<PAGE>
This Registration Statement also constitutes Post-Effective Amendment No. 3 to
Registration Statement No. 33-55583
As filed with the Securities and Exchange Commission on December 2, 1997.
Registration No. -
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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, (Name, address, including zip code,
and telephone number, and telephone number,
including area code, of including area code,
Registrant's principal executive offices) of agent for service)
Copy to:
Morris F. DeFeo, Jr., Esq.
Swidler & Berlin, Chartered
3000 K Street, NW, 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./ /
_______________
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./ /
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed Maximum Amount of
Title of Each Class of Securities Amount to be Maximum Offering Aggregate Offering Registration
to be Registered(1) Registered Price Per Unit(2) Price Fee
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per 5,000,000 shares $14.81 $62,957,665 $19,078.08
share (3)
</TABLE>
(1) The Prospectus relates to this Registration Statement and Registration
Statement No. 33-55583 relating to the current CRIIMI MAE Inc. Dividend
Reinvestment and Stock Purchase Plan. It is estimated that the transition
from the current CRIIMI MAE Inc. Dividend Reinvestment and Stock Purchase
Plan to the Plan described herein will be effected on or about December 26,
1997 and that approximately 748,976 shares of Common Stock previously
registered but remaining unsold will be carried forward.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) of the Securities Act of 1933, as amended,
based upon the average of the high and low prices of the Common Stock on
November 28, 1997, as reported on the New York Stock Exchange.
(3) Pursuant to Rule 429 of the Securities Act of 1933, as amended, the
Prospectus included herein also covers 748,976 shares of Common Stock from
a previous Registration Statement (No.33-55583), 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 covers 748,976 shares of Common Stock of the
Registrant registered under Registration Statement No. 33-55583, as amended
by Post-Effective Amendment No. 1 filed on September 23, 1994 and
Post-Effective Amendment No. 2 filed on March 1, 1996. In the event any of
the previously registered Common Stock is offered prior to the effective date
of this Registration Statement, it will not be included in any Prospectus
hereunder. The amount of Common Stock of the Registrant being registered
hereby, together with the Common Stock registered under Registration
Statement No. 33-55583, represents the maximum amount of Common Stock 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 DECEMBER 1, 1997
PROSPECTUS {LOGO}
CRIIMI MAE INC.
Dividend Reinvestment and Stock Purchase Plan
CRIIMI MAE Inc. ("CRIIMI MAE" or the "Company") hereby offers
participation in its Dividend Reinvestment and Stock Purchase Plan (the
"Plan"). The Plan is designed to provide investors with a convenient and
economical way to purchase shares of CRIIMI MAE's Common Stock, par value
$.01 per share ("Common Shares"), without paying any service fees, brokerage
commissions or other charges, and to reinvest all or a portion of their cash
dividends in additional Common Shares, in most cases at a discount to the
market price. Participants in the Plan and interested investors may:
- Invest by making optional cash payments at any time up to a maximum of
$10,000 per month, regardless of whether the participants' dividends
are being reinvested.
- Make an initial cash investment up to a maximum of $10,000.
- Invest by making an initial cash investment in excess of $10,000, or
optional cash payments in excess of $10,000 per month, subject to
permission of the Company, regardless of whether the participants'
dividends are being reinvested.
- Automatically reinvest cash dividends on all or a portion of their
Common Shares.
To fulfill the Plan's requirements, Common Shares may be purchased in the
open market, in privately negotiated transactions or from the Company. Common
Shares purchased in the open market or in privately negotiated transactions
will be credited to participant accounts at the average price per share of
all Common Shares purchased with respect to the relevant Dividend
Reinvestment Date or Investment Date, as applicable, less any applicable
discount. When the Company elects to make Common Shares available for
purchase under the Plan, the purchase price of the Common Shares so purchased
will be the average of the daily high and low sales prices of the Common
Shares as reported on the New York Stock Exchange Composite Tape (i) with
respect to Common Shares purchased with reinvested dividends, on the five
Trading Days prior to the Dividend Reinvestment Date less any discount and
(ii) with respect to Common Shares purchased with optional cash payments or
initial cash investments, on the ten Trading Days prior to the Investment
Date (in the case of optional cash payments less any discount). The price to
participants of Common Shares purchased with reinvested dividends or with
optional cash payments that do not exceed $10,000 will reflect a discount,
initially, of 2% from the market price. Common Shares purchased with optional
cash payments exceeding $10,000 (as approved by the Company) may reflect a
discount ranging from 0% to 5%. No discount will be offered on Common Shares
purchased under the Plan with initial cash investments.
The closing price of the Common Shares on November 28, 1997, as reported on
the New York Stock Exchange ("NYSE"), was $14.8125 per share.
This Prospectus relates to 5,000,000 Common Shares offered for purchase
under the Plan. We suggest that you read the Prospectus carefully and retain it
for future reference.
Holders of Common Shares who do not choose to participate in the Plan will
continue to receive cash dividends, as declared, in the usual manner.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is December __, 1997
<PAGE>
AVAILABLE INFORMATION
CRIIMI MAE and certain of its subsidiaries 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 can be inspected and copied at the SEC's Public Reference
Room, 450 Fifth Street, NW, Washington, D.C. 20549 and the SEC's Regional
Offices at 7 World Trade Center, 13th Floor, New York, New York 10048 and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661; and copies of such
material can be obtained from the Public Reference Section of the SEC, 450
Fifth Street, NW, Washington, D.C. 20549, at prescribed rates. In addition,
reports, proxy material and other information concerning CRIIMI MAE 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 Common Shares. Statements contained in this
Prospectus 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 SEC. The Registration Statement, including
the exhibits and schedules thereto, may be inspected without charge at the
SEC's principal office at 450 Fifth Street, NW, 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 SEC.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by CRIIMI MAE with the SEC (File
No. 1-10360) are incorporated herein by reference:
1. Annual Report on Form 10-K for the year ended December 31, 1996.
2. Quarterly Reports on Form 10-Q for the quarters ended March 31,
1997, June 30, 1997 and September 30, 1997.
3. Definitive Proxy Statements dated April 28, 1995 and April 6,
1993.
4. Form 8-K, as filed with the SEC on November 19, 1997.
5. Form 8-K, as filed with the SEC on October 3, 1997.
6. Form 8-A, as filed with the SEC on October 16, 1989.
7. Form 8-B, as filed with the SEC on October 27, 1993.
All documents filed by CRIIMI MAE pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the Common Shares 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>
SUMMARY OF THE PLAN
The following is a summary of certain features of the Plan and is
qualified in its entirety by, and should be read in conjunction with, the
more detailed information appearing elsewhere in this Prospectus.
Capitalized terms that are used but not defined in this summary have the
meanings given to them in "CRIIMI MAE Inc. Dividend Reinvestment and Stock
Purchase Plan--Definitions."
The Plan provides holders of Common Shares and other investors with a
convenient and economical way to purchase Common Shares through the
reinvestment of all or a portion of their cash dividends in additional Common
Shares. There is no minimum or maximum limitation on the amount of cash
dividends a participant may reinvest under the Plan. In addition to
reinvestment of dividends, participants in the Plan may invest additional
funds through optional cash payments of not less than $100 and not more than
$10,000 per month (except in cases covered by a Request for Waiver, as
discussed below). Persons not currently holders of the Company's Common
Shares may become participants by making an initial cash investment of not
less than $500 and not more than $10,000 to purchase Common Shares through
the Plan (except in cases covered by a Request for Waiver, as described
below). For purposes of these limitations, all Plan accounts under the common
control or management of a participant may be aggregated at the Company's
sole discretion. Optional cash payments that exceed $10,000 and initial cash
investments that exceed $10,000 may be made only upon acceptance by the
Company of a completed Request for Waiver form. Participants may also make
optional cash payments by having their bank checking accounts debited
directly on a monthly basis (without charge to participants) to purchase
Common Shares through the Plan.
To fulfill Plan requirements, Common Shares may be purchased in the open
market or in privately negotiated transactions, or directly from the Company.
Common Shares purchased with reinvested dividends or with optional cash
payments that do not exceed $10,000 will be issued at a discount, initially,
of 2% to the market price of Common Shares. This discount is subject to
change from time to time or may be discontinued at the Company's discretion,
without prior notice to participants, after a review of current market
conditions, the level of participation in the Plan and the Company's current
and projected capital needs. The Company may establish a different discount
(ranging from 0% to 5%, the "Waiver Discount") regarding Common Shares
purchased from the Company with optional cash payments exceeding $10,000 that
are approved by the Company pursuant to a Request for Waiver. CRIIMI MAE
reserves the right to modify the pricing or any other provision of the Plan
at any time. No participant shall have any authority or power to direct the
time or price at which or the manner by which Common Shares may be purchased.
There will be no discount on Common Shares purchased with initial cash
investments.
Each month, at least three Trading Days prior to the first day of the
relevant Pricing Period, the Company may establish a Waiver Discount
applicable to optional cash payments exceeding $10,000 and a minimum price
(the "Threshold Price") applicable to all optional cash payments and all
initial cash investments. The Waiver Discount, which may vary each month from
0% to 5%, will be established in the Company's sole discretion after a review
of current market conditions, the level of participation in the Plan and the
Company's current and projected capital needs. The Threshold Price will apply
to Common Shares purchased through the Plan directly from the Company but
will not apply to Common Shares purchased in the open market or through
negotiated transactions. Further, the reinvestment of dividends in additional
Common Shares will not be subject to such Threshold Price, if any.
Common Shares purchased for the Plan directly from the Company with
reinvested dividends will be acquired on the relevant Dividend Reinvestment
Date at a price to participants, computed to four decimal places, obtained by
averaging the daily high and low sales price of the Common Shares on the New
York Stock Exchange Composite Tape on the five Trading Days immediately
preceding the relevant Dividend Reinvestment Date, less a discount of 2% (or
such other discount, if any, then in effect). Common Shares purchased for the
Plan directly from the Company with optional cash payments and initial cash
investments will be acquired on the relevant Investment Date at a price to
participants, computed to four decimal places, obtained by averaging the
daily high and low sales price of the Common Shares on the New York Stock
Exchange Composite Tape on the ten Trading Days immediately preceding the
relevant Investment Date, in the case of optional cash payments less any
discount. In the event that the Threshold Price is not
3
<PAGE>
satisfied for a Trading Day during the Pricing Period, then such Trading Day
and the trading prices for that day will be excluded from (i) the Pricing
Period and (ii) the determination of the purchase price of the Common Shares
for all Common Shares purchased with optional cash payments and initial cash
investments on that Investment Date. Thus, for example, if the Threshold
Price is not satisfied for three of the ten Trading Days in the Pricing
Period, then the purchase price of the Common Shares purchased directly from
the Company with optional cash payments and initial cash investments on the
Investment Date will be based upon the remaining seven Trading Days for which
the Threshold Price was satisfied.
With respect to optional cash payments that exceed $10,000, for each
Trading Day of the related Pricing Period on which the Threshold Price is not
satisfied, one-tenth of a participant's optional cash payment will be
returned to the participant without interest. No part of a participant's
optional cash payment that does not exceed $10,000 or an initial cash
investment of any amount will be returned for any Trading Day of the related
Pricing Period on which the Threshold Price is not satisfied. Rather, the
full amount of the optional cash payment that does not exceed $10,000 or
initial cash investment will be used to purchase Common Shares (excluding
from the calculation of the purchase price, however, any Trading Day on which
the Threshold Price is not satisfied).
In deciding whether to approve a Request for Waiver, the Company will
consider relevant factors including, but not limited to, whether the Plan is
then acquiring newly issued or treasury shares directly from the Company or
acquiring Common Shares from third parties in the open market or in privately
negotiated transactions, the Company's needs for additional funds, the
attractiveness of obtaining such additional funds through the sale of Common
Shares as compared to other sources of funds, the purchase price likely to
apply to any sale of Common Shares under the Plan, the participant submitting
the request, the extent and nature of such participant's prior participation
in the Plan, the number of Common Shares held by such participant and the
aggregate amount of optional cash payments and initial cash investments for
which Requests for Waiver have been submitted by all participants. If such
requests are submitted for any Investment Date for an aggregate amount in
excess of the amount the Company is then willing to accept, the Company may
honor such requests in order of receipt, pro rata or by any other method that
the Company in its sole discretion determines to be appropriate.
From time to time, financial intermediaries, including brokers and
dealers, and other persons may engage in positioning transactions in order to
benefit from the discount from the market price of the Common Shares acquired
under the Plan. Such transactions may cause fluctuations in the trading
volume of the Common Shares. Financial intermediaries and such other persons
that engage in positioning transactions may be deemed to be underwriters
within the meaning of Section 2(11) of the Securities Act. The Company has no
arrangements or understandings, formal or informal, with any person relating
to the sale of Common Shares to be received pursuant to the Plan.
Subject to the availability of Common Shares registered for issuance
under the Plan, there is no total maximum number of Common Shares that can be
issued pursuant to the reinvestment of dividends and no preestablished
maximum limit applicable to optional cash payments and initial cash
investments that may be made pursuant to Requests for Waiver. As of the date
hereof, 5,000,000 Common Shares have been registered and are available for
sale under the Plan.
Participants in the Plan will pay no commissions or brokerage fees on
open market purchases of Common Shares made in connection with dividend
reinvestments, optional cash payments and initial cash investments. All
costs of administering the Plan and all fees, commissions and expenses
incurred in connection with any open market purchases made pursuant to the
Plan will be paid by CRIIMI MAE.
If a participant wishes to sell Common Shares held in the Plan, the
participant may elect to have such Common Shares sold through the Plan.
Common Shares sold through the Plan will be effected by the Agent through a
registered broker-dealer and will be subject to an administrative charge of
$10.00, applicable brokerage fees and commissions and transfer taxes, if any.
A participant that wishes to sell Common Shares held in the Plan other than
through the Plan may request that the Agent deliver a certificate for such
Common Shares to the participant, which the participant may then sell through
his or her registered broker-dealer.
Participants in the Plan who reinvest dividends will be treated for
federal income tax purposes as having received
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<PAGE>
a dividend (to the extent the Company has current or accumulated earnings and
profits) equal to (i) in the case of Common Shares purchased from the
Company, the fair market value of Common Shares received, and (ii) in the
case of Common Shares purchased on the open market, the amount of cash
provided by the Company to purchase the Common Shares plus the amount of any
brokerage commissions paid by the Company with respect to the Common Shares,
without receiving cash to pay any tax payment obligation which arises as a
result of such dividend. Participants in the Plan who make optional cash
payments will be treated for federal income tax purposes as having received a
dividend equal to the excess of the fair market value on the Investment Date
of such Common Shares over the amount of the optional cash payment made by
the Participant. Participants will not be able to control the specific timing
of optional cash payments, initial cash investments and sales of Common
Shares under the Plan. The market discount for purchases of Common Shares may
change from time to time or may be eliminated at any time. See "CRIIMI MAE
Inc. Dividend Reinvestment and Stock Purchase Plan-- Disadvantages."
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<PAGE>
CRIIMI MAE
CRIIMI MAE is a full service commercial mortgage company structured as a
self-administered real estate investment trust ("REIT"). CRIIMI MAE
specializes in the acquisition, origination, securitization and servicing of
multifamily and commercial mortgages and mortgage-related assets throughout
the United States.
CRIIMI MAE INC. DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The following is a complete statement of the Plan.
Purpose
The purpose of the Plan is to provide holders of CRIIMI MAE's Common
Shares and other investors with a convenient and economical way to purchase
Common Shares and to reinvest all or a portion of their cash dividends in
additional Common Shares.
The Plan may also have the effect of raising additional capital through
the direct sale of Common Shares by the Company. These sales may be effected,
in part, through the Company's approval from time to time, in its sole
discretion, of Requests for Waiver regarding the limitations applicable to
the initial cash investment and optional cash payment features of the Plan.
Definitions
The following is a list of certain capitalized terms and their meanings for
purposes of this Prospectus.
- Agent means Registrar and Transfer Company, the Company's agent and
administrator for the Plan.
- Beneficial Owner means a holder of Common Shares who beneficially owns
Common Shares that are registered in a name other than such holder's
name (for example, where Common Shares are held in the name of a
broker, bank or other nominee).
- Dividend Reinvestment Date means the first Trading Day after the date
on which the Company pays quarterly dividends. Dividends on Common
Shares have historically been paid on the last Trading Day of each
quarter ended March 31, June 30, September 30 and December 31.
- Holder of Record means a holder of Common Shares who owns Common
Shares in his or her own name.
- Investment Date means for all optional cash payments and initial cash
investments, including optional cash payments and initial cash
investment exceeding $10,000, the eleventh Trading Day after the
commencement of the Pricing Period each month. Please see Schedule A
for a list of the Investment Dates for each month through the month
ending December 31, 1999.
- Pricing Period means, (i) with respect to optional cash payments and
initial cash investments, the period encompassing the ten Trading Days
immediately preceding the relevant Investment Date and (ii) with
respect to the reinvestment of cash dividends, the period encompassing
the five Trading Days immediately preceding the relevant Dividend
Reinvestment Date.
- Threshold Price means the stated dollar amount that the average of the
high and low sales price of the Common Shares on the New York Stock
Exchange Composite Tape for a Trading Day in a Pricing Period must
equal or exceed in order to be included in the calculation of the
purchase price for newly issued Common Shares acquired from the
Company. With respect to initial cash investments and optional cash
payments (in each case regardless of dollar amount), if the Threshold
Price is not satisfied for a Trading Day in the Pricing Period, then
the high and low sales price for that Trading Day will be excluded
from the calculation of the purchase price of Common Shares. See
"--Source and Price of Common Shares" below.
- Trading Day means a day on which trades of the Common Shares are
reported on the NYSE.
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<PAGE>
Advantages
- Common Shares purchased under the Plan with reinvested dividends and
optional cash payments that do not exceed $10,000, whether purchased
in the open market or directly from the Company, will be issued
commission free and at a discount, initially, of 2% to the market
price. If it is determined that Common Shares to be purchased under
the Plan will be made in the open market instead of directly from the
Company, participants will not pay any brokerage fees or commissions
on open market purchases or in privately negotiated purchases of
Common Shares.
- In addition to reinvestment of dividends, participants may invest
additional funds in Common Shares through optional cash payments of
not less than $100 and not more than $10,000 per month, unless a
Request for Waiver is approved by the Company. Optional cash payments
may be made by sending to the Agent a check or money order payable to
"Registrar and Transfer Company." Optional cash payments may be made
occasionally or at regular intervals, as the participant desires.
Participants may also make optional cash payments by having their bank
checking accounts debited directly, without paying a fee, on a monthly
basis to purchase Common Shares through the Plan. Participants may
make optional cash payments even if dividends on their Common Shares
are not being reinvested.
- Persons not currently holders of Common Shares may become participants
by making an initial cash investment of not less than $500 and not
more than $10,000, or a greater amount if a Request for Waiver is
approved by the Company, to purchase Common Shares under the Plan.
- Funds invested in the Plan for Holders of Record are fully invested
through the purchase of fractions of Common Shares, as well as full
Common Shares, and proportionate cash dividends on fractions of Common
Shares are used to purchase additional Common Shares. See
"--Participation Option" for a discussion of fractional shares owned
by Beneficial Owners.
- A participant may make a gift, at any time and at a nominal cost to
the participant, of all or a portion of the Common Shares held in the
Plan in the name of the participant to a Plan account for another
person by instructing the Agent of the request and enclosing a check
for the processing fee made payable to the Agent.
- The Plan offers a "share safekeeping" service whereby participants may
deposit their Common Share certificates with the Agent and have their
ownership of such Common Shares maintained on the Agent's records as
part of their Plan accounts. Participants will not be charged a fee
for this service.
- Participants will not pay any service fees, brokerage commissions or
other charges in connection with purchases of Common Shares under the
Plan.
Disadvantages
- Participants in the Plan who reinvest dividends will be treated for
federal income tax purposes as having received a dividend on the
dividend payment date. In addition, participants in the Plan who make
optional cash payments will be treated for federal income tax purposes
as having received a dividend at the time they receive Common Shares
purchased with such optional cash payments to the extent of any
discount received as a result of such optional cash payments. Such
dividends may give rise to a tax payment obligation without providing
the participant with immediate cash to pay such tax when it becomes
due. See "Certain United States Federal Income Tax Considerations."
- Participants will not be able to control the specific timing of
purchases and sales of Common Shares under the Plan. Because purchases
under the Plan will be made no earlier than eleven Trading Days
following receipt of an investment instruction, and because sales
under the Plan will be effected by the Agent through a registered
broker-dealer only as soon as practicable after the Agent receives
such instructions, a participant may be unable to achieve the same
level of control over purchase and sale timing that he or she might
have regarding investments made outside the Plan.
- The Company may, without prior notice to participants, change or
eliminate the discount on Common Shares to be purchased through the
Plan pursuant to the dividend reinvestment and optional cash payment
features. As a result, participants will generally be unable to depend
on the availability of a market discount regarding Common Shares
acquired through the Plan.
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<PAGE>
- No interest will be paid by the Company or the Agent to a participant
on dividends, initial cash investments or optional cash payments held
pending reinvestment or investment or to be returned to the
participant. In addition, optional cash payments exceeding $10,000 per
month may be subject to return to the participant (in whole or
proportionate part) without interest in the event that (i) a Threshold
Price has been established with respect to Common Shares to be
purchased from the Company and (ii) such Threshold Price is not met
for a Trading Day during the related Pricing Period.
- With respect to optional cash payments exceeding $10,000, while the
Plan allows the Company to establish a discount from the average
market price of the Common Shares during the Pricing Period, there can
be no assurance that such average market price, as so discounted, will
equal or exceed the market price of the Common Shares on the relevant
Investment Date. Similarly, there can be no assurance that the average
market price of Common Shares purchased with optional cash payments
that do not exceed $10,000, less any discount (initially 2%), will
equal or exceed the market price of the Common Shares on the relevant
Investment Date.
Administration
CRIIMI MAE has retained Registrar and Transfer Company as plan
administrator and agent (the "Agent") to administer the Plan, keep records,
send statements of account activity to each participant and perform other
duties relating to the Plan. Common Shares purchased under the Plan and held
by the Agent will be registered in the Agent's name or the name of its
nominee for the benefit of the participants. If the Agent resigns or
otherwise ceases to act as plan administrator and agent, the Company will
appoint a new plan administrator and agent to administer the Plan.
Questions regarding the Plan may be directed to the Agent either by phone
at (800) 998-9151 or in writing to the following address:
Registrar and Transfer Company
Attention: CRIIMI MAE Dividend Reinvestment and Stock Purchase Plan
10 Commerce Drive
Cranford, New Jersey 07016
Participation
Participation in the Plan is open to any person or entity, whether or not
a holder of Common Shares, provided that such person or entity fulfills the
prerequisites for participation described below under "Enrollment
Procedures." A holder of Common Shares who owns the Common Shares in his or
her own name is referred to herein as a "Holder of Record." A Holder of
Record may participate directly in the Plan. A holder of the Common Shares
who beneficially owns Common Shares that are registered in a name other than
such holder's name (for example, where Common Shares are held in the name of
a broker, bank or other nominee) is referred to herein as a "Beneficial
Owner." A Beneficial Owner may participate in the Plan by either (i) becoming
a Holder of Record by having one or more Common Shares transferred into such
holder's own name or (ii) coordinating such holder's participation with his
or her broker, bank or other nominee who is the record holder to participate
on such holder's behalf. A prospective investor who holds no Common Shares
may participate, at his or her option, either directly or through a broker,
bank or other nominee. See "--Enrollment Procedures" below.
The Plan is intended for the benefit of investors in CRIIMI MAE and not
for persons or entities who accumulate accounts under the Plan over which
they have control for the purpose of exceeding the $10,000 per month maximum
without seeking the advance approval of the Company or who engage in
transactions that cause or are designed to cause aberrations in the price or
trading volume of the Common Shares. Notwithstanding anything in the Plan to
the contrary, CRIIMI MAE reserves the right to exclude from participation in
the Plan, at any time, (i) persons or entities who attempt to circumvent the
Plan's standard $10,000 per month maximum by accumulating accounts over which
they have control or (ii) any other persons or entities, as determined in the
sole discretion of the Company.
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Participants currently enrolled in the CRIIMI MAE Inc. Dividend
Reinvestment and Stock Purchase Plan, the predecessor to the Plan, will
automatically be enrolled in the Plan. Participants currently enrolled in
the CRIIMI MAE Inc. Dividend Reinvestment and Stock Purchase Plan who do not
wish to enroll in the Plan may withdraw from the Plan by sending written
notice to the Agent. See "--Withdrawal."
Previous Sales Under the Plan
Under the CRIIMI MAE Inc. Dividend Reinvestment and Stock Purchase Plan
in effect from August 1990 until the adoption of this Plan by the Company's
board of directors, the Company issued 251,024 Common Shares. A total of
37,786 Common Shares were issued pursuant to the optional cash payment
feature of such predecessor plan.
Enrollment Procedures
After being furnished a copy of this Prospectus:
(a) Holders of Record may become participants by delivering a
completed Enrollment Form to the Agent. Participants currently enrolled in
the CRIIMI MAE Inc. Dividend Reinvestment and Stock Purchase Plan need not
do anything to continue their participation in the Plan.
(b) Beneficial Owners are eligible to participate in the reinvestment
of dividends. However, Beneficial Owners must instruct their broker, bank
or other nominee who is a Depository Trust Company ("DTC") participant to
participate on their behalf in the Plan. See "--Broker and Nominee Form."
(c) Interested persons not currently holders of Common Shares may
become participants by (i) directly delivering a completed Enrollment Form
to the Agent or (ii) instructing their broker, bank or other nominee to
deliver a completed and signed Enrollment Form to the Agent together with
an initial cash investment of not less than $500 and not more than $10,000;
provided, that initial cash investments of more than $10,000 may be made if
a Request for Waiver therefor is approved by the Company.
Enrollment Forms will be processed as promptly as practicable.
Participation in the Plan will begin after the properly completed Enrollment
Form has been reviewed and accepted by the Agent (and, in cases of initial
cash investments exceeding $10,000, a properly completed Request for Wavier
form has been reviewed and accepted by the Company).
Participation Option
The Enrollment Form appoints the Agent as agent for the participants and
directs the Company to pay to the Agent such participants' cash dividends on
all or a specified number of Common Shares owned by the participants
("Participating Shares"), as well as on all whole and fractional Common
Shares credited to participants' Plan accounts ("Plan Shares"). The
Enrollment Form directs the Agent to purchase, on the Dividend Reinvestment
Date, additional Common Shares with such dividends. The Enrollment Form also
directs the Agent to purchase on the relevant Investment Date additional
Common Shares with optional cash payments and initial cash investments of not
more than $10,000, if any, made by Holders of Record. See "--Cash Investments
Exceeding $10,000" below for a discussion of the requirements for optional
cash payments and initial cash investments exceeding $10,000. See "--Broker
and Nominee Form" below for a discussion of the requirements for optional
cash payments of a Beneficial Owner, and initial cash investments of an
investor who is not currently a holder of Common Shares, whose broker, bank
or other nominee holds or will hold such person's Common Shares. The
Enrollment Form also directs the Agent to automatically reinvest all
subsequent dividends on Plan Shares. Dividends will continue to be reinvested
until the participant specifies otherwise by contacting the Agent, withdraws
from the Plan or the Plan is terminated.
The Enrollment Form provides for the purchase of additional Common Shares
through the following investment
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options:
(a) Full Dividend Reinvestment--The Agent will apply any cash
dividends on all Common Shares held in certificate form by the participant
and all cash dividends on Plan Shares, together with any optional cash
payments or initial cash investment, toward the purchase of additional
Common Shares.
(b) Partial Dividend Reinvestment--The Agent will apply cash dividends
on Common Shares held in certificate form by the participant and specified
on the Enrollment Form, and all cash dividends on Plan Shares, together
with any optional cash payments or initial cash investment, toward the
purchase of additional Common Shares.
(c) Optional Cash Payment and Initial Cash Investment Only--The
participant will continue to receive cash dividends on Common Shares held
in certificate form by the participant in the usual manner. However, the
Agent will apply all cash dividends on all Plan Shares, together with any
optional cash payments or initial cash investment received from the
participant, toward the purchase of additional Common Shares.
Each participant may select any one of these three options. In each case,
dividends will be reinvested on all Participating Shares and on all Plan
Shares held in the Plan account, including dividends on Common Shares
purchased with any optional cash payments or initial cash investment, until a
participant specifies otherwise by contacting the Agent, or withdraws from
the Plan altogether, or until the Plan is terminated. If a participant would
prefer to receive cash payments of dividends on Plan Shares rather than
reinvest such dividends, those Common Shares must be withdrawn from the Plan
by written notification to the Agent. See "--Withdrawal" below.
Beneficial Owners may have their dividends reinvested in additional
Common Shares if the Beneficial Owner's broker, bank or other nominee is a
DTC participant. The Beneficial Owner should instruct his or her broker, bank
or other nominee to provide instructions to DTC to reinvest all or a portion
of his or her cash dividends. Common Shares issued as a result of reinvested
dividends pursuant to a request by a Beneficial Owner will be in certificated
form. A Beneficial Owner can make optional cash payments or an initial cash
investment by instructing his or her broker, bank or other nominee to
complete a Broker and Nominee Form and transmit funds to the Agent. A
Beneficial Owner that wishes to purchase Common Shares by making an optional
cash payment or initial cash investment through a broker, bank or other
nominee may not receive fractions of Common Shares, in which event uninvested
cash will be returned via check to the broker, bank or other nominee on
behalf of the Beneficial Owner. See "--Broker and Nominee Form" below.
The Enrollment Form also permits a participant to authorize automatic
deductions from his or her personal bank checking account. If this option is
selected, the Agent will automatically deduct from the participant's
designated bank account the amount indicated on the Enrollment Form (not less
than $100 or more than $10,000 per month) on or about the fifteenth day of
each month.
A participant may change his or her investment option at any time by
completing a new Enrollment Form and returning it to the Agent.
Broker and Nominee Form
The Broker and Nominee Form provides the only means by which a broker,
bank or other nominee holding Common Shares on behalf of a Beneficial Owner,
or planning to hold Common Shares on behalf of an interested investor who is
not currently a holder of Common Shares, may make optional cash payments or
an initial cash investment within the minimum and maximum investment
limitations established for the Plan (see "--Optional Cash Payments and
Initial Cash Investments" below) on behalf of such Beneficial Owner or
interested investor. A Broker and Nominee Form must be delivered to the Agent
each time such broker, bank or other nominee transmits optional cash payments
or an initial cash investment. Broker and Nominee Forms will be furnished at
any time upon request to the
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Agent.
The Broker and Nominee Form and appropriate instructions must be received
by the Agent not later than 12:00 p.m. (noon) Eastern time on the Trading Day
immediately preceding the commencement of the relevant Pricing Period in
order to be invested on the Investment Date, otherwise the optional cash
payment or initial cash investment will be returned, without interest.
Common Shares issued pursuant to a properly completed Broker and Nominee
Form will not be deemed Plan Shares. Therefore, subsequent dividends will be
paid in cash unless otherwise instructed by the Beneficial Owner. See
"--Enrollment Procedures" above for a discussion of the requirements for a
Beneficial Owner participating in the reinvestment of dividends.
Reinvestment of Cash Dividends
A participant may elect to reinvest cash dividends paid on all or a
portion of the Common Shares held in certificate form by the participant by
designating his or her election on the Enrollment Form. Reinvestment levels
may be changed from time to time as a participant desires by submitting a new
election to the Agent on a properly completed Enrollment Form. To be
effective with respect to a particular dividend payment date, any change in
the reinvestment election must be received by the Agent no later than three
Trading Days before the record date for such dividend. The record date is
usually about ten days prior to the dividend payment date.
Dividends on Common Shares are expected to be paid on the last Trading
Day of each quarter ended March 31, June 30, September 30 and December 31.
The reinvestment of dividends will generally begin on the Dividend
Reinvestment Date and will normally extend over a period of two to five
Trading Days in the case of open market purchases. Newly issued Common Shares
will be purchased from CRIIMI MAE on the Dividend Reinvestment Date. If the
participant has specified partial reinvestment of dividends or optional cash
payment or initial cash investment only, the portion of such dividend payment
not being reinvested will be sent to the participant by check in the usual
manner.
Optional Cash Payments and Initial Cash Investments
Participants in the Plan may make optional cash payments by personal
check or money order made payable to "Registrar and Transfer Company." An
optional cash payment may also be made by a broker, bank or other nominee
acting on behalf of a Beneficial Owner. Optional cash payments must be at
least $100 for any single investment and may not exceed $10,000 per month.
(For purposes of these limitations, all Plan accounts under the common
control or management of a participant may be aggregated, at the Company's
sole discretion). Optional cash payments exceeding $10,000 per month may be
made only upon acceptance by CRIIMI MAE of a properly completed Request for
Waiver form. See "--Cash Investments Exceeding $10,000" below. There is no
obligation to make an optional cash payment at any time, and the amount of
such payments may vary from time to time. Participants may also make optional
cash payments by arranging to have their bank checking accounts debited
directly on a monthly basis to have Common Shares purchased through the Plan.
To initiate direct debiting, a participant must complete the "Automatic Cash
Investment" portion of the Enrollment Form and return to the Agent the
Enrollment Form and a voided check on the account the participant wishes to
be debited. Debits to participants' accounts will be processed on or about
the fifteenth day of each month, but will not commence until the month
following the Agent's receipt of the completed Enrollment Form and voided
check. The minimum monthly account debit is $100 and the maximum is $10,000.
Participants will not be charged a fee in connection with making optional
cash payments by direct debit. Cash contributions may not be accepted by the
Agent if a participant imposes any restrictions with respect to the number of
Common Shares to be purchased, the price at which the Common Shares are to be
purchased or the timing of the purchase.
An interested person not currently a holder of Common Shares may become a
participant by directly enrolling in the Plan by delivering a completed
Enrollment Form to the Agent and making an initial cash investment in the
form of a personal check or money order payable to "Registrar and Transfer
Company." An interested person not currently
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a holder of Common Shares and not wanting to enroll directly in the Plan must
instruct his or her broker, bank or other nominee to complete a Broker and
Nominee Form and transmit the initial cash investment to the Agent. Initial
cash investments must be at least $500 and may not exceed $10,000 (without
the prior approval of the Company pursuant to a Request for Waiver). (For
purposes of these limitations, all Plan accounts under the common control or
management of a participant may be aggregated, at CRIIMI MAE's sole
discretion). Initial cash investments exceeding $10,000 per month may be made
only upon acceptance by the Company of a properly completed Request for
Waiver form.
Optional cash payments and initial cash investments that do not exceed
$10,000 must be received by the Agent no later than 12:00 p.m. (noon) Eastern
time on the Trading Day immediately preceding the commencement of the
relevant Pricing Period, and any payment in the form of check or money order
must have cleared on or before the Investment Date in order to be invested on
the Investment Date. Optional cash payments and initial cash investments that
are received or cleared after such time will be returned to the participant,
without interest. OPTIONAL CASH PAYMENTS AND INITIAL CASH INVESTMENTS
EXCEEDING $10,000 MUST BE RECEIVED (TOGETHER WITH A COMPLETED REQUEST FOR
WAIVER FORM) BY THE AGENT IN GOOD FUNDS NOT LATER THAN 12:00 P.M. (NOON)
EASTERN TIME ON THE TRADING DAY IMMEDIATELY PRECEDING THE COMMENCEMENT OF THE
RELEVANT PRICING PERIOD IN ORDER FOR SUCH FUNDS TO BE INVESTED ON THE RELATED
INVESTMENT DATE. Upon a participant's written request received by the Agent
no later than two Trading Days prior to the Pricing Period, a timely optional
cash payment or initial cash investment not already invested under the Plan
will be canceled or returned to the participant, as appropriate. However, in
such latter event, no refund of a check or money order will be made until the
funds have been actually received by the Agent. Accordingly, such refunds may
be delayed by up to three weeks.
The Agent will establish an escrow account for the deposit of optional
cash payments that exceed $10,000 and initial cash investments that exceed
$10,000 pending their investment in Common Shares. Interest that accrues on
funds deposited in the escrow account pending their investment on the
relevant Investment Date will be paid to CRIIMI MAE. No interest will be paid
to CRIIMI MAE from funds deposited with the Agent in connection with optional
cash payments not exceeding $10,000 and initial cash investments not
exceeding $10,000. No interest will be paid to participants on amounts held
by the Agent pending investment or to be returned to the participant. All
optional cash payments and initial cash payments are subject to collection by
the Agent for full face value in U.S. funds.
The Agent will apply the optional cash payment or initial cash payment
received from a participant to the purchase of Common Shares for the account
of the participant on the relevant Investment Date. See "--Source and Price
of Shares" and "--Cash Investments Exceeding $10,000" below. See Schedule A
for a list of Investment Dates.
Source and Price of Common Shares
Source
To fulfill the Plan's requirements, the Agent may purchase or sell Common
Shares in the open market or in privately negotiated transactions subject to
such terms and conditions, including price and delivery, as the Agent may
accept. The Agent may also purchase Common Shares from CRIIMI MAE, to the
extent CRIIMI MAE makes Common Shares available. The Agent may commingle each
participant's funds with those of other participants for the purpose of
executing purchases.
For open market purchases in connection with optional cash payments and
initial cash investments, Common Shares purchased by the Agent will be
acquired through open market transactions conducted by a registered
broker-dealer commencing on the first Trading Day that follows the end of the
Pricing Period; open market purchases will typically extend over two to five
Trading Days. Newly issued Common Shares acquired with optional cash payments
and initial cash investments will be purchased from CRIIMI MAE on the
Investment Date.
Dividend and voting rights on Common Shares purchased in the open market
will commence upon settlement,
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which is normally three Trading Days after purchase. However, Common Shares
purchased in the open market within a period of three Trading Days prior to
and including a dividend record date are considered purchased "ex-dividend"
and therefore are not entitled to payment of that dividend.
Price
Reinvested Dividends. Common Shares purchased in the open market
pursuant to the reinvestment of dividends will be credited to participants'
accounts at the weighted average price per share of all Common Shares
purchased with respect to the relevant Dividend Reinvestment Date less a
discount, initially, of 2%. Common Shares purchased for the Plan directly
from CRIIMI MAE will be acquired on the Dividend Reinvestment Date at a price
to participants, computed to four decimal places, obtained by averaging the
daily high and low sales price of the Common Shares as reported on the New
York Stock Exchange Composite Tape on the five Trading Days immediately
preceding the Dividend Reinvestment Date and subtracting from such average a
discount, initially, of 2%.
Optional Cash Payments That Do Not Exceed $10,000. Common Shares
purchased in the open market with optional cash payments that do not exceed
$10,000 will be credited to participants' accounts at the weighted average
price per share of all Common Shares purchased with respect to the relevant
Investment Date, less a discount, initially, of 2%. Common Shares purchased
for the Plan directly from CRIIMI MAE with optional cash payments that do not
exceed $10,000 will be acquired on the relevant Investment Date at a price to
participants, computed to four decimal places, obtained by (i) averaging the
daily high and low sales price of the Common Shares on the New York Stock
Exchange Composite Tape on the Trading Days during the Pricing Period
immediately preceding the relevant Investment Date on which the Threshold
Price, if any, is satisfied and (ii) subtracting from such average a
discount, initially, of 2%. See "--Cash Investments Exceeding $10,000--Waiver
Discount and Threshold Price" for a discussion of the price of and discount
for Common Shares purchased with optional cash payments that exceed $10,000.
Initial Cash Investments. Common Shares purchased in the open market
with initial cash investments will be credited to participants' accounts at
the weighted average price per share of all Common Shares purchased with
respect to the relevant Investment Date. Common Shares purchased for the Plan
directly from CRIIMI MAE with initial cash investments will be acquired on
the relevant Investment Date at a price to participants, computed to four
decimal places, obtained by averaging the daily high and low sales price of
the Common Shares on the New York Stock Exchange Composite Tape on the
Trading Days during the relevant Pricing Period on which the Threshold Price,
if any, is satisfied. There is no discount for Common Shares purchased in the
open market or directly from the Company with initial cash investments.
Threshold Price. Notwithstanding anything contained herein to the
contrary, CRIIMI MAE may establish for each Pricing Period a Threshold Price
applicable to the purchase of newly issued Common Shares purchased through
optional cash payments and initial cash investments. The Threshold Price, if
any, will be established by the Company, in its sole discretion, at least
three Trading Days prior to the first day of the Pricing Period based upon a
review of current market conditions and other relevant factors. Participants
may obtain the applicable Threshold Price by telephoning the Company at (800)
266-0535 and requesting "CRIIMI MAE Investor Services." The Threshold Price
will be a stated dollar amount that the average of the high and low sales
price of the Common Shares on the New York Stock Exchange Composite Tape for
a Trading Day of the Pricing Period must equal or exceed in order to be
included in the calculation of the purchase price for newly issued Common
Shares acquired from CRIIMI MAE. In the event that such Threshold Price is
not satisfied for a Trading Day of the Pricing Period, then such Trading Day
and the trading prices of the Common Shares for that day will be excluded
from (i) the Pricing Period and (ii) the determination of the purchase price
of the Common Shares for all optional cash payments and initial cash
investments. Thus, for example, if the Threshold Price is not satisfied for
three of the ten Trading Days in the Pricing Period, then the purchase price
of the Common Shares will be based upon the remaining seven Trading Days for
which the Threshold Price was satisfied.
No portion of any optional cash payment that does not exceed $10,000, and
no portion of any initial cash investment, will be returned to participants
for any Trading Day of a Pricing Period for which the Threshold Price is
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not satisfied.
See Schedule A for a list of Investment Dates and associated optional
cash payment and initial cash investment due dates and Pricing Periods.
The discount for purchases of Common Shares with optional cash payments
that do not exceed $10,000 and reinvested dividends will initially be 2% but
may be changed or eliminated by CRIIMI MAE, without prior notice to
participants, at any time.
Cash Investments Exceeding $10,000
Request for Waiver
Initial cash investments in excess of $10,000 and optional cash payments
in excess of $10,000 per month may be made only pursuant to a written Request
for Waiver accepted in writing by CRIIMI MAE. A Request for Waiver must be
received by CRIIMI MAE at its corporate address or via facsimile at (301)
231-0334 no later than 12:00 p.m. (noon) Eastern time on the third Trading
Day preceding the relevant Pricing Period. Request for Waiver forms may be
obtained by calling the Company at (800) 266-0535 and requesting "CRIIMI MAE
Investor Services." It is solely within CRIIMI MAE's discretion as to whether
any such approval for initial cash investments in excess of $10,000 or
optional cash payments in excess of $10,000 will be granted. In deciding
whether to approve a Request for Waiver, CRIIMI MAE will consider relevant
factors including, but not limited to, whether the Plan is then acquiring
newly issued or treasury shares directly from the Company or acquiring Common
Shares from third parties in the open market or in privately negotiated
transactions, the Company's need for additional funds, the attractiveness of
obtaining such additional funds through the sale of Common Shares as compared
to other sources of funds, the purchase price likely to apply to any sale of
Common Shares under the Plan, the participant submitting the request, the
extent and nature of such participant's prior participation in the Plan, the
number of Common Shares held by such participant and the aggregate amount of
cash investments for which Requests for Waiver have been submitted by all
participants. If such requests are submitted for any Investment Date for an
aggregate amount in excess of the amount CRIIMI MAE is then willing to
accept, CRIIMI MAE may honor such requests in order of receipt, pro rata or
by any other method that CRIIMI MAE determines in its sole discretion to be
appropriate.
The Company anticipates that it will respond to each Request for Waiver
by the close of business (5:00 p.m. Eastern time) on the second Trading Day
preceding the relevant Pricing Period. GOOD FUNDS ON ALL APPROVED REQUESTS
FOR WAIVER MUST BE RECEIVED BY THE AGENT NOT LATER THAN 12:00 P.M. (NOON)
EASTERN TIME ON THE TRADING DAY IMMEDIATELY PRECEDING THE COMMENCEMENT OF THE
RELEVANT PRICING PERIOD IN ORDER FOR SUCH FUNDS TO BE INVESTED ON THE
RELEVANT INVESTMENT DATE. A participant who has delivered an optional cash
payment in excess of $10,000 or an initial cash investment in excess of
$10,000 to the Agent may request the return of such optional cash payment or
initial cash payment at any time prior to the second Trading Day immediately
preceding the commencement of the relevant Pricing Period.
The Agent will establish an escrow account for the deposit of optional
cash payments that exceed $10,000 and initial cash investments that exceed
$10,000 pending their investment in Common Shares. Interest that accrues on
funds deposited in the escrow account pending their investment on the
Investment Date will be paid to CRIIMI MAE.
See "--Plan of Distribution; Expenses" below; also see Schedule A for a
list of important dates applicable to the Request for Waiver.
Purchase Price
Common Shares purchased in connection with approved Requests for Waiver
in open market purchases or
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directly from the Company will be acquired on the Investment Date at a price
to participants, computed to four decimal places, obtained by (i) averaging
the daily high and low sales price of the Common Shares on the New York Stock
Exchange Composite Tape on the Trading Days during the related Pricing Period
on which the Threshold Price, if any, is satisfied and (ii) subtracting from
such average the Waiver Discount, if any, applicable to such Common Shares.
See "--Waiver Discount and Threshold Price" below. Only Common Shares
purchased with optional cash payments that exceed $10,000 (pursuant to an
approved Request for Waiver) will receive the Waiver Discount, if any. The
purchase price to participants of Common Shares purchased with initial cash
investments that exceed $10,000 will not be reduced by the Waiver Discount.
Waiver Discount and Threshold Price
Each month, at least three Trading Days prior to the first day of the
Pricing Period, the Company may establish a Waiver Discount applicable to
optional cash payments exceeding $10,000. The Waiver Discount, which may vary
each month from 0% to 5%, will be established in the Company's sole
discretion after a review of current market conditions, the level of
participation in the Plan and current and projected capital needs of the
Company. The Waiver Discount will apply both to Common Shares purchased
directly from the Company and Common Shares acquired in open market purchases
or in negotiated transactions.
Notwithstanding anything contained herein to the contrary, CRIIMI MAE may
establish for each Pricing Period a Threshold Price applicable to the
purchase of newly issued Common Shares purchased through optional cash
payments and initial cash investments. This Threshold Price, if any, will be
established by the Company, in its sole discretion, at least three Trading
Days prior to the first day of the Pricing Period based upon a review of
current market conditions and other relevant factors. The Threshold Price
will be a stated dollar amount that the average of the high and low sales
price of the Common Shares on the New York Stock Exchange Composite Tape for
a Trading Day of the Pricing Period must equal or exceed in order to be
included in the calculation of the purchase price for newly issued Common
Shares acquired from the Company. In the event that such Threshold Price is
not satisfied for a Trading Day of the Pricing Period, then such Trading Day
and the trading prices of the Common Shares for that day will be excluded
from (i) the Pricing Period and (ii) the determination of the purchase price
of the Common Shares for all optional cash payments and initial cash
investments. Thus, for example, if the Threshold Price is not satisfied for
three of the ten Trading Days, then the purchase price of the Common Shares
will be based upon the remaining seven Trading Days for which the Threshold
Price was satisfied.
Each Trading Day of a Pricing Period for which the Threshold Price is not
satisfied will cause the return of a portion of any optional cash payments
made pursuant to Requests for Waiver approved by the Company. The returned
amount will equal one-tenth of such optional cash payments for each Trading
Day that the Threshold Price is not satisfied. Thus, for example, if the
Threshold Price is not satisfied for three Trading Days, then 3/10 (i.e.,
30%) of such optional cash payments will be returned without interest.
The Threshold Price applies to all optional cash payments and initial
cash investments. The return procedure discussed above applies only to
optional cash payments made pursuant to Requests for Waiver approved by the
Company and not to the reinvestment of dividends, optional cash payments that
do not exceed $10,000 or initial cash investments.
Participants may obtain the applicable Waiver Discount and Threshold
Price by telephoning the Company at (800) 266-0535 and requesting "CRIIMI MAE
Investor Services."
Any person who acquires Common Shares through the Plan and resells them
shortly before or after acquiring them may be considered to be an underwriter
within the meaning of the Securities Act. The Company expects that certain
persons will acquire Common Shares pursuant to a Request for Waiver and
resell such Common Shares in order to obtain the financial benefit of any
Waiver Discount then being offered under the Plan. The Company has no
arrangements or understandings, informal or formal, with any person relating
to a distribution of Common Shares to
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be received pursuant to the Plan.
Investment Date
The Plan's "Investment Date'' for all optional cash payments and initial
cash investments, including cash investments exceeding $10,000, is the
eleventh Trading Day after the commencement of the Pricing Period each month.
See Schedule A for a list of Investment Dates and associated optional cash
payment and initial cash investment due dates and Pricing Periods.
Ways to Make Investments
Personal Check or Money Order
Optional cash payments that do not exceed $10,000 and initial cash
investments that do not exceed $10,000 may be made by personal check or money
order payable in U.S. dollars to "Registrar and Transfer Company." Optional
cash payments mailed to the Agent should include the Optional Cash Payment
Form attached to the quarterly statement of account sent to participants or
available upon request from the Agent or CRIIMI MAE.
Automatic Investment from a Bank Account
Participants may also make optional cash payments by arranging to have
their bank checking accounts debited directly on a monthly basis to have
Common Shares purchased through the Plan. To initiate direct debiting, a
participant must complete the "Automatic Cash Investment" portion of the
Enrollment Form. Debits to participants' accounts will be processed on or
about the fifteenth day of each month. The minimum monthly account debit is
$100 and the maximum is $10,000. Participants will not pay any fee in
connection with optional cash payments made by direct debit. Cash
contributions may not be accepted by the Agent if a participant imposes any
restrictions with respect to the number of Common Shares to be purchased, the
price at which the Common Shares are to be purchased or the timing of the
purchase.
To initiate automatic monthly deductions, the participant must provide
written authorization to the Agent together with a voided blank check for the
account from which funds are to be drawn. The written request for automatic
monthly deduction will be processed and will become effective as promptly as
practicable.
Participants may change or terminate their automatic monthly deduction
election by providing new written instructions to the Agent. To be effective
with respect to a particular month, however, the new instructions must be
received by the Agent prior to the last Trading Day of the preceding calendar
month.
Cashiers Check or Wire (for optional cash payments exceeding $10,000 and
initial cash investments exceeding $10,000)
Optional cash payments exceeding $10,000 and initial cash investments
exceeding $10,000 must be made by cashiers check payable to "Registrar and
Transfer Company" or by wire transfer, or by such other method that is
expressly approved by CRIIMI MAE on the Request for Waiver Form with respect
to such optional cash payment or initial cash investment.
Sale of Common Shares
Participants may elect to sell Common Shares held in their Plan accounts
through the Plan. Participants who wish to sell Common Shares through the
Plan should request the Agent to sell any number of whole Common Shares held
in their Plan accounts by giving written instruction to the Agent. The Agent
will sell Common Shares on the open market through a registered broker-dealer
as soon as practicable, except where and to the extent necessary under any
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applicable federal securities laws or other government or stock exchange
regulations. Participants will generally be unable to terminate the sale
after submitting the request. The Company will have no influence over sales
of Common Shares on behalf of participants in the Plan. Participants will
receive the proceeds, less an administrative charge of $10.00 and applicable
brokerage fees and commissions, if any, and any transfer taxes. Net proceeds
of Common Shares sold through the Plan will be paid to participants normally
by check upon settlement of trade. A participant that wishes to sell Common
Shares held in the Plan other than through the Plan may request that the
Agent deliver a certificate for such Common Shares to the participant, which
the participant may then sell through his or her registered broker-dealer.
If instructions for the sale of Common Shares are received on or after an
ex-dividend date but before the related dividend payment date, the sale will
be processed as described above and a separate check for the dividend will be
mailed following the dividend payment date. A request to sell all Common
Shares held in a participant's account will be treated as a withdrawal from
the Plan (see "--Withdrawal" below).
Share Safekeeping
At the time of enrollment in the Plan, or at any later time, participants
may use the Plan's share safekeeping service to deposit any Common Share
certificates in their possession with the Agent. Participants will not be
charged a fee for this service. Common Shares deposited will be transferred
into the name of the Agent or its nominee and credited to the participant's
account under the Plan.
By using the Plan's share safekeeping service, participants no longer
bear the risk associated with loss, theft or destruction of stock
certificates. Also, because Common Shares deposited with the Agent are
treated in the same manner as Common Shares purchased through the Plan, they
may be transferred or sold through the Plan in a convenient and efficient
manner. See "--Sale of Common Shares" above and "--Withdrawal" and
"--Gift/Transfer of Common Shares Within the Plan" below.
Participants who wish to deposit their Common Share certificates with the
Agent must complete and return to the Agent, by registered, insured mail, the
Common Share certificates to be deposited, along with a properly completed
Enrollment Form, if applicable. The certificates should not be endorsed.
Gift/Transfer of Common Shares Within the Plan
If a participant wishes to transfer the ownership of all or part of the
Common Shares held in the participant's Plan account to a Plan account for
another person, whether by gift, private sale or otherwise, the participant
may effect such transfer by written request to the Agent, together with an
executed stock assignment (stock power) and a check for $5.00 payable to
"Registrar and Transfer Company," to the Agent. Requests for transfer are
subject to the same requirements as for the transfer of Common Share
certificates, including requirements of a signature guarantee on the stock
assignment.
Common Shares so transferred will continue to be held by the Agent under
the Plan. An account will be opened in the name of the transferee, if he or
she is not already a participant, and such transferee will automatically be
enrolled in the Plan. If the transferee is not already a registered holder of
Common Shares or a Plan participant, the donor may make a reinvestment
election for the transferee at the time of the gift. The transferee may
change the reinvestment election after the gift has been made as described
under "--Reinvestment of Cash Dividends" above.
The transferee will receive a statement showing the number of Common
Shares transferred to and held in the transferee's Plan account.
Reports to Participants
As soon as practicable after each purchase of Common Shares by the Agent
for the participant's account, a
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confirmation of the transaction will be mailed to the participant by the
Agent. In addition, a statement of account will be mailed by the Agent to the
participant quarterly. These confirmation receipts and quarterly statements
are the participant's continuing record of current activity and should be
retained for tax purposes. In addition, each participant will receive all
communications sent to other holders of the Company's Common Shares,
including any annual and quarterly reports to holders of the Company's Common
Shares, proxy statements and dividend income information for tax reporting
purposes. Participants should be aware that it is important to retain all
statements received as there could be a fee incurred when requesting the
Agent to supply past history.
All notices, statements and reports from the Agent to a participant will
be addressed to the participant at his or her latest address of record with
the Agent. Therefore, participants must promptly notify the Agent of any
change of address. To be effective with respect to mailings of dividend
checks and quarterly statements and reports for a particular quarter, address
changes must be received by the Agent prior to the record date for that
quarter's dividend.
Certificates for Common Shares
Common Shares purchased and held under the Plan will be held in
safekeeping by the Agent in its name or the name of its nominee. The number
of Common Shares (including fractional shares) held for each participant will
be shown on each statement of account. Participants may obtain a new
certificate for all or some of the whole Common Shares held in their Plan
accounts upon written request to the Agent. Any remaining whole or fractional
Plan Shares will continue to be held by the Agent. Withdrawal of Common
Shares in the form of a certificate in no way affects dividend reinvestment.
See "--Reinvestment of Cash Dividends" above.
Except as described above under "Gift/Transfer of Common Shares Within
the Plan," Common Shares held by the Agent for a participant's Plan account
may not be pledged or assigned. A participant who wishes to pledge or assign
any such Common Shares must request that a certificate for such Common Shares
be issued in the participant's name.
Plan of Distribution; Expenses
Except to the extent the Agent effects purchases of Common Shares in open
market transactions through a registered broker-dealer or in privately
negotiated transactions negotiated by CRIIMI MAE, the Agent will acquire
Common Shares directly from the Company for the Plan. The Company may sell
Common Shares to owners of Common Shares (including brokers or dealers) who,
in connection with any resales of such Common Shares, may be deemed to be
underwriters. Such Common Shares, including Common Shares acquired pursuant
to Requests for Waiver approved with respect to the optional cash payment and
initial cash investment features of the Plan, may be resold in market
transactions (including coverage of short positions) on any national
securities exchange on which Common Shares trade or in privately negotiated
transactions. The Common Shares are currently listed on the NYSE.
Under certain circumstances, it is expected that a portion of the Common
Shares available for issuance under the Plan will be issued pursuant to such
Requests for Waiver. The difference between the price such owners pay to the
Company for Common Shares acquired under the Plan, after deduction of the
applicable discount from the market price (in the case of optional cash
payments that exceed $10,000), and the price at which such Common Shares are
resold, may be deemed to constitute underwriting commissions received by such
owners in connection with such transactions.
Subject to the availability of Common Shares registered for issuance
under the Plan, there is no total maximum number of Common Shares that can be
issued pursuant to the reinvestment of dividends. From time to time,
financial intermediaries may engage in positioning transactions in order to
benefit from the discount from the market price of Common Shares acquired
through the reinvestment of dividends under the Plan.
Common Shares purchased for a participant with respect to a particular
Investment Date will be credited to the participant's account at the weighted
average price per share of all Common Shares purchased with respect to that
Investment Date (less any applicable discount). Participants have no control
over the terms and conditions, including
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price and delivery, pursuant to which Common Shares are purchased or whether
Common Shares are purchased in the open market through registered
broker-dealers, in private transactions negotiated by the Company or directly
from the Company.
The Company will pay the costs of administering the Plan, including
charges by the Agent for bank services on each dividend reinvestment.
Participants will not pay brokerage commissions on Common Shares purchased
directly from the Company. In addition, the Company will pay all brokerage
commissions related to purchases of Common Shares in the open market effected
through registered broker-dealers. The Company will also pay any processing
fees associated with the direct debit feature of the Plan. The Agent may
charge a participant for additional services not provided under the Plan or
where specified charges are indicated. Certain expenses will be incurred by
the participant if the participant requests that Common Shares be sold.
Brokers or nominees who participate on behalf of Beneficial Owners for whom
they are holding Common Shares may charge such beneficial owners fees in
connection with such participation, for which neither the Agent nor the
Company will be responsible.
Withdrawal
A participant may withdraw from the Plan at any time by giving written
instructions to the Agent. Upon a participant's withdrawal from the Plan, a
certificate for the whole Common Shares held in the Plan for the participant
will be issued. Alternatively, a participant may specify in the withdrawal
notice that all (but not less than all) whole Plan Shares be sold. The Agent
will effect the sale through a registered broker-dealer on the open market as
soon as practicable after receipt of the withdrawal notice (see "--Source and
Price of Common Shares" above), and the participant will receive a check for
the proceeds, less an administrative charge of $10.00 and applicable
brokerage fees and commissions, if any, and any transfer taxes.
Whether whole Plan Shares are withdrawn or sold, participants terminating
their participation in the Plan will receive a check for the cash value of
any fractional Common Shares held in their Plan accounts. Fractions of Common
Shares will be valued at the same effective price as whole Common Shares sold.
If notice of withdrawal is received on or after an ex-dividend date but
before the related dividend payment date, the withdrawal will be processed as
described above and a separate check for the dividend will be mailed
following the dividend payment date.
After participation in the Plan has been terminated, no further
investments may be made without re-enrolling in the Plan.
Miscellaneous
Stock Split, Stock Dividend or Rights Offering
Any dividends in Common Shares or split shares distributed by the Company
on Common Shares held in the Plan will be added to the participant's account.
Common Share dividends or split shares distributed on certificated Common
Shares will be credited to the participant's account, unless otherwise
instructed.
In the event of a rights offering, the participant will receive rights
based upon the total number of whole Common Shares owned, that is, the total
number of Plan Shares and certificated Common Shares standing in the
participant's name.
Voting of Common Shares Held in the Plan
Whole and fractional Common Shares held in a Plan account may be voted in
person or by the proxy sent to the participant.
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Limitation of Liability
Neither the Company nor the Agent (nor any of their respective agents,
representatives, employees, officers, directors or subcontractors) will be
liable in administering the Plan for any act done in good faith nor for any
good faith omission to act, including, without limitation, any claim of
liability arising with respect to the prices or times at which Common Shares
are purchased or sold for participants, or any change in the market value of
Common Shares, or from failure to terminate a participant's account upon a
participant's death. The foregoing does not represent a waiver of any rights
a participant may have under applicable securities laws.
Change or Termination of the Plan
The Company, in its sole discretion, may suspend, modify or terminate the
Plan at any time in whole, in part, or in respect of participants in one or
more jurisdictions. Written notice of such suspension, modification or
termination will be sent to all affected participants at least ten days prior
to such action. No such event will affect any Common Shares then credited to
a participant's account. Upon any whole or partial termination of the Plan by
the Company, certificates for whole Common Shares held in an affected
participant's account under the Plan will be issued to the participant and a
cash payment will be made for any fractional Common Share held in his or her
Plan account. Any change in the Waiver Discount made by the Company shall not
constitute a modification of the Plan requiring notice to participants.
Termination of a Participant
The Company may terminate any participant's participation in the Plan for
any reason (including, without limitation, the attempted circumvention by a
participant of the $10,000 monthly maximum for cash purchases through the
accumulation of Plan accounts over which they have control) after written
notice in advance mailed to such participant at the address appearing on the
Agent's records. A participant whose participation in the Plan has been
terminated will receive certificates for whole Common Shares held in his or
her account and a check for the cash value of any fractional Common Shares
held in his or her Plan account.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary of certain U.S. federal income and estate tax
consequences of the reinvestment of dividends pursuant to the Plan is based
on current law, is for general information only and is not tax advice. This
discussion does not purport to deal with all aspects of taxation that may be
relevant to particular investors in light of their personal investment
circumstances, or certain types of investors (including insurance companies,
tax-exempt organizations, financial institutions and broker-dealers) subject
to special treatment under the federal income tax laws. Those considering
participation in the Plan are urged to consult with their own tax advisors
regarding the specific tax consequences (including the federal, state, local
and foreign tax consequences) that may result from their participation in the
Plan and of potential changes in applicable tax laws. For purposes of this
discussion, a "U.S. Holder" is a participant or Beneficial Owner that is (i)
a citizen or resident of the United States, (ii) a corporation or partnership
created or organized in the United States or under the laws of the United
States or of any state, (iii) an estate whose income is includable in gross
income for United States federal income tax purposes regardless of its source
or (iv) a trust if a United States court is able to exercise primary
supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of the
trust. Notwithstanding the preceding sentence, to the extent provided in the
regulations promulgated by the Treasury Department, certain trusts in
existence on August 20, 1996 and treated as United States persons prior to
such date that elect to continue to be so treated also shall be considered
United States persons. A "Non-U.S. Holder" is any participant or Beneficial
Owner that is not a U.S. Holder. For purposes of the withholding tax on
dividends discussed below, a non-resident fiduciary of an estate or trust
will be considered a Non-U.S. Holder.
U.S. Holders
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Dividend Reinvestment
The reinvestment of dividends does not relieve the U.S. Holder of any
federal income tax which may be payable on such dividends. Dividends paid
with respect to Common Shares that are reinvested in Common Shares purchased
directly from CRIIMI MAE will be treated for federal income tax purposes as
having been received by the U.S. Holder in the form of a taxable stock
dividend. Accordingly, an amount equal to the fair market value on the date
of purchase of Common Shares acquired with reinvested dividends will be
treated as a dividend to the extent that CRIIMI MAE has current or
accumulated earnings and profits for federal income tax purposes. Dividends
paid with respect to Common Shares that are reinvested in Common Shares
purchased on the open market will be treated for federal income tax purposes
as having been received by the U.S. Holder in the form of a cash dividend.
Accordingly, the actual amount of cash provided by CRIIMI MAE that is used to
purchase the Common Shares on the open market (whether such cash is a payment
of stated dividends or an additional amount paid by CRIIMI MAE to allow the
Common Shares to be provided to the U.S. Holders at 98% of the average
closing sales price), plus (as discussed in more detail below) the amount of
any brokerage commissions paid by CRIIMI MAE with respect to the Common
Shares, will be treated as a dividend for federal income tax purposes to the
extent that CRIIMI MAE has current or accumulated earnings and profits for
federal income tax purposes. U.S. Holders having made optional cash payments
will be deemed to have received a dividend for federal income tax purposes
equal to the excess of the fair market value of the Common Shares purchased
with optional cash payments over the amount of such optional cash payments.
Dividends in excess of current and accumulated earnings and profits, if
any, would not be taxable to a U.S. Holder to the extent that such dividends
do not exceed the adjusted basis of the U.S. Holder's Common Shares. To the
extent such dividends exceed the adjusted basis of a U.S. Holder's Common
Shares, they would be includable in income as capital gain. In addition, in
the event that the Company designates a part or all of the amount so
distributed as a capital gain dividend, such amount would be treated by the
U.S. Holder as long-term capital gain. A Form 1099-DIV mailed to U.S. Holders
at year-end will show total income and the amount of any capital gain
dividend.
The Internal Revenue Service ("IRS") has ruled in private letter rulings
that brokerage commissions paid by a corporation on behalf of participants in
a dividend reinvestment plan (i.e., in the case of open market purchases of
Common Shares) were to be treated as constructive dividends to the
participants. Such constructive dividends were subject to income tax in the
same manner as dividends and were includable in the participants' cost basis
of the Common Shares purchased. Accordingly, if the Company pays brokerage
commissions with respect to any open market purchases made by the Agent, the
Company intends to take the position that participants will have received
their proportionate amount of such commissions as additional dividends. In
addition, consistent with the foregoing, CRIIMI MAE intends to reflect any
discount for purchases of Common Shares under the Plan as constructive
dividends to participants. The information return sent by the Agent to you
and the IRS at the end of the year will show the amount of such dividends
paid to you. While the matter is not free from doubt, CRIIMI MAE intends to
take the position that administrative expenses of the Plan paid by CRIIMI MAE
are not constructive dividends to participants.
The tax basis of Common Shares acquired directly from CRIIMI MAE pursuant
to the reinvestment of dividends under the Plan will be equal to the fair
market value of the Common Shares on the applicable date of purchase. The tax
basis of Common Shares acquired on the open market pursuant to the
reinvestment of dividends under the Plan will be equal to the actual purchase
price of the Common Shares provided to U.S. Holders pursuant to the Plan plus
the U.S. Holder's share of brokerage commissions, if any. The holding period
of Common Shares acquired under the Plan will begin on the day following the
date as of which the Common Shares were purchased for the U.S. Holder's
account.
A U.S. Holder will not realize any taxable income when the U.S. Holder
receives certificates for Common Shares credited to the U.S. Holder's
account, either upon the U.S. Holder's request for such certificates or upon
withdrawal from or termination of the Plan. However, a U.S. Holder may
recognize gain or loss when Common Shares acquired under the Plan are sold or
exchanged or when a U.S. Holder receives cash for fractional Common Shares.
The amount of such gain or loss will be the difference between the amount
received in such sale or exchange for the U.S. Holder's Common Shares and the
tax basis thereof.
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The IRS has ruled in connection with similar plans that a dividend
reinvestment plan will not adversely affect the qualification of a REIT for
federal income tax purposes. In addition, REITs should be able to include
amounts deemed distributed as dividends under such a plan for purposes of its
dividends-paid deduction.
Optional Purchases
The IRS has indicated in somewhat similar situations that a participant
who makes an optional cash payment for the purchase of Common Shares under
the Plan will be treated as having received a distribution equal to the
excess of the fair market value on the Investment Date of such Common Shares
over the amount of the optional cash payment made by the participant. In
addition, if Common Shares are acquired by the Agent in an open-market
transaction, the IRS may assert that a participant has received an additional
distribution equal to a pro rata share of any commissions or fees paid by the
Company on behalf of the participant.
The taxation of such a distribution is not entirely clear. Participants
should be aware that the Company will treat the entire amount of any deemed
distribution, for tax reporting purposes, as a distribution taxable as a
dividend to the extent of the Company's current or accumulated earnings and
profits. Accordingly, a participant's tax basis in his or her Common Shares
acquired through optional cash payments under the Plan will generally equal
the total amount of the optional cash payments plus any distribution a
participant is deemed to have received (as described above). A participant's
holding period for Common Shares purchased under the Plan generally will
begin on the day following the date on which Common Shares are credited to
the participant's account.
It is possible, however, that all or a portion of such deemed
distribution should be treated as a tax-free return of capital or not treated
as a taxable distribution. Participants are encouraged to consult their own
tax counsel in this regard.
Non-U.S. Holders
In general, distributions to a Non-U.S. Holder of Common Shares which are
not attributable to gain from the sale or exchange of United States real
property interests and are not designated by the Company as capital gain
dividends will be treated as dividends of ordinary income (to the extent of
earnings and profits) for U.S. federal income tax purposes. Such
distributions ordinarily will be subject to withholding of U.S. federal
income tax at a 30% rate, unless such rate is reduced by an applicable income
tax treaty. Dividends that are effectively connected with such Non-U.S.
Holder's conduct of a trade or business in the United States or, if a tax
treaty applies, attributable to a permanent establishment in the United
States ("U.S. trade or business income") generally are subject to U.S.
federal income tax at regular rates (and, in the case of a Non-U.S. Holder
that is a corporation, under certain circumstances may be subject to an
additional "branch profits tax" at a 30% rate or such lower rate as may be
applicable under an income tax treaty), but are not generally subject to the
30% withholding tax if the Non-U.S. Holder files the appropriate form with
the payer. If you are a Non-U.S. Holder whose dividends are subject to United
States income tax withholding, the appropriate amount will be withheld and
the remaining balance will be used to purchase additional Common Shares.
Distributions by CRIIMI MAE which are not dividends out of earnings and
profits (as determined for U.S. federal income tax purposes) should not be
subject to U.S. withholding tax. Such distributions are treated first as a
tax-free return of capital to the Non-U.S. Holder and reduce the tax basis of
the Non-U.S. Holder's Common Shares by the amount of such distribution (but
not below zero). Distributions in excess of the Non-U.S. Holder's tax basis
are taxable as a sale or exchange of Common Shares. If it cannot be
determined at the time a distribution is made whether or not such
distribution will be in excess of current and accumulated earnings and
profits, the entire amount of the distribution will be subject to withholding
at the rate applicable to dividends. However, the Non-U.S. Holder may seek a
refund of such amounts from the IRS if it is subsequently determined that
such distribution was, in fact, in excess of current and accumulated earnings
and profits of CRIIMI MAE. CRIIMI MAE does not expect to pay dividends in
excess of current and accumulated earnings and profits.
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Under the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA"),
for as long as the Company qualifies as a REIT, a distribution made by CRIIMI
MAE to a Non-U.S. Holder that is attributable to gains from the sale or
exchange of U.S. real property interests generally will be taxable as if the
distributions were gains "effectively connected" with a U.S. trade or
business. Therefore, in such circumstances, Non-U.S. Holders generally will
be taxed at the capital gain rates applicable to U.S. Holders (subject to
applicable alternative minimum tax and a special alternative minimum tax in
the case of nonresident alien individuals). Distributions subject to FIRPTA
also may be subject to a 30% branch profits tax in the hands of a corporate
Non-U.S. Holder (unless reduced or eliminated by treaty). In addition, the
Company will be required to withhold U.S. tax equal to 35% of the amount of
dividends that could have been designated as capital gain dividends, but such
requirement apparently is limited to the amount of such gain that is
attributable to the sale or exchange of U.S. real property interests. The
amount so withheld is creditable against the U.S. federal income tax
liability of such Non-U.S. Holder and a refund may be available if the amount
withheld exceeds the U.S. federal income tax liability of the Non-U.S.
Holder.
In order to obtain complete exemption from withholding with respect to
dividends, a Non-U.S. Holder must provide the Company in a timely manner with
either (i) an IRS Form 1001 stating that the Non-U.S. Holder is entitled to a
complete exemption under an applicable treaty, or (ii) if such dividends are
"effectively connected" income, an IRS Form 4224. In order to obtain a
partial exemption from withholding with respect to dividends based on a
treaty, a Non-U.S. Holder must provide CRIIMI MAE in a timely manner with an
IRS Form 1001, stating that the Non-U.S. Holder is so entitled to such a
reduced rate on dividends paid. Such forms must be signed by the Non-U.S.
Holder or the Non-U.S. Holder's agent. A Non-U.S. Holder that is required to
submit a certification on Form 1001 or 4224 to avoid the imposition of United
States federal withholding tax with respect to a dividend on Common Shares is
required to submit such certification to CRIIMI MAE as soon as practicable
after the Non-U.S. Holder acquires such Common Shares or a beneficial
interest therein. If the Company does not physically receive such
certification by the date that is 10 days prior to a dividend payment date,
the Company may treat such certification as ineffective with respect to any
payment to such Non-U.S. Holder and may withhold tax from such payment on
such date. The Non-U.S. Holder will be responsible for ensuring that all IRS
Forms are properly updated. If an IRS form provided by a Non-U.S. Holder is
not properly updated, CRIIMI MAE will commence withholding on the dividend
payment date on or following the date that such form becomes no longer
current.
In general, an individual who is a Non-U.S. Holder for U.S. estate tax
purposes will incur liability for U.S. federal estate tax if the fair market
value of the property included in such individual's taxable estate for U.S.
federal estate tax purposes exceeds the statutory threshold amount. For these
purposes, Common Shares owned or treated as owned by an individual who is a
Non-U.S. Holder (for U.S. estate tax purposes) at the time of death will be
included in the individual's taxable estate for U.S. federal estate tax
purposes, unless an applicable estate tax treaty provides otherwise.
On October 6, 1997, the Treasury Department issued final rules with
respect to withholding tax on income paid to foreign persons and related
matters (the "New Withholding Regulations"). The New Withholding Regulations
will generally be effective for payments made after December 31, 1998,
subject to certain transition rules. Non-U.S. Holders are urged to consult
with their own tax advisors with respect to the New Withholding Regulations.
Backup Withholding
If you fail to provide certain federal income tax certifications in the
manner required by law (such as the taxpayer identification number),
dividends on and proceeds from the sale of any Common Shares held for your
account are subject to federal backup withholding, currently at the rate of
31%. Certain exempt holders of the Company's Common Shares (including most
corporations) are, however, exempt from the above withholding requirements,
provided that certain certifications are made.
Any amounts withheld under the backup withholding rules from a payment to
a person would be allowed as a refund or a credit against that person's
United States federal income tax, provided that the required information is
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furnished to the IRS. Furthermore, certain penalties may be imposed by the
IRS on a Holder who is required to supply information but who does not do so
in the proper manner.
USE OF PROCEEDS
CRIIMI MAE intends to use the net proceeds from the sale of the Common
Shares offered pursuant to the Plan (i) to acquire or originate mortgage
assets, primarily Subordinated CMBS, (ii) to sponsor and/or participate in
collateralized mortgage obligation programs and (iii) for other general
corporate purposes, including working capital. Pending their use for the
foregoing purposes, the net proceeds are expected to be invested in
short-term, interest-bearing accounts and/or used to pay down debt on a
temporary basis.
LEGAL MATTERS
Certain legal matters will be passed upon for CRIIMI MAE by Swidler &
Berlin, Chartered, Washington, D.C.
EXPERTS
The financial statements included in CRIIMI MAE's Annual Report on Form
10-K for the year ended December 31, 1996, incorporated herein by reference,
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their 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 in giving said reports.
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Schedule A
List of Important Dates for the Plan
The following list sets forth, for each quarter through the quarter ended
December 31, 1999, the Dividend Reinvestment Date.
Dividend Reinvestment Date
01/02/98
04/01/98
07/01/98
10/01/98
01/04/99
04/01/99
07/01/99
10/01/99
01/03/00
The following list sets forth, for each month through the month ended
December 31, 1999, (i) the latest date on which the Threshold Price and
Waiver Discount may be set by the Company, (ii) the date by which initial
cash investments and optional cash payments must be received by the Agent for
investment on the Investment Date, (iii) the date that the Pricing Period
commences and (iv) the Investment Date (i.e., the date on which initial cash
investments and optional cash payments will be invested in Common Shares).
Threshold Initial Cash Investment Pricing
Price and Waiver and Optional Cash Period Investment
Discount Set Payment due Date Commences Date
12/29/97 12/31/97 01/02/98 01/16/98
01/28/98 01/30/98 02/02/98 02/17/98
02/25/98 02/27/98 03/02/98 03/16/98
03/27/98 03/31/98 04/01/98 04/16/98
04/28/98 04/30/98 05/01/98 05/15/98
05/27/98 05/29/98 06/01/98 06/15/98
06/26/98 06/30/98 07/01/98 07/16/98
07/29/98 07/31/98 08/03/98 08/17/98
08/27/98 08/31/98 09/01/98 09/16/98
09/28/98 09/30/98 10/01/98 10/16/98
10/28/98 10/30/98 11/02/98 11/17/98
11/25/98 11/30/98 12/01/98 12/15/98
12/29/98 12/31/98 01/04/99 01/19/99
01/27/99 01/29/99 02/01/99 02/16/99
02/24/99 02/26/99 03/01/99 03/15/99
03/29/99 03/31/99 04/01/99 04/16/99
04/28/99 04/30/99 05/03/99 05/17/99
05/26/99 05/28/99 06/01/99 06/15/99
06/28/99 06/30/99 07/01/99 07/16/99
07/28/99 07/30/99 08/02/99 08/16/99
08/27/99 08/31/99 09/01/99 09/16/99
09/28/99 09/30/99 10/01/99 10/18/99
10/27/99 10/29/99 11/01/99 11/16/99
11/24/99 11/30/99 12/01/99 12/15/99
<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 and, if given or made, such information or representation
must not be relied upon as having been authorized. 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 does it 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 the information contained herein is correct as of any date subsequent to
the date hereof.
TABLE OF CONTENTS
Page
Available Information..........................................................2
Incorporation of Certain Documents by Reference................................2
Summary of the Plan............................................................3
CRIIMI MAE.....................................................................6
CRIIMI MAE Inc. Dividend Reinvestment and
Stock Purchase Pla.........................................................6
Certain United States Federal Income Tax Considerations.......................20
Use of Proceeds...............................................................24
Legal Matters.................................................................24
Experts.......................................................................24
List of Important Dates...............................................Schedule A
Dividend Reinvestment
and Stock Purchase Plan
CRIIMI MAE Inc.
5,000,000 Common Shares
____________________
PROSPECTUS
____________________
December __, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Dividend
All of the expenses set forth below, except the SEC registration fee, are
estimated.
SEC registration fee $19,078
New York Stock Exchange listing fee
Printing and engraving expenses 7,000
Accounting fees and expenses
Legal fees and expenses 25,000
Blue Sky fees and expenses (including legal fees)
Agent fees
Miscellaneous
---
Total $
--------
--------
- -----------
All of the above are estimated, except the SEC registration fee.
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 Bylaws provide that CRIIMI MAE shall indemnify its
directors and officers, 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 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.
<PAGE>
Item 16. Exhibits
(a) Exhibits.
Exhibit
Number Description
*4.1 --Articles of Incorporation, as amended, of CRIIMI MAE Inc.
*4.2 --Bylaws, as amended, of CRIIMI MAE Inc.
*4.6 --Form of specimen certificate representing Common Shares
5 --Opinion regarding validity of securities being registered
8 --Tax Opinion
23.1 --Consent of Arthur Andersen LLP
23.2 --Consent of Swidler & Berlin, Chartered (included in Exhibit 5)
24.1 --Power of Attorney (included on signature page)
99.1 --Form of Enrollment Form
- -----------
* Incorporated herein by reference to CRIIMI MAE's Registration Statement
on Form S-3 (File No. 33-50679), as amended.
<PAGE>
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; (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; and (3) 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,
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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 1st day of
December, 1997.
CRIIMI MAE INC.
By: /s/ William B. Dockser
-----------------------------------
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 true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his 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, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ William B. Dockser Chairman of the Board (Principal December 1, 1997
- --------------------------- Executive Officer and Director)
William B. Dockser
/s/ H. William Willoughby Director, President and Secretary December 1, 1997
- ---------------------------
H. William Willoughby
/s/ Garret G. Carlson* Director December 1, 1997
- ---------------------------
Garrett G. Carlson
/s/ Larry H. Dale* Director December 1, 1997
- ---------------------------
Larry H Dale
/s/ G. Richard Dunnells* Director December 1, 1997
- ---------------------------
G. Richard Dunnells
/s/ Robert J. Merrick* Director December 1, 1997
- ---------------------------
Robert J. Merrick
/s/ Cynthia O. Azzara Chief Financial Officer December 1, 1997
- --------------------------- (Principal Financial and
Cynthia O. Azzara Accounting Officer)
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description Page
*4.1 --Articles of Incorporation, as amended, of CRIIMI MAE Inc.
*4.2 --Bylaws, as amended, of CRIIMI MAE Inc.
*4.6 --Form of specimen certificate representing Common Shares
5 --Opinion regarding validity of securities being registered
8 --Tax Opinion
23.1 --Consent of Arthur Andersen LLP
23.2 --Consent of Swidler & Berlin, Chartered (included in Exhibit 5)
24.1 --Power of Attorney
99.1 --Form of Enrollment Form
- -----------
* Incorporated herein by reference to CRIIMI MAE's Registration Statement
on Form S-3 (File No. 33-50679), as amended.
<PAGE>
Exhibit 5
[SWIDLER & BERLIN, CHARTERED LETTERHEAD]
December 1, 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 (the "Securities Act"), of up to five million shares of the
Company's common stock, par value $.01 per share ("Common Shares"), which
Common Shares may be sold by the Company from time to time pursuant to the
CRIIMI MAE Inc. Dividend Reinvestment and Stock Purchase Plan, as set forth
in the prospectus which forms a part of the Registration Statement. 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.
We assume that the issuance, sale, amount and terms of the Common Shares
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.
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, when the Registration
Statement has become effective under the Securities Act, upon due
authorization by Board Action, and upon issuance and delivery of such Common
Shares against payment of valid consideration therefor in accordance with the
terms of such Board Action, and as contemplated by the Registration
Statement, such Common Shares will be validly issued, fully paid and
nonassessable.
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
Securities Act or the rules promulgated thereunder.
This opinion is rendered solely for your benefit in connection with the
transactions described above upon the
<PAGE>
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,
/s/ Swidler & Berlin, Chartered
SWIDLER & BERLIN, CHARTERED
<PAGE>
Exhibit 8
[SWIDLER & BERLIN, CHARTERED LETTERHEAD]
December 1, 1997
CRIIMI MAE Inc.
The CRI Building
11200 Rockville Pike
Rockville, MD 20852
RE: Sale of Securities Pursuant to Shelf Registration Statement
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 (the "Securities Act"), of up to five million shares of the
Company's common stock, par value $.01 per share ("Common Shares"), which
Common Shares may be sold by the Company from time to time pursuant to the
CRIIMI MAE Inc. Dividend Reinvestment and Stock Purchase Plan, as set forth
in the prospectus which forms a part of the Registration Statement (the
"Prospectus"). This opinion letter is furnished to you at your request to
enable you to fulfill the requirements of Item 601(b)(8) of Regulation S-K,
17 C.F.R. Section . 229.601(b)(8), in connection with the Registration
Statement.
In issuing this opinion, we have examined (1) the Registration
Statement, including the Prospectus, (2) the Company's Articles of
Incorporation, as amended, and (3) such other corporate records, including
the resolutions of the Company's Board of Directors, and such other documents
as we have deemed necessary in order to express the opinions set forth below.
In our examination we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity
to all originals of all documents submitted to us as copies. The opinions
set forth in this letter are premised on certain written representations of
the Company contained in a letter to us of even date herewith.
In rendering our opinion, we have considered the applicable provisions
of the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
regulations promulgated thereunder ("Treasury Regulations"), relevant
judicial authorities, rulings of the United States Internal Revenue Service
(the "Service"), and such other authorities as we deemed relevant. The Code,
Treasury Regulations, judicial decisions, rulings and other authorities that
we have considered are subject to change at any time and with retroactive
effect. A change in any of the authorities upon which our opinion is based
could affect our conclusions. Moreover, relevant laws could change in a
manner that could adversely affect the Company or its stockholders. We
undertake no obligation to inform you of any such change in the law. We have
not been requested to opine, and we have not opined, as to any issues other
than those expressly set forth herein. Capitalized terms used in this opinion
letter and not otherwise defined are as defined in the Prospectus.
The Company is intended to qualify as a real estate investment trust
("REIT") under the Code. Based upon and subject to the foregoing, it is our
opinion that:
(1) the Company was organized and has operated in conformity with the
requirements for qualification and taxation as a REIT under the Code
for each of the taxable years it has been in existence, and the
Company's current organization and method of operation will enable it
to continue to meet the requirements for qualification as a REIT for
each of its subsequent taxable years; and
(2) the discussions in the Registration Statement and Prospectus under the
heading "CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS" are
correct in all material respects and fairly summarize the United
States federal income tax considerations that are likely to be
material to a holder of Common Shares of the Company.
The Company's qualification as a REIT under the Code will depend upon the
Company's ability to meet,
<PAGE>
CRIIMI MAE Inc.
December 1, 1997
Page 2
through actual operating results, distribution levels, diversity of stock
ownership and the various income and asset qualification tests imposed under
the Code. Such operating results may not be reviewed by us as counsel, and
accordingly, no assurance can be given that the actual results of the
Company's operations for any one taxable year will satisfy the requirements
under the Code for REIT qualification. Moreover, certain aspects of the
Company's operations have not been considered by the courts or the Service.
There can be no assurance that a court or the Service will agree with our
opinion. In addition, qualification as a REIT depends on future transactions
and events that cannot be known at this time.
For a discussion relating the law to the facts, and the legal analysis
underlying the opinions set forth in this letter, we incorporate by reference
the discussion of federal income tax issues in the sections of the
Registration Statement and the Prospectus under the heading "CERTAIN UNITED
STATES FEDERAL INCOME TAX CONSIDERATIONS."
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
Securities 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,
/s/ Swidler & Berlin, Chartered
SWIDLER & BERLIN, CHARTERED
<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 dated February 17,
1997 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.
/s/ ARTHUR ANDERSEN LLP
Washington, D.C.
December 1, 1997
<PAGE>
Exhibit 24.1
POWER OF ATTORNEY
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 true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his 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.
/s/ Garrett G. Carlson December 1, 1997
----------------------
Garrett G. Carlson
Director
/s/ Larry H. Dale December 1, 1997
----------------------
Larry H. Dale
Director
/s/ Robert J. Merrick December 1, 1997
----------------------
Robert J. Merrick
Director
/s/ G. Richard Dunnells December 1, 1997
----------------------
G. Richard Dunnells
Director
/s/ Cynthia O. Azzara December 1, 1997
----------------------
Cynthia O. Azzara
Chief Financial Officer
(Principal Financial and
Accounting Officer)
<PAGE>
CRIIMI MAE Inc.
Dividend Reinvestment and Stock Purchase Plan
Enrollment Form
Please print all items except signatures. QUESTIONS? Call Registrar &
Transfer Company (the "Agent") toll-free at 1-800-998-9151. Mail your
completed Enrollment Form in the courtesy envelope provided. Capitalized
terms used herein but not otherwise defined have the meanings given to them
in the Prospectus that sets forth the description of the CRIIMI MAE Inc.
Dividend Reinvestment and Stock Purchase Plan (the "Plan").
A. ENROLLING IN THE PLAN
Please check one box and provide the requested information. This form is not
to be used for optional cash payments greater than $10,000 or initial cash
investments greater than $10,000.
/ / I wish to enroll. My dividend reinvestment participation option is
indicated under Section C below.
/ / I am currently a holder of the Company's common stock ("Common Shares")
and wish to enroll by making an optional cash payment under the Plan. I
have enclosed a check or money order for $_____________($100 minimum/
$10,000 maximum monthly) payable to "Registrar & Transfer Company." I
acknowledge that my payment must be received by the Agent no later than
12:00 p.m. (noon) Eastern time on the Trading Day immediately preceding the
commencement of the relevant Pricing Period as described in Schedule A of
the Prospectus. I also acknowledge that no interest will be paid to me by
the Company or the Agent on optional cash payments held pending investment
or to be returned to me.
/ / I wish to enroll by making an initial cash investment under the Plan. I
have enclosed a check or money order for $_____________($500 minimum/
$10,000 maximum) payable to "Registrar & Transfer Company." I acknowledge
that my payment must be received no later than 12:00 p.m. (noon) Eastern
time on the Trading Day immediately preceding the commencement of the
relevant Pricing Period as described in Schedule A of the Prospectus. I
also acknowledge that no interest will be paid to me by the Company or the
Agent on initial cash investments pending investment or to be returned
to me.
If your Common Shares are being held by your broker and you wish to
participate in the Plan, your Common Shares can be enrolled through your
broker. Tell your broker the Plan is eligible for DTC Dividend Reinvestment
Services and to request a Broker and Nominee Form from the Agent.
B. YOUR MAILING ADDRESS
Please provide your mailing address below. We must have a complete address to
process your enrollment.
- -------------------------------------------------------------
First Name M.I. Last Name
- -------------------------------------------------------------
Address Apartment Number
- -------------------------------------------------------------
City State Zip Code Country
Please provide your day and evening phone numbers to assist us in
processing your enrollment.
Daytime Phone: ( )
-----------------------------
Evening Phone: ( )
-----------------------------
C. DIVIDEND REINVESTMENT
You may choose to reinvest all, part or none of the dividends paid on Common
Shares held by you in certificate form. Please check one of the following
boxes and provide the requested information.
/ / FULL DIVIDEND REINVESTMENT: The Agent will apply cash dividends on all
Common Shares held in certificate form by you and all cash dividends on
Plan Shares, together with any optional cash payments or initial cash
investment, toward the purchase of additional Common Shares.
/ / PARTIAL DIVIDEND REINVESTMENT: The Agent will apply cash dividends on the
following whole number of Common Shares held in certificate form by you and
all cash dividends on Plan Shares, together with any optional cash payments
or initial cash investment, toward the purchase of additional Common
Shares: ______ Common Shares
/ / OPTIONAL CASH PAYMENT and INITIAL CASH INVESTMENT ONLY: You will continue
to receive cash dividends on Common Shares held in certificate form by you
in the usual manner. However, the Agent will apply all cash dividends on
Plan Shares, together with any optional cash payments or initial cash
investment received from you, toward the purchase of additional Common
Shares.
- Please complete the reverse side of form -
<PAGE>
Dividend Reinvestment and Stock Purchase Plan
Enrollment Form CRIIMI MAE Inc.
D. YOUR ACCOUNT REGISTRATION Please Print Clearly
/ / INDIVIDUAL OR JOINT. Joint accounts will be presumed to be joint tenants
unless restricted by applicable state law or otherwise indicated. Only one
Social Security Number is required for tax reporting.
- -------------------------------------------------------------
Owner's First Name M.I. Last Name
- -------------------------------------------------------------
Owner's Social Security No.
- -------------------------------------------------------------
Joint Owner's First Name M.I. Last Name
/ / CUSTODIAL. A minor is the beneficial owner of the account with an adult
custodian managing the account until the minor becomes of age, as specified
in the Uniform Gifts/ Transfers to Minors Act in the minor's state of
residence.
- -------------------------------------------------------------
Custodian's First Name M.I. Last Name
- -------------------------------------------------------------
Minor's First Name M.I. Last Name
- -------------------------------- ---------------------------
Minor's Social Security No. Minor's State of Residence
/ / TRUST. Account is established in accordance with provisions of
trust agreement.
- --------------------- --------------------- ---------------
Trustee Name Name of Trust Trust Date
- --------------------- --------------------------------------
Tax ID Number Beneficiary
/ / CORPORATION, PARTNERSHIP or OTHER ENTITY.
- ---------------------- -------------------------------------
Business Name Tax ID Number
PLEASE BE SURE TO COMPLETE AND SIGN THIS FORM.
E. SIGNATURES
By signing this form, I request enrollment, certify that I have received and
read the Prospectus describing the CRIIMI MAE Inc. Dividend Reinvestment and
Stock Purchase Plan and agree to abide by the terms and conditions of the
Plan. I hereby appoint Registrar & Transfer Company as my agent to apply
dividends and any optional cash payments and initial cash investment I may
make to the purchase of Common Shares under the Plan. Further, I understand
that no interest will be paid to me by the Company or the Agent on dividends,
initial cash investments or optional cash payments held pending reinvestment
or investment or to be returned to me. I understand that I may revoke this
authorization at any time by written notice to Registrar & Transfer Company.
All joint owners must sign.
Under the penalties of perjury, I also certify that: A. The number shown on
this form is my/our correct Social Security Number or Taxpayer ID Number. B.
I am not subject to backup withholding either because (1) I have not been
notified by the Internal Revenue Service ("IRS") that I am subject to backup
withholding as a result of a failure to report all interest or dividends, or
(2) the IRS has notified me that I am no longer subject to backup
withholding. (Check here ___ if you have been notified by the IRS that you
are subject to backup withholding because of underreporting of interest or
dividends on your tax returns.)
- -------------------------------------- ---------------------------------------
Signature Date Signature Date
You may authorize automatic monthly deductions from your personal bank
account. The Agent will automatically debit your bank account on or about the
fifteenth of each month and invest these deductions in Common Shares. To
initiate these deductions, please complete this section of the form and
include a voided check on the account you wish to be debited. Please note
that the automatic debit will not be in effect until the month following the
receipt of this form.
Amount to be deducted:
-------------------------
(minimum $100/ maximum $10,000 per month)
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Signature Date Signature Date
QUESTIONS? Call toll-free 1-800-998-9151
RETURN TO : Registrar & Transfer Company, ATTN: CRIIMI MAE DRSPP
Post Office Box 1010, Cranford, New Jersey 07016-1010
