SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):March 19, 1998
CRIIMI MAE Inc.
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(Exact name of registrant as specified in its charter)
Maryland 1-10360 52-1622022
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
11200 Rockville Pike, Rockville, Maryland 20852
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(Address of principal executive office) (Zip code)
Registrant's telephone number including area code: (301) 816-2300
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(Former name or former address, if changed since last report)
Exhibit Index on Page 4<PAGE>
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Item 5. Other Events.
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CRIIMI MAE Inc. (the "Company") is issuing and selling pursuant to its
registration statement on Form S-3 filed with the Securities and Exchange
Commission on October 21, 1997 (Commission File Number 333-38409) (the
"Registration Statement"), as supplemented by a Prospectus Supplement thereto
dated March 19, 1998 (the "Prospectus Supplement"), 2,600,000 shares of common
stock of the Company, par value $.01 per share ("Common Stock"). Closing on
the sale is scheduled to occur on March 25, 1998.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
c) Exhibits
1.0 Underwriting Agreement dated March 19, 1998 between
CRIIMI MAE Inc., Prudential Securities Incorporated and Friedman,
Billings, Ramsey & Co., Inc.
8.1 Opinion of Counsel re Tax Matters
20 Rule 424(b)(5) Prospectus Supplement dated March 19, 1998
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CRIIMI MAE Inc.
Date: March 20, 1998 By: /s/ H. William Willoughby
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H. William Willoughby
President
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INDEX TO EXHIBITS
FORM 8-K
Exhibit Page
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1.0 Underwriting Agreement dated as of March 19, 1998
between CRIIMI MAE Inc., Prudential Securities Incorporated and
Friedman, Billings, Ramsey & Co., Inc.
8.1 Opinion of Counsel re Tax Matters
*20 Rule 424(b)(5) Prospectus Supplement dated March 19, 1998
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*Filed by Registrant with the Commission on March 20, 1998 and incorporated
herein by reference.
CRIIMI MAE INC.
(a Maryland corporation)
2,600,000 Shares
Common Stock
UNDERWRITING AGREEMENT
March 19, 1998
PRUDENTIAL SECURITIES INCORPORATED
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
One New York Plaza
New York, New York 10292
Ladies and Gentlemen:
CRIIMI MAE INC., a Maryland corporation, which is organized and has been
operated in conformity with the requirements for qualification and taxation as
a real estate investment trust (the "Company"), hereby confirms its agreement
with the several underwriters named in Schedule 1 hereto (the "Underwriters"),
for whom you have been duly authorized to act as representatives (in such
capacities, the "Representatives"), as set forth below.
1. Securities. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell to the several Underwriters 2,600,000
shares (the "Firm Securities") of the Company's Common Stock, par value $.01
per share ("Common Shares"). The Company also proposes to issue and sell to
the several Underwriters not more than 390,000 additional Common Shares if
requested by the Representatives as provided in Section 3 of this Agreement.
Any and all Common Shares to be purchased by the Underwriters pursuant to such
option are referred to herein as the "Option Securities", and the Firm
Securities and any Option Securities are collectively referred to herein as
the "Securities".
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the several Underwriters
that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"). A registration statement on
such Form (File No. 333-38409) with respect to the Securities, including a
basic prospectus, has been filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Act, and one or more <PAGE>
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amendments to such registration statement may have been so filed. Such
registration statement, as so amended, has been declared by the Commission to
be effective under the Act. Such registration statement, as amended at the
date of this Agreement, meets the requirements set forth in Rule 415(a)(1)(x)
under the Act and complies in all other material respects with said Rule. The
Company will next file with the Commission, either (A) if the Company relies
on Rule 434 under the Act, a Term Sheet (as hereinafter defined) relating to
the Securities, that shall identify the Preliminary Prospectus (as hereinafter
defined) that it supplements and, if required to be filed pursuant to Rules
434(c)(2) and 424(b), an Integrated Prospectus (as hereinafter defined), in
either case, containing such information as is required or permitted by Rule
434, 430A and 424(b) under the Act or (B) if the Company does not rely on Rule
434 under the Act, pursuant to Rule 424(b) under the Act a final prospectus
supplement to the basic prospectus in the form most recently included in an
amendment to such registration statement (or, if no such amendment shall have
been filed, in such registration statement), with such changes or insertions
as are required by Rule 430A under the Act or permitted by Rule 424(b) under
the Act, and in the case of clause (i)(A) or (i)(B) of this sentence as have
been provided to and approved by the Representatives prior to the execution of
this Agreement. The Company may also file a related registration statement
with the Commission pursuant to Rule 462(b) under the Act for the purpose of
registering certain additional Securities, which registration shall be
effective upon filing with the Commission. As used in this Agreement, the
term "Original Registration Statement" means the registration statement
initially filed relating to the Securities, as amended at the time when it was
declared effective, including (A) all financial schedules and exhibits
thereto, (B) all documents incorporated by reference therein filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (C) any
information omitted therefrom pursuant to Rule 430A under the Act and included
in the Prospectus (as hereinafter defined) or, if required to be filed
pursuant to Rule 434(c)(2) and 424(b), in the Integrated Prospectus; the term
"Rule 462(b) Registration Statement" means any registration statement filed
with the Commission pursuant to Rule 462(b) under the Act (including the
Registration Statement and any Preliminary Prospectus or Prospectus
incorporated therein at the time such Registration Statement becomes
effective); the term "Registration Statement" includes both the Original
Registration Statement and any Rule 462(b) Registration Statement; the term
"Preliminary Prospectus" means each prospectus subject to completion filed
with such registration statement or any amendment thereto (including the
prospectus subject to completion, if any, included in the Registration
Statement or any amendment thereto at the time it was declared effective) or
any preliminary prospectus supplement filed pursuant to Rule 424(b) after the
Registration Statement was declared effective, including all documents
incorporated by reference therein filed under the Exchange Act; the term
"Prospectus" means:
(A) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule 424(b)(7)
under the Act, together with the preliminary Prospectus identified therein
that such Term Sheet supplements;
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(B) if the Company does not rely on Rule 434 under the Act, the
prospectus, as supplemented, first filed with the Commission after the date
hereof pursuant to Rule 424(b) under the Act; or
(C) if the Company does not rely on Rule 434 under the Act and if no
prospectus is required to be filed pursuant to Rule 424(b) under the Act, the
prospectus included in the Registration Statement, including, in the case of
clauses (A), (B) or (C) of this sentence, all documents incorporated by
reference therein filed under the Exchange Act; the term "Integrated
Prospectus" means a prospectus first filed with the Commission pursuant to
Rules 434(c)(2) and 424(b) under the Act; and the Term "Term Sheet" means any
abbreviated term sheet that satisfies the requirements of Rule 434 under the
Act. Any reference in this Agreement to an "amendment or supplement" to any
Preliminary Prospectus, the Prospectus or any Integrated Prospectus or an
"amendment" to any registration statement (including the Registration
Statement) shall be deemed to include any document incorporated by reference
therein that is filed with the Commission under the Exchange Act after the
date of such Preliminary Prospectus, Prospectus, Integrated Prospectus or
registration statement, as the case may be. For purposes of the preceding
sentence, any reference herein to the "date" of a Prospectus that includes a
Term Sheet shall mean the date of such Term Sheet; any reference to the
"effective date" of an amendment to a registration statement shall, if such
amendment is effected by means of the filing with the Commission under the
Exchange Act of a document incorporated by reference in such registration
statement, be deemed to refer to the date on which such document was so filed
with the Commission.
(b) The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus. When any Preliminary Prospectus and any
amendment or supplement thereto was filed with the Commission, it (i)
contained all statements required to be stated therein in accordance with, and
complied in all material respects with the requirements of, the Act, the
Exchange Act and the respective rules and regulations of the Commission
thereunder, and (ii) did not include any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. When the Registration Statement or any amendment thereto was
declared effective, it (i) contained all statements required to be stated
therein in accordance with, and complied in all material respects with the
requirements of, the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder and (ii) did not include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading. When the Prospectus or any Term
Sheet that is a part thereof or any amendment or supplement to the Prospectus
is filed with the Commission pursuant to Rule 424(b) (or, if the Prospectus or
part thereof or such amendment or supplement is not required to be so filed,
when the Registration Statement or the amendment thereto containing such
amendment or supplement to the Prospectus was declared effective), on the date
when the Prospectus is otherwise amended or supplemented and on the Firm
Closing Date and any Option Closing Date (both as hereinafter defined), each
of the Prospectus, and, if required to be filed pursuant to Rules 434(c)(2)
and 424(b) under the Act, the Integrated Prospectus as amended or supplemented
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at any such time, (i) contained or will contain all statements required to be
stated therein in accordance with, and complied or will comply in all material
respects with the requirements of, the Act, the Exchange Act and the
respective rules and regulations of the Commission thereunder and (ii) did not
or will not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
foregoing provisions of this paragraph (b) do not apply to statements or
omissions made in any Preliminary Prospectus or any amendment or supplement
thereto, the Registration Statement or any amendment thereto, the Prospectus
or, if required to be filed pursuant to Rules 434(c)(2) and 424(b) and the
Act, the Integrated Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives specifically for use
therein.
(c) If the Company has elected to rely on Rule 462(b) and the Rule
462(b) Registration Statement has not been declared effective (i) the Company
has filed a Rule 462(b) Registration Statement in compliance with and that is
effective upon filing pursuant to Rule 462(b) and has received confirmation of
its receipt and (ii) the Company has given irrevocable instructions for
transmission of the applicable filing fee in connection with the filing of the
Rule 462(b) Registration Statement, in compliance with Rule 111 promulgated
under the Act, or the Commission has received payment of such filing fee.
(d) Each subsidiary of the Company is set forth in Schedule 2 hereto (the
"Subsidiaries"). The Company and each of its Subsidiaries have been duly
organized and are validly existing as corporations or limited partnerships in
good standing under the laws of their respective jurisdictions of
incorporation or formation and are duly qualified to transact business as
foreign corporations or entities and are in good standing under the laws of
all other jurisdictions where the ownership or leasing of their respective
properties or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified does not amount to
a material liability or disability to the Company and its Subsidiaries, taken
as a whole.
(e) The Company and each of its Subsidiaries have full power (corporate
and other) to own or lease their respective properties and conduct their
respective businesses as described in the Registration Statement, and the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus; and the Company has full power (corporate and other)
to enter into this Agreement and to carry out all the terms and provisions
hereof to be carried out by it.
(f) The issued shares of capital stock of each of the Company's
Subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable and, except for directors' qualifying shares and as otherwise
set forth in the Prospectus, or if the Prospectus is not in existence, the
most recent Preliminary Prospectus, are owned beneficially by the Company free
and clear of any security interests, liens, encumbrances, equities or claims.
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(g) The Company has an authorized, issued and outstanding capitalization
as set forth in the Prospectus or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus. All of the issued shares of capital stock
of the Company have been duly authorized and validly issued and are fully paid
and nonassessable. The Firm Securities and the Option Securities have been
duly authorized and at the Firm Closing Date or the related Option Closing
Date (as the case may be), after payment therefor in accordance herewith, will
be validly issued, fully paid and nonassessable. No holders of outstanding
shares of capital stock of the Company are entitled as such to any preemptive
or other rights to subscribe for any of the Securities, and no holder of
securities of the Company has any right which has not been fully exercised or
waived to require the Company to register the offer or sale of any securities
owned by such holder under the Act in the public offering contemplated by this
Agreement.
(h) The capital stock of the Company conforms to the description thereof
contained in the Prospectus or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus.
(i) Except as disclosed in the Prospectus or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus, there are not
outstanding (A) securities or obligations of the Company or any of its
Subsidiaries convertible into or exchangeable for any capital stock of the
Company or any of the Subsidiaries, (B) warrants, rights or options to
subscribe for or purchase from the Company or any of the Subsidiaries any such
capital stock or any such convertible or exchangeable securities or
obligations, or (C) obligations of the Company or any of the Subsidiaries to
issue any shares of capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or options.
(j) The consolidated financial statements and schedules of the Company
and its consolidated Subsidiaries included in the Registration Statement and
the Prospectus fairly present the financial position of the Company and its
consolidated Subsidiaries and the results of operations and changes in
financial condition as of the dates and periods therein specified. Such
financial statements and schedules have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved (except as otherwise noted therein). The selected financial
data set forth under the caption "Selected Consolidated Financial Data" in the
Prospectus Supplement and in the Company's Annual Report on Form 10-K for the
fiscal year ended 1996, fairly present, on the basis stated in each of the
Prospectus and such Annual Report, the information included therein. In
addition, any pro forma financial statements of the Company and its
Subsidiaries and the related notes thereto included in the Registration
Statement and the Prospectus present fairly the information shown therein,
have been prepared in all material respects in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein, and
the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein.
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(k) Arthur Anderson LLP, who have certified certain financial statements
of the Company and its consolidated Subsidiaries and delivered their report
with respect to the audited consolidated financial statements and schedules
included in the Registration Statement and the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus, are
independent public accountants as required by the Act, the Exchange Act and
the related published rules and regulations thereunder.
(l) The execution and delivery of this Agreement have been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms.
(m) No legal or governmental proceedings are pending to which the
Company or any of its Subsidiaries is a party or to which the property of the
Company or any of its Subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and that are not so
described or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus, and no such proceedings have been threatened against
the Company or any of its Subsidiaries or with respect to any of their
respective properties; and no contract or other document is required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement that is not described therein, or if the
Prospectus is not in existence, the most recent Preliminary Prospectus, or
filed as required.
(n) The issuance, offering and sale of the Securities to the Underwriters
by the Company pursuant to this Agreement, the compliance by the Company with
the other provisions of this Agreement and the consummation of the other
transactions herein contemplated do not (i) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained, such as may be required under
state securities or blue sky laws and, if the registration statement filed
with respect to the Securities (as amended) is not effective under the Act as
of the time of execution hereof, such as may be required (and shall be
obtained as provided in this Agreement) under the Act, or (ii) conflict with
or result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any (a) indenture, mortgage, deed of trust, lease
or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries or
any of their respective properties are bound, or (b) the charter documents or
by-laws of the Company or any of its Subsidiaries, or (c) any statute or any
judgment, decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to the Company or any of its
Subsidiaries, except in the case of clauses (a) and (c), for such breaches,
conflicts, violations or defaults that would not have a Material Adverse
Effect (as defined below).
(o) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus, neither the Company nor
any of its Subsidiaries has sustained any material loss or interference with
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their respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from any
labor dispute or any legal or governmental proceeding and there has not been
any material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise),
management, business prospects, net worth, or results of operations of the
Company or any of its Subsidiaries taken as a whole (a "Material Adverse
Effect"), except in each case as described in or contemplated by the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus.
(p) The Company has not, directly or indirectly, (i) taken any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A) sold,
bid for, purchased, or paid anyone any compensation for soliciting purchases
of, the Securities or (B) paid or agreed to pay to any person any compensation
for soliciting another to purchase any other securities of the Company, other
than for the March 24, 1997 and January 22, 1998 equity offerings and the
November 21, 1997 note issuance.
(q) The Company has not distributed and, prior to the later of (i) the
Closing Date and (ii) the completion of the distribution of the Securities,
will not distribute any offering material in connection with the offering and
sale of the Securities other than the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or other materials, if any permitted by the Act.
(r) The Company is organized and has been operated in conformity with
the requirements for qualification and taxation as a real estate investment
trust ("REIT") under the Internal Revenue Code of 1986, as amended (the
"Code"), for each of its taxable years beginning with its taxable year ended
December 31, 1989, and its current organization and method of operation will
enable it to continue to meet the requirements for qualification as a REIT.
(s) No labor dispute with the employees of the Company or any of the
Subsidiaries exists or, to the knowledge of the Company, is imminent, and the
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its or any of the Subsidiaries principal customers or
contractors, which, in either case, may reasonably be expected to result in a
Material Adverse Effect.
(t) The Company and its Subsidiaries own or possess, or can acquire on
reasonable terms, all material patents, patent applications, trademarks,
service marks, trade names, licenses, copyrights and proprietary or other
confidential information currently employed by them in connection with their
respective businesses, and neither the Company nor any of the Subsidiaries has
received any notice of infringement of or conflict with asserted rights of any
third party with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect except as described in or contemplated by
the Prospectus.<PAGE>
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(u) The Company and each of its Subsidiaries have good and marketable
title in fee simple to all items of real property and marketable title to all
personal property owned by each of them, in each case free and clear of any
security interests, liens, encumbrances, equities, claims and other defects,
except such as do not materially and adversely affect the value of such
property and do not interfere with the use made or proposed to be made of such
property by the Company or any of the Subsidiaries, and any real property and
buildings held under lease by the Company or any of the Subsidiaries are held
under valid, subsisting and enforceable leases, with such exceptions as are
not material and do not interfere with the use made or proposed to be made of
such property and buildings by the Company or any Subsidiaries, in each case
except as described in or contemplated by the Prospectus.
(v) The Company and its Subsidiaries conduct and will conduct their
operations in a manner that does not and will not subject any of them to
registration as an investment company under the Investment Company Act of
1940, as amended, and this transaction will not cause the Company or any of
its Subsidiaries to become an investment company subject to registration under
such Act.
(w) Neither the Company nor any of its Subsidiaries is in violation of
any federal or state law or regulation relating to occupational safety and
health or to the storage, handling or transportation of hazardous or toxic
materials and the Company and its Subsidiaries have received all permits,
licenses or other approvals required of them under applicable federal and
state occupational safety and health and environmental laws and regulations to
conduct their respective businesses, and the Company and each of the
Subsidiaries is in compliance with all terms and conditions of any such
permit, license or approval, except any such violation of law or regulation,
failure to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
which would not, singly or in the aggregate, result in a Material Adverse
Effect, except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(x) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a Material
Adverse Effect) and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of the
foregoing is due and payable, except for any such assessment, fine or penalty
that is currently being contested in good faith or as described in or
contemplated by the Prospectus.
(y) The Company and each of its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; neither the Company nor any of the Subsidiaries has been refused any
insurance coverage sought or applied for; and neither the Company nor any of
the Subsidiaries has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
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business at a cost that would not have a Material Adverse Effect, except as
described in or contemplated by the Prospectus.
(z) The Company and each of its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(aa) The Company has not distributed and, prior to the later of (i) the
Firm Closing Date (as defined hereinafter) and (ii) the completion of the
distribution of the Securities, will not distribute any offering material in
connection with the offering and sale of the Securities other than the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or other materials, if
any permitted by the Act.
(ab) The Company has not at any time during the last five years (i) made
any unlawful contribution to any candidate for foreign office, or failed to
disclose fully any contribution in violation of law, or (ii) made any payment
to any federal or state governmental officer or official, or other person
charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any jurisdiction
thereof.
(ac) All material transactions between the Company and the officers and
directors of the Company and its affiliates required to be disclosed in the
Registration Statement and Prospectus have been accurately disclosed in all
material respects in the Registration Statement and Prospectus and the
documents incorporated therein by reference.
(ad) None of the assets of the Company are, nor will such assets, as of
the Closing Date, constitute, "plan assets" under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
(ae) Any certificate signed by any officer of the Company or any of the
Subsidiaries and delivered to the Underwriters or to counsel for the
Underwriters in connection with the offering of the Securities shall be deemed
a representation and warranty by the Company to the Underwriters as to the
matters covered thereby on the date of such certificate and, unless
subsequently amended or supplemented, at each Representation Date subsequent
thereto.
3. Purchase, Sale and Delivery of the Securities.
(a) On the basis of the representations, warranties, agreements and
covenants herein contained and subject to the terms and conditions herein set
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forth, the Company agrees to issue and sell to each of the Underwriters, and
each of the Underwriters, severally and not jointly, agrees to purchase from
the Company, at a purchase price of $14.5825 per share, the number of Firm
Securities set forth opposite the name of such Underwriter in Schedule 1
hereto. One or more certificates in definitive form for the Firm Securities
that the several Underwriters have agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as the
Representatives request upon notice to the Company at least 48 hours prior to
the Firm Closing Date, shall be delivered by or on behalf of the Company to
the Representatives for the respective accounts of the Underwriters, against
payment by or on behalf of the Underwriters of the purchase price thereof by
wire transfer in same day funds (the "Wired Funds") to the account of the
Company. Such delivery of and payment for the Firm Securities shall be made
at the offices of Hogan & Hartson L.L.P., 555 Thirteenth Street N.W.,
Washington D.C. 20004 at 9:30 A.M., New York time, on March 25, 1998, or at
such other place, time or date as the Representatives and the Company may
agree upon, such time and date of delivery against payment being herein
referred to as the "Firm Closing Date". The Company will make such
certificate or certificates for the Firm Securities available for checking and
packaging by the Representatives at the offices in New York, New York of the
Company's transfer agent or registrar or of Prudential Securities Incorporated
at least 24 hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in connection with
the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company hereby grants to the several Underwriters an option to
purchase, severally and not jointly, the Option Securities. The purchase
price to be paid for any Option Securities shall be the same price per share
as the price per share for the Firm Securities set forth above in paragraph
(a) of this Section 3, plus if the purchase and sale of any Option Securities
takes place after the Firm Closing Date and after the Firm Securities are
trading "ex-dividend", an amount equal to the dividend payable on such Option
Securities. The option granted hereby may be exercised as to all or any part
of the Option Securities from time to time within 30 days after the date of
the Prospectus (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the New York Stock Exchange
is open for trading). The Underwriters shall not be under any obligation to
purchase any of the Option Securities prior to the exercise of such option.
The Representatives may from time to time exercise the option granted hereby
by giving notice in writing or by telephone (confirmed in writing) to the
Company setting forth the aggregate principal amount of Option Securities as
to which the several Underwriters are then exercising the option and the date
and time for delivery of and payment for such Option Securities. Any such
date of delivery shall be determined by the Representatives but shall not be
earlier than two business days or later than five business days after such
exercise of the option and, in any event, shall not be earlier than the Firm
Closing Date. The time and date set forth in such notice, or such other time
on such other date as the Representatives and the Company may agree upon or as
the Representatives may determine, is herein called the "Option Closing Date"
with respect to such Option Securities. Upon exercise of the option as
provided herein, subject to the terms and conditions herein set forth, the
Company shall become obligated to sell to each of the several Underwriters,
<PAGE>
<PAGE>11
and each of the Underwriters (severally and not jointly) shall become
obligated to purchase from the Company, the same percentage of the total
number of the Option Securities as to which the several Underwriters are then
exercising the option as such Underwriter is obligated to purchase of the
aggregate number of Firm Securities, as adjusted by the Representatives in
such manner as they deem advisable to avoid fractional shares. If the option
is exercised as to all or any portion of the Option Securities, one or more
certificates in definitive form for such Option Securities, and payment
therefor, shall be delivered on the related Option Closing Date in the manner,
and upon the terms and conditions, set forth in paragraph (a) of this Section
3, except that reference therein to the Firm Securities and the Firm Closing
Date shall be deemed, for purposes of this paragraph (b), to refer to such
Option Securities and Option Closing Date, respectively.
(c) The Company hereby acknowledges that the wire transfer by or on
behalf of the Underwriters of the purchase price for any Securities does not
constitute closing of a purchase and sale of the Securities. Only execution
and delivery of a receipt for Securities by the Underwriters indicates
completion of the closing of a purchase of the Securities from the Company.
Furthermore, in the event that the Underwriters wire funds to the Company
prior to the completion of the closing of a purchase of Securities, the
Company hereby acknowledges that until the Underwriters execute and deliver a
receipt for the Securities, by facsimile or otherwise, the Company will not be
entitled to the Wired Funds and shall return the Wired Funds to the
Underwriters as soon as practicable (by wire transfer of same-day funds) upon
demand. In the event that the closing of a purchase of Securities is not
completed and the Wired Funds are not returned by the Company to the
Underwriters on the same day the Wired Funds were received by the Company, the
Company agrees to pay to the Underwriters in respect of each day the wire
funds are not returned by it, in same-day funds, interest on the amount of
such wire funds in an amount representing the Underwriters' cost of financing
as reasonably determined by Prudential Securities Incorporated.
(d) It is understood that either of you, individually and not as one of
the Representatives, may (but shall not be obligated to) make payment on
behalf of any Underwriter or Underwriters for any of the Securities to be
purchased by such Underwriter or Underwriters. No such payment shall relieve
such Underwriter or Underwriters from any of its or their obligations
hereunder.
4. Offering by the Underwriters. Upon your authorization of the release
of the Firm Securities, the several Underwriters propose to offer the Firm
Securities for sale to the public upon the terms set forth in the Prospectus.
5. Covenants of the Company. The Company covenants and agrees with each
of the Underwriters that:
(a) The Company will file the Prospectus and any amendment or supplement
thereto with the Commission in the manner and within the time period required
by Rule 434 and 424(b) under the Act. During any time when a prospectus
relating to the Securities is required to be delivered under the Act, the
Company (i) will comply with all requirements imposed upon it by the Act and
<PAGE>
<PAGE>12
the Exchange Act and the respective rules and regulations of the Commission
thereunder to the extent necessary to permit the continuance of sales of or
dealings in the Securities in accordance with the provisions hereof and of the
Prospectus and any Integrated Prospectus, as then amended or supplemented, and
(ii) will not file with the Commission the Prospectus, Term Sheet, any
Integrated Prospectus or any amendment or supplement to such prospectus or any
amendment to the Registration Statement or any Rule 462(b) Registration
Statement of which the Representatives shall not previously have been advised
and furnished with a copy for a reasonable period of time prior to the
proposed filing and as to which filing the Representatives shall not have
given their consent. The Company will prepare and file with the Commission,
in accordance with the rules and regulations of the Commission, promptly upon
request by the Representatives or counsel for the Underwriters, any amendments
to the Registration Statement or amendments or supplements to the Prospectus
and any Integrated Prospectus that may be necessary or advisable in connection
with the distribution of the Securities by the several Underwriters, and will
use its best efforts to cause any such amendment to the Registration Statement
to be declared effective by the Commission as promptly as possible. The
Company will advise the Representatives, promptly after receiving notice
thereof, of the time when the Registration Statement or any amendment thereto
has been filed or declared effective or the Prospectus or any amendment or
supplement thereto has been filed and will provide evidence satisfactory to
the Representatives of each such filing or effectiveness.
(b) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the Original
Registration Statement or any Rule 462(b) Registration Statement or any
post-effective amendment thereto, or any order directed at any document
incorporated by reference in the Registration Statement, the Prospectus and
any required Integrated Prospectus, or any amendment or supplement thereto, or
any order preventing or suspending the use of any Preliminary Prospectus, the
Prospectus and any Integrated Prospectus or any amendment or supplement
thereto, (ii) the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, (iii) the institution, threatening or
contemplation of any proceeding for any such purpose or (iv) any request made
by the Commission for amending the Original Registration Statement or any Rule
462(b) Registration Statement, for amending or supplementing any Preliminary
Prospectus, the Prospectus and any Integrated Prospectus or for additional
information. The Company will use its best efforts to prevent the issuance of
any such stop order and, if any such stop order is issued, to obtain the
withdrawal thereof as promptly as possible.
(c) The Company will arrange for the qualification of the Securities for
offering and sale under the securities or blue sky laws of such jurisdictions
as the Representatives may designate and will continue such qualifications in
effect for as long as may be necessary to complete the distribution of the
Securities, provided, however, that in connection therewith the Company shall
not be required to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction.
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<PAGE>13
(d) If, at any time prior to the later of (i) the final date when a
prospectus relating to the Securities is required to be delivered under the
Act or (ii) the Option Closing Date, any event occurs as a result of which
each of the Prospectus or any Integrated Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or
if for any other reason it is necessary at any time to amend or supplement the
Prospectus or any Integrated Prospectus to comply with the Act, the Exchange
Act or the respective rules or regulations of the Commission thereunder, the
Company will promptly notify the Representatives thereof and, subject to
Section 5(a) hereof, will prepare and file with the Commission, at the
Company's expense, an amendment to the Registration Statement or an amendment
or supplement to the Prospectus or any Integrated Prospectus that corrects
such statement or omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the Representatives
and to counsel for the Underwriters a conformed copy of the registration
statement originally filed with respect to the Securities and each amendment
thereto (in each case including exhibits thereto) or any Rule 462(b)
Registration Statement, certified by the Secretary or an Assistant Secretary
of the Company to be true and complete copies thereof as filed with the
Commission by electronic transmission and (ii) so long as a prospectus
relating to the Securities is required to be delivered under the Act, as many
copies of each Preliminary Prospectus, the Prospectus or any Integrated
Prospectus or any amendment or supplement thereto as the Representatives may
reasonably request; without limiting the application of clause (iii) of this
sentence, the Company, not later than (A) 6:00 PM, New York City time, on the
date of determination of the public offering price, if such determination
occurred at or prior to 10:00 AM, New York City time on such date or (B) 2:00
PM, New York City time, on the business day following the date of
determination of the public offering price, if such determination occurred
after 10:00 AM, New York City time, on such date, will deliver to the
Underwriters, without charge, as many copies of the Prospectus and any
amendment or supplement thereto as the Representatives may reasonably request
for purposes of confirming orders that are expected to settle on the Firm
Closing Date.
(f) The Company, as soon as practicable, will make generally available
to its securityholders and to the Representatives a consolidated earnings
statement of the Company and its Subsidiaries that satisfies the provisions of
Section 11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus and any
Integrated Prospectus.
(h) The Company will not, directly or indirectly, without the prior
written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
<PAGE>
<PAGE>14
other sale or disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Common Stock
for a period of 45 days after the date hereof; except pursuant to this
Agreement, for issuances pursuant to the exercise of employee stock options
outstanding on the date hereof, the grant of additional options to purchase
Common Stock pursuant to the Company's stock option plans and the issuance of
shares of Common Stock upon the exercise thereof, pursuant to the Company's
dividend reinvestment plan, pursuant to the terms of convertible securities of
the Company outstanding on the date hereof and the issuance of shares of
Series C Cumulative Convertible Preferred Stock under an agreement with an
institutional investor through June 1998 and the issuances of shares of Common
Stock upon conversion thereof.
(i) The Company will not, directly or indirectly, (i) take any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company.
(j) The Company will obtain the agreements described in Section 7(f)
hereof prior to the Firm Closing Date.
(k) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to the Option Closing Date,
any rumor, publication or event relating to or affecting the Company shall
occur as a result of which in your opinion the market price of the Common
Stock has been or is likely to be materially affected (regardless of whether
such rumor, publication or event necessitates a supplement to or amendment of
the Prospectus and any Integrated Prospectus), the Company will, after notice
from you advising the Company to the effect set forth above, forthwith
prepare, consult with you concerning the substance of, and disseminate a press
release or other public statement, reasonably satisfactory to you, responding
to or commenting on such rumor, publication or event.
(l) If the Company elects to rely on Rule 462(b), the Company shall both
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) and pay the applicable fees in accordance with Rule 111
promulgated under the Act by the earlier of (i) 10:00 P.M. Eastern time on the
date of this Agreement and (ii) the time confirmations are sent or given, as
specified by Rule 462(b)(2).
(m) The Company will cause the Securities to be duly authorized for
listing by the New York Stock Exchange prior to the Firm Closing Date.
6. Expenses. The Company will pay all costs and expenses incident to
the performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 12 hereof, including all costs and expenses
incident to (i) the printing or other production of documents with respect to
<PAGE>
<PAGE>15
the transactions, including any costs of printing the registration statement
originally filed with respect to the Securities and any amendment thereto, any
Rule 462(b) Registration Statement, any Preliminary Prospectus, the Prospectus
and any Integrated Prospectus and any amendment or supplement thereto, this
Agreement and any blue sky memoranda, (ii) all arrangements relating to the
delivery to the Underwriters of copies of the foregoing documents, (iii) the
fees and disbursements of the counsel, accountants and any other experts or
advisors retained by the Company, (iv) preparation, issuance and delivery to
the Underwriters of any certificates evidencing the Securities, including
transfer agent's and registrar's fees, (v) the qualification of the Securities
under state securities and blue sky laws, including filing fees and reasonable
fees and disbursements of counsel for the Underwriters relating thereto, (vi)
the filing fees of the Commission relating to the Securities, (vii) the
listing of the Securities on the New York Stock Exchange, (viii) meetings with
prospective investors in the Securities (other than shall have been
specifically approved by the Representatives to be paid for by the
Underwriters) and (ix) advertising relating to the offering of the Securities
(other than shall have been specifically approved by the Representatives to be
paid for by the Underwriters). If the sale of the Securities provided for
herein is not consummated because any condition to the obligations of the
Underwriters set forth in Section 7 hereof is not satisfied, because this
Agreement is terminated pursuant to Section 12(a)(i) or (ii) hereof or because
of any failure, refusal or inability on the part of the Company to perform all
obligations and satisfy all conditions on its part to be performed or
satisfied hereunder other than by reason of a default by any of the
Underwriters, the Company will reimburse the Underwriters severally upon
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by it in connection
with the proposed purchase and sale of the Securities. The Company shall not
in any event be liable to the Underwriters for the loss of anticipated profits
from the transactions covered by this Agreement.
7. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company contained herein as of the date
hereof and as of the Firm Closing Date, as if made on and as of the Firm
Closing Date, to the accuracy of the statements of the Company's officers made
pursuant to the provisions hereof, to the performance by the Company of its
covenants and agreements hereunder and to the following additional conditions:
(a) The Prospectus and any Integrated Prospectus, as the case may be,
and any amendment or supplement thereto shall have been filed with the
Commission in the manner and within the time period required by Rules 434 and
424(b) under the Act; no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and no order
directed at any document incorporated by reference in the Registration
Statement, the Prospectus or any Integrated Prospectus or any amendment or
supplement thereto shall have been issued, and no proceeding for that purpose
shall have been instituted or threatened or, to the knowledge of the Company
or the Representatives, shall be contemplated by the Commission; and the
Company shall have complied with any request of the Commission for additional
<PAGE>
<PAGE>16
information (to be included in the Registration Statement, the Prospectus or
any Integrated Prospectus or otherwise).
(b) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Swidler & Berlin, Chartered, counsel for the Company, to the
effect that:
(i) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Maryland and is
duly qualified to transact business as a foreign corporation and is in good
standing under the laws of the jurisdictions set forth on Schedule 2. Each of
the Subsidiaries has been duly formed and is validly existing as a general or
limited partnership or corporation in good standing under the laws of its
jurisdiction of organization, and is duly qualified to transact business and
is in good standing under the laws of all the jurisdictions set forth on
Schedule 2;
(ii) the Company and each of the Subsidiaries have all requisite
corporate power to own or lease their respective properties and conduct their
respective businesses as described in the Registration Statement and the
Prospectus, and the Company has corporate power to enter into this Agreement
and to carry out all the terms and provisions thereof to be carried out by it;
(iii) the issued shares of capital stock of each of the
Subsidiaries that is a corporation have been duly authorized and validly
issued, are fully paid and nonassessable, and all the partnership interests in
each of the Subsidiaries that is a partnership are validly issued and fully
paid. Except for directors' qualifying shares and as otherwise set forth in
each of the Prospectus, are owned beneficially by the Company free and clear
of any perfected security interests or, to the best knowledge of such counsel,
any other security interests, liens, encumbrances, equities or claims;
(iv) the Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus; all of the issued shares of
stock of the Company have been duly authorized and validly issued and are
fully paid and nonassessable, have been issued in compliance with all
applicable federal and state securities laws and were not issued in violation
of or subject to any preemptive rights or other rights to subscribe for or
purchase securities;
(v) the Firm Securities have been duly authorized by all necessary
corporate action of the Company and, when issued and delivered to and paid for
by the Underwriters pursuant to this Agreement, will be validly issued, fully
paid and nonassessable; the Securities have been duly authorized for listing,
subject to official notice of issuance, on the New York Stock Exchange; no
holders of outstanding shares of stock of the Company are entitled as such to
any preemptive or other rights to subscribe for any of the Securities; and no
holders of securities of the Company are entitled to have such securities
registered under the Registration Statement;
(vi) the statements set forth under the heading "Description of
Capital Stock" in the Prospectus, insofar as such statements purport to
<PAGE>
<PAGE>17
summarize certain provisions of the capital stock of the Company, provide a
fair summary of such provisions; and the statements set forth under the
headings Certain United States Federal Income Tax Considerations",
"Description of Capital Stock - Common Shares - Restrictions on Ownership and
Transfer," "Risk Factors - Certain Tax Considerations" and "Risk Factors -
Investment Company Act Risk" in the Prospectus, insofar as such statements
constitute a summary of the legal matters, documents or proceedings referred
to therein, provide a fair summary of such legal matters, documents and
proceedings,
(vii) the execution and delivery of this Agreement has been duly
authorized by all necessary corporate action of the Company, and this
Agreement has been duly executed and delivered by the Company;
(viii) no legal or governmental proceedings are pending to which
the Company or any of the Subsidiaries is a party or to which the property of
the Company or any of the Subsidiaries is subject that are required to be
described in the Registration Statement and the Prospectus and are not
described therein, and, to the knowledge of such counsel, no such proceedings
have been threatened against the Company or any of the Subsidiaries or with
respect to any of their respective properties; and, to counsel's knowledge,
no contract or other document is required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration
Statement that is not described therein or filed as required;
(ix) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by the
Company with the other provisions of this Agreement and the consummation of
the other transactions herein contemplated do not (A) require the consent,
approval, authorization, registration or qualification of or with any United
States or Maryland governmental authority, except such as have been obtained
and such as may be required under state securities or blue sky laws, or (B)
conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, lease or other agreement or instrument, known to such counsel, to which
the Company or any of the Subsidiaries is a party or by which the Company or
any of the Subsidiaries or any of their respective properties are bound, or
the charter documents or by-laws of the Company or any of the Subsidiaries, or
any United States or Maryland statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any arbitrator
known to such counsel and applicable to the Company or any of the
Subsidiaries;
(x) the Registration Statement is effective under the Act; any
required filing of the Prospectus pursuant to Rules 434 and 424(b) has been
made in the manner and within the time period required by Rules 434 and
424(b); and no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto and no order directed at any
document incorporated by reference in the Registration Statement with the
Prospectus or any amendment or supplement thereto has been issued, and no
proceedings for that purpose have been instituted or, to the best of counsel's
knowledge, threatened or, are contemplated by the Commission;
<PAGE>
<PAGE>18
(xi) The Company is organized and has been operated in conformity
with the requirements for qualification and taxation as real estate investment
trust ("REIT") under the Internal Revenue Code of 1986, as amended (the
"Code"), for each of its taxable years beginning with its taxable year ended
December 31, 1989, and its current organization and method of operation will
enable it to continue to meet the requirements for qualification as a REIT;
(xii) Neither the Company nor any of its Subsidiaries is required
to register as an "investment company" within the meaning of the Investment
Company Act of 1940, as amended;
(xiii) the Registration Statement originally filed with respect to
the Securities and each amendment thereto, the Prospectus (in each case,
including the documents incorporated by reference therein but not including
the financial statements and other financial information contained therein, as
to which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act, the Exchange
Act and the respective rules and regulations of the Commission thereunder; and
(xiv) if the Company elects to rely on Rule 434, the Prospectus is
not "materially different", as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time of its
effectiveness or any effective post-effective amendment thereto (including
such information that is permitted to be omitted pursuant to Rule 430A).
Such counsel shall also state, in addition to the foregoing opinions, no facts
have come to our attention which lead us to believe that the Registration
Statement, or any amendment thereto, as of the time it became effective under
the 1933 Act, and at the Firm Closing Date, contained or contains an untrue
statement of a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
or that the Prospectus, as amended or supplemented, as of its date and at the
Firm Closing Date, included or includes an untrue statement of a material fact
or omitted or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deem proper, on certificates of responsible
officers of the Company and public officials and, as to matters involving the
application of laws of any jurisdiction other than the District of Columbia or
the Federal Law of the United States or the General Corporate Law of the State
of Maryland, to the extent satisfactory in form and scope to counsel for the
Underwriters, upon the opinion of local counsel. The foregoing opinion shall
also state that the Underwriters are justified in relying upon such opinion of
local counsel, and copies of such opinion shall be delivered to the
Representatives and counsel for the Underwriters.
References to the Registration Statement and the Prospectus and any
Integrated Prospectus in this paragraph (b) shall include any amendment or
supplement thereto at the date of such opinion.
<PAGE>
<PAGE>
(c) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Hogan & Hartson L.L.P., counsel for the Underwriters, with
respect to the issuance and sale of the Firm Securities, the Registration
Statement and the Prospectus or any Integrated Prospectus, and such other
related matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they may reasonably
request for the purpose of enabling them to pass upon such matters. In
rendering such opinion, such counsel may rely as to all matters of law upon
the opinions of such counsel referred to in paragraph (b) above.
(d) The Representatives shall have received from Arthur Andersen, LLP a
letter or letters dated, respectively, the date hereof and the Firm Closing
Date, in form and substance satisfactory to the Representatives, to the effect
that:
(i) they are independent accountants with respect to the Company
and its consolidated Subsidiaries within the meaning of the Act, the Exchange
Act and the applicable rules and regulations thereunder;
(ii) in their opinion, the audited consolidated financial
statements and schedules and pro forma financial statements examined by them
and included in the Registration Statement and the Prospectus and any
Integrated Prospectus comply in form in all material respects with the
applicable accounting requirements of the Act, the Exchange Act and the
related published rules and regulations thereunder;
(iii) on the basis of their limited review in accordance with
standards established by the American Institute of Certified Public
Accountants of any interim unaudited consolidated condensed financial
statements of the Company and its consolidated Subsidiaries as indicated in
their report[s] incorporated in the Registration Statement, the Prospectus and
any Integrated Prospectus, a reading of the latest available interim unaudited
consolidated condensed financial statements of the Company and its
consolidated Subsidiaries, and of the unaudited consolidated financial
statements of the Company and its consolidated Subsidiaries for the periods
from which such amounts are derived, carrying out certain specified procedures
(which do not constitute an examination made in accordance with generally
accepted auditing standards) that would not necessarily reveal matters of
significance with respect to the comments set forth in this paragraph (iii), a
reading of the minute books of the shareholders, the board of directors and
any committees thereof of the Company and each of its consolidated
Subsidiaries, and inquiries of certain officials of the Company and its
consolidated subsidiaries who have responsibility for financial and accounting
matters, nothing came to their attention that caused them to believe that:
(A) the unaudited consolidated condensed financial statements of the
Company and its consolidated Subsidiaries included in the Registration
Statement, the Prospectus and any Integrated Prospectus do not comply in form
in all material respects with the applicable accounting requirements of the
Act, the Exchange Act and the related published rules and regulations
thereunder, or are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of the <PAGE>
<PAGE>
audited consolidated financial statements included in the Registration
Statement and the Prospectus and any Integrated Prospectus;
(B) at a specific date not more than five business days prior to the
date of such letter, there were any changes in the capital stock or long-term
debt of the Company and its consolidated Subsidiaries or any decreases in net
current assets or stockholders' equity of the Company and its consolidated
Subsidiaries, in each case compared with amounts shown on the December 31,
1997 consolidated balance sheet included in the Registration Statement and the
Prospectus and any Integrated Prospectus, or for the period from January 1,
1998 to such specified date there were any decreases in sales, net revenues,
net income before income taxes or total or per share amounts of net income of
the Company and its consolidated Subsidiaries except in all instances for
changes, decreases or increases set forth in such letter;
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting records of
the Company and its consolidated Subsidiaries and are included in the
Registration Statement, the Prospectus and any Integrated Prospectus, and have
compared such amounts, percentages and financial information with such records
of the Company and its consolidated Subsidiaries and with information derived
from such records and have found them to be in agreement, excluding any
questions of legal interpretation; and
(v) on the basis of a reading of the unaudited pro forma
consolidated condensed financial statements included in the Registration
Statement, the Prospectus and any Integrated Prospectus, carrying out certain
specified procedures that would not necessarily reveal matters of significance
with respect to the comments set forth in this paragraph (v), inquiries of
certain officials of the Company and its consolidated Subsidiaries who have
responsibility for financial and accounting matters and proving the arithmetic
accuracy of the application of the pro forma adjustments to the historical
amounts in the unaudited pro forma consolidated condensed financial
statements, nothing came to their attention that caused them to believe that
the unaudited pro forma consolidated condensed financial statements do not
comply in form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or that the pro forma adjustments
have not been properly applied to the historical amounts in the compilation of
such statements.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by
a written explanation of the Company as to the significance thereof, unless
the Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives,
make it impractical or inadvisable to proceed with the purchase and delivery
of the Securities as contemplated by the Registration Statement, as amended as
of the date hereof.
References to the Registration Statement, the Prospectus and any
Integrated Prospectus in this paragraph (d) with respect to either letter
<PAGE>
<PAGE>
referred to above shall include any amendment or supplement thereto at the
date of such letter.
(e) The Representatives shall have received a certificate, dated the
Firm Closing Date, of the Chairman of the Board or the President and the Chief
Financial Officer of the Company to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct as if made on and as of the Firm Closing Date;
the Registration Statement, as amended as of the Firm Closing Date, does not
include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading, the Prospectus,
as amended or supplemented as of the Firm Closing Date, does not include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the Company has
performed all covenants and agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the Firm Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and no order
directed at any document incorporated by reference in the Registration
Statement, the Prospectus or any amendment or supplement thereto has been
issued, and no proceedings for that purpose have been instituted or threatened
or, to the best of the Company's knowledge, are contemplated by the
Commission; and
(iii) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, neither the Company
nor any of its Subsidiaries has sustained any material loss or interference
with their respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from any
labor dispute or any legal or governmental proceeding, and there has not been
any material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise),
management, business prospects, net worth or results of operations of the
Company or any of its Subsidiaries, except in each case as described in or
contemplated by the Prospectus and any Integrated Prospectus.
(f) The Representatives shall have received from each person who is
a director or executive officer of the Company an agreement to the effect that
such person will not, directly or indirectly, without the prior written
consent of Prudential Securities Incorporated, on behalf of the Underwriters,
offer, sell, offer to sell, contract to sell, pledge, grant any option to
purchase or otherwise sell or dispose (or announce any offer, sale, offer of
sale, contract of sale, pledge, grant of an option to purchase or other sale
or disposition) of any shares of Common Stock or any securities convertible
into, or exchangeable or exercisable for, shares of Common Stock for a period
of 45 days after the date of this Agreement; provided, however, that the
foregoing agreement and representation shall not apply to gifts or charitable
contributions of Common Stock made by the undersigned if the recipient of such
gift or charitable contribution agrees to be bound by the terms hereof.
<PAGE>
<PAGE>
(g) On or before the Firm Closing Date, the Representatives and
counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.
(h) Prior to the commencement of the offering of the Securities, the
Securities shall have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the
Representatives such conformed copies of such opinions, certificates, letters
and documents in such quantities as the Representatives and counsel for the
Underwriters shall reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each
of the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter or
such controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by the
Company in Section 2 of this Agreement;
(ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus and any Integrated
Prospectus or any amendment or supplement thereto or (B) any application or
other document, or any amendment or supplement thereto, executed by the
Company or based upon written information furnished by or on behalf of the
Company filed in any jurisdiction in order to qualify the Securities under the
securities or blue sky laws thereof or filed with the Commission or any
securities association or securities exchange (each an "Application");
(iii) the omission or alleged omission to state in the Registration
Statement or any amendment thereto, any Preliminary Prospectus, the Prospectus
and any Integrated Prospectus or any amendment or supplement thereto, or any
Application a material fact required to be stated therein or necessary to make
the statements therein not misleading; or
<PAGE>
<PAGE>
(iv) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials used in connection
with the marketing of the Securities, including without limitation, slides,
videos, films and tape recordings
and will reimburse, as incurred, each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in such
Registration Statement or any amendment thereto, any Preliminary Prospectus,
the Prospectus and any Integrated Prospectus or any amendment or supplement
thereto, or any Application in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives specifically for use therein. This indemnity agreement will
be in addition to any liability which the Company may otherwise have. The
Company will not, without the prior written consent of the Underwriter or
Underwriters purchasing, in the aggregate, more than fifty percent (50%) of
the Securities, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder (whether or not any such
Underwriter or any person who controls any such Underwriter within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act is a party to such
claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of all the Underwriters and such
controlling persons from all liability arising out of such claim, action, suit
or proceeding.
(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any losses, claims, damages or liabilities to which the
Company or any such director, officer or controlling person may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus or any Integrated
Prospectus or any amendment or supplement thereto, or any Application or (ii)
the omission or the alleged omission to state therein a material fact required
to be stated in the Registration Statement or any amendment thereto, any
Preliminary Prospectus, the Prospectus, Integrated Prospectus or any amendment
or supplement thereto, or any Application or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein; and, subject to the limitation set forth <PAGE>
<PAGE>
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses reasonably incurred by the Company or any such director,
officer or controlling person in connection with investigating or defending
any such loss, claim, damage, liability or any action in respect thereof.
This indemnity agreement will be in addition to any liability which such
Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
this Section 8, notify the indemnifying party of the commencement thereof; but
the omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 8. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party; provided, however, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or
more legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to direct the defense of such
action on behalf of such indemnified party or parties and such indemnified
party or parties shall have the right to select separate counsel to defend
such action on behalf of such indemnified party or parties. After notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof and approval by such indemnified party of counsel
appointed to defend such action, the indemnifying party will not be liable to
such indemnified party under this Section 8 for any legal or other expenses,
other than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in
any one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the Representatives in the case of paragraph (a) of this Section
8, representing the indemnified parties under such paragraph (a) who are
parties to such action or actions) or (ii) the indemnifying party does not
promptly retain counsel satisfactory to the indemnified party or (iii) the
indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the consent of the indemnifying
party.
<PAGE>
<PAGE>
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 8 is unavailable or insufficient, for
any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or the
Underwriters, the parties' relative intents, knowledge, access to information
and opportunity to correct or prevent such statement or omission, and any
other equitable considerations appropriate in the circumstances. The Company
and the Underwriters agree that it would not be equitable if the amount of
such contribution were determined by pro rata or per capita allocation (even
if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take into account the equitable
considerations referred to above in this paragraph (d). Notwithstanding any
other provision of this paragraph (d), no Underwriter shall be obligated to
make contributions hereunder that in the aggregate exceed the total public
offering price of the Securities purchased by such Underwriter under this
Agreement, less the aggregate amount of any damages that such Underwriter has
otherwise been required to pay in respect of the same or any substantially
similar claim, and no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute hereunder are several in proportion to
their respective underwriting obligations and not joint, and contributions
among Underwriters shall be governed by the provisions of the Prudential
Securities Incorporated Master Agreement Among Underwriters. For purposes of
this paragraph (d), each person, if any, who controls an Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall
have the same rights to contribution as such Underwriter, and each director of
the Company, each officer of the Company who signed the Registration Statement
and each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, shall have the same
rights to contribution as the Company.
<PAGE>
<PAGE>
9. Default of Underwriters. If one or more Underwriters default in
their obligations to purchase Firm Securities or Option Securities hereunder
and the aggregate number of such Securities that such defaulting Underwriter
or Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by
all of the Underwriters at such time hereunder, the other Underwriters may
make arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or
Option Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase. If one or more Underwriters so default with respect to an
aggregate number of Securities that is more than ten percent of the aggregate
number of Firm Securities or Option Securities, as the case may be, to be
purchased by all of the Underwriters at such time hereunder, and if
arrangements satisfactory to the Representatives are not made within 36 hours
after such default for the purchase by other persons (who may include one or
more of the non-defaulting Underwriters, including the Representatives) of the
Securities with respect to which such default occurs, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or
the Company other than as provided in Section 10 hereof. In the event of any
default by one or more Underwriters as described in this Section 9, the
Representatives shall have the right to postpone the Firm Closing Date or the
Option Closing Date, as the case may be, established as provided in Section 3
hereof for not more than seven business days in order that any necessary
changes may be made in the arrangements or documents for the purchase and
delivery of the Firm Securities or Option Securities, as the case may be. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section 9. Nothing herein shall relieve any
defaulting Underwriter from liability for its default.
10. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers and the several Underwriters set forth in this Agreement or made by
or on behalf of them, respectively, pursuant to this Agreement shall remain in
full force and effect, regardless of (i) any investigation made by or on
behalf of the Company, any of its officers or directors, any Underwriter or
any controlling person referred to in Section 8 hereof and (ii) delivery of
and payment for the Securities. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6 and 8 hereof shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement.
11. Information Supplied by the Underwriters. The statements set
forth in the last paragraph on the front cover page and under the heading
"Underwriting" in any Preliminary Prospectus, the Prospectus or any Integrated
Prospectus (to the extent such statements relate to the Underwriters)
constitute the only information furnished by any Underwriter through the
Representatives to the Company for the purposes of Sections 2(b) and 8 hereof.
The Underwriters confirms that such statements (to such extent) are correct.
<PAGE>
<PAGE>
12. Termination.
(a) This Agreement may be terminated with respect to the Firm Securities
or any Option Securities in the sole discretion of the Representatives by
notice to the Company given prior to the Firm Closing Date or the related
Option Closing Date, respectively, in the event that the Company shall have
failed, refused or been unable to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Firm Closing Date or such Option Closing
Date, respectively:
(i) the Company or any of its Subsidiaries shall have, in the sole
judgment of the Representatives, sustained any material loss or interference
with their respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from any
labor dispute or any legal or governmental proceeding or there shall have been
any material adverse change, or any development involving a prospective
material adverse change (including without limitation a change in management
or control of the Company), in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company and its
Subsidiaries, except in each case as described in or contemplated by the
Prospectus (exclusive of any amendment or supplement thereto);
(ii) trading in the Common Stock shall have been suspended by the
Commission or the New York Stock Exchange;
(iii) trading in securities generally on the New York Stock
Exchange shall have been suspended or minimum or maximum prices shall have
been established on such exchange,
(iv) a banking moratorium shall have been declared by New York or
United States authorities; or
(v) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an outbreak
or escalation of any other insurrection or armed conflict involving the United
States or (C) any other calamity or crisis or material adverse change in
general economic, political or financial conditions having an effect on the U.
S. financial markets that, in the sole judgment of the Representatives, makes
it impractical or inadvisable to proceed with the public offering or the
delivery of the Securities as contemplated by the Registration Statement, as
amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 12 shall be
without liability of any party to any other party except as provided in
Section 10 hereof.
13. Notices. All communications hereunder shall be in writing and,
if sent to any of the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, One New York Plaza, New York, New York 10292, Attention: Equity
Transactions Group, with a copy to Hogan & Hartson L.L.P., 555 Thirteenth
<PAGE>
<PAGE>
Street, N.W., Washington, D.C. 20004, Attention: James E. Showen, and if
sent to the Company, shall be delivered or sent by mail, telex or facsimile
transmission and confirmed in writing to the Company at CRIIMI MAE Inc.,
11200 Rockville Pike, Rockville, Maryland 20852, Attention: Cynthia O.
Azzara, Senior Vice President, with a copy to Swidler & Berlin, Chartered,
3000 K Street, N.W., Washington, D.C. 20007, Attention: Morris F. DeFeo, Jr.
14. Successors. This Agreement shall inure to the benefit of and shall
be binding upon the several Underwriters, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons and for the benefit of no other person
except that (i) the indemnities of the Company contained in Section 8 of this
Agreement shall also be for the benefit of any person or persons who control
any Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act and (ii) the indemnities of the Underwriters contained in
Section 8 of this Agreement shall also be for the benefit of the directors of
the Company, the officers of the Company who have signed the Registration
Statement and any person or persons who control the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act. No purchaser of
Securities from any Underwriter shall be deemed a successor because of such
purchase.
15. Applicable Law. The validity and interpretation of this Agreement,
and the terms and conditions set forth herein, shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any provisions relating to conflicts of laws.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
<PAGE>
<PAGE>
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company and
each of the several Underwriters.
Very truly yours,
CRIIMI MAE INC.
By: /s/ Cynthia O. Azzara
--------------------------
Name: Cynthia O. Azzara
Title: Chief Financial Officer/
Treasurer/Senior Vice
President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
By Prudential Securities Incorporated
By: /s/ Jean-Claude Canfin
---------------------------------
Jean-Claude Canfin
Managing Director
For itself and on behalf of the Representatives
<PAGE>
<PAGE>
SCHEDULE 1
UNDERWRITERS
Number of
Underwriters Shares
Prudential Securities Incorporated. 1,300,000
Friedman, Billings, Ramsey & Co., Inc. 1,300,000
Total 2,600,000
<PAGE>
<PAGE>
SCHEDULE 2
SUBSIDIARIES
Name Jurisdiction of Incorporation or
Formation
CRIIMI MAE Inc. Maryland
CRIIMI, Inc. Maryland
CRIIMI MAE Management, Inc. Maryland
CRIIMI MAE Financial Corporation Maryland
CRIIMI MAE Financial Corporation II Maryland
CRIIMI MAE Financial Corporation III Maryland
CRIIMI MAE Services Limited Partnership Maryland
CRIIMI MAE Services, Inc. Maryland
CRIIMI MAE Holdings, L.P. Delaware
CRIIMI MAE Holdings, Inc. Delaware
CRIIMI MAE QRS 1, Inc. Delaware
[LETTERHEAD OF SWIDLER & BERLIN, CHARTERED]
March 19, 1998
CRIIMI MAE Inc.
The CRI Building
11200 Rockville Pike
Rockville, MD 20852
RE: Sale of Common Stock Pursuant to Shelf Registration Statement
Gentlemen:
We have acted as counsel to CRIIMI MAE Inc., a Maryland corporation (the
"Company"), in connection with the filing of a registration statement on Form
S-3
with the Securities and Exchange Commission on October 21, 1997, as well as a
prospectus dated October 28, 1997 (the "Prospectus") included therein (together
the "Registration Statement"), for the registration under the Securities Act of
1933, as amended, of the sale of an indeterminate number of shares of the
Company's common stock, par value $.01 per share; the Company's preferred stock,
par value $.01 per share; the Company's debt securities; and the Company's
warrants pursuant to the Registration Statement, as well as a Prospectus
Supplement to the Prospectus dated March 19, 1998 (the Prospectus Supplement")
relating to the offering of 2.6 million shares of the Company's common stock
(the
"Offering"). In connection with the Offering, we have been asked to provide you
with an opinion regarding certain United States federal income tax matters
related to the Company.
In issuing this opinion, we have examined (1) the Registration Statement;
(2) the Prospectus Supplement; (3) the Company's Articles of Incorporation, as
amended; and (4) such other corporate records, including the resolution 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 of 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
<PAGE>
<PAGE>
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 Supplement.
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 proposed 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 Prospectus Supplement under the headings "CERTAIN
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS" and "RISK FACTORS-
CERTAIN 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 stock of the
Company.
The Company's qualification as a REIT under the Code will depend upon the
Company's ability to meet, 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 Prospectus
Supplement under the headings "CERTAIN UNITED STATES FEDERAL INCOME TAX
CONSIDERATIONS" and "RISK FACTORS - CERTAIN TAX CONSIDERATIONS."
<PAGE>
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Prospectus Supplement and to all references to our firm in the Prospectus
Supplement. 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
