Series E Convertible Preferred Stock Term Sheet between CRIIMI MAE Inc. and Fortis Proprietary Capital Inc.

Summary

This agreement outlines the terms for the issuance of Series E Convertible Preferred Stock by CRIIMI MAE Inc. to Fortis Proprietary Capital Inc. (formerly MeesPierson Investments Inc.) as part of CRIIMI MAE's bankruptcy reorganization. Fortis will receive up to $20.3 million in preferred shares, with specific dividend rates, conversion rights into common stock, and limitations on conversion timing and ownership percentage. The agreement is contingent on the company's reorganization plan and includes detailed provisions for dividend payments and conversion pricing.

EX-2.2 3 ex-2_2.txt EXHIBIT 2.2 Exhibit 2.2 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF MARYLAND Greenbelt Division ) ) In re ) ) CRIIMI MAE Inc., et al., ) Chapter 11 ) Case Nos. 98-2-3115(DK) Debtors. ) through 98-2-3117(DK) ) (Jointly Administered) ) PRAECIPE FILING AMENDED EXHIBIT 3 TO THE DEBTORS' THIRD AMENDED JOINT PLAN OF REORGANIZATION In connection with the hearing on approval of the Debtors' Second Amended Joint Disclosure Statement (the "Disclosure Statement') held on April 25, 2000, CRIIMI MAE Inc. ("CMI"), CRIIMI MAE Holdings II, L.P. ("Holdings") and CRIIMI MAE Management, Inc. ("Management") (collectively, the "Debtors") and the Official Committee of Equity Security Holders of CMI (the "Equity Committee"), by and through their undersigned counsel, hereby file this Praecipe Filing Amended Exhibit 3 to the Debtors' Third Amended Joint Plan of Reorganization (the "Plan"). Attached hereto as Exhibit 1 is Amended Exhibit 3 to the Plan filed on April 25, 2000. The Plan to be sent out to impaired classes of creditors and equity security holders for voting and to be included as Exhibit A to the Disclosure Statement will include this Amended Exhibit 3. Dated: July 12, 2000 VENABLE, BAETJER AND AKIN, GUMP, STRAUSS, HOWARD, LLP HAUER & FELD, L.L.P. By: /s/ By: /s/ -------------------------- -------------------------- Richard L. Wasserman Stanley J. Samorajczyk Federal Bar No. 02784 Federal Bar No. 03113 Carrie B. Weinfeld 1333 New Hampshire Ave., NW Federal Bar No. 25365 Washington, D.C. 20036 1800 Mercantile Bank and Trust ###-###-#### Building Two Hopkins Plaza Baltimore, Maryland 21201 Co-Counsel for CRIIMI MAE Inc. (410) 244-7400 and CRIIMI MAE Holdings II, L.P., Debtors-in-Possession Co-Counsel for CRIIMI MAE Inc. and CRIIMI MAE Holdings II, L.P., Debtors-in-Possession SHULMAN, ROGERS, GANDAL, COVINGTON & BURLING PORDY & ECKER, P.A. By: /s/ By: /s/ -------------------------- -------------------------- Morton A. Faller Michael St. Patrick Baxter Federal Bar No. 01488 Federal Bar No. 09694 11921 Rockville Pike Dennis B. Auerbach Third Floor Federal Bar No. 09290 Rockville, MD 20852-2753 1201 Pennsylvania Avenue, N.W. (301) 231-0928 Washington, D.C. 20044 ###-###-#### Counsel for CRIIMI MAE Management, Inc., Counsel for the Official Committee Debtor-in-Possession of Equity Security Holders of CRIIMI MAE Inc. -2- AMENDED EXHIBIT 3 TO THE DEBTORS' THIRD AMENDED JOINT PLAN OF REORGANIZATION SERIES E CONVERTIBLE PREFERRED STOCK TERM SHEET ISSUER: CRIIMI MAE Inc. ("CRIIMI MAE", "CMI" or the "Company") HOLDER: MeesPierson Investments Inc. now known as Fortis Proprietary Capital Inc. ("Fortis") ISSUE AMOUNT: $10.3 million (103,000 Preferred Shares (defined below)). If the Subsequent Exchange (defined below) occurs, then the Corporation shall issue another $10.0 million of Preferred Shares to Fortis. "Subsequent Exchange" shall mean the exchange of 100,000 shares of the Company's Series D Cumulative Convertible Preferred Stock, par value $0.01 (the "Series D Preferred Stock") by Fortis for 100,000 shares of the Preferred Shares on or prior to July 31, 2000. LIQUIDATION VALUE: $100 per share SECURITIES: Series E Cumulative Convertible Preferred Shares ("Preferred Shares") DIVIDEND: 1. From the date of issuance of the relevant share(s) of Preferred Shares to Fortis through the Effective Date of the Company's Reorganization Plan (the "Effective Date"), cumulative, floating-rate dividends based upon 3-month LIBOR plus 75 basis points, accruing quarterly, and payable, on the Effective Date, in common stock, which will not require registration to trade ("Dividend Securities"). 2. After the Effective Date, cumulative, floating rate dividends based upon 3-month LIBOR plus 250 basis points, payable quarterly in cash or Dividend Securities at CMI's option. 3. Unpaid dividends shall compound quarterly. DIVIDEND SHARE The amount of shares received as Dividend Securities will be AMOUNT: equal to the dividend dollar amount divided by the average of the five (5) closing trade prices of the common stock for the five (5) previous trading days prior to the dividend payment date. EXHIBIT 3 CONVERSION The Preferred Shares will become convertible into CRIIMI MAE FEATURE: common stock at the option of Fortis beginning three months after the Effective Date in accordance with the following schedule: 1. Up to 25,750 (to be increased to 50,750, if the Subsequent Exchange Occurs) Preferred Shares may be converted beginning at the end of 3 months, 9 months, 12 months and 15 months after the Effective Date without regard to the price of CRIIMI MAE's common stock. 2. Beginning 4 months after the Effective Date and ending 8 months after the Effective Date, Fortis may convert up to 7,500 (to be increased to 15,000, if the Subsequent Exchange occurs) additional Preferred Shares in any 21 trading day period so long as the price of the common stock remained above $3.00 per share for each of the previous 21 trading days. 3. Beginning 10 months after the Effective Date, Fortis may convert up to 5,000 (to be increased to 10,000, if the Subsequent Exchange occurs) additional Preferred Shares in any 21 trading day period so long as the price of the common stock remained above $3.00 per share for each of the previous 21 trading days. 4. In no event may Fortis convert (i) more than 25,750 (to be increased to 50, 750, if the Subsequent Exchange occurs) Preferred Shares in any 21 trading day period, or (ii) Preferred Shares resulting in Fortis owning 5% or more of CMI's then outstanding common stock. CONVERSION PRIOR TO THE EFFECTIVE DATE. In the event that the Effective Date does not occur on or before December 31, 2000, then 5,000 (to be increased to 10,000, if the Subsequent Exchange occurs) Preferred Shares shall become convertible at the option of Fortis into fully paid and non-assessable shares of CMI common stock in January 2001 and in each month thereafter until the Effective Date. In no event may Fortis convert (i) more than 5,000 (to be increased to 10,000, if the Subsequent Exchange occurs) Preferred Shares (or less than 1,000 Preferred Shares at any one time) during any calendar month or (ii) any Preferred Shares into CMI common stock if such conversion would result in Fortis owning 5% or more of CMI's then outstanding common stock. CONVERSION SETTLEMENT: Upon conversion, Fortis shall receive the common shares and accrued and unpaid dividends on the Series E Preferred Shares within five business days following completion of the Conversion Pricing Period. CONVERSION PRICE: Fortis may convert its Preferred Shares into common stock, which will not require registration to trade, at a price per share equal to the Closing Trade Price for a Valid Trading Day within the Conversion Pricing Period mutually acceptable to CMI and Fortis or, if no Closing Trade Price is mutually acceptable to CMI and Fortis, the Average Closing Trade Price of CMI common stock over the applicable Conversion Pricing Period. CLOSING TRADE The last trade price for CMI common shares (a) as PRICE: reported on the stock exchange composite tape, or (b) if the CMI common stock is traded over-the-counter, the last reported bid quotation for the common stock or the survivor common stock as the case may be, for such trading day. AVERAGE CLOSING Calculated by dividing (i) the sum of the closing TRADE PRICE: trade prices as reported on the stock exchange composite tape for CMI common stock on each Valid Trading Day during the applicable Conversion Pricing Period, by (ii) the total number of Valid Trading Days in such Conversion Pricing Period. CONVERSION 21 trading days preceding the date of delivery of the notice PRICING PERIOD: of conversion, subject to earlier termination as agreed upon by CMI and Fortis. VALID Any trading day during a Conversion Pricing Period in which TRADING DAY: either (i) the Minimum Daily Price has been exceeded, or (ii) the Minimum Daily Price has not been exceeded and Fortis and CMI agree to include such day as a Valid Trading Day in such Conversion Pricing Period. MINIMUM Either (i) 75% of the Closing Trade Price for the trading DAILY PRICE: day immediately preceding either the date of delivery of the Holder Conversion Notice to the Company or the Mandatory Conversion Date, as the case may be, or (ii) an amount agreed upon by Fortis and CMI at the beginning of any Conversion Pricing Period, that shall be applicable for every trading day during a Conversion Pricing Period. MANDATORY Any outstanding Preferred Shares will be converted on the CONVERSION: second anniversary of the Effective Date. OPTIONAL Upon thirty (30) days prior written notice to Fortis, the REDEMPTION: Preferred Shares will be redeemable, in whole or in part, at anytime at CRIIMI MAE's discretion at 106% plus accrued and unpaid dividends. CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 13TH day of July, 2000, copies of the Praecipe Filing Amended Exhibit 3 to the Debtors' Third Amended Joint Plan of Reorganization were sent via first-class mail, postage prepaid (except as otherwise indicated), to the persons on the attached service list. /s/ ------------------------- Richard L. Wasserman