chairman of the June 6, 1997
- ------------------------------------ Board (Principal
WILLIAM B. DOCKSER Executive Officer
and Director)
/s/ H. William Willoughby Director, President June 6, 1997
- ------------------------------------ and Secretary
H. WILLIAM WILLOUGHBY
/s/ Garrett G. Carlson Director June 6, 1997
- ------------------------------------
GARRETT G. CARLSON
/s/ Larry H. Dale Director June 6, 1997
- ------------------------------------
LARRY H. DALE
/s/ G. Richard Dunnells Director June 6, 1997
- ------------------------------------
G. RICHARD DUNNELLS
/s/ Robert J. Merrick Director June 6, 1997
- ------------------------------------
ROBERT J. MERRICK
/s/ Cynthia O. Azzara Chief Financial June 6, 1997
- ------------------------------------ Officer (Principal
CYNTHIA O. AZZARA Financial and
Accounting
Officer)
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 --Form of Underwriting Agreement for Common Shares and Preferred
Shares(1)
1.2 --Form of Underwriting Agreement for Debt Securities(1)
4.1 --Articles of Incorporation, as amended, of CRIIMI MAE Inc.(2)
4.2 --Amended and Restated Bylaws of CRIIMI MAE Inc.
4.3 --Form of Indenture for Debt Securities(3)
4.4 --Form of Articles Supplementary with respect to Preferred Shares(1)
4.4.1 --Form of Articles Supplementary with respect to Series A Preferred
Shares(4)
4.4.2 --Form of Articles Supplementary with respect to Series B Preferred
Shares(5)
4.5 --Form of specimen certificate representing Preferred Shares(1)
4.5.1 --Form of specimen certificate representing Series A Preferred
Shares(4)
4.5.2 --Form of specimen certificate representing Series B Preferred
Shares(5)
4.6 --Form of specimen certificate representing Common Shares(2)
4.7 --Form of Warrant Agreement, including form of specimen warrant
certificate(1)
5.1 --Opinion of Swidler & Berlin, Chartered regarding validity of
Securities being registered
8.1 --Tax Opinion of Swidler & Berlin, Chartered(1)
12.1 --Computation of Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred Dividends of CRIIMI
MAE
23.1 --Consent of Arthur Andersen LLP
23.2 --Consent of Swidler & Berlin, Chartered (included in Exhibit 5.1)
23.3 --Consent of Swidler & Berlin, Chartered re: Tax Opinion(1)
24.1 --Power of Attorney (see signature page)
25.1 --Statement of Eligibility of Trustee on Form T-1(1)
25.2 --Statement of Eligibility of Trustee on Form T-2(1)
</TABLE>
- --------
(1) To be filed by amendment or incorporated by reference in connection with
the offering of Securities.
(2) Incorporated herein by reference to CRIIMI MAE's Registration Statement on
Form S-3 (File No. 33-50679), as amended.
(3) Incorporated herein by reference to CRIIMI MAE's Registration Statement on
Form S-3 (File No.33-54267), as amended.
(4) Incorporated herein by reference to CRIIMI MAE's Current Report on Form 8-K
dated July 1, 1996.
(5) Incorporated herein by reference to CRIIMI MAE's Current Report on Form 8-K
dated August 7, 1996.
<PAGE>
EXHIBIT 4.2
AMENDED AND RESTATED
BYLAWS
OF
CRIIMI MAE INC.
(the Corporation)
ARTICLE I
OFFICES
The Corporation may have such office(s) at such place(s), both within and
outside the State of Maryland, as the Board of Directors (the Board) from time
to time determines or as the business of the Corporation from time to time
requires.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. ANNUAL MEETINGS. Subject to the provisions of section 6(d) of
Article IX of these bylaws (BYLAWS), annual meetings of the Corporation's
shareholders (SHAREHOLDERS) shall be held at such time and place (within or
outside the State of Maryland) as shall be designated from time to time by the
Board and stated in the notice of the meeting. Subject to the Articles of
Incorporation, at each annual meeting Shareholders shall elect directors to
succeed those whose terms expire and shall transact such other business as may
properly be brought before the meeting.
Section 2. SPECIAL MEETINGS. Unless otherwise prescribed by law, the
Articles of Incorporation or these Bylaws, special meetings of Shareholders for
any purpose or purposes may be called only by the Chairman of the Board, the
President or the Board of Directors, and must be called by the Secretary upon
the written request of a majority of the total number of directors of the
Corporation or Shareholders entitled to cast at least 25 percent of all the
votes entitled to be cast at the meeting. Requests for special meetings shall
state the purpose or purposes of the proposed meeting and shall state that no
other business shall be conducted. Special meetings of Shareholders shall be
held at such time and place (within or outside the State of Maryland) as shall
be designated from time to time by the Board and stated in the notice of the
meeting. Business transacted at special meetings shall be confined to the
purpose or purposes stated in the notice.
Section 3. NOTICES OF ANNUAL AND SPECIAL MEETINGS.
(a) Except as otherwise provided by law, the Articles of Incorporation
or these Bylaws, written notice of any annual or special meeting of Shareholders
shall state the place, date and time thereof and, in the case of a special
meeting, the purpose or purposes for which the meeting is called, and shall be
given to each Shareholder of record entitled to vote at such meeting and to each
other Shareholder entitled to notice of such meeting not less than ten (10) nor
more than sixty (60) days prior to the meeting.
<PAGE>
BYLAWS OF
CRIIMI MAE INC.
(b) Notice of any meeting of Shareholders (whether annual or special)
to act upon an amendment to the Articles of Incorporation, a reduction of stated
capital or a plan of merger, consolidation or sale of all or substantially all
of the Corporation's assets shall be accompanied by a copy of the proposed
amendment or plan of reduction, merger, consolidation or sale.
Section 4. LIST OF SHAREHOLDERS. At least ten (10) days (but not more
than sixty (60) days) before any meeting of Shareholders, the officer or
transfer agent in charge of the stock transfer books of the Corporation shall
prepare and make a complete alphabetical list of Shareholders entitled to vote
at such meeting, which list shows the address of each Shareholder and the number
of shares registered in the name of each Shareholder. The list so prepared
shall be maintained at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held, and shall be open to
inspection by any Shareholder, for any purpose germane to the meeting, during
ordinary business hours during a period of no less than ten (10) days prior to
the meeting. The list also shall be produced and kept open at the meeting
(during the entire duration thereof) and, except as otherwise provided by law,
may be inspected by any Shareholder or proxy of a Shareholder who is present in
person at such meeting.
Section 5. PRESIDING OFFICERS; ORDER OF BUSINESS.
(a) Meetings of Shareholders shall be presided over by the Chairman of
the Board, if any, or, if the Chairman is not present (or, if there is none), by
the President, or, if the President is not present, by a vice president, or, if
a vice president is not present, by such person who is chosen by the Board, or,
if none, by a chairperson to be chosen at the meeting by Shareholders present in
person or by proxy who own a majority of the shares of capital stock of the
Corporation entitled to vote and represented at such meeting. The secretary of
meetings shall be the Secretary of the Corporation, or, if the Secretary is not
present, an assistant secretary, or, if an assistant secretary is not present,
such person as may be chosen by the Board, or, if none, by such person who is
chosen by the chairperson at the meeting.
(b) The following order of business, unless otherwise ordered at the
meeting by the chairperson thereof, shall be observed as far as practicable and
consistent with the purposes of the meeting:
(1) Call of the meeting to order.
(2) Presentation of proof of mailing of notice of the meeting
and, if the meeting is a special meeting, the call thereof.
2
<PAGE>
BYLAWS OF
CRIIMI MAE INC.
(3) Presentation of proxies.
(4) Determination and announcement that a quorum is present.
(5) Reading and approval (or waiver thereof) of the minutes of
the previous meeting.
(6) Reports, if any, of officers.
(7) Election of directors to succeed those whose terms expired,
if the meeting is an annual meeting or a meeting called for such purpose.
(8) Consideration of the specific purpose or purposes for which
the meeting has been called (other than the election of directors).
(9) Transaction of such other business as may properly come
before the meeting.
(10) Adjournment.
Section 6. QUORUM; ADJOURNMENTS.
(a) The holders of a majority of the shares of capital stock of
the Corporation issued and outstanding and entitled to vote at any given meeting
present in person or by proxy shall be necessary to and shall constitute a
quorum for the transaction of business at all meetings of the Shareholders,
except as otherwise provided by law or by the Articles of Incorporation.
(b) If a quorum is not present in person or by proxy at any
meeting of Shareholders, the chairperson of the meeting or the holders of a
majority of all of the shares of stock entitled to vote at the meeting, present
in person or by proxy, shall have the power to adjourn the meeting from time to
time, without notice of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken, until a quorum is
present in person or by proxy.
(c) Even if a quorum is present in person or by proxy at any
meeting of Shareholders, the holders of a majority of all the shares of stock
entitled to vote thereat present in person or by proxy shall have the power to
adjourn the meeting from time to time for good cause, without notice of the
adjourned meeting if the time and place thereof are announced at the meeting at
which the adjournment is taken, until a date which is not more than thirty (30)
days after the date
3
<PAGE>
BYLAWS OF
CRIIMI MAE INC.
of the original meeting.
(d) Any business which might have been transacted at a meeting as
originally called may be transacted at any meeting held after adjournment as
provided in this Section 6 at which reconvened meeting a quorum is present in
person or by proxy. Anything in paragraph (b) of this section 6 to the contrary
notwithstanding, if an adjournment is for more than thirty (30) days, or if
after an adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given to each Shareholder of record
entitled to vote thereat.
Section 7. VOTING.
(a) At any meeting of Shareholders every Shareholder having the
right to vote shall be entitled to vote in person or by proxy authorized by an
instrument in writing filed in accordance with the procedure established for the
meeting. Except as otherwise provided by law or by the Articles of
Incorporation, each Shareholder of record shall be entitled to one vote (on each
matter submitted to a vote) for each share of capital stock registered in his,
her or its name on the books of the Corporation.
(b) All elections of directors and, except as otherwise provided
by law or by the Articles of Incorporation, all other matters, shall be
determined by a vote of a majority of the shares present in person or
represented by proxy and voting on such other matters.
(c) All voting, including on the election of directors but
excepting where otherwise required by law, may be by a voice vote; provided,
however, that upon demand therefor by a Shareholder entitled to vote or his
proxy, a share vote shall be taken. Every share vote shall be taken by ballots,
each of which shall state the name of the Shareholder or proxy voting and such
other information as may be required under the procedure established for the
meeting. Every vote taken by ballots shall be counted by an inspector or
inspectors appointed by the chairman of the meeting.
Section 8. NOTICE OF SHAREHOLDER BUSINESS. At any annual or special
meeting of Shareholders, only such business shall be conducted as shall have
been properly brought before the meeting. To be properly brought before a
meeting, business must be (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board, (b) properly
brought before the meeting by or at the direction of the Board, or (c) properly
brought before an annual meeting by a Shareholder, and if and only if the notice
of a special meeting provides for business to be brought before the special
meeting by Shareholders, properly brought before the special meeting by a
Shareholder. For business to be properly brought before a meeting by a
Shareholder, the Shareholder must have given timely notice thereof in writing to
the Secretary of the Corporation. To be timely, a Shareholder's notice must be
delivered to or mailed and received at the principal
4
<PAGE>
BYLAWS OF
CRIIMI MAE INC.
executive offices of the Corporation not less than ninety (90) days prior to the
meeting; provided, however, that if less than one hundred (100) days' notice or
prior public disclosure of the date of the meeting is given or made to
Shareholders, notice by the Shareholder to be timely must be so received not
later than the close of business on the tenth day following the day on which
such notice of the date of the meeting was mailed or such public disclosure was
made. Furthermore, Shareholders are not permitted to nominate individuals to
serve as directors, unless notice of such nomination is given to the Corporation
in accordance with Section 15 of Article III of these Bylaws. A Shareholder's
notice to the Secretary shall set forth as to each matter the Shareholder
proposes to bring before the meeting: (a) a brief description of the business
desired to be brought before the meeting and the reasons for conducting such
business at the meeting; (b) the name and address, as they appear on the
Corporation's books, of the Shareholder proposing such business; (c) the class
and number of shares of the Corporation which are beneficially owned by the
Shareholder; and (d) any material interest of the Shareholder in such business.
Notwithstanding anything in the Bylaws to the contrary, no business shall be
conducted at any meeting of Shareholders except in accordance with the
procedures set forth in this Section 8 of Article II. The chairman of a meeting
shall, if the facts warrant, determine and declare to the meeting that business
was not properly brought before the meeting and in accordance with the
provisions of this section, and if he should so determine, he shall so declare
that the meeting and any such business not properly brought before the meeting
shall not be transacted. Notwithstanding anything in the Bylaws to the contrary,
the Corporation shall be under no obligation to submit for action any
Shareholder proposal at any meeting of Shareholders, which proposal the
Corporation would otherwise be permitted to omit in accordance with Rule 14a-8
under the Securities Exchange Act of 1934, as amended.
Section 9. ACTION BY CONSENT. Any action required or permitted to be
taken at any meeting of the Shareholders may be effected by the unanimous
written consent of all Shareholders.
ARTICLE III
DIRECTORS
Section 1. GENERAL POWERS; NUMBER; TENURE. The business and affairs of
the Corporation shall be managed under the direction of the Board, which may
exercise all powers of the Corporation and perform or authorize the performance
of all lawful acts and things which are not by law, the Articles of
Incorporation or these Bylaws directed or required to be exercised or performed
by the Shareholders. The number of directors of the Corporation shall be fixed
from time to time exclusively by the Board pursuant to a resolution adopted by a
majority of the total number of authorized directors (whether or not there exist
any vacancies in previously authorized directorships at the time any such
resolution is presented to the Board for adoption), but shall not at any time be
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less than three (3). The directors shall be divided into three (3) classes, as
nearly equal in number as reasonably possible, with the term of office of one
class to expire at the 1994 annual meeting of Shareholders, the term of office
of another class to expire at the 1995 annual meeting of Shareholders and the
term of office of the remaining class to expire at the 1996 annual meeting of
Shareholders. At each annual meeting of Shareholders following such initial
classification and election, directors elected to succeed those directors whose
terms expire shall be elected for a term of office to expire at the third
succeeding annual meeting of Shareholders after their election. Directors need
not be Shareholders of the Corporation nor residents of the State of
Maryland.
Section 2. UNAFFILIATED DIRECTORS. At least a majority of the entire
Board and a majority of every committee of the Board shall be Unaffiliated
Directors. Unaffiliated Directors are those directors of the Corporation who
perform no other services for the Corporation, except as directors. An
AFFILIATE shall mean any person directly or indirectly controlling, controlled
by or under common control with another person.
Section 3. VACANCIES. Subject to the rights of the holders of any
series of Preferred Shares then outstanding, newly created directorships
resulting from any increase in the authorized number of directors or any
vacancies in the Board resulting from death, resignation, retirement,
disqualification, removal from office or other cause may be filled only by a
majority vote of the directors then in office though less than a quorum, or by
the sole remaining director, and directors so chosen shall hold office for a
term expiring at the annual meeting of Shareholders at which the term of office
of the class to which they have been elected expires or until their successors
have been duly elected and have qualified; provided, however that any vacancy
------------------
that must be filled by an Unaffiliated Director shall be filled by selection of
a successor by a majority vote of the remaining Unaffiliated Directors, although
less than a quorum. No decrease in the number of directors constituting the
Board shall shorten the term of any incumbent director. When one or more
directors shall resign from the Board, effective at a future date, a majority of
the directors then in office or a majority of the Unaffiliated Directors, as the
case may be, including those who have so resigned, shall have power to fill such
vacancy or vacancies, the vote thereon to take effect when such resignation or
resignations shall become effective, and each director so chosen shall hold
office for a term expiring at the annual meeting of Shareholders at which the
term of office of the class to which such director has been elected expires or
until his successor has been elected and has qualified.
Section 4. REMOVAL; RESIGNATION.
(a) Subject to the rights of the holders of any series of Preferred
Shares then outstanding, and except as otherwise provided by law, the Articles
of Incorporation or these Bylaws, at any meeting of the Shareholders called
expressly for such purpose, any director may be removed, but only for cause, by
a vote of Shareholders holding a majority of the shares issued and
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outstanding and entitled to vote at an election of directors.
(b) Any director may resign at any time by giving written notice to
the Board, the chairman of the Board, the president, or the secretary of the
Corporation. Unless otherwise specified in such written notice, a resignation
shall take effect upon delivery thereof to the Board or the designated officer.
A resignation need not be accepted in order for it to be effective.
Section 5. PLACE OF MEETINGS. The Board of Directors may hold both
regular and special meetings either within or outside the State of Maryland, at
such place as the Board from time to time deems advisable.
Section 6. ANNUAL MEETING. The annual meeting of each newly elected
Board shall be held as soon as is practicable following the annual meeting of
the Shareholders, and no notice to the newly elected directors of such meeting
shall be necessary for such meeting to be lawful, provided a quorum is present
thereat.
Section 7. REGULAR MEETINGS. Additional regular meetings of the Board
may be held without notice, at such time and place as from time to time may be
determined by the Board.
Section 8. SPECIAL MEETINGS. Special meetings of the Board may be
called by the Chairman of the Board or by the President or by any three (3)
directors upon twenty-four (24) hours' notice to each director if such notice is
delivered personally sent by national overnight courier service, sent by
facsimile or sent by telegram, or upon five (5) days' notice if sent by mail,
unless such notice is waived. Unless otherwise indicated in the notice thereof,
any and all business may be transacted at a special meeting.
Section 9. QUORUM; ADJOURNMENTS. A majority of the total number of
directors then in office shall constitute a quorum for the transaction of
business at each and every meeting of the Board, and the act of a majority of
the directors present at any meeting at which a quorum is present shall be the
act of the Board of Directors, except as may otherwise specifically be provided
by law, the Articles of Incorporation or these Bylaws. If a quorum is not
present at any meeting of the Board, the directors present may adjourn the
meeting, from time to time, without notice other than announcement at the
meeting, until a quorum is present.
Section 10. APPROVAL BY UNAFFILIATED DIRECTORS. For all purposes, a
transaction which is subject to approval by a majority of the Unaffiliated
Directors shall be approved if such transaction is approved by a majority of the
directors present and entitled to vote at a meeting at which a quorum is
present, provided that the Unaffiliated Directors voting to approve the
transaction constitute an absolute majority of all Unaffiliated Directors
serving at such time.
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Section 11. RESERVED.
Section 12. COMPENSATION. Directors shall be entitled to such
compensation for their services as directors as from time to time may be fixed
by the Board, including, without limitation, for their services as members of
committees of the Board and in any event shall be entitled to reimbursement of
all reasonable expenses incurred by them in attending directors' meetings. Any
director may waive compensation for any meeting. No director who receives
compensation as a director shall be barred from serving the Corporation in any
other capacity or from receiving compensation and reimbursement of reasonable
expenses for any or all such other matters.
Section 13. ACTION BY CONSENT. Any action required or permitted to be
taken at any meeting of the Board may be taken without a meeting and without
prior notice if a written consent in lieu of such meeting which sets forth the
action so taken is signed either before or after such action by all directors.
All written consents shall be filed with the minutes of the Board's proceedings.
Section 14. MEETINGS BY TELEPHONE OR SIMILAR COMMUNICATIONS. The
directors may participate in meetings by means of conference telephone or
similar communications equipment, whereby all directors participating in the
meeting can hear each other at the same time, and participation in any such
meeting shall constitute presence in person by such director at such meeting. A
written record shall be made of all actions taken at any meeting conducted by
means of a conference telephone or similar communications equipment.
Section 15. NOMINATION OF DIRECTOR CANDIDATES. Subject to the rights
of holders of any class or series of Preferred Shares then outstanding,
nominations for the election of directors may be made by: (a) the Board or a
proxy committee appointed by the Board (provided, that Unaffiliated Directors
shall nominate replacements for vacancies among Unaffiliated Directors) or (b)
any Shareholder entitled to vote in the election of directors generally.
However, any Shareholder entitled to vote in the election of directors generally
may nominate one or more persons for election as directors at a meeting only if
timely notice of such . Shareholder's intent to make such nomination or
nominations has been given in writing to the secretary of the Corporation. To
be timely, a Shareholder's notice must be delivered to or mailed and received at
the principal executive offices of the Corporation not fewer than ninety (90)
days prior to the meeting; provided, however, that in the event that less than
one hundred (100) days' notice or prior public disclosure of the date of the
meeting is given or made to Shareholders, notice by the Shareholder to be timely
must be so received not later than the close of business on the tenth (10th) day
following the day on which such notice of the date of the meeting was mailed or
such public disclosure was made. Each such notice shall set forth: (a) the name
and address of the Shareholder who intends to make the nomination and of the
person or persons to be nominated; (b) a representation that the Shareholder is
a holder of record of
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stock of the Corporation entitled to vote for the election of directors on the
date of such notice and intends to appear in person or by proxy at the meeting
to nominate the person or persons specified in the notice; (c) a description of
all arrangements or understandings between the Shareholder and each nominee and
any other person or persons (naming such person or persons) pursuant to which
the nomination or nominations are to be made by the Shareholder; (d) such other
information regarding each nominee proposed by such Shareholder as would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission, had the nominee been nominated, or
intended to be nominated, by the Board; and (e) the consent of each nominee to
serve as a director of the Corporation if so elected.
In the event that a person is validly designated as a nominee in
accordance with this Section 15 and shall thereafter become unable or unwilling
to stand for election to the Board, the Board or the Shareholder who proposed
such nominee, as the case may be, may designate a substitute nominee upon
delivery, not fewer than ten (10) days prior to the date of the meeting for the
election of such nominee of a written notice to the Secretary setting forth such
information regarding such substitute nominee as would have been required to be
delivered to the Secretary pursuant to this Section 15 had such substitute
nominee been initially proposed as a nominee. Such notice shall include a
signed consent to serve as a director of the Corporation, if elected, of each
such substitute nominee.
If the chairman of the meeting for the election of directors determines
that a nomination of any candidate for election as a director at such meeting
was not made in accordance with the applicable provisions of this Section 15,
such nomination shall be void; provided, however, that nothing in this Section
15 shall be deemed to limit any voting rights upon the occurrence of dividend
arrearages provided to holders of Preferred Shares pursuant to the Preferred
Shares designation for any series of Preferred Shares.
ARTICLE IV
COMMITTEES
Section 1. FORMATION OF COMMITTEES. The Board may, by resolution passed by a
majority of the entire Board, designate two or more committees, including an
Audit Committee, with each committee consisting of one or more directors of the
Corporation. At least a majority of the directors of each committee shall be
Unaffiliated Directors; provided, however, that any Pricing Committee formed
from time to time may be comprised of any Directors designated by the Board. The
Board may designate one or more directors as alternate members of any committee
who may replace any absent or disqualified member at any meeting of the
committee. Except as prohibited by statute, any such committee, to the extent
provided in the resolution, shall have and may exercise the powers of the Board
conferred upon such committee by the Board in the management
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of the business and affairs of the Corporation, and may authorize the seal of
the Corporation to be affixed to all papers which may require it. Such committee
or committees shall have the name or names as may be determined from time to
time by resolution adopted by the Board.
Section 2. OTHER PROVISIONS REGARDING COMMITTEES.
(a) Subject to the limitations set forth in Section 1 of this Article
IV, the Board shall have the power at any time to fill vacancies in, change the
membership of, or discharge any committee.
(b) Members of any committee shall be entitled to such compensation
for their services as such as from time to time may be fixed by the Board and in
any event shall be entitled to reimbursement of all reasonable expenses incurred
in attending committee meetings. Any member of a committee may waive
compensation for any meeting. No committee member who receives compensation as
a member of any one or more committees shall be barred from serving the
Corporation in any other capacity or from receiving compensation and
reimbursement of reasonable expenses for any or all such other services.
(c) Unless prohibited by law, the provisions of Section 13 ("Action by
Consent") and Section 14 ("Meetings by Telephone or Similar Communications") of
Article III shall apply to all committees from time to time created by the
Board.
(d) Each committee may determine the procedural rules for meeting and
conducting its business and shall act in accordance therewith, except as
otherwise provided herein or required by law. Adequate provision shall be made
for notice to members of all meetings; one-third of the authorized members shall
constitute a quorum unless the committee shall consist of two (2) members, in
which event one (1) member shall constitute a quorum; and all matters shall be
determined by a majority vote of the members present.
ARTICLE V
OFFICERS
Section 1. POSITIONS. The Corporation's officers shall be chosen by the
Board and shall consist of a president, one or more vice presidents (if and to
the extent required by law or if not required, if the Board from time to time
appoints a vice president or vice presidents; and each of which vice presidents
may at the discretion of the Board be designated as executive vice president,
senior vice president, group vice president and/or assistant vice president), a
secretary and a treasurer. The Board also may choose a chairman of the Board,
one or more assistant secretaries and/or assistant treasurers and such other
officers and/or agents as the Board from time to time deems necessary or
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appropriate. The Board may delegate to the President or the Chairman of the
Board of the Corporation the authority to appoint any officer or agent of the
Corporation and to fill a vacancy other than the Chairman of the Board,
President, Secretary or Treasurer. The election or appointment of any officer of
the Corporation in itself shall not create contract rights for any such officer.
All officers of the Corporation shall exercise such powers and perform such
duties as from time to time shall be determined by the Board. Any two or more
offices may be held by the same person except the offices of president and vice
president, if any.
Section 2. TERM OF OFFICE; REMOVAL. Each officer of the Corporation shall
hold office at the pleasure of the Board and any officer may be removed, with or
without cause, at any time by the affirmative vote of a majority of the
directors then in office, provided that any officer appointed by the President
or the Chairman of the Board pursuant to authority delegated thereto by the
Board may be removed, with or without cause, at any time whenever the President
or the Chairman of the Board in his or her absolute discretion shall consider
that the best interests of the Corporation shall be served by such removal.
Removal of an officer by the Board or by the President or the Chairman of the
Board, as the case may be, shall not prejudice the contract rights, if any, of
the person so removed. Vacancies (however caused) in any office may be filled
for the unexpired portion of the term by the Board (or by the President or the
Chairman of the Board in the case of a vacancy occurring in an office to which
the President or the Chairman of the Board has been delegated the authority to
make appointments).
Section 3. COMPENSATION. The salaries of all officers of the Corporation
shall be fixed from time to time by the Board, and no officer shall be prevented
from receiving a salary by reason of the fact that he or she also receives from
the Corporation compensation in any other capacity.
Section 4. ACTION WITH RESPECT TO SECURITIES OF OTHER CORPORATIONS.
Unless otherwise directed by the Board, the President or the Chairman of the
Board or any officer of the Corporation authorized by the President or the
Chairman of the Board shall have power to vote and otherwise act on behalf of
the Corporation, in person or by proxy, at any meeting of shareholders of or
with respect to any action of shareholders of any other corporation in which
this Corporation may hold securities and otherwise to exercise any and all
rights and powers which this Corporation may possess by reason of its ownership
of securities in such other corporation.
Section 5. CHAIRMAN OF THE BOARD. The Chairman of the Board shall be an
officer of the Corporation and, subject to the direction of the Board, shall
perform such executive, supervisory and management functions and duties as from
time to time may be assigned to him or her by the Board. The Chairman of the
Board, if present, shall preside at all meetings of the Shareholders and all
meetings of the Board.
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Section 6. PRESIDENT. The President shall be the chief operating officer
of the Corporation and, subject to the direction of the Board, shall have
general charge of the business, affairs and property of the Corporation and
general supervision over its other officers and agents. In general, the
president shall perform all duties incident to the office of president of a
stock corporation and shall see that all orders and resolutions of the Board are
carried into effect.
Section 7. VICE PRESIDENTS, DEPARTMENTAL DIRECTORS. In the absence or
disability of the President, the Vice President, if any (or in the event there
is more than one, the Vice Presidents in the order designated, or in the absence
of any designation, in the order of their election), shall perform the duties
and exercise the powers of the President. The Vice President(s) also generally
shall assist the President and shall perform such other duties and have such
other powers as from time to time may be prescribed by the Board or the
President or the Chairman of the Board. Departmental Directors generally shall
assist the President and the Vice Presidents, if any, and shall perform such
other duties and have such other powers as from time to time may be prescribed
by the Board or the President or the Chairman of the Board.
Section 8. SECRETARY. The Secretary shall attend all meetings of the
Board and of the Shareholders and shall record all votes and the proceedings of
all meetings in a book to be kept for such purposes. The Secretary also shall
perform like duties for the committees, if required by any such committee. The
Secretary shall give (or cause to be given) notice of all meetings of the
Shareholders and all special meetings of the Board and shall perform such other
duties as from time to time may be prescribed by the Board, the Chairman of the
Board or the President. The Secretary shall have custody of the seal of the
Corporation, shall have authority, (as shall any assistant secretary) to affix
the same to any instrument requiring it, and to attest the seal by his or her
signature. The Board may give general authority to officers other than the
Secretary or any assistant secretary to affix the seal of the Corporation and to
attest the affixing thereof by his or her signature.
Section 9. ASSISTANT SECRETARY. The Assistant Secretary, if any (or in
the event there is more than one, the Assistant Secretaries in the order
designated, or in the absence of any designation, in the order of their
election), in the absence or disability of the Secretary, shall perform the
duties and exercise the powers of the Secretary. The Assistant Secretary(ies)
shall perform such other duties and have such other powers as from time to
time may be prescribed by the Board.
Section 10. TREASURER. The Treasurer shall have the custody of the
corporate funds, securities, other similar valuable effects, and evidences of
indebtedness, shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as from time to time may be designated by the Board. The
Treasurer shall disburse the funds of the Corporation in such manner as may be
ordered by the Board from time to time and shall
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render to the Chairman of the Board, the President and the Board, at regular
meetings of the Board or whenever any of them may so require, an account of all
transactions and of the financial condition of the Corporation.
Section 10. ASSISTANT TREASURER. The Assistant Treasurer, if any (or in
the event there is more than one, the Assistant Treasurers in the order
designated, or in the absence of any designation, in the order of their
election), in the absence or disability of the Treasurer, shall perform the
duties and exercise the powers of the Treasurer. The Assistant Treasurer(s)
shall perform such other duties and have such other powers as from time to time
may be prescribed by the Board.
ARTICLE VI
NOTICES
Section 1. FORM; DELIVERY. Any notice required or permitted to be given
to any director, officer, or Shareholder or committee member shall be given in
writing, either personally, by national overnight courier service, by facsimile
or by first-class mail with postage prepaid, in any case addressed to the
recipient at his or her address as it appears in the records of the Corporation.
Personally delivered notices, notices sent by facsimile, and notices sent by
national overnight courier service shall be deemed to be given at the time they
are delivered at the address of the named recipient as it appears in the records
of the Corporation, and mailed notices shall be deemed to be given at the time
they are deposited in the United States mail. Notice to a director also may be
given by telegram sent to his or her address as it appears on the records of the
Corporation and shall be deemed given at the time delivered at such address.
Section 2. WAIVER; EFFECT OF ATTENDANCE. Whenever any notice is required
to be given by law, the Articles of Incorporation or these Bylaws, a written
waiver thereof, signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be the equivalent of the giving
of such notice. In addition, any Shareholder who attends a meeting of
Shareholders in person, or who is represented at such meeting by a proxy, or any
director or committee member who attends a meeting of the Board or a committee
thereof shall be deemed to have had timely and proper notice of the meeting,
unless such Shareholder (or his or her proxy) or director or committee member
attends for the express purpose of objecting to the transaction of any business
on the grounds that the meeting is not lawfully called or convened.
ARTICLE VII
INDEMNIFICATION AND EXCULPATION
Section 1. INDEMNIFICATION AND EXCULPATION.
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(a) Reference is hereby made to Section 2-418 of the General
Corporation Law of the State of Maryland (or any successor provision thereto)
(the SECTION). The Corporation shall indemnify each director and officer of the
Corporation, and any Affiliate of C.R.I., Inc. or the Corporation acting as the
holder (HOLDER) of a special equity interest in the owner of a property
underlying a Participating Mortgage Investment in which the Corporation has
invested, to the full extent permitted by the Section. The Corporation may, in
the sole discretion of the Board, indemnify any other person who may be
indemnified pursuant to the Section to the extent the Board deems advisable, as
permitted by the Section. In each and every situation where the Corporation may
do so under the Section, the Corporation hereby obligates itself to so indemnify
the directors and officers of the Corporation, and any Holder, and in each case,
if any, where the Corporation must make certain investigations on a case-by-case
basis prior to indemnification, the Corporation hereby obligates itself to
pursue such investigations diligently. It is the specific intention of these
Bylaws to obligate the Corporation to indemnify each director and officer of the
Corporation, and any Holder to the fullest extent permitted by the Maryland
General Corporation Law, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment permits
the Corporation to provide broader indemnification rights than said law
permitted the Corporation to provide prior to such amendment). The Corporation
shall pay expenses incurred by a director or officer in defending any action,
suit or proceeding, whether civil, criminal, administrative, arbitrative or
investigative (PROCEEDING), in advance of its final disposition; provided,
however, that the payment of such expenses incurred by a director or officer in
his capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of such Proceeding, shall be made only upon delivery to
the Corporation of (i) a written affirmation by such director or officer of his
or her good faith belief that the standard of conduct necessary for
indemnification under the Section has been met and (ii) an undertaking, by or on
behalf of such director or officer, to repay all amounts so advanced if it
should be determined ultimately that such director or officer is not entitled to
be indemnified under this section or otherwise.
(b) The Board is authorized to enter into a contract with any
director, officer, employee or agent of the Corporation, or any person serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
including employee benefit plans, providing for indemnification rights
equivalent to or, if the Board so determines, greater than, those provided for
in this Article VII.
Section 2. INSURANCE. The Corporation shall maintain insurance to the
extent reasonably available, at its expense, to protect itself and any director,
officer, employee or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss, whether or not the Corporation would have the power to
indemnify such person against such expense, liability or loss under the Maryland
General Corporation Law.
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Section 3. EFFECT OF AMENDMENT. Any amendment, repeal or modification of
any provision of this Article VII by the Shareholders or the directors of the
Corporation shall not adversely affect any right or protection of a director or
officer of the Corporation existing at the time of such amendment, repeal or
modification.
ARTICLE VIII
STOCK CERTIFICATES
Section 1. FORM; SIGNATURES. Each Shareholder who has fully paid for any
stock of the Corporation shall be entitled to receive a certificate representing
such shares, which shall be nonassessable, and such certificate shall be signed
by the Chairman of the Board or the President or a vice president, and by the
Treasurer or an assistant treasurer or the Secretary or an assistant secretary
of the Corporation. Signatures on the certificate may be facsimile, in the
manner prescribed by law. Each certificate shall exhibit on its face the number
and class (and series, if any) of the shares it represents. Each certificate
also shall state upon its face the name of the person to whom it is issued and
that the Corporation is organized under the laws of the State of Maryland. Each
certificate may (but need not) be sealed with the seal of the Corporation or
facsimile thereof. In the event any officer, transfer agent or registrar who
has signed or whose facsimile signature has been placed upon a certificate
ceases to be such officer, transfer agent or registrar before the certificate is
issued, the certificate nevertheless may be issued by the Corporation with the
same effect as if such person were such officer at the date of issue of the
certificate. All stock certificates representing shares of capital stock which
are subject to restrictions on transfer or to other restrictions may have
imprinted thereon a notation of such restriction.
Section 2. REGISTRATION OF TRANSFER. Upon surrender to the Corporation or
to any transfer agent of the Corporation of a certificate for shares duly
endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, the Corporation, or its transfer agent, shall issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon the Corporation's books.
Section 3. REGISTERED SHAREHOLDERS. Except as otherwise provided by law,
the Corporation shall be entitled to recognize the exclusive right of a person
who is registered on its books as the owner of shares of its capital stock to
receive dividends or other distributions (to the extent otherwise distributable
or distributed), to vote (in the case of voting stock) as such owner, and to
hold liable for calls and assessments a person who is registered on its books as
the owner of shares of its capital stock. The Corporation shall not be bound to
recognize any equitable or legal claim to or interest in such shares on the part
of any other person. The Corporation (or its transfer agent) shall not be
required to send notices or dividends to a name or address other than the name
or address of the Shareholders appearing on the stock ledger maintained by the
Corporation (or by the transfer
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agent or registrar, if any), unless any such Shareholder shall have notified the
Corporation (or the transfer agent or registrar, if any), in writing, of another
name or address at least ten (10) days prior to the mailing of such notice or
dividend.
Section 4. RECORD DATE. In order that the Corporation may determine the
Shareholders of record who are entitled (i) to notice of or to vote at any
meeting of Shareholders or any adjournment thereof, (ii) to receive payment of
any dividend or other distribution or allotment of any rights, or (iii) to
exercise any rights in respect of any change, conversion or exchange of stock,
or for the purpose of any other lawful action, the Board, in advance, may fix a
date as the record date for any such determination. Such date shall not be more
than sixty (60) days nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to the date of any other action. A
determination of Shareholders of record entitled to notice of or to vote at a
meeting of the Shareholders shall apply to any adjournment of the meeting taken
pursuant to Section 6 of Article II; provided, however, that the Board, in its
-------------------
discretion, may fix a new record date for the adjourned meeting.
Section 5. LOST, STOLEN OR DESTROYED CERTIFICATE. The Board may direct a
new certificate to be issued in place of any certificate theretofore issued by
the Corporation which is claimed to have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming the certificate
to be lost, stolen or destroyed. When authorizing such issue of a new
certificate, the Board, in its discretion, may require as a condition precedent
to issuance that the owner of such lost, stolen or destroyed certificate, or his
or her legal representative, advertise the same in such manner as the Board
shall require and/or to give the Corporation a bond in such sum, or other
security in such form, as the Board may direct, as indemnity against any claim
that may be made against the Corporation with respect to the certificate claimed
to have been lost, stolen or destroyed.
ARTICLE IX
GENERAL PROVISIONS
Section 1. DIVIDENDS. Subject to the General Corporation Law of the State
of Maryland and to any provisions of the Articles of Incorporation relating to
dividends, dividends upon the outstanding capital stock of the Corporation may
be declared by the Board at any annual, regular or special meeting and may be
paid in cash, in property or in shares of the Corporation's capital stock. Any
distribution to Shareholders of income or capital assets of the Corporation will
be accompanied by a written statement disclosing the source of the funds
distributed. If, at the time of distribution, this information is not
available, a written explanation of the relevant circumstances will accompany
the distribution and the written statement disclosing the source of the funds
distributed will be sent to the Shareholders not later than sixty (60) days
after the close of the fiscal year in which the distribution was made.
16
<PAGE>
BYLAWS OF
CRIIMI MAE INC.
Section 2. RESERVES. The Board, in its sole discretion, may fix a sum
which may be set aside or reserved over and above the paid-in capital of the
Corporation for working capital or as a reserve for any proper purpose, and from
time to time may increase, diminish or vary such fund or funds.
Section 3. FISCAL YEAR. The fiscal year of the Corporation shall be as
determined from time to time by the Board.
Section 4. SEAL. The corporate seal shall have inscribed thereon the name
of the Corporation, the year of its incorporation and the words "Corporate Seal"
and "Maryland".
Section 5. AMENDMENT OF THE BYLAWS. The Board is expressly empowered to
adopt, amend or repeal Bylaws of the Corporation. Any adoption, amendment or
repeal of Bylaws by the Board shall require the approval of a majority of the
total number of authorized directors (whether or not there exist any vacancies
in previously authorized directorships at the time any resolution providing for
adoption, amendment or repeal is presented to the Board). The Shareholders
shall also have power to adopt, amend or repeal the Bylaws. In addition to any
vote of the holders of any class or series of stock of the Corporation required
by law or by these Bylaws, the affirmative vote of the holders of at least
sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the
then-outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class, shall
be required to adopt, amend or repeal any provisions of the Bylaws.
17
<PAGE>
BYLAWS OF
CRIIMI MAE INC.
Section 6. REPORTS.
(a) The Chairman of the Board or the President shall prepare or cause
to be prepared annually a full and correct annual report (ANNUAL REPORT)
concerning the operations of the Corporation and containing financial statements
for the preceding fiscal year prepared in accordance with generally accepted
accounting principles.
(b) The Annual Report shall include full disclosure of all material
terms, factors and circumstances surrounding any and all transactions involving
the Corporation and any Affiliate occurring during the period. The Unaffiliated
Directors shall examine and comment in the Annual Report on the fairness of such
transactions.
(c) The Annual Report shall be mailed or delivered to each Shareholder
as of a record date after the end of such fiscal year and each holder of other
publicly held securities of the Corporation within one hundred twenty (120) days
after the end of the fiscal year.
(d) There shall be an annual meeting of the Corporation's Shareholders
upon reasonable notice following delivery of the Annual Report. The Annual
Report shall also be submitted at the annual meeting and shall be placed on file
thereafter at the principal office of the Corporation.
Section 7. INSPECTION OF BOOKS AND RECORDS. Any Shareholder may inspect
the Corporation's Bylaws, minutes of Shareholder proceedings and voting trust
agreements on file during the Corporation's usual business hours. In addition,
Shareholders may request a statement showing the number, consideration received
and value of shares issued during a specified period of not more than twelve
(12) months before the date of the request. Only Shareholders who together are
and for at least six (6) months have been Shareholders of record of at least
five (5) percent of the outstanding stock of any class of the Corporation may
inspect the Corporation's books and stock ledger or Shareholder list. However,
any Shareholder may inspect the Corporation's Shareholder list at least ten (10)
but not more than sixty (60) days prior to any Shareholder meeting for any
purpose germane to such meeting.
18
<PAGE>
Section 6. REPORTS.
(a) The Chairman of the Board or the President shall prepare or cause
to be prepared annually a full and correct annual report (ANNUAL REPORT)
concerning the operations of the Corporation and containing financial statements
for the preceding fiscal year prepared in accordance with generally accepted
accounting principles.
(b) The Annual Report shall include full disclosure of all material
terms, factors and circumstances surrounding any and all transactions involving
the Corporation and any Affiliate occurring during the period. The Unaffiliated
Directors shall examine and comment in the Annual Report on the fairness of such
transactions.
(c) The Annual Report shall be mailed or delivered to each Shareholder
as of a record date after the end of such fiscal year and each holder of other
publicly held securities of the Corporation within one hundred twenty (120) days
after the end of the fiscal year.
(d) There shall be an annual meeting of the Corporation's Shareholders
upon reasonable notice following delivery of the Annual Report. The Annual
Report shall also be submitted at the annual meeting and shall be placed on file
thereafter at the principal office of the Corporation.
Section 7. INSPECTION OF BOOKS AND RECORDS. Any Shareholder may inspect
the Corporation's Bylaws, minutes of Shareholder proceedings and voting trust
agreements on file during the Corporation's usual business hours. In addition,
Shareholders may request a statement showing the number, consideration received
and value of shares issued during a specified period of not more than twelve
(12) months before the date of the request. Only Shareholders who together are
and for at least six (6) months have been Shareholders of record of at least
five (5) percent of the outstanding stock of any class of the Corporation may
inspect the Corporation's books and stock ledger or Shareholder list. However,
any Shareholder may inspect the Corporation's Shareholder list at least ten (10)
but not more than sixty (60) days prior to any Shareholder meeting for any
purpose germane to such meeting.
7008836.2
19
<PAGE>
June 9, 1997
The Board of Directors
CRIIMI MAE Inc.
11200 Rockville Pike
Rockville, Maryland
RE: REGISTRATION STATEMENT ON FORM S-3
Gentlemen:
We have acted as counsel to CRIIMI MAE Inc., a Maryland corporation (the
"Company"), with respect to the Company's Registration Statement on Form S-3
(the "Registration Statement") filed with the Securities and Exchange
Commission, in connection with the registration under the Securities Act of
1933, as amended, of up to $272,645,000 in aggregate public offering price of
the Company's unsecured subordinated debt securities ("Debt Securities"),
preferred stock, par value $.01 per share ("Preferred Stock"), common stock, par
value $.01 per share ("Common Stock"), and warrants to purchase Preferred Stock
or Common Stock ("Warrants," and together with the Debt Securities, Preferred
Stock and Common Stock, the "Securities"), all of which Securities may be sold
by the Company from time to time as set forth in the prospectus which forms a
part of the Registration Statement (the "Prospectus"), and as to be set forth in
one or more supplements to the Prospectus (each, a "Prospectus Supplement").
This opinion letter is furnished to you at your request to enable you to fulfill
the requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. ss.
229.601(b)(5), in connection with the Registration Statement.
As counsel to the Company, we have examined the Company's Articles of
Incorporation, as amended (the "Articles"), and such Company records,
certificates and other documents and relevant statutes, regulations, published
rulings and such questions of law as we considered necessary or appropriate for
the purpose of this opinion.
In our examination, we have assumed the authenticity of original
documents, the accuracy of copies and the genuineness of signatures. We have
relied upon the representations and statements of officers and other
representatives of the Company with respect to the factual determinations
underlying the legal conclusions set forth herein. We have not attempted to
verify independently such representations and statements.
<PAGE>
The Board of Directors
June 9, 1997
Page 2
We assume that the issuance, sale, amount and terms of the Securities to
be offered from time to time will be duly authorized and determined by proper
action of the Board of Directors of the Company consistent with the procedures
and terms described in the Registration Statement (each, a "Board Action") and
in accordance with the Articles and applicable Maryland law. We further assume
that (i) any Debt Securities will be issued pursuant to an "Indenture," the form
of which will be filed as an exhibit to a Current Report on Form 8-K prior to
issuance thereof, (ii) any Warrants will be issued under one or more warrant
agreements (each, a "Warrant Agreement"), each to be between the Company and a
warrant agent identified therein (each, a "Warrant Agent"), and (iii) prior to
any issuance of shares of Preferred Stock, appropriate articles supplementary
shall be filed for recordation with the State Department of Assessments and
Taxation of the State of Maryland (each, "Articles Supplementary").
This opinion letter is based as to matters of law solely on (i) the
General Corporation Law of the State of Maryland and (ii) Maryland contract law
(but not including any statutes, ordinances, administrative decisions, rules or
regulations of any political subdivision of Maryland), in each case as currently
in effect, and we express no opinion herein as to any other laws, statutes,
ordinances, rules or regulations.
Based upon, subject to and limited by the foregoing and the other
qualifications herein, we are of the opinion that:
1. When the Registration Statement has become effective under the
Securities Act of 1933 (the "Act") and when the Debt Securities have been (a)
duly established by an Indenture or any supplemental indenture thereto, (b) duly
authorized and established by applicable Board Action and duly authenticated by
the Trustee thereunder (the "Trustee"), and (c) duly executed and delivered on
behalf of the Company against payment therefor in accordance with the terms of
such Board Action, any applicable underwriting agreement, an Indenture and any
applicable supplemental indenture, and as contemplated by the Registration
Statement and/or the applicable Prospectus Supplement, the Debt Securities will
constitute binding obligations of the Company, enforceable in accordance with
their terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting rights of creditors and other obligees
(including, without limitation, the effect of statutory and other law regarding
fraudulent conveyances, fraudulent transfers and preferential transfers) and as
may be limited by the exercise of judicial discretion and the application of
principles of equity, including, without limitation, requirements of good
faith, fair dealing, conscionability and materiality (regardless of whether the
Debt Securities are considered in a proceeding in equity or at law).
2. When the Registration Statement has become effective under the Act
and when a series of the Preferred Stock has been duly authorized and
established by applicable Board Action, in accordance with the terms of the
Articles and applicable law, and appropriate Articles Supplementary have been
duly filed, and, upon issuance and delivery of such series of Preferred
<PAGE>
The Board of Directors
June 9, 1997
Page 3
Stock against payment of valid consideration therefor in accordance with the
terms of such Board Action and any applicable underwriting or purchase
agreement, and as contemplated by the Registration Statement and/or the
applicable Prospectus Supplement, the shares represented by such series of
Preferred Stock will be validly issued, fully paid and nonassessable.
3. When the Registration Statement has become effective under the Act,
upon due authorization by Board Action of an issuance of Common Stock, and upon
issuance and delivery of such Common Stock against payment of valid
consideration therefor in accordance with the terms of such Board Action and any
applicable underwriting or purchase agreement, and as contemplated by the
Registration Statement and/or the applicable Prospectus Supplement, such shares
of Common Stock will be validly issued, fully paid and nonassessable.
4. When the Registration Statement has become effective under the Act
and when the Warrants have been (a) duly established pursuant to the related
Warrant Agreement, (b) duly authorized and established by applicable Board
Action and duly authenticated by the Warrant Agent, and (c) duly executed and
delivered on behalf of the Company against payment therefor in accordance with
the terms of such Board Action, any applicable underwriting or purchase
agreement and the applicable Warrant Agreement and as contemplated by the
Registration Statement and/or the applicable Prospectus Supplement, the Warrants
will constitute binding obligations of the Company, enforceable in accordance
with their terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting rights of creditors and other
obligees (including, without limitation, the effect of statutory and other law
regarding fraudulent conveyances, fraudulent transfers and preferential
transfers) and as may be limited by the exercise of judicial discretion and the
application of principles of equity, including, without limitation, requirements
of good faith, fair dealing, conscionability and materiality (regardless of
whether the Warrants are considered in a proceeding in equity or at law).
The opinion expressed in Paragraphs (1) and (4) above shall be
understood to mean only that if there is a default in performance of an
obligation, (i) if a failure to pay or other damage can be shown and (ii) if the
defaulting party can be brought into a court which will hear the case and apply
the governing law, then, subject to the availability of defenses and to the
exceptions set forth in Paragraphs (1) and (4), the court will provide a money
damage (or perhaps injunctive or specific performance) remedy.
To the extent that the obligations of the Company under an Indenture may
be dependent upon such matters, we assume for purposes of this opinion that the
Trustee is duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization; that the Trustee is duly qualified to
engage in the activities contemplated by the Indenture; that the Indenture has
been duly authorized, executed and delivered by the Trustee and constitutes the
legally valid and binding obligation of the Trustee enforceable against the
Trustee in accordance with its terms; that the Trustee is in compliance, with
respect to acting as a trustee under the
<PAGE>
The Board of Directors
June 9, 1997
Page 4
Indenture, with all applicable laws and regulations; and that the Trustee has
the requisite organizational and legal power and authority to perform its
obligations under the Indenture.
To the extent that the obligations of the Company under any Warrant
Agreement may be dependent upon such matters, we assume for purposes of this
opinion that the applicable Warrant Agent is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization; that
the Warrant Agent is duly qualified to engage in the activities contemplated by
the Warrant Agreement; that the Warrant Agreement has been duly authorized,
executed, and delivered by the Warrant Agent and constitutes the legally valid
and binding obligation of the Warrant Agent enforceable against the Warrant
Agent in accordance with its terms; that the Warrant Agent is in compliance,
with respect to acting as a Warrant Agent under the Warrant Agreement, with all
applicable laws and regulations; and that the Warrant Agent has the requisite
organizational and legal power and authority to perform its obligations under
the Warrant Agreement.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to all references to our firm in the Registration
Statement. In giving this consent, we do not admit that we come within the
category of persons whose consent is required under Section 7 of the Act or the
rules promulgated thereunder.
This opinion is rendered solely for your benefit in connection with the
transactions described above upon the understanding that we are not hereby
assuming any professional responsibility to any other person. Except as provided
in the preceding paragraph, this opinion may not be relied upon by any other
person and this opinion may not be used, disclosed, quoted, filed with a
governmental agency or otherwise referred to without our express prior written
consent. The opinions expressed in this letter are limited to the matters
expressly set forth herein, and no other opinions should be inferred beyond the
matters expressly stated herein.
Very truly yours,
SWIDLER & BERLIN, CHARTERED
/s/ Morris F. DeFeo, Jr.
<PAGE>
EXHIBIT 12.1
CRIIMI MAE INC.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31, FOR THE YEARS ENDED DECEMBER 31,
--------------------- ------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS
Net income.............. 17,274,154 11,543,125 31,713,406 18,534,089 26,010,119 15,757,505 16,041,231
Plus:
Extraordinary item.... 0 0 0 0 0 0 0
Interest expense...... 17,787,736 15,283,202 61,215,870 46,208,089 33,760,835 28,688,536 21,142,010
Amortization of debt
costs................ 534,187 392,112 1,862,897 3,644,583 5,483,786 4,209,980 3,249,891
Loss from investment
in limited partner-
ship................. 0 0 0 0 0 0 731,951
Adjustment to hedges
for valuations/
sales................ 0 (148,189) 178,750 2,393,106 0 0 0
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total earnings.......... 35,596,077 27,070,025 94,970,923 70,779,867 65,254,740 48,656,021 41,165,083
---------- ---------- ---------- ---------- ---------- ---------- ----------
FIXED CHARGES
Interest expense........ 17,787,736 15,283,202 61,215,870 46,208,089 33,760,835 28,688,536 21,142,010
Amortization of debt
costs.................. 534,187 392,112 1,862,897 3,644,583 5,483,786 4,209,980 3,249,891
Adjustment to hedges for
valuations/ sales...... 0 (148,189) 178,750 2,393,106 0 0 0
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total fixed charges..... 18,321,923 15,527,125 63,257,517 52,245,778 39,244,621 32,898,516 24,391,901
---------- ---------- ---------- ---------- ---------- ---------- ----------
Ratio of earnings to
fixed charges.......... 1.94 1.74 1.50 1.35 1.66 1.48 1.69
========== ========== ========== ========== ========== ========== ==========
FIXED CHARGES AND
PREFERRED STOCK
DIVIDENDS
Total fixed charges..... 18,321,923 15,527,125 63,257,517 52,245,778 39,244,621 32,898,516 24,391,901
Preferred stock divi-
dends.................. 1,825,387 0 3,526,451 0 0 0 0
Total fixed charges and
preferred stock divi-
dends.................. 20,147,310 15,527,125 66,783,968 52,245,778 39,244,621 32,898,516 24,391,901
Ratio of earnings to
fixed charges and pre-
ferred stock dividends. 1.86 1.74 1.47 1.35 1.66 1.48 1.69
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report included in the Annual
Report of CRIIMI MAE Inc. on Form 10-K for the year ended December 31, 1996,
and to all references to our Firm included in or made a part of this
registration statement.
Arthur Andersen LLP
Washington, D.C.
June 6, 1997
