<PAGE>
THIS REGISTRATION STATEMENT ALSO CONSTITUTES POST EFFECTIVE AMENDMENT NO. 4 TO
REGISTRATION STATEMENT NO. 33-54267,
POST-EFFECTIVE AMENDMENT NO. 2 TO REGISTRATION STATEMENT NO. 333-28823
AND POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 333-38409
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 29, 1998
REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
CRIIMI MAE INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 52-1622022
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
WILLIAM B. DOCKSER
CHAIRMAN OF THE BOARD
11200 ROCKVILLE PIKE 11200 ROCKVILLE PIKE
ROCKVILLE, MARYLAND 20852 ROCKVILLE, MARYLAND 20852
(301) 816-2300 (301) 816-2300
(ADDRESS, INCLUDING ZIP CODE, AND (NAME, ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER,INCLUDING AREA TELEPHONE NUMBER, INCLUDING AREA CODE, OF
CODE, OF REGISTRANT'S PRINCIPAL AGENT FOR SERVICE)
EXECUTIVE OFFICES)
COPY TO:
MORRIS F. DEFEO, JR., ESQ.
SWIDLER & BERLIN, CHARTERED
3000 K STREET, N.W., SUITE 300
WASHINGTON, DC 20007
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable on or after the effective date of this Registration Statement.
--------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
--------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED(1) REGISTERED(2) PER UNIT(2) PRICE(2)(3) FEE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities,
Preferred Stock, par
value $.01 per share,
Common Stock, par
value $.01 per share
and Warrants......(4) (5) (5) $350,000,000 $103,250(6)
</TABLE>
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(1) This Registration Statement also covers delayed delivery contracts which
may be issued by the Registrant under which the counterparty may be
required to purchase Debt Securities, Preferred Stock, Common Stock or
Warrants. Such contracts would be issued with the Debt Securities,
Preferred Stock, Common Stock and/or Warrants. In addition, any securities
registered hereunder may be sold separately or as units with other
securities registered hereunder.
(2) In no event will the aggregate maximum offering price of all securities
issued under this Registration Statement exceed $350,000,000 or the
equivalent thereof in one or more foreign currencies or composite
currencies or, if any Debt Securities are issued with original issue
discount, such greater amount as shall result in proceeds of not more than
$350,000,000 to the Registrant. The aggregate maximum offering price of
$350,000,000 includes $73,968,875 of Debt Securities, Preferred Stock,
Common Stock and Warrants previously registered under Registration
Statement No. 333-38409 and $276,031,125 of Debt Securities, Preferred
Stock, Common Stock and Warrants registered under this Registration
Statement dated May 29, 1998.
(3) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(o) of the Securities Act of 1933, as amended.
(4) There is also being registered hereunder (i) an indeterminable number of
shares of Common Stock and Preferred Stock as may be issued upon the
exercise of the Warrants, (ii) indeterminate number of shares of Common
Stock and Preferred Stock as may be issued in exchange for, or upon
conversion of, the Debt Securities and an indeterminate number of shares
of Common Stock as may be issued in exchange for, or upon conversion of,
the Preferred Stock. No separate consideration will be received for any
securities registered hereunder that are issued in exchange for, or upon
conversion of, as the case may be, Debt Securities, Preferred Stock and/or
Warrants registered hereunder.
(5) Not applicable pursuant to General Instruction II.D. of Form S-3 under the
Securities Act of 1933, as amended.
(6) Pursuant to Rule 429 of the Securities Act of 1933, as amended, the
Prospectus included herein covers (i) $27,355,000 of Debt Securities,
Preferred Stock and Common Stock from a previous Registration Statement
(No. 33-54267), (ii) $264,915,000 of Debt Securities, Preferred Stock,
Common Stock and Warrants from a previous Registration Statement (No. 333-
28823), and $73,968,875 of Debt Securities, Preferred Stock, Common Stock
and Warrants from a previous Registration Statement (No. 333-38409) as to
each of which a registration fee has previously been paid.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THE
PROSPECTUS INCLUDED HEREIN RELATES TO $73,968,875 AGGREGATE PRINCIPAL AMOUNT
OF DEBT SECURITIES, PREFERRED STOCK, COMMON STOCK AND WARRANTS OF THE
REGISTRANT REGISTERED UNDER REGISTRATION STATEMENT NO. 333-38409, $237,560,000
AGGREGATE PRINCIPAL AMOUNT OF DEBT SECURITIES, PREFERRED STOCK, COMMON STOCK
AND WARRANTS OF THE REGISTRANT REGISTERED UNDER REGISTRATION STATEMENT NO.
333-28823, AS AMENDED BY POST-EFFECTIVE AMENDMENT NO. 1 FILED ON OCTOBER 21,
1997 AND $27,355,000 AGGREGATE PRINCIPAL AMOUNT OF DEBT SECURITIES, PREFERRED
STOCK AND COMMON STOCK OF THE REGISTRANT REGISTERED UNDER REGISTRATION
STATEMENT NO. 33-54267, AS AMENDED BY POST-EFFECTIVE AMENDMENT NO. 1 FILED ON
FEBRUARY 1, 1996, POST-EFFECTIVE AMENDMENT NO. 2 FILED ON JUNE 9, 1997 AND
POST-EFFECTIVE AMENDMENT NO. 3 FILED ON OCTOBER 21, 1997. IN THE EVENT ANY OF
SUCH PREVIOUSLY REGISTERED DEBT SECURITIES, PREFERRED STOCK, COMMON STOCK
AND/OR WARRANTS OF THE REGISTRANT ARE OFFERED PRIOR TO THE EFFECTIVE DATE OF
THIS REGISTRATION STATEMENT, THEY WILL NOT BE INCLUDED IN ANY PROSPECTUS
HEREUNDER. THE AMOUNT OF DEBT SECURITIES, PREFERRED STOCK, COMMON STOCK AND
WARRANTS OF THE REGISTRANT BEING REGISTERED HEREBY, TOGETHER WITH THE DEBT
SECURITIES, PREFERRED STOCK, COMMON STOCK AND WARRANTS OF THE REGISTRANT
REGISTERED UNDER REGISTRATION STATEMENT NO. 333-38409, THE DEBT SECURITIES,
PREFERRED STOCK, COMMON STOCK AND WARRANTS OF THE REGISTRANT REGISTERED UNDER
REGISTRATION STATEMENT NO. 333-28823 AND THE DEBT SECURITIES, PREFERRED STOCK
AND COMMON STOCK OF THE REGISTRANT REGISTERED UNDER REGISTRATION STATEMENT NO.
33-54267, REPRESENTS THE MAXIMUM AMOUNT OF DEBT SECURITIES, PREFERRED STOCK,
COMMON STOCK AND WARRANTS OF THE REGISTRANT WHICH IS EXPECTED TO BE OFFERED
FOR SALE.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 , AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MAY 29, 1998
PROSPECTUS
CRIIMI MAE INC.
$350,000,000
DEBT SECURITIES, PREFERRED SHARES, COMMON SHARES AND WARRANTS
CRIIMI MAE Inc. ("CRIIMI MAE") may from time to time offer in one or more
series its debt securities (the "Debt Securities"), shares of its preferred
stock, par value $.01 per share (the "Preferred Shares"), shares of its common
stock, par value $.01 per share (the "Common Shares"), and warrants to purchase
Preferred Shares or Common Shares (the "Warrants"), with an aggregate public
offering price of up to $350,000,000 (or its foreign currency equivalent based
on the exchange rate at the time of sale) in amounts, at prices and on terms to
be determined at the time of offering. The Debt Securities, Preferred Shares,
Common Shares and Warrants (collectively, the "Securities") may be offered,
separately or together, in separate series in amounts, at prices and on terms
to be set forth in one or more supplements to this Prospectus (each, a
"Prospectus Supplement").
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the applicable Prospectus Supplement and
will include, where applicable: (i) in the case of Debt Securities, the
specific title, ranking, aggregate principal amount, currency, form (which may
be registered or bearer, or certificated or global), authorized denominations,
maturity, rate (or manner of calculation thereof) and time of payment of
interest, terms for redemption at the option of CRIIMI MAE or repayment at the
option of the holder, terms for sinking fund payments, terms for conversion
into Preferred Shares or Common Shares, covenants and any initial public
offering price; (ii) in the case of Preferred Shares, the specific title and
stated value, any dividend, liquidation, redemption, conversion, voting and
other rights, and any initial public offering price; (iii) in the case of
Common Shares, any public offering price; and (iv) in the case of Warrants, the
number and terms thereof, the designation and number or amount of Preferred
Shares or Common Shares issuable upon their exercise, the exercise price, the
terms of the offering and sale thereof and, where applicable, the duration and
detachability thereof. In addition, such specific terms may include limitations
on direct or beneficial ownership and restrictions on transfer of the
Securities, in each case as may be appropriate to preserve the status of CRIIMI
MAE as a real estate investment trust ("REIT") for federal income tax purposes.
See "Certain United States Federal Income Tax Considerations."
The applicable Prospectus Supplement will also contain information, where
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities
covered by such Prospectus Supplement.
The Securities may be offered directly, through agents designated from time
to time by CRIIMI MAE, or to or through underwriters or dealers. If any agents
or underwriters are involved in the sale of any of the Securities, their names,
and any applicable purchase price, fee, commission or discount arrangement
between or among them, will be set forth, or will be calculable from the
information set forth, in the applicable Prospectus Supplement. See "Plan of
Distribution." No Securities may be sold without delivery of the applicable
Prospectus Supplement describing the method and terms of the offering of such
Securities.
CRIIMI MAE's Common Shares, and shares of its Series B Cumulative Convertible
Preferred Stock, par value $.01 per share (the "Series B Preferred Shares"),
are traded on the New York Stock Exchange (the "NYSE") under the symbol "CMM"
and "CMM-PrB," respectively.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF THE SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
------------
THE DATE OF THIS PROSPECTUS IS , 1998.
<PAGE>
AVAILABLE INFORMATION
CRIIMI MAE and certain of its subsidiaries are subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith file reports, proxy statements and other
information with the Securities and Exchange Commission (the "SEC" or
"Commission"). Reports, proxy statements and other information filed by CRIIMI
MAE can be inspected and copied at the SEC's Public Reference Room, 450 Fifth
Street, N.W., Washington, D.C. 20549 and the SEC's Regional Offices at 7 World
Trade Center, 13th Floor, New York, New York 10048 and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and copies of such material can
be obtained from the Public Reference Section of the SEC, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. In addition, reports, proxy
material and other information concerning CRIIMI MAE may be inspected at the
NYSE, 20 Broad Street, New York, New York 10005 or reviewed through the
Commission's Electronic Data Gathering Analysis and Retrieval System, which is
publicly available through the Commission's Web site (http://www.sec.gov).
This Prospectus constitutes part of a Registration Statement on Form S-3
(together with all amendments and exhibits, the "Registration Statement")
filed by CRIIMI MAE with the SEC under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus does not contain all of the
information included in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the SEC. Reference is
made to the Registration Statement for further information with respect to
CRIIMI MAE and the Securities. Statements contained in this Prospectus and any
accompanying Prospectus Supplement concerning the provisions or contents of
any contract, agreement or any other document referred to herein are not
necessarily complete. With respect to each such contract, agreement or
document filed as an exhibit to the Registration Statement, reference is made
to such exhibit for a more complete description of the matters involved, and
each such statement shall be deemed qualified in its entirety by such
reference to the copy of the applicable document filed with the Commission.
The Registration Statement including the exhibits and schedules thereto, may
be inspected without charge at the Commission's principal office at 450 Fifth
Street, N.W., Washington, D.C. and copies of it or any part thereof may be
obtained from such office, upon payment of the fees prescribed by the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by CRIIMI MAE with the SEC (File
No. 1-10360) are incorporated herein by reference (collectively, the
"Incorporated Information"):
1. Annual Report on Form 10-K for the year ended December 31, 1997.
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 1998.
3. Form 8-K, as filed with the SEC on May 18, 1998.
4. Definitive Proxy Statements dated March 30, 1998, April 26, 1995 and
April 6, 1993.
5. Form 8-K, as filed with the SEC on June 30, 1995.
6. Form 8-A, as filed with the SEC on October 16, 1989.
7. Form 8-B, as filed with the SEC on October 27, 1993.
The Prospectus should be read in conjunction with the Incorporated
Information and any applicable Prospectus Supplement, which are incorporated
by reference into the Prospectus. All documents filed by CRIIMI MAE pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to the termination of the offering of the Securities
offered hereby shall be deemed to be incorporated by reference in this
Prospectus from the date of filing of such documents. Any statement contained
herein or in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
2
<PAGE>
CRIIMI MAE will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered, on the
written or oral request of any such person, a copy of any or all of the
documents referred to above which have been or may be incorporated in this
Prospectus by reference, other than exhibits to such documents, unless such
exhibits are specifically incorporated by reference. Requests for such copies
should be directed to CRIIMI MAE's principal executive offices: CRIIMI MAE
Inc., Investor Services, 11200 Rockville Pike, Rockville, Maryland 20852, or
telephone (301) 816-2300 or toll-free (800) 266-0535.
3
<PAGE>
CRIIMI MAE
CRIIMI MAE is a full service commercial mortgage company structured as a
self-administered real estate investment trust ("REIT"). CRIIMI MAE's
portfolio of assets consists primarily of non-investment grade subordinated
securities backed by first mortgage loans on multifamily and other commercial
real estate ("Subordinated CMBS") and interests in government insured or
guaranteed mortgages secured by multifamily housing complexes located
throughout the United States. CRIIMI MAE believes that its concentration on
acquiring Subordinated CMBS and originating commercial mortgage loans for its
own securitization program, together with its expertise as an underwriter and
servicer, enable CRIIMI MAE to take advantage of the rapid growth in the
securitization of debt backed by income-producing commercial real estate.
CRIIMI MAE is one of the largest publicly traded REITs focused primarily on
the acquisition of Subordinated CMBS. In addition, CRIIMI MAE provides certain
servicing functions, including acting as the special servicer for the
commercial mortgage loans underlying its Subordinated CMBS portfolio, with
respect to commercial mortgage assets.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement for any
offering of Securities, CRIIMI MAE intends to use the majority of the net
proceeds from the sale of Securities (i) to acquire additional mortgage
assets, primarily Subordinated CMBSs, (ii) to sponsor and/or participate in
collateralized mortgage obligation programs, and (iii) for other general
corporate purposes, including working capital and pay down of debt. Pending
their use for the foregoing purposes, the net proceeds may be invested in
short term, interest-bearing accounts and/or used to pay down debt on a
temporary basis.
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The following table sets forth CRIIMI MAE's consolidated ratios of (i)
earnings to fixed charges and (ii) earnings to combined fixed charges and
preferred stock dividends for the periods shown:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH
YEARS ENDED DECEMBER 31, 31,
------------------------ -------------
1993 1994 1995 1996 1997 1997 1998
---- ---- ---- ---- ---- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges... 1.48 1.66 1.35 1.56 1.70 2.04 1.51
Ratio of earnings to combined fixed
charges and preferred stock
dividends*.......................... 1.48 1.66 1.35 1.47 1.57 1.86 1.42
</TABLE>
- --------
* Prior to the offering of Series A Cumulative Convertible Preferred Stock on
July 1, 1996, CRIIMI MAE did not have any issued or outstanding Preferred
Shares.
For purposes of computing these ratios, earnings consist of CRIIMI MAE's
consolidated net income, plus fixed charges, extraordinary items, loss from
investment in limited partnerships and dividends on Preferred Shares. Fixed
charges and Preferred Share dividends consist of gross interest cost,
including amortization of debt cost, discount or premium and adjustment to
hedges for valuation and sales, and dividends on Preferred Shares.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Debt Securities are to be issued under one or more trust indentures
(each, an "Indenture") between CRIIMI MAE and one or more trustees (each, a
"Trustee"). The form of the Subordinated Indenture (as defined
4
<PAGE>
below) and the form of the Senior Indenture (as defined below) have been filed
as exhibits to the Registration Statement of which this Prospectus is a part.
The Indentures are subject to and governed by the Trust Indenture Act of 1939,
as amended (the "TIA"). The statements made under this heading relating to the
Debt Securities and the Indentures, as modified or superseded by any
applicable Prospectus Supplement, are summaries of the provisions thereof and
do not purport to be complete and are qualified in their entirety by reference
to the Indentures and such Debt Securities. If Debt Securities are to be
issued, a description of their terms (as well as the form of Debt Securities)
will be filed by CRIIMI MAE as an exhibit to a current report on Form 8-K and
incorporated herein by reference.
When issued, the Debt Securities will be direct obligations of CRIIMI MAE
and may be either senior Debt Securities ("Senior Debt Securities") or
subordinated Debt Securities ("Subordinated Debt Securities"). The
indebtedness represented by Subordinated Debt Securities, as set forth below
under "--Subordination," will be subordinate in right of payment to Senior
Debt Securities and other senior indebtedness of CRIIMI MAE. In addition to
the terms of the Indenture and any specific, express terms of the Debt
Securities described below, the issuance of the Debt Securities will be
limited by, and subject to certain terms of, CRIIMI MAE's existing financing
facilities. Senior Debt Securities and Subordinated Debt Securities will be
issued pursuant to separate indentures (respectively, a "Senior Indenture" and
a "Subordinated Indenture"), in each case between the Company and a Trustee.
TERMS
The applicable Indenture may provide that the Debt Securities may be issued
without limit as to aggregate principal amount, in one or more series, in each
case as established from time to time in or pursuant to authority granted by a
resolution of the Board of Directors of CRIIMI MAE (the "Board") or as
established in one or more indentures supplemental to such Indenture. All Debt
Securities of one series need not be issued at the same time and, unless
otherwise provided, a series may be reopened, without the consent of the
holders of the Debt Securities of such series, for issuances of additional
Debt Securities of such series.
The applicable Indenture may also provide that there may be more than one
Trustee thereunder, each with respect to one or more series of Debt
Securities. Any Trustee under the applicable Indenture may resign or be
removed with respect to one or more series of Debt Securities, and a successor
Trustee may be appointed to act with respect to such series. In the event that
two or more persons are acting as Trustee with respect to different series of
Debt Securities, each such Trustee shall be a Trustee of a trust under the
applicable Indenture separate and apart from the trust administered by any
other Trustee, and, except as otherwise indicated therein, any action
described therein to be taken by the Trustee may be taken by each such Trustee
with respect to, and only with respect to, the one or more series of Debt
Securities for which it is Trustee under the applicable Indenture.
Reference is made to the Prospectus Supplement relating to the series of
Debt Securities being offered for the specific terms thereof, including:
(1) the title of such Debt Securities and whether such Debt Securities
are Senior Debt Securities or Subordinated Debt Securities;
(2) the aggregate principal amount of such Debt Securities and any limit
on such aggregate principal amount;
(3) the percentage of the principal amount at which such Debt Securities
will be issued and, if other than the principal amount thereof, the portion
of the principal amount thereof payable upon declaration of acceleration of
the maturity thereof, or (if applicable) the portion of the principal
amount of such Debt Securities that is convertible into Common Shares
and/or Preferred Shares, or the method by which any such portion shall be
determined;
(4) if convertible, in connection with the preservation of CRIIMI MAE's
status as a REIT, any applicable limitations on the ownership or
transferability of the Common Shares and/or Preferred Shares into which
such Debt Securities are convertible;
5
<PAGE>
(5) the date or dates, or the method for determining such date or dates,
on which the principal of such Debt Securities will be payable;
(6) the rate or rates (which may be fixed or variable), or the method by
which such rate or rates shall be determined, at which such Debt Securities
will bear interest, if any;
(7) the date or dates, or the method for determining such date or dates,
from which any such interest will accrue, the interest payment dates on
which any such interest will be payable, the regular record dates for such
interest payment dates, or the method by which such dates shall be
determined, the persons to whom such interest shall be payable, and the
basis upon which interest shall be calculated if other than that of a 360-
day year of twelve 30-day months;
(8) the place or places where the principal of (and premium, if any) and
interest, if any, on such Debt Securities will be payable, where such Debt
Securities may be surrendered for conversion or registration of transfer or
exchange and where notices or demands to or upon CRIIMI MAE in respect of
such Debt Securities and the applicable Indenture may be served;
(9) the period or periods within which, the price or prices at which and
the other terms and conditions upon which such Debt Securities may be
redeemed, as a whole or in part, at the option of CRIIMI MAE, if CRIIMI MAE
is to have such an option;
(10) the obligation, if any, of CRIIMI MAE to redeem, repay or purchase
such Debt Securities pursuant to any sinking fund or analogous provision or
at the option of a holder thereof, and the period or periods within which,
the price or prices at which and the other terms and conditions upon which
such Debt Securities will be redeemed, repaid or purchased, as a whole or
in part, pursuant to such obligation;
(11) if other than U.S. dollars, the currency or currencies in which such
Debt Securities are denominated and payable, which may be a foreign
currency or units of two or more foreign currencies or a composite currency
or currencies, and the terms and conditions relating thereto;
(12) whether the amount of payments of principal of (and premium, if any)
or interest, if any, on such Debt Securities may be determined with
reference to an index, formula or other method (which index, formula or
method may, but need not be, based on a currency, currencies, currency unit
or units or composite currency or currencies) and the manner in which such
amounts shall be determined;
(13) whether such Debt Securities will be issued in the form of one or
more global securities and whether such global securities are to be
issuable in a temporary global form or permanent global form;
(14) any additions to, modifications of or deletions from the terms of
such Debt Securities with respect to the events of default or covenants set
forth in the applicable Indenture;
(15) any provision for collateral security for repayment of such Debt
Securities;
(16) whether such Debt Securities will be issued in certificated or book-
entry form;
(17) whether such Debt Securities will be in registered or bearer form
and, if in registered form, the denominations thereof if other than $1,000
and any integral multiple thereof and, if in bearer form, the denominations
thereof and terms and conditions relating thereto;
(18) the applicability, if any, of the defeasance and covenant defeasance
provisions of the applicable Indenture;
(19) the terms, if any, upon which such Debt Securities may be
convertible into Common Shares and/or Preferred Shares and the terms and
conditions upon which such conversion will be effected, including, without
limitation, the initial conversion price or rate and the conversion period;
(20) whether and under what circumstances CRIIMI MAE will pay additional
amounts on such Debt Securities in respect of any tax, assessment or
governmental charge and, if so, whether CRIIMI MAE will have the option to
redeem such Debt Securities in lieu of making such payment; and
(21) any other terms of such Debt Securities not inconsistent with the
provisions of the applicable Indenture.
6
<PAGE>
The Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities") or that the principal amount thereof
payable at their stated maturity may be more or less than the principal amount
thereof at original issuance ("Indexed Securities"). Special U.S. federal
income tax, accounting and other considerations applicable to Original Issue
Discount Securities or Indexed Securities will be described in the applicable
Prospectus Supplement.
Except as may be set forth in any Prospectus Supplement, the Debt Securities
will not contain any provisions that would limit the ability of CRIIMI MAE to
incur indebtedness or that would afford holders of Debt Securities protection
in the event of a highly leveraged or similar transaction involving CRIIMI MAE
or in the event of a change of control. Restrictions on ownership and
transfers of CRIIMI MAE's Common Shares and Preferred Shares are designed to
preserve its status as a REIT and, therefore, may act to prevent or hinder a
change of control. See "Description of Capital Stock." Reference is made to
the applicable Prospectus Supplement for information with respect to any
deletions from, modifications of, or additions to, the events of default or
covenants of CRIIMI MAE that are described below, including any addition of a
covenant or other provision providing event risk or similar protection.
DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the Debt
Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof.
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium, if any) and interest on any series of
Debt Securities will be payable at the corporate trust office of the Trustee;
provided that, at the option of CRIIMI MAE, payment of interest may be made by
check mailed to the address of the person entitled thereto as it appears in
the register to be maintained by the Trustee or by wire transfer of funds to
such person at an account maintained within the United States.
Any interest not punctually paid or duly provided for on any interest
payment date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the holder thereof on the applicable record
date and may either be paid to the person in whose name such Debt Security is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
applicable Trustee, notice whereof shall be given to each holder of such Debt
Security not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner, all as more completely described
in the applicable Indenture.
Subject to certain limitations imposed upon Debt Securities issued in book-
entry form, the Debt Securities of any series will be exchangeable for other
Debt Securities of the same series and of a like aggregate principal amount
and tenor of different authorized denominations upon surrender of such Debt
Securities at the corporate trust office of the applicable Trustee. In
addition, subject to certain limitations imposed upon Debt Securities issued
in book-entry form, the Debt Securities of any series may be surrendered for
conversion or registration of transfer thereof at the corporate trust office
of the applicable Trustee. Every Debt Security tendered for conversion,
registration of transfer or exchange shall be duly endorsed or accompanied by
a written instrument of transfer. No service charge will be made for any
registration of transfer or exchange of any Debt Securities, but CRIIMI MAE
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. If the applicable Prospectus
Supplement refers to any transfer agent (in addition to the applicable
Trustee) initially designated by CRIIMI MAE with respect to any series of Debt
Securities, CRIIMI MAE may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, except that CRIIMI MAE will be required to maintain a
transfer agent in each place of payment for such series of Debt Securities.
CRIIMI MAE may at any time designate additional transfer agents with respect
to any series of Debt Securities.
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To protect CRIIMI MAE's status as a REIT, CRIIMI MAE may refuse to effect a
transfer of Debt Securities if, as a result of such transfer, any person would
beneficially own, either directly or indirectly, more than 9.8% of CRIIMI
MAE's outstanding capital stock. Neither CRIIMI MAE nor any Trustee shall be
required to (i) issue, register the transfer of or exchange Debt Securities of
any series during a period beginning at the opening of business 15 days before
any selection of Debt Securities of that series to be redeemed and ending at
the close of business on the day of mailing of the relevant notice of
redemption; (ii) register the transfer of or exchange any Debt Security, or
portion thereof, called for redemption, except the unredeemed portion of any
Debt Security being redeemed in part; or (iii) for Debt Securities repayable
at the option of the holder, issue, register the transfer of or exchange any
Debt Security that has been surrendered for repayment at the option of the
holder, except the portion, if any, of such Debt Security not to be so repaid.
MERGER, CONSOLIDATION OR SALE
Each Indenture will provide that CRIIMI MAE may consolidate with, or sell,
lease or convey all or substantially all of its assets to, or merge with or
into, any other corporation or trust or other entity provided that (a) either
CRIIMI MAE shall be the continuing corporation, or the successor corporation
(if other than CRIIMI MAE) formed by or resulting from any such consolidation
or merger or which shall have received the transfer of such assets and shall
be an entity organized and existing under the laws of the United States or a
state thereof and the successor entity shall expressly assume payment of the
principal of (and premium, if any) and interest on all of the Debt Securities
and the due and punctual performance and observance of all of the covenants
and conditions contained in the applicable Indenture; (b) immediately after
giving effect to such transaction and treating any indebtedness that becomes
an obligation of CRIIMI MAE or any subsidiary as a result thereof as having
been incurred by CRIIMI MAE or such subsidiary at the time of such
transaction, no event of default under the applicable Indenture, and no event
which, after notice or the lapse of time, or both, would become such an event
of default, shall have occurred and be continuing; and (c) an officers'
certificate and legal opinion covering such conditions shall be delivered to
each Trustee.
CERTAIN COVENANTS
Existence. Except as permitted under "--Merger, Consolidation or Sale,"
CRIIMI MAE will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence, rights (charter and
statutory) and franchises; provided, however, that CRIIMI MAE shall not be
required to preserve any right or franchise if it determines that the
preservation thereof is no longer desirable in the conduct of its business and
that the loss thereof is not disadvantageous in any material respect to the
holders of the Debt Securities.
Maintenance of Properties. CRIIMI MAE will cause all of its material
properties used or useful in the conduct of its business or the business of
any subsidiary to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of CRIIMI MAE may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that CRIIMI MAE and its
subsidiaries shall not be prevented from discontinuing the operation and
maintenance of any such properties if such discontinuance is in the judgment
of CRIIMI MAE desirable in the conduct of its business and not disadvantageous
in any material respect to the holders of the Debt Securities.
Payment of Taxes and Other Claims. CRIIMI MAE will pay or discharge or cause
to be paid or discharged, before the same shall become delinquent, (i) all
taxes, assessments and governmental charges levied or imposed upon it or any
subsidiary or upon the income, profits or property of CRIIMI MAE or any
subsidiary, and (ii) all lawful claims for labor, materials and supplies
which, if unpaid, might by law become a lien upon the property of CRIIMI MAE
or any subsidiary; provided, however, that CRIIMI MAE shall not be required to
pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings.
Additional Covenants. Any additional covenants of CRIIMI MAE with respect to
any series of Debt Securities will be set forth in the Prospectus Supplement
relating thereto.
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EVENTS OF DEFAULT, NOTICE AND WAIVER
Each Indenture will describe specific "Events of Default" with respect to
any series of Debt Securities issued thereunder. Such "Events of Default" are
likely to include (with grace and cure periods): (a) default for 30 days in
the payment of any installment of interest on any Debt Security of such
series; (b) default in the payment of the principal of (or premium, if any,
on) any Debt Security of such series when due and payable, at maturity, upon
redemption or otherwise which continues for five business days; (c) default in
making any sinking fund payment as required for any Debt Security of such
series which continues for five business days; (d) default in the performance
or breach of any other covenant or warranty of CRIIMI MAE contained in the
applicable Indenture (other than a covenant added to such Indenture solely for
the benefit of a series of Debt Securities issued thereunder other than such
series), continued for 60 days after written notice as provided in the
applicable Indenture; (e) a default not being contested in good faith by
CRIIMI MAE under any bond, debenture, note or other evidence of indebtedness
for money borrowed by CRIIMI MAE (including obligations under leases required
to be capitalized on the balance sheet of the lessee under generally accepted
accounting principles but not including any indebtedness or obligations for
which recourse is limited to property purchased) in an aggregate principal
amount in excess of $10,000,000 or under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any indebtedness for money borrowed by CRIIMI MAE (including such leases but
not including such indebtedness or obligations for which recourse is limited
to property purchased) in an aggregate principal amount in excess of
$10,000,000 by CRIIMI MAE, whether such indebtedness now exists or shall
hereafter be created which default shall have resulted in such indebtedness
becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable or such obligations being accelerated,
without such acceleration having been rescinded or annulled; (f) certain
events of bankruptcy, insolvency or reorganization, or court appointment of a
receiver, liquidator or trustee of CRIIMI MAE or any Significant Subsidiary or
either of its properties; and (g) any other Event of Default provided with
respect to a particular series of Debt Securities. The term "Significant
Subsidiary" means each significant subsidiary (as defined in Regulation S-X
promulgated under the Securities Act) of CRIIMI MAE.
If an Event of Default under an Indenture with respect to Debt Securities of
any series at the time outstanding occurs and is continuing, then in every
such case the applicable Trustee or the holders of not less than 25% in
principal amount of the outstanding Debt Securities of that series may declare
the principal amount (or, if the Debt Securities of that series are Original
Issue Discount Securities or Indexed Securities, such portion of the principal
amount as may be specified in the terms thereof) of all the Debt Securities of
that series to be due and payable immediately by written notice thereof to
CRIIMI MAE (and to the applicable Trustee if given by the holders). However,
at any time after such a declaration of acceleration with respect to Debt
Securities of such series (or of all Debt Securities then outstanding under
the applicable Indenture, as the case may be) has been made, but before a
judgment or decree for payment of the money due has been obtained by the
applicable Trustee, the holders of not less than a majority in principal
amount of outstanding Debt Securities of such series (or of all Debt
Securities then outstanding under the applicable Indenture, as the case may
be) may rescind and annul such declaration and its consequences if (a) CRIIMI
MAE shall have paid or deposited with the applicable Trustee all required
payments of the principal of (and premium, if any) and interest on the Debt
Securities of such series (or of all Debt Securities then outstanding under
the applicable Indenture, as the case may be), plus certain fees, expenses,
disbursements and advances of the applicable Trustee and (b) all Events of
Default, other than the non-payment of accelerated principal (or specified
portion thereof), with respect to Debt Securities of such series (or of all
Debt Securities then outstanding under the applicable Indenture, as the case
may be) have been cured or waived as provided in the applicable Indenture.
Each Indenture will also provide that the holders of not less than a majority
in principal amount of the outstanding Debt Securities of any series (or of
all Debt Securities then outstanding under the applicable Indenture, as the
case may be) may waive any past default with respect to such series and its
consequences, except a default (x) in the payment of the principal of (or
premium, if any) or interest on any Debt Security of such series or (y) in
respect of a covenant or provision contained in the applicable Indenture that
cannot be modified or amended without the consent of the holder of each
outstanding Debt Security affected thereby.
The applicable Trustee will be required to give notice to the holders of
Debt Securities within 90 days of a default under the applicable Indenture
unless such default shall have been cured or waived; provided, however,
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that such Trustee may withhold notice to the holders of any series of Debt
Securities of any default with respect to such series (except a default in the
payment of the principal of (or premium, if any) or interest on any Debt
Security of such series or in the payment of any sinking fund installment in
respect of any Debt Security of such series) if designated officers of such
Trustee consider such withholding to be in the interest of such holders.
The right of any holder to institute a proceeding with respect to an
Indenture will be subject to certain conditions precedent including notice and
indemnity to the applicable Trustee, but the holder has an absolute right to
receipt of principal of (and premium, if any) and interest on such holder's
Debt Security on or after the respective due dates expressed in the Debt
Security, and to institute suit for the enforcement of any such payments.
Subject to provisions in the Indenture relating to its duties in case of
default, no Trustee will be under an obligation to exercise any of its rights
or powers under such Indenture at the request or direction of any holders of
any series of Debt Securities then outstanding under such Indenture, unless
such holders shall have offered to the applicable Trustee thereunder
reasonable security or indemnity. The holders of not less than a majority in
aggregate principal amount of the outstanding Debt Securities of any series
(or of all Debt Securities then outstanding under the applicable Indenture, as
the case may be) shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the applicable Trustee,
or of exercising any trust or power conferred upon such Trustee. However, each
Trustee may refuse to follow any direction which is in conflict with any law
or the applicable Indenture, which may involve such Trustee in personal
liability or which may be unduly prejudicial to the holders of Debt Securities
of such series not joining therein.
Within 120 days after the close of each fiscal year, CRIIMI MAE will be
required to deliver to each Trustee a certificate, signed by one of several
specified officers, stating whether or not such officer has knowledge of any
default under the applicable Indenture and, if so, specifying each such
default and the nature and status thereof.
MODIFICATION OF THE INDENTURE
Modifications and amendments of an Indenture may be made only with the
consent of the holders of not less than a majority in aggregate principal
amount of all outstanding Debt Securities issued under the Indenture which are
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the holder of each such
Debt Security affected thereby, (a) change the stated maturity of the
principal of, or any installment of interest (or premium, if any) on, any such
Debt Security; (b) reduce the principal amount of, or the rate or amount of
interest on, or any premium payable on redemption of, any such Debt Security,
or reduce the amount of principal of an Original Issue Discount Security that
would be due and payable upon declaration of acceleration of the maturity
thereof or would be provable in bankruptcy, or adversely affect any right of
repayment of the holder of any such Debt Security; (c) change the place of
payment, or the coin or currency, for payment of principal of, premium, if
any, or interest on any such Debt Security; (d) impair the right to institute
suit for the enforcement of any payment on or with respect to any such Debt
Security; (e) reduce the above-stated percentage of outstanding Debt
Securities of any series necessary to modify or amend the Indenture, to waive
compliance with certain provisions thereof or certain defaults and
consequences thereunder or to reduce the quorum or voting requirements set
forth in the Indenture; or (f) modify any of the foregoing provisions or any
of the provisions relating to the waiver of certain past defaults or certain
covenants, except to increase the required percentage to effect such action or
to provide that certain other provisions may not be modified or waived without
the consent of the holder of such Debt Security.
The holders of not less than a majority in principal amount of outstanding
Debt Securities issued under an Indenture have the right to waive compliance
by CRIIMI MAE with certain covenants in such Indenture.
Modifications and amendments of an Indenture may be made by CRIIMI MAE and
the respective Trustee thereunder without the consent of any holder of Debt
Securities for any of the following purposes: (i) to evidence the succession
of another person to CRIIMI MAE as obligor under such Indenture; (ii) to add
to the covenants of CRIIMI MAE for the benefit of the holders of all or any
series of Debt Securities or to surrender any right or power conferred upon
CRIIMI MAE in such Indenture; (iii) to add Events of Default for the benefit
of the
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holders of all or any series of Debt Securities; (iv) to add or change any
provisions of the Indenture to facilitate the issuance of, or to liberalize
certain terms of, Debt Securities in bearer form, or to permit or facilitate
the issuance of Debt Securities in uncertificated form, provided that such
action shall not adversely affect the interests of the holders of the Debt
Securities of any series in any material respect; (v) to change or eliminate
any provisions of the Indenture, provided that any such change or elimination
shall become effective only when there are no Debt Securities outstanding of
any series created prior thereto which are entitled to the benefit of such
provision; (vi) to secure the Debt Securities; (vii) to establish the form or
terms of Debt Securities of any series, including the provisions and
procedures, if applicable, for the conversion of such Debt Securities into
Common Shares and/or Preferred Shares; (viii) to provide for the acceptance of
appointment by a successor Trustee or facilitate the administration of the
trusts under the Indenture by more than one Trustee; (ix) to cure any
ambiguity, defect or inconsistency in the Indenture, provided that such action
shall not adversely affect the interests of holders of Debt Securities of any
series issued under such Indenture in any material respect; or (x) to
supplement any of the provisions of the Indenture to the extent necessary to
permit or facilitate defeasance and discharge of any series of such Debt
Securities, provided that such action shall not adversely affect the interests
of the holders of the Debt Securities of any series in any material respect.
Each Indenture will provide that in determining whether the holders of the
requisite principal amount of outstanding Debt Securities of a series have
given any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination
upon declaration of acceleration of the maturity thereof, (ii) the principal
amount of a Debt Security denominated in a foreign currency that shall be
deemed outstanding shall be the U.S. dollar equivalent, determined on the
issue date for such Debt Security, of the principal amount (or, in the case of
an Original Issue Discount Security, the U.S. dollar equivalent on the issue
date of such Debt Security of the amount determined as provided in (i) above),
(iii) the principal amount of an Indexed Security that shall be deemed
outstanding shall be the principal face amount of such Indexed Security at
original issuance, unless otherwise provided with respect to such Indexed
Security pursuant to the Indenture, and (iv) Debt Securities owned by CRIIMI
MAE or any other obligor upon the Debt Securities or any affiliate of CRIIMI
MAE or of such other obligor shall be disregarded.
Each Indenture will contain provisions for convening meetings of the holders
of Debt Securities of a series. A meeting may be called at any time by the
applicable Trustee, and also, upon request, by CRIIMI MAE or the holders of at
least 25% in principal amount of the outstanding Debt Securities of such
series, in any such case upon notice given as provided in the applicable
Indenture. Except for any consent that must be given by the holder of each
Debt Security affected by certain modifications and amendments of the
Indenture, any resolution presented at a meeting or adjourned meeting duly
reconvened at which a quorum is present may be adopted by the affirmative vote
of the holders of a majority in principal amount of the outstanding Debt
Securities of that series; provided, however, that, except as referred to
above, any resolution with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action that may be made, given or
taken by the holders of a specified percentage, which is less than a majority,
in principal amount of the outstanding Debt Securities of a series may be
adopted at a meeting or adjourned meeting duly reconvened at which a quorum is
present by the affirmative vote of the holders of such specified percentage in
principal amount of the outstanding Debt Securities of that series. Any
resolution passed or decision taken at any meeting of holders of Debt
Securities of any series duly held in accordance with the applicable Indenture
will be binding on all holders of Debt Securities of that series. The quorum
at any meeting called to adopt a resolution, and at any reconvened meeting,
will be persons holding or representing a majority in principal amount of the
outstanding Debt Securities of a series; provided, however, that if any action
is to be taken at such meeting with respect to a consent or waiver which may
be given by the holders of not less than a specified percentage in principal
amount of the outstanding Debt Securities of a series, the persons holding or
representing such specified percentage in principal amount of the outstanding
Debt Securities of such series will constitute a quorum.
Notwithstanding the foregoing provisions, if any action is to be taken at a
meeting of holders of Debt Securities of any series with respect to any
request, demand, authorization, direction, notice, consent, waiver or
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other action that the applicable Indenture expressly provides may be made,
given or taken by the holders of a specified percentage in principal amount of
all outstanding Debt Securities affected thereby, or of the holders of such
series and one or more additional series: (i) there shall be no minimum quorum
requirement for such meeting and (ii) the principal amount of the outstanding
Debt Securities of such series that vote in favor of such request, demand,
authorization, direction, notice, consent, waiver or other action shall be
taken into account in determining whether such request, demand, authorization,
direction, notice, consent, waiver or other action has been made, given or
taken under the Indenture.
SUBORDINATION
Upon any distribution to creditors of the Company in a liquidation,
dissolution or reorganization, the payment of the principal of and interest on
any Subordinated Debt Securities will be subordinated to the extent provided
in the applicable Indenture in right of payment to the prior payment in full
of all Senior Debt Securities and other senior indebtedness. No payment of
principal or interest will be permitted to be made on Subordinated Debt
Securities at any time if a default in Senior Debt Securities exists that
permits the holders of such Senior Debt Securities to accelerate their
maturity and the default is the subject of judicial proceedings or the Company
receives notice of the default. After all Senior Debt Securities are paid in
full and until the Subordinated Debt Securities are paid in full, holders of
Subordinated Debt Securities will be subrogated to the right of holders of
Senior Debt Securities to the extent that distributions otherwise payable to
holders of Subordinated Debt Securities have been applied to the payment of
Senior Debt Securities. By reason of such subordination, in the event of a
distribution of assets upon insolvency, certain general creditors of the
Company may recover more, ratably, than holders of Subordinated Debt
Securities. If this Prospectus is being delivered in connection with a series
of Subordinated Debt Securities, the accompanying Prospectus Supplement or the
information incorporated herein by reference will contain the approximate
amount of Senior Debt Securities outstanding as of the end of the Company's
most recent fiscal quarter.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Under the Indentures, CRIIMI MAE may be permitted to discharge certain
obligations to holders of any series of Debt Securities issued thereunder that
have not already been delivered to the applicable Trustee for cancellation and
that either have become due and payable or will become due and payable within
one year (or scheduled for redemption within one year) by irrevocably
depositing with the applicable Trustee, in trust, funds in such currency or
currencies, currency unit or units or composite currency or currencies in
which such Debt Securities are payable in an amount sufficient to pay the
entire indebtedness on such Debt Securities in respect of principal (and
premium, if any) and interest to the date of such deposit (if such Debt
Securities have become due and payable) or to the stated maturity or
redemption date, as the case may be.
Each Indenture will provide that, under certain circumstances, CRIIMI MAE
may elect either (a) to defease and be discharged from any and all obligations
with respect to such Debt Securities (except for the obligation to pay
additional amounts, if any, upon the occurrence of certain events of tax,
assessment or governmental charge with respect to payments on such Debt
Securities and the obligations to register the transfer or exchange of such
Debt Securities, to replace temporary or mutilated, destroyed, lost or stolen
Debt Securities, to maintain an office or agency in respect of such Debt
Securities and to hold moneys for payment in trust) ("defeasance") or (b) to
be released from its obligations with respect to such Debt Securities under
the applicable Indenture or, under certain circumstances, its obligations with
respect to any other covenant, and any omission to comply with such
obligations shall not constitute a default or an Event of Default with respect
to such Debt Securities ("covenant defeasance"), in either case upon the
irrevocable deposit by CRIIMI MAE with the applicable Trustee, in trust, of an
amount, in such currency or currencies, currency unit or units or composite
currency or currencies in which such Debt Securities are payable at stated
maturity, or Government Obligations (as defined below), or both, applicable to
such Debt Securities which through the scheduled payment of principal and
interest in accordance with their terms will provide money in an amount
sufficient to pay the principal of (and premium, if any) and interest on such
Debt Securities, and any mandatory sinking fund or analogous payments thereon,
on the scheduled due dates therefor.
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Such a trust may be established only if, among other things, CRIIMI MAE has
delivered to the applicable Trustee an opinion of counsel (as specified in
each Indenture) to the effect that the holders of such Debt Securities will
not recognize income, gain or loss for U.S. federal income tax purposes as a
result of such defeasance or covenant defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance or covenant defeasance
had not occurred, and such opinion of counsel, in the case of defeasance, must
refer to and be based upon a ruling of the Internal Revenue Service or a
change in applicable U.S. federal income tax law occurring after the date of
the Indenture.
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government which issued the foreign
currency in which the Debt Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations
of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which
issued the foreign currency in which the Debt Securities of such series are
payable, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America or such other
government, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of any
such Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
Unless otherwise provided in the applicable Prospectus Supplement, if after
CRIIMI MAE has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any
series, (a) the holder of a Debt Security of such series is entitled to, and
does, elect pursuant to the Indenture or the terms of such Debt Security to
receive payment in a currency, currency unit or composite currency other than
that in which such deposit has been made in respect of such Debt Security, or
(b) a Conversion Event (as defined below) occurs in respect of the currency,
currency unit or composite currency in which such deposit has been made, the
indebtedness represented by such Debt Security shall be deemed to have been,
and will be, fully discharged and satisfied through the payment of the
principal of (and premium, if any) and interest on such Debt Security as they
become due out of the proceeds yielded by converting the amount so deposited
in respect of such Debt Security into the currency, currency unit or composite
currency in which such Debt Security becomes payable as a result of such
election or such cessation of usage based on the applicable market exchange
rate. "Conversion Event" means the cessation of use of (i) a currency,
currency unit or composite currency both by the government of the country
which issued such currency and for the settlement of transactions by a central
bank or other public institutions of or within the international banking
community, (ii) the European Currency Unit ("ECU") both within the European
Monetary System established by the Resolution of December 5, 1978 of the
council of the European Economic Community, European Coal and Steel Community
and the European Atomic Energy Community (collectively, the "European
Communities") and for the settlement of transactions by public institutions of
or within the European Communities or (iii) any currency unit or composite
currency other than the ECU for the purposes for which it was established.
Unless otherwise provided in the applicable Prospectus Supplement, all
payments of principal of (and premium, if any) and interest on any Debt
Security that is payable in a foreign currency that ceases to be used by its
government of issuance shall be made in U.S. dollars.
The applicable Prospectus Supplement may further describe the provisions, if
any, permitting such defeasance or covenant defeasance, including any
modifications of the provisions described above, with respect to the Debt
Securities of or within a particular series.
CONVERSION RIGHTS
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Shares or Preferred Shares will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will
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include whether such Debt Securities are convertible into Common Shares and/or
Preferred Shares, the conversion price (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at the option
of the holders or CRIIMI MAE, the events requiring an adjustment of the
conversion price and provisions affecting conversion in the event of the
redemption of such Debt Securities.
To protect CRIIMI MAE's status as a REIT, CRIIMI MAE may refuse to effect a
conversion of the Debt Securities if, as a result of such conversion, any
person would beneficially own, either directly or indirectly, more than 9.8%
of CRIIMI MAE's outstanding capital stock. See "Description of Capital Stock--
Common Shares--Restrictions on Ownership and Transfer."
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depositary identified in the applicable
Prospectus Supplement relating to such series. Global Securities may be issued
in either registered or bearer form and in either temporary or permanent form.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series.
DESCRIPTION OF CAPITAL STOCK
As of the date hereof, the authorized capital stock of CRIIMI MAE comprises
60 million Common Shares and 25 million Preferred Shares.
PREFERRED SHARES
General. The following description of the Preferred Shares sets forth
certain general terms and provisions of the Preferred Shares to which any
Prospectus Supplement may relate. The statements below describing the
Preferred Shares are in all respects subject to and qualified in their
entirety by reference to the applicable provisions of CRIIMI MAE's Articles of
Incorporation, as amended (the "Articles of Incorporation") and Bylaws and
applicable articles supplementary relating to any offering of Preferred Shares
("Articles Supplementary"). If Preferred Shares are to be issued, a
description of the terms of such Preferred Shares (as well as the form of
Preferred Share certificate) will be filed by CRIIMI MAE as an exhibit to a
current report on Form 8-K and incorporated by reference.
Terms. Subject to the limitations prescribed by the Articles of
Incorporation, the Board is authorized to fix the number of shares
constituting each series of Preferred Shares and the designations and powers,
preferences and relative, participating, optional or other special rights and
qualifications, limitations or restrictions thereof, including such provisions
as may be desired concerning voting, redemption, dividends, dissolution or the
distribution of assets, conversion or exchange, and such other subjects or
matters as may be fixed by resolution of the Board. The Preferred Shares will,
when issued, be fully paid and nonassessable by CRIIMI MAE and will have no
preemptive rights.
Reference is made to the Prospectus Supplement relating to the Preferred
Shares offered thereby for specific terms, including:
(1) The title and stated value of such Preferred Shares;
(2) The number of such Preferred Shares offered, the liquidation
preference per share and the offering price of such Preferred Shares;
(3) The dividend rate(s), period(s) and/or payment date(s) or method(s)
of calculation thereof applicable to such Preferred Shares;
(4) The date from which dividends on such Preferred Shares shall
accumulate, if applicable;
(5) The procedures for any auction and remarketing, if any, for such
Preferred Shares;
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(6) The provision for a sinking fund, if any, for such Preferred Shares;
(7) The provision for redemption, if applicable, of such Preferred
Shares;
(8) Any listing of such Preferred Shares on any securities exchange;
(9) The terms and conditions, if applicable, upon which such Preferred
Shares will be convertible into Common Shares, including the conversion
price (or manner of calculation thereof);
(10) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Shares;
(11) A discussion of federal income tax considerations applicable to such
Preferred Shares;
(12) The relative ranking and preferences of such Preferred Shares as to
dividend rights and rights upon liquidation, dissolution or winding up of
the affairs of CRIIMI MAE;
(13) Any limitations on issuance of any series of Preferred Shares
ranking senior to or on a parity with such series of Preferred Shares as to
dividend rights and rights upon liquidation, dissolution or winding up of
the affairs of CRIIMI MAE; and
(14) Any limitations on direct or beneficial ownership and restrictions
on transfer, in each case as may be appropriate to preserve the status of
CRIIMI MAE as a REIT.
Rank. Unless otherwise specified in the Prospectus Supplement, the Preferred
Shares will, with respect to dividend rights and rights upon liquidation,
dissolution or winding up of CRIIMI MAE, rank (i) senior to all classes or
series of Common Shares and to all equity securities ranking junior to such
Preferred Shares with respect to dividend rights or rights upon liquidation,
dissolution or winding up of CRIIMI MAE; (ii) on a parity with all equity
securities issued by CRIIMI MAE the terms of which specifically provide that
such equity securities rank on a parity with the Preferred Shares with respect
to dividend rights or rights upon liquidation, dissolution or winding up of
CRIIMI MAE; and (iii) junior to all equity securities issued by CRIIMI MAE the
terms of which specifically provide that such equity securities rank senior to
the Preferred Shares with respect to dividend rights or rights upon
liquidation, dissolution or winding up of CRIIMI MAE. The term "equity
securities" does not include convertible debt securities.
Dividends. Holders of the Preferred Shares of each series will be entitled
to receive, when, as and if declared by the Board, out of assets of CRIIMI MAE
legally available for payment, cash dividends at such rates and on such dates
as will be set forth in the applicable Prospectus Supplement. Each such
dividend shall be payable to holders of record as they appear on the share
transfer books of CRIIMI MAE on such record dates as shall be fixed by the
Board.
Dividends on any series of the Preferred Shares may be cumulative or non-
cumulative, as provided in the applicable Prospectus Supplement. Dividends, if
cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the Board fails to declare a dividend
payable on a dividend payment date on any series of the Preferred Shares for
which dividends are noncumulative, then the holders of such series of the
Preferred Shares will have no right to receive a dividend in respect of the
dividend period ending on such dividend payment date, and CRIIMI MAE will have
no obligation to pay the dividend accrued for such period, whether or not
dividends on such series are declared payable on any future dividend payment
date.
If Preferred Shares of any series are outstanding, full dividends will not
be declared or paid or set apart for payment on the Preferred Shares of any
other series ranking, as to dividends, on a parity with the Preferred Shares
of such series, and no dividends will be declared or paid or set apart for
payment on the Preferred Shares of any other series ranking, as to dividends,
junior to the Preferred Shares of such series for any period unless (i) if
such series of Preferred Shares has a cumulative dividend, full cumulative
dividends have been or contemporaneously are declared and paid or declared and
a sum sufficient for the payment thereof set apart for such payment on the
Preferred Shares of such series for all past dividend periods and the then
current dividend period or (ii) if such series of Preferred Shares does not
have a cumulative dividend, full dividends for the then current dividend
period have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for such payment on the
Preferred Shares of such series. When dividends are
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not paid in full (or a sum sufficient for such full payment is not so set
apart) upon Preferred Shares of any series and the shares of any other series
of Preferred Shares ranking on a parity as to dividends with the Preferred
Shares of such series, all dividends declared upon Preferred Shares of such
series and any other series of Preferred Shares ranking on a parity as to
dividends with such Preferred Shares shall be declared pro rata so that the
amount of dividends declared per Preferred Share of such series and such other
series of Preferred Shares shall in all cases bear to each other the same
ratio that accrued dividends per share on the Preferred Shares of such series
(which shall not include any accumulation in respect of unpaid dividends for
prior dividend periods if such Preferred Shares do not have a cumulative
dividend) and such other series of Preferred Shares bear to each other.
Except as provided in the immediately preceding paragraph, unless (i) if
such series of Preferred Shares has a cumulative dividend, full cumulative
dividends on the Preferred Shares of such series have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for all past dividend periods and
the then current dividend period and (ii) if such series of Preferred Shares
does not have a cumulative dividend, full dividends on the Preferred Shares of
such series have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment for the
then current dividend period, no dividends (other than in Common Shares or
other capital shares ranking junior to the Preferred Shares of such series as
to dividends and upon liquidation) shall be declared or paid or set aside for
payment or other distribution shall be declared or made upon the Common
Shares, or any other capital shares of CRIIMI MAE ranking junior to or on a
parity with the Preferred Shares of such series as to dividends or upon
liquidation, nor shall any Common Shares, or any other capital shares of
CRIIMI MAE ranking junior to or on a parity with the Preferred Shares of such
series as to dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for
a sinking fund for the redemption of any such shares) by CRIIMI MAE (except by
conversion into or exchange for other capital shares of CRIIMI MAE ranking
junior to the Preferred Shares of such series as to dividends and upon
liquidation).
Any dividend payment made on shares of a series of Preferred Shares shall
first be credited against the earliest accrued but unpaid dividend due with
respect to shares of such series which remains payable.
Redemption. If so provided in the applicable Prospectus Supplement, the
Preferred Shares will be subject to mandatory redemption or redemption at the
option of CRIIMI MAE, as a whole or in part, in each case upon the terms, at
the times and at the redemption prices set forth in such Prospectus
Supplement.
The Prospectus Supplement relating to a series of Preferred Shares that is
subject to mandatory redemption will specify the number of such Preferred
Shares that shall be redeemed by CRIIMI MAE in each year commencing after a
date to be specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid dividends thereon
(which shall not, if such Preferred Shares do not have a cumulative dividend,
include any accumulation in respect of unpaid dividends for prior dividend
periods) to the date of redemption. The redemption price may be payable in
cash or other property, as specified in the applicable Prospectus Supplement.
If the redemption price for Preferred Shares of any series is payable only
from the net proceeds of the issuance of capital shares of CRIIMI MAE, the
terms of such Preferred Shares may provide that, if no such capital shares
shall have been issued or to the extent the net proceeds from any issuance are
insufficient to pay in full the aggregate redemption price then due, such
Preferred Shares shall automatically and mandatorily be converted into the
applicable capital shares of CRIIMI MAE pursuant to conversion provisions
specified in the applicable Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if such series of Preferred Shares
has a cumulative dividend, full cumulative dividends on all shares of any
series of Preferred Shares shall have been or contemporaneously are declared
and paid or declared and a sum sufficient for the payment thereof set apart
for payment for all past dividend periods and the then current dividend period
and (ii) if such series of Preferred Shares does not have a cumulative
dividend, full dividends on the Preferred Shares of any series have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for the then
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current dividend period, no shares of any series of Preferred Shares shall be
redeemed (unless all outstanding Preferred Shares of such series are
simultaneously redeemed) or directly or indirectly purchased or acquired
(except by conversion into or exchange for capital shares of CRIIMI MAE
ranking junior to the Preferred Shares of such series as to dividends and upon
liquidation); provided, however, that the foregoing shall not prevent the
purchase or acquisition of Preferred Shares of such series to preserve the
REIT status of CRIIMI MAE or pursuant to a purchase or exchange offer made on
comparable terms to holders of all outstanding Preferred Shares of such
series.
If fewer than all of the outstanding Preferred Shares of any series are to
be redeemed, the number of shares to be redeemed will be determined by the
Board and such shares may be redeemed pro rata from the holders of record of
such shares in proportion to the number of such shares held by such holders
(with adjustments to avoid redemption of fractional shares) or any other
equitable method determined by the Board.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of Preferred Shares
of any series to be redeemed at the address shown on the share transfer books
of CRIIMI MAE. Each notice shall state: (i) the redemption date; (ii) the
number of shares and series of the Preferred Shares to be redeemed; (iii) the
redemption price; (iv) the place or places where certificates for such
Preferred Shares are to be surrendered for payment of the redemption price;
(v) that dividends on the shares to be redeemed will cease to accrue on such
redemption date; and (vi) the date upon which the holder's conversion rights,
if any, as to such shares shall terminate. If fewer than all the Preferred
Shares of any series are to be redeemed, the notice mailed to each such holder
thereof shall also specify the number of Preferred Shares to be redeemed from
each such holder. If notice of redemption of any Preferred Shares has been
given and if the funds necessary for such redemption have been set aside by
CRIIMI MAE in trust for the benefit of the holders of any Preferred Shares so
called for redemption, then from and after the redemption date dividends will
cease to accrue on such Preferred Shares, such Preferred Shares shall no
longer be deemed outstanding and all rights of the holders of such shares will
terminate, except the right to receive the redemption price. Any moneys so
deposited which remain unclaimed by the holders of the Preferred Shares at the
end of two years after the redemption date will be returned by such bank or
trust company to CRIIMI MAE.
Liquidation Preference. Upon any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of CRIIMI MAE, then, before any
distribution or payment shall be made to the holders of any Common Shares or
any other class or series of capital shares of CRIIMI MAE ranking junior to
the Preferred Shares in the distribution of assets upon any liquidation,
dissolution or winding up of CRIIMI MAE, the holders of each series of
Preferred Shares shall be entitled to receive out of assets of CRIIMI MAE
legally available for distribution to stockholders, liquidating distributions
in the amount of the liquidation preference per share (set forth in the
applicable Prospectus Supplement), plus an amount equal to all dividends
accrued and unpaid thereon (which shall not include any accumulation in
respect of unpaid dividends for prior dividend periods if such Preferred
Shares do not have a cumulative dividend). After payment of the full amount of
the liquidating distributions to which they are entitled, the holders of
Preferred Shares will have no right or claim to any of the remaining assets of
CRIIMI MAE. In the event that, upon any such voluntary or involuntary
liquidation, dissolution or winding up, the available assets of CRIIMI MAE are
insufficient to pay the amount of the liquidating distributions on all
outstanding Preferred Shares and the corresponding amounts payable on all
shares of other classes or series of capital shares of CRIIMI MAE ranking on a
parity with the Preferred Shares in the distribution of assets upon
liquidation, dissolution or winding up, then the holders of the Preferred
Shares and all other such classes or series of capital shares shall share
ratably in any such distribution of assets in proportion to the full
liquidating distributions to which they would otherwise be respectively
entitled.
If liquidating distributions shall have been made in full to all holders of
Preferred Shares, the remaining assets of CRIIMI MAE shall be distributed
among the holders of any other classes or series of capital shares ranking
junior to the Preferred Shares upon liquidation, dissolution or winding up,
according to their respective rights and preferences and in each case
according to their respective number of shares. For such purposes, the
consolidation or merger of CRIIMI MAE with or into any other corporation,
trust or entity, or the sale, lease or
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conveyance of all or substantially all of the property or business of CRIIMI
MAE, shall not be deemed to constitute a liquidation, dissolution or winding
up of CRIIMI MAE.
Voting Rights. Holders of the Preferred Shares will not have any voting
rights, except as set forth below or as otherwise from time to time required
by law or as indicated in the applicable Prospectus Supplement.
Unless provided otherwise for any series of Preferred Shares, so long as any
Preferred Shares remain outstanding, CRIIMI MAE will not, without the
affirmative vote or consent of the holders of at least a majority of the
shares of each series of Preferred Shares outstanding at the time, given in
person or by proxy, either in writing or at a meeting (such series voting
separately as a class), (i) authorize or create, or increase the authorized or
issued amount of, any class or series of capital shares ranking prior to such
series of Preferred Shares with respect to payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up or
reclassify any authorized capital shares of CRIIMI MAE into any such shares,
or create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such shares; or (ii) amend, alter or
repeal the provisions of CRIIMI MAE's Articles of Incorporation or the
Articles Supplementary for such series of Preferred Shares, whether by merger,
consolidation or otherwise (each, an "Event"), so as to materially and
adversely affect any right, preference, privilege or voting power of such
series of Preferred Shares or the holders thereof; provided, however, with
respect to the occurrence of any of the Events set forth in (ii) above, so
long as the Preferred Shares remain outstanding with the terms thereof
materially unchanged, taking into account that upon the occurrence of an
Event, CRIIMI MAE may not be the surviving entity, the occurrence of any such
Event shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting power of holders of Preferred Shares, and
provided further that (x) any increase in the amount of the authorized Common
Shares or Preferred Shares or the authorization, creation or issuance of any
other series of Preferred Shares or any other class or series of capital
shares, or (y) any increase in the amount of authorized shares of such series
or any other series of Preferred Shares or any other class or series of
capital shares, in each case ranking on a parity with or junior to the
Preferred Shares of such series with respect to payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up, shall not
be deemed to materially and adversely affect such rights, preferences,
privileges or voting powers.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of such series of Preferred Shares shall
have been redeemed or called for redemption and sufficient funds shall have
been deposited in trust to effect such redemption.
Conversion Rights. The terms and conditions, if any, upon which any series
of Preferred Shares are convertible into Common Shares will be set forth in
the applicable Prospectus Supplement relating thereto. Such terms will include
the number of Common Shares into which the Preferred Shares are convertible,
the conversion price (or manner of calculation thereof), the conversion
period, provisions as to whether conversion will be at the option of the
holders of the Preferred Shares or CRIIMI MAE, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of such Preferred Shares.
Restrictions on Ownership and Transfer. As discussed below under "--Common
Shares--Restrictions on Ownership and Transfer," for CRIIMI MAE to qualify as
a REIT under the Internal Revenue Code of 1986, as amended (the "Code"), not
more than 50% in value of its outstanding capital shares may be owned,
directly or constructively, by five or fewer individuals (as defined in the
Code to include certain entities) during the last half of a taxable year. To
assist CRIIMI MAE in meeting this requirement, CRIIMI MAE may take certain
actions to limit the beneficial ownership, directly or indirectly, by a single
person of more than 9.8% of CRIIMI MAE's outstanding capital stock, including
any Preferred Shares of CRIIMI MAE. Therefore, the Articles Supplementary for
each series of Preferred Shares may contain certain provisions restricting the
ownership and transfer of the Preferred Shares. The applicable Prospectus
Supplement will specify any additional ownership limitation relating to a
series of Preferred Shares.
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COMMON SHARES
The following description of the Common Shares is summarized from relevant
portions of CRIIMI MAE's Articles of Incorporation and Bylaws, as amended. A
more complete description of the Common Shares may be obtained by reference to
such documents and to the documents incorporated by reference in this
Prospectus. The following statements are qualified in their entirety by such
reference.
General. Stockholders are entitled to one vote for each Common Share held on
all matters presented for a vote to stockholders. The Board serves in
staggered three-year terms. Directors may be removed only for cause, upon the
affirmative vote of holders of a majority of the Common Shares voting together
as a single class. Except as otherwise provided in the Articles of
Incorporation, in meetings where a quorum is present, a majority of the votes
cast by stockholders is required to adopt a provision. Stockholders are
entitled to receive all assets available for distribution to the stockholders,
subject to any preferential rights of the holders of any Preferred Shares. The
Common Shares, when issued, will be fully paid and nonassessable and will not
be subject to redemption, except as provided in the Articles of Incorporation,
nor will they have any preference, conversion, exchange, preemptive or
cumulative voting rights.
The transfer agent and register for the Common Shares is Registrar and
Transfer Company.
Restrictions on Ownership and Transfer. The Code provides that a corporation
may not qualify as a REIT if more than 50% in value of the shares of the
corporation are owned, directly or indirectly, by five or fewer individuals,
which for this purpose includes pension funds and certain other tax-exempt
entities. Provisions of the Articles of Incorporation, intended to prevent
concentrated ownership of the capital stock of CRIIMI MAE that might
jeopardize its qualification as a REIT, authorize the Board to refuse to
effect a transfer of shares of capital stock of CRIIMI MAE to any person who
as a result would own in excess of 9.8% of the outstanding shares of capital
stock of CRIIMI MAE ("Excess Shares") and to redeem such Excess Shares.
DESCRIPTION OF WARRANTS
CRIIMI MAE may issue Warrants for the purchase of Preferred Shares or Common
Shares. Warrants may be issued independently or together with any Debt
Securities, Preferred Shares or Common Shares, offered by any Prospectus
Supplement and may be attached to or separate from such Debt Securities,
Preferred Shares or Common Shares. Each series of Warrants will be issued
under a separate warrant agreement (a "Warrant Agreement") to be entered into
between CRIIMI MAE and a bank or trust company, as warrant agent (the "Warrant
Agent"), all as set forth in the Prospectus Supplement relating to the
particular issue of Warrants. The Warrant Agent will act solely as an agent of
CRIIMI MAE in connection with the Warrants and will not assume any obligation
or relationship of agency or trust for or with any holders of Warrants or
beneficial owners of Warrants. If Warrants are to be issued, a copy of the
form of Warrant Agreement will be filed by CRIIMI MAE as an exhibit to a
current report on Form 8-K and incorporated herein by reference. The following
summary of certain provisions of the form of Warrant Agreement does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, all the provisions of the applicable Warrant Agreement.
General. If Warrants are offered, the related Prospectus Supplement will
describe the Warrant Agreement and the terms of the Warrants, including the
following: (i) the title of such Warrants; (ii) the aggregate number of such
Warrants; (iii) the price or prices at which such Warrants will be issued;
(iv) the currencies in which the price or prices of such Warrants may be
payable; (v) the designation, amount and terms of the Preferred Shares and/or
Common Shares purchasable upon exercise of such Warrants; (vi) the designation
and terms of the Debt Securities, Preferred Shares and/or Common Shares, if
any, with which such Warrants are issued and the number of such Warrants
issued with each such Security; (vii) if applicable, the date on and after
which such Warrants and the Preferred Shares and/or Common Shares purchasable
upon exercise of such Warrants will be separately transferable; (viii) the
price or prices at which and the currency or currencies in which the Preferred
Shares and/or Common Shares purchasable upon exercise of such Warrants may be
purchased; (ix) the date on which the right to exercise such Warrants shall
commence and the date on which such right shall expire; (x) the minimum and
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maximum amount of such Warrants which may be exercised at any one time; (xi)
information with respect to book-entry procedures, if any; (xii) a discussion
of certain United States federal income tax considerations; and (xiii) any
other material terms of such Warrants, including terms, procedures and
limitations relating to exchange or exercise of such Warrants.
Exercise. Prior to the exercise of any Warrants to purchase Preferred Shares
and/or Common Shares, holders of such Warrants will not have any of the rights
of holders of Preferred Shares or Common Shares, as the case may be,
purchasable upon such exercise, including the right to receive payments of
dividends, if any, on the Preferred Shares or Common Shares purchasable upon
such exercise, or to exercise any applicable right to vote.
Each Warrant will entitle the holder to purchase Preferred Shares and/or
Common Shares at such exercise price as shall in each case be set forth in, or
calculable from, the Prospectus Supplement relating to the Warrants. Warrants
may be exercised at any time up to 5:00 P.M. New York time on the expiration
date set forth in the Prospectus Supplement relating to such Warrants. After
the close of business on the expiration date (or such later date to which such
expiration date may be extended by CRIIMI MAE), unexercised Warrants will
become void.
Restrictions on Ownership and Transfer. As discussed above under "--Common
Shares--Restrictions on Ownership and Transfer," for CRIIMI MAE to qualify as
a REIT under the Code, not more than 50% in value of its outstanding capital
shares may be owned, directly or constructively, by five or fewer individuals
(as defined in the Code to include certain entities) during the last half of a
taxable year. To assist CRIIMI MAE in meeting this requirement, CRIIMI MAE may
take certain actions to limit the beneficial ownership, directly or
indirectly, by a single person of more than 9.8% of CRIIMI MAE's outstanding
capital stock. An individual or entity that owns Warrants to acquire Common
Shares and/or Preferred Shares will be deemed to own such Common Shares or
Preferred Shares for purposes of meeting the ownership requirement. Therefore,
the terms of any Warrant Agreement entered into in connection with the
issuance of Warrants may contain certain provisions restricting the ownership
and transfer of the Warrants. The applicable Prospectus Supplement will
specify any additional ownership limitation relating to the Warrants.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary of certain United States federal income tax
considerations to CRIIMI MAE is based on current law, is for general
information only, and is not tax advice. The tax treatment of a holder of any
of the Securities will vary depending upon the terms of the specific
Securities acquired by such holder, as well as such holder's particular
situation, and this discussion does not attempt to address any aspects of
United States federal income taxation relating to holders of Securities.
Certain United States federal income tax considerations relevant to holders of
the Securities will be provided in the applicable Prospectus Supplement
relating thereto.
This discussion does not consider specific facts and circumstances that may
be relevant to a particular holder's tax position, and does not consider U.S.
state and local or non-U.S. tax consequences. Furthermore, the following
discussion is based on provisions of the Code and administrative and judicial
interpretations, all of which are subject to change, possibly on a retroactive
basis.
EACH INVESTOR IS ADVISED TO CONSULT THE APPLICABLE PROSPECTUS SUPPLEMENT, AS
WELL AS HIS OWN TAX ADVISOR, REGARDING THE TAX CONSEQUENCES TO HIM OF THE
ACQUISITION, OWNERSHIP AND SALE OF THE SECURITIES, INCLUDING THE FEDERAL,
STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF SUCH ACQUISITION,
OWNERSHIP AND SALE AND OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
CRIIMI MAE has qualified, and intends to continue to qualify, as a REIT
under the Code. Qualification for treatment as a REIT requires CRIIMI MAE to
meet certain criteria including certain requirements regarding the
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nature of its ownership, assets, income and distributions of taxable income. A
REIT generally is not subject to federal income tax on that portion of its
ordinary income or capital gains that is distributed currently to
stockholders. CRIIMI MAE has distributed and intends to continue to distribute
substantially all of its taxable income to stockholders and to meet
distribution requirements to continue to qualify as a REIT. CRIIMI MAE will
generally be subject to federal income tax at normal corporate rates on its
undistributed income and to a 4% excise tax under the Code on the amount, if
any, by which 85% of its REIT taxable income (including accrued but unpaid
interest income) and 95% of any net capital gain exceed the amount actually
distributed to its stockholders during the year (or declared as a dividend
during October, November or December of a calendar year, if distributed during
the following January as ordinary income dividends). Accrued income for the
last month of each quarter is generally received within 30 days after the end
of the quarter. CRIIMI MAE is not aware of any present circumstances that
would cause it to fail to qualify as a REIT, nor does it anticipate any such
circumstances in the reasonably foreseeable future. If the U.S. Internal
Revenue Service ("IRS") successfully challenged the tax status of CRIIMI MAE
as a REIT, CRIIMI MAE's earnings would become subject to federal income tax
(including any applicable minimum tax) at corporate rates.
To assist in maintaining CRIIMI MAE's qualification as a REIT under the
Code, CRIIMI MAE's Articles of Incorporation provide that no person or persons
acting as a group (defined to include partnerships, corporations, trusts and
other entities), with the exception of C.R.I., Inc. or its affiliates, shall
at any time directly or indirectly acquire ownership of more than 9.8% of the
outstanding shares of CRIIMI MAE's capital stock.
PLAN OF DISTRIBUTION
CRIIMI MAE may sell Securities to or through one or more underwriters, and
also may sell Securities directly to other purchasers or through agents. The
distribution of the Securities may be effected from time to time in one or
more transactions, at a fixed price or prices which may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. If underwriters are used in the sale of
Securities, the Securities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more transactions,
including negotiated transactions. If the Securities are sold through one or
more agents, as designated by CRIIMI MAE from time to time, any such agent
will be acting on a best efforts basis for the period of its appointment.
In connection with the sale of Securities, underwriters may receive
compensation from CRIIMI MAE or from purchasers of Securities, for whom they
may act as agents, in the form of discounts, concessions, or commissions.
Underwriters may sell Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions, or commissions
from the underwriters (which may be all or a portion of the discount to be
received by such underwriter from CRIIMI MAE) and/or commissions from the
purchasers for whom they may act as agents. Underwriters, dealers, and agents
that participate in the distribution of Securities may be deemed to be
underwriters, and any discounts or commissions they receive from CRIIMI MAE,
and any profit on the resale of Securities they realize may be deemed to be
underwriting discounts and commissions, under the Securities Act. Any such
underwriter or agent will be identified, and any such compensation received
from CRIIMI MAE will be described, in the Prospectus Supplement.
Unless otherwise specified in the related Prospectus Supplement, each series
of Securities will be a new issue with no established trading market, other
than the Common Shares which are listed on the NYSE. Any Common Shares sold
pursuant to a Prospectus Supplement are expected to be listed on such
exchange, subject to official notice of issuance. CRIIMI MAE may elect to list
any series of Debt Securities, Preferred Shares or Warrants on a securities
exchange, but is not obligated to do so. It is possible that one or more
underwriters may make a market in a series of Securities, but will not be
obligated to do so and may discontinue any market making at any time without
notice. Therefore, no assurance can be given as to the liquidity of the
trading market for any Securities (other than Common Shares).
21
<PAGE>
Under agreements CRIIMI MAE may enter into, underwriters, dealers, and
agents who participate in the distribution of Securities may be entitled to
indemnification by CRIIMI MAE against certain liabilities, including
liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, or be customers of, CRIIMI MAE in the ordinary course of
business. In connection with any particular issue of Debt Securities, CRIIMI
MAE may enter into hedging transactions with an underwriter, dealer or agent
participating in such transaction or an affiliate thereof.
If so indicated in the Prospectus Supplement, CRIIMI MAE will authorize
underwriters or other persons acting as CRIIMI MAE's agents to solicit offers
by certain institutions to purchase Securities from CRIIMI MAE pursuant to
contracts providing for payment and delivery on a future date. Institutions
with which such contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such institutions must be
approved by CRIIMI MAE. The obligations of any purchaser under any such
contract will be subject to the condition that the purchase of the Securities
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject. The underwriters and such
other agents will not have any responsibility in respect of the validity or
performance of such contracts.
LEGAL MATTERS
Certain matters relating to the validity of the Securities will be passed
upon for CRIIMI MAE by Swidler & Berlin, Chartered, Washington, D.C.
EXPERTS
The financial statements included in CRIIMI MAE's Annual Report on Form 10-K
incorporated herein by reference, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and have been incorporated by reference herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.
22
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED IN CONNECTION WITH ANY
OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION
OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHO-
RIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES OFFERED HEREBY, NOR
DO THEY CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY
OF THE SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT
IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE INFORMATION
CONTAINED HEREIN OR IN THE AFFAIRS OF CRIIMI MAE SINCE THE DATE HEREOF.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
CRIIMI MAE................................................................ 4
Use of Proceeds........................................................... 4
Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges
and Preferred Stock Dividends............................................ 4
Description of Debt Securities............................................ 4
Description of Capital Stock.............................................. 14
Description of Warrants................................................... 19
Certain United States Federal Income Tax Considerations................... 20
Plan of Distribution...................................................... 21
Legal Matters............................................................. 22
Experts................................................................... 22
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CRIIMI MAE INC.
$350,000,000
DEBT SECURITIES, PREFERRED SHARES,
COMMON SHARES AND WARRANTS
----------------
PROSPECTUS
----------------
, 1998
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
All of the expenses set forth below, except the SEC registration fee, are
estimated.
<TABLE>
<S> <C>
SEC registration fee............................................. $81,429
New York Stock Exchange listing fee.............................. *
Rating Agency fees............................................... *
Printing and engraving expenses.................................. *
Accounting fees and expenses..................................... *
Legal fees and expenses.......................................... *
Blue Sky fees and expenses (including legal fees)................ *
Transfer agent and registrar fees................................ *
Trustees fees.................................................... *
Miscellaneous.................................................... *
-------
Total........................................................ $ *
=======
</TABLE>
- --------
* To be furnished by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Maryland law, a corporation formed under Maryland law is permitted to
limit, by provisions in its articles of incorporation, the liability of its
directors and officers to the corporation or its stockholders for money
damages except for (i) actual receipt of an improper benefit or profit in
money, property or services or (ii) active and deliberate dishonesty
established by a final judgment as being material to the cause of action.
CRIIMI MAE's Articles of Incorporation include such a provision which limits
such liability to the fullest extent permitted by Maryland law.
CRIIMI MAE's Amended and Restated Bylaws provide that CRIIMI MAE shall
indemnify its directors, officers and advisers, and may indemnify other
persons who may be indemnified, to the fullest extent permitted by Maryland
law against any liability and related expenses (including attorneys' fees)
incurred in conjunction with any proceeding or threatened proceeding in which
any of them may be involved, or threatened to be involved, as a party or
otherwise, arising out of or incidental to CRIIMI MAE's business. CRIIMI MAE
has purchased and maintains liability insurance against liabilities that may
be asserted against such persons in connection with CRIIMI MAE, whether or not
indemnification against such liabilities would be permitted under the
provisions of CRIIMI MAE's Articles of Incorporation.
Section 2-418 of the General Corporation Law of the State of Maryland
provides, together with the Amended and Restated Bylaws described above, for
the indemnification of directors, officers and other corporate agents in terms
sufficiently broad to indemnify such persons, under certain circumstances, for
liabilities (including reimbursements of expenses incurred) arising under the
Securities Act.
II-1
<PAGE>
ITEM 16. EXHIBITS
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 --Form of Underwriting Agreement for Common Shares and Preferred
Shares(1)
1.2 --Form of Underwriting Agreement for Debt Securities(1)
4.1 --Articles of Incorporation, as amended, of CRIIMI MAE Inc.(2)
4.2 --Amended and Restated Bylaws of CRIIMI MAE Inc.(3)
4.3 --Form of Indenture for Subordinated Debt Securities(4)
4.3.1 --Form of Indenture for Senior Debt Securities(5)
4.3.2 --Indenture between CRIIMI MAE Inc. and State Street Bank and Trust
Company, as Trustee, dated as of November 21, 1997 for 9 1/8% Senior
Notes due 2002(6)
4.3.3 --First Supplemental Indenture dated as of November 21, 1997 to
Indenture between CRIIMI MAE Inc. and State Street Bank and Trust
Company, as Trustee, dated as of November 21, 1997 for Senior Notes
due 2002(6)
4.4 --Form of Articles Supplementary with respect to Preferred Shares(1)
4.4.1 --Articles Supplementary with respect to Series A Preferred Shares(7)
4.4.2 --Articles Supplementary with respect to Series B Preferred Shares(8)
4.4.3 --Articles Supplementary with respect to Series C Preferred Shares(9)
4.5 --Form of specimen certificate representing Preferred Shares(1)
4.5.1 --Form of specimen certificate representing Series A Preferred
Shares(7)
4.5.2 --Form of specimen certificate representing Series B Preferred
Shares(8)
4.5.3 --Form of specimen certificate representing Series C Preferred
Shares(9)
4.6 --Form of specimen certificate representing Common Shares(2)
4.7 --Form of Warrant Agreement, including form of specimen warrant
certificate(1)
5.1 --Opinion of Swidler & Berlin, Chartered regarding validity of
Securities being registered
8.1 --Tax Opinion of Swidler & Berlin, Chartered(1)
12.1 --Computation of Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred Dividends of CRIIMI
MAE
23.1 --Consent of Arthur Andersen LLP
23.2 --Consent of Swidler & Berlin, Chartered (included in Exhibit 5.1)
23.3 --Consent of Swidler & Berlin, Chartered re: Tax Opinion(1)
24.1 --Power of Attorney (see signature page)
25.1 --Statement of Eligibility of Trustee on Form T-1(1)
25.2 --Statement of Eligibility of Trustee on Form T-2(1)
</TABLE>
- --------
(1) To be filed by amendment or incorporated by reference in connection with
the offering of Securities.
(2) Incorporated herein by reference to CRIIMI MAE's Registration Statement on
Form S-3 (File No. 33-50679), as amended.
(3) Incorporated herein by reference to CRIIMI MAE's Registration Statement on
Form S-3 (File No. 333-28823).
(4) Incorporated herein by reference to CRIIMI MAE's Registration Statement on
Form S-3 (File No. 33-54267), as amended.
(5) Incorporated herein by reference to CRIIMI MAE's Registration Statement on
Form S-3 (File No. 333-38409).
(6) Incorporated herein by reference to CRIIMI MAE's Current Report on Form 8-
K dated November 19, 1997.
(7) Incorporated herein by reference to CRIIMI MAE's Current Report on Form 8-
K dated July 1, 1996.
(8) Incorporated herein by reference to CRIIMI MAE's Current Report on Form 8-
K dated August 7, 1996.
(9) Incorporated herein by reference to CRIIMI MAE's Current Report on Form 8-
K dated September 23, 1997.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes: (1) To file, during any period
in which offers or sales are being made, a post-effective amendment to this
registration statement to include any material information with
II-2
<PAGE>
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement; and (2) To remove from registration by means of a
post-effective amendment any of the Securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant also hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 15, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. If a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the Securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the Trustee to act under subsection
(a) of section 310 of the Trust Indenture Act (the "TIA") in accordance with
the rules and regulations prescribed by the Commission under section 305(b)(2)
of the TIA.
The undersigned registrant hereby further undertakes that: (1) For purposes
of determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this Registration
Statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this Registration Statement as of
the time it was declared effective; and (2) For the purpose of determining any
liability under the Securities Act, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF ROCKVILLE, STATE OF MARYLAND, ON THE TWENTY-EIGHTH
DAY OF MAY 1998.
CRIIMI MAE INC.
/s/ William B. Dockser
By: __________________________________
WILLIAM B. DOCKSER Chairman of
the Board
KNOW ALL PERSONS BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS
BELOW CONSTITUTES AND APPOINTS WILLIAM B. DOCKSER AND H. WILLIAM WILLOUGHBY,
AND EACH OF THEM SEVERALLY, AS HIS OR HER TRUE AND LAWFUL ATTORNEYS-IN-FACT AND
AGENTS, WITH FULL POWER OF SUBSTITUTION AND RESUBSTITUTION, FOR HIM OR HER AND
IN HIS OR HER NAME, PLACE, AND STEAD, IN ANY AND ALL CAPACITIES, TO SIGN ANY
AND ALL AMENDMENTS (INCLUDING POST-EFFECTIVE AMENDMENTS) TO THIS REGISTRATION
STATEMENT, AND TO FILE THE SAME, WITH ALL EXHIBITS THERETO, AND OTHER DOCUMENTS
IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE COMMISSION, GRANTING
UNTO SAID ATTORNEYS-IN-FACT AND AGENTS, FULL POWER AND AUTHORITY TO DO AND
PERFORM EACH AND EVERY ACT AND THING REQUISITE AND NECESSARY TO BE DONE IN
CONNECTION THEREWITH, AS FULLY TO ALL INTENTS AND PURPOSES AS HE OR SHE MIGHT
OR COULD DO IN PERSON, HEREBY RATIFYING AND CONFIRMING ALL THAT SAID ATTORNEYS-
IN-FACT AND AGENTS OR ANY OF THEM, OR OF HIS OR HER SUBSTITUTE OR SUBSTITUTES,
MAY LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES INDICATED.
/s/ William B. Dockser Chairman of the May 28, 1998
- ------------------------------------ Board (Principal
WILLIAM B. DOCKSER Executive Officer
and Director)
/s/ H. William Willoughby Director, President May 28, 1998
- ------------------------------------ and Secretary
H. WILLIAM WILLOUGHBY
/s/ Garrett G. Carlson Director May 28, 1998
- ------------------------------------
GARRETT G. CARLSON
/s/ Larry H. Dale Director May 28, 1998
- ------------------------------------
LARRY H. DALE
/s/ G. Richard Dunnells Director May 28, 1998
- ------------------------------------
G. RICHARD DUNNELLS
/s/ Robert J. Merrick Director May 28, 1998
- ------------------------------------
ROBERT J. MERRICK
/s/ Cynthia O. Azzara Chief Financial May 28, 1998
- ------------------------------------ Officer (Principal
CYNTHIA O. AZZARA Financial and
Accounting
Officer)
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 --Form of Underwriting Agreement for Common Shares and Preferred
Shares(1)
1.2 --Form of Underwriting Agreement for Debt Securities(1)
4.1 --Articles of Incorporation, as amended, of CRIIMI MAE Inc.(2)
4.2 --Amended and Restated Bylaws of CRIIMI MAE Inc.(3)
4.3. --Form of Indenture for Subordinated Debt Securities(4)
4.3.1 --Form of Indenture for Senior Debt Securities
4.4 --Form of Articles Supplementary with respect to Preferred Shares(1)
4.4.1 --Form of Articles Supplementary with respect to Series A Preferred
Shares(5)
4.4.2 --Form of Articles Supplementary with respect to Series B Preferred
Shares(6)
4.4.3 --Form of Articles Supplementary with respect to Series C Preferred
Shares(7)
4.5 --Form of specimen certificate representing Preferred Shares(1)
4.5.1 --Form of specimen certificate representing Series A Preferred
Shares(5)
4.5.2 --Form of specimen certificate representing Series B Preferred
Shares(6)
4.5.3 --Form of specimen certificate representing Series C Preferred
Shares(7)
4.6 --Form of specimen certificate representing Common Shares(2)
4.7 --Form of Warrant Agreement, including form of specimen warrant
certificate(1)
5.1 --Opinion of Swidler & Berlin, Chartered regarding validity of
Securities being registered
8.1 --Tax Opinion of Swidler & Berlin, Chartered(1)
12.1 --Computation of Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred Dividends of CRIIMI
MAE
23.1 --Consent of Arthur Andersen LLP
23.2 --Consent of Swidler & Berlin, Chartered (included in Exhibit 5.1)
23.3 --Consent of Swidler & Berlin, Chartered re: Tax Opinion(1)
24.1 --Power of Attorney (see signature page)
25.1 --Statement of Eligibility of Trustee on Form T-1(1)
25.2 --Statement of Eligibility of Trustee on Form T-2(1)
</TABLE>
- --------
(1) To be filed by amendment or incorporated by reference in connection with
the offering of Securities.
(2) Incorporated herein by reference to CRIIMI MAE's Registration Statement on
Form S-3 (File No. 33-50679), as amended.
(3) Incorporated herein by reference to CRIIMI MAE's Registration Statement on
Form S-3 (File No. 333-28823).
(4) Incorporated herein by reference to CRIIMI MAE's Registration Statement on
Form S-3 (File No. 33-54267), as amended.
(5) Incorporated herein by reference to CRIIMI MAE's Current Report on Form 8-
K dated July 1, 1996.
(6) Incorporated herein by reference to CRIIMI MAE's Current Report on Form 8-
K dated August 7, 1996.
(7) Incorporated herein by reference to CRIIMI MAE's Current Report on Form 8-
K dated September 23, 1997.
<PAGE>
EXHIBIT 5.1
May 29, 1998
The Board of Directors
CRIIMI MAE Inc.
11200 Rockville Pike
Rockville, Maryland
RE: REGISTRATION STATEMENT ON FORM S-3
Gentlemen:
We have acted as counsel to CRIIMI MAE Inc., a Maryland corporation (the
"Company"), with respect to the Company's Registration Statement on Form S-3
(the "Registration Statement") filed with the Securities and Exchange
Commission, in connection with the registration under the Securities Act of
1933, as amended, of up to $350,000,000 in aggregate public offering price of
the Company's debt securities ("Debt Securities"), preferred stock, par value
$.01 per share ("Preferred Stock"), common stock, par value $.01 per share
("Common Stock"), and warrants to purchase Preferred Stock or Common Stock
("Warrants," and together with the Debt Securities, Preferred Stock and Common
Stock, the "Securities"), all of which Securities may be sold by the Company
from time to time as set forth in the prospectus which forms a part of the
Registration Statement (the "Prospectus"), and as to be set forth in one or
more supplements to the Prospectus (each, a "Prospectus Supplement"). This
opinion letter is furnished to you at your request to enable you to fulfill
the requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. (S)
229.601(b)(5), in connection with the Registration Statement.
As counsel to the Company, we have examined the Company's Articles of
Incorporation, as amended (the "Articles"), and such Company records,
certificates and other documents and relevant statutes, regulations, published
rulings and such questions of law as we considered necessary or appropriate
for the purpose of this opinion.
In our examination, we have assumed the authenticity of original documents,
the accuracy of copies and the genuineness of signatures. We have relied upon
the representations and statements of officers and other representatives of
the Company with respect to the factual determinations underlying the legal
conclusions set forth herein. We have not attempted to verify independently
such representations and statements.
We assume that the issuance, sale, amount and terms of the Securities to be
offered from time to time will be duly authorized and determined by proper
action of the Board of Directors of the Company consistent with the procedures
and terms described in the Registration Statement (each, a "Board Action") and
in accordance with the Articles and applicable Maryland law. We further assume
that (i) any Debt Securities will be issued pursuant to one or more indentures
(each, an "Indenture"), the forms of which will be filed as exhibits to a
Current Report on Form 8-K prior to issuance thereof, (ii) any Warrants will
be issued under one or more warrant agreements, the forms of which will be
filed as exhibits to a Current Report on Form 8-K prior to issuance thereof
(each, a "Warrant Agreement"), each to be between the Company and a warrant
agent identified therein (each, a "Warrant Agent"), and (iii) prior to any
issuance of shares of Preferred Stock, appropriate articles supplementary
shall be filed for recordation with the State Department of Assessments and
Taxation of the State of Maryland (each, "Articles Supplementary").
This opinion letter is based as to matters of law solely on (i) the General
Corporation Law of the State of Maryland and (ii) Maryland contract law (but
not including any statutes, ordinances, administrative decisions, rules or
regulations of any political subdivision of Maryland), in each case as
currently in effect, and we express no opinion herein as to any other laws,
statutes, ordinances, rules or regulations.
<PAGE>
Based upon, subject to and limited by the foregoing and the other
qualifications herein, we are of the opinion that:
1. When the Registration Statement has become effective under the
Securities Act of 1933, as amended (the "Act"), and when the Debt
Securities have been (a) duly established by an Indenture or any
supplemental indenture thereto, (b) duly authorized and established by
applicable Board Action and duly authenticated by the Trustee thereunder
(the "Trustee"), and (c) duly executed and delivered on behalf of the
Company against payment of valid consideration therefor in accordance with
the terms of such Board Action, any applicable underwriting agreement, an
Indenture and any applicable supplemental indenture, and as contemplated by
the Registration Statement and/or the applicable Prospectus Supplement, the
Debt Securities will constitute binding obligations of the Company,
enforceable in accordance with their terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
rights of creditors and other obligees (including, without limitation, the
effect of statutory and other law regarding fraudulent conveyances,
fraudulent transfers and preferential transfers) and as may be limited by
the exercise of judicial discretion and the application of principles of
equity, including, without limitation, requirements of good faith, fair
dealing, conscionability and materiality (regardless of whether the Debt
Securities are considered in a proceeding in equity or at law).
2. When the Registration Statement has become effective under the Act and
when a series of the Preferred Stock has been duly authorized and
established by applicable Board Action, in accordance with the terms of the
Articles and applicable law, and appropriate Articles Supplementary have
been duly filed, and, upon issuance and delivery of such series of
Preferred Stock against payment of valid consideration therefor in
accordance with the terms of such Board Action and any applicable
underwriting or purchase agreement, and as contemplated by the Registration
Statement and/or the applicable Prospectus Supplement, the shares
represented by such series of Preferred Stock will be validly issued, fully
paid and nonassessable.
3. When the Registration Statement has become effective under the Act,
upon due authorization by Board Action of an issuance of Common Stock, and
upon issuance and delivery of such Common Stock against payment of valid
consideration therefor in accordance with the terms of such Board Action
and any applicable underwriting or purchase agreement, and as contemplated
by the Registration Statement and/or the applicable Prospectus Supplement,
such shares of Common Stock will be validly issued, fully paid and
nonassessable.
4. When the Registration Statement has become effective under the Act and
when the Warrants have been (a) duly established pursuant to the related
Warrant Agreement, (b) duly authorized and established by applicable Board
Action and duly authenticated by the Warrant Agent, and (c) duly executed
and delivered on behalf of the Company against payment of valid
consideration therefor in accordance with the terms of such Board Action,
any applicable underwriting or purchase agreement and the applicable
Warrant Agreement and as contemplated by the Registration Statement and/or
the applicable Prospectus Supplement, the Warrants will constitute binding
obligations of the Company, enforceable in accordance with their terms,
except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting rights of creditors and other obligees
(including, without limitation, the effect of statutory and other law
regarding fraudulent conveyances, fraudulent transfers and preferential
transfers) and as may be limited by the exercise of judicial discretion and
the application of principles of equity, including, without limitation,
requirements of good faith, fair dealing, conscionability and materiality
(regardless of whether the Warrants are considered in a proceeding in
equity or at law).
The opinions expressed in Paragraphs (1) and (4) above shall be understood
to mean only that if there is a default in performance of an obligation, (i)
if a failure to pay or other damage can be shown and (ii) if the defaulting
party can be brought into a court which will hear the case and apply the
governing law, then, subject to the availability of defenses and to the
exceptions set forth in Paragraphs (1) and (4), the court will provide a money
damage (or perhaps injunctive or specific performance) remedy.
To the extent that the obligations of the Company under any Indenture may be
dependent upon such matters, we assume for purposes of this opinion that the
Trustee is duly organized, validly existing and in good standing
2
<PAGE>
under the laws of its jurisdiction of organization; that the Trustee is duly
qualified to engage in the activities contemplated by the Indenture; that the
Indenture has been duly authorized, executed and delivered by the Trustee and
constitutes the legally valid and binding obligation of the Trustee
enforceable against the Trustee in accordance with its terms; that the Trustee
is in compliance, with respect to acting as a trustee under the Indenture,
with all applicable laws and regulations; and that the Trustee has the
requisite organizational and legal power and authority to perform its
obligations under the Indenture.
To the extent that the obligations of the Company under any Warrant
Agreement may be dependent upon such matters, we assume for purposes of this
opinion that the applicable Warrant Agent is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization; that
the Warrant Agent is duly qualified to engage in the activities contemplated
by the Warrant Agreement; that the Warrant Agreement has been duly authorized,
executed and delivered by the Warrant Agent and constitutes the legally valid
and binding obligation of the Warrant Agent enforceable against the Warrant
Agent in accordance with its terms; that the Warrant Agent is in compliance,
with respect to acting as a warrant agent under the Warrant Agreement, with
all applicable laws and regulations; and that the Warrant Agent has the
requisite organizational and legal power and authority to perform its
obligations under the Warrant Agreement.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to all references to our firm in the Registration
Statement. In giving this consent, we do not admit that we come within the
category of persons whose consent is required under Section 7 of the Act or
the rules promulgated thereunder.
This opinion is rendered solely for your benefit in connection with the
transactions described above upon the understanding that we are not hereby
assuming any professional responsibility to any other person. Except as
provided in the preceding paragraph, this opinion may not be relied upon by
any other person and this opinion may not be used, disclosed, quoted, filed
with a governmental agency or otherwise referred to without our express prior
written consent. The opinions expressed in this letter are limited to the
matters expressly set forth herein, and no other opinions should be inferred
beyond the matters expressly stated herein.
Very truly yours,
Swidler & Berlin, Chartered
/s/ Morris F. DeFeo
3
<PAGE>
EXHIBIT 12.1
CRIIMI MAE INC.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31, FOR THE YEARS ENDED DECEMBER 31,
--------------------- -------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---------- ---------- ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS
Net income.............. 13,895,428 19,099,541 54,187,616 35,239,857 18,534,089 26,010,119 15,757,505
Plus:
Extraordinary item.... 0 0 0 0 0 0 0
Interest expense...... 26,339,698 17,665,232 74,958,102 61,215,870 46,208,089 33,760,835 28,688,536
Amortization of debt
costs................ 1,052,155 656,691 2,961,312 1,862,897 3,644,583 5,483,786 4,209,980
Loss from investment
in limited
partnership.......... 0 0 0 0 0 0 0
Adjustment to hedges
for valuations/
sales................ 0 0 28,250 178,750 2,393,106 0 0
---------- ---------- ----------- ---------- ---------- ---------- ----------
Total earnings.......... 41,287,281 37,421,464 132,135,280 98,497,374 70,779,867 65,254,740 48,656,021
---------- ---------- ----------- ---------- ---------- ---------- ----------
FIXED CHARGES
Interest expense........ 26,339,698 17,665,232 74,958,102 61,215,870 46,208,089 33,760,835 28,688,536
Amortization of debt
costs.................. 1,052,155 656,691 2,961,312 1,862,897 3,644,583 5,483,786 4,209,980
Adjustment to hedges for
valuations/ sales...... 0 0 28,250 178,750 2,393,106 0 0
---------- ---------- ----------- ---------- ---------- ---------- ----------
Total fixed charges..... 27,391,853 18,321,923 77,947,664 63,257,517 52,245,778 39,244,621 32,898,516
---------- ---------- ----------- ---------- ---------- ---------- ----------
Ratio of earnings to
fixed charges.......... 1.51 2.04 1.70 1.56 1.35 1.66 1.48
========== ========== =========== ========== ========== ========== ==========
FIXED CHARGES AND
PREFERRED STOCK
DIVIDENDS
Total fixed charges..... 27,391,853 18,321,923 77,947,664 63,257,517 52,245,778 39,244,621 32,898,516
Preferred stock
dividends.............. 1,639,497 1,825,387 6,472,540 3,526,451 0 0 0
Total fixed charges and
preferred stock divi-
dends.................. 29,031,350 20,147,310 84,420,204 66,783,968 52,245,778 39,244,621 32,898,516
Ratio of earnings to
fixed charges and
preferred stock
dividends.............. 1.42 1.86 1.57 1.47 1.35 1.66 1.48
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 21, 1998
included in the Annual Report of CRIIMI MAE Inc.'s Form 10- K for the year
ended December 31, 1997 and to all references to our Firm included in this
registration statement.
Arthur Andersen LLP
Washington, D.C.
May 29, 1998
