EXHIBIT A
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BA0DOCS1\0017537.01
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-A
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of
The Securities Exchange Act of 1934
RESOURCE MORTGAGE CAPITAL, INC.
(Exact name of registrant as specified in its charter)
Virginia 52-1549373
(State of incorporation (I.R.S. Employer
Identification Number)
or organization)
4880 Cox Road
Glen Allen, Virginia 23060
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (804) 967-
5800
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each
exchange on which
to be so registered each class is to
be registered
None None
If this Form relates to the registration of a class of debt
securities and is effective upon filing pursuant to General
Instruction A.(c)(1), please check the following box. [ ]
If this Form relates to the registration of a class of debt
securities and is to become effective simultaneously with the
effectiveness of a concurrent registration statement under the
Securities Act of 1933 pursuant to General Instruction A.(c)(2),
please check the following box. [ ]
Securities to be registered pursuant to Section 12(g) of the Act:
Series B Cumulative Convertible Preferred Stock, par value $.01
per share
(Title of Class)
<PAGE>
Item 1. Description of Registrant's Securities to be
Registered.
A full description of the Registrant's Series B
Cumulative Convertible Preferred Stock, $.01 par value per
share, will be contained in a Rule 424(b) Prospectus
Supplement filed hereafter supplementing the Registrant's
Registration Statement on Form S-3, No. 33-50705, which
became effective on January 28, 1994, which Prospectus
Supplement shall be deemed to be incorporated herein by
reference.
Item 2. Exhibits.
I. A.1. Articles of Incorporation (incorporated
herein by reference to the
Company's Registration Statement on Form S-3
(No. 33-53494) dated October 20, 1992).
A.2. Amendment to Articles of Incorporation
(incorporated herein by reference to the
Company's Report on Form 8-K dated June 26,
1995).
A.3. Form of Amendment to Articles of
Incorporation.
B. Form of Certificate for the Series B
Cumulative Convertible Preferred Stock.
C. Bylaws (incorporated herein by reference to
(i) Amendment No. 2 of the Company's
Registration Statement on Form S-11 (No. 33-
19261) dated February 4, 1988 and (ii) Annual
Report on Form 10-K dated December 31, 1992).
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the Registrant has duly
caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date: October 13, 1995 RESOURCE MORTGAGE CAPITAL,
INC.
By: /s/ Thomas H.
Potts______________
Thomas H. Potts
President
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Page
<S> <C> <C>
I.A.1. Articles of Incorporation (incorporated herein by
reference
to the Company's Registration Statement on
Form S-3
(No. 33-53494) dated October 20, 1992).
I.A.2. Amendment to Articles of Incorporation
(incorporated
herein by reference to the Company's Report on
Form 8-K
dated June 26, 1995).
I.A.3. Form of Amendment to Articles of Incorporation.
5
I.B. Form of Certificate for the Series B Cumulative
Convertible 25
Preferred Stock.
I.C. Bylaws (incorporated herein by reference to (i)
Amendment
No. 2 of the Company's Registration Statement on
Form S-11
(No. 33-19261) dated February 4, 1988 and (ii)
Annual Report
on Form 10-K dated December 31, 1992).
</TABLE>
<PAGE>
EXHIBIT I.A.3.
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
RESOURCE MORTGAGE CAPITAL, INC.
1. The name of the Corporation is Resource Mortgage
Capital, Inc.
2. A new Article IIIB shall be inserted following the
existing text of Article IIIA and shall read as set forth in
Exhibit A hereto.
3. This Amendment to the Articles of Incorporation was
duly adopted by the Board of Directors of the Corporation by
unanimous written consent dated September 25, 1995. In
accordance with Sections 13.1-706.6 and 13.1-639 of the
Virginia Stock Corporations Act, no shareholder action was
required.
IN WITNESS WHEREOF, the undersigned President of the
Corporation has executed these Articles of Amendment on
behalf of the Corporation.
Date: _______ __, 1995 RESOURCE MORTGAGE CAPITAL,
INC.
By:
Thomas H. Potts
President
<PAGE>
RESOURCE MORTGAGE CAPITAL, INC.
Section 1. Number of Shares and Designation. This
series of Preferred Stock shall be designated as Series B ____%
Cumulative Convertible Preferred Stock (the "Series B Preferred
Stock") and up to Two Million Seven Hundred Sixty Thousand
(2,760,000) shall be the number of shares of such Preferred Stock
constituting such series.
Section 2. Definitions. For purposes of the Series B
Preferred Stock, the following terms shall have the meanings
indicated:
"Act" shall mean the Securities Act of 1933, as amended.
"affiliate" of a person means a person that directly, or
indirectly through one or more intermediaries, controls or
is controlled by, or is under common control with, the
person specified.
"Board of Directors" shall mean the Board of Directors of
the Corporation or any committee authorized by such Board of
Directors to perform any of its responsibilities with
respect to the Series B Preferred Stock.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which state or federally chartered
banking institutions in New York, New York are not required
to be open.
"Call Date" shall have the meaning set forth in paragraph
(b) of Section 5 hereof.
"Common Stock" shall mean the common stock, $.01 par value
per share, of the Corporation or such shares of the
Corporation's capital stock into which such Common Stock
shall be reclassified.
"Conversion Price" shall mean the conversion price per
share of Common Stock for which each share of Series B
Preferred Stock is convertible, as such Conversion Price may
be adjusted pursuant to paragraph (d) of Section 7. The
initial Conversion Price shall be $____ (equivalent to an
initial conversion rate of one share of Common Stock for
each share of Series B Preferred Stock).
"Current Market Price" of publicly traded shares of Common
Stock or any other class or series of capital stock or other
security of the Corporation or of any similar security of
any other issuer for any day shall mean the closing price,
regular way on such day, or, if no sale takes place on such
day, the average of the reported closing bid and asked
prices regular way on such day, in either case as reported
on the New York Stock Exchange
<PAGE>
("NYSE") or, if such security is not listed or admitted for
trading on the NYSE, on the principal national securities
exchange on which such security is listed or admitted for
trading or, if not listed or admitted for trading on any
national securities exchange, on the National Market of the
National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or, if such security is not
quoted on such National Market, the average of the closing
bid and asked prices on such day in the over-the-counter
market as reported by NASDAQ or, if bid and asked prices for
such security on such day shall not have been reported
through NASDAQ, the average of the bid and asked prices on
such day as furnished by any NYSE or National Association of
Securities Dealers, Inc. member firm regularly making a
market in such security selected for such purpose by the
Chief Executive Officer or the Board of Directors or if any
class or series of securities are not publicly traded, the
fair value of the shares of such class as determined
reasonably and in good faith by the Board of Directors of
the Corporation.
"Distribution" shall have the meaning set forth in paragraph
(d)(iii) of Section 7 hereof.
"Dividend Payment Date" shall mean, with respect to each
Dividend Period, the last day of January, April, July and
October, in each year, commencing on January 31, 1996 with
respect to the period commencing on the date of issue and
ending December 31, 1995; provided, however, that if any
Dividend Payment Date falls on any day other than a Business
Day, the dividend payment due on such Dividend Payment Date
shall be paid on the Business Day immediately following such
Dividend Payment Date.
"Dividend Periods" shall mean quarterly dividend periods
commencing on January 1, April 1, July 1 and October 1 of
each year and ending on and including the day preceding the
first day of the next succeeding Dividend Period (other than
the initial Dividend Period, which shall commence on the
Issue Date and end on and include December 31, 1995).
"Fair Market Value" shall mean the average of the daily
Current Market Prices of a share of Common Stock during five
(5) consecutive Trading Days selected by the Corporation
commencing not more than twenty (20) Trading Days before,
and ending not later than, the earlier of the day in
question and the day before the "ex" date with respect to
the issuance or distribution requiring such computation.
The term "`ex' date," when used with respect to any issuance
or distribution, means the first day on which the share of
Common Stock trades regular way, without the right to
receive such issuance or distribution, on the exchange or in
the market, as the case may be, used to determine that day's
Current Market Price.
"Issue Date" shall mean _______ ___, 1995.
<PAGE>
"Junior Stock" shall mean the Common Stock and any other
class or series of capital stock of the Corporation over
which the shares of Series B Preferred Stock have preference
or priority in the payment of dividends or in the
distribution of assets on any liquidation, dissolution or
winding up of the Corporation.
"Parity Stock" shall have the meaning set forth in paragraph
(b) of Section 8 hereof. Series A Preferred Stock is Parity
Stock.
"Person" shall mean any individual, firm, partnership,
corporation or other entity and shall include any successor
(by merger or otherwise) of such entity.
"Press Release" shall have the meaning set forth in
paragraph (a)(i) of Section 5 hereof.
"Series A Preferred Stock" shall mean the Series A
Cumulative Convertible Preferred Stock of the Corporation as
set forth in Article IIIA, Section 1 of the Corporation's
Articles of Incorporation (as amended).
"Series B Preferred Stock" shall have the meaning set forth
in Section 1 hereof.
"set apart for payment" shall be deemed to include, without
any action other than the following, the recording by the
Corporation in its accounting ledgers of any accounting or
bookkeeping entry which indicates, pursuant to a declaration
of dividends or other distribution by the Board of
Directors, the allocation of funds to be so paid on any
series or class of capital stock of the Corporation;
provided, however, that if any funds for any class or series
of Junior Stock or any class or series of Parity Stock are
placed in a separate account of the Corporation or delivered
to a disbursing, paying or other similar agent, then "set
apart for payment" with respect to the Series B Preferred
Stock shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other
similar agent.
"Trading Day", as to any securities, shall mean any day on
which such securities are traded on the NYSE or, if such
securities are not listed or admitted for trading on the
NYSE, on the principal national securities exchange on which
such securities are listed or admitted or, if such
securities are not listed or admitted for trading on any
national securities exchange, on the National Market of
NASDAQ or, if such securities are not quoted on such
National Market, in the securities market in which such
securities are traded.
"Transaction" shall have the meaning set forth in paragraph
(e) of Section 7 hereof.
"Transfer Agent" means First Union National Bank of North
Carolina or such other transfer agent as may be designated
by the Board of Directors or their designee as the transfer
agent for the Series B Preferred Stock.
<PAGE>
"Voting Preferred Stock" shall have the meaning set forth in
Section 9 hereof.
Section 3. Dividends.
(a) The holders of Series B Preferred Stock shall be
entitled to receive, when and as declared by the Board of
Directors out of funds legally available for that purpose,
cumulative dividends payable in cash in an amount per share of
Series B Preferred Stock equal to the greater of (i) the base
dividend of $0.___ per quarter (the "Base Rate") or (ii) the cash
dividends declared on the number of shares of Common Stock, or
portion thereof, into which a share of Series B Preferred Stock
is convertible. The initial Dividend Period shall commence on
the Issue Date and end on December 31, 1995. The dividends
payable with respect to the portion of the initial Dividend
Period commencing on the Issue Date and ending on December 31,
1995, shall be determined by reference to the Base Rate. The
amount referred in clause (ii) of this paragraph (a) with respect
to each Dividend Period shall be determined as of the applicable
Dividend Payment Date by multiplying the number of shares of
Common Stock, or portion thereof calculated to the fourth decimal
point, into which a share of Series B Preferred Stock would be
convertible at the opening of business on such Dividend Payment
Date (based on the Conversion Price then in effect) by the
quarterly cash dividend payable or paid for such Dividend Period
in respect of a share of Common Stock outstanding as of the
record date for the payment of dividends on the Common Stock with
respect to such Dividend Period or, if different, with respect to
the most recent quarterly period for which dividends with respect
to the Common Stock have been declared. Such dividends shall be
cumulative from the Issue Date, whether or not in any Dividend
Period or Periods such dividends shall be declared or there shall
be funds of the Corporation legally available for the payment of
such dividends, and shall be payable quarterly in arrears on the
Dividend Payment Dates, commencing on the first Dividend Payment
Date after the Issue Date. Each such dividend shall be payable
in arrears to the holders of record of the Series B Preferred
Stock, as they appear on the stock records of the Corporation at
the close of business on a record date which shall be not more
than 60 days prior to the applicable Dividend Payment Date and
shall be fixed by the Board of Directors to coincide with the
record date for the regular quarterly dividends, if any, payable
with respect to the Common Stock; provided, however, that the
record dates for the Dividend Period ending December 31, may be
separated so that the record date for the Common Stock dividend
is December 31 and the record date for the Series B Preferred
Stock dividend is January 1 and vice versa. Accumulated, accrued
and unpaid dividends for any past Dividend Periods may be
declared and paid at any time, without reference to any regular
Dividend Payment Date, to holders of record on such date, which
date shall not precede by more than 45 days the payment date
thereof, as may be fixed by the Board of Directors.
Upon a final administrative determination by the
Internal Revenue Service that the Corporation does not qualify as
a real estate investment trust in accordance with Section 856 of
the Internal Revenue code of 1986 (the "Code"), the Base Rate set
forth in (a)(i) will be increased to $0.___ until such time as
the Corporation regains its status as a real estate investment
trust; provided, however, that if the Corporation contests its
loss of real estate
<PAGE>
investment trust status in Federal Court, following its receipt
of an opinion of nationally recognized tax counsel to the effect
that there is a reasonable basis to contest such loss of status,
the Base Rate shall not be increased during the pendency of such
judicial proceeding; provided further, however, that upon a final
judicial determination in Federal Tax Court, Federal District
Court or the Federal Claims Court that the Corporation does not
qualify as a real estate investment trust, the Base Rate as
stated above will be increased.
(b) The amount of dividends payable per share of
Series B Preferred Stock for the portion of the initial Dividend
Period commencing on the Issue Date and ending and including
December 31, 1995, or any other period shorter than a full
Dividend Period, shall be computed ratably on the basis of twelve
30-day months and a 360-day year. Holders of Series B Preferred
Stock shall not be entitled to any dividends, whether payable in
cash, property or stock, in excess of cumulative dividends, as
herein provided, on the Series B Preferred Stock. No interest,
or sum of money in lieu of interest, shall be payable in respect
of any dividend payment or payments on the Series B Preferred
Stock that may be in arrears.
(c) So long as any of the shares of Series B Preferred
Stock are outstanding, except as described in the immediately
following sentence, no dividends shall be declared or paid or set
apart for payment by the Corporation and no other distribution of
cash or other property shall be declared or made directly or
indirectly by the Corporation with respect to any class or series
of Parity Stock for any period unless dividends equal to the full
amount of accumulated, accrued and unpaid dividends have been or
contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof has been or contemporaneously
is set apart for such payment on the Series B Preferred Stock for
all Dividend Periods terminating on or prior to the Dividend
Payment Date with respect to such class or series of Parity
Stock. When dividends are not paid in full or a sum sufficient
for such payment is not set apart, as aforesaid, all dividends
declared upon the Series B Preferred Stock and all dividends
declared upon any other class or series of Parity Stock shall be
declared ratably in proportion to the respective amounts of
dividends accumulated, accrued and unpaid on the Series B
Preferred Stock and accumulated, accrued and unpaid on such
Parity Stock.
(d) So long as any of the shares of Series B Preferred
Stock are outstanding, no dividends (other than dividends or
distributions paid in shares of or options, warrants or rights to
subscribe for or purchase shares of Junior Stock) shall be
declared or paid or set apart for payment by the Corporation and
no other distribution of cash or other property shall be declared
or made directly or indirectly by the Corporation with respect to
any shares of Junior Stock, nor shall any shares of Junior Stock
be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of Common Stock made
for purposes of an employee incentive or benefit plan of the
Corporation or any subsidiary) for any consideration (or any
moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) directly or
indirectly by the Corporation (except by conversion into or
exchange for Junior Stock), nor shall any other cash or other
property otherwise be paid or distributed to or for
<PAGE>
the benefit of any holder of shares of Junior Stock in
respect thereof, directly or indirectly, by the Corporation
unless in each case (i) the full cumulative dividends (including
all accumulated, accrued and unpaid dividends) on all outstanding
shares of Series B Preferred Stock and any other Parity Stock of
the Corporation shall have been paid or such dividends have been
declared and set apart for payment for all past Dividend Periods
with respect to the Series B Preferred Stock and all past
dividend periods with respect to such Parity Stock and (ii)
sufficient funds shall have been paid or set apart for the
payment of the full dividend for the current Dividend Period with
respect to the Series B Preferred Stock and the current dividend
period with respect to such Parity Stock.
Section 4. Liquidation Preference.
(a) In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary,
before any payment or distribution of the assets of the
Corporation (whether capital or surplus) shall be made to or set
apart for the holders of Junior Stock, the holders of shares of
Series B Preferred Stock shall be entitled to receive _________-
_______ Dollars ($____) per share of Series B Preferred Stock
("Liquidation Preference"), plus an amount equal to all dividends
(whether or not earned or declared) accumulated, accrued and
unpaid thereon to the date of final distribution to such holders;
but such holders shall not be entitled to any further payment.
Until the holders of the Series B Preferred Stock have been paid
the Liquidation Preference in full, plus an amount equal to all
dividends (whether or not earned or declared) accumulated,
accrued and unpaid thereon to the date of final distribution to
such holders, no payment will be made to any holder of Junior
Stock upon the liquidation, dissolution or winding up of the
Corporation. If, upon any liquidation, dissolution or winding up
of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of Series B Preferred
Stock shall be insufficient to pay in full the preferential
amount aforesaid and liquidating payments on any other shares of
any class or series of Parity Stock, then such assets, or the
proceeds thereof, shall be distributed among the holders of
Series B Preferred Stock and any such other Parity Stock ratably
in the same proportion as the respective amounts that would be
payable on such Series B Preferred Stock and any such other
Parity Stock if all amounts payable thereon were paid in full.
For the purposes of this Section 4, (i) a consolidation or merger
of the Corporation with one or more corporations, (ii) a sale or
transfer of all or substantially all of the Corporation's assets,
or (iii) a statutory share exchange shall not be deemed to be a
liquidation, dissolution or winding up, voluntary or involuntary,
of the Corporation.
(b) Subject to the rights of the holders of any shares
of Parity Stock, upon any liquidation, dissolution or winding up
of the Corporation, after payment shall have been made in full to
the holders of Series B Preferred Stock and any Parity Stock, as
provided in this Section 4, any other series or class or classes
of Junior Stock shall, subject to the respective terms thereof,
be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Series B Preferred Stock and
any Parity Stock shall not be entitled to share therein.
<PAGE>
Section 5. Redemption at the Option of the Corporation.
(a) Shares of Series B Preferred Stock shall not be
redeemable by the Corporation prior to October 31, 1998. On and
after October 31, 1998, the Corporation, at its option, may
redeem shares of Series B Preferred Stock, in whole or from time
to time in part, as set forth herein, subject to the provisions
described below:
(i) Shares of Series B Preferred Stock may be
redeemed, in whole or in part, at the option of the
Corporation, at any time on or after October 31, 1998 by
issuing and delivering to each holder for each share of
Series B Preferred Stock to be redeemed such number of
authorized but previously unissued shares of Common Stock as
equals the Liquidation Preference (excluding any
accumulated, accrued and unpaid dividends which are to be
paid in cash as provided below) per share of Series B
Preferred Stock divided by the Conversion Price as in effect
as of the opening of business on the Call Date (as defined
in paragraph (b) below); provided, however, that the
Corporation may redeem shares of Series B Preferred Stock
pursuant to this paragraph (a)(i) only if for twenty (20)
Trading Days, within any period of thirty (30) consecutive
Trading Days, including the last Trading Day of such 30-
Trading Day period, the Current Market Price of the Common
Stock on each of such 20 Trading Days equals or exceeds the
Conversion Price in effect on such Trading Day. In order to
exercise its redemption option pursuant to this paragraph
(a)(i), the Corporation must issue a press release
announcing the redemption (the "Press Release") prior to the
opening of business on the second Trading Day after the
condition in the preceding sentence has, from time to time,
been satisfied. The Corporation may not issue a Press
Release prior to August 31, 1998. The Press Release shall
announce the redemption and set forth the number of shares
of Series B Preferred Stock that the Corporation intends to
redeem; or
(ii) Shares of Series B Preferred Stock may be
redeemed, in whole or in part, at the option of the
Corporation at any time on or after October 31, 1998 out of
funds legally available therefor at a redemption price
payable in cash equal to $____ per share of Series B
Preferred Stock (plus all accumulated, accrued and unpaid
dividends as provided below).
(iii) In the event of a redemption pursuant to
Section 5(a)(i), the Corporation shall pay in cash all
cumulative, accrued and unpaid dividends for all Dividend
Periods ending prior to the Dividend Period in which the
redemption occurs; but no dividend shall accrue or be
payable on the Series B Preferred Stock to be redeemed for
the Dividend Period in which the redemption occurs unless
the Call Date is after the record date for the dividend
payable on the Common Stock for such Dividend Period in
which event such dividend with respect to the Series B
Preferred Stock shall accrue and be payable from the period
beginning of the Dividend Period in which the redemption
occurs and ending on the Call Date. In the event of a
redemption pursuant to Section 5(a)(ii), the Corporation
shall pay in cash all cumulative, accrued and unpaid
<PAGE>
dividends for all Dividend Periods ending prior to the
Dividend Period in which the redemption occurs, plus the
dividend (determined by reference to the Base Rate if the
Call Date precedes the date on which the dividend on the
Common Stock is declared for such Dividend Period) accrued
from the beginning of the Dividend Period in which the
redemption occurs and ending on the Call Date.
(b) Shares of Series B Preferred Stock shall be
redeemed by the Corporation on the date specified in the notice
to holders required under paragraph (d) of this Section 5 (the
"Call Date"). The Call Date shall be selected by the
Corporation, shall be specified in the notice of redemption and
shall be not less than 30 days nor more than 60 days after (i)
the date on which the Corporation issues the Press Release, if
such redemption is pursuant to paragraph (a)(i) of this Section
5, and (ii) the date notice of redemption is sent by the
Corporation, if such redemption is pursuant to paragraph (a)(ii)
of this Section 5. In the event of a redemption pursuant to
Section 5(a)(i) or 5(a)(ii), if the Call Date falls after a
dividend payment record date and prior to the corresponding
Dividend Payment Date, then (i) in the event of a redemption
pursuant to Section 5(a)(i) each holder of Series B Preferred
Stock at the close of business on such dividend payment record
date shall be entitled to the dividend payable on such shares on
the corresponding Dividend Payment Date notwithstanding the
redemption of such shares prior to such Dividend Payment Date and
(ii) in the event of a redemption pursuant to Section 5(a)(ii),
each holder of Series B Preferred Stock at the close of business
on such dividend payment record date shall be entitled to the
portion of the dividend accrued from the beginning of the
Dividend Period in which the redemption occurs and ending on the
Call Date notwithstanding the redemption of such shares prior to
such Dividend Payment Date. Except as provided above, the
Corporation shall make no payment or allowance for accumulated or
accrued dividends on shares of Series B Preferred Stock called
for redemption or on the shares of Common Stock issued upon such
redemption.
(c) If full cumulative dividends on all outstanding
shares of Series B Preferred Stock and any other class or series
of Parity Stock of the Corporation have not been paid or declared
and set apart for payment, no shares of Series B Preferred Stock
may be redeemed unless all outstanding shares of Series B
Preferred Stock are simultaneously redeemed and neither the
Corporation nor any affiliate of the Corporation may purchase or
acquire shares of Series B Preferred Stock, otherwise than
pursuant to a purchase or exchange offer made on the same terms
to all holders of shares of Series B Preferred Stock.
(d) If the Corporation shall redeem shares of Series B
Preferred Stock pursuant to paragraph (a) of this Section 5,
notice of such redemption shall be given to each holder of record
of the shares to be redeemed and, if such redemption is pursuant
to paragraph (a)(i) of this Section 5, such notice shall be given
not more than ten (10) Business Days after the date on which the
Corporation issues the Press Release. Such notice shall be
provided by first class mail, postage prepaid, at such holder's
address as the same appears on the stock records of the
Corporation, or by publication in The Wall Street Journal or The
New York Times, or if neither such newspaper is then being
published, any other daily newspaper of national circulation
<PAGE>
not less than 30 nor more than 60 days prior to the
Call Date. If the Corporation elects to provide such notice by
publication, it shall also promptly mail notice of such
redemption to the holders of the shares of Series B Preferred
Stock to be redeemed. Neither the failure to mail any notice
required by this paragraph (d), nor any defect therein or in the
mailing thereof, to any particular holder, shall affect the
sufficiency of the notice or the validity of the proceedings for
redemption with respect to the other holders. Any notice which
was mailed in the manner herein provided shall be conclusively
presumed to have been duly given on the date mailed whether or
not the holder receives the notice. Each such mailed or
published notice shall state, as appropriate: (1) the Call Date;
(2) the number of shares of Series B Preferred Stock to be
redeemed and, if fewer than all such shares held by such holder
are to be redeemed, the number of such shares to be redeemed from
such holder; (3) whether redemption will be for shares of Common
Stock pursuant to paragraph (a)(i) of this Section 5 or for cash
pursuant to paragraph (a)(ii) of this Section 5, and, if
redemption will be for Common Stock, the number of shares of
Common Stock to be issued with respect to each share of Series B
Preferred Stock to be redeemed; (4) the place or places at which
certificates for such shares are to be surrendered for
certificates representing shares of Common Stock; and (5) the
then-current Conversion Price. Notice having been published or
mailed as aforesaid, from and after the Call Date (unless the
Corporation shall fail to issue and make available the number of
shares of Common Stock and/or amount of cash necessary to effect
such redemption), (i) except as otherwise provided herein,
dividends on the shares of Series B Preferred Stock so called for
redemption shall cease to accumulate or accrue on the shares of
Series B Preferred Stock called for redemption (except that, in
the case of a Call Date after a dividend record date and prior to
the related Dividend Payment Date, holders of Series B Preferred
Stock on the dividend record date will be entitled on such
Dividend Payment Date to receive the dividend payable on such
shares), (ii) said shares shall no longer be deemed to be
outstanding, and (iii) all rights of the holders thereof as
holders of Series B Preferred Stock of the Corporation shall
cease (except the rights to receive the shares of Common Stock
and/or cash payable upon such redemption, without interest
thereon, upon surrender and endorsement of their certificates if
so required and to receive any dividends payable thereon). The
Corporation's obligation to provide shares of Common Stock and/or
cash in accordance with the preceding sentence shall be deemed
fulfilled if, on or before the Call Date, the Corporation shall
deposit with a bank or trust company (which may be an affiliate
of the Corporation) that has, or is an affiliate of a bank or
trust company that has, a capital and surplus of at least
$50,000,000, such number of shares of Common Stock and such
amount of cash as is necessary for such redemption, in trust,
with irrevocable instructions that such shares of Common Stock
and/or cash be applied to the redemption of the shares of Series
B Preferred Stock so called for redemption. In the case of any
redemption pursuant to paragraph (a)(i) of this Section 5, at the
close of business on the Call Date, each holder of shares of
Series B Preferred Stock to be redeemed (unless the Corporation
defaults in the delivery of the shares of Common Stock or cash
payable on such Call Date) shall be deemed to be the record
holder of the number of shares of Common Stock into which such
shares of Series B Preferred Stock are to be converted at
redemption, regardless of whether such holder has surrendered the
certificates representing the shares of Series B Preferred Stock
to be so redeemed. No interest shall accrue for the benefit of
the holders of shares of Series B Preferred Stock to be redeemed
on any cash so
<PAGE>
set aside by the Corporation. Subject to applicable escheat
laws, any such cash unclaimed at the end of two years from the
Call Date shall revert to the general funds of the Corporation,
after which reversion the holders of shares of Series B Preferred
Stock so called for redemption shall look only to the general
funds of the Corporation for the payment of such cash.
As promptly as practicable after the surrender in accordance
with said notice of the certificates for any such shares so
redeemed (properly endorsed or assigned for transfer, if the
Corporation shall so require and if the notice shall so state),
such certificates shall be exchanged for certificates
representing shares of Common Stock and/or any cash (without
interest thereon) for which such shares have been redeemed in
accordance with such notice. If fewer than all the outstanding
shares of Series B Preferred Stock are to be redeemed, shares to
be redeemed shall be selected by the Corporation from outstanding
shares of Series B Preferred Stock not previously called for
redemption by lot or, with respect to the number of shares of
Series B Preferred Stock held of record by each holder of such
shares, pro rata (as nearly as may be) or by any other method as
may be determined by the Board of Directors in its discretion to
be equitable. If fewer than all the shares of Series B Preferred
Stock represented by any certificate are redeemed, then a new
certificate representing the unredeemed shares shall be issued
without cost to the holders thereof.
(e) In the case of any redemption pursuant to
paragraph (a)(i) of this Section 5, no fractional shares of
Common Stock or scrip representing fractions of shares of Common
Stock shall be issued upon redemption of the shares of Series B
Preferred Stock. Instead of any fractional interest in a share
of Common Stock that would otherwise be deliverable upon
redemption of shares of Series B Preferred Stock, the Corporation
shall pay to the holder of such share an amount in cash (computed
to the nearest cent) based upon the Current Market Price of the
Common Stock on the Trading Day immediately preceding the Call
Date. If more than one share shall be surrendered for redemption
at one time by the same holder, the number of full shares of
Common Stock issuable upon redemption thereof shall be computed
on the basis of the aggregate number of shares of Series B
Preferred Stock so surrendered.
(f) In the case of any redemption pursuant to
paragraph (a)(i) of this Section 5, the Corporation covenants
that any shares of Common Stock issued upon redemption of shares
of Series B Preferred Stock shall be validly issued, fully paid
and non-assessable. The Corporation shall use its best efforts
to list, subject to official notice of issuance, the shares of
Common Stock required to be delivered upon any such redemption of
shares of Series B Preferred Stock, prior to such redemption,
upon each national securities exchange, if any, upon which the
outstanding shares of Common Stock are listed at the time of such
delivery.
The Corporation shall take any action necessary to ensure
that any shares of Common Stock issued upon the redemption of
Series B Preferred Stock are freely transferable and not subject
to any resale restrictions under the Act, or any applicable state
securities or blue sky laws (other than any shares of Common
Stock issued upon redemption of any Series B Preferred Stock
which are held by an "affiliate" (as defined in Rule 144 under
the Act) of the Corporation).
<PAGE>
Section 6. Stock To Be Retired. All shares of Series B
Preferred Stock which shall have been issued and reacquired in
any manner by the Corporation shall be restored to the status of
authorized, but unissued shares of Preferred Stock, without
designation as to series. The Corporation may also retire any
unissued shares of Series B Preferred Stock, and such shares
shall then be restored to the status of authorized but unissued
shares of Preferred Stock, without designation as to series.
Section 7. Conversion.
Holders of shares of Series B Preferred Stock shall have the
right to convert all or a portion of such shares into shares of
Common Stock, as follows:
(a) Subject to and upon compliance with the provisions
of this Section 7, a holder of shares of Series B Preferred Stock
shall have the right, at such holder's option, at any time to
convert such shares, in whole or in part, into the number of
fully paid and non-assessable shares of authorized but previously
unissued shares of Common Stock per each share of Series B
Preferred Stock obtained by dividing the Liquidation Preference
(excluding any accumulated, accrued and unpaid dividends) by the
Conversion Price (as in effect at the time and on the date
provided for in the last clause of paragraph (b) of this Section
7) and by surrendering such shares to be converted, such
surrender to be made in the manner provided in paragraph (b) of
this Section 7; provided, however, that the right to convert
shares of Series B Preferred Stock called for redemption pursuant
to Section 5 shall terminate at the close of business on the Call
Date fixed for such redemption, unless the Corporation shall
default in making payment of shares of Common Stock and/or cash
payable upon such redemption under Section 5 hereof.
(b) In order to exercise the conversion right, the
holder of each share of Series B Preferred Stock to be converted
shall surrender the certificate representing such share, duly
endorsed or assigned to the Corporation or in blank, at the
office of the Transfer Agent, accompanied by written notice to
the Corporation that the holder thereof elects to convert such
share of Series B Preferred Stock. Unless the shares issuable on
conversion are to be issued in the same name as the name in which
such share of Series B Preferred Stock is registered, each share
surrendered for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Corporation, duly executed
by the holder or such holder's duly authorized attorney and an
amount sufficient to pay any transfer or similar tax (or evidence
reasonably satisfactory to the Corporation demonstrating that
such taxes have been paid).
Holders of shares of Series B Preferred Stock at the close
of business on a dividend payment record date shall be entitled
to receive the dividend payable on such shares on the
corresponding Dividend Payment Date notwithstanding the
conversion thereof following such dividend payment record date
and prior to such Dividend Payment Date. Except as provided
above, the Corporation shall make no payment or allowance for
unpaid dividends, whether or not in arrears, on converted shares
or for dividends on the shares of Common Stock issued upon such
conversion.
<PAGE>
As promptly as practicable after the surrender of
certificates for shares of Series B Preferred Stock as aforesaid,
the Corporation shall issue and shall deliver at such office to
such holder, or send on such holder's written order, a
certificate or certificates for the number of full shares of
Common Stock issuable upon the conversion of such shares of
Series B Preferred Stock in accordance with provisions of this
Section 7, and any fractional interest in respect of a share of
Common Stock arising upon such conversion shall be settled as
provided in paragraph (c) of this Section 7.
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which
the certificates for shares of Series B Preferred Stock shall
have been surrendered and such notice received by the Corporation
as aforesaid, and the person or persons in whose name or names
any certificate or certificates for shares of Common Stock shall
be issuable upon such conversion shall be deemed to have become
the holder or holders of record of the shares represented thereby
at such time on such date and such conversion shall be at the
Conversion Price in effect at such time on such date unless the
stock transfer books of the Corporation shall be closed on that
date, in which event such person or persons shall be deemed to
have become such holder or holders of record at the close of
business on the next succeeding day on which such stock transfer
books are open, but such conversion shall be at the Conversion
Price in effect on the date on which such shares shall have been
surrendered and such notice received by the Corporation. If the
dividend payment record date for the Series B Preferred Stock and
Common Stock do not coincide, and the preceding sentence does not
operate to ensure that a holder of shares of Series B Preferred
Stock whose shares are converted into Common Stock does not
receive dividends on both the shares of Series B Preferred Stock
and the Common Stock into which such shares are converted for the
same Dividend Period, then notwithstanding anything herein to the
contrary, it is the intent, and the Transfer Agent is authorized
to ensure that no conversion after the earlier of such record
dates will be accepted until after the latter of such record
dates.
(c) No fractional share of Common Stock or scrip
representing fractions of a share of Common Stock shall be issued
upon conversion of the shares of Series B Preferred Stock.
Instead of any fractional interest in a share of Common Stock
that would otherwise be deliverable upon the conversion of shares
of Series B Preferred Stock, the Corporation shall pay to the
holder of such share an amount in cash based upon the Current
Market Price of the Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one share shall
be surrendered for conversion at one time by the same holder, the
number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the aggregate number of
shares of Series B Preferred Stock so surrendered.
(d) The Conversion Price shall be adjusted from time
to time as follows:
<PAGE>
(i) If the Corporation shall after the Issue Date
(A) pay a dividend or make a distribution on its capital
stock in shares of Common Stock, (B) subdivide its
outstanding Common Stock into a greater number of shares,
(C) combine its outstanding Common Stock into a smaller
number of shares or (D) issue any shares of capital stock by
reclassification of its Common Stock, the Conversion Price
in effect at the opening of business on the day following
the date fixed for the determination of stockholders
entitled to receive such dividend or distribution or at the
opening of business on the day following the day on which
such subdivision, combination or reclassification becomes
effective, as the case may be, shall be adjusted so that the
holder of any share of Series B Preferred Stock thereafter
surrendered for conversion shall be entitled to receive the
number of shares of Common Stock (or fraction of a share of
Common Stock) that such holder would have owned or have been
entitled to receive after the happening of any of the events
described above had such share of Series B Preferred Stock
been converted immediately prior to the record date in the
case of a dividend or distribution or the effective date in
the case of a subdivision, combination or reclassification.
An adjustment made pursuant to this paragraph (d)(i) of this
Section 7 shall become effective immediately after the
opening of business on the day next following the record
date (except as provided in paragraph (h) below) in the case
of a dividend or distribution and shall become effective
immediately after the opening of business on the day next
following the effective date in the case of a subdivision,
combination or reclassification.
(ii) If the Corporation shall issue after the
Issue Date rights, options or warrants to all holders of
Common Stock entitling them (for a period expiring within 45
days after the record date described below in this paragraph
(d)(ii) of this Section 7) to subscribe for or purchase
Common Stock at a price per share less than the Fair Market
Value per share of the Common Stock on the record date for
the determination of stockholders entitled to receive such
rights or warrants, then the Conversion Price in effect at
the opening of business on the day next following such
record date shall be adjusted to equal the price determined
by multiplying (A) the Conversion Price in effect
immediately prior to the opening of business on the day
following the date fixed for such determination by (B) a
fraction, the numerator of which shall be the sum of (X) the
number of shares of Common Stock outstanding on the close of
business on the date fixed for such determination and (Y)
the number of shares that the aggregate proceeds to the
Corporation from the exercise of such rights or warrants for
Common Stock would purchase at such Fair Market Value, and
the denominator of which shall be the sum of (XX) the number
of shares of Common Stock outstanding on the close of
business on the date fixed for such determination and (YY)
the number of additional shares of Common Stock offered for
subscription or purchase pursuant to such rights or
warrants. Such adjustment shall become effective
immediately after the opening of business on the day next
following such record date (except as provided in paragraph
(h) below). In determining whether any rights or warrants
entitle the holders of Common Stock to subscribe for or
purchase Common Stock at less than such Fair Market Value,
there shall
<PAGE>
be taken into account any consideration received by the
Corporation upon issuance and upon exercise of such rights
or warrants, the value of such consideration, if other than
cash, to be determined in good faith by the Board of
Directors.
(iii) No adjustment in the Conversion Price
shall be required unless such adjustment would require a
cumulative increase or decrease of at least 1% in such
price; provided, however, that any adjustments that by
reason of this paragraph (d)(iii) are not required to be
made shall be carried forward and taken into account in any
subsequent adjustment until made; and provided, further,
that any adjustment shall be required and made in accordance
with the provisions of this Section 7 (other than this
paragraph (d)(iii)) not later than such time as may be
required in order to preserve the tax-free nature of a
distribution to the holders of shares of Common Stock.
Notwithstanding any other provisions of this Section 7, the
Corporation shall not be required to make any adjustment of
the Conversion Price for the issuance of any shares of
Common Stock pursuant to any plan providing for the
reinvestment of dividends or interest payable on securities
of the Corporation and the investment of additional optional
amounts in shares of Common Stock under such plan. All
calculations under this Section 7 shall be made to the
nearest cent (with $.005 being rounded upward) or to the
nearest one-tenth of a share (with .05 of a share being
rounded upward), as the case may be. Anything in this
paragraph (d) of this Section 7 to the contrary
notwithstanding, the Corporation shall be entitled, to the
extent permitted by law, to make such reductions in the
Conversion Price, in addition to those required by this
paragraph (d), as it in its discretion shall determine to be
advisable in order that any stock dividends, subdivision of
shares, reclassification or combination of shares,
distribution of rights or warrants to purchase stock or
securities, or a distribution of other assets (other than
cash dividends) hereafter made by the Corporation to its
stockholders shall not be taxable, or if that is not
possible, to diminish any income taxes that are otherwise
payable because of such event.
(e) If the Corporation shall be a party to any
transaction (including without limitation a merger,
consolidation, statutory share exchange, issuer or self tender
offer for all or a substantial portion of the shares of Common
Stock outstanding, sale of all or substantially all of the
Corporation's assets or recapitalization of the Common Stock, but
excluding any transaction as to which paragraph (d)(i) of this
Section 7 applies) (each of the foregoing being referred to
herein as a "Transaction"), in each case as a result of which
shares of Common Stock shall be converted into the right to
receive stock, securities or other property (including cash or
any combination thereof), each share of Series B Preferred Stock
which is not converted into the right to receive stock,
securities or other property in connection with such Transaction
shall thereupon be convertible into the kind and amount of shares
of stock, securities and other property (including cash or any
combination thereof) receivable upon such consummation by a
holder of that number of shares of Common Stock into which one
share of Series B Preferred Stock was convertible immediately
prior to such Transaction. The Corporation shall not be a party
to any Transaction unless the terms of such Transaction are
consistent with the provisions of this
<PAGE>
paragraph (e), and it shall not consent or agree to the
occurrence of any Transaction until the Corporation has entered
into an agreement with the successor or purchasing entity, as the
case may be, for the benefit of the holders of the Series B
Preferred Stock that will contain provisions enabling the holders
of the Series B Preferred Stock that remain outstanding after
such Transaction to convert into the consideration received by
holders of Common Stock at the Conversion Price in effect
immediately prior to such Transaction. The provisions of this
paragraph (e) shall similarly apply to successive Transactions.
(f) If:
(i) the Corporation shall declare a dividend (or
any other distribution) on the Common Stock (other than cash
dividends and cash distributions); or
(ii) the Corporation shall authorize the granting
to all holders of the Common Stock of rights or warrants to
subscribe for or purchase any shares of any class or series
of capital stock or any other rights or warrants; or
(iii) there shall be any reclassification of
the Common Stock or any consolidation or merger to which the
Corporation is a party and for which approval of any
stockholders of the Corporation is required, or a statutory
share exchange, or an issuer or self tender offer by the
Corporation for all or a substantial portion of its
outstanding shares of Common Stock (or an amendment thereto
changing the maximum number of shares sought or the amount
or type of consideration being offered therefor) or the sale
or transfer of all or substantially all of the assets of the
Corporation as an entirety; or
(iv) there shall occur the voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation,
then the Corporation shall cause to be filed with the Transfer
Agent and shall cause to be mailed to each holder of shares of
Series B Preferred Stock at such holder's address as shown on the
stock records of the Corporation, as promptly as possible, but at
least 15 days prior to the applicable date hereinafter specified,
a notice stating (A) the record date for the payment of such
dividend, distribution or rights or warrants, or, if a record
date is not established, the date as of which the holders of
Common Stock of record to be entitled to such dividend,
distribution or rights or warrants are to be determined or (B)
the date on which such reclassification, consolidation, merger,
statutory share exchange, sale, transfer, liquidation,
dissolution or winding up is expected to become effective, and
the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common
Stock for securities or other property, if any, deliverable upon
such reclassification, consolidation, merger, statutory share
exchange, sale, transfer, liquidation, dissolution or winding up
or (C) the date on which such tender offer commenced, the date on
which such tender offer is scheduled to expire
<PAGE>
unless extended, the consideration offered and the other material
terms thereof (or the material terms of any amendment thereto).
Failure to give or receive such notice or any defect therein
shall not affect the legality or validity of the proceedings
described in this Section 7.
(g) Whenever the Conversion Price is adjusted as
herein provided, the Corporation shall promptly file with the
Transfer Agent an officer's certificate setting forth the
Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment which
certificate shall be conclusive evidence of the correctness of
such adjustment absent manifest error. Promptly after delivery
of such certificate, the Corporation shall prepare a notice of
such adjustment of the Conversion Price setting forth the
adjusted Conversion Price and the effective date such adjustment
becomes effective and shall mail such notice of such adjustment
of the Conversion Price to each holder of shares of Series B
Preferred Stock at such holder's last address as shown on the
stock records of the Corporation.
(h) In any case in which paragraph (d) of this Section
7 provides that an adjustment shall become effective on the day
next following the record date for an event, the Corporation may
defer until the occurrence of such event (A) issuing to the
holder of any share of Series B Preferred Stock converted after
such record date and before the occurrence of such event the
additional Common Stock issuable upon such conversion by reason
of the adjustment required by such event over and above the
Common Stock issuable upon such conversion before giving effect
to such adjustment and (B) paying to such holder any amount of
cash in lieu of any fraction pursuant to paragraph (c) of this
Section 7.
(i) There shall be no adjustment of the Conversion
Price in case of the issuance of any capital stock of the
Corporation in a reorganization, acquisition or other similar
transaction except as specifically set forth in this Section 7.
(j) If the Corporation shall take any action affecting
the Common Stock, other than action described in this Section 7,
that in the opinion of the Board of Directors would materially
adversely affect the conversion rights of the holders of Series B
Preferred Stock, the Conversion Price for the Series B Preferred
Stock may be adjusted, to the extent permitted by law, in such
manner, if any, and at such time as the Board of Directors, in
its sole discretion, may determine to be equitable under the
circumstances.
(k) The Corporation shall at all times reserve and
keep available, free from preemptive rights, out of the aggregate
of its authorized but unissued Common Stock solely for the
purpose of effecting conversion of the Series B Preferred Stock,
the full number of shares of Common Stock deliverable upon the
conversion of all outstanding shares of Series B Preferred Stock
not theretofore converted into Common Stock. For purposes of
this paragraph (k), the number of shares of Common Stock that
shall be deliverable upon the conversion of all outstanding
shares of Series B Preferred Stock shall be computed as if at the
time of computation all such outstanding shares were held by a
single holder.
<PAGE>
The Corporation covenants that any shares of Common Stock
issued upon conversion of the shares of Series B Preferred Stock
shall be validly issued, fully paid and non-assessable.
The Corporation shall use its best efforts to list the
shares of Common Stock required to be delivered upon conversion
of the shares of Series B Preferred Stock, prior to such
delivery, upon each national securities exchange, if any, upon
which the outstanding shares of Common Stock are listed at the
time of such delivery.
The Corporation shall take any action necessary to ensure
that any shares of Common Stock issued upon conversion of shares
of Series B Preferred Stock are freely transferable and not
subject to any resale restrictions under the Act, or any
applicable state securities or blue sky laws (other than any
shares of Common Stock which are held by an "affiliate" (as
defined in Rule 144 under the Act)).
(l) The Corporation will pay any and all documentary
stamp or similar issue or transfer taxes payable in respect of
the issue or delivery of shares of Common Stock or other
securities or property on conversion or redemption of shares of
Series B Preferred Stock pursuant hereto; provided, however, that
the Corporation shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issue or
delivery of shares of Common Stock or other securities or
property in a name other than that of the holder of the shares of
Series B Preferred Stock to be converted or redeemed, and no such
issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the Corporation the
amount of any such tax or established, to the reasonable
satisfaction of the Corporation, that such tax has been paid.
Section 8. Ranking. Any class or series of capital
stock of the Corporation shall be deemed to rank:
(a) prior or senior to the Series B Preferred Stock,
as to the payment of dividends and as to distribution of assets
upon liquidation, dissolution or winding up, if the holders of
such class or series shall be entitled to the receipt of
dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or
priority to the holders of Series B Preferred Stock;
(b) on a parity with the Series B Preferred Stock, as
to the payment of dividends and as to distribution of assets upon
liquidation, dissolution or winding up, whether or not the
dividend rates, dividend payment dates or redemption or
liquidation prices per share thereof be different from those of
the Series B Preferred Stock, if the holders of such class of
stock or series and the Series B Preferred Stock shall be
entitled to the receipt of dividends and of amounts distributable
upon liquidation, dissolution or winding up in proportion to
their respective amounts of accrued and unpaid dividends per
share or liquidation preferences, without preference or priority
one over the other ("Parity Stock"); and
<PAGE>
(c) junior to the Series B Preferred Stock, as to the
payment of dividends or as to the distribution of assets upon
liquidation, dissolution or winding up, if such stock or series
shall be Common Stock or if the holders of Series B Preferred
Stock shall be entitled to receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the
case may be, in preference or priority to the holders of shares
of such class or series ("Junior Stock").
Section 9. Voting.
(a) If and whenever (i) six quarterly dividends
(whether or not consecutive) payable on the Series B Preferred
Stock or any series or class of Parity Stock shall be in arrears
(which shall, with respect to any such quarterly dividend, mean
that any such dividend has not been paid in full), whether or not
earned or declared, or (ii) the consolidated shareholders' equity
of the Corporation (determined in accordance with generally
accepted accounting principles and giving effect to any
adjustment for the net unrealized gain or loss on available-for-
sale mortgage securities) at the end of any calendar quarter is
less than 150% of the aggregate Liquidation Preference (excluding
any accumulated, accrued and unpaid dividends) of the then
outstanding Voting Preferred Stock, the number of directors then
constituting the Board of Directors shall be increased by two (if
not, in the case of an arrearage in dividends, already increased
by reason of a similar arrearage with respect to any Parity
Stock) and the holders of shares of Series B Preferred Stock,
together with the holders of shares of every other series of
Parity Stock (any other such series, the "Voting Preferred
Stock"), voting as a single class regardless of series, shall be
entitled to elect the two additional directors to serve on the
Board of Directors at any annual meeting of stockholders or
special meeting held in place thereof, or at a special meeting of
the holders of the Series B Preferred Stock and the Voting
Preferred Stock called as hereinafter provided. Notwithstanding
anything herein to the contrary, if any Series A Preferred Stock
(voting together with the Series B Preferred Stock and Voting
Preferred Stock voting as a single class) is entitled to elect
two directors as a result of a decline in consolidated
shareholders' equity below $80,000,000 pursuant to Article IIIA
of the Articles of Incorporation, then when such entitlement is
triggered, the separate entitlement to elect two directors
pursuant to Section 9(a)(ii) hereof shall be suspended. Whenever
the entitlement pursuant to Section 9(a)(ii) of the Series B
Preferred Stock (together with holders of Voting Preferred Stock
voting as a single class regardless of series) to vote is
suspended as described in the preceding sentence, the terms of
office of all persons elected as directors by the Series B
Preferred Stock and Voting Preferred Stock in respect of a
shortfall in consolidated shareholders' equity below 150% of the
consolidated shareholders equity of the then outstanding Voting
Preferred Stock shall terminate upon the election of the two
directors elected pursuant to a vote of the Series B Preferred
Stock and Voting Preferred Stock voting as a single class as a
result of a shortfall in consolidated shareholders' equity below
$80,000,000. Whenever (1) in the case of an arrearage in
dividends described in clause (i), all arrears in dividends on
the Series B Preferred Stock and the Voting Preferred Stock then
outstanding shall have been paid and dividends thereon for the
current quarterly dividend period shall have been paid or
declared and set apart for payment, or (2) in the case of a
shortfall in the Corporation's consolidated shareholders' equity
described in clause (ii), the consolidated shareholders' equity
of the Corporation (determined in accordance with
<PAGE>
generally accepted accounting principles and giving effect to any
adjustment for the net unrealized gain or loss on available-for-
sale mortgage securities) at the end of any subsequent calendar
quarter equals or exceeds 150% of the aggregate Liquidation
Preference (excluding any accumulated, accrued and unpaid
dividends) of the then outstanding Voting Preferred Stock, then
the right of the holders of the Series B Preferred Stock and the
Voting Preferred Stock to elect such additional two directors
shall cease (but subject always to the same provision for the
vesting of such voting rights in the case of any similar future
arrearages in six quarterly dividends or shortfall in
consolidated shareholders' equity), and the terms of office of
all persons elected as directors by the holders of the Series B
Preferred Stock and the Voting Preferred Stock shall forthwith
terminate and the number of the Board of Directors shall be
reduced accordingly. At any time after such voting power shall
have been so vested in the holders of Series B Preferred Stock
and the Voting Preferred Stock, if applicable, the Secretary of
the Corporation may, and upon the written request of any holder
of Series B Preferred Stock (addressed to the Secretary at the
principal office of the Corporation) shall, call a special
meeting of the holders of the Series B Preferred Stock and of the
Voting Preferred Stock for the election of the two Directors to
be elected by them as herein provided, such call to be made by
notice similar to that provided in the Bylaws of the Corporation
for a special meeting of the stockholders or as required by law.
If any such special meeting required to be called as above
provided shall not be called by the Secretary within 20 days
after receipt of any such request, then any holder of Series B
Preferred Stock may call such meeting, upon the notice above
provided, and for that purpose shall have access to the stock
books of the Corporation. The Directors elected at any such
special meeting shall hold office until the next annual meeting
of the stockholders or special meeting held in lieu thereof if
such office shall not have previously terminated as above
provided. If any vacancy shall occur among the Directors elected
by the holders of the Series B Preferred Stock and the Voting
Preferred Stock, a successor shall be elected by the Board of
Directors, upon the nomination of the then-remaining Director
elected by the holders of the Series B Preferred Stock and the
Voting Preferred Stock or the successor of such remaining
Director, to serve until the next annual meeting of the
stockholders or special meeting held in place thereof if such
office shall not have previously terminated as provided above.
(b) So long as any shares of Series B Preferred Stock
are outstanding, in addition to any other vote or consent of
stockholders required by law or by the Articles of Incorporation,
as amended, the affirmative vote of at least 66 2/3% of the votes
entitled to be cast by the holders of the Series B Preferred
Stock, given in person or by proxy, either in writing without a
meeting or by vote at any meeting called for the purpose, shall
be necessary for effecting or validating:
(i) Any amendment, alteration or repeal of any of
the provisions of this amendment to the Articles of
Incorporation, the Articles of Incorporation or the Bylaws
of the Corporation that materially adversely affects the
voting powers, rights or preferences of the holders of the
Series B Preferred Stock; provided, however, that the
amendment of the provisions of the Articles of Incorporation
so as to authorize or create, or to increase the authorized
amount of, any Junior Stock or any shares of any class
<PAGE>
ranking on a parity with the Series B Preferred Stock shall
not be deemed to materially adversely affect the voting
powers, rights or preferences of the holders of Series B
Preferred Stock; or
(ii) The authorization or creation of, or the
increase in the authorized amount of, any shares of any
class or any security convertible into shares of any class
ranking prior or senior to the Series B Preferred Stock in
the distribution of assets on any liquidation, dissolution
or winding up of the Corporation or in the payment of
dividends; provided, however, that no such vote of the
holders of Series B Preferred Stock shall be required if, at
or prior to the time when such amendment, alteration or
repeal is to take effect, or when the issuance of any such
prior shares or convertible security is to be made, as the
case may be, provision is made for the redemption of all
shares of Series B Preferred Stock at the time outstanding.
For purposes of the foregoing provisions of this Section 9,
each share of Series B Preferred Stock shall have one (1) vote
per share, except that when any other series of preferred stock
shall have the right to vote with the Series B Preferred Stock as
a single class on any matter, then the Series B Preferred Stock
and such other series shall have with respect to such matters one
(1) vote per $____ of stated liquidation preference. Except as
otherwise required by applicable law or as set forth herein, the
Series B Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers
other than as set forth herein, and the consent of the holders
thereof shall not be required for the taking of any corporate
action.
Section 10. Record Holders. The Corporation and the
Transfer Agent may deem and treat the record holder of any share
of Series B Preferred Stock as the true and lawful owner thereof
for all purposes, and neither the Corporation nor the Transfer
Agent shall be affected by any notice to the contrary.
<PAGE>
EXHIBIT I.B.
NUMBER [FACE OF CERTIFICATE] SHARES
RB_______ Resource Mortgage Capital, Inc. _________
ORGANIZED UNDER THE SEE
REVERSE FOR
LAWS OF THE COMMONWEALTH CERTAIN
DEFINITIONS
OF VIRGINIA
CUSIP 76121E 30 1
This certifies that [insert name of holder] is the record
holder of FULLY PAID AND NON-ASSESSABLE SHARES OF THE SERIES B
CUMULATIVE CONVERTIBLE PREFERRED STOCK, $.01 PAR VALUE, OF
RESOURCE MORTGAGE CAPITAL, INC. transferable on the books of the
Corporation in person or by duly authorized attorney upon
surrender of the Certificate properly endorsed. This Certificate
is not valid unless countersigned by the Transfer Agent and
registered by the Registrar.
Witness the facsimile seal of the Corporation and the
facsimile signatures of its duly authorized officers.
Date: (SEAL)
/s/Thomas H. Potts
President
/s/Lynn K. Geurin
Secretary
COUNTERSIGNED AND REGISTERED:
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
(SEAL) (Charlotte, North Carolina)
Transfer Agent and Registrar
By:
Authorized Signature
<PAGE>
[REVERSE SIDE OF CERTIFICATE]
TRANSFER RESTRICTIONS
THE TRANSFER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED. NO TRANSFER MAY BE MADE TO ANY
PERSON (i) WHO IS A NONRESIDENT ALIEN INDIVIDUAL OR FOREIGN
ENTITY, (ii) WHO IS AN ENTITY EXEMPT FROM FEDERAL INCOME
TAXATION THAT IS NOT SUBJECT TO TAX ON UNRELATED BUSINESS
TAXABLE INCOME (OR ANY PASS-THROUGH ENTITY IN WHICH SUCH A TAX-
EXEMPT ENTITY HOLDS OR IS PERMITTED TO HOLD AN INTEREST), OR
(iii) IF SUCH PERSON OR GROUP OF PERSONS DIRECTLY OR THROUGH
THE OPERATION OF CERTAIN ATTRIBUTION RULES WOULD OWN IN EXCESS
OF 9.8% OF THE CORPORATION'S OUTSTANDING CAPITAL STOCK AFTER
THE TRANSFER.
THE CORPORATION MAY REQUIRE EVIDENCE OF A PROPOSED
TRANSFEREE'S STATUS AND OWNERSHIP INTEREST BEFORE PERMITTING
ANY TRANSFER AND MAY REDEEM ANY SHARES HELD IN VIOLATION OF
THE PRECEDING PARAGRAPH. THE CORPORATION WILL FURNISH TO ANY
STOCKHOLDER WITHOUT CHARGE A FULL STATEMENT OF THE TRANSFER
RESTRICTIONS UPON REQUEST TO THE SECRETARY OF THE CORPORATION
AT ITS PRINCIPAL OFFICE.
THE CORPORATION WILL FURNISH TO THE STOCKHOLDER
INFORMATION REGARDING THE DESIGNATIONS, RELATIVE RIGHTS,
PREFERENCES, AND LIMITATIONS APPLICABLE TO EACH CLASS OF ITS
CAPITAL STOCK ON REQUEST AND WITHOUT CHARGE.
KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST,
STOLEN, OR DESTROYED THE CORPORATION WILL REQUIRE A BOND OF
INDEMNITY AS A CONDITION TO THE ISSUANCE OF A REPLACEMENT
CERTIFICATE.
The following abbreviations, when used in the inscription on
the face of this certificate, shall be constituted as though they
were written out in full according to applicable laws or
regulations:
TEN COM--as tenants in common UNIF GIFT MIN ACT--
______Custodian_____
TEN ENT --as tenants by the entireties
(Cust) (Minor)
JT TEN --as joint tenants with right of survivorship
under Uniform Gift to and not as tenants in
common Minors Act _____
(State)
Additional abbreviations may be used though not in the above
list.
For value received, ____ hereby sell assign an transfer unto
_____________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 _______.
