SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 31, 1998 (July 22,
1998)
CRIIMI MAE Inc.
---------------
(Exact name of registrant as specified in its charter)
Maryland 1-10360 52-1622022
- ------------------------------------------------------------------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
11200 Rockville Pike, Rockville, Maryland 20852
- ------------------------------------------------------------------------------
(Address of principal executive office) (Zip code)
Registrant's telephone number including area code: (301) 816-2300
-------------
- -------------------------------------------------------------
(Former name or former address, if changed since last report)
Exhibit Index on Page 4<PAGE>
<PAGE>
Item 5. Other Events.
CRIIMI MAE Inc.(the "Company") has issued, pursuant to its registration
statement on Form S-3 filed with the Securities and Exchange Commission on
March 29, 1998 (Commission File Number 333-54031)(the "Registration
Statement"),as supplemented by a Prospectus Supplement thereto dated July 29,
1998 (the "Prospectus Supplement"), 100,000 shares of Series D Cumulative
Convertible Preferred Stock of the Company, $.01 par value per share (the
"Series D Preferred Shares"), at an aggregate offering price of $10,000,000.
The Series D Preferred Shares were placed with a single institutional
investor pursuant to the terms of a Preferred Stock Purchase Agreement dated
as of July 22, 1998, a copy of which is attached hereto as Exhibit 10.1 and is
incorporated in its entirety by reference in response to this Item 5 (the
"Purchase Agreement"). In connection with this offering, the Company paid
$700,000 to exercise a put option the Company acquired from such institutional
investor pursuant to the Purchase Agreement.
The terms and provisions of the Series D Preferred Shares are set forth in
Articles Supplementary to the Articles of Incorporation of the Company, a copy
of which is attached hereto as Exhibit 4.1 and is incorporated in its entirety
by reference in response to this Item 5.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
c) Exhibits
4.1 Articles Supplementary with respect to Series D Preferred Shares
4.2 Form of specimen certificate representing Series D Preferred Shares
8.1 Opinion of Counsel re Tax Matters
10.1 Preferred Stock Purchase Agreement dated as of July 22, 1998
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CRIIMI MAE Inc.
Date: July 31, 1998 By:
----------------------------
H. William Willoughby
President and Secretary
<PAGE>
<PAGE>
INDEX TO EXHIBITS
FORM 8-K
Page
----
4.1 Articles Supplementary with respect to Series D Preferred Shares
4.2 Form of specimen certificate representing Series D Preferred Shares
8.1 Opinion of Counsel re Tax Matters
10.1 Preferred Stock Purchase Agreement dated as of July 22, 1998
ARTICLES SUPPLEMENTARY
TO THE
ARTICLES OF INCORPORATION
OF
CRIIMI MAE INC.
CRIIMI MAE INC., a Maryland corporation (the "Corporation"), by and
through its undersigned Senior Vice President, does hereby certify that:
A. On July 18, 1998, the Board of Directors of the Corporation (the "Board of
Directors"), pursuant to Section 2-105 of the Maryland General Corporation
Law(the "GCL") and Article SIXTH of the Articles of Incorporation of the
Corporation duly classified 300,000 unissued shares of the Corporation's
preferred stock, $.01 par value per share ("Preferred Stock"), into a class of
preferred stock designated "Series D Cumulative Convertible Preferred Stock"
(the "Series D Preferred Stock") and established and fixed the preferences,
conversion or other rights, voting powers, restrictions or terms or conditions
of redemption of such shares of stock, and authorized the execution and
delivery of these Articles Supplementary to the Maryland State Department of
Assessments and Taxation for filing pursuant to Section 2-208 of the GCL.
B. The terms of the Series D Preferred Stock, as set by the Board
of Directors, are as follows:
1. Definitions. For the purposes of these Articles Supplementary,
the following terms shall have the meanings indicated:
"Average Closing Trade Price" shall mean the quotient of (a) the sum
of the Closing Trade Prices for all of the Valid Trading Days during the
applicable Conversion Pricing Period divided by (b) the number of Valid
Trading Days in such Conversion Pricing Period.
"Applicable Rate" shall mean, for each Quarterly Dividend Period the
sum of (a) 75 basis points plus (b) LIBOR as of the second LIBOR Market Day
preceding the commencement of such Quarterly Dividend Period.
"Business Day" shall mean any day other than a Saturday, Sunday or
the Friday after Thanksgiving or a day on which banking institutions in the
State of New York or Maryland are authorized or obligated by law or executive
order to close.
"Closing Trade Price" for a given Trading Day shall mean (a) the
last traded price for the Common Stock or the Survivor Common Stock, as the
case may be, for such Trading Day as reported by the New York Stock Exchange
or the American Stock Exchange or any successor thereto or (b) the last
reported bid quotation for the Common Stock or the Survivor Common Stock, as
<PAGE>
<PAGE>
the case may be, for such Trading Day as quoted by the NASDAQ National Market
System or any successor thereto.
"Common Stock" shall mean the common stock, par value $.01 per
share, of the Corporation.
"Conversion Pricing Period" shall mean a period of twenty-one (or
such fewer number as shall be mutually agreed upon in writing by the
Corporation and the holder of the Series D Preferred Stock being converted)
consecutive Trading Days immediately preceding the date of delivery of a
Holder Conversion Notice or the Mandatory Conversion Date, as the case may be.
"Dividend Parity Stock" shall have the meaning ascribed thereto in
Section 3(b) hereof.
"Event" shall have the meaning ascribed thereto in Section 4(b)
hereof.
"Holder Conversion Notice" shall have the meaning ascribed thereto
in Section 9(d) hereof.
"LIBOR" shall mean the arithmetic mean of the offered rates for 3
month deposits in United States dollars which appear on the display designated
as "Page 3750" on the Telerate Service (or such other page as may replace Page
3750 on that service for the purpose of displaying London interbank offered
rates of major banks) (the "Telerate Screen Page 3750") as of 11:00 A.M.,
London time, on the specified LIBOR Market Day; provided, however, if at the
specified time on the specified LIBOR Market Day fewer than two such offered
rates so appear on the Telerate Screen Page 3750, LIBOR shall mean the
arithmetic mean of three offered rates to prime banks for 3 month deposits in
United States dollars by three major banks in the London interbank market, as
selected by the Corporation, at approximately 11:00 A.M., London time, on the
specified LIBOR Market Day; provided, further, if fewer than three major banks
in the London interbank market are quoting rates to prime banks for 3 month
deposits in United States dollars, LIBOR shall be the LIBOR in effect for the
previous Quarterly Dividend Period.
"LIBOR Market Day" shall mean any day on which commercial banks are
open for business (including dealings in foreign exchange and foreign currency
deposits) in London, England.
"Liquidation Value" with respect to a share of Series D Preferred
Stock shall mean $100.
"Mandatory Conversion Date" shall mean the second yearly anniversary
of the date of issuance of a given share of Series D Preferred Stock.
"Minimum Daily Price" shall mean either (a) 75% of the Closing Trade
Price for the Trading Day immediately preceding either the date of delivery of
the Holder Conversion Notice to the Corporation or the Mandatory Conversion
Date, as the case may be, or (b) such price as shall be mutually agreed in
<PAGE>
<PAGE>
writing by the Corporation and the holder of the Series D Preferred Stock that
has requested conversion thereof.
"Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
"Qualified Person" shall mean any Person that, immediately after
giving effect to the applicable Transaction, (i) is a solvent corporation or
other entity organized under the laws of any State of the United States of
America having its common stock or, in the case of an entity other than a
corporation, equivalent equity securities, listed on the New York Stock
Exchange or the American Stock Exchange or quoted by the NASDAQ National
Market System or any successor thereto, and such common stock or equivalent
equity security continues to meet the requirements for such listing or
quotation and (ii) is required to file, and in each of the three fiscal years
immediately preceding the consummation of the applicable Transaction (or, if
shorter, since its inception) has filed, reports with the Securities and
Exchange Commission pursuant to Section 13 or 15(d) of the United States
Securities Exchange Act of 1934, as amended.
"Quarterly Dividend Payment Date"shall have the meaning ascribed
thereto in Section 3(a) hereof.
"Quarterly Dividend Period" shall mean, with respect to any
Quarterly Dividend Payment Date, the period commencing on the day succeeding
the prior Quarterly Dividend Payment Date (or, with respect to the first
Quarterly Dividend Payment Date for a share of Series D Preferred Stock, the
date of issuance of such share of Series D Preferred Stock) to and including
such Quarterly Dividend Payment Date.
"Redemption Price" shall have the meaning ascribed thereto in
Section 6(a) hereof.
"Series A Preferred Stock" shall mean the Corporation's Series A
Cumulative Convertible Preferred Stock, par value $.01 per share.
"Series B Preferred Stock" shall mean the Corporation's Series B
Cumulative Convertible Preferred Stock, par value $.01 per share.
"Series C Preferred Stock" shall mean the Corporation's Series C
Cumulative Convertible Preferred Stock, par value $.01 per share.
"Subsidiary" of any Person means any corporation or other entity of
which a majority of the voting power of the voting equity securities or equity
interest is owned, directly or indirectly, by such Person.
"Surviving Person" shall mean the continuing or surviving Person of
a merger, consolidation or other corporate combination, the Person receiving a
transfer of all or substantially all of the properties and assets of the
Corporation, or the Person consolidating with or merging into the Corporation
in a merger, consolidation or other corporate combination in which the<PAGE>
<PAGE>
Corporation is the continuing or surviving Person, but in connection with
which the Series D Preferred Stock or Common Stock of the Corporation is
exchanged, converted or reinstated into the securities of any other Person or
cash or any other property; provided, however, if such Surviving Person is a
direct or indirect Subsidiary of a Qualified Person, the parent entity that is
a Qualified Person shall be the Surviving Person.
"Survivor Common Stock" with respect to any Person shall mean any
shares of such Person of any class or series which has no preference or
priority in the payment of dividends or in the distribution of assets upon any
voluntary or involuntary liquidation, dissolution or winding up of such Person
and which is not subject to redemption by such Person; provided, however, that
if at any time there shall be more than one such class or series, the shares
of each such class and series issuable upon conversion of the Series D
Preferred Stock then being converted shall be substantially in the proportion
to the total number of shares of each such class and series.
"Trading Day" shall mean any day on which the principal national
securities exchange on which the Common Stock or Survivor Common Stock, as the
case may be, is listed or admitted to trading is open for the transaction of
business or, if the Common Stock or Survivor Common Stock, as the case may be,
is not listed or admitted to trading on any national securities exchange, a
Business Day.
"Transaction" shall have the meaning ascribed thereto in Section
9(k) hereof.
"Transfer Agent" shall have the meaning ascribed thereto in Section
9(d) hereof.
"Valid Trading Day" shall mean any Trading Day during a Conversion
Pricing Period in which either (a) the Closing Trade Price for such Trading
Day exceeds the Minimum Daily Price or (b) the Closing Trade Price for such
Trading Day does not exceed the Minimum Daily Price and the Corporation and
the holder of the Series D Preferred Stock that has requested conversion
thereof agree in writing to include such day as a Valid Trading Day in such
Conversion Pricing Period.
2. Designation and Number; Rank. (a) The shares of such series of
preferred stock shall be designated as "Series D Cumulative Convertible
Preferred Stock" (the "Series D Preferred Stock"). The number of shares
initially constituting the Series D Preferred Stock shall be 300,000, which
number may be decreased (but not increased) by the Board of Directors without
a vote of the holders of Series D Preferred Stock; provided, however, that
such number may not be decreased below the number of then outstanding shares
of Series D Preferred Stock.
(b) The Series D Preferred Stock shall, with respect to dividend
rights and rights upon liquidation, dissolution or winding up, rank (i) senior
to the common stock, par value $.01 per share of the Corporation (the "Common
Stock") and to all other capital stock of the Corporation the terms of which
specifically provide that such capital stock ranks junior to the Series D<PAGE>
<PAGE>
Preferred Stock with respect to dividend rights or rights upon liquidation,
dissolution or winding up of the Corporation, (ii) on a parity with all
capital stock of the Corporation the terms of which specifically provide that
such capital stock ranks on a parity with the Series D Preferred Stock with
respect to dividend rights or rights upon liquidation, dissolution or winding
up of the Corporation and (iii) junior to (w) the Corporation's Series A
Cumulative Convertible Preferred Stock, par value $.01 per share (the "Series
A Preferred Stock"), (x) the Corporation's Series B Cumulative Convertible
Preferred Stock, par value $.01 per share (the "Series B Preferred Stock"),
(y) the Corporation's Series C Cumulative Convertible Preferred Stock, par
value $.01 per share (the "Series C Preferred Stock") and (z) all other
capital stock of the Corporation the terms of which specifically provide that
such capital stock ranks senior to the Series D Preferred Stock with respect
to dividend rights or rights upon liquidation, dissolution or winding up of
the Corporation.
3. Dividends and Distributions. (a) The holders of shares of
Series D Preferred Stock, in preference to the holders of shares of Common
Stock and of any other shares of capital stock of the Corporation ranking
junior to the Series D Preferred Stock as to payment of dividends, shall be
entitled to receive, when, as and if declared by the Board of Directors, out
of the assets of the Corporation legally available therefor, cumulative cash
dividends at the Applicable Rate, payable in quarterly installments on the
last Business Day of each calendar quarter in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"). Each such
quarterly dividend shall be fully cumulative, to the extent not paid, and,
with respect to each share of Series D Preferred Stock, shall accrue (whether
or not earned or declared) on a daily basis with additional cumulative
dividends on any accrued but unpaid dividends accruing daily (whether or not
earned or declared) and compounding quarterly at the Applicable Rate, from the
date of issuance of such share of Series D Preferred Stock, and thereafter
from the first day of the quarterly period in which such dividend may be
payable as herein provided.
(b) Dividends paid on the shares of the Series D Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated among all such shares of Series D
Preferred Stock and all other shares of capital stock of the Corporation
ranking on a parity as to dividends with the Series D Preferred Stock
("Dividend Parity Stock") at the time outstanding pro rata so that the amount
of dividends declared per share of Series D Preferred Stock and the Dividend
Parity Stock shall in all cases bear to each other the same ratio that accrued
dividends per share on the Series D Preferred Stock and the Dividend Parity
Stock bear to each other. The Board of Directors may fix a record date for
the determination of holders of shares of the Series D Preferred Stock
entitled to receive payment of a dividend declared thereon, which record date
shall be no more than sixty days nor less than ten days prior to the date
fixed for the payment thereof.
(c) Any dividend payment made on shares of the Series D Preferred
Stock shall first be credited against the earliest accrued but unpaid dividend
due with respect to shares of the Series D Preferred Stock which remains<PAGE>
<PAGE>
payable.
(d) The holders of shares of the Series D Preferred Stock shall not
be entitled to receive any dividends or other distributions except as
expressly provided herein.
4. Voting Rights. So long as the Series D Preferred Stock remains
outstanding, the holders of shares of the Series D Preferred Stock shall have
the following voting rights:
(a) The holders of shares of Series D Preferred Stock shall have no
voting rights except as set forth below or as otherwise from time to time
required by law.
(b) The affirmative vote or consent of the holders of at least
two-thirds of the outstanding shares of Series D Preferred Stock, voting
separately as a class, in person or by proxy, in writing or at a special or
annual meeting of stockholders called for the purpose, shall be necessary to,
(i) authorize, create or increase the authorized or issued amount of, any
class or series of the Corporation's capital stock ranking prior to the Series
D Preferred Stock with respect to payment of dividends or distribution of
assets upon liquidation, dissolution or winding up or reclassify any
authorized capital stock of the Corporation into any such capital stock, or
create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such capital stock or (ii) amend, alter
or repeal any of the provisions of the Articles of Incorporation or the
Articles Supplementary to the Articles of Incorporation for the Series D
Preferred Stock, whether by merger, consolidation or otherwise (an "Event"),
so as to materially and adversely affect any right, preference, privilege or
voting power of the Series D Preferred Stock or the holders thereof; provided,
however, with respect to the occurrence of any of the Events set forth in (ii)
above, so long as the Series D Preferred Stock remains outstanding with the
terms thereof materially unchanged, taking into account that upon the
occurrence of an Event, the Corporation may not be the surviving entity, the
occurrence of any such Event shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting power of holders of the
Series D Preferred Stock; and provided, further, that (x) any increase in the
amount of authorized Common Stock or Series D Preferred Stock or the
authorization, creation or issuance of any other class or series of capital
stock or (y) any increase in the amount of authorized shares of any other
class or series of capital stock, in each case ranking on a parity with or
junior to the Series D Preferred Stock with respect to the payment of
dividends or the distribution of assets upon liquidation, dissolution or
winding up, shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers.
(c) During any period in which dividends on the Series D Preferred
Stock are cumulatively in arrears for six or more quarterly dividend payments
(whether or not consecutive), then the number of directors constituting the
Board of Directors shall, without further action, be increased by two and the
holders of shares of the Series D Preferred Stock, voting separately as a
single class (together with any other series of Preferred Stock as provided in
<PAGE>
<PAGE>
Section 4(d)(iii)), shall have, in addition to the other voting rights
expressly set forth herein, the right to elect the directors of the
Corporation to fill such newly created directorships, the remaining directors
to be elected by the other classes of stock entitled to vote therefor at each
meeting of stockholders held for the purpose of electing such remaining
directors. Such additional voting rights shall continue until such time as
all dividends accumulated on the Series D Preferred Stock shall have been paid
in full, at which time such additional directors shall cease to be directors,
subject to the rights of any other series of Preferred Stock to vote for the
election of such additional directors (as described in Section 4(d)(iii)), and
such additional voting right of the holders of Series D Preferred Stock shall
terminate, subject to revesting in the event of each and every subsequent
event of the character indicated above. In no event shall the holders of
Series D Preferred Stock voting separately as a class be entitled to elect a
total of more than two directors to the Board of Directors pursuant to this
Section 4.
(d)(i) The foregoing rights of holders of shares of Series D
Preferred Stock to take any actions as provided in this Section 4 may be
exercised at any annual meeting of stockholders or at a special meeting of
stockholders held for such purpose as hereinafter provided or at any
adjournment thereof, or by the written consent, delivered to the Secretary of
the Corporation, of the holders of the minimum number of shares required to
take such action. So long as such right to vote continues (and unless such
right has been exercised by written consent of the minimum number of shares
required to take such action), the Chairman of the Board of Directors may
call, and upon the written request of holders of record of 20% of the
outstanding shares of Series D Preferred Stock addressed to the Secretary of
the Corporation at the principal office of the Corporation, shall call, a
special meeting of the holders of shares entitled to vote as provided herein.
Such meeting shall be held within 60 days after delivery of such request to
the Secretary, at the place and upon the notice provided by law and in the
by-laws of the Corporation for the holding of meetings of stockholders.
(ii) Except as provided in paragraph (d)(iii) of this Section 4, at
each meeting of stockholders at which the holders of shares of Series D
Preferred Stock shall have the right, voting separately as a single class, to
elect directors of the Corporation as provided in this Section 4 or to take
any action, the presence in person or by proxy of the holders of record of a
majority of the total number of shares of Series D Preferred Stock then
outstanding and entitled to vote on the matter shall be necessary and
sufficient to constitute a quorum. At any such meeting or at any adjournment
thereof:
(A) the absence of a quorum of the holders of shares of Series
D Preferred Stock shall not prevent the election of directors other than those
to be elected by the holders of shares of Series D Preferred Stock and the
absence of a quorum of the holders of shares of any other class or series of
capital stock shall not prevent the election of directors to be elected by the
holders of shares of Series D Preferred Stock or the taking of any action as
provided in this Section 4; and
<PAGE>
(B) in the absence of a quorum of the holders of shares of
Series D Preferred Stock, a majority of the holders of such shares present in
person or by proxy shall have the power to adjourn the meeting as to the
actions to be taken by the holders of shares of Series D Preferred Stock from
time to time and place to place without notice other than announcement at the
meeting until a quorum shall be present.
(iii) If, at any time when the holders of Series D Preferred
Stock are entitled to elect directors pursuant to the provisions of Section
4(c), the holders of any one or more other series of Preferred Stock are
entitled to elect directors by reason of any default or event specified in the
Corporation's Articles of Incorporation (or any articles supplementary
thereto), as in effect at the time, or the articles supplementary for such
series, and if the terms for such other additional series so permit, then the
voting rights of the two or more series then entitled to vote shall be
combined (with each series having a number of votes proportional to the
aggregate liquidation preference of its outstanding shares). In such case,
the holders of Series D Preferred Stock and of all such other series then
entitled so to vote, voting together as one class, shall elect such directors.
At each meeting of stockholders at which the holders of shares of Series D
Preferred Stock shall have the right, voting together with such other series
as a single class, to elect directors of the Corporation as provided in this
Section 4 or to take any action, the presence in person or by proxy of the
holders of record of a majority of the total number of shares of such two or
more series then outstanding and entitled to vote on the matter shall be
necessary and sufficient to constitute a quorum. At any such meeting or at
any adjournment thereof:
(A) the absence of a quorum of the holders of shares of such
two or more series shall not prevent the election of directors other than
those to be elected by the holders of shares of such two or more series and
the absence of a quorum of the holders of shares of any other class or series
of capital stock shall not prevent the election of directors to be elected by
the holders of shares of such two or more series or the taking of any action
as provided in this Section 4; and
(B) in the absence of a quorum of the holders of shares of
such two or more series, a majority of the holders of such shares present in
person or by proxy shall have the power to adjourn the meeting as to the
actions to be taken by the holders of shares of such two or more series from
time to time and place to place without notice other than announcement at the
meeting until a quorum shall be present.
If the holders of any such other series have elected such directors
prior to the happening of the default or event permitting the holders of
Series D Preferred Stock to elect directors, or prior to a written request for
the holding of a special meeting being received by the Secretary of the
Corporation as elsewhere required in Section 4(d) above, then a new election
shall be held with all such other series of Preferred Stock and the Series D
Preferred Stock voting together as a single class for such directors,
resulting in the election of such new directors. If the holders of any such
other series are entitled to elect in excess of two directors, the Series D
<PAGE>
<PAGE>
Preferred Stock shall not participate in the election of more than two such
directors, and those directors whose terms first expire shall be deemed to be
the directors elected by the holders of Series D Preferred Stock; provided
that, if at the expiration of such terms, the holders of Series D Preferred
Stock are entitled to vote in the election of directors pursuant to the
provisions of this Section 4, then the Secretary of the Corporation shall call
a meeting (which meeting may be the annual meeting or special meeting of
stockholders) of holders of Series D Preferred Stock for the purpose of
electing replacement directors (in accordance with the provisions of this
Section 4) to be held at or prior to the time of expiration of the expiring
terms referred to above.
(iv) Except as otherwise specifically provided in paragraph
(d)(iii) of this Section 4:
(A) for the taking of any action as provided in paragraphs
(b) and (c) of this Section 4 by the holders of Series D Preferred Stock, each
such holder shall have one vote for each share of such stock standing in such
holder's name on the transfer books of the Corporation as of any record date
fixed for such purpose or, if no such date be fixed, at the close of business
on the Business Day next preceding the day on which notice is given, or if
notice is waived, at the close of business on the Business Day next preceding
the day on which the meeting is held; and
(B) each director elected by the holders of shares of Series
D Preferred Stock as provided in this Section 4 shall, unless his or her term
shall expire earlier upon payment in full by the Corporation of all
accumulated dividends on the Series D Preferred Stock, hold office until the
annual meeting of stockholders next succeeding his election or until his
successor, if any, is elected and qualified;
(v) In case any vacancy shall occur among the directors elected by
the holders of shares of Series D Preferred Stock (and any other series of
Preferred Stock, if any) as provided in this Section 4, such vacancy may be
filled for the unexpired portion of the term by vote of the remaining director
theretofore elected by such holders (if there is a remaining director), or
such director's successor in office. If any such vacancy is not so filled
within 20 days after the creation thereof or if both directors so elected by
the holders of Series D Preferred Stock (and any other series of Preferred
Stock, if any, as provided in Section 4(d)(iii)) shall cease to serve as
directors before their terms shall expire, the holders of the Series D
Preferred Stock (and any other series of Preferred Stock, if any, as provided
in Section 4(d)(iii)) then outstanding and entitled to vote for such directors
may, by written consent as herein provided, or at a special meeting of such
holders called as provided herein, elect successors to hold office for the
unexpired terms of such directors whose places shall be vacant.
(vi) Any director elected by the holders of shares of Series D
Preferred Stock voting separately as a single class (together with any other
series of Preferred Stock, if any, as provided in Section 4(d)(iii)) may be
removed from office with or without cause by the vote or written consent of
the holders of at least a majority of the outstanding shares of Series D<PAGE>
<PAGE>
Preferred Stock (together with any other series of Preferred Stock, if any, as
provided in Section 4(d)(iii)). A special meeting of the holders of shares of
Series D Preferred Stock (together with holders of any other series of
Preferred Stock, if any, as provided in Section 4(d)(iii)) may be called in
accordance with the procedures set forth in subparagraph (d)(i) of this
Section 4.
5. Certain Restrictions. (a) If shares of Series D Preferred Stock
are outstanding, unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for such payment on the Series D Preferred Stock
for all past dividend periods and the then current dividend period, other than
pursuant to Section 3(b), the Corporation will not declare, make, pay or set
apart for payment or distribution any dividends or other distributions (other
than in Common Stock or other capital shares ranking junior to the Series D
Preferred Stock as to dividends and upon liquidation, dissolution or winding
up) on the Common Stock or any other series or class of capital stock ranking,
as to dividends, on a parity with or junior to the Series D Preferred Stock
for any period.
(b) If shares of Series D Preferred Stock are outstanding, unless
full cumulative dividends have been or contemporaneously are declared and paid
or declared and a sum sufficient for the payment thereof set apart for such
payment on the Series D Preferred Stock for all past dividend periods and the
then current dividend period, the Corporation shall not redeem, purchase or
otherwise acquire for any consideration (or pay or make available money for a
sinking fund for the redemption of) any Common Stock or any other series or
class of capital stock ranking, as to dividends or upon liquidation,
dissolution or winding up, on a parity with or junior to the Series D
Preferred Stock (except by conversion into or exchange for Common Stock or
other capital stock of the Corporation ranking junior to the Series D
Preferred Stock as to dividends and upon liquidation, dissolution or winding
up); provided, however, the foregoing shall not prevent the purchase or
acquisition of any shares of capital stock of the Corporation by the
Corporation (i) in order to preserve the status of the Corporation as a real
estate investment trust ("REIT") or (ii) pursuant to a purchase or exchange
offer made on comparable terms to all holders of outstanding shares of capital
stock of the Corporation.
(c) The Corporation shall not permit any Subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
capital stock of the Corporation unless the Corporation could, pursuant to
paragraph (b) of this Section 5, purchase or otherwise acquire such shares at
such time and in such manner.
6. Redemption. (a) The Series D Preferred Stock shall not be
redeemable in whole or in part prior to the first yearly anniversary of the
date of issuance of the Series D Preferred Stock. On or after the first
yearly anniversary of the date of issuance of the Series D Preferred Stock, to
the extent the Corporation shall have funds legally available therefor, the
Series D Preferred Stock shall be subject to redemption in whole or in part,
in cash, at the option of the Corporation at any time or from time to time, at
<PAGE>
<PAGE>
$106 per share (the "Redemption Price"), together in each case with an amount
equal to accrued and unpaid dividends to (and including) the date fixed for
redemption. On and after the date fixed for redemption, provided that the
Redemption Price (including any accrued and unpaid dividends to (and
including) the date fixed for redemption) has been duly paid or deposited in
trust for the benefit of the holders of the Series D Preferred Stock,
dividends shall cease to accrue on the Series D Preferred Stock called for
redemption, such shares shall no longer be deemed to be outstanding and all
rights of the holders of such shares as stockholders of the Corporation shall
cease, except the right to receive the moneys payable upon such redemption,
without interest thereon, upon surrender of the certificates evidencing such
shares. Any moneys deposited in trust by the Corporation which shall not be
required for redemption because of the exercise of any right of conversion by
the holders of the Series D Preferred Stock, shall be repaid to the
Corporation forthwith. Any moneys deposited in trust by the Corporation and
unclaimed at the end of two years from the date fixed for such redemption
shall be repaid to the Corporation upon its written request, after which
repayment the holders of the shares of Series D Preferred Stock so called for
redemption shall look only to the Corporation for the payment thereof.
(b) Notice of any redemption pursuant to Section 6(a) shall be
given to the holders of shares of Series D Preferred Stock once not less than
45 or more than 60 days prior to the date fixed for redemption. Notice of
redemption shall be given by first class mail to each such holder's address as
shown on the stock books of the Corporation and will specify (i) the date
fixed for redemption, (ii) the number of shares of Series D Preferred Stock to
be redeemed, (iii) the Redemption Price, (iv) the place or places where
certificates for shares of Series D Preferred Stock are to be surrendered for
payment of the Redemption Price, (v) that dividends on the shares of Series D
Preferred Stock to be redeemed will cease to accrue on the date fixed for
redemption, (vi) the date upon which the holders' conversion rights will
terminate (which date shall be determined in accordance with Section 9(g)).
If less than all shares of Series D Preferred Stock then outstanding are to be
redeemed, the shares of Series D Preferred Stock will be redeemed pro rata
from among the holders of shares of Series D Preferred Stock then outstanding.
7. Reacquired Shares. Any shares of Series D Preferred Stock
converted, redeemed, purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and canceled promptly after the acquisition
thereof. All such shares of Series D Preferred Stock shall upon their
cancellation, and upon the filing of an appropriate certificate with the
Maryland State Department of Assessments and Taxation, become authorized but
unissued shares of Preferred Stock and may be reissued as part of another
series of Preferred Stock subject to the conditions or restrictions on
issuance set forth herein, to the extent any Series D Preferred Stock remains
outstanding.
8. Liquidation, Dissolution or Winding Up. (a) Upon any voluntary
or involuntary liquidation, dissolution or winding up of the affairs of the
Corporation then, before any distribution or payment shall be made to the
holders of any shares of Common Stock or any other class or series of capital
stock of the Corporation ranking junior to the Series D Preferred Stock in the
<PAGE>
distribution of assets upon any liquidation, dissolution or winding up of the
Corporation, the holders of Series D Preferred Stock shall be entitled to
receive out of assets of the Corporation legally available for distribution to
stockholders, liquidating distributions in the amount of the Liquidation Value
per share, plus an amount equal to all dividends accrued and unpaid thereon as
of the date of liquidation, dissolution or winding up. After payment of the
full amount of the liquidating distributions to which they are entitled, the
holders of Series D Preferred Stock will have no right or claim to any of the
remaining assets of the Corporation. In the event that, upon any such
voluntary or involuntary liquidation, dissolution or winding up, the available
assets of the Corporation are insufficient to pay the amount of the
liquidating distributions on all outstanding shares of Series D Preferred
Stock and the corresponding amounts payable on all shares of other classes or
series of capital stock of the Corporation ranking on a parity with the Series
D Preferred Stock in the distribution of assets upon liquidation, dissolution
or winding up, then the holders of the Series D Preferred Stock and all other
such classes or series of capital stock shall share ratably in any such
distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled.
(b) Neither the consolidation, merger or other business combination
of the Corporation with or into any other Person, nor the sale, lease or
conveyance of all or substantially all of the property or business of the
Corporation shall be deemed to constitute a liquidation, dissolution or
winding up of the Corporation for purposes of this Section 8.
9. Conversion. (a) Prior to the Mandatory Conversion Date for each
share of Series D Preferred Stock, such share of Series D Preferred Stock
shall be convertible at the option of the holder thereof into fully paid and
nonassessable shares of Common Stock, subject to the restrictions in this
Section 9(a), or unless such restrictions are modified by written agreement
between the Corporation and the holder of Series D Preferred Shares. In
connection with the first issuance of up to 100,000 shares of Series D
Preferred Stock by the Corporation to any Person, (i) no share of Series D
Preferred Stock may be converted during the first twenty-nine calendar days
after the issuance of such share, (ii) up to 50,000 shares of Series D
Preferred Stock may be converted on any Business Day that is 30 or more
calendar days after the issuance thereof but less than 60 calendar days after
the issuance thereof, and (iii) up to 100,000 shares of Series D Preferred
Stock may be converted on any Business Day that is 60 or more calendar days
after the issuance thereof. In connection with the issuance to any Person of
shares of Series D Preferred Stock following the first issuance of 100,000
shares to such Person of Series D Preferred Stock, (i) no share of Series D
Preferred Stock may be converted during the first twenty-nine calendar days
after the issuance of such share, and (ii) any share of Series D Preferred
Stock may be converted on any Business Day that is 30 or more days after the
issuance thereof. A holder of shares of Series D Preferred Stock may not
convert less than 10,000 shares of Series D Preferred Stock at any one time.
Determination of which holders shall be entitled to convert during any 30
consecutive calendar day period shall be based upon the holders which first
deliver to the Corporation the conversion notice and certificates of Series D
Preferred Stock specified in paragraph (d) below, with any allocation between
<PAGE>
<PAGE>
holders delivering the required conversion notice and certificates of Series D
Preferred Stock on the same day to be made pro rata based upon the number of
shares of Series D Preferred Stock submitted for conversion. In the event a
holder of Series D Preferred Stock cannot effect a requested conversion of
such holder's Series D Preferred Stock at the time requested, the Corporation
shall, without further action on the part of such holder, convert such shares
of Series D Preferred Stock into Common Stock on the earliest date that such
conversion is possible under the terms of these Articles Supplementary. In no
event may the holder of Series D Preferred Stock convert a share of Series D
Preferred Stock into shares of Common Stock if such conversion would result in
the holder of Series D Preferred Stock requesting the conversion thereof
having beneficial ownership of 5% or more of the Corporation's then
outstanding Common Stock. For purpose of these Articles Supplementary,
"beneficial ownership" shall be determined in accordance with Rule 13d-3 of
the Securities Exchange Act of 1934.
(b) On the Mandatory Conversion Date for each share of Series D
Preferred Stock, such share of Series D Preferred Stock shall be automatically
converted into fully paid and nonassessable shares of Common Stock.
(c) The number of shares of Common Stock deliverable upon
conversion of a share of Series D Preferred Stock shall be equal to a fraction
(i) the numerator of which is the Liquidation Value of the Series D Preferred
Stock and (ii) the denominator of which is a Closing Trade Price for a Trading
Day occurring within the Conversion Pricing Period mutually acceptable to the
Corporation and the holder; provided, however, that if no Closing Trade Price
is mutually acceptable to the Corporation and the holder, then the denominator
shall be the Average Closing Trade Price for the applicable Conversion Pricing
Period.
(d) Prior to the Mandatory Conversion Date, the holders of Series D
Preferred Stock may convert such Series D Preferred Stock into Common Stock by
surrendering to the Corporation at the principal office of the Corporation in
the State of Maryland (the "Transfer Agent") or at the office of any agent or
agents of the Corporation, as may be designated by the Board of Directors, the
certificate of such Series D Preferred Stock to be converted accompanied by a
written notice stating that such holder elects to convert all or a specified
whole number of such shares in accordance with the provisions of this Section
9 and specifying the name or names in which such holder wishes the certificate
or certificates for shares of Common Stock to be issued (a "Holder Conversion
Notice"). In case a Holder Conversion Notice shall specify a name or names
other than that of such holder, such Holder Conversion Notice shall be
accompanied by payment of all transfer taxes, if any, payable upon the
issuance of shares of Common Stock in such name or names. Other than such
taxes, the Corporation will pay any and all issue and other taxes (other than
taxes based on income) that may be payable in respect of any issue or delivery
of shares of Common Stock on conversion of Series D Preferred Stock pursuant
hereto.
(e) After the Mandatory Conversion Date, the holders of Series D
Preferred Stock may exchange certificates representing Series D Preferred
Stock for certificates representing Common Stock by surrendering to the<PAGE>
<PAGE>
Transfer Agent such certificates representing Series D Preferred Stock. In
case the holder of Series D Preferred Stock requests the Common Stock to be
registered in a name or names other than that of such holder, the Series D
Preferred Stock submitted for conversion shall be accompanied by payment of
all transfer taxes, if any, payable upon the issuance of shares of Common
Stock in such name or names. Other than such taxes, the Corporation will pay
any and all issue and other taxes (other than taxes based on income) that may
be payable in respect of any issue or delivery of shares of Common Stock on
conversion of Series D Preferred Stock pursuant hereto.
(f) As promptly as practicable, and in any event within five
Business Days after the date of delivery of the shares of Series D Preferred
Stock to be converted (and, if prior to the Mandatory Conversion Date, the
Holder Conversion Notice), the Corporation shall deliver or cause to be
delivered (i) certificates representing the number of validly issued, fully
paid and nonassessable full shares of Common Stock to which the holder of
shares of Series D Preferred Stock being converted shall be entitled and (ii)
if less than the full number of shares of Series D Preferred Stock evidenced
by the surrendered certificate or certificates is being converted, a new
certificate or certificates, of like tenor, for the number of shares of Series
D Preferred Stock evidenced by such surrendered certificate or certificates
less the number of shares being converted. All conversions shall be deemed to
have been made at the close of business on the date of delivery of the Holder
Conversion Notice or the Mandatory Conversion Date, as the case may be, so
that the rights of the holder thereof as to the shares being converted shall
cease except for the right to receive shares of Common Stock in accordance
herewith, and the Person entitled to receive the shares of Common Stock shall
be treated for all purposes as having become the record holder of such shares
of Common Stock at such time. The Corporation shall not be required to
convert, and no surrender of shares of Series D Preferred Stock shall be
effective for that purpose, while the transfer books of the Corporation for
the Common Stock are closed for any purpose (but not for any period in excess
of 10 calendar days); but the surrender of shares of Series D Preferred Stock
for conversion during any period while such books are so closed shall become
effective for conversion immediately upon the reopening of such books, as if
the conversion had been made on the date such shares of Series D Preferred
Stock were surrendered, and at a rate of conversion which assumes the
Conversion Pricing Period took place during the period immediately prior to
the closing of such books.
(g) In case any shares of Series D Preferred Stock are to be
redeemed pursuant to Section 6, the right of conversion set forth in this
Section 9 shall cease and terminate as to the shares of Series D Preferred
Stock to be redeemed at the close of business, Washington, D.C. time, on the
date of delivery to the holders of Series D Preferred Stock of notice of
redemption in accordance with Section 6(b), unless (i) the Corporation shall
have received a Holder Conversion Notice in respect of such shares of Series D
Preferred Stock prior to such time or (ii) the Corporation shall default in
the payment of the amount payable upon such redemption.
(h) Upon conversion of any shares of the Series D Preferred Stock,
all accrued and unpaid dividends up to (and including) the date of receipt by
the Corporation of the Holder Conversion Notice or the Mandatory Conversion
<PAGE>
<PAGE>
Date, as the case may be, whether or not declared, on each share of Series D
Preferred Stock being converted shall become immediately due and payable in
cash on the date of the issuance and delivery by the Corporation of the
certificate representing the shares of Common Stock to which such holder of
shares of the Series D Preferred Stock being converted is entitled. In the
event that the Corporation is legally prohibited from paying such dividends on
such date, the Corporation shall pay such unpaid dividends to the holder of
such shares as soon thereafter as it is legally able to do so.
(i) In connection with the conversion of any shares of Series D
Preferred Stock, no fractions of shares of Common Stock shall be issued, but
in lieu thereof the Corporation shall pay a cash adjustment in respect of such
fractional interest in an amount equal to such fractional interest multiplied
by the Average Closing Trade Price for the applicable Conversion Pricing
Period. If more than one share of Series D Preferred Stock shall be
surrendered for conversion by the same holder at the same time, the number of
full shares of Common Stock issuable on conversion thereof shall be computed
on the basis of the total number of shares of Series D Preferred Stock so
surrendered.
(j) The Corporation shall at all times reserve and keep available
for issuance upon the conversion of the Series D Preferred Stock, such number
of its authorized but unissued shares of Common Stock as will from time to
time be sufficient to permit the conversion of all outstanding shares of
Series D Preferred Stock, and shall take all action required to increase the
authorized number of shares of Common Stock if necessary to permit the
conversion of all outstanding shares of Series D Preferred Stock.
(k) In case of any capital reorganization or reclassification of
outstanding shares of Common Stock, or in the case of any consolidation or
merger of the Corporation with or into another Person or in the case of any
sale or conveyance to another Person of the property of the Corporation as an
entirety or substantially as an entirety (each of the foregoing being referred
to as a "Transaction"), at the option of the holder of any shares of Series D
Preferred Stock, (i) each share of Series D Preferred Stock then outstanding
shall thereafter be convertible into, in lieu of the Common Stock issuable
upon such conversion prior to consummation of such Transaction, the kind and
amount of shares of stock and other securities and property receivable
(including cash) upon the consummation of such Transaction by a holder of that
number of shares of Common Stock into which one share of Series D Preferred
Stock was convertible, assuming that the Conversion Pricing Period related
thereto ended on the day immediately preceding the consummation of such
Transaction (including, on a pro rata basis, the cash, securities or property
received by holders of Common Stock in any tender or exchange offer that is a
step in such Transaction, insofar as receipt of such cash, securities or
property in connection with any step in such Transaction does not result in
the holders of Series D Preferred Stock receiving the aggregate more than such
holders would otherwise be entitled to receive pursuant to this clause (i)) or
(ii) each share of Series D Preferred Stock shall entitle the holder thereof
to receive, upon presentation of the certificate therefor to the Surviving
Person subsequent to the consummation of such Transaction (A) if the Surviving
Person is a Qualified Person, that number of shares of Survivor Common Stock
<PAGE>
<PAGE>
of the Surviving Person determined by multiplying the number of shares of
Common Stock into which such share of Series D Preferred Stock was
convertible, assuming that the Conversion Pricing Period related thereto ended
on the day immediately preceding the consummation of such Transaction by a
fraction, the numerator of which is the average Closing Trade Price for the
Common Stock for twenty-one Trading Days preceding the date of consummation of
such Transaction and the denominator of which is the average Closing Trade
Price for the Survivor Common Stock for the twenty-one Trading Days preceding
the consummation of the Transaction giving rise to the adjustment in this
paragraph (k) or (B) if the Surviving Person is not a Qualified Person, $106
in cash per share of Series D Preferred Stock, payable in immediately
available funds. In any such case, if necessary, appropriate adjustment (as
determined by the Board of Directors) shall be made in the application of the
provisions set forth in this Section 9 with respect to the rights and
interests thereafter of the holders of shares of Series D Preferred Stock to
the end that the provisions set forth herein for the protection of the
conversion rights of the Series D Preferred Stock shall thereafter be
applicable, as nearly as reasonably may be, to any such other shares of stock
and other securities and property deliverable upon conversion of the shares of
Series D Preferred Stock remaining outstanding (with such adjustments in the
conversion price and number of shares issuable upon conversion and such other
adjustments in the provisions hereof as the Board of Directors shall determine
to be appropriate). In case securities or property other than Common Stock
shall be issuable or deliverable upon conversion as aforesaid, then all
references to this Section 9 shall be deemed to apply, so far as appropriate
and as nearly as may be, to such other securities or property.
10. REIT Status. Nothing contained in these Articles Supplementary
or the Articles of Incorporation shall limit the authority of the Board of
Directors to take such other action as it deems necessary or advisable to
protect the Corporation and the interests of the stockholders by preservation
of the Corporation's qualification as a REIT under the REIT Provisions (as
defined in the Articles of Incorporation), including, without limitation, the
enforcement of the provisions of Article EIGHTEENTH of the Articles of
Incorporation.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, this instrument has been executed for and on
behalf and in the name of the Corporation by its officers thereunto duly
authorized on July 28, 1998.
CRIIMI MAE INC.
By: /S/ Cynthia O. Azzara
---------------------
Cynthia O. Azzara
Senior Vice President/Chief Financial
Officer/Treasurer
[Seal]
Attest:
/S/ Sharilyn M. Green
- ---------------------
Sharilyn M. Green
Assistant Vice President/Senior Counsel<PAGE>
<PAGE>
THE UNDERSIGNED, Senior Vice President of the Corporation, who
executed on behalf of the Corporation Articles Supplementary of which this
Certificate is made a part, hereby acknowledges in the name and on behalf of
said Corporation the foregoing Articles Supplementary to be the corporate act
of said Corporation and hereby certifies that the matters and facts set forth
herein with respect to the authorization and approval thereof are true in all
material respects under the penalties of perjury.
By: /S/ Cynthia O. Azzara
---------------------
Cynthia O. Azzara
Senior Vice President/Chief Financial
Officer/Treasurer
Exhibit 4.2
FORM OF SPECIMEN CERTIFICATE REPRESENTING
SERIES D PREFERRED SHARES
[Front]
CRIIMI MAE INC.
(Incorporated Under the Laws of the State of Maryland)
- ------------- -----------
NUMBER Certificate SHARES
- ------------- -----------
This certificate is transferable in Series D Cumulative
the City of New York, New York Convertible Preferred Stock
or New Jersey
(See reverse for
restrictions
on transfer and
definitions)
CUSIP
THIS CERTIFIES THAT is the owner of
------------------- --------------------
fully paid and non-assessable shares of Series D Cumulative
- ------------------
Convertible Preferred Stock, par value of one cent ($.01) each, of
CRIIMI MAE Inc., transferable on the books of the Corporation by the owner in
person, or by duly authorized attorney, upon the surrender of this
Certificate properly endorsed or assigned. This Certificate and the shares
represented hereby are subject to the laws of the State of Maryland and to the
Articles of Incorporation and By-laws of the Corporation, as now or hereafter
amended.
This Certificate is not valid unless countersigned and registered by the
Transfer Agent and by the Registrar.
Witness the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
Dated:
<PAGE>
COUNTERSIGNED AND REGISTERED
Registrar and Transfer Company Chairman of the Board
TRANSFER AGENT AND REGISTRAR
[SEAL 1993]
AUTHORIZED SIGNATURE Secretary<PAGE>
<PAGE>
[Back]
CRIIMI MAE Inc.
Article EIGHTEENTH of the Corporation's Articles of Incorporation places
certain restrictions on the ownership of the Corporation's capital stock,
including limitations as to rights to acquire the Corporation's capital stock,
in an aggregate amount in excess of 9.8% of the outstanding capital stock of
the Corporation. The Corporation will furnish to any shareholder, upon
request and without charge, a full or summary statement of (1) the
designations, preferences, limitations, restrictions, and relative rights of
the shares of each class authorized to be issued, (2) the variations in the
relative rights and preferences between the shares of each series of preferred
stock so far as the same have been fixed and determined, and (3) the authority
of the board of directors to fix and determine the relative rights and
preferences of subsequent series. Such request may be made to the transfer
agent named on the face hereof or to the secretary of the Corporation.
---------------------------------------
Notice of Election to Convert
(Convertible into Common Stock)
The undersigned hereby irrevocably elects to convert
----------------
shares of the Series D Cumulative Convertible Preferred Stock represented by
the within certificate into shares of Common Stock of CRIIMI MAE INC. (as
such shares may be constituted on the conversion date) in accordance with the
provisions of the Articles of Incorporation, as amended, of the Corporation.
Dated:
------------------------- ----------------------------
Signature
--------------------------
(State)
Custodian (Cust)
---------
--------------------------------------------
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT - under Uniform Gifts to
Minor Act
TEN ENT - as tenants by the entireties JT TEN - as joint tenants with
right of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above
list.
<PAGE>
<PAGE>
FOR VALUE RECEIVED, hereby sell, assign and transfer
-------------
unto
Please insert social security or other
identifying number of assignee
- ---------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
(Please print or typewrite name and address, including zip code of assignee)
<PAGE>
<PAGE>
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
- ------------------------------------------------ Shares of the capital stock
represented by the within Certificate, and do hereby irrevocably constitute
and appoint Attorney
----------------------------------------------------------
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated
-----------------
- ------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION
OR ENLARGEMENT, OR ANY CHANGE WHATEVER.
Signature(s) Guaranteed:
- -----------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.
Exhibit 8.1
July 30, 1998
CRIIMI MAE Inc.
The CRI Building
11200 Rockville Pike
Rockville, MD 20852
RE: Sale of Series D Preferred Stock
-----------------------------------------------------------
Gentlemen:
We have examined a copy of the Registration Statement on Form S-3 filed
with the Securities and Exchange Commission on May 29, 1998 (Commission File
Number 333-54031) (the "Registration Statement"), as well as the Prospectus
dated May 29, 1998 included therein (the "Prospectus"), of CRIIMI MAE Inc., a
Maryland corporation (the "Company"), for the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of the sale of an
indeterminate number of shares of the Company's common stock, par value $.01
per share, the Company's preferred stock, par value $.01 per share, the
Company's debt securities and the Company's warrants (collectively, the
"Securities") pursuant to the Registration Statement and the Prospectus
Supplement thereto dated July 29, 1998 (the "Prospectus Supplement").
In issuing this opinion, we have also examined the Company's Articles of
Incorporation, as amended, and such other corporate records, including
resolutions of the Company's Board of Directors, and such other documents as
we have deemed necessary in order to express the opinions set forth below. In
our examination we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity
to all originals of all documents submitted to us as copies. The opinions set
forth in this letter are premised on certain written representations of the
Company contained in a letter to us of even date herewith.
In rendering our opinion, we have considered the applicable provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
regulations promulgated thereunder ("Treasury Regulations"), relevant judicial
authorities, rulings of the United States Internal Revenue Service (the
"Service"), and such other authorities as we deemed relevant. The Code,
Treasury Regulations, judicial decisions, rulings and other authorities that
we have considered are subject to change at any time and with retroactive
effect. A change in any of the authorities upon which our opinion is based
could affect our conclusions. Moreover, relevant laws could change in a
manner that could adversely affect the Company or its stockholders. We
undertake no obligation to inform you of any such change in the law. We have
<PAGE>
<PAGE>
not been requested to opine, and we have not opined, as to any issues other
than those expressly set forth herein. Capitalized terms used in this opinion
letter and not otherwise defined are as defined in the Registration Statement.
The Company is intended to qualify as a real estate investment trust
("REIT") under the Code. Based upon and subject to the foregoing, it is our
opinion that:
(1) the Company was organized and has operated in conformity with the
requirements for qualification and taxation as a REIT under the Code for each
of the taxable years it has been in existence, and the Company's current
organization and method of operation will enable it to continue to meet the
requirements for qualification as a REIT for each of its subsequent taxable
years; and
(2) the discussions in the Registration Statement under the headings
"RISK FACTORS CERTAIN TAX CONSIDERATIONS" and "CERTAIN UNITED STATES FEDERAL
INCOME TAX CONSIDERATIONS" are correct in all material respects and fairly
summarize the United States federal income tax considerations that are likely
to be material to a holder of the Securities of the Company.
The Company's qualification as a REIT under the Code will depend upon the
Company's ability to meet, through actual operating results, distribution
levels, diversity of stock ownership and the various income and asset
qualification tests imposed under the Code. Such operating results may not be
reviewed by us as counsel, and accordingly, no assurance can be given that the
actual results of the Company's operations for any one taxable year will
satisfy the requirements under the Code for REIT qualification. Moreover,
certain aspects of the Company's operations have not been considered by the
courts or the IRS. There can be no assurance that the courts or the IRS will
agree with our opinion. In addition, qualification as a REIT depends on
future transactions and events that cannot be known at this time.
For a discussion relating the relevant United States federal income tax
laws to the facts, and the legal analysis underlying the opinions set forth in
this letter, we incorporate by reference the discussion of United States
federal income tax issues in the sections of the Registration Statement under
the headings "RISK FACTORS CERTAIN TAX CONSIDERATIONS" and "CERTAIN UNITED
STATES FEDERAL INCOME TAX CONSIDERATIONS."
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to all references to our firm in the Registration
Statement. In giving this consent, we do not admit that we come within the
category of persons whose consent is required under Section 7 of the
Securities Act or the rules promulgated thereunder.
This opinion is rendered solely for your benefit in connection with the
transactions described above upon the understanding that we are not hereby
assuming any professional responsibility to any other person. Except as
provided in the preceding paragraph, this opinion may not be relied upon by
any other person and this opinion may not be used, disclosed, quoted, filed
with a governmental agency or otherwise referred to without our express prior
<PAGE>
<PAGE>
written consent. The opinions expressed in this letter are limited to the
matters expressly set forth herein, and no other opinions should be inferred
beyond the matters expressly stated herein.
Very truly yours,
/S/ SWIDLER & BERLIN, CHARTERED
PREFERRED STOCK PURCHASE AGREEMENT
PREFERRED STOCK PURCHASE AGREEMENT, dated as of July 22, 1998 (this
"Agreement"), between CRIIMI MAE Inc., a Maryland corporation (the "Company"),
and MeesPierson Investments Inc., a Delaware corporation (the "Investor").
WHEREAS, the Company desires to sell to the Investor, and the Investor
desires to purchase from the Company, up to 300,000 shares of the Company's
Series D Cumulative Convertible Preferred Stock, par value $.01 per share (the
"Series D Preferred Stock"), on the terms and subject to the conditions set
forth herein;
NOW THEREFORE, in consideration of the foregoing premises and mutual
representations, warranties and agreements contained herein, and for other
good and valuable consideration, the adequacy and receipt of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
Purchase and Sale of Series D Preferred Stock
Section 1.1 Purchase and Sale. (a) Subject to the terms and conditions
set forth in this Agreement, the Investor hereby grants to the Company the
right to sell to the Investor at the Company's election in whole or in part
from time to time up to 300,000 shares of Series D Preferred Stock (the
"Shares"). Any election to sell the Shares may be exercised by written notice
from the Company to the Investor (an "Option Notice"), delivered to the
Investor at any time from the day hereof until 5:00 P.M., New York City time
on July 31, 1999. The Company may not exercise its put option pursuant to
this Section 1.1, (i) if upon the sale of the Shares there would be shares of
Series C Cumulative Convertible Preferred Stock, par value $.01 per share
("Series C Preferred Stock"), and Series D Preferred Stock, issued and
outstanding, with an aggregate liquidation preference in excess of $30,000,000
or (ii) if the sale of the Shares would result in the Investor, together with
its affiliates (as such term is defined in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), having beneficial
ownership of 5% or more of the Company's Common Stock, par value $.01 per
share ("Common Stock"). For purposes of this Agreement, "beneficial
ownership" shall be determined in accordance with Rule 13d-3 of the Exchange
Act.
(b) The purchase price for each Share shall equal $100, payable as
specified in Section 1.2 hereof.
Section 1.2 The Closings. (a) The purchase and sale of Shares shall
take place at the offices of the Company at 11200 Rockville Pike, Rockville,
Maryland 20852, at 10:00 a.m. on the third business day following the date of
delivery to the Investor of an Option Notice, as the case may be, or at such
other time and place as the Company and the Investor may mutually agree. Each
such time and date for delivery of the Shares and the Purchase Price therefor
<PAGE>
<PAGE>
is herein called a "Closing" and the date of any such Closing is herein called
a "Closing Date."
(b) The aggregate purchase price for Shares purchased at a Closing
(the "Purchase Price") shall equal the product of (i) the number of Shares
being purchased at such Closing multiplied by (ii) $100.
(c) At each Closing for the sale and purchase of Shares, (i) the
Company shall satisfy, or the Investor shall waive, each of the conditions
set forth in Section 4.2 and the Company shall deliver to the Investor (A) one
or more stock certificates representing the Shares being purchased, registered
in the name of the Investor or its nominee and (B) the Put Option Exercise Fee
and (ii) the Investor shall satisfy, or the Company shall waive, each of the
conditions set forth in Section 4.1 and the Investor shall deliver to the
Company the Purchase Price in immediately available funds by wire transfer to
such account as shall be designated in writing by the Company.
(d) For purposes of this Agreement, the "Put Option Exercise Fee"
(referred to in Section 1.2(c)) shall be equal to (i) the number of Shares
being purchased and sold at such Closing multiplied by (ii) $1, in immediately
available funds by wire transfer to such account as shall be designated in
writing by the Investor at least two business days prior to the scheduled date
of the Closing. In connection with the first exercise of the put option
(which shall not exceed 100,000 Shares), the Company shall deliver to the
Investor the sum of (i) $600,000 and (ii) the Put Option Exercise Fee, in
immediately available funds by wire transfer to such account as shall be
designated in writing by the Investor at least two business days prior to the
scheduled date of the Closing.
ARTICLE II
Representations and Warranties
Section 2.1 Representations and Warranties of the Company. The Company
hereby makes the following representations and warranties to the Investor:
(a) The Company meets the requirements for the use of Form S-3
under the Securities Act of 1933, as amended (the "Securities Act"), and has
filed with the Securities and Exchange Commission (the "SEC") a registration
statement on such Form, as amended (File No. 333-54031), which has become
effective, for the registration under the Securities Act of the Shares. Such
registration statement, as amended at the date of this Agreement, meets the
requirements set forth in Rule 415(a)(1)(x) under the Securities Act and
complies in all other material respects with said Rule. The Company proposes
to file with the SEC pursuant to Rule 424 under the Securities Act a
supplement to the prospectus included in such registration statement relating
to the Shares and the plan of distribution thereof and has previously advised
the Investor of all further information (financial and other) with respect to
the Company to be set forth therein. Such registration statement, including
the exhibits thereto, as amended at the date of this Agreement, is hereinafter
called the "Registration Statement"; such prospectus in the form in which it
appears in the Registration Statement is hereinafter called the "Basic<PAGE>
<PAGE>
Prospectus"; and the supplemented prospectus, in the form in which it shall be
filed with the SEC pursuant to Rule 424(b) (including the Basic Prospectus as
so supplemented) is hereinafter called the "Final Prospectus". Any reference
herein to the Registration Statement, the Basic Prospectus or the Final
Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 which were filed under
the Exchange Act on or before the date of this Agreement, or the issue date of
the Basic Prospectus or the Final Prospectus, as the case may be; and any
reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus or the Final
Prospectus shall be deemed to refer to and include the filing of any document
under the Exchange Act after the date of this Agreement, or the issue date of
the Basic Prospectus or the Final Prospectus, as the case may be, and deemed
to be incorporated therein by reference.
(b) When the Final Prospectus is first filed pursuant to Rule
424(b) under the Securities Act, when, prior to any Closing Date, any
amendment to the Registration Statement becomes effective (including the
filing of any document incorporated by reference in the Registration
Statement), when any supplement to the Final Prospectus is filed with the SEC
and at each Closing Date, (i) the Registration Statement, as amended as of any
such time and the Final Prospectus, as amended or supplemented as of any such
time, complies or will comply in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and the respective
rules thereunder and (ii) neither the Registration Statement, as amended as of
any such time, nor the Final Prospectus, as amended or supplemented as of any
such time, will contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading.
(c) The accountants who certified the financial statements and
supporting schedules included in the Registration Statement are independent
public accountants as required by the Securities Act and the rules thereunder.
(d) The financial statements included in the Registration Statement
and the Final Prospectus present fairly the financial position of the Company
and any entity with respect to which the Company has the power to vote or
direct the voting of sufficient securities or interests to elect a majority of
the directors or management committee or similar governing body (each a
"Subsidiary"), which is required to be consolidated with the Company by
generally accepted accounting principles, as at the dates indicated and the
results of their operations for the periods specified; except as otherwise
stated in the Registration Statement, said audited financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis; and the supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein.
(e) As of the date hereof, since the respective dates as of which
information is given in the Registration Statement and the Final Prospectus,
except as otherwise stated therein, (i) there has been no event or condition
that would have a material adverse effect on the business, operations,<PAGE>
<PAGE>
properties, assets, financial condition or results of operations of the
Company and its Subsidiaries, taken as a whole, or on the Company's ability to
consummate this Agreement in accordance with its terms (a "Material Adverse
Effect"), (ii) there have been no transactions entered into by the Company or
any of its Subsidiaries, other than in the ordinary course of business, which
are material with respect to the Company and its Subsidiaries considered as
one enterprise and (iii) except for regular quarterly dividends on the Common
Stock and quarterly dividends on its outstanding preferred stock, there has
been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(f) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Maryland with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Final Prospectus and to enter into
and perform its obligations under this Agreement; and the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not have a Material Adverse
Effect.
(g) Each Subsidiary of the Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in
the Final Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not have a Material Adverse Effect; all of the issued and outstanding
capital stock of each such Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable; and the capital stock of each
Subsidiary held by the Company, directly or through Subsidiaries, is held free
and clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity, except as set forth in the Final Prospectus or otherwise disclosed
to the Investor in writing prior to the date of this Agreement.
(h) As of June 15, 1998, the authorized capital stock of the
Company consists of (i) 25,000,000 shares of preferred stock, par value $.01
per share (the "Preferred Stock"), of which as of the close of business on
June 15, 1998, 0 shares of Series A Cumulative Convertible Preferred Stock,
1,629,582 shares of Series B Cumulative Convertible Preferred Stock and
250,000 shares of Series C Preferred Stock are issued and outstanding and (ii)
60,000,000 shares of Common Stock, of which as of the close of business on
June 15, 1998, 47,795,989 shares were issued and outstanding and 0 shares were
held in its treasury. All of such outstanding shares of Common Stock and
Preferred Stock have been duly authorized, validly issued and are fully paid
and non-assessable. The Shares have been duly authorized for issuance and
sale to the Investor pursuant to this Agreement and, when issued and delivered
by the Company pursuant to this Agreement against payment of the consideration
set forth herein, will be validly issued and fully paid and non-assessable.
<PAGE>
<PAGE>
The shares of Common Stock issuable upon conversion of the Shares have been
duly authorized and reserved on the books of the Company for such issuance
and, when issued and delivered in accordance with the terms of the Articles
Supplementary to the Articles of Incorporation of the Company for the Series D
Preferred Stock, will be validly issued and fully paid and non-assessable.
The Preferred Stock and the Common Stock conform to all statements relating
thereto contained in the Final Prospectus and the issuance of the Shares, and
any Common Stock upon the conversion of the Shares, is not subject to
preemptive or other similar rights.
(i) Neither the Company nor any of its Subsidiaries is in violation
of its charter or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
the Company or any of its Subsidiaries is a party or by which it or any of
them may be bound, or to which any of the property or assets of the Company or
any of its Subsidiaries is subject, other than violations or defaults which do
not individually or in the aggregate have a Material Adverse Effect. The
execution, delivery and performance of this Agreement, the consummation of the
transactions contemplated herein and compliance by the Company with its
obligations hereunder have been duly authorized by all necessary corporate
action and will not (i) result in any violation of the provisions of the
charter or by-laws of the Company or any Subsidiary, (ii) conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance (collectively, "Liens") upon any
property or assets of the Company or any of its Subsidiaries pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other instrument
to which the Company or any of its Subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company or any of its Subsidiaries is subject or (iii) violate any applicable
law, administrative regulation or administrative or court decree, other than,
in the case of clauses (ii) and (iii) above, those conflicts, breaches,
defaults, creation or imposition of Liens and violations which do not
individually or in the aggregate have a Material Adverse Effect.
(j) There is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company or any
of its Subsidiaries, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might have a Material
Adverse Effect. There are no contracts or documents of the Company or any of
its Subsidiaries which are required to be filed as exhibits to the
Registration Statement by the Securities Act or the regulations thereunder
which have not been so filed.
(k) No authorization, approval or consent of any court or
governmental authority or agency is necessary in connection with the offering,
issuance or sale of the Shares hereunder, except such as may be required under
the Securities Act or the regulations thereunder or state securities laws.
(l) The Company and its Subsidiaries possess such certificates,
authorizations or permits issued by the appropriate state, federal or foreign
<PAGE>
regulatory agencies or bodies necessary to conduct the business now operated
by them, except where the failure to possess such certificates, authorizations
or permits would not have, individually or in the aggregate, a Material
Adverse Effect, and neither the Company nor any of its Subsidiaries has
received any notice of proceedings relating to the revocation or modification
of any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a Material Adverse Effect.
(m) This Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of, rights and remedies of
creditors and other obligees or by other equitable principles of general
application.
(n) Except as set forth on Exhibit A attached hereto, there are no
persons with registration or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise registered by
the Company under the Securities Act.
Any certificate signed by an executive officer of the Company and
delivered to the Investor in connection with this Agreement shall be deemed a
representation and warranty by the Company to the Investor as to the nature of
the matters covered thereby.
Section 2.2 Representations and Warranties of the Investor. The
Investor hereby makes the following representations and warranties to the
Company:
(a) (i) The Investor has been duly organized and is in good standing
under the laws of the State of Delaware, (ii) the Investor is duly qualified
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required for the Investor to
perform its obligations under this Agreement, (iii) the Investor has the
requisite corporate power and authority to enter into and perform this
Agreement, (iv) the execution and delivery of this Agreement by the Investor
and performance by it of its obligations hereunder have been duly authorized,
(v) this Agreement has been duly executed and delivered by the Investor and
(vi) this Agreement constitutes a valid and binding obligation of the Investor
enforceable against the Investor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of, rights and remedies of
creditors and other obligees or by other equitable principles of general
application.
(b) No authorization, approval or consent of any court or
governmental authority or agency is necessary to be obtained by the Investor
in connection with the purchase of the Shares hereunder.<PAGE>
<PAGE>
(c) The execution, delivery and performance of this Agreement, the
consummation of the transactions contemplated herein and compliance by the
Investor with its obligations hereunder have been duly authorized by all
necessary corporate action and will not (i) result in any violation of the
provisions of the charter or by-laws of the Investor, (ii) conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any Lien upon any property or assets of the Investor pursuant
to, any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Investor is a party or by which it may be bound, or to
which any of the property or assets of the Investor is subject or (iii)
violate any applicable law, administrative regulation or administrative or
court decree, other than, in the case of clauses (ii) and (iii) above, those
conflicts, breaches, defaults, creation or imposition of Liens and violations
which do not individually or in the aggregate have a material adverse effect
on the Investors' ability to consummate this Agreement in accordance with its
terms.
(d) The Investor understands and has evaluated the risks of a
purchase of the Shares, has been provided an opportunity to obtain any
additional information concerning the offering, the Company and all other
information to the extent the Company possesses such information or can
acquire it without unreasonable effort or expense, and has been given the
opportunity to ask questions of, and receive answers from, the Company and its
management concerning the terms and conditions of the offering and other
matters pertaining to this investment.
ARTICLE III
Covenants
Section 3.1 Covenants of the Company. The Company covenants with the
Investor that, prior to the termination of the sale of the Shares, the Company
will not file any amendment to the Registration Statement or supplement to the
Basic Prospectus which relates to the Series D Preferred Stock unless the
Company has furnished the Investor a copy for the Investor's review prior to
filing and will not file any such proposed amendment or supplement to which
the Investor reasonably objects. Subject to the foregoing sentence, the
Company will cause the Final Prospectus to be filed pursuant to Rule 424(b)
under the Securities Act not later than the close of business on the second
business day following the execution and delivery of the first Option Notice
hereunder. The Company will promptly advise the Investor (i) when the Final
Prospectus shall have been filed with the SEC pursuant to Rule 424(b), (ii)
when any amendment to the Registration Statement relating to the Shares shall
have become effective, (iii) of any request received by the Company from the
SEC for any amendment of the Registration Statement or amendment of or
supplement to the Final Prospectus or for any additional information, (iv) of
the issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding for
that purpose of which the Company has knowledge and (v) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Shares in any jurisdiction or the initiation or
<PAGE>
threatening of any proceeding for such purpose of which the Company has
knowledge.
3.2 Covenants of the Investor. The Investor covenants with the Company
that, during any Conversion Pricing Period (as such term is defined in the
Articles Supplementary set forth in Exhibit C) neither the Investor nor its
affiliates will engage in the sale of shares of Common Stock if such sale
would constitute the last sale of shares of Common Stock prior to the
scheduled time of closing of trading on the New York Stock Exchange (or on any
other exchange or system on which the Common Stock is or may be listed or
quoted) on any day on which such exchange or system is open for trading.
ARTICLE IV
Conditions
Section 4.1 Company Conditions Precedent. The obligation hereunder of
the Company to sell the Shares to the Investor is subject to the satisfaction,
at or before each Closing, of each of the following conditions set forth
below. These conditions are for the Company's sole benefit and may be waived
by the Company at any time in its sole discretion.
(a) Accuracy of Investor's Representations and Warranties. The
representations and warranties of the Investor shall be true and correct as of
the date when made and as of each Closing Date as though made at that time
(except for representations and warranties that speak as of a particular
date).
(b) Performance by Investor. The Investor shall have performed,
satisfied and complied with all covenants, agreements and conditions required
to be performed, satisfied or complied with by the Investor at or prior to
each Closing.
(c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority having competent jurisdiction
which prohibits or materially impairs the consummation of any of the
transactions contemplated by this Agreement.
Section 4.2 Investor Conditions Precedent. The obligation of the
Investor to acquire and pay for the Shares is subject to the satisfaction, at
or before each Closing, of each of the following conditions set forth below.
These conditions are for the Investor's sole benefit and may be waived by the
Investor at any time in its sole discretion.
(a) Accuracy of Company's Representations and Warranties. The
representations and warranties of the Company shall be true and correct as of
the date when made and as of each Closing Date as though made at that time
(except for representations and warranties that speak as of a particular
date).
(b) Performance by Company. The Company shall have performed,<PAGE>
<PAGE>
satisfied and complied with all covenants, agreements and conditions required
to be performed, satisfied or complied with by the Company at or prior to each
Closing.
(c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority having competent jurisdiction
which prohibits or materially impairs the consummation of any of the
transactions contemplated by this Agreement.
(d) No Stop Order. No stop order suspending the effectiveness of
the Registration Amendment shall have been issued and no proceedings for that
purpose shall have been instituted or threatened; and the Final Prospectus
shall have been filed with the SEC pursuant to Rule 424(b) not later than the
close of business on the second business day following the execution and
delivery of this Agreement.
(e) Officers' Certificate. The Company shall have furnished to the
Investor a certificate, signed by two executive officers of the Company, to
the effect that the signers of such certificate have carefully examined the
Registration Statement, the Final Prospectus and this Agreement and that, to
their best knowledge: (i) the representations and warranties of the Company in
this Agreement are true and correct on and as of the Closing Date with the
same effect as if made on the Closing Date, and the Company has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date; (ii) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or threatened; and (iii)
since the date of the most recent financial statements incorporated by
reference in the Final Prospectus, there has been no event or condition
causing a Material Adverse Effect.
(f) Opinion. The Company shall have furnished to the Investor an
opinion of Swidler & Berlin, substantially in the form attached hereto as
Exhibit B.
(g) Articles Supplementary. The Company shall have filed with the
Maryland State Department of Assessments and Taxation Articles Supplementary
to the Articles of Incorporation of the Company for the Series D Preferred
Stock, which Articles Supplementary shall be substantially in the form
attached hereto as Exhibit C.
(h) Subsequent Events. On or after the date of execution of this
Agreement there shall not have occurred any of the following: (i) any event or
condition that has had or would have a Material Adverse Effect; (ii) a
suspension or material limitation in the trading of the Common Stock on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading or in securities generally on the principal national
securities exchange on which the Common Stock is listed or admitted to
trading; (iii) a general moratorium on commercial banking activities in
Amsterdam declared by the relevant authorities; (iv) the outbreak or<PAGE>
<PAGE>
escalation of any hostilities involving the United States or the declaration
by the United States of a national emergency or war; or (v) the public
announcement of (A) a tender offer or exchange offer for the Common Stock, (B)
a merger, consolidation or sale of all or substantially all of the assets of
the Company, (C) the acquisition by a third party (other than H. William
Willoughby or William B. Dockser) of more than 5% of the Common Stock, (D) a
proxy solicitation by any person other than management (other than proposals
of security holders included in the Company's proxy statement pursuant to Rule
14a-8 under the Exchange Act) or (E) the occurrence of any other material
event or events signifying an imminent change in control of the Company.
ARTICLE V
Miscellaneous
Section 5.1 Fees and Expenses. Each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. Each
party hereto represents to the other party that it neither is nor will be
obligated for any finders' fee or commission in connection with this
transaction. Each party hereto agrees to indemnify and to hold harmless the
other party for any commission or compensation in the nature of a finders' fee
(and the costs and expenses of defending against such liability or asserted
liability) for which such party or any of its officers, partners, employees or
representatives is responsible.
Section 5.2 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect.
Section 5.3 Consent to Jurisdiction. Each of the Company and the
Investor (i) hereby irrevocably submits to the exclusive jurisdiction of the
courts of the State of Maryland or the United States of America in the State
of Maryland for the purposes of any suit, action or proceeding arising out of
or relating to this Agreement and (ii) hereby waives, and agrees not to assert
in any such suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such court, that the suit, action or proceeding
is brought in an inconvenient forum or that the venue of the suit, action or
proceeding is improper. Each of the Company and the Investor consents to
process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing in this paragraph shall affect
or limit any right to service of process in any other manner permitted by law.
Section 5.4 Trial by Jury. Each of the Company and the Investor hereby
irrevocably waives all right of trial by jury in any action, proceeding or
counterclaim arising out of or in connection with this Agreement or any matter
arising hereunder.
<PAGE>
Section 5.5 Entire Agreement; Amendments. This Agreement contains the
entire understanding of the parties with respect to the matters covered hereby
and, except as specifically set forth herein, neither the Company nor the
Investor makes any representation, warranty, covenant or undertaking with
respect to such matters. No provision of this Agreement may be waived,
amended or otherwise modified other than by a written instrument signed by
each of the parties hereto.
Section 5.6 Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be effective (a)
upon hand delivery or facsimile at the address or number designated below, (b)
on the third business day in the country of receipt following the date of
mailing by international express courier service, fully prepaid, addressed to
such address or (c) upon actual receipt of any other form of delivery. The
addresses for such communications shall be:
If to the Company
MeesPierson Investments Inc.
3 Stamford Plaza
301 Tresser Boulevard
Stamford, CT 06901-3239
Attention: Raymond B. Lang, Managing Director
Facsimile: 203-705-5902
If to the Investor:
CRIIMI MAE Inc.
11200 Rockville Pike
Rockville, Maryland 20852
Attention: Cynthia O. Azzara
Facsimile: 301-231-0334
Either party hereto may from time to time change its address for notices
under this Section 5.6 by giving at least 10 days' prior written notice of
such changed address to the other party hereto.
Section 5.7 Headings. The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
Section 5.8 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their successors and
permitted assigns. Neither party hereto shall assign this Agreement or any
rights or obligations hereunder without the prior written consent of the other
party hereto, which consent shall not be unreasonably withheld.
Section 5.9 No Third Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective permitted
successors and assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other person.<PAGE>
<PAGE>
Section 5.10 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Maryland without regard to such State's principles of conflict of laws.
Section 5.11 Counterparts. This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which shall
be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
Section 5.12 Publicity. The Company and the Investor shall consult with
each other prior to issuing any press releases or otherwise making public
statements with respect to the transactions contemplated hereby.
Section 5.13. Termination. This Agreement may be terminated at any time
by the mutual consent of the Company and the Investor; provided that the
provisions of Section 3.2 shall survive such termination.<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date hereof.
CRIIMI MAE INC. MEESPIERSON INVESTMENTS INC.
By:/S/ Cynthia O. Azzara By: /S/Thomas Abbott
--------------------- -------------------
Cynthia O. Azzara Thomas Abbott
Senior Vice President/Chief Chairman
Financial Officer/Treasurer
By: /S/ Bruce T. Bernstein
-----------------------
Bruce T. Bernstein
President and C.E.O.
<PAGE>
<PAGE>
EXHIBIT A
Each of William B. Dockser, H. William Willoughby, Jay R. Cohen, Deborah
A. Linn, Frederick J. Burchill and Cynthia O. Azzara have entered into a
Registration Rights and Lock-Up Agreement with CRIIMI MAE Inc. ("CRIIMI MAE"),
pursuant to which they are entitled to certain incidental, shelf and demand
registration rights with respect to shares of CRIIMI MAE common stock, par
value $0.01 per share, held by such individuals.<PAGE>
<PAGE>
EXHIBIT B
Form of Opinion of Swidler & Berlin
a. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Maryland with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement, as
supplemented by the Prospectus Supplement, and to enter into and perform its
obligations under the Purchase Agreement. The Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction identified on Exhibit B hereto.
b. Each Subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction
of its incorporation, has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement, as supplemented by the Prospectus Supplement, and is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction identified on Exhibit B hereto. All of the
issued and outstanding capital stock of each such Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable. The capital
stock of each Subsidiary held by the Company, directly or through
Subsidiaries, is held free and clear of any perfected security interest, or,
to our knowledge, any other mortgage, pledge, lien, encumbrance, claim or
equity, except as set forth in the Registration Statement or on Exhibit C
hereto or otherwise disclosed to you in writing prior to the date of the
Purchase Agreement.
c. As of June 15, 1998, the authorized capital stock of the Company
consisted of (i) 25,000,000 shares of preferred stock, par value $.01 per
share (the "Preferred Stock"), of which as of the close of business on June
15, 1998, 0 shares of Series A Cumulative Convertible Preferred Stock,
1,629,582 shares of Series B Cumulative Convertible Preferred Stock and
250,000 shares of Series C Cumulative Convertible Preferred Stock are issued
and outstanding and (ii) 60,000,000 shares of Common Stock, par value $.01 per
share ("Common Stock"), of which as of the close of business on June 15, 1998,
47,795,989 shares were issued and outstanding and 0 shares were held in its
treasury. All of such outstanding Common Shares and Preferred Stock have been
duly authorized, validly issued and are fully paid and non-assessable. The
Shares have been duly authorized for issuance and sale to the Investor
pursuant to the Purchase Agreement and, when issued and delivered by the
Company pursuant to the Purchase Agreement against payment of the
consideration set forth therein, will be validly issued and fully paid and
non-assessable. The Common Shares have been duly authorized and reserved on
the books of the Company for issuance upon conversion of the Shares and, when
issued and delivered in accordance with the terms of the Articles
Supplementary to the Articles of Incorporation of the Company for the Shares,
will be validly issued and fully paid and non-assessable. The Shares and the
Common Shares conform to the legal description thereof contained in the
Registration Statement, as supplemented by the Prospectus Supplement and, to
<PAGE>
<PAGE>
our knowledge, the issuance of the Shares and any Common Shares upon the
conversion of the Shares is not subject to preemptive or other similar rights.
d. The execution, delivery and performance by the Company of the Purchase
Agreement, the consummation of the transactions contemplated therein and
compliance by the Company with its obligations thereunder have been duly
authorized by all necessary corporate action and will not (i) result in any
violation of the provisions of the charter or by-laws of the Company or any
Subsidiary, (ii) to our knowledge, constitute a breach of, or default under,
or result in the creation or imposition of any Lien upon any property or
assets of the Company or any of its Subsidiaries pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or other instrument
identified on Exhibit D hereto to which the Company or any of its Subsidiaries
is a party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its Subsidiaries is subject or
(iii) to our knowledge, based upon our review of those United States or
Maryland laws, rules and regulations which, in our experience, are normally
applicable to transactions of the type contemplated by the Purchase Agreement,
violate any applicable United States or Maryland law, administrative
regulation or administrative or court decree, other than, in the case of
clauses (ii) and (iii) above, those breaches, defaults, creation or imposition
of Liens and violations which do not individually or in the aggregate have a
Material Adverse Effect.
e. To our knowledge, there is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now pending, or
threatened, against or affecting the Company or any of its Subsidiaries, which
is required to be disclosed in the Registration Statement and which is not so
disclosed, or which might have a Material Adverse Effect. To our knowledge,
there are no contracts or documents of the Company or any of its Subsidiaries
which are required to be filed as exhibits to the Registration Statement by
the Securities Act or the regulations thereunder which have not been so filed.
f. No authorization, approval or consent of any United States or Maryland
court or governmental authority or agency is necessary in connection with the
offering, issuance or sale of the Shares pursuant to the Purchase Agreement,
except such as may be required under the Securities Act or the regulations
thereunder or state securities laws. The Company intends to file each of the
Purchase Agreement, the Articles Supplementary and the form of Share
certificate with the Securities and Exchange Commission, contemporaneously
with the closing of the sale of Shares, as exhibits to a Current Report on
Form 8-K.
g. To our knowledge, neither the Company nor any of its Subsidiaries has
received any notice of proceedings relating to the revocation or modification
of any certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect.
h. The Purchase Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company<PAGE>
<PAGE>
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of, rights and remedies of
creditors and other obligees or by other equitable principles of general
application.
i. The Registration Statement and any amendments thereto have become
effective under the Securities Act and, to our knowledge, no stop order
suspending the effectiveness of the Registration Statement, as amended, has
been issued and no proceeding for that purpose has been instituted or
threatened. The Registration Statement, the Prospectus and each amendment
thereof or supplement thereto as of their respective effective or issue dates
complied as to form in all material respects with the applicable requirements
of the Securities Act and the Securities Exchange Act of 1934, as amended, and
the respective rules thereunder; provided, however, that we express no view
as to (i) the financial statements and the financial statement schedules
contained or incorporated by reference therein or omitted therefrom (including
the notes to the financial statements and the auditors' reports on the
financial statements) and (ii) the other financial or statistical information
contained or incorporated by reference therein or omitted therefrom (including
the projected annualized total returns and the assumptions described therein).
<PAGE>
<PAGE>
EXHIBIT C
ARTICLES SUPPLEMENTARY
TO THE
ARTICLES OF INCORPORATION
OF
CRIIMI MAE INC.
CRIIMI MAE INC., a Maryland corporation (the "Corporation"), by and
through its undersigned Senior Vice President, does hereby certify that:
A. On July 18, 1998, the Board of Directors of the Corporation (the
"Board of Directors"), pursuant to Section 2-105 of the Maryland General
Corporation Law (the "GCL") and Article SIXTH of the Articles of Incorporation
of the Corporation duly classified 300,000 unissued shares of the
Corporation's preferred stock, $.01 par value per share ("Preferred Stock"),
into a class of preferred stock designated "Series D Cumulative Convertible
Preferred Stock" (the "Series D Preferred Stock") and established and fixed
the preferences, conversion or other rights, voting powers, restrictions or
terms or conditions of redemption of such shares of stock, and authorized the
execution and delivery of these Articles Supplementary to the Maryland State
Department of Assessments and Taxation for filing pursuant to Section 2-208 of
the GCL.
B. The terms of the Series D Preferred Stock, as set by the Board
of Directors, are as follows:
1. Definitions. For the purposes of these Articles Supplementary,
the following terms shall have the meanings indicated:
"Average Closing Trade Price" shall mean the quotient of (a) the sum
of the Closing Trade Prices for all of the Valid Trading Days during the
applicable Conversion Pricing Period divided by (b) the number of Valid
Trading Days in such Conversion Pricing Period.
"Applicable Rate" shall mean, for each Quarterly Dividend Period the
sum of (a) 75 basis points plus (b) LIBOR as of the second LIBOR Market Day
preceding the commencement of such Quarterly Dividend Period.
"Business Day" shall mean any day other than a Saturday, Sunday or
the Friday after Thanksgiving or a day on which banking institutions in the
State of New York or Maryland are authorized or obligated by law or executive
order to close.
"Closing Trade Price" for a given Trading Day shall mean (a) the
last traded price for the Common Stock or the Survivor Common Stock, as the
case may be, for such Trading Day as reported by the New York Stock Exchange
or the American Stock Exchange or any successor thereto or (b) the last
reported bid quotation for the Common Stock or the Survivor Common Stock, as
<PAGE>
<PAGE>
the case may be, for such Trading Day as quoted by the NASDAQ National Market
System or any successor thereto.
"Common Stock" shall mean the common stock, par value $.01 per
share, of the Corporation.
"Conversion Pricing Period" shall mean a period of twenty-one (or
such fewer number as shall be mutually agreed upon in writing by the
Corporation and the holder of the Series D Preferred Stock being converted)
consecutive Trading Days immediately preceding the date of delivery of a
Holder Conversion Notice or the Mandatory Conversion Date, as the case may be.
"Dividend Parity Stock" shall have the meaning ascribed thereto in
Section 3(b) hereof.
"Event" shall have the meaning ascribed thereto in Section 4(b)
hereof.
"Holder Conversion Notice" shall have the meaning ascribed thereto
in Section 9(d) hereof.
"LIBOR" shall mean the arithmetic mean of the offered rates for 3
month deposits in United States dollars which appear on the display designated
as "Page 3750" on the Telerate Service (or such other page as may replace Page
3750 on that service for the purpose of displaying London interbank offered
rates of major banks) (the "Telerate Screen Page 3750") as of 11:00 A.M.,
London time, on the specified LIBOR Market Day; provided, however, if at the
specified time on the specified LIBOR Market Day fewer than two such offered
rates so appear on the Telerate Screen Page 3750, LIBOR shall mean the
arithmetic mean of three offered rates to prime banks for 3 month deposits in
United States dollars by three major banks in the London interbank market, as
selected by the Corporation, at approximately 11:00 A.M., London time, on the
specified LIBOR Market Day; provided, further, if fewer than three major banks
in the London interbank market are quoting rates to prime banks for 3 month
deposits in United States dollars, LIBOR shall be the LIBOR in effect for the
previous Quarterly Dividend Period.
"LIBOR Market Day" shall mean any day on which commercial banks are
open for business (including dealings in foreign exchange and foreign currency
deposits) in London, England.
"Liquidation Value" with respect to a share of Series D Preferred
Stock shall mean $100.
"Mandatory Conversion Date" shall mean the second yearly anniversary
of the date of issuance of a given share of Series D Preferred Stock.
"Minimum Daily Price" shall mean either (a) 75% of the Closing Trade
Price for the Trading Day immediately preceding either the date of delivery of
the Holder Conversion Notice to the Corporation or the Mandatory Conversion
Date, as the case may be, or (b) such price as shall be mutually agreed in
writing by the Corporation and the holder of the Series D Preferred Stock that
<PAGE>
has requested conversion thereof.
"Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
"Qualified Person" shall mean any Person that, immediately after
giving effect to the applicable Transaction, (i) is a solvent corporation or
other entity organized under the laws of any State of the United States of
America having its common stock or, in the case of an entity other than a
corporation, equivalent equity securities, listed on the New York Stock
Exchange or the American Stock Exchange or quoted by the NASDAQ National
Market System or any successor thereto, and such common stock or equivalent
equity security continues to meet the requirements for such listing or
quotation and (ii) is required to file, and in each of the three fiscal years
immediately preceding the consummation of the applicable Transaction (or, if
shorter, since its inception) has filed, reports with the Securities and
Exchange Commission pursuant to Section 13 or 15(d) of the United States
Securities Exchange Act of 1934, as amended.
"Quarterly Dividend Payment Date"shall have the meaning ascribed
thereto in Section 3(a) hereof.
"Quarterly Dividend Period" shall mean, with respect to any
Quarterly Dividend Payment Date, the period commencing on the day succeeding
the prior Quarterly Dividend Payment Date (or, with respect to the first
Quarterly Dividend Payment Date for a share of Series D Preferred Stock, the
date of issuance of such share of Series D Preferred Stock) to and including
such Quarterly Dividend Payment Date.
"Redemption Price" shall have the meaning ascribed thereto in
Section 6(a) hereof.
"Series A Preferred Stock" shall mean the Corporation's Series A
Cumulative Convertible Preferred Stock, par value $.01 per share.
"Series B Preferred Stock" shall mean the Corporation's Series B
Cumulative Convertible Preferred Stock, par value $.01 per share.
"Series C Preferred Stock" shall mean the Corporation's Series C
Cumulative Convertible Preferred Stock, par value $.01 per share.
"Subsidiary" of any Person means any corporation or other entity of
which a majority of the voting power of the voting equity securities or equity
interest is owned, directly or indirectly, by such Person.
"Surviving Person" shall mean the continuing or surviving Person of
a merger, consolidation or other corporate combination, the Person receiving a
transfer of all or substantially all of the properties and assets of the
Corporation, or the Person consolidating with or merging into the Corporation
in a merger, consolidation or other corporate combination in which the
Corporation is the continuing or surviving Person, but in connection with<PAGE>
<PAGE>
which the Series D Preferred Stock or Common Stock of the Corporation is
exchanged, converted or reinstated into the securities of any other Person or
cash or any other property; provided, however, if such Surviving Person is a
direct or indirect Subsidiary of a Qualified Person, the parent entity that is
a Qualified Person shall be the Surviving Person.
"Survivor Common Stock" with respect to any Person shall mean any
shares of such Person of any class or series which has no preference or
priority in the payment of dividends or in the distribution of assets upon any
voluntary or involuntary liquidation, dissolution or winding up of such Person
and which is not subject to redemption by such Person; provided, however, that
if at any time there shall be more than one such class or series, the shares
of each such class and series issuable upon conversion of the Series D
Preferred Stock then being converted shall be substantially in the proportion
to the total number of shares of each such class and series.
"Trading Day" shall mean any day on which the principal national
securities exchange on which the Common Stock or Survivor Common Stock, as the
case may be, is listed or admitted to trading is open for the transaction of
business or, if the Common Stock or Survivor Common Stock, as the case may be,
is not listed or admitted to trading on any national securities exchange, a
Business Day.
"Transaction" shall have the meaning ascribed thereto in Section
9(k) hereof.
"Transfer Agent" shall have the meaning ascribed thereto in Section
9(d) hereof.
"Valid Trading Day" shall mean any Trading Day during a Conversion
Pricing Period in which either (a) the Closing Trade Price for such Trading
Day exceeds the Minimum Daily Price or (b) the Closing Trade Price for such
Trading Day does not exceed the Minimum Daily Price and the Corporation and
the holder of the Series D Preferred Stock that has requested conversion
thereof agree in writing to include such day as a Valid Trading Day in such
Conversion Pricing Period.
2. Designation and Number; Rank. (a) The shares of such series of
preferred stock shall be designated as "Series D Cumulative Convertible
Preferred Stock" (the "Series D Preferred Stock"). The number of shares
initially constituting the Series D Preferred Stock shall be 300,000, which
number may be decreased (but not increased) by the Board of Directors without
a vote of the holders of Series D Preferred Stock; provided, however, that
such number may not be decreased below the number of then outstanding shares
of Series D Preferred Stock.
(b) The Series D Preferred Stock shall, with respect to dividend
rights and rights upon liquidation, dissolution or winding up, rank (i) senior
to the common stock, par value $.01 per share of the Corporation (the "Common
Stock") and to all other capital stock of the Corporation the terms of which
specifically provide that such capital stock ranks junior to the Series D
Preferred Stock with respect to dividend rights or rights upon liquidation,
<PAGE>
<PAGE>
dissolution or winding up of the Corporation, (ii) on a parity with all
capital stock of the Corporation the terms of which specifically provide that
such capital stock ranks on a parity with the Series D Preferred Stock with
respect to dividend rights or rights upon liquidation, dissolution or winding
up of the Corporation and (iii) junior to (w) the Corporation's Series A
Cumulative Convertible Preferred Stock, par value $.01 per share (the "Series
A Preferred Stock"), (x) the Corporation's Series B Cumulative Convertible
Preferred Stock, par value $.01 per share (the "Series B Preferred Stock"),
(y) the Corporation's Series C Cumulative Convertible Preferred Stock, par
value $.01 per share (the "Series C Preferred Stock") and (z) all other
capital stock of the Corporation the terms of which specifically provide that
such capital stock ranks senior to the Series D Preferred Stock with respect
to dividend rights or rights upon liquidation, dissolution or winding up of
the Corporation.
3. Dividends and Distributions. (a) The holders of shares of
Series D Preferred Stock, in preference to the holders of shares of Common
Stock and of any other shares of capital stock of the Corporation ranking
junior to the Series D Preferred Stock as to payment of dividends, shall be
entitled to receive, when, as and if declared by the Board of Directors, out
of the assets of the Corporation legally available therefor, cumulative cash
dividends at the Applicable Rate, payable in quarterly installments on the
last Business Day of each calendar quarter in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"). Each such
quarterly dividend shall be fully cumulative, to the extent not paid, and,
with respect to each share of Series D Preferred Stock, shall accrue (whether
or not earned or declared) on a daily basis with additional cumulative
dividends on any accrued but unpaid dividends accruing daily (whether or not
earned or declared) and compounding quarterly at the Applicable Rate, from the
date of issuance of such share of Series D Preferred Stock, and thereafter
from the first day of the quarterly period in which such dividend may be
payable as herein provided.
(b) Dividends paid on the shares of the Series D Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated among all such shares of Series D
Preferred Stock and all other shares of capital stock of the Corporation
ranking on a parity as to dividends with the Series D Preferred Stock
("Dividend Parity Stock") at the time outstanding pro rata so that the amount
of dividends declared per share of Series D Preferred Stock and the Dividend
Parity Stock shall in all cases bear to each other the same ratio that accrued
dividends per share on the Series D Preferred Stock and the Dividend Parity
Stock bear to each other. The Board of Directors may fix a record date for
the determination of holders of shares of the Series D Preferred Stock
entitled to receive payment of a dividend declared thereon, which record date
shall be no more than sixty days nor less than ten days prior to the date
fixed for the payment thereof.
(c) Any dividend payment made on shares of the Series D Preferred
Stock shall first be credited against the earliest accrued but unpaid dividend
due with respect to shares of the Series D Preferred Stock which remains
payable.
<PAGE>
(d) The holders of shares of the Series D Preferred Stock shall not
be entitled to receive any dividends or other distributions except as
expressly provided herein.
4. Voting Rights. So long as the Series D Preferred Stock remains
outstanding, the holders of shares of the Series D Preferred Stock shall have
the following voting rights:
(a) The holders of shares of Series D Preferred Stock shall have no
voting rights except as set forth below or as otherwise from time to time
required by law.
(b) The affirmative vote or consent of the holders of at least
two-thirds of the outstanding shares of Series D Preferred Stock, voting
separately as a class, in person or by proxy, in writing or at a special or
annual meeting of stockholders called for the purpose, shall be necessary to,
(i) authorize, create or increase the authorized or issued amount of, any
class or series of the Corporation's capital stock ranking prior to the Series
D Preferred Stock with respect to payment of dividends or distribution of
assets upon liquidation, dissolution or winding up or reclassify any
authorized capital stock of the Corporation into any such capital stock, or
create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such capital stock or (ii) amend, alter
or repeal any of the provisions of the Articles of Incorporation or the
Articles Supplementary to the Articles of Incorporation for the Series D
Preferred Stock, whether by merger, consolidation or otherwise (an "Event"),
so as to materially and adversely affect any right, preference, privilege or
voting power of the Series D Preferred Stock or the holders thereof; provided,
however, with respect to the occurrence of any of the Events set forth in (ii)
above, so long as the Series D Preferred Stock remains outstanding with the
terms thereof materially unchanged, taking into account that upon the
occurrence of an Event, the Corporation may not be the surviving entity, the
occurrence of any such Event shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting power of holders of the
Series D Preferred Stock; and provided, further, that (x) any increase in the
amount of authorized Common Stock or Series D Preferred Stock or the
authorization, creation or issuance of any other class or series of capital
stock or (y) any increase in the amount of authorized shares of any other
class or series of capital stock, in each case ranking on a parity with or
junior to the Series D Preferred Stock with respect to the payment of
dividends or the distribution of assets upon liquidation, dissolution or
winding up, shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers.
(c) During any period in which dividends on the Series D Preferred
Stock are cumulatively in arrears for six or more quarterly dividend payments
(whether or not consecutive), then the number of directors constituting the
Board of Directors shall, without further action, be increased by two and the
holders of shares of the Series D Preferred Stock, voting separately as a
single class (together with any other series of Preferred Stock as provided in
Section 4(d)(iii)), shall have, in addition to the other voting rights
expressly set forth herein, the right to elect the directors of the
<PAGE>
<PAGE>
Corporation to fill such newly created directorships, the remaining directors
to be elected by the other classes of stock entitled to vote therefor at each
meeting of stockholders held for the purpose of electing such remaining
directors. Such additional voting rights shall continue until such time as
all dividends accumulated on the Series D Preferred Stock shall have been paid
in full, at which time such additional directors shall cease to be directors,
subject to the rights of any other series of Preferred Stock to vote for the
election of such additional directors (as described in Section 4(d)(iii)), and
such additional voting right of the holders of Series D Preferred Stock shall
terminate, subject to revesting in the event of each and every subsequent
event of the character indicated above. In no event shall the holders of
Series D Preferred Stock voting separately as a class be entitled to elect a
total of more than two directors to the Board of Directors pursuant to this
Section 4.
(d)(i) The foregoing rights of holders of shares of Series D
Preferred Stock to take any actions as provided in this Section 4 may be
exercised at any annual meeting of stockholders or at a special meeting of
stockholders held for such purpose as hereinafter provided or at any
adjournment thereof, or by the written consent, delivered to the Secretary of
the Corporation, of the holders of the minimum number of shares required to
take such action. So long as such right to vote continues (and unless such
right has been exercised by written consent of the minimum number of shares
required to take such action), the Chairman of the Board of Directors may
call, and upon the written request of holders of record of 20% of the
outstanding shares of Series D Preferred Stock addressed to the Secretary of
the Corporation at the principal office of the Corporation, shall call, a
special meeting of the holders of shares entitled to vote as provided herein.
Such meeting shall be held within 60 days after delivery of such request to
the Secretary, at the place and upon the notice provided by law and in the
by-laws of the Corporation for the holding of meetings of stockholders.
(ii) Except as provided in paragraph (d)(iii) of this Section 4, at
each meeting of stockholders at which the holders of shares of Series D
Preferred Stock shall have the right, voting separately as a single class, to
elect directors of the Corporation as provided in this Section 4 or to take
any action, the presence in person or by proxy of the holders of record of a
majority of the total number of shares of Series D Preferred Stock then
outstanding and entitled to vote on the matter shall be necessary and
sufficient to constitute a quorum. At any such meeting or at any adjournment
thereof:
(A) the absence of a quorum of the holders of shares of Series D
Preferred Stock shall not prevent the election of directors other than
those to be elected by the holders of shares of Series D Preferred Stock
and the absence of a quorum of the holders of shares of any other class
or series of capital stock shall not prevent the election of directors
to be elected by the holders of shares of Series D Preferred Stock or
the taking of any action as provided in this Section 4; and
<PAGE>
<PAGE>
(B) in the absence of a quorum of the holders of shares of Series D
Preferred Stock, a majority of the holders of such shares present in
person or by proxy shall have the power to adjourn the meeting as to the
actions to be taken by the holders of shares of Series D Preferred Stock
from time to time and place to place without notice other than
announcement at the meeting until a quorum shall be present.
(iii) If, at any time when the holders of Series D Preferred
Stock are entitled to elect directors pursuant to the provisions of Section
4(c), the holders of any one or more other series of Preferred Stock are
entitled to elect directors by reason of any default or event specified in the
Corporation's Articles of Incorporation (or any articles supplementary
thereto), as in effect at the time, or the articles supplementary for such
series, and if the terms for such other additional series so permit, then the
voting rights of the two or more series then entitled to vote shall be
combined (with each series having a number of votes proportional to the
aggregate liquidation preference of its outstanding shares). In such case,
the holders of Series D Preferred Stock and of all such other series then
entitled so to vote, voting together as one class, shall elect such directors.
At each meeting of stockholders at which the holders of shares of Series D
Preferred Stock shall have the right, voting together with such other series
as a single class, to elect directors of the Corporation as provided in this
Section 4 or to take any action, the presence in person or by proxy of the
holders of record of a majority of the total number of shares of such two or
more series then outstanding and entitled to vote on the matter shall be
necessary and sufficient to constitute a quorum. At any such meeting or at
any adjournment thereof:
(A) the absence of a quorum of the holders of shares of such two or
more series shall not prevent the election of directors other than those
to be elected by the holders of shares of such two or more series and
the absence of a quorum of the holders of shares of any other class or
series of capital stock shall not prevent the election of directors to
be elected by the holders of shares of such two or more series or the
taking of any action as provided in this Section 4; and
(B) in the absence of a quorum of the holders of shares of such two
or more series, a majority of the holders of such shares present in
person or by proxy shall have the power to adjourn the meeting as to the
actions to be taken by the holders of shares of such two or more series
from time to time and place to place without notice other than
announcement at the meeting until a quorum shall be present.
If the holders of any such other series have elected such directors
prior to the happening of the default or event permitting the holders of
Series D Preferred Stock to elect directors, or prior to a written request for
the holding of a special meeting being received by the Secretary of the
Corporation as elsewhere required in Section 4(d) above, then a new election
shall be held with all such other series of Preferred Stock and the Series D
<PAGE>
Preferred Stock voting together as a single class for such directors,
resulting in the election of such new directors. If the holders of any such
other series are entitled to elect in excess of two directors, the Series D
Preferred Stock shall not participate in the election of more than two such
directors, and those directors whose terms first expire shall be deemed to be
the directors elected by the holders of Series D Preferred Stock; provided
that, if at the expiration of such terms, the holders of Series D Preferred
Stock are entitled to vote in the election of directors pursuant to the
provisions of this Section 4, then the Secretary of the Corporation shall call
a meeting (which meeting may be the annual meeting or special meeting of
stockholders) of holders of Series D Preferred Stock for the purpose of
electing replacement directors (in accordance with the provisions of this
Section 4) to be held at or prior to the time of expiration of the expiring
terms referred to above.
(iv) Except as otherwise specifically provided in paragraph
(d)(iii) of this Section 4:
(A) for the taking of any action as provided in paragraphs (b) and
(c) of this Section 4 by the holders of Series D Preferred Stock, each
such holder shall have one vote for each share of such stock standing in
such holder's name on the transfer books of the Corporation as of any
record date fixed for such purpose or, if no such date be fixed, at the
close of business on the Business Day next preceding the day on which
notice is given, or if notice is waived, at the close of business on the
Business Day next preceding the day on which the meeting is held; and
(B) each director elected by the holders of shares of Series D
Preferred Stock as provided in this Section 4 shall, unless his or her
term shall expire earlier upon payment in full by the Corporation of all
accumulated dividends on the Series D Preferred Stock, hold office until
the annual meeting of stockholders next succeeding his election or until
his successor, if any, is elected and qualified;
(v) In case any vacancy shall occur among the directors elected by
the holders of shares of Series D Preferred Stock (and any other series of
Preferred Stock, if any) as provided in this Section 4, such vacancy may be
filled for the unexpired portion of the term by vote of the remaining director
theretofore elected by such holders (if there is a remaining director), or
such director's successor in office. If any such vacancy is not so filled
within 20 days after the creation thereof or if both directors so elected by
the holders of Series D Preferred Stock (and any other series of Preferred
Stock, if any, as provided in Section 4(d)(iii)) shall cease to serve as
directors before their terms shall expire, the holders of the Series D
Preferred Stock (and any other series of Preferred Stock, if any, as provided
in Section 4(d)(iii)) then outstanding and entitled to vote for such directors
may, by written consent as herein provided, or at a special meeting of such
holders called as provided herein, elect successors to hold office for the
unexpired terms of such directors whose places shall be vacant.
<PAGE>
<PAGE>
(vi) Any director elected by the holders of shares of Series D
Preferred Stock voting separately as a single class (together with any other
series of Preferred Stock, if any, as provided in Section 4(d)(iii)) may be
removed from office with or without cause by the vote or written consent of
the holders of at least a majority of the outstanding shares of Series D
Preferred Stock (together with any other series of Preferred Stock, if any, as
provided in Section 4(d)(iii)). A special meeting of the holders of shares of
Series D Preferred Stock (together with holders of any other series of
Preferred Stock, if any, as provided in Section 4(d)(iii)) may be called in
accordance with the procedures set forth in subparagraph (d)(i) of this
Section 4.
5. Certain Restrictions. (a) If shares of Series D Preferred Stock
are outstanding, unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for such payment on the Series D Preferred Stock
for all past dividend periods and the then current dividend period, other than
pursuant to Section 3(b), the Corporation will not declare, make, pay or set
apart for payment or distribution any dividends or other distributions (other
than in Common Stock or other capital shares ranking junior to the Series D
Preferred Stock as to dividends and upon liquidation, dissolution or winding
up) on the Common Stock or any other series or class of capital stock ranking,
as to dividends, on a parity with or junior to the Series D Preferred Stock
for any period.
(b) If shares of Series D Preferred Stock are outstanding, unless
full cumulative dividends have been or contemporaneously are declared and paid
or declared and a sum sufficient for the payment thereof set apart for such
payment on the Series D Preferred Stock for all past dividend periods and the
then current dividend period, the Corporation shall not redeem, purchase or
otherwise acquire for any consideration (or pay or make available money for a
sinking fund for the redemption of) any Common Stock or any other series or
class of capital stock ranking, as to dividends or upon liquidation,
dissolution or winding up, on a parity with or junior to the Series D
Preferred Stock (except by conversion into or exchange for Common Stock or
other capital stock of the Corporation ranking junior to the Series D
Preferred Stock as to dividends and upon liquidation, dissolution or winding
up); provided, however, the foregoing shall not prevent the purchase or
acquisition of any shares of capital stock of the Corporation by the
Corporation (i) in order to preserve the status of the Corporation as a real
estate investment trust ("REIT") or (ii) pursuant to a purchase or exchange
offer made on comparable terms to all holders of outstanding shares of capital
stock of the Corporation.
(c) The Corporation shall not permit any Subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
capital stock of the Corporation unless the Corporation could, pursuant to
paragraph (b) of this Section 5, purchase or otherwise acquire such shares at
such time and in such manner.
6. Redemption. (a) The Series D Preferred Stock shall not be
redeemable in whole or in part prior to the first yearly anniversary of the
<PAGE>
<PAGE>
date of issuance of the Series D Preferred Stock. On or after the first
yearly anniversary of the date of issuance of the Series D Preferred Stock, to
the extent the Corporation shall have funds legally available therefor, the
Series D Preferred Stock shall be subject to redemption in whole or in part,
in cash, at the option of the Corporation at any time or from time to time, at
$106 per share (the "Redemption Price"), together in each case with an amount
equal to accrued and unpaid dividends to (and including) the date fixed for
redemption. On and after the date fixed for redemption, provided that the
Redemption Price (including any accrued and unpaid dividends to (and
including) the date fixed for redemption) has been duly paid or deposited in
trust for the benefit of the holders of the Series D Preferred Stock,
dividends shall cease to accrue on the Series D Preferred Stock called for
redemption, such shares shall no longer be deemed to be outstanding and all
rights of the holders of such shares as stockholders of the Corporation shall
cease, except the right to receive the moneys payable upon such redemption,
without interest thereon, upon surrender of the certificates evidencing such
shares. Any moneys deposited in trust by the Corporation which shall not be
required for redemption because of the exercise of any right of conversion by
the holders of the Series D Preferred Stock, shall be repaid to the
Corporation forthwith. Any moneys deposited in trust by the Corporation and
unclaimed at the end of two years from the date fixed for such redemption
shall be repaid to the Corporation upon its written request, after which
repayment the holders of the shares of Series D Preferred Stock so called for
redemption shall look only to the Corporation for the payment thereof.
(b) Notice of any redemption pursuant to Section 6(a) shall be
given to the holders of shares of Series D Preferred Stock once not less than
45 or more than 60 days prior to the date fixed for redemption. Notice of
redemption shall be given by first class mail to each such holder's address as
shown on the stock books of the Corporation and will specify (i) the date
fixed for redemption, (ii) the number of shares of Series D Preferred Stock to
be redeemed, (iii) the Redemption Price, (iv) the place or places where
certificates for shares of Series D Preferred Stock are to be surrendered for
payment of the Redemption Price, (v) that dividends on the shares of Series D
Preferred Stock to be redeemed will cease to accrue on the date fixed for
redemption, (vi) the date upon which the holders' conversion rights will
terminate (which date shall be determined in accordance with Section 9(g)).
If less than all shares of Series D Preferred Stock then outstanding are to be
redeemed, the shares of Series D Preferred Stock will be redeemed pro rata
from among the holders of shares of Series D Preferred Stock then outstanding.
7. Reacquired Shares. Any shares of Series D Preferred Stock
converted, redeemed, purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and canceled promptly after the acquisition
thereof. All such shares of Series D Preferred Stock shall upon their
cancellation, and upon the filing of an appropriate certificate with the
Maryland State Department of Assessments and Taxation, become authorized but
unissued shares of Preferred Stock and may be reissued as part of another
series of Preferred Stock subject to the conditions or restrictions on
issuance set forth herein, to the extent any Series D Preferred Stock remains
outstanding.<PAGE>
<PAGE>
8. Liquidation, Dissolution or Winding Up. (a) Upon any voluntary
or involuntary liquidation, dissolution or winding up of the affairs of the
Corporation then, before any distribution or payment shall be made to the
holders of any shares of Common Stock or any other class or series of capital
stock of the Corporation ranking junior to the Series D Preferred Stock in the
distribution of assets upon any liquidation, dissolution or winding up of the
Corporation, the holders of Series D Preferred Stock shall be entitled to
receive out of assets of the Corporation legally available for distribution to
stockholders, liquidating distributions in the amount of the Liquidation Value
per share, plus an amount equal to all dividends accrued and unpaid thereon as
of the date of liquidation, dissolution or winding up. After payment of the
full amount of the liquidating distributions to which they are entitled, the
holders of Series D Preferred Stock will have no right or claim to any of the
remaining assets of the Corporation. In the event that, upon any such
voluntary or involuntary liquidation, dissolution or winding up, the available
assets of the Corporation are insufficient to pay the amount of the
liquidating distributions on all outstanding shares of Series D Preferred
Stock and the corresponding amounts payable on all shares of other classes or
series of capital stock of the Corporation ranking on a parity with the Series
D Preferred Stock in the distribution of assets upon liquidation, dissolution
or winding up, then the holders of the Series D Preferred Stock and all other
such classes or series of capital stock shall share ratably in any such
distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled.
(b) Neither the consolidation, merger or other business combination
of the Corporation with or into any other Person, nor the sale, lease or
conveyance of all or substantially all of the property or business of the
Corporation shall be deemed to constitute a liquidation, dissolution or
winding up of the Corporation for purposes of this Section 8.
9. Conversion. (a) Prior to the Mandatory Conversion Date for each
share of Series D Preferred Stock, such share of Series D Preferred Stock
shall be convertible at the option of the holder thereof into fully paid and
nonassessable shares of Common Stock, subject to the restrictions in this
Section 9(a), or unless such restrictions are modified by written agreement
between the Corporation and the holder of Series D Preferred Shares. In
connection with the first issuance of up to 100,000 shares of Series D
Preferred Stock by the Corporation to any Person, (i) no share of Series D
Preferred Stock may be converted during the first twenty-nine calendar days
after the issuance of such share, (ii) up to 50,000 shares of Series D
Preferred Stock may be converted on any Business Day that is 30 or more
calendar days after the issuance thereof but less than 60 calendar days after
the issuance thereof, and (iii) up to 100,000 shares of Series D Preferred
Stock may be converted on any Business Day that is 60 or more calendar days
after the issuance thereof. In connection with the issuance to any Person of
shares of Series D Preferred Stock following the first issuance of 100,000
shares to such Person of Series D Preferred Stock, (i) no share of Series D
Preferred Stock may be converted during the first twenty-nine calendar days
after the issuance of such share, and (ii) any share of Series D Preferred
<PAGE>
<PAGE>
Stock may be converted on any Business Day that is 30 or more days after the
issuance thereof. A holder of shares of Series D Preferred Stock may not
convert less than 10,000 shares of Series D Preferred Stock at any one time.
Determination of which holders shall be entitled to convert during any 30
consecutive calendar day period shall be based upon the holders which first
deliver to the Corporation the conversion notice and certificates of Series D
Preferred Stock specified in paragraph (d) below, with any allocation between
holders delivering the required conversion notice and certificates of Series D
Preferred Stock on the same day to be made pro rata based upon the number of
shares of Series D Preferred Stock submitted for conversion. In the event a
holder of Series D Preferred Stock cannot effect a requested conversion of
such holder's Series D Preferred Stock at the time requested, the Corporation
shall, without further action on the part of such holder, convert such shares
of Series D Preferred Stock into Common Stock on the earliest date that such
conversion is possible under the terms of these Articles Supplementary. In no
event may the holder of Series D Preferred Stock convert a share of Series D
Preferred Stock into shares of Common Stock if such conversion would result in
the holder of Series D Preferred Stock requesting the conversion thereof
having beneficial ownership of 5% or more of the Corporation's then
outstanding Common Stock. For purpose of these Articles Supplementary,
"beneficial ownership" shall be determined in accordance with Rule 13d-3 of
the Securities Exchange Act of 1934.
(b) On the Mandatory Conversion Date for each share of Series D
Preferred Stock, such share of Series D Preferred Stock shall be automatically
converted into fully paid and nonassessable shares of Common Stock.
(c) The number of shares of Common Stock deliverable upon
conversion of a share of Series D Preferred Stock shall be equal to a fraction
(i) the numerator of which is the Liquidation Value of the Series D Preferred
Stock and (ii) the denominator of which is a Closing Trade Price for a Trading
Day occurring within the Conversion Pricing Period mutually acceptable to the
Corporation and the holder; provided, however, that if no Closing Trade Price
is mutually acceptable to the Corporation and the holder, then the denominator
shall be the Average Closing Trade Price for the applicable Conversion Pricing
Period.
(d) Prior to the Mandatory Conversion Date, the holders of Series D
Preferred Stock may convert such Series D Preferred Stock into Common Stock by
surrendering to the Corporation at the principal office of the Corporation in
the State of Maryland (the "Transfer Agent") or at the office of any agent or
agents of the Corporation, as may be designated by the Board of Directors, the
certificate of such Series D Preferred Stock to be converted accompanied by a
written notice stating that such holder elects to convert all or a specified
whole number of such shares in accordance with the provisions of this Section
9 and specifying the name or names in which such holder wishes the certificate
or certificates for shares of Common Stock to be issued (a "Holder Conversion
Notice"). In case a Holder Conversion Notice shall specify a name or names
other than that of such holder, such Holder Conversion Notice shall be
accompanied by payment of all transfer taxes, if any, payable upon the
issuance of shares of Common Stock in such name or names. Other than such
taxes, the Corporation will pay any and all issue and other taxes (other than
<PAGE>
<PAGE>
taxes based on income) that may be payable in respect of any issue or delivery
of shares of Common Stock on conversion of Series D Preferred Stock pursuant
hereto.
(e) After the Mandatory Conversion Date, the holders of Series D
Preferred Stock may exchange certificates representing Series D Preferred
Stock for certificates representing Common Stock by surrendering to the
Transfer Agent such certificates representing Series D Preferred Stock. In
case the holder of Series D Preferred Stock requests the Common Stock to be
registered in a name or names other than that of such holder, the Series D
Preferred Stock submitted for conversion shall be accompanied by payment of
all transfer taxes, if any, payable upon the issuance of shares of Common
Stock in such name or names. Other than such taxes, the Corporation will pay
any and all issue and other taxes (other than taxes based on income) that may
be payable in respect of any issue or delivery of shares of Common Stock on
conversion of Series D Preferred Stock pursuant hereto.
(f) As promptly as practicable, and in any event within five
Business Days after the date of delivery of the shares of Series D Preferred
Stock to be converted (and, if prior to the Mandatory Conversion Date, the
Holder Conversion Notice), the Corporation shall deliver or cause to be
delivered (i) certificates representing the number of validly issued, fully
paid and nonassessable full shares of Common Stock to which the holder of
shares of Series D Preferred Stock being converted shall be entitled and (ii)
if less than the full number of shares of Series D Preferred Stock evidenced
by the surrendered certificate or certificates is being converted, a new
certificate or certificates, of like tenor, for the number of shares of Series
D Preferred Stock evidenced by such surrendered certificate or certificates
less the number of shares being converted. All conversions shall be deemed to
have been made at the close of business on the date of delivery of the Holder
Conversion Notice or the Mandatory Conversion Date, as the case may be, so
that the rights of the holder thereof as to the shares being converted shall
cease except for the right to receive shares of Common Stock in accordance
herewith, and the Person entitled to receive the shares of Common Stock shall
be treated for all purposes as having become the record holder of such shares
of Common Stock at such time. The Corporation shall not be required to
convert, and no surrender of shares of Series D Preferred Stock shall be
effective for that purpose, while the transfer books of the Corporation for
the Common Stock are closed for any purpose (but not for any period in excess
of 10 calendar days); but the surrender of shares of Series D Preferred Stock
for conversion during any period while such books are so closed shall become
effective for conversion immediately upon the reopening of such books, as if
the conversion had been made on the date such shares of Series D Preferred
Stock were surrendered, and at a rate of conversion which assumes the
Conversion Pricing Period took place during the period immediately prior to
the closing of such books.
(g) In case any shares of Series D Preferred Stock are to be
redeemed pursuant to Section 6, the right of conversion set forth in this
Section 9 shall cease and terminate as to the shares of Series D Preferred
Stock to be redeemed at the close of business, Washington, D.C. time, on the
date of delivery to the holders of Series D Preferred Stock of notice of
redemption in accordance with Section 6(b), unless (i) the Corporation shall
<PAGE>
<PAGE>
have received a Holder Conversion Notice in respect of such shares of Series D
Preferred Stock prior to such time or (ii) the Corporation shall default in
the payment of the amount payable upon such redemption.
(h) Upon conversion of any shares of the Series D Preferred Stock,
all accrued and unpaid dividends up to (and including) the date of receipt by
the Corporation of the Holder Conversion Notice or the Mandatory Conversion
Date, as the case may be, whether or not declared, on each share of Series D
Preferred Stock being converted shall become immediately due and payable in
cash on the date of the issuance and delivery by the Corporation of the
certificate representing the shares of Common Stock to which such holder of
shares of the Series D Preferred Stock being converted is entitled. In the
event that the Corporation is legally prohibited from paying such dividends on
such date, the Corporation shall pay such unpaid dividends to the holder of
such shares as soon thereafter as it is legally able to do so.
(i) In connection with the conversion of any shares of Series D
Preferred Stock, no fractions of shares of Common Stock shall be issued, but
in lieu thereof the Corporation shall pay a cash adjustment in respect of such
fractional interest in an amount equal to such fractional interest multiplied
by the Average Closing Trade Price for the applicable Conversion Pricing
Period. If more than one share of Series D Preferred Stock shall be
surrendered for conversion by the same holder at the same time, the number of
full shares of Common Stock issuable on conversion thereof shall be computed
on the basis of the total number of shares of Series D Preferred Stock so
surrendered.
(j) The Corporation shall at all times reserve and keep available
for issuance upon the conversion of the Series D Preferred Stock, such number
of its authorized but unissued shares of Common Stock as will from time to
time be sufficient to permit the conversion of all outstanding shares of
Series D Preferred Stock, and shall take all action required to increase the
authorized number of shares of Common Stock if necessary to permit the
conversion of all outstanding shares of Series D Preferred Stock.
(k) In case of any capital reorganization or reclassification of
outstanding shares of Common Stock, or in the case of any consolidation or
merger of the Corporation with or into another Person or in the case of any
sale or conveyance to another Person of the property of the Corporation as an
entirety or substantially as an entirety (each of the foregoing being referred
to as a "Transaction"), at the option of the holder of any shares of Series D
Preferred Stock, (i) each share of Series D Preferred Stock then outstanding
shall thereafter be convertible into, in lieu of the Common Stock issuable
upon such conversion prior to consummation of such Transaction, the kind and
amount of shares of stock and other securities and property receivable
(including cash) upon the consummation of such Transaction by a holder of that
number of shares of Common Stock into which one share of Series D Preferred
Stock was convertible, assuming that the Conversion Pricing Period related
thereto ended on the day immediately preceding the consummation of such
Transaction (including, on a pro rata basis, the cash, securities or property
received by holders of Common Stock in any tender or exchange offer that is a
step in such Transaction, insofar as receipt of such cash, securities or<PAGE>
<PAGE>
property in connection with any step in such Transaction does not result in
the holders of Series D Preferred Stock receiving the aggregate more than such
holders would otherwise be entitled to receive pursuant to this clause (i)) or
(ii) each share of Series D Preferred Stock shall entitle the holder thereof
to receive, upon presentation of the certificate therefor to the Surviving
Person subsequent to the consummation of such Transaction (A) if the Surviving
Person is a Qualified Person, that number of shares of Survivor Common Stock
of the Surviving Person determined by multiplying the number of shares of
Common Stock into which such share of Series D Preferred Stock was
convertible, assuming that the Conversion Pricing Period related thereto ended
on the day immediately preceding the consummation of such Transaction by a
fraction, the numerator of which is the average Closing Trade Price for the
Common Stock for twenty-one Trading Days preceding the date of consummation of
such Transaction and the denominator of which is the average Closing Trade
Price for the Survivor Common Stock for the twenty-one Trading Days preceding
the consummation of the Transaction giving rise to the adjustment in this
paragraph (k) or (B) if the Surviving Person is not a Qualified Person, $106
in cash per share of Series D Preferred Stock, payable in immediately
available funds. In any such case, if necessary, appropriate adjustment (as
determined by the Board of Directors) shall be made in the application of the
provisions set forth in this Section 9 with respect to the rights and
interests thereafter of the holders of shares of Series D Preferred Stock to
the end that the provisions set forth herein for the protection of the
conversion rights of the Series D Preferred Stock shall thereafter be
applicable, as nearly as reasonably may be, to any such other shares of stock
and other securities and property deliverable upon conversion of the shares of
Series D Preferred Stock remaining outstanding (with such adjustments in the
conversion price and number of shares issuable upon conversion and such other
adjustments in the provisions hereof as the Board of Directors shall determine
to be appropriate). In case securities or property other than Common Stock
shall be issuable or deliverable upon conversion as aforesaid, then all
references to this Section 9 shall be deemed to apply, so far as appropriate
and as nearly as may be, to such other securities or property.
10. REIT Status. Nothing contained in these Articles Supplementary
or the Articles of Incorporation shall limit the authority of the Board of
Directors to take such other action as it deems necessary or advisable to
protect the Corporation and the interests of the stockholders by preservation
of the Corporation's qualification as a REIT under the REIT Provisions (as
defined in the Articles of Incorporation), including, without limitation, the
enforcement of the provisions of Article EIGHTEENTH of the Articles of
Incorporation.
IN WITNESS WHEREOF, this instrument has been executed for and on
behalf and in the name of the Corporation by its officers thereunto duly
authorized on July 28, 1998.
<PAGE>
CRIIMI MAE INC.
By: /S/ Cynthia O. Azzara
----------------------
Cynthia O. Azzara
Senior Vice President/Chief Financial
Officer/Treasurer
[Seal]
Attest:
/S/ Sharilyn M. Green
-----------------
Sharilyn M. Green
Assistant Vice President/Senior Counsel
<PAGE>
<PAGE>
THE UNDERSIGNED, Senior Vice President of the Corporation, who
executed on behalf of the Corporation Articles Supplementary of which this
Certificate is made a part, hereby acknowledges in the name and on behalf of
said Corporation the foregoing Articles Supplementary to be the corporate act
of said Corporation and hereby certifies that the matters and facts set forth
herein with respect to the authorization and approval thereof are true in all
material respects under the penalties of perjury.
By: /S/ Cynthia O. Azzara
---------------------
Cynthia O. Azzara
Senior Vice President/Chief Financial
Officer/Treasurer
