As filed with the Securities and Exchange Commission on
August 23, 1996
Registration No.
--------
- --------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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RESOURCE MORTGAGE CAPITAL, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 52-1549373
(State or other (IRS
jurisdiction Employer
of incorporation or Identification
organization) No.)
4880 Cox Road
Glen Allen, Virginia 23060
(804) 967-5800
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Thomas H. Potts
President
Resource Mortgage Capital, Inc.
4880 Cox Road
Glen Allen, Virginia 23060
(804) 967-5800
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Elizabeth R. Hughes,
Esq.
Venable, Baetjer and
Howard, LLP
1800 Mercantile Bank &
Trust Bldg.
2 Hopkins Plaza
Baltimore, Maryland
21201
(410) 244-7400
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Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
Box: [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: |X|
<PAGE>
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
If this Form is to be a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: [ ]
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box: [ ]
Information contained in this Registration Statement is subject to completion or
amendment. Securities herein may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective. This
Registration Statement shall not constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sales of these securities in any State
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such State.
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<PAGE>
CALCULATION OF REGISTRATION FEE
- ---------------------=========-==========-----------===========--
Proposed Proposed
Maximum Maximum
Title of Securities Amount Offering Aggregate Amount of
Being Price Offering
Being Registered (1) Registered Per Share Price (2) Registration
Fee (3)
--
- ----------------------------------------------------------------
PRIMARY OFFERING:
Common Stock
($.01 par value);
Preferred Stock
(no par value);
Debt Securities;
Warrants to
Purchase Common
Stock;
Warrants to
Purchase Preferred
Stock;
Warrants to (4) (4) $450,000,000 $155,172
Purchase Debt
Securities...........
====================-====================-----------===========--
(1) This Registration Statement also covers contracts which may be issued by
the Registrant under which the party purchasing such contracts may be
required to purchase Debt Securities or shares of Preferred Stock. Such
contracts would be issued together with the specific Securities to which
they relate. In addition, any other Securities registered hereunder either
may be sold separately or as units comprised of more than one type of
Securities registered hereunder.
(2) The maximum offering price of all Securities will not
exceed $450,000,000.
(3) Estimated solely for purposes of calculating the amount of registration
fee pursuant to Rule 457(o) under the Securities Act of 1933.
(4) Not applicable pursuant to Form S-3 Instruction II.D.
under the Securities Act of 1993.
-----------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a),
may determine.
<PAGE>
Subject to Completion, dated August 23, 1996
PROSPECTUS
[GRAPHIC OMITTED]
Resource Mortgage Capital, Inc.
Common Stock, Preferred Stock, Debt Securities
Warrants to Purchase Common Stock, Warrants
to Purchase Preferred Stock and Warrants to
Purchase Debt Securities
----------------
Resource Mortgage Capital, Inc., a Virginia corporation (the "Company"),
directly or through agents, dealers or underwriters designated from time to
time, may issue and sell from time to time one or more of the following types of
its securities (the "Securities"): (i) shares of its common stock, par value
$0.01 per share ("Common Stock"); (ii) shares of its preferred stock, no par
value, in one or more series ("Preferred Stock"); (iii) debt securities, in one
or more series, any series of which may be either senior debt securities or
subordinated debt securities (collectively, "Debt Securities" and, as
appropriate, "Senior Debt Securities" or "Subordinated Debt Securities"); (iv)
warrants to purchase shares of Common Stock ("Common Stock Warrants"); (v)
warrants to purchase Preferred Stock ("Preferred Stock Warrants"); (vi) warrants
to purchase debt securities ("Debt Warrants"); and (vii) any combination of the
foregoing, either individually or as units consisting of one or more of the
foregoing types of Securities. The Securities offered pursuant to this
Prospectus may be issued in one or more series, in amounts, at prices and on
terms to be determined at the time of the offering of each such series. The
Securities offered by the Company pursuant to this Prospectus will be limited to
$450,000,000 aggregate initial public offering price, including the exercise
price of any Common Stock Warrants, Preferred Stock Warrants and Debt Warrants
(collectively, "Securities Warrants").
The specific terms of each offering of Securities in respect of
which this Prospectus is being delivered are set forth in an
accompanying Prospectus Supplement (each, a "Prospectus Supplement")
relating to such offering of Securities. Such specific terms include,
without limitation, to the extent applicable the following: (1) in the
case of any series of Preferred Stock, the specific designations,
rights, preferences, privileges and restrictions of such series of
Preferred Stock, including the dividend rate or rates or the method
for calculating same, dividend payment dates, voting rights,
liquidation preferences, and any conversion, exchange, redemption or
sinking fund provisions; (2) in the case of any series of Debt
Securities, the specific designations, rights and restrictions of such
series of Debt Securities, including without limitation whether the
Debt Securities are Senior Debt Securities or Subordinated Debt
Securities, the currency in which such Debt Securities are denominated
and payable, the aggregate principal amount, stated maturity, method
of calculating and dates for payment of interest and premium, if any,
and any conversion, exchange, redemption or sinking fund provisions;
(3) in the case of the Securities Warrants, the Debt Securities,
Preferred Stock or Common Stock, as applicable, for which each such
warrant is exercisable, and the exercise price, duration, detachability
and call provisions of each such warrant; and (4) in the case of any
offering of Securities, to the extent applicable, the initial public
offering price or prices, listing on any securities exchange, certain
federal income tax consequences and the agents, dealers or
underwriters, if any, participating in the offering and sale of the
Securities. If so specified in the applicable Prospectus Supplement,
any series of Securities may be issued in whole or in part in the form
of one or more temporary or permanent Global Securities, as defined
herein.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
----------------
The Company may sell all or a portion of any offering of its Securities
through agents, to or through underwriters or dealers, or directly to other
purchasers. See "Plan Distribution." The related Prospectus Supplement for each
offering of Securities sets forth the name of any agents, underwriters or
dealers involved in the sale of such Securities and any applicable fee,
commission, discount or indemnification arrangement with any such party. See
"Use of Proceeds."
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement. The delivery in any jurisdiction of this
Prospectus together with a Prospectus Supplement relating to specific Securities
shall not constitute an offer in such jurisdiction of any other Securities
covered by this Prospectus but not described in such Prospectus Supplement.
----------------
The date of this Prospectus is , 1996
<PAGE>
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- --------------------------------------------------------------------------
18
2
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR THE ACCOMPANYING PROSPECTUS
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER,
AGENT OR DEALER. NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE ACCOMPANYING
PROSPECTUS SUPPLEMENT NOR ANY DISTRIBUTION OF SECURITIES BEING OFFERED PURSUANT
TO THIS PROSPECTUS AND AN ACCOMPANYING PROSPECTUS SUPPLEMENT SHALL UNDER ANY
CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR THAT THE INFORMATION
CONTAINED HEREIN OR THEREIN IS CORRECT AT ANY TIME SUBSEQUENT TO THE DATE HEREOF
OR THEREOF. THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT DO NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE
SECURITIES BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS
NOT AUTHORIZED OR IN WHICH THE PERSON MAKING THE OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, NW, Judiciary Plaza, Washington, D.C. 20549, and at the
Commission's following regional offices: Chicago Regional Office, Room 3190, 230
South Dearborn Street, Chicago, Illinois 60604; and New York Regional Office,
Room 1400, 75 Park Place, New York, New York 10007. Copies of such material can
also be obtained at prescribed rates from the Public Reference Section of the
Commission at 450 Fifth Street, NW, Judiciary Plaza, Washington, D.C. 20549. The
Common Stock of the Company is listed on the New York Stock Exchange ("NYSE")
and such reports, proxy statements and other information concerning the Company
may also be inspected at the offices of such Exchange at 20 Broad Street, New
York, New York 10005. The Commission maintains a Web site that contains reports,
proxy and information statements and other information regarding the Company at
http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Securities offered hereby. This Prospectus does not contain all
of the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the
Securities offered hereby, reference is made to the Registration Statement and
the exhibits and schedules thereto. Statements contained in this Prospectus as
to the contents of any contract or other documents are not necessarily complete,
and in each instance, reference is made to the copy of such contract or
documents filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission by the Company are
incorporated in this Prospectus by reference: Annual Report on Form 10-K for the
year ended December 31, 1995; Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996; Quarterly Report on Form 10-Q for the quarter ended June
30, 1996; and the description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A under the Exchange Act, including
any amendment or report filed to update the description.
<PAGE>
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of all Securities shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of filing
of such documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any accompanying Prospectus Supplement relating to a
specific offering of Securities or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus or any accompanying Prospectus Supplement. Subject to the foregoing,
all information appearing in this Prospectus is qualified in its entirety by the
information appearing in the documents incorporated herein by reference.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any and all of the documents described above under "Incorporation of
Certain Documents by Reference", other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference therein. Written
requests should be directed to: Resource Mortgage Capital, Inc., 4880 Cox Road,
Glen Allen, Virginia, 23060, Attention: Investor Relations, Telephone: (804)
967-5800.
<PAGE>
THE COMPANY
Resource Mortgage Capital, Inc. (the "Company") is a mortgage and consumer
finance company which uses its production operations to create investments for
its portfolio. Currently, the Company's primary production operations include
the origination of loans secured by manufactured housing and the origination of
mortgage loans secured by multi-family properties. Through its inception in 1987
through May 13, 1996, the Company's principal production operations included the
purchase or origination of single-family loans. The Company sold such operations
on May 13, 1996 to Dominion Mortgage Services, Inc., a wholly-owned subsidiary
of Dominion Resources, Inc. (NYSE: D).
The Company will generally securitize loans funded as collateral for
collateralized mortgage obligations ("CMOs") or mortgage-backed securities to
limit its credit risk and provide long-term financing for its portfolio. The
majority of the Company's current investment portfolio is comprised of loans or
securities that have coupon rates which adjust over time (subject to certain
limitations) in conjunction with changes in short-term interest rates. The
Company intends to expand its production sources in the future to include other
financial products, such as commercial mortgage loans.
The Company's principle sources of earnings are net interest income on its
investment portfolio and loans in warehouse. The Company's investment portfolio
consists principally of adjustable-rate mortgage ("ARM") securities and
collateral for CMOs. The Company funds its production and its portfolio
investments with both borrowings and cash raised from the issuance of equity
capital. For the portion of loans in warehouse and portfolio investments funded
with borrowings, the Company generates net interest income to the extent that
there is a positive spread between the yield on the earning assets and the cost
of borrowed funds. For that portion of the balance sheet that is funded with
equity capital, net interest income is primarily a function of the yield
generated from the interest earning asset. The cost of the Company's borrowings
may be increased or decreased by interest rate swap, cap, or floor agreements.
Generally, during a period of rising interest rates, the Company's net
interest spread earned on its investment portfolio will decrease. The decrease
of the net interest spread results from (i) the lag in resets of the ARM loans
underlying the ARM securities and collateral for CMOs and (ii) the fact that the
resets on the ARM loans are limited to generally 1% every six months, while the
associated borrowings have no such limitation. As interest rates stabilize and
the ARM loans reset, the net interest margin may be restored to its former level
as the yields on the ARM loans adjust to market conditions. Conversely, net
interest margin may increase following a fall in short-term interest rates; this
increase may be temporary as the yields on the ARM loans adjust to the new
market conditions after a lag period. In each case, however, the Company expects
that the increase or decrease in the net interest spread due to changes in the
short-term interest rates is temporary. The net interest spread may also be
increased or decreased by the cost or proceeds of the interest rate swap, cap or
floor agreements.
The Company seeks to generate growth in earnings and dividends per share in a
variety of ways, including (i) adding investments to its portfolio when
opportunities in the market are favorable, (ii) developing production
capabilities to originate and acquire financial assets in order to create
investments for the portfolio at a lower effective cost then if such assets were
purchased and (iii) increasing the efficiency with which the Company utilizes
its equity capital over time.
The Company elects to be taxed as a real estate investment trust (a "REIT")
and, as a result, is required to distribute substantially all of its earnings
annually to its shareholders. In order to grow its equity base, the Company may
issue additional preferred or common stock. Management strives to issue such
additional shares when it believes existing shareholders are likely to benefit
from such offerings through higher earnings and dividends per share than as
compared to the level of earnings and dividends the Company would likely
generate without such offerings.
<PAGE>
Other Information
The Company, and its qualified REIT subsidiaries, have elected to be treated
as a REIT for federal income tax purposes. A REIT must distribute annually
substantially all of its income to shareholders. The Company and its qualified
REIT subsidiaries (collectively, "Resource REIT") generally will not be subject
to federal income tax to the extent that certain REIT qualifications are met.
Certain other affiliated entities which are consolidated with the Company for
financial reporting purposes, are not consolidated for federal income tax
purposes because such entities are not qualified REIT subsidiaries. All taxable
income of these affiliated entities are subject to federal and state income
taxes, where applicable. See "Federal Income Tax Considerations."
The principal executive office of the Company is located at 4880 Cox Road,
Glen Allen, Virginia 23060, telephone number (804) 967-5800.
<PAGE>
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement for any
offering of Securities, the net proceeds from the sale of Securities offered by
the Company will be available for the general corporate purposes of the Company.
These general corporate purposes may include, without limitation, repayment of
maturing obligations, redemption of outstanding indebtedness, financing future
acquisitions (including acquisitions of loans and other related products),
capital expenditures and working capital. Pending any such uses, the Company may
invest the net proceeds from the sale of any Securities or may use them to
reduce short-term indebtedness. If the Company intends to use the net proceeds
from a sale of Securities to finance a significant acquisition, the related
Prospectus Supplements will describe the material terms of such acquisition.
If Debt Securities are issued to one or more persons in exchange for the
Company's outstanding debt securities, the accompanying Prospectus Supplement
related to such offering of Debt Securities will set forth the aggregate
principal amount of the outstanding debt securities which the Company will
receive in such exchange and which will cease to be outstanding, the residual
cash payment, if any, which the Company may receive from such persons or which
such persons may receive from the Company, as appropriate, the dates from which
the Company will pay interest accrued on the outstanding debt securities to be
exchanged for the offered Debt Securities and an estimate of the Company's
expenses in respect of such offering of the Debt Securities.
RATIO OF AVAILABLE EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges of the Company for the periods indicated:
Six
months
ended
June 30, Year ended December 31,
1996 1995 1994 1993 1992 1991
------------------------------------------
Ratio of earnings to 1.53:1 1.26:1 1.35:1 1.69:1 1.80:1 1.69:1
fixed charges (1)
(1) For purposes of computing the ratios, "earnings" consist of net income,
before income taxes, plus interest and debt expense and excludes fixed charges
related to CMOs issued by the Company which are nonrecourse to the Company. This
sum is divided by fixed charges, which consists of total interest and debt
expense, to determine the ratio of available earnings to fixed charges.
DESCRIPTION OF SECURITIES
The following is a brief description of the material terms of the Company's
securities which may be offered under this prospectus. This description does not
purport to be complete and is subject in all respects to applicable Virginia law
and to the provisions of the Company's Articles of Incorporation and Bylaws,
copies of which are on file with the Commission as described under "Available
Information" and are incorporated by reference herein.
General
The Company may offer under this Prospectus one or more of the following
categories of its Securities: (i) shares of its Common Stock, par value $0.01
per share; (ii) shares of its Preferred Stock, no par value, in one or more
series; (iii) Debt Securities, in one or more series, any series of which may be
either Senior Debt Securities or Subordinated Debt Securities; (iv) Common Stock
Warrants; (v) Preferred Stock Warrants; (vi) Debt Warrants; and (vii) any
combination of the foregoing, either individually or as units consisting of one
or more of the types of Securities described in clauses (i) through (vi). The
terms of any specific offering of Securities, including the terms of any units
offered, will be set forth in a Prospectus Supplement relating to such offering.
The Company's authorized equity capitalization consists of 50 million shares
of Common Stock, par value $0.01 per share and 50 million shares of Preferred
Stock, no par amount. Neither the holders of the Common Stock nor of any
Preferred Stock, now or hereafter authorized, will be entitled to any preemptive
or other subscription rights. The Common Stock is listed on the New York Stock
Exchange. The Company intends to list any additional shares of its Common Stock
which are issued and sold hereunder. The Company may list any series of its
Preferred Stock which are offered and sold hereunder, as described in the
Prospectus Supplement relating to such series of Preferred Stock.
Common Stock
As of July 31, 1996, there were 20,553,943 outstanding shares of Common Stock
held by 3,530 holders of record. Holders of Common Stock are entitled to receive
dividends when, as and if declared by the Board of Directors, out of funds
legally available therefor. Dividends on any outstanding shares of preferred
stock must be paid in full before payment of any dividends on the Common Stock.
Upon liquidation, dissolution or winding up of the Company, holders of Common
Stock are entitled to share ratably in assets available for distribution after
payment of all debts and other liabilities and subject to the prior rights of
any holders of any preferred stock then outstanding.
Holders of Common Stock are entitled to one vote per share with respect to
all matters submitted to a vote of shareholders and do not have cumulative
voting rights. Accordingly, holders of a majority of the Common Stock entitled
to vote in any election of directors may elect all of the directors standing for
election, subject to the voting rights (if any) of any series of preferred stock
that may be outstanding from time to time. The Company's Articles of
Incorporation and Bylaws contain no restrictions on the repurchase by the
Company of shares of the Common Stock. All the outstanding shares of Common
Stock are validly issued, fully paid and nonassessable.
Preferred Stock
As of July 31, 1996, there were 1,552,500 outstanding shares of Series A
Cumulative Convertible Preferred Stock, and 2,196,824 shares of Series B
Cumulative Convertible Preferred Stock (together, the Preferred Stock). Holders
of shares of the Series A and Series B Preferred Stock will be entitled to
receive, when and as declared by the Board of Directors of the Company, out of
funds of the Company legally available for payment thereof, cumulative cash
dividends payable in an amount per share equal to the greater of (i) $0.585 per
quarter or (ii) the cash dividends for such quarter declared on a number of
shares of the Company's Common Stock equal to the number of shares of Common
Stock (or portion thereof) into which a share of Preferred Stock is convertible.
Dividends will be cumulative, and unpaid accumulated dividends will not bear
interest.
The Board of Directors is authorized to designate with respect to each series
of Preferred Stock the number of shares in each such series, the dividend rates
and dates of payment, voluntary and involuntary liquidation preferences,
redemption prices, whether or not dividends shall be cumulative and, if
cumulative, the date or dates from which the same shall be cumulative, the
sinking fund provisions, if any, for redemption or purchase of shares, the
rights, if any, and the terms and conditions on which shares can be converted
into or exchanged for shares of another class or series, and the voting rights,
if any. As of the date hereof, there were no shares of Preferred Stock issued
and outstanding.
Any preferred shares issued will rank prior to the Common Stock as to
dividends and as to distributions in the event of liquidation, dissolution or
winding up of the Company. The ability of the Board of Directors to issue
Preferred Stock, while providing flexibility in connection with possible
acquisitions and other corporate purposes, could, among other things, adversely
affect the voting powers of holders of Common Stock.
<PAGE>
Securities Warrants
General
The Company may issue Securities Warrants for the Purchase of Common Stock,
Preferred Stock or Debt Securities. Such warrants are referred to herein as
Common Stock Warrants, Preferred Stock Warrants or Debt Warrants, as
appropriate. Securities Warrants may be issued independently or together with
any other Securities covered by the Registration Statement and offered by this
Prospectus and any accompanying Prospectus Supplement and may be attached to or
separate from such other Securities. Each series of Securities Warrants will be
issued under a separate agreement (each, a "Securities Warrant Agreement") to be
entered into between the Company and a bank or trust company, as agent (each, a
"Securities Warrant Agent"), all as set forth in the Prospectus Supplement
relating to the particular issue of offered Securities Warrants. Each issue of
Securities Warrants will be evidenced by warrant certificates (the "Securities
Warrant Certificates"). The Securities Warrant Agent will act solely as an agent
of the Company in connection with the Securities Warrant Certificates and will
not assume any obligation or relationship of agency or trust for or with any
holders of Securities Warrant Certificates or beneficial owners of Securities
Warrants. Copies of the definitive Securities Warrant Agreements and Securities
Warrant Certificates will be filed with the Commission by means of a Current
Report on Form 8-K in connection with the offering of such series of Securities
Warrants.
If Securities Warrants are offered, the applicable Prospectus Supplement will
describe the terms of such Securities Warrants, including in the case of
Securities Warrants for the purchase of Debt Securities, the following where
applicable: (i) the offering price; (ii) the currencies in which such Debt
Warrants are being offered; (iii) the designation, aggregate principal amount,
currencies, denominations and terms of the series of Debt Securities purchasable
upon exercise of such Debt Warrants; (iv) the designation and terms of any
Securities with which such Debt Warrants are being offered and the number of
such Debt Warrants being offered with each such Security; (v) the date on and
after which such Debt Warrants and the related Securities will be transferable
separately; (vi) the principal amount of the series of Debt Securities
purchasable upon exercise of each such Debt Warrant and the price at which the
currencies in which such principal amount of Debt Securities of such series may
be purchased upon such exercise; (vii) the date on which the right to exercise
such Debt Warrants shall commence and the date on which such right shall expire
(the "Expiration Date"); (viii) whether the Debt Warrant will be issued in
registered or bearer form; (ix) certain federal income tax consequences; and (x)
any other material terms of such Debt Warrants.
In the case of Securities Warrants for the purchase of Preferred Stock or
Common Stock, the applicable Prospectus Supplement will describe the terms of
such Securities Warrants, including the following where applicable: (i) the
offering price; (ii) the aggregate number of shares purchasable upon exercise of
such Securities Warrants, and in the case of Securities Warrants for Preferred
Stock, the designation, aggregate number and terms of the series of Preferred
Stock purchasable upon exercise of such Securities Warrants; (iii) the
designation and terms of the Securities with which such Securities Warrants are
being offered and the number of such Securities Warrants being offered with each
such Security; (iv) the date on and after which such Securities Warrants and the
related Securities will be transferable separately; (v) the number of shares of
Preferred Stock or shares of Common Stock purchasable upon exercise of each such
Securities Warrant and the price at which such number of shares of Preferred
Stock of such series or shares of Common Stock may be purchased upon such
exercise; (vi) the date on which the right to exercise such Securities Warrants
shall commence and the Expiration Date on which such right shall expire; (vii)
certain federal income tax consequences; and (viii) any other material terms of
such Securities Warrants.
Securities Warrant Certificates may be exchanged for new Securities Warrant
Certificates of different denominations, may (if in registered form) be
presented for registration of transfer, and may be exercised at the corporate
trust office of the appropriate Securities Warrant Agent or other office
indicated in the applicable Prospectus Supplement. Prior to the exercise of any
Securities Warrant to purchase Debt Securities, holders of such Debt Warrants
will not have any of the rights of Holders of the Debt Securities purchasable
upon such exercise, including the right to receive payments of principal,
premium, if any, or interest, if any, on the Debt Securities purchasable upon
such exercise or to enforce covenants in the applicable Indenture. Prior to the
exercise of any Securities Warrants to purchase Preferred Stock or Common Stock,
holders of such Preferred Stock Warrants or Common Stock Warrants will not have
any rights of holders of the respective Preferred Stock or Common Stock
purchasable upon such exercise, including the right to receive payments of
dividends, if any, on the Preferred Stock or Common Stock purchasable upon such
exercise or to exercise any applicable right to vote.
Exercise of Securities Warrants
Each Securities Warrant will entitle the holder thereof to purchase such
principal amount of Debt Securities or number of shares of Preferred Stock or
shares of Common Stock, as the case may be, at such exercise price as shall in
each case be set forth in, or calculable from, the Prospectus Supplement
relating to the offered Securities Warrants. After the close of business on the
Expiration Date (or such later date to which such Expiration Date may be
extended by the Company), unexercised Securities Warrants will become void.
Securities Warrants may be exercised by delivering to the Securities Warrant
Agent payment, as provided in the applicable Prospectus Supplement, of the
amount required to purchase the applicable Debt Securities, Preferred Stock or
Common Stock purchasable upon such exercise together with certain information
set forth on the reverse side of the Securities Warrant Certificate. Upon
receipt of such payment and the definitive Securities Warrant Certificates
properly completed and duly executed at the corporate trust office of the
Securities Warrant Agent or any other office indicated in the applicable
Prospectus Supplement, the Company will, as soon as practicable, issue and
deliver the applicable Debt Securities, Preferred Stock or Common Stock
purchasable upon such exercise. If fewer than all of the Securities Warrants
represented by such Securities Warrant Certificate are exercised, a new
Securities Warrant Certificate will be issued for the remaining amount of
Securities Warrants.
Amendments and Supplements to Securities Warrant Agreements
Each Securities Warrant Agreement may be amended or supplemented without the
consent of the holders of the Securities Warrants issued thereunder to effect
changes that are not inconsistent with the provisions of the Securities Warrants
and that do not adversely affect the interests of the holders of the Securities
Warrants.
Common Stock Warrant Adjustments
Unless otherwise indicated in the applicable Prospectus Supplement, the
exercise price of, and the number of shares of Common Stock covered by, a Common
Stock Warrant are subject to adjustment in certain events, including: (i) the
issuance of Common Stock as a dividend or distribution on the Common Stock; (ii)
subdivisions and combinations of the Common Stock; (iii) the issuance to all
holders of Common Stock of certain rights or warrants entitling them to
subscribe for or purchase Common Stock within the number of days, specified in
the applicable Prospectus Supplement, after the date fixed for the determination
of the stockholders entitled to receive such rights or warrants, at less than
the current market price (as defined in the Securities Warrant Agreement
governing such series of Common Stock Warrants); and (iv) the distribution to
all holders of Common Stock of evidences of indebtedness or assets of the
Company (excluding certain cash dividends and distributions described below).
The terms of any such adjustment will be specified in the related Prospectus
Supplement for such Common Stock Warrants.
No Rights as Stockholders
Holders of Common Stock Warrants will not be entitled by virtue of being such
holders, to vote, to consent, to receive dividends, to receive notice as
stockholders with respect to any meeting of stockholders for the election of
directors of the Company of any other matter, or to exercise any rights
whatsoever as stockholders of the Company.
<PAGE>
Existing Securities Holders
The Company may issue, as a dividend at no cost, such Securities Warrants to
holders of record of the Company's Securities or any class thereof on the
applicable record date. If Securities Warrants are so issued to existing holders
of Securities, the applicable Prospectus Supplement will describe, in addition
to the terms of the Securities Warrants and the Securities issuable upon
exercise thereof, the provisions, if any, for a holder of such Securities
Warrants who validly exercises all Securities Warrants issued to such holder to
subscribe for unsubscribed Securities (issuable pursuant to unexercised
Securities Warrants issued to other holders) to the extent such Securities
Warrants have not been exercised.
Debt Securities
General
The Company may offer one or more series of its Debt Securities representing
general, unsecured obligations of the Company. Any series of Debt Securities may
either (1) rank prior to all subordinated indebtedness of the Company and pari
passu with all other unsecured indebtedness of the Company outstanding on the
date of the issuance of such Debt Securities ("Senior Debt Securities") or (2)
be subordinated in light of payments to certain other obligations of the Company
outstanding on the date of issuance ("Subordinated Debt Securities"). In this
Prospectus, any indenture relating to Subordinated Debt Securities is referred
to as a "Subordinated Indenture" and the term "Indenture" refers to Senior and
Subordinated Indentures, collectively.
The aggregate principal amount of Debt Securities which may be issued by the
Company will be set from time to time by the Board of Directors. Further, the
amount of Debt Securities which may be offered by this Prospectus will be
subject to the aggregate initial offering price of Securities specified in the
Registration Statement. Each Indenture will permit the issuance of an unlimited
amount of Debt Securities thereunder from time to time in one or more series.
Additional debt securities may be issued pursuant to another registration
statement for issuance under any Indenture. Any offering of Debt Securities may
be denominated in any currency composite designated by the Company.
The following description of the Debt Securities which may be offered by the
Company hereunder describes certain general terms and provisions of the Debt
Securities to which any Prospectus Supplement may relate. The particular terms
and provisions of the Debt Securities and the extent to which the following
general provisions may apply to such offering of Debt Securities will be
described in the accompanying Prospectus Supplement relating to such offering of
Debt Securities. The following descriptions of certain provisions of the
Indentures do not purport to be complete and are qualified in their entirety by
reference to the form of Senior Indenture or Subordinated Indenture, as
appropriate. The definitive Indenture relating to each offering of Debt
Securities will be filed with the Commission by means of a Current Report on
Form 8-K in connection with the offering of such Debt Securities. All article
and section references appearing herein are references to the articles and
sections of the appropriate Indenture and, unless defined herein, all
capitalized terms have the respective meanings specified in the appropriate
Indenture.
The Prospectus Supplement relating to any offering of Debt Securities will
set forth the following terms and other information to the extent applicable
with respect to the Debt Securities being offered thereby; (1) the designation,
aggregate principal amount, authorized denominations and priority of such Debt
Securities; (2) the price (expressed as a percentage of the aggregate principal
amount of such Debt Securities) at which such Debt Securities will be issued;
(3) the currency or currency units for which the Debt Securities may be
purchased and in which the principal of, and any interest on such Debt
Securities may be payable; (4) the stated maturity of such Debt Securities or
means by which a maturity date may be determined; (5) the rate at which such
Debt Securities will bear interest or the method by which such rate of interest
is to be calculated (which rate may be zero in the case of certain Debt
Securities issued at a price representing a discount from the principal amount
payable at maturity); (6) the periods during which such interest will accrue,
the dates on which such interest will be payable (or the method by which such
dates may be determined, including without limitation that such rate of interest
may bear an inverse relationship to some index or standard) and the
circumstances under which the Company may defer payment of interest; (7)
redemption provisions, including any optional redemption, required repayment or
mandatory sinking fund provisions; (8) any terms by which such Debt Securities
may be convertible into shares of the Company's Common Stock, Preferred Stock or
any other Securities of the Company, including a description of the Securities
into which any such Debt Securities are convertible; (9) any terms by which the
principal of such Debt Securities will be exchangeable for any other Securities
of the Company; (10) whether such Debt Securities are issuable as definitive
Fully-Registered Securities (as defined below) or Global Securities and, if
Global Securities are to be issued, the terms thereof, including the manner in
which interest thereon will be payable to the beneficial owners thereof and
other book-entry procedures, any terms for exchange of such Global Securities
into definitive Fully-Registered Securities (as defined below) and any
provisions relating to the issuance of a temporary Global Security; (11) any
additional restrictive covenants included for the benefit of the holders of such
Debt Securities; (12) any additional events of default provided with respect to
such Debt Securities; (13) the terms of any Securities being offered together
with such Debt Securities, (14) whether such Debt Securities represent general,
unsecured obligations of the Company and (15) any other material terms of such
Debt Securities.
If any of the Debt Securities are sold for foreign currency units, the
restrictions, elections, tax consequences, specific terms, and other information
with respect to such issue of Debt Securities and such currencies or currency
units will be set forth in the Prospectus Supplement relating to thereto.
Indenture Provisions
The Debt Securities may be issued in definitive, fully registered form
without coupons ("Fully Registered Securities"), or in a form registered as to
principal only with coupons or in bearer form with coupons. Unless otherwise
specified in the Prospectus Supplement, the Debt Securities will only be Fully
Registered Securities. In addition, Debt Securities of a series may be issuable
in the form of one or more Global Securities, which will be denominated in an
amount equal to all or a portion of the aggregate principal amount of such Debt
Securities.
See "Global Securities" below.
One or more series of Debt Securities may be sold at a substantial discount
below their stated principal amount, bearing no interest or interest at a rate
that at the time of issuance is below market rates. Federal income tax
consequences and special considerations applicable to any such series will be
described in the Prospectus Supplement relating thereto.
Unless otherwise indicated in the related Prospectus Supplement for a series
of Debt Securities, there are no provisions contained in the Indentures that
would afford holders of Debt Securities protection in the event of a highly
leveraged transaction involving the Company.
Global Securities. Any series of Debt Securities may be issued in whole or in
part in the form of one or more Global Securities that will be deposited with,
or on behalf of, the Depositary identified in the Prospectus Supplement relating
to such series. Unless and until it is exchanged in whole or in part for Debt
Securities in individually certificated form, a Global Security may not be
transferred except as a whole to a nominee of the Depositary for such Global
Security, or by a nominee for the Depositary to the Depositary, or to a
successor of the Depositary or a nominee of such successor.
The specific terms of the Depositary arrangement with respect to any series
of Debt Securities and the rights of, and limitations on, owners of beneficial
interests in a Global Security representing all or a portion of a series of Debt
Securities will be described in the Prospectus Supplement relating to such
series.
Modification of Indentures. Unless otherwise specified in the related
Prospectus Supplement, each Indenture, the rights and obligations of the
Company, and the rights of the Holders may be modified with respect to one or
more series of Debt Securities issued under such Indenture with the consent of
the Holders of not less than a majority in principal amount of the outstanding
Debt Securities of each such series affected by the modification or amendment.
No modification of the terms of payment of principal or interest, and no
modification reducing the percentage required for modification, is effective
against any Holder without his consent.
Events of Default. Unless otherwise specified in the related Prospectus
Supplement, each Indenture, will provide that the following are Events of
Default with respect to any series of Debt Securities issued thereunder: (1)
default in the payment of the principal of any Debt Security of such series when
and as the same shall be due and payable; (2) default in making a sinking fund
payment, if any, when and as the same shall be due and payable by the terms of
the Debt Securities of such series; (3) default for 30 days in payment of any
installment of interest on any Debt Securities of such series; (4) default for a
specified number of days after notice in the performance of any other covenants
in respect of the Debt Securities of such series contained in the Indenture; (5)
certain events of bankruptcy, insolvency or reorganization, or court appointment
of a receiver, liquidator, or trustee of the Company or its property; and (6)
any other Event of Default provided in the applicable supplemental indenture
under which such series of Debt Securities is issued. An Event of Default with
respect to a particular series of Debt Securities issued under an Indenture will
not necessarily constitute an Event of Default with respect to any other series
of Debt Securities issued under such Indenture. The trustee under an Indenture
may withhold notice to the Holders of any series of Debt Securities of any
default with respect to such series (except in the payment of principal or
interest) if it considers such withholding in the interests of such Holders.
If an Event of Default with respect to any series of Debt Securities shall
have occurred and be continuing, the appropriate trustee under the Indenture or
the Holders of not less than 25% in the aggregate principal amount of the Debt
Securities of such series may declare the principal, or in the case of
discounted Debt Securities, such portion thereof as may be described in the
Prospectus Supplement, of all the Debt Securities of such series to be due and
payable immediately.
Within four months after the close of each fiscal year, the Company will file
with each trustee under the indentures a certificate, signed by specified
officers, stating whether or not such officers have knowledge of any default,
and, if so, specifying each such default and the nature thereof.
Subject to provisions relating to its duties in case of default, a trustee
under the Indentures shall be under no obligation to exercise any of its rights
or powers under the applicable Indenture at the request, order, or direction of
any Holder, unless such Holders shall have offered to such trustee reasonable
indemnity. Subject to such provisions for indemnification, the Holders of a
majority in principal amount of the Debt Securities of any series may direct the
time, method, and place of conducting any proceeding for any remedy available to
the appropriate trustee, or exercising any trust or power conferred upon such
trustee, with respect to the Debt Securities of such series.
Payment and Transfer. Principal of, and premium and interest, if any, on,
fully Registered Securities will be payable at the Place of Payment as specified
in the applicable Prospectus Supplement, provided that payment of interest, if
any, may be made, unless otherwise provided in the applicable Prospectus
Supplement, by check mailed to the person in whose names such Debt Securities
are registered at the close of business on the day or days specified in the
Prospectus Supplement or transfer to an account maintained by the payee located
inside the United States. The principal of, and premium and interest, if any,
on, Debt Securities in other forms will be payable in the manner and at the
place or places as designated by the Company and specified in the applicable
Prospectus Supplement. Unless otherwise provided in the Prospectus Supplement,
payment of interest may be made, in the case of Bearer Security by transfer to
an account maintained by the payee with a bank outside the United States.
Fully Registered Securities may be transferred or exchanged at the corporate
trust office of the trustee or any other office or agency maintained by the
Company for such purposes, subject to the limitations in the applicable
Indenture, without the payment of any service charge except for any tax or
governmental charge incidental thereto. Provisions with respect to the transfer
and exchange of Debt Securities in other forms will be set forth in the
applicable Prospectus Supplement.
Defeasance. The Indentures provide that each will cease to be of further
effect with respect to a certain series of Debt Securities (except for certain
obligations to register the transfer or exchange of Securities) if (a) the
Company delivers to the Trustee for the Securities of such series for
cancellation of all Securities of all series and the coupons, if any,
appertaining thereto, or (b) if the Company deposits into trust with the Trustee
money or United States government obligations, that, through the payment of
interest thereon and principal thereof in accordance with their terms, will
provide money in an amount sufficient to pay all of the principal of, and
interest on, the Securities of such series on the dates such payments are due or
redeemable in accordance with the terms of such Securities.
Certain Charter and Virginia Law Provisions
Unless the amendment effects an extraordinary transaction, the Articles of
Incorporation of the Company may be amended with the approval of the holders of
a majority of the outstanding shares of Common Stock, subject to the voting
rights (if any) of any series of Preferred Stock that may be outstanding from
time to time. Amendments that effect extraordinary transactions, which include
mergers, share exchanges, a sale of substantially all the assets of the Company,
the dissolution of the Company or the share ownership restrictions described
below, require the approval of the holders of more than two-thirds of the
outstanding shares of Common Stock (subject to any voting rights of any series
of preferred stock outstanding).
Special meetings of the shareholders of the Company may be called by a
majority of the Board of Directors, a majority of the unaffiliated directors,
the Chairman of the Board, the President or generally by shareholders holding at
least 25% of the outstanding shares of Common Stock entitled to be voted at the
meeting.
Virginia law and the Articles of Incorporation of the Company provide that
the directors and officers of the Company shall have no liability to the Company
or its shareholders in certain actions brought by or on behalf of shareholders
of the Company unless such officer or director has engaged in willful misconduct
or violations of federal or state securities laws and certain other activities.
Repurchase of Shares and Restrictions on Transfer
Two of the requirements for qualification for the tax benefits accorded a
REIT under the Internal Revenue Code of 1986, as amended ("the Code"), are that
(i) during the last half of each taxable year not more than 50% of the
outstanding shares may be owned directly or indirectly by five or fewer
individuals and (ii) there must be at least 100 shareholders for at least 335
days in each taxable year. Those requirements apply for all taxable years after
the year in which a REIT elects REIT status.
The Articles of Incorporation prohibit any person or group of persons from
acquiring or holding, directly or indirectly, ownership of a number of shares of
Common Stock in excess of 9.8% of the outstanding shares. Shares of Common Stock
owned by a person or group of persons in excess of such amounts are referred to
as "Excess Shares." For this purpose the term "ownership" is defined in
accordance with the Code, the constructive ownership provisions of Section 544
of the Code and Rule 13d-3 promulgated under the Exchange Act, and the term
"group" is defined to have the same meaning as that term has for purposes of
Section 13(d)(3) of the Exchange Act. Accordingly, shares of Common Stock owned
or deemed to be owned by a person who individually owns less than 9.8% of the
shares outstanding may nevertheless be Excess Shares.
For purposes of determining whether a person holds Excess Shares, a person or
group will be treated as owning not only shares of Common Stock actually or
beneficially owned, but also any shares of Common Stock attributed to such
person or group under the constructive ownership provisions contained in Section
544 of the Code.
The Articles of Incorporation provide that in the event any person acquires
Excess Shares, each Excess Share may be redeemed at any time by the Company at
the closing price of a share of Common Stock on the New York Stock Exchange on
the last business day prior to the redemption date. From and after the date
fixed for redemption of Excess Shares, such shares shall cease to be entitled to
any distribution and other benefits, except only the right to payment of the
redemption price for such shares.
Under the Articles of Incorporation any acquisition of shares that would
result in failure to qualify as a REIT under the Code is void to the fullest
extent permitted by law, and the Board of Directors is authorized to refuse to
transfer shares to a person if, as a result of the transfer, that person would
own Excess Shares. Prior to any transfer or transaction which, if consummated,
would cause a shareholder to own Excess Shares, and in any event upon demand by
the Board of Directors, a shareholder is required to file with the Company an
affidavit setting forth, as to that shareholder, the information required to be
reported in returns filed by shareholders under Treasury Regulation Section
1.857-9 under the Code and in reports filed under Section 13(d) of the Exchange
Act. Additionally, each proposed transferee of shares of Common Stock, upon
demand of the Board of Directors, also may be required to file a statement or
affidavit with the Company setting forth the number of shares already owned by
the transferee and any related person.
The Common Stock may not be purchased by nonresident aliens or foreign
entities. In addition, the Common Stock may not be held by "disqualified
organizations" within the meaning of Section 860E(e)(5) of the Code, which
generally includes governmental entities and other tax-exempt persons not
subject to the tax on unrelated business taxable income.
Transfer Agent and Registrar
The transfer agent and the registrar for the Company's Common Stock
is First Union National Bank of North Carolina, Charlotte, North
Carolina.
PLAN OF DISTRIBUTION
The Company may sell Securities (1) through underwriters or dealers, (2)
directly to one or more purchasers, or (3) through agents designated from time
to time.
The distribution of Securities may be effected from time to time in one or
more transactions at a fixed price or prices, which may be changed, or at market
prices prevailing at the time of the sale, or at prices related to such
prevailing market prices or at negotiated prices. The Prospectus Supplement will
describe the method of distribution of the Securities offered.
If underwriters are used in the sale in a firm commitment underwriting, the
Securities will be acquired by the underwriters for their own account and may be
resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The obligations of the underwriters to purchase the
Securities will be subject to certain conditions precedent, and the underwriters
will be obligated to purchase all the Securities of the series offered by the
Company's Prospectus Supplement if any of the Securities are purchased. Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
Only underwriters named in the Prospectus Supplement are deemed to be
underwriting in connection with the Securities in respect of which such
Prospectus Supplement and this Prospectus are delivered and any firms not named
therein are not parties to the underwriting agreement in respect of such
Securities and will have no direct or indirect participation in the underwriting
thereof, although they may participate in the discussion of such Securities
under circumstances where they may be entitled to a dealer's commission.
Securities may also be sold directly by the Company or through agents
designated by the Company from time to time. The Securities offered hereby may
also be sold from time to time through agents for the Company by means of (i)
ordinary broker's transactions, (ii) block transactions (which may involve
crosses) in accordance with the rules of the Exchanges, in which such agents may
attempt to sell Securities as agent but may purchase and resell all or a portion
of the blocks as principal, (iii) "fixed price offerings" in accordance with the
rules of the Exchanges, or (iv) a combination of any such methods of sale. In
connection therewith, distributors' or sellers' commissions may be paid or
allowed which will not exceed those customary in the types of transactions
involved. A Prospectus Supplement will set forth the terms of any such "fixed
price offering," "exchange distributions" and "special offerings." If the agent
purchases Securities as principal, it may sell such Securities by any of the
methods described above. Any such agent involved in the offering and sale of
Securities in respect of which this Prospectus is delivered will be named, and
any commissions payable by the Company to such agent set forth in the Prospectus
Supplement. Unless otherwise indicated herein or in the Prospectus Supplement,
any such agent is acting on a best-efforts basis for the period of its
appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters, or dealers to solicit offers by certain institutional
investors to purchase Securities providing for payment and delivery on a future
date specified in the Prospectus Supplement. There may be limitations on the
minimum amount which may be purchased by any such institutional investor or on
the portion of the aggregate principal amount of the particular Securities which
may be sold pursuant to such arrangements. Institutional investors to which such
offers may be made, when authorized, include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions, and such other institutions as may be approved by the
Company. The obligations of any such purchasers pursuant to such delayed
delivery and payment arrangements will not be subject to any conditions except
(1) the purchase by an institution of the particular Securities shall not at the
time of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject, and (2) if the particular
Securities are being sold to underwriters, the Company shall have sold to such
underwriters the total principal amount of such Securities less the principal
amount thereof covered by such arrangements. Underwriters will not have any
responsibility in respect of the validity of such arrangements or the
performance of the Company or such institutional investors thereunder.
Agents, underwriters and dealers may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act of 1933, or to
contribution with respect to payments which the agents or underwriters may be
required to make in respect thereof. Agents, underwriters and dealers may engage
in transactions with, or perform services for, the Company in the ordinary
course of business.
If an agent or agents are utilized in the sale, such persons may be deemed to
be "underwriters", and any documents, commissions or concessions received by
them from the Company or any profit on the resale of Securities by them may be
deemed to be underwriting discounts and commissions under the Securities Act.
Any such person who may be deemed to be an underwriter and any such compensation
received from the Company will be described in the Prospectus Supplement.
FEDERAL INCOME TAX CONSIDERATIONS
Federal Income Taxation of Shareholders
The following section is a general summary of certain federal income tax
aspects of an investment in the Company that should be considered by prospective
shareholders. The discussion in this section is based on existing provisions of
the Code, existing and proposed Treasury regulations, existing court decisions,
and existing rulings and other administrative interpretations. There can be no
assurance that future Code provisions or other legal authorities will not alter
significantly the tax consequences described below. No rulings have been
obtained from the Internal Revenue Service concerning any of the matters
discussed in this section.
The Company and its qualified REIT subsidiaries (collectively "Resource
REIT") believes it has complied, and intends to comply in the future, with the
requirements for qualification as a REIT under the Code. The federal income tax
provisions governing REITs and their shareholders are extremely complicated, and
what follows is only a very brief and general summary of the most important
considerations for shareholders. ACCORDINGLY, PROSPECTIVE INVESTORS ARE URGED TO
CONSULT THEIR OWN TAX ADVISORS CONCERNING THE FEDERAL, STATE AND LOCAL TAX
CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF SHARES OF THE
COMPANY.
General Considerations
Resource REIT believes it has complied, and intends to comply in the future,
with the requirements for qualification as a REIT under the Code. Venable,
Baetjer and Howard, counsel to the Company, has given the Company its opinion to
the effect that, as of the date hereof and based on the various representations
made to it by the Company with respect to its income, assets, and activities
since its inception, and subject to certain assumptions and qualifications
stated in such opinion, (i) Resource REIT qualifies for treatment as a REIT
under the Code and (ii) the organization and contemplated method of operation of
Resource REIT are such as to enable it to continue so to qualify in subsequent
years, provided the various operational requirements of REIT status are
satisfied in those years. However, investors should be aware that opinions of
counsel are not binding on the courts or the Internal Revenue Service. To the
extent that Resource REIT qualifies as a REIT for federal income tax purposes,
it generally will not be subject to federal income tax on the amount of its
income or gain that is distributed to shareholders. However, certain
nonqualified REIT subsidiaries of the Company, which operate the Company's
production operations and are included in the Company's consolidated GAAP
financial statements, are not qualified REIT subsidiaries. Consequently, all of
the nonqualified REIT subsidiarys' taxable income is subject to federal and
state income taxes.
The REIT rules generally require that a REIT invest primarily in real
estate-related assets, its activities be passive rather than active, and it
distribute annually to its shareholders a high percentage of its taxable income.
The Company could be subject to a number of taxes if it failed to satisfy those
rules or if it acquired certain types of income-producing real property through
foreclosure. Although no complete assurances can be given, the Company does not
expect that it will be subject to material amounts of such taxes.
Resource REIT's failure to satisfy certain Code requirements could cause the
Company to lose its status as a REIT. If Resource REIT failed to qualify as a
REIT for any taxable year, it would be subject to federal income tax (including
any applicable minimum tax) at regular corporate rates and would not receive
deductions for dividends paid to shareholders. As a result, the amount of
after-tax earnings available for distribution to shareholders would decrease
substantially. While the Board of Directors intends to cause Resource REIT to
operate in a manner that will enable it to qualify as a REIT in all future
taxable years, there can be no certainty that such intention will be realized
because, among other things, qualification hinges on the conduct of the business
of Resource REIT.
Taxation of Distributions by the Company
Assuming that Resource REIT maintains its status as a REIT, any distributions
that are properly designated as "capital gain dividends" generally will be taxed
to shareholders as long-term capital gains, regardless of how long a shareholder
has owned his shares. Any other distributions out of Resource REIT current or
accumulated earnings and profits will be dividends taxable as ordinary income.
Shareholders will not be entitled to dividends-received deductions with respect
to any dividends paid by Resource REIT. Distributions in excess of Resource
REIT's current or accumulated earnings and profits will be treated as tax-free
returns of capital, to the extent of the shareholder's basis in his shares of
Common Stock, and as gain from the disposition of shares, to the extent they
exceed such basis. Shareholders may not include on their own returns any of
Resource REIT ordinary or capital losses. Distributions to shareholders
attributable to "excess inclusion income" of Resource REIT will be characterized
as excess inclusion income in the hands of the shareholders. Excess inclusion
income can arise from Resource REIT's holdings of residual interests in real
estate mortgage investment conduits and in certain other types of
mortgage-backed security structures created after 1991. Excess inclusion income
constitutes unrelated business taxable income ("UBTI") for tax-exempt entities
(including employee benefit plans and individual retirement accounts), and it
may not be offset by current deductions or net operating loss carryovers. In the
unlikely event that the Company's excess inclusion income is greater than its
taxable income, the Company's distribution would be based on the Company's
excess inclusion income. In 1995 the Company's excess inclusion was
approximately 31% of its taxable income. Although Resource REIT itself would be
subject to a tax on any excess inclusion income that would be allocable to a
"disqualified organization" holding its shares, Resource REIT's by-laws provide
that disqualified organizations are ineligible to hold Resource REIT's shares.
Dividends paid by Resource REIT to organizations that generally are exempt
from federal income tax under Section 501(a) of the Code should not be taxable
to them as UBTI except to the extent that (i) purchase of Shares of Resource
REIT was financed by "acquisition indebtedness," (ii) such dividends constitute
excess inclusion income or (iii) with respect to the trusts owning more than 10%
of the shares of Resource REIT, under certain circumstances a portion of such
dividend is attributable to UBTI. Because an investment in Resource REIT may
give rise to UBTI or trigger the filing of an income tax return that otherwise
would not be required, tax-exempt organizations should give careful
consideration to whether an investment in Resource REIT is prudent.
Taxation of Dispositions of Shares of the Common Stock
In general, any gain or loss realized upon a taxable disposition of shares
will be treated as long-term capital gain or loss if the shares have been held
for more than twelve months and otherwise as short-term capital gain or loss.
However, any loss realized upon a taxable disposition of shares held for six
months or less will be treated as long-term capital loss to the extent of any
capital gain dividends received with respect to such shares. All or a portion of
any loss realized upon a taxable disposition of Shares of Resource REIT may be
disallowed if other Shares of Resource REIT are purchased (under a dividend
reinvestment plan or otherwise) within 30 days before or after the disposition.
Backup Withholding
Resource REIT generally is required to withhold and remit to the United
States Treasury 31% of the dividends paid to any shareholder who (i) fails to
furnish Resource REIT with a correct taxpayer identification number, (ii) has
notified Resource REIT that a shareholder has underreported dividend or interest
income to the Internal Revenue Service, or (iii) under certain circumstances,
fails to certify to Resource REIT that he is not subject to backup withholding.
An individual's taxpayer identification number is his social security number.
Debt Securities
The Debt Securities will be taxable as indebtedness. Interest and original
issue discount, if any, on a Debt Security will be treated as ordinary income to
a holder. Any special tax considerations applicable to a Debt Security will be
described in the related Prospectus Supplement.
Exercise of Securities Warrants
Upon a holder's exercise of a Securities Warrant, the holder will, in
general, (i) not recognize any income, gain or loss for federal income tax
purposes, (ii) receive an initial tax basis in the Security received equal to
the sum of the holder's tax basis in the exercised Securities Warrant and the
exercise price paid for such Security and (iii) have a holding period for the
Security received beginning on the date of exercise.
Sale or Expiration of Securities Warrants
If a holder of a Securities Warrant sells or otherwise disposes of such
Securities Warrant (other than by its exercise), the holder generally will
recognize capital gain or loss (long term capital gain or loss if the holder's
holding period for the Securities Warrant exceeds twelve months on the date of
disposition; otherwise, short term capital gain or loss) equal to the difference
between (i) the cash and fair market value of other property received and (ii)
the holder's tax basis (on the date of disposition) in the Securities Warrant
sold. Such a holder generally will recognize a capital loss upon the expiration
of an unexercised Securities Warrant equal to the holder's tax basis in the
Securities Warrant on the expiration date.
State and Local Tax Considerations
State and local tax laws may not correspond to the federal income tax
principles discussed in this section. Accordingly, prospective investors should
consult their tax advisers concerning the state and local tax consequences of an
investment in Resource REIT.
LEGAL OPINIONS
The validity of the Shares will be passed upon for the Company by Venable,
Baetjer and Howard LLP, Baltimore, Maryland.
EXPERTS
The consolidated financial statements and schedules of the Company
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1995, have been audited by KPMG Peat Marwick LLP, independent auditors, as
set forth in their reports included therein, and incorporated herein by
reference. Such financial statements and schedules have been incorporated by
reference herein in reliance upon the reports of that firm and upon the
authority of that firm as experts in auditing and accounting.
<PAGE>
- --------------------------------------------------------------------------
II-5
- --------------------------------------------------------------------------
II-1
Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses, other than underwriting discounts and commissions, in
connection with the offerings of Securities are:
Registration Fee............................. $155,172
Legal Fees and Expenses......................
*
Accounting Fees and Expenses.................
*
Blue Sky Qualification and Expenses
including Counsel Fees....................... *
New York Stock Exchange Listing Fee..........
*
Printing and Engraving Expenses..............
*
Transfer Agent and Registrar Fees............
*
Miscellaneous................................
*
-------
TOTAL
$
*
=======
- ----------------
* To be supplied by amendment or incorporated by reference to periodic reports
filed by the Company pursuant to Section 13 of the Securities Exchange Act of
1934.
Item 15. Indemnification of Directors and Officers
The Virginia Stock Corporation Act and the Company's Articles of
Incorporation provide for indemnification of the Company's directors and
officers in a variety of circumstances, which may include liabilities under the
Securities Act of 1933. The Company's Articles of Incorporation require
indemnification of directors and officers with respect to certain liabilities,
expenses, and other amounts imposed on them by reason of having been a director
or officer, except in the case of willful misconduct or a knowing violation of
criminal law. The Company also carries insurance on behalf of directors,
officers, employees or agents which may cover liabilities under the Securities
Act of 1933. In addition, the Virginia Stock Corporation Act and the Company's
Articles of Incorporation eliminate the liability of a director or officer of
the Company in a shareholder or derivative proceeding except in the event of
willful misconduct or a knowing violation of the criminal law or of federal or
state securities laws.
The Underwriting Agreement filed as Exhibit 1.1 hereto contains certain
provisions relating to the indemnification of the Company's directors, officers
and control persons.
Item 16. Exhibits
*1.1 - Form of Underwriting Agreement
4.1 - Form of Common Stock Certificate (incorporated herein by
reference to Amendment No. 3 of the Company's Registration
Statement on Form S-11 (No. 33-19261) dated February 10, 1988
4.2 - Articles of Incorporation (incorporated herein by reference to the
Company's Registration Statement on Form S-3 (No.
33-53494), dated October 20, 1992)
*4.3 - Specimen of Articles Supplementary relating to Preferred Stock
4.4 - Form of Senior Indenture (incorporated herein by reference to
Amendment No.1 of the Company's Registration Statement on Form
S-3 (No. 33-50705), dated January 28, 1994)
4.5 - Form of Subordinated Indenture (incorporated herein by
reference to Amendment No.1 of the Company's Registration
Statement on Form S-3 (No. 33-50705), dated January 28, 1994)
*4.6 - Form of Common Stock Warrant Agreement
*4.7 - Form of Preferred Stock Warrant Agreement
*4.8 - Form of Debt Warrant Agreement
5.1 - Opinion of Venable, Baetjer and Howard, LLP
*8.1 - Tax Opinion of Venable, Baetjer and Howard, LLP
12.1 - Ratio of Available Earnings to Fixed Charges
23.1 - Consent of KPMG Peat Marwick, LLP
23.2 - Consent of Venable, Baetjer and Howard, LLP (contained in
Exhibits 5.1 and 8.1)
24.1 - Power of Attorney relating to amendments (included in
signature pages)
*25.1 - Statement of Eligibility of Trustee on Form T-1 (to be
filed under separate cover)
* To be filed by amendment or incorporated by reference to periodic reports
filed by the Company pursuant to Section 13 of the Securities Exchange Act of
1934.
<PAGE>
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from the registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b)The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) of 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c)Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the response to Item 15, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefor, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes that:
(1)For the purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b) (1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of
this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
County of Henrico, and the State of Virginia, on August 23, 1996.
RESOURCE MORTGAGE CAPITAL, INC.
Thomas H.Potts
Thomas H. Potts, President
(Principal Executive Officer)
Each person whose signature appears below does hereby make, constitute and
appoint Thomas H. Potts and Lynn K. Geurin, and each of them, his/her true and
lawful attorney with full power of substitution to execute, deliver and file
with the Securities and Exchange Commission, for and on his/her behalf, and in
his/her capacity or capacities as stated below, any amendment (including
post-effective amendments) to the Registration Statement with all exhibits
thereto, making such changes in the Registration Statement as the Registrant
deems appropriate.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities indicated
on August 23, 1996.
Signature Capacity
/s/ Thomas H. Potts President and Director
Thomas H. Potts (Principal Executive Officer)
/s/ Lynn K. Geurin Executive Vice President,
Lynn K. Geurin (Principal Financial and
Accounting Officer)
/s/ J. Sidney Davenport, IV Director
J. Sidney Davenport, IV
/s/ Richard C. Leone Director
Richard C. Leone
/s/ Paul S. Reid Director
Paul S. Reid
/s/ Donald B. Vaden Director
Donald B. Vaden
<PAGE>
EXHIBIT INDEX
Exhibit Sequentially
Numbered Page
5.1 Opinion of Venable, Baetjer and Howard, LLP 1
12.1 Ratio of Available Earnings to Fixed 4
Charges............................
23.1 Consent of KPMG Peat Marwick, LLP.... 5
<PAGE>
EX 5.1
..... August 23, 1996
Resource Mortgage Capital, Inc.
4880 Cox Road
Glen Allen, Virginia 23060
Re: $450,000,000 Aggregate Offering price of
Securities of Resource Mortgage Capital, Inc.
Ladies and Gentlemen:
We are acting as counsel for Resource Mortgage Capital, Inc. (the
"Company") in connection with the registration statement on Form S-3 (the
"Registration Statement") being filed by you with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended, (the
"Act") relating to the offering from time to time, as set forth in the
prospectus contained in the Registration Statement (the "Prospectus") and as to
be set forth in one or more supplements to the Prospectus (each a "Prospectus
supplement"), by the Company of up to $450,000,000 aggregate offering price of
(i) one or more series of debt securities (the "Debt Securities"), (ii) one or
more series of shares of preferred stock, no par value (the "Preferred Stock"),
(iii) shares of common stock, par value $.01 per share (the "Common Stock"), or
(iv) warrants to purchase Common Stock, Preferred Stock or Debt Securities. The
Debt Securities, Preferred Stock, Common Stock and Warrants are collectively
referred to as the "Securities." Any Debt Securities and Preferred Stock may be
convertible into shares of Common Stock,.
The Debt Securities will be issued pursuant to Indentures (the
"Indentures") between the Company and a financial institution ("Trustee") to be
identified therein. The forms of the Indentures are included as exhibits to the
Registration Statement. The Warrants will be issued under one or more warrant
agreements to be filed as an exhibit to the Registration Statement at or prior
to such time as the Prospectus Supplement relating to the Warrants to be offered
is filed with the Commission (each, a "Warrant Agreement"). Each Warrant
Agreement will be between the Company and a financial institution identified
therein as warrant agent (each, a "Warrant Agent").
In our capacity as your counsel in connection with such registration,
we are familiar with the proceedings taken and proposed to be taken by the
Company in connection with the authorization and issuance of the Securities and
for the purposes of this opinion, have assumed such proceedings will be timely
completed in the manner presently proposed. In addition, we have made such legal
and factual examinations and inquiries, including an examination of originals or
copies, certified or otherwise identified to our satisfaction, of such
documents, corporate records and instruments, as we have deemed necessary or
appropriate for purposes of this opinion.
In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, and
the conformity to authentic original documents of all documents submitted to us
as copies. We have obtained and relied upon such certificates and assurances
from public officials we have deemed necessary.
Our opinion is limited to the federal laws of the United States and
the laws of the State of Virginia, and we express no opinion with respect to the
laws of any other jurisdiction.
Subject to the foregoing and the other matters set forth herein, it
is our opinion that, as of the date hereof:
1....When appropriate corporate action by the Company has been taken
by the Company to authorize the Indentures, the Indentures, when duly executed
and delivered by the Company, will be legally valid and binding agreements of
the Company, enforceable against the Company in accordance with their terms.
2....When appropriate corporate action by the Company has been taken
to authorize the Debt Securities and when the Debt Securities have been duly
established by the applicable Indenture, duly authenticated by the Trustee and
duly executed and delivered on behalf of the Company against payment therefor in
accordance with the terms and provisions of the applicable Indenture and as
contemplated by the Registration Statement and/or the applicable Prospectus
Supplement the Debt Securities will constitute legally valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms.
3....When appropriate corporate action has been taken by the Company
to authorize the issuance of the Preferred Stock, and when the Preferred Stock
has been duly established in accordance with the terms of the Company's Articles
of Incorporation, as amended, and applicable law, and upon issuance, delivery
and payment therefor in the manner contemplated by the Registration Statement
and/or the applicable Prospectus Supplement, the Preferred Stock will be validly
issued, fully paid and nonassessable.
4....When appropriate corporate action has been taken by the Company
to authorize the issuance of the Common Stock, upon issuance, delivery and
payment therefor in the manner contemplated by the Registration Statement and/or
the applicable Prospectus Supplement, the Common Stock will be validly issued,
fully paid and nonassessable.
5....When appropriate corporate action has been taken by the Company
to authorize the Warrant Agreements and the final terms thereof have been duly
established, the Warrant Agreements, when duly executed and delivered by the
Company, will constitute the legally valid and binding agreements of the
Company, enforceable against the Company in accordance with their terms.
6....When appropriate corporate action has been taken by the Company
to authorize the Warrants and the Securities issuable upon the exercise thereof,
and when the final terms thereof have been duly established and the Warrants
have been duly executed and delivered by the Company and countersigned by the
applicable Warrant Agent in accordance with the applicable Warrant Agreement and
delivered to and paid for by the purchasers thereof in the manner contemplated
by the Registration Statement and/or the applicable Prospectus Supplement, the
Warrants will constitute legally valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms.
The opinions set forth above are subject to the following exceptions,
limitations and qualifications: (i) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or thereafter in effect
relating to or affecting the rights and remedies of creditors; (ii) the effect
of general principals of equity, and whether enforcement is considered in a
proceeding in equity or law, the discretion of the court before which any
proceeding therefor may be brought, and (iii) the unenforceability under certain
circumstances under law or court decisions of provisions providing for the
indemnification of or contribution to a party with respect to a liability where
such indemnification or contribution is contrary to public policy.
To the extent that the obligations of the Company under the
Indentures may be dependent upon such matters, we assume for purposes of this
opinion that the Trustees thereunder are duly organized, validly existing and in
good standing under the laws of their respective jurisdictions of organization;
that the Trustees thereunder are duly qualified to engage in the activities
contemplated by the applicable Indentures; that the Indentures have been duly
authorized, executed and delivered by the respective Trustees and constitute the
legally valid and binding obligations of the respective Trustees enforceable
against the respective Trustees in accordance with their terms; that the
Trustees are in compliance, generally with respect to acting as a trustee under
the applicable Indentures, with all applicable laws and regulations; and that
the Trustees have the requisite organizational and legal power and authority to
perform their obligations under the respective Indentures.
To the extent that the obligations of the Company under each Warrant
Agreement may be dependent upon such matters, we assume for purposes of this
opinion that the Warrant Agent is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization; that the Warrant
Agent is duly qualified to engage in the activities contemplated by the Warrant
Agreement; that the Warrant Agreement has been duly authorized, executed and
delivered by the Warrant Agent and constitutes the legally valid and binding
obligation of the Warrant Agent enforceable against the Warrant Agent in
accordance with its terms; that the Warrant Agent is in compliance, generally
with respect to acting as a Warrant Agent under the Warrant Agreement, with all
applicable laws and regulations; and that the Warrant Agent has the requisite
organizational and legal power and authority to perform its obligations under
the Warrant Agreement.
We consent to your filing this opinion as an exhibit to the Registration
Statement and to the reference to our firm under the caption "Legal Matters" in
the Prospectus included therein. By giving the foregoing consent, we do not
admit that we come within the category of persons whose consent is required
under Section 7 of the Act.
This opinion is rendered only to you and is solely for your benefit
in connection with the transactions covered hereby. This opinion may not be
relied upon by you for any other purposes, or furnished to, quoted to, or relied
upon by any other person, firm or corporation for any purpose, without our prior
written consent.
..... Very truly yours,
VENABLE, BAETJER and HOWARD LLP
<PAGE>
EX. 12.1
RATIO OF AVAILABLE EARNINGS TO FIXED CHARGES
Six
Months Year Ended
Ended
June 1995 1994 1993 1992 1991
1996
Net income
before income $38,588 $41,933 $49,680 $57,291 $45,217 $25,464
taxes
Fixed charges
(interest
expense, net of
non-recourse
interest 72,644 162,762 143,278 82,586 56,341 37,009
expense, other
CMO expenses and
provision for
losses)
--------------------------------------------
Total Available $111,226 $204,695 $192,958 $139,877 $101,588 $62,473
Earnings ============================================
(as defined)
Ratio of Available
Earnings 1.53:1 1.26:1 1.35:1 1.69:1 1.80:1 1.69:1
to Fixed Charges
============================================
<PAGE>
EX 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Resource Mortgage Capital, Inc.:
We consent to the use of our reports incorporated by reference herein and to the
reference to our firm under the heading "Experts" in the Prospectus.
KPMG PEAT MARWICK LLP
Richmond, Virginia
August 23, 1996
