As filed with the Securities and Exchange Commission on March 21, 1997
Registration No. 333-10783
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
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 jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
10900 Nuckols Road
Glen Allen, Virginia 23060
(804) 217-5800
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Thomas H. Potts
President
Resource Mortgage Capital, Inc.
10900 Nuckols Road
Glen Allen, Virginia 23060
(804) 217-5800
(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:
--------------------------------
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 March 21, 1997
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
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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.
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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.
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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 , 1997
<PAGE>
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: Midwest Regional Office, Citicorp
Center, 500 West Madison, Suite 1400, Chicago, Illinois 60661-2511; and
Northeast Regional Office, 7 World Trade Center, Suite 1300, New York, New York
10048. 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; Quarterly Report on Form 10-Q for the quarter ended September 30, 1996
as amended by Form 10-Q/A filed on March 6, 1997; Current Report on Form 8-K
dated October 15, 1996; Current Report on Form 8-K dated February 27, 1997; 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.
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., 10900 Nuckols
Road, Glen Allen, Virginia, 23060, Attention: Investor Relations, Telephone:
(804) 217-5800.
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 mortgage loans secured by multi-family properties and the
origination of loans secured by manufactured homes. From 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 the loans funded as collateral for
collateralized bonds, limiting its credit risk and providing long-term financing
for its portfolio. The majority of the Company's current investment portfolio is
comprised of loans or securities (ARM loans or ARM 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 real estate loans. The Company has elected to be treated as a real
estate investment trust (REIT) for federal income tax purposes and as such must
distribute substantially all of its taxable income to shareholders, and will
generally not be subject to federal income tax.
The Company's principal sources of earnings are net interest income on its
investment portfolio. The Company's investment portfolio consists principally of
collateral for collateralized bonds, ARM securities and loans held for
securitization. The Company funds its portfolio investments with both borrowings
and cash raised from the issuance of equity capital. For the portion of the
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 Collateralized bonds and (ii)
thefact 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 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.
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 10900 Nuckols
Road, Glen Allen, Virginia 23060, telephone number (804) 217-5800.
<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:
<TABLE>
<CAPTION>
Year ended December 31,
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1996 1995 1994 1993 1992
------------- ------------- ------------- ------------ ------------
S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges (1) 1.56:1 1.26:1 1.35:1 1.69:1 1.80:1
(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 collateralized bonds 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.
</TABLE>
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, par value $0.01 per share, 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, par value $0.01 per share. 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 February 28, 1997, there were 20,890,742 outstanding shares of Common
Stock held by 3,344 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 February 28, 1997, there were 1,515,000 shares of Series A Cumulative
Convertible Preferred Stock, 2,184,824 shares of Series B Cumulative Convertible
Preferred Stock, and 1,840,000 shares of Series C Cumulative Convertible
Preferred Stock (together, the Preferred Stock) issued and outstanding.
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.
All 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.
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.
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.
<PAGE>
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, LLP, 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 Securities will be passed upon for the Company by
Venable, Baetjer and Howard, LLP, Baltimore, Maryland.
EXPERTS
The consolidated financial statements of the Company included in the
Company's Report on Form 10-K for the year ended December 31, 1995 and current
report on Form 8-K for the year ended December 31, 1996 dated March 6, 1997
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 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>
Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
<TABLE>
<CAPTION>
The estimated expenses, other than underwriting discounts and commissions, in
connection with the offerings of Securities are:
<S> <C> <C> <C>
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.
</TABLE>
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 - Amendment to Articles of Incorporation effective October 19, 1992
(filed herewith)
*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
4.9 - Articles of Incorporation of the registrant, as amended,
effective as of February 2, 1988 (filed herewith)
4.10 - Amendment to Articles of Incorporation effective
December 29, 1989 (filed herewith)
4.11 - Amendment to Articles of Incorporation effective
August 17, 1992(filed herewith)
4.12 - Amendment to Articles of Incorporation effective June 27, 1995
(incorporated herein by reference to the Company's Current Report on
Form 8-K (File No. 1-9819), dated June 26, 1995)
4.13 - Amendment to Articles of Incorporation effective October 23, 1995
(incorporated herein by reference to the Company's Current Report on
Form 8-K (File No. 1-9819), dated October 19, 1995)
4.14 - Amendment to Articles of Incorporation effective October 9, 1996
(incorporated herein by reference to the Company's Current Report on Form 8-K
(File No. 1-9819), dated October 15, 1996)
4.15 - Amendment to Articles of Incorporation effective October 10, 1996
(incorporated herein by reference to the Company's Current Report
on Form 8-K (File No. 1-9819), dated October 15, 1996)
5.1 - Opinion of Venable, Baetjer and Howard, LLP (previously filed)
*8.1 - Tax Opinion of Venable, Baetjer and Howard, LLP
12.1 - Ratio of Available Earnings to Fixed Charges (filed herewith)
23.1 - Consent of KPMG Peat Marwick LLP (filed herewith)
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 (previously filed)
25.1 - Statement of Eligibility of Trustee on Form T-1 (filed herewith)
27.1 - Financial Data Schedule (filed herewith)
* 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.
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) or 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.
(e) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance
with the rules and regulations prescribed by the Commission under
Section 305(b)(2) of the Act.
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 Amendment No. 1 to the
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 March
21, 1997.
RESOURCE MORTGAGE CAPITAL, INC.
/s/ Thomas H.Potts
Thomas H. Potts, President
(Principal Executive Officer)
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 March 21, 1997.
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)
* Director
J. Sidney Davenport, IV
* Director
Richard C. Leone
* Director
Paul S. Reid
* Director
Donald B. Vaden
* By /s/ Thomas H. Potts
Thomas H. Potts
Attorney-in-fact
<TABLE>
<CAPTION>
EXHIBIT INDEX
<S> <C> <C>
Exhibit Sequentially
Numbered Page
4.2 Amendment to Articles of Incorporation effective October 19, 1992 ......1
4.9 Articles of Incorporation as amended effective as of February 2, 1988...3
4.10 Amendment to Articles of Incorporation effective December 29, 1989 ....10
4.11 Amendment to Articles of Incorporation effective August 17, 1992.......12
12.1 Ratio of Available Earnings to Fixed Charges.......................... 13
23.1 Consent of KPMG Peat Marwick LLP................................ . ....14
25.1 Statement of Eligibility of Trustee on Form T-1........................15
27.1 Financial Data Schedule................................................16
</TABLE>
Exhibit 4.2
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
RESOURCE MORTGAGE CAPITAL, INC.
1. The name of the Corporation is Resource Mortgage Capital, Inc.
2. Article III of the Corporation's Articles of Incorporation shall be
deleted in its entirety, and a new Article III shall be inserted in its place,
which shall read as set forth in Exhibit A hereto:
3. This amendment was proposed by the board of directors and submitted to
the shareholders for approval in accordance to Section 13.1-707 of the Virginia
Stock Corporation Act in a special meeting held on August 21, 1992.
4. The designation, number of outstanding shares and number of votes
entitled to be cast by each voting group entitled to vote separately on the
amendment are as follows:
Designation
of Voting Group
Entitled to vote Number of Shares Number of Votes
Separately Outstanding Entitled to be Cast
Holders of Common Stock - Common Stock -
Common Stock 13,572,052 13,572,052
5. There were 6,925,647 undisputed votes cast by the holders of the
Company's common stock in favor of the amendment, and these votes were
sufficient for approval of the amendment.
IN WITNESS WHEREOF, the undersigned vice president of the Corporation has
executed these Articles of Amendment on behalf of the Corporation.
Date: October 14, 1992 RESOURCE MORTGAGE CAPITAL, INC.
By: /s/ W. Lance Anderson
------------------------
Its: Vice President
<PAGE>
EXHIBIT A
III. CAPITAL STOCK
Common Stock
The number of shares of Common Stock that the Corporation shall have
authority to issue shall be 50,000,000 shares of Common Stock with the par value
of $.01 each. The shares of the Common Stock of the Corporation shall be
non-assessable. No holder of shares of any class of the Common Stock of the
Corporation shall have any preemptive or preferential right to purchase or
subscribe to (i) any shares of any class of the Corporation, whether now or
hereafter authorized; (ii) any warrants, rights, or options to purchase any such
shares; or (iii) any securities or obligations convertible into such shares or
into warrants, rights or options to purchase any such shares.
Preferred Stock
The number of shares of Preferred Stock that the Corporation shall have the
authority to issue shall be 50,000,000 shares of Preferred Stock without par
value. The Preferred Stock may be issued from time to ime in one or more
classes or series, with such distinctive designations, rights and preferences as
shall be stated and expressed herein or in the resolution or resolutions
providing for the issue of shares of a particular series, and in such resolution
or resolutions providing for the issue of shares of such series. The Board of
Directors is expressly authorized to fix:
The annual or other periodic dividend rate for such series, the
dividend payment dates, the date from which dividends on all shares of
such series issued shall be cumulative, and the extent of participation
rights, if any;
The redemption price or prices, if any for such series and other
terms and conditions on which such series may be retired and redeemed;
The obligation, if any, of the Corporation to purchase and retire or
redeem shares of such series as a sinking fund or otherwise, and the terms
and conditions of any such redemption;
The option or obligation of holders of one or more series of
preferred stock to participate in a dividend reinvestment program;
The designation and maximum number of shares of such series
issuable;
The right to vote, if any, with holders of shares of any other class
or series and any right to vote as a separate voting group, either
generally or as a condition to specified corporate action;
The amount payable upon shares in event of voluntary liquidation;
The rights, if any, of the holders of shares of such series to
convert such shares into other classes of stock of the Corporation and the
terms and conditions of any such conversion; and
Such other rights as may be specified by the Board of Directors and
not prohibited by law.
All shares of Preferred Stock of any one series shall be identical with
each other in all respects except, if so determined by the Board of Directors,
as to the dates from which dividends thereon shall be cumulative; and all shares
of Preferred Stock shall be of equal rank with each other, regardless of series,
and shall be identical with each other in all respects except as provided herein
or in the resolution or resolutions providing for the issue of a particular
series. In case dividends on all shares of Preferred Stock for any quarterly
dividend period are not paid in full, all such shares shall participate ratably
in any partial payment of dividends for such period in proportion to the full
amounts of dividends for such period to which they are respectively entitled.
Exhibit 4.9
ARTICLES OF INCORPORATION
OF
RAC MORTGAGE INVESTMENT CORPORATION
I. NAME
The name of the Corporation is RAC Mortgage Investment Corporation (the
'Corporation').
II. PURPOSE
The purpose for which the Corporation is formed is to transact any or
all lawful business, not required to be specifically stated in these
Articles, for which corporations may be incorporated under the Virginia Stock
Corporation Act as amended from time to time.
III. CAPITAL STOCK
The number of shares which the Corporation shall have authority to
issue shall be 50,000,000 shares of common stock with the par value of $.01
each. The shares of the Corporation shall be non-assessable. No holder of
shares of any class of the Corporation shall have any preemptive or
preferential right to purchase or subscribe to (i) any shares of any class of
the Corporation, whether now or hereafter authorized; (ii) any warrants,
rights, or options to purchase any such shares; or (iii) any securities or
obligations convertible into any such shares or into warrants, rights, or
options to purchase any such shares.
IV. REGISTERED OFFICE AND AGENT
The initial registered office shall be located at P.O. Box 1535, 707
East Main Street, Richmond, Virginia, 23212, in the City of Richmond, and the
initial registered agent shall be Randolph F. Totten, Esq., who is a resident
of Virginia and a member of the Virginia State Bar, and whose business
address is the same as the address of the initial registered office.
V. INDEMNIFICATION
(1) In this Article:
'applicant' means the person seeking indemnification pursuant to
this Article.
"expenses" includes counsel fees and disbursements.
"liability" means the obligation to pay a judgment, settlement,
penalty, fine, including any excise tax assessed with respect to an employee
benefit plan, or reasonable expenses incurred with respect to a proceeding.
"party" includes an individual who was, is, or is threatened to
be made a named defendant or respondent in a proceeding.
"proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative or investigative
and whether formal or informal.
(2) In any proceeding brought by a shareholder of the Corporation in
the right of the Corporation or brought by or on behalf of shareholders of
the Corporation, no director or officer of the Corporation shall be liable to
the Corporation or its shareholders for monetary damages in excess of $0.00
with respect to any transaction, occurrence or course of conduct, whether
prior or subsequent to the effective date of this Article, except for
liability resulting from such person's having engaged in willful misconduct
or a knowing violation of the criminal law or any federal or state securities
law.
(3) The Corporation shall indemnify (i) any person who was or is a
party to any proceeding, including a proceeding brought by a shareholder in
the right of the Corporation or brought by or on behalf of shareholders of
the Corporation, by reason of the fact that he is or was a director, or
officer of the Corporation, or (ii) any director or officer who is or was
serving at the request of the Corporation as a director, trustee, partner or
officer of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against any liability incurred by him in
connection with such proceeding unless he engaged in willful misconduct or a
knowing violation of the criminal law. A person is considered to be serving
an employee benefit plan at the Corporation's request if his duties to the
Corporation also impose duties on, or otherwise involve services by, him to
the plan or to participants in or beneficiaries of the plan. The Board of
Directors is hereby empowered, by a majority vote of a quorum of
disinterested Directors, to enter into a contract to indemnify any Director
or officer in respect of any proceedings arising from any act or omission,
whether occurring before or after the execution of such contract.
(4) The provisions of this Article shall be applicable to all
proceedings commenced after the adoption hereof by the shareholders of the
Corporation, arising from any act or omission, whether occurring before or
after such adoption. No amendment or repeal of this Article shall have any
effect on the rights provided under this Article with respect to any act or
omission occurring prior to such amendment or repeal. The Corporation shall
promptly take all such actions, and make all such determinations, as shall be
necessary or appropriate to comply with its obligation to make any indemnity
under this Article and shall promptly pay or reimburse all reasonable
expenses, including attorneys fees, incurred by any such director or officer
in connection with such actions and determinations or proceedings of any kind
arising therefrom.
(5) The termination of any proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not of
itself create a presumption that the applicant did not meet the standard of
conduct described in Section (2) or (3) of this Article.
(6) Any indemnification under section (3) of this Article (unless
ordered by a court) shall be made by the Corporation only as authorized in
the specific case upon a determination that indemnification of the applicant
is proper in the circumstances because he has met the applicable standard of
conduct set forth in section (3).
The determination shall be made:
(a)...By the Board of Directors by a majority vote of a quorum
consisting of Directors not at the time parties to the proceeding;
(b)...If a quorum cannot be obtained under subsection (a) of this
section, by majority vote of a committee duly designated by the Board of
Directors (in which designation Directors who are parties may participate),
consisting solely of two or more Directors not at the time parties to the
proceeding;
(c)...By special legal counsel:
......(i) Selected by the Board of Directors or its committee
in the manner prescribed in subsection (a) or (b) of this section; or
......(ii) If a quorum of the Board of Directors cannot be
obtained under subsection (a) of this section and a committee cannot be
designated under subsection (b) of this section, selected by majority vote of
the full Board of Directors, in which selection Directors who are parties may
participate; or
(d)...By the shareholders, but shares owned by or voted under the
control of Directors who are at the time parties to the proceeding may not be
voted on the determination.
Any evaluation as to reasonableness of expenses shall be made in the
same manner as the determination that indemnification is appropriate, except
that if the determination is made by special legal counsel, such evaluation
as to reasonableness of expenses shall be made by those entitled under
subsection (c) of this section (6) to select counsel.
Notwithstanding the foregoing, in the event there has been a change in
the composition of a majority of the Board of Directors after the date of the
alleged act or omission with respect to which indemnification is claimed, any
determination as to indemnification and advancement of expenses with respect
to any claim for indemnification made pursuant to this Article shall be made
by special legal counsel agreed upon by the Board of Directors and the
applicant. If the Board of Directors and the applicant are unable to agree
upon such special legal counsel the Board of Directors and the applicant each
shall select a nominee, and the nominees shall select such special legal
counsel.
(7) (a)...The corporation shall pay for or reimburse the reasonable
expenses incurred by any applicant who is a party to a proceeding in advance
of final disposition of the proceeding or the making of any determination
under section (3) if the applicant furnishes the Corporation:
......(i) a written statement of his good faith belief that he
has met the standard of conduct described in section (3); and
......(ii) a written undertaking, executed personally or on his
behalf, to repay the advance if it is ultimately determined that he did not
meet such standard of conduct.
(b)...The undertaking required by paragraph (ii) of subsection
(a) of this section shall be an unlimited general obligation of the applicant
but need not be secured and may be accepted without reference to financial
ability to make repayment.
(c)...Authorizations of payments under this section shall be made
by the persons specified in section (6).
(8) The Board of Directors is hereby empowered, by majority vote of a
quorum consisting of disinterested Directors, to cause the Corporation to
indemnify or contract to indemnify any person not specified in section (2) or
(3) of this Article who was, is or may become a party to any proceeding, by
reason of the fact that he is or was an employee or agent of the Corporation,
or is or was serving at the request of the Corporation as director, officer,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, to the same extent as if such
person were specified as one to whom indemnification is granted in section
(3). The provisions of sections (4) through (7) of this Article shall be
applicable to any indemnification provided hereafter pursuant to this section
(8).
(9) The Corporation may purchase and maintain insurance to indemnify
it against the whole or any portion of the liability assumed by it in
accordance with this Article and may also procure insurance, in such amounts
as the Board of Directors may determine, on behalf of any person who is or
was a director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against any liability asserted against or
incurred by him in any such capacity or arising from his status as such,
whether or not the Corporation would have power to indemnify him against such
liability under the provisions of this Article.
(10) Every reference herein to directors, officers, employees or
agents shall include former directors, officers, employees and agents and
their respective heirs, executors and administrators. The indemnification
hereby provided and provided hereafter pursuant to the power hereby conferred
by this Article on the Board of Directors shall not be exclusive of any other
rights to which any person may be entitled, including any right under
policies of insurance that may be purchased and maintained by the Corporation
or others, with respect to claims, issues or matters in relation to which the
Corporation would not have the power to indemnify such person under the
provisions of this Article. Such rights shall not prevent or restrict the
power of the Corporation to make or provide for any further indemnity, or
provisions for determining entitlements to indemnity, pursuant to one or more
indemnification agreements, bylaws, or other arrangements (including, without
limitation, creation of trust funds or security interests funded by letters
of credit or other means) approved by the Board of Directors (whether or not
any of the directors of the Corporation shall be a party to or beneficiary of
any such agreements, bylaws, or other arrangements ); provided, however, that
any provision of such agreements, bylaws or other arrangements shall not be
effective if and to the extent that it is determined to be contrary to this
Article or applicable laws of the Commonwealth of Virginia.
(11) Each provision of this Article shall be severable, and an adverse
determination as to any such provision shall in no way affect the validity of
any other provision.
VI. EXCESS SHARES
(1) Affidavits of Transferees. Whenever it is deemed by the Board of
Directors to be prudent in protecting the tax status of the Corporation, the
Board of Directors may require to be filed with the Corporation a statement
or affidavit from each proposed transferee of shares of capital stock of the
Corporation setting forth the number of such shares already owned by the
transferee and any related person(s) specified in the form prescribed by the
Board of Directors for that purpose. Any contract for the sale or other
transfer of shares of capital stock of the Corporation shall be subject to
this provision.
(2) Affidavits of Shareholders. Prior to any transfer or transaction
which would cause a shareholder to own, directly or indirectly, shares in
excess of the "Limit" as defined in Section (4) of this Article, and in any
event upon demand of the Board of Directors, such shareholder shall file with
the Corporation an affidavit setting forth the number of shares of capital
stock of the Corporation (a) owned directly and (b) owned indirectly (for
purposes of this Section (2), shares of capital stock not owned directly
shall be deemed to be owned indirectly by a person if that person would be
the beneficial owner of such shares for purposes of Rule 13d-3, or any
successor rule thereto, promulgated under the Securities Exchange Act of
1934, as amended or any successor statute thereto (the "Exchange Act"),
and/or would be considered to own such shares by reason of the attribution
rules in Section 544 of the Internal Revenue Code of 1986, as amended from
time to time (the "Code") or the regulations issued thereunder), by the
person filing the affidavit. The affidavit to be filed with the Corporation
shall set forth all information required to be reported in returns filed by
shareholders under Treasury Regulation Subsection 1.857-9 issued under the
Code or similar provisions of any successor regulation, and in reports to be
filed under Section 13(d), or any successor rule thereto, of the Exchange
Act. The affidavit, or an amendment thereto, shall be filed with the
Corporation within ten (10) days after demand therefor and at least fifteen
(15) days prior to any transfer or transaction which, if consummated, would
cause the filing person to hold a number of shares of capital stock of the
Corporation in excess of the "Limit" as defined in Section (4) of this
Article. The Board of Directors shall have the right, but shall not be
required, to refuse to transfer any shares of capital stock of the
Corporation purportedly transferred other than in compliance with the
provisions of this Section (2).
(3) Void Transfers. Any acquisition of shares of capital stock of
the Corporation that could or would result in the disqualification of the
Corporation as a real estate investment trust under the Code shall be void ab
initio to the fullest extent permitted under applicable law and the intended
transferee of those shares shall be deemed never to have had an interest
therein. If the foregoing provision is determined to be void or invalid by
virtue of any legal decision, statute, rule or regulation, then the
transferee of those shares shall be deemed, at the option of the Corporation,
to have acted as agent on behalf of the Corporation in acquiring those shares
and to hold those shares on behalf of the Corporation.
(4) Excess Shares. Notwithstanding any other provision hereof to the
contrary and subject to the provisions of Section (5) of this Article, no
person or persons acting as a group shall at any time directly or indirectly
own in the aggregate more than 9.8% of the outstanding shares of capital
stock of the Corporation (the "Limit"). Shares which but for this Article
would be owned by a person or persons acting as a group and would, at any
time, be in excess of the Limit shall be deemed "Excess Shares." For the
purposes of determining ownership of Excess Shares, "ownership" of shares
shall be deemed to include shares constructively owned by a person under the
provisions of Section 544 of the Code and also shall include shares
beneficially owned under the provisions of Rule 13d-3, or any successor rule,
under the Exchange Act. For purposes of determining persons acting as a
group, "group" shall have the same meaning as such term has for purposes of
Section 13(d)(3), or any successor rule, of the Exchange Act. All shares of
capital stock of the Corporation which any person or persons acting as a
group have the right to acquire upon exercise of outstanding rights, options
and warrants, and upon conversion of any securities convertible into those
shares, if any, shall be considered outstanding for purposes of determining
the applicable Limit if such inclusion will cause such person or persons
acting as a group to own more than the Limit. The Board of Directors shall
have the right, but shall not be required, to refuse to transfer shares of
capital stock on the books of the Corporation if, as a result of the proposed
transfer, for any person or persons acting as a group would hold or be deemed
to hold Excess Shares.
(5) Exemptions. The Limit set forth in Section (4) of this Article
shall not apply to the acquisition of shares of capital stock of the
Corporation by an underwriter in a public offering of those shares or in any
transaction involving the issuance of shares of capital stock by the
Corporation in which the Board of Directors determines that the underwriter
or other person or party initially acquiring those shares will timely
distribute those shares to or among others so that, following such
distribution, none of those shares will be deemed to be Excess Shares. The
Board of Directors in its discretion may exempt from the Limit and from the
filing requirements of Section (2) of this Article ownership or transfers or
certain designated shares of capital stock of the Corporation while owned by
or transferred to a person who has provided the Board of Directors with
evidence and assurances acceptable to the Board of Directors that the
qualification of the Corporation as a real estate investment trust under the
Code and the regulations issued under the Code would not be jeopardized
thereby.
(6) Redemption of Excess Shares. At the discretion of the Board of
Directors, all Excess Shares may be redeemed by the Corporation. Written
notice of redemption shall be provided to the holder of the Excess Shares not
less than one week prior to the redemption date (the "Redemption Date")
determined by the Board of Directors and included in the notice of
redemption. The redemption price to be paid for Excess Shares will be equal
to (a) the closing price of those shares on the principal national securities
exchange on which the shares are listed or admitted to trading on the last
business day prior to the Redemption Date, or (b) if the shares are not so
listed or admitted to trading, the closing bid price on the last business day
prior to the redemption Date as reported on the NASD System, if quoted
thereon, or (c) if the redemption price is not determinable in accordance
with either clause (a) or (b) of this sentence, the net asset value of the
shares determined in good faith by the Board of Directors and in accordance
with the Virginia Stock Corporation Act (the 'Net Asset Value'). The
redemption price for any shares of capital stock of the Corporation so
redeemed shall be paid on the Redemption Date. From and after the Redemption
Date, the holder of any shares of capital stock of the corporation called for
redemption shall cease to be entitled to any distributions and other benefits
with respect to those shares, except the right to payment of the redemption
price fixed as aforesaid.
(7) Application of Article. Nothing contained in this Article or in
any other provision hereof shall limit the authority of the Board of
Directors to take any and all other action as it in its sole discretion deems
necessary or advisable to protect the Corporation and the interests of its
shareholders by maintaining the Corporation's eligibility to be, and
preserving the Corporation's status as, a qualified real estate investment
trust under the Code.
(8) Definition of "Person". For purposes of this Article only, the
term "person" shall include individuals, corporations, limited partnerships,
general partnerships, joint stock companies or associations, joint ventures,
associations, consortia, companies, trusts, banks, trust companies, land
trusts, common law trusts, business trusts, or other entities and governments
and agencies and political subdivisions thereof.
(9) Severability. If any provision of this Article or any
application of any such provision is determined to be invalid by any federal
or state court having jurisdiction over the issue, the validity of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of that court.
Dated: December 17, 1987
/s/ Jack A. Molenkamp
Jack A. Molenkamp,
Incorporator
<PAGE>
RAC MORTGAGE INVESTMENT CORPORATION
ARTICLES OF AMENDMENT
1. The name of the Corporation is RAC Mortgage Investment Corporation.
2. The Amendment adopted is as follows:
(a) Insert as Article VII of the Articles of Incorporation of RAC
Mortgage Investment Corporation the following:
VII. ACQUISITION OF SHARES BY CERTAIN TAX-EXEMPT ORGANIZATIONS
(1) Affidavits of Shareholders and Transferees. Whenever it is
deemed by the Board of Directors to be prudent in avoiding (a) the direct or
indirect imposition of a penalty tax on the Corporation (including the
imposition of an entity-level tax on one or more real estate mortgage
investment conduits ("REMICs") in which the Corporation has acquired or plans
to acquire an interest) or (b) the endangerment of the tax status of one or
more REMICs in which the Corporation has acquired or plans to acquire an
interest, the Board of Directors may require to be filed with the Corporation
a statement or affidavit from any holder or proposed transferee of capital
stock of the Corporation stating whether the holder or proposed transferee is
(i) the United States, any state or political subdivision thereof, any
possession of the United States, any agency or instrumentality of the
foregoing, or any other organization that is exempt from federal income
taxation (including taxation under the unrelated business taxable income
provisions of the Code) (a "Tax-Exempt Organization") or (ii) a partnership,
trust, real estate investment trust, regulated investment company, or other
pass-through entity in which a Tax-Exempt Organization holds or is permitted
to hold a direct or indirect beneficial interest (a "Pass-through Entity").
Any contract for the sale or other transfer of shares of capital stock of the
Corporation shall be subject to this provision. Furthermore, the Board of
Directors shall have the right, but shall not be required, to refuse to
transfer any shares of capital stock of the Corporation purportedly
transferred, if either (a) a statement or affidavit requested pursuant to
this Section (1) has not been received, or (b) the proposed transferee is a
Tax-Exempt organization or Pass-Through Entity.
(2) Void Transfers. Any acquisition of shares of capital stock of
the Corporation that could or would (a) result in the direct or indirect
imposition of a penalty tax on the Corporation (including the imposition of
an entity-level tax on one or more REMICs in which the Corporation has
acquired or plans to acquire an interest) or (b) endanger the tax status of
one or more REMICs in which the Corporation has acquired or plans to acquire
an interest shall be void ab initio to the fullest extent permitted under
applicable law and the intended transferee of the subject shares shall be
deemed never to have had an interest therein. If the foregoing provision is
determined to be void or invalid by virtue of any legal decision, statute,
rule or regulation, then the transferee of those shares shall be deemed, at
the option of the Corporation, to have acted as agent on behalf of the
Corporation in acquiring those shares and to hold those shares on behalf of
the Corporation.
(3) Redemption of Shares. Whenever it is deemed by the Board of
Directors to be prudent in avoiding (a) the direct or indirect imposition of
a penalty tax on the Corporation (including the imposition of an entity-level
tax on one or more REMICs in which the Corporation has acquired or plans to
acquire an interest) or (b) the endangerment of the tax status of one or more
REMICs in which the Corporation has acquired or plans to acquire an interest,
the Corporation may redeem shares of its capital stock. Any such redemption
shall be conducted in accordance with the procedures set forth in Section (6)
of Article VI.
(4) Application of Article. Nothing contained in this Article or in
any other provision hereof shall limit the authority of the Board of
Directors to take any and all other action as it in its sole discretion deems
necessary or advisable to protect the Corporation or the interests of its
shareholders by avoiding (a) the direct or indirect imposition of a penalty
tax on the Corporation (including the imposition of an entity-level tax on
one or more REMICs in which the Corporation has acquired or plans to acquire
an interest) or (b) the endangerment of the tax status of one or more REMICs
in which the Corporation has acquired or plans to acquire an interest.
(5) Severability. If any provision of this Article or any
application of any such provision is determined to be invalid by any federal
or state court having jurisdiction over the issue, the validity of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of that court.
3. The sole shareholder approved the Amendment by Consent dated January
27, 1988.
Dated: January 27, 1988 RAC Mortgage Investment Corporation
By: /s/ Thomas H. Potts
Its: President
Exhibit 4.10
RAC MORTGAGE INVESTMENT CORPORATION
ARTICLES OF AMENDMENT
1. The name of the corporation is RAC Mortgage Investment Corporation.
2. Attached as Exhibit A is the text of the amendment to the Corporation's
Articles of Incorporation to change the shareholder vote required to
approve an amendment to the Articles of Incorporation.
3. The amendment was adopted by the Corporation's Board of Directors on
December 19, 1989 without shareholder action; no shareholder action was
required in accordance with Section 13.1-706.6 of the Virginia Code.
/s/ Michael J. Sonnenfeld
-------------------------
Michael J. Sonnenfeld
Senior Vice President
<PAGE>
Exhibit A
---------
A new Article VIII is added to the Corporation's Articles of
Incorporation as follows:
VIII. AMENDMENTS.
Except as otherwise required by the Virginia Stock Corporation Act, by
these Articles of Incorporation, or by the board of directors acting pursuant to
Subsection C of Section 13.1-707 of the Virginia Stock Corporation Act, or any
successor provision, the vote required to approve an amendment or restatement of
these Articles of Incorporation, other than an amendment or restatement that
amends or affects (i) the shareholder vote required by the Virginia Stock
Corporation Act to approve a merger, share exchange, sale of all or
substantially all of the corporation's assets or the dissolution of the
corporation or (ii) Article VI of these Articles of Incorporation, shall be a
majority of all votes entitled to be cast by each voting group entitled to vote
on the amendment.
Exhibit 4.11
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
RAC MORTGAGE INVESMTENT CORPORATION
1. The name of the Corporation is RAC Mortgage Investment
Corporation.
2. Article One of the Corporation's Certificate of Incorporation
shall be deleted in its entirety, and a new Article One shall be inserted in
its place, which shall read as follows:
The name of the Corporation is Resource Mortgage Capital, Inc.
3. This amendment was proposed by the board of directors and
submitted to the shareholders for approval in accordance to Section 13.1-707
of the Virginia Stock Corporation Act in a special meeting held on August 17,
1992.
4. The designation, number of outstanding shares and number of votes
entitled to be cast by each voting group entitled to vote separately on the
amendment are as follows:
Designation
of Voting Group
Entitled to vote Number of Shares Number of Votes
Separately Outstanding Entitled to be cast
Holders of Common Stock - Common Stock -
Common Stock 13,572,052 13,572,052
5. There were 12,286,892 undisputed votes cast by the holders of the
Company's common stock , and these votes were sufficient for approval of the
amendment.
IN WITNESS WHEREOF, the undersigned president of the Corporation has
executed this Certificate of Amendment on behalf of the Corporation.
Date: August 17, 1992 RAC MORTGAGE INVESTMENT CORPORATION
By: /s/ Mary Margaret Smithers
Its: Vice President
<TABLE>
<CAPTION>
Exhibit 12.1
-------------
RATIO OF AVAILABLE EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS
Year Ended
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992
------------- ------------- ----------- ------------ -------------
Net income before income taxes $71,731 $41,933 $49,680 $57,291 $45,217
Fixed charges (interest expense, net of
non-recourse interest expense, other CMO
expenses and provision for losses) 128,309 162,762 143,278 82,586 56,341
------------- ------------- ----------- ------------ -------------
Total Available Earnings (as defined) $200,040 $204,695 $192,958 $139,877 $101,588
============= ============= =========== ============ =============
Preferred Stock Dividend
Requirements $10,009 $2,746 - - -
Ratio of Available Earnings
to Fixed Charges 1.56:1 1.26:1 1.35:1 1.69:1 1.80:1
============= ============= =========== ============ =============
Ratio of Available Earnings to Combined
Fixed Charges and Preferred Stock
Dividends 1.52:1 1.25:1 1.35:1 1.69:1 1.80:1
============= ============= =========== ============ =============
</TABLE>
Exhibit 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 in the
registration statement on Form S-3 of Resource Mortgage Capital, Inc. (No.
333-10783) and to the reference to our firm under the heading "Experts" in the
Prospectus.
KPMG PEAT MARWICK LLP
Richmond, Virginia
March 21, 1997
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)____ [Not applicable]
----------------
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
A National Banking Association 74-0800980
(State of Incorporation if not a U.S. (I.R.S. Employer
national bank) Identification No.)
- -------------------------------------------------------------------------------
712 Main Street
Houston, Texas 77002
(Address of principal (Zip Code)
executive offices)
- -------------------------------------------------------------------------------
Carol Kirkland, 712 Main Street, 26th Floor
Houston, Texas 77002 (713) 216-2448
(Name, Address and Telephone Number
of Agent for Service)
----------------
RESOURCE MORTGAGE CAPITAL, INC.
(Exact name of obligor as specified in its charter)
- -------------------------------------------------------------------------------
Virginia 52-1549373
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
- -------------------------------------------------------------------------------
10500 Little Patuxent
Parkway 21044
Columbia, Maryland (Zip Code)
(Address of principal
executive offices)
- -------------------------------------------------------------------------------
Resource Mortgage
Capital, Inc. Company
Senior Debt Securities
(Title of the indenture
securities)
- -------------------------------------------------------------------------------
<PAGE>
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Comptroller of the Currency, Washington, D.C.
Federal Deposit Insurance Corporation, Washington, D.C.
Board of Governors of The Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee.
Item 3. Voting securities of the trustee.
Furnish the following information as to each class of voting
securities of the trustee:
------------------------------------------------------------------
Col. A Col. B
Title of Class Amount outstanding
------------------------------------------------------------------
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
------------------------------------------------------------------
Item 4. Trusteeships under other indentures.
If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
(a) Title of the securities outstanding under each such other
indenture.
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
(b) A brief statement of the facts relied upon as a basis for the
claim that no conflicting interest within the meaning of Section 310(b)(1)
of the Act arises as a result of the trusteeship under any such other
indenture, including a statement as to how the indenture securities will
rank as compared with the securities issued under such other indenture.
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
Item 5. Interlocking directorates and similar relationships with the
obligor or underwriters.
If the trustee or any of the directors or executive officers of the
trustee is a director, officer, partner, employee, appointee or representative
of the obligor or of any underwriter for the obligor, identify each such person
having any such connection and state the nature of each such connection.
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
Item 6. Voting securities of the trustee owned by the obligor or its
officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner and
executive officer of the obligor.
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
- ------------------------------------------------------------------------------
Percentage of
voting securities
represented by
Amount owned amount given
Name of owner Title of class beneficially in Col. C
- -------------------------------------------------------------------------------
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
Item 7. Voting securities of the trustee owned by underwriters or their
officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and each
director, partner and executive officer of each such underwriter.
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
- -------------------------------------------------------------------------------
Percent of
voting securities
represented by
Amount owned amount given
Name of owner Title of class beneficially in Col. C
- -------------------------------------------------------------------------------
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
Item 8. Securities of the obligor owned or held by the trustee.
Furnish the following information as to securities of the obligor
owned beneficially or held as collateral security for obligations in default by
the trustee.
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
- -------------------------------------------------------------------------------
Whether the Amount owned
securities beneficially or Percent of class
are voting held represented by
or nonvoting as collateral amount given
Title of class securities security in Col. C
for obligations
in default
- -------------------------------------------------------------------------------
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
Item 9. Securities of underwriters owned or held by the trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor, furnish
the following information as to each class of securities of such underwriter any
of which are so owned or held by the trustee.
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
- -------------------------------------------------------------------------------
Amount owned
beneficially or Percent of class
held represented by
Name of issuer and Amount as collateral amount given
title of class outstanding security in Col. C
for obligations in
default by trustee
- -------------------------------------------------------------------------------
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
Item 10. Ownership or holdings by the trustee of voting securities of
certain affiliates or security holders of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge of
the trustee (1) owns 10 percent or more of the voting securities of the obligor
or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the
following information as to the voting securities of such person:
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
- -------------------------------------------------------------------------------
Amount owned
beneficially or Percent of class
held represented by
Name of issuer and Amount as collateral amount given
title of class outstanding security in Col. C
for obligations in
default by trustee
- -------------------------------------------------------------------------------
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
Item 11. Ownership or holdings by the trustee of any securities of a
person owning 50 percent or more of the voting securities of the
obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge of the
trustee, owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such person
any of which are so owned or held by the trustee.
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
- -------------------------------------------------------------------------------
Amount owned
beneficially or Percent of class
held represented by
Name of issuer and Amount as collateral amount given
title of class outstanding security in Col. C
for obligations in
default by trustee
- -------------------------------------------------------------------------------
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
Item 12. Indebtedness of the obligor to the trustee.
Except as noted in the instructions, if the obligor is indebted to
the trustee, furnish the following information:
- -------------------------------------------------------------------------------
Col. A Col. B Col. C
Nature of Amount
Indebtedness Outstanding Date Due
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
Item 13. Defaults by the obligor.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
There is not, nor has there been, a default with respect to the
securities under this indenture. (See Note on Page 6.)
(b) If the trustee is a trustee under another indenture under which
any other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been a default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
There has not been a default under any such indenture or
series. (See Note on Page 6.)
Item 14. Affiliations with the underwriters.
If any underwriter is an affiliate of the trustee, describe each
such affiliation.
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
Item 15. Foreign trustee.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be qualified
under the Act.
Not applicable.
Item 16. List of exhibits.
List below all exhibits filed as a part of this statement of
eligibility.
*1 -- A copy of the articles of association of the trustee
as now in effect.
**2 -- A copy of the certificate of authority of the
trustee to commence business.
**3 -- A copy of the authorization of the trustee to
exercise corporate trust powers.
***4 -- A copy of the existing by-laws of the trustee.
5 -- Not applicable.
6 -- The consent of the trustee required by Section 321(b)
of the Act.
****7 -- A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining authority.
8 -- Not applicable.
9 -- Not applicable.
* Incorporated by reference to Exhibit bearing the same Exhibit number
submitted with the Form T-1 of Texas Commerce Bank National Association
with respect to File No. 33-51417
** Incorporated by reference to Exhibit bearing the same Exhibit number
submitted with the Form T-1 of Texas National Bank of Commerce with respect
to File No. 2-24599.
*** Incorporated by reference to Exhibit bearing the same Exhibit number
submitted with the Form T-1 of Texas Commerce Bank National Association
with respect to File No. 333-15539.
**** Incorporated by reference to Exhibit bearing the same Exhibit number
submitted with the Form T-1 of Texas Commerce Bank National Association
with respect to File No. 333-15539.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment of all facts
on which to base a responsive answer to Item 13, the answer to said Item is
based on incomplete information. Such item may, however, be considered as
correct unless amended by an amendment to this Form T-1.
<PAGE>
- ------------------------------------------------------------------------------
7
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Texas Commerce Bank National Association, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Houston
and State of Texas, on the 21st day of March, 1997.
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By: /s/ Rafael A. Herrera
Rafael A. Herrera
Vice President and Trust Officer
<PAGE>
- ------------------------------------------------------------------------------
Exhibit 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939 in connection with the proposed issue of Resource Mortgage Capital, Inc
Debt Securities, we hereby consent that reports of examinations by Federal,
State, Territorial or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor.
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By: /s/ Rafael A. Herrera
Rafael A. Herrera
Vice President and Trust Officer
Dated: March 21, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> Dec-31-1996
<CASH> 11,396
<SECURITIES> 3,956,104
<RECEIVABLES> 8,078
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,987,457
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 2,519,708
0
139,625
<COMMON> 207
<OTHER-SE> 363,785
<TOTAL-LIABILITY-AND-EQUITY> 3,987,457
<SALES> 0
<TOTAL-REVENUES> 312,067
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 30,772
<LOSS-PROVISION> 3,106
<INTEREST-EXPENSE> 234,054
<INCOME-PRETAX> 63,039
<INCOME-TAX> 0
<INCOME-CONTINUING> 63,039
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63,039
<EPS-PRIMARY> 3.08
<EPS-DILUTED> 2.96
<FN>
<F1> The Company's balance sheet is unclassified
</FN>
</TABLE>
