SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
__________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(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 or Organization) (I.R.S. Employer Identification
Number)
4880 Cox Road
Glen Allen, Virginia 23060
(Address of principal executive offices) (zip code)
Registrant's telephone number,
including area code: (804) 967-5800
If this Form relates to the If this Form relates to
registration of a class of the registration of a
debt securities and is class of debt securities
effective upon filing pursuant and is to become effective
to General Instruction A(c)(1) simultaneously with the
please check the following effectiveness of a
box. ______ 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(b) of the Act:
Title of Each Class Name of Each Exchange on
to be so Registered Which
Each Class is to be
Registered
None None
Securities to be registered pursuant to Section 12(g) of the Act:
Series C Cumulative Convertible Preferred Stock, par value $.01 per share
(Title of class)
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Item 1. Description of Registrant's Securities to be Registered.
A full description of the Registrant's Series C 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 February 2, 1994, which Prospectus Supplement shall be deemed
to be incorporated herein by reference.
Item 2. Exhibits.
I. A.1. Articles of incorporation as amended (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. Amendment to Articles of Incorporation (incorporated herein
by reference to the Company's Report on Form 8-K dated October 19, 1995).
A.4. Form of Amendment to Articles of Incorporation.
B. Form of Certificate for the Series C Cumulative Convertible
Preferred Stock.
C. Amended 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) the Company's Annual Report on
Form 10-K dated December 31, 1992).
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SIGNATURE
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, thereto duly authorized.
RESOURCE MORTGAGE CAPITAL, INC.
Date: September 20, 1996 By: \s\ Stephen Benedetti
Stephen Benedetti
Vice President
EXHIBIT A
EXHIBIT I.A.4.
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 IIIC shall be inserted following the existing text of
Article IIIB 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 consents
dated [ ] and [ ]. 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: [ ] RESOURCE MORTGAGE CAPITAL, INC.
By:
Thomas H. Potts
President
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RESOURCE MORTGAGE CAPITAL, INC.
Section 1. Number of Shares and Designation. This series of
Preferred Stock shall be designated as Series C [ ]% Cumulative
Convertible Preferred Stock (the "Series C Preferred Stock") and up to [
([ ])] shall be the number of shares of such Preferred Stock constituting
such series.
Section 2. Definitions. For purposes of the Series C 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 C
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 C 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 C Preferred Stock).
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"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 ("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, 1997 with respect to the period
commencing on the date of issue and ending December 31, 1996;
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, 1996).
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"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 [ ].
"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 C 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 and Series B Preferred
Stock are 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 mean the Series A Cumulative
Convertible Preferred Stock of the Corporation set forth in Article
IIIB, Section 1 of the Corporation's Articles of Incorporation (as
amended).
"Series C Preferred Stock" shall have the meaning set forth in Section
1 hereof.
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"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 C 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 C
Preferred Stock.
"Voting Preferred Stock" shall have the meaning set forth in Section 9
hereof.
Section 3. Dividends.
(a) The holders of Series C 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 C Preferred Stock equal to the greater of (i)
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the base dividend of $[ ] 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 C Preferred Stock is convertible.
The initial Dividend Period shall commence on the Issue Date and end on
December 31, 1996. The dividends payable with respect to the portion of
the initial Dividend Period commencing on the Issue Date and ending on
December 31, 1996, shall be prorated from the date of issuance and
determined by reference to the Base Rate. The amount referred to in clause
(ii) of this paragraph (a) with respect to each Dividend Period shall be
determined by multiplying the number of shares of Common Stock, or portion
thereof calculated to the fourth decimal point, into which a share of
Series C Preferred Stock would be convertible at the close of business on
the record date for the payment of dividends on the Series C Preferred
Stock (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
C 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 C 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.
<PAGE>
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 $[ ]
per quarter 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 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 C
Preferred Stock for the portion of the initial Dividend Period commencing
on the Issue Date and ending and including December 31, 1996, 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 C
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 C 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 C Preferred Stock that may be in arrears.
(c) So long as any of the shares of Series C 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 C 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
<PAGE>
sum sufficient for such payment is not set apart, as aforesaid, all
dividends declared upon the Series C 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 C Preferred Stock and accumulated, accrued
and unpaid on such Parity Stock.
(d) So long as any of the shares of Series C 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 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 C
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 C 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 C
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
<PAGE>
of shares of Series C Preferred Stock shall be entitled to receive [Dollars
($[ ])] per share of Series C 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 C 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 C 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 C Preferred Stock and any such other Parity
Stock ratably in the same proportion as the respective amounts that would
be payable on such Series C 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 C
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 C
Preferred Stock and any Parity Stock shall not be entitled to share
therein.
Section 5. Redemption at the Option of the Corporation.
(a) Shares of Series C Preferred Stock shall not be redeemable
by the Corporation prior to September 30, 1999. On and after September 30,
1999, the Corporation, at its option, may redeem shares of Series C
Preferred Stock, in whole or from time to time in part, as set forth
herein, subject to the provisions described below:
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(i) Shares of Series C Preferred Stock may be redeemed, in
whole or in part, at the option of the Corporation, at any time on or
after September 30, 1999 by issuing and delivering to each holder for
each share of Series C Preferred Stock to be redeemed such number of
authorized but previously unissued shares of Common Stock as equals
the Liquidation Preference (which excludes any accumulated, accrued
and unpaid dividends which are to be paid in cash as provided below)
per share of Series C 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 C 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 [ ]. The Press Release shall announce the
redemption and set forth the number of shares of Series C Preferred
Stock that the Corporation intends to redeem; or
(ii) Shares of Series C Preferred Stock may be redeemed, in
whole or in part, at the option of the Corporation at any time on or
after September 30, 1999 out of funds legally available therefor at a
redemption price payable in cash equal to $[ ] per share of Series C
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 C 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 C Preferred Stock shall accrue and be payable from the period
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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 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 C 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 C 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 C 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 C Preferred Stock called for redemption or on the shares
of Common Stock issued upon such redemption.
<PAGE>
(c) If full cumulative dividends on all outstanding shares of
Series C 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 C Preferred Stock may be redeemed unless all
outstanding shares of Series C Preferred Stock are simultaneously redeemed
and neither the Corporation nor any affiliate of the Corporation may
purchase or acquire shares of Series C Preferred Stock, otherwise than
pursuant to a purchase or exchange offer made on the same terms to all
holders of shares of Series C Preferred Stock.
(d) If the Corporation shall redeem shares of Series C 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; if the
Corporation shall redeem shares of Series C Preferred stock pursuant to
paragraph (a)(ii) of this Section 5, notice of such redemption shall be
given not less than thirty (30) nor more than sixty (60) days prior to the
Call Date. 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 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 C 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 C 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
<PAGE>
to be issued with respect to each share of Series C 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 C Preferred
Stock so called for redemption shall cease to accumulate or accrue on the
shares of Series C 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 C 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 C 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 C 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 C 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 C Preferred Stock are to be converted at
redemption, regardless of whether such holder has surrendered the
certificates representing the shares of Series C Preferred Stock to be so
redeemed. No interest shall accrue for the benefit of the holders of
shares of Series C Preferred Stock to be redeemed on any cash so set aside
<PAGE>
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 C 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 C
Preferred Stock are to be redeemed, shares to be redeemed shall be selected
by the Corporation from outstanding shares of Series C Preferred Stock not
previously called for redemption by lot or, with respect to the number of
shares of Series C 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 C 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 C Preferred Stock. Instead of any
fractional interest in a share of Common Stock that would otherwise be
deliverable upon redemption of shares of Series C 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 C 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
<PAGE>
Stock issued upon redemption of shares of Series C 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 C 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 C 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 C
Preferred Stock which are held by an "affiliate" (as defined in Rule 144
under the Act) of the Corporation).
Section 6. Stock To Be Retired. All shares of Series C 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 C 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 C 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 C 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 C 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
<PAGE>
paragraph (b) of this Section 7; provided, however, that the right to
convert shares of Series C 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 C 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 C 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 C 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 C 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.
As promptly as practicable after the surrender of certificates for
shares of Series C 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 C 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.
<PAGE>
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 C 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 C Preferred Stock and Common Stock do
not coincide, and the preceding sentence does not operate to ensure that a
holder of shares of Series C Preferred Stock whose shares are converted
into Common Stock does not receive dividends on both the shares of Series C
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 C 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 C 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 C 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 C 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 C 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
<PAGE>
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 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
<PAGE>
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
C 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 C 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 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 C Preferred
Stock that will contain provisions enabling the holders of the Series C
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.
<PAGE>
(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 C 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
<PAGE>
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 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 C 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 C
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.
<PAGE>
(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 C Preferred Stock, the
Conversion Price for the Series C 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 C Preferred Stock, the full number of shares of
Common Stock deliverable upon the conversion of all outstanding shares of
Series C 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 C Preferred Stock shall be computed as if at the time of computation
all such outstanding shares were held by a single holder.
The Corporation covenants that any shares of Common Stock issued upon
conversion of the shares of Series C 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 C 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 C
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 C Preferred Stock pursuant hereto; provided,
<PAGE>
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 C 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 C 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 C Preferred Stock;
(b) on a parity with the Series C 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 C Preferred Stock, if the holders of
such class of stock or series and the Series C 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
(c) junior to the Series C 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 C 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").
<PAGE>
Section 9. Voting.
(a) If and whenever (i) six quarterly dividends (whether or not
consecutive) payable on the Series C 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 Series C Preferred Stock and aggregate liquidation
preference (excluding any accumulated, accrued and unpaid dividends) of the
then outstanding Series A Preferred Stock and Series B Preferred Stock, the
number of directors then constituting the Board of Directors shall be
increased by two (if not already increased by reason of similar types of
provisions with respect to Voting Preferred Stock (as defined below)) and
the holders of shares of Series C 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 C Preferred Stock and the Voting Preferred Stock called as
hereinafter provided. Notwithstanding anything herein to the contrary, if
any class or series of Voting Preferred Stock (with which the Series C
Preferred Stock is entitled to vote as a single class) is entitled to elect
two directors as a result of a failure to maintain a specified level of
consolidated shareholders' equity required by the terms of such Voting
Preferred Stock, 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 C 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 pursuant to Section 9(a)(ii) shall terminate upon the
election of the two directors elected pursuant to a vote of the Series C
Preferred Stock and Voting Preferred Stock voting as a single class as a
result of a failure to maintain a specified level of consolidated
shareholders' equity required by the terms of such class or series of
<PAGE>
Voting Preferred Stock. Whenever (1) in the case of an arrearage in
dividends described in clause (i), all arrears in dividends on the Series C
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 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 Series C Preferred Stock and the
aggregate liquidation preference (excluding any accumulated, accrued and
unpaid dividends) of the then outstanding Series A Preferred Stock and
Series B Preferred Stock, then the right of the holders of the Series C
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 C 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 C 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 C Preferred Stock
(addressed to the Secretary at the principal office of the Corporation)
shall, call a special meeting of the holders of the Series C 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 C 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
<PAGE>
the Directors elected by the holders of the Series C 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 C 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 C 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 C 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 C 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 ranking on a parity with
the Series C Preferred Stock shall not be deemed to materially
adversely affect the voting powers, rights or preferences of the
holders of Series C 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 C 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 C 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 C Preferred Stock at the time
outstanding.
<PAGE>
For purposes of the foregoing provisions of this Section 9, each share
of Series C 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 C Preferred Stock as a single class on any matter, then the
Series C 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 C 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 C 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.
EXHIBIT I.B.
NUMBER___ [FACE OF CERTIFICATE] SHARES_____
Resource Mortgage Capital, Inc.
INCORPORATED UNDER THE SEE REVERSE FOR
LAWS OF THE COMMONWEALTH CERTAIN DEFINITIONS
OF VIRGINIA
CUSIP 76121E 40 0
This certifies that [insert name of holder] is the record holder of
FULLY PAID AND NON-ASSESSABLE SHARES OF THE SERIES C 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 this 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.
Dated: (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)
By:
Transfer Agent and Registrar
Authorized Signature
[REVERSE SIDE OF CERTIFICATE]
TRANSFER RESTRICTIONS
<PAGE>
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 Under Uniform Gift to
survivorship and not as Minors Act ________
tenants in common (State)
Additional abbreviations may be used though not in the above
list.
For value received, ____ hereby sell assign and 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 ____________.
