COVENANT LETTER
Date: April 11, 1996
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attention: Diversified Finance
Gentlemen:
As an inducement for The First National Bank of Boston (the "Bank") to
provide loans and financial accommodations to and for the account of Cityscape
Corp., a New York corporation (the "Borrower") pursuant to the Borrower's
Commercial Promissory Note of even date in the principal amount of
$30,000,000.00 (the "Note"), the Borrower, Cityscape Financial Corp. (the
"Guarantor") and Cityscape Funding Corp. ("CFC") hereby make the following
representations, covenants, and warranties; agree that all of such
representations, covenants, and warranties apply to all loans and financial
accommodations provided by the Bank to the Borrower; and recognizes that the
Bank will be making all of such loans and financial accommodations in reliance
upon the following. Capitalized terms used herein and not otherwise defined
shall have the same meaning herein as in the Note.
ARTICLE 1. - GENERAL REPRESENTATIONS AND WARRANTIES.
1.1 (a) Borrower has been duly organized and is validly existing as a
corporation under the laws of the State of New York. The only directly owned
subsidiaries of the Borrower are CFC and City Mortgage Corporation Limited
("CMCL").
(b) Guarantor has been duly organized and is validly existing as a
corporation under the laws of the State of Delaware. The sole subsidiary of the
Guarantor is the Borrower.
(c) CFC has been duly organized and is validly existing as a
corporation under the laws of the State of
Delaware. CFC is, and shall remain, a wholly owned subsidiary of the Borrower.
1.2. Borrower is duly licensed where required as a "licensee" or is
otherwise qualified in each state in which it transacts business and is not in
default of such state's applicable laws, rules and regulations, except where the
failure to so qualify or such default would not have a material adverse effect
on its ability to conduct its business or to perform its obligations.
1.3. Borrower has the requisite power and authority and legal right to own
and grant a lien on all of its right, title and interest in and to its assets to
the Bank, and Borrower has the requisite power and authority and legal right to
execute and deliver, engage in the transactions contemplated by, and perform and
observe the terms and conditions of, the Note and the other instruments,
documents, and agreements executed in connection therewith (as same may be
modified, amended, supplemented or restated from time to time, the "Loan
Documents").
1.4. Borrower is not in default (beyond any applicable cure period) under
any mortgage, borrowing agreement or other instrument or agreement pertaining to
indebtedness for borrowed money with respect to which a default thereunder would
materially and adversely effect the performance of the Borrower of its
obligations under, or the validity and enforceability of, any Loan Document to
which it is party, and the execution and delivery by Borrower of the Loan
Documents will not result in any violation of any such mortgage, instrument or
agreement to which Borrower is a party or by which its property is bound.
1.5. The execution, delivery and performance by the Borrower of the Loan
Documents do not conflict with any term or provisions of any other agreement to
which Borrower is a party or with any term or provision of Borrower's charter or
by-laws, or any law, rule, regulation, order, judgment, writ, injunction or
decree applicable to Borrower of any court, regulatory body, administrative
agency or governmental body having jurisdiction over the Borrower, which
conflict, in each case, would materially and adversely effect the performance of
the Borrower of its
obligations under, or the validity and enforceability of, any Loan Document to
which it is party.
1.6. No consent, approval, authorization or order of, registration or
filing with, or notice to any governmental authority or court is required under
applicable law in connection with the execution, delivery and performance by
Borrower of the Loan Documents, except for (i) any consent, approval,
authorization, order, registration, filing or notice which has been obtained,
given, or made and is in full force and effect, (ii) any consent, approval,
authorization, order, registration, filing, or notice, the failure to obtain,
give or make would not materially and adversely effect the performance of the
Borrower of its obligations under, or the validity and enforceability of, any
Loan Document to which it is party, and (iii) any filing as is necessary to
perfect any lien of the Bank created under the Loan Documents.
1.7. There is no action, proceeding or investigation pending or threatened
against Borrower before any court, administrative agency or other tribunal (i)
seeking to prevent the consummation of any of the transactions contemplated by
any of the Loan Documents, or (ii) which is likely to materially and adversely
affect the performance by Borrower of its obligations under, or the validity or
enforceability of, any of the Loan Documents.
1.8. The Guarantor has furnished the Bank with its consolidated financial
statements for the fiscal year ending December 31, 1995 audited and certified by
KPMG Peat Marwick LLP. All such financial statements were prepared in accordance
with generally accepted accounting principles, consistently applied, and fairly
presents the financial position of the Guarantor and its direct and indirect
subsidiaries for such periods.
1.9. No portion of any loan from the Bank to the Borrower is to be used for
the purpose of purchasing or carrying any margin stock as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System.
ARTICLE 2. - COVENANTS.
2.1. CFC shall not, and the Borrower shall cause CFC to not, amend CFC's
Certificate of Incorporation or By-laws without the prior written consent of the
Bank.
2.2. CFC shall not, and the Borrower shall cause CFC to not, issue any
shares of capital stock or rights, warrants or options in respect of capital
stock or securities convertible into or exchangeable for capital stock, other
than the shares of common stock which have pledged (or will be pledged promptly
upon issuance) to the Bank pursuant to a Stock Pledge Agreement of even date.
2.3. Borrower shall comply, and shall cause its subsidiaries to comply, in
all material respects with all laws, rules, regulations and agreements to which
it is or may be subject.
2.4. Borrower shall not engage in any business other than as a
consumer and mortgage finance lender and servicer.
2.5. The Borrower does not, and shall not, have any indebtedness with
the exceptions of
2.5.1 any indebtedness to the Bank;
2.5.2 the indebtedness (if any) listed on EXHIBIT A, annexed
hereto;
2.5.3. indebtedness incurred in the normal course of the
Borrower's business in an amount not to exceed $5,000,000.00 at any
time outstanding;
2.5.4. intercompany indebtedness existing as of the date hereof
amongst the Borrower, any of its subsidiaries and the Guarantor;
2.5.5. intercompany indebtedness hereafter arising amongst the
Borrower, any of its subsidiaries and the Guarantor in an amount
(together with any guaranties described in Paragraph 2.7(e) hereof) not
to exceed $1,000,000.00 in the aggregate;
2.5.6. indebtedness to Greenwich Capital Financial Products Inc.
("Greenwich") in an amount not to exceed $10,000,000.00; provided that the
instruments, documents, and agreements evidencing the arrangement between
the Borrower and Greenwich shall be satisfactory in form and substance to
the Bank (such approval not to be unreasonably withheld); and provided
further that Greenwich shall have executed and delivered to the Bank an
Intercreditor Agreement substantially in the form of Schedule 1 hereto;
and
2.5.7. purchase money indebtedness and capital leases not to
exceed $100,000.00 in the aggregate at any time outstanding.
2.6. The Borrower shall, and shall cause its subsidiaries to, pay or cause
to be paid all taxes, assessments or governmental charges on or against it prior
to the time when they become due, other than any tax, assessment or governmental
charge which is being contested in good faith and by appropriate proceedings and
as to which no lien has been filed against the Borrower or any of its assets.
2.7. Borrower shall not guarantee, endorse, or otherwise in any way become
or be responsible for any obligations of any other person, entity or affiliate,
including without limitation, whether directly or indirectly by agreement to
purchase the indebtedness of any other person or through the purchase of goods,
supplies or services, or maintenance of working capital or other balance sheet
covenants or conditions, or by way of stock purchase, capital contributions,
advance or loan for the purposes of paying or discharging any indebtedness or
obligation of such other person or otherwise other than:
2.7.1. contingent obligations (if any) listed on EXHIBIT B annexed
hereto;
2.7.2. guarantees of obligations to third parties in connection
with the relocation of employees of the Borrower not to exceed
$100,000.00 in the aggregate;
2.7.3. endorsements of instruments for deposit or collection in
the ordinary course of business;
2.7.4. intercompany guaranties existing as of the date hereof from
the Borrower of indebtedness of any of its subsidiaries or the
Guarantor; and
2.7.5. guaranties hereafter executed by the Borrower of
indebtedness of any of its subsidiaries or the Guarantor in an amount
(together with any indebtedness described in Paragraph 2.5(e) hereof)
not to exceed $1,000,000.00 in the aggregate.
2.8. The Borrower is, and shall hereafter remain, the owner of all of the
Borrower's properties and assets free and clear of all liens, encumbrances,
attachments, security interests, purchase money security interests, mortgages,
and charges with the exceptions of
2.8.1. security and mortgage interests granted to the Bank;
2.8.2. the security interests and other encumbrances (if any)
listed on EXHIBIT C, annexed hereto;
2.8.3. pledges or deposits in connection with workmen's
compensation, unemployment insurance and other social security
legislation;
2.8.4. deposits to secure the performance of bids, trade or
government contracts, leases, licenses, statutory obligations, surety
and appeal bonds and other obligations of a like nature incurred in the
ordinary course of business;
2.8.5. liens for any tax, assessment or governmental charge not
yet delinquent;
2.8.6. carriers', warehousemens', mechanics, landlords',
materialmens', repairmens' or other like liens arising in the ordinary
course of business with respect to obligations which are not yet due or
which are bonded;
2.8.7. purchase money liens and liens with respect to capital leases
not to exceed $100,000.00 in the aggregate at any time outstanding;
provided that such liens shall extend only to the assets acquired and not
to any other property; and
2.8.8. liens in favor of Greenwich in an amount not to exceed
$10,000,000.00; provided that the instruments, documents, and agreements
evidencing the arrangement between the Borrower and Greenwich shall be
satisfactory in form and substance to the Bank (such approval not to be
unreasonably withheld); and provided further that Greenwich shall have
executed and delivered to the Bank an Intercreditor Agreement
substantially in the form of Schedule 1 hereto.
2.9. (a) CFC does not have, and shall not incur, any indebtedness.
(b) CFC is, and shall hereafter remain, the owner of all of its
properties and assets free and clear of all liens, encumbrances, attachments,
security interest, purchase money security interests, mortgages and charges.
(c) CFC's sole business is, and shall consist of, the holding of
Residual Interests and I/O Interests (as each of those terms is defined in a
certain Pledge Agreement of even date executed by the Borrower in favor of the
Bank).
(d) The Borrower shall not transfer to, and CFC shall not obtain or
acquire, title to any Residual Interests and I/O Interests other than those
owned by CFC as of the date of this Agreement.
2.10. The Borrower shall not
2.10.1 pay any dividend, other than a common stock dividend of the
Borrower's own capital stock; provided, however, that until the occurrence
of an Event of Default under the Loan Documents, the Borrower shall be
permitted to pay dividends to the Guarantor in an amount equal to (i) the
amounts required for the Guarantor to pay franchise taxes and other fees
required to maintain its corporate existence and costs relating to the
transaction evidenced by the Loan Documents and to provide for operating
costs not to exceed $500,000.00 in any calendar year; and (ii) the amounts
required for the Guarantor to pay federal, state and local income taxes to
the extent that such taxes are attributable to the income of the Borrower.
2.10.2. own or acquire any of the Borrower's capital stock;
2.10.3. invest in or purchase any securities of any other entity,
other than those entities listed on EXHIBIT D, annexed hereto;
2.10.4. merge or consolidate or be merged or consolidated with or
into any other entity;
2.10.5. consolidate any of the Borrower's operations with those of
any other entity; or
2.10.6. organize any subsidiary or other affiliated entity, other
than those entities listed on EXHIBIT D, annexed hereto; or
2.10.7. make any loans or advances to any person or entity, other
than (i) travel and entertainment advances and relocation and other loans
to officers and employees of the Borrower not to exceed $250,000.00 in the
aggregate outstanding at any one time; and (ii) those loans and advances
set forth on EXHIBIT E, annexed hereto.
2.11. The Borrower is a limited partner of Industry Mortgage Corporation
("IMC") and holds a nine (9%) percent interest therein. Upon the consummation of
the initial public offering for IMC and the conversion of the Borrower's limited
partnership interest into stock of IMC or any successor thereto, subject to the
following sentence, the Borrower shall pledge to the Bank its entire interest in
IMC as further collateral for the Borrower's obligations. Notwithstanding the
foregoing, the Borrower shall be obligated to pledge such interest only to the
extent that the pledge is permitted by the terms of any agreement pursuant to
which the initial public offering is made (or if restricted thereby, upon the
termination of any such restriction); the Borrower shall, however, use its
reasonable
efforts to cause such agreements to permit the pledge of such interests to the
Bank hereunder.
ARTICLE 3. - FINANCIAL REPORTING.
3.1. The Borrower shall at all times keep proper books of account, in which
full, true, and accurate entries shall be made of all of the Borrower's
transactions, all in accordance with GAAP.
3.2. (a) The Borrower shall, upon reasonable notice and during normal
business hours, provide access to the Bank as the Bank may require to all
properties owned by or over which the Borrower has control.
3.3. The Borrower will permit the Bank, upon reasonable notice during
normal business hours, at the Borrower's expense, to examine and inspect all of
the Borrower's properties, and to examine, inspect, copy, and make extracts from
any and all of the Borrower's books and records.
3.4. The Borrower authorizes the Bank from time to time, upon reasonable
notice, to meet with the Borrower's accountants, and business consultants,
and/or any other person providing professional services to the Borrower
respectively to review and to discuss the Borrower's financial condition and
operations.
3.5. (a) The Borrower shall provide, or cause to be provided to, the Bank
with such financial information concerning the Borrower, the Guarantor, CFC
and/or CMCL as the Bank may reasonably request. Without limiting the generality
of the foregoing, the Borrower shall provide, or cause to be provided to, the
Bank with the following:
Monthly, within fifteen (15) days following the end of the previous month,
an internally prepared management report substantially in the form
previously submitted to the Bank;
Quarterly, within forty-five (45) days following the end of the previous
quarter, an internally prepared consolidated and consolidating financial
statement of the Guarantor's and its subsidiaries' financial condition at,
and the results of its operations for, the previous quarter, which
financial statement shall include, at a minimum, a balance sheet, income
statement, and statement of cash flow;
Annually, within ninety (90) days following the end of the Guarantor's
fiscal year (commencing with the fiscal year ending December 31, 1996), an
original signed counterpart of the Guarantor's annual financial statement,
which statement shall have been prepared on a consolidated and
consolidating basis by, and bear the unqualified opinion of, the
Guarantor's independent certified public accountants.
3.6. Borrower shall deliver, or cause to be delivered, to the Bank; (1)
with respect to each pool of mortgage loans underlying any collateral granted to
the Bank by the Borrower; (i) any report relating to such pool, including
without limitation, any trustee's report; (ii) any notice of transfer of
servicing; (iii) monthly reports detailing the delinquency, loss, prepayment and
foreclosure experience of each such pool; (iv) any public document filed with
any regulatory body or agency; and (v) any other such document or information as
the Bank may reasonably request from time to time; and (2) all reports, notices
and other information regarding CFC listed in (1) above with regard to any pool
of mortgage loans underlying any assets of CFC; and (3) all reports, notices and
other information regarding CMCL listed in (1) above with regard to any pool of
mortgage loans underlying any assets of CMCL in which the Borrower has been
granted a security interest to secure intercompany indebtedness due to the
Borrower by CMCL (which security interest and intercompany note has been
collaterally assigned to the Bank by the Borrower).
3.7. Borrower, Guarantor and CFC shall each, promptly upon filing, deliver
to the Bank copies of all public filings made by Borrower, the Guarantor, or CFC
with the Securities and Exchange Commission or any governmental authority
succeeding to any of its functions.
ARTICLE 4. - GENERAL.
4.1. This Agreement shall be binding upon the Borrower, the Guarantor, CFC
and their respective successors and assigns and shall ensure to the benefit of
the Bank and the Bank's successors and assigns.
4.2. Any determination that any provision of this Agreement or any
application thereof is invalid, illegal, or unenforceable in any respect in any
instance shall not affect the validity, legality, or enforceability of such
provision in any other instance, or the validity, legality, or enforceability of
any other provision of this Agreement.
4.3. No failure or delay by the Bank in exercising any right or enforcing
any obligation of the Borrower, Guarantor, CFC, or CMCL hereunder shall operate
as a waiver thereof.
4.4. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts.
4.5. This Agreement may be executed in any number of counterparts,
each of which together shall constitute one entire agreement.
ATTEST: CITYSCAPE CORP.
(Borrower)
______________________________ By:___________________________
Print Name:___________________
Title:________________________
ATTEST: CITYSCAPE FINANCIAL CORP.
(Guarantor)
______________________________ By:___________________________
Print Name:___________________
Title:________________________
ATTEST: CITYSCAPE FUNDING CORP.
(CFC)
______________________________ By:___________________________
Print Name:___________________
Title:________________________
AGREED:
THE FIRST NATIONAL BANK OF BOSTON
By:______________________________
Print Name:______________________
Title:___________________________
EXHIBITS
_____The following Exhibits to this Agreement are respectively described in the
section indicated. those Exhibits in which no information has been inserted
shall be deemed to read "NONE".
EXHIBIT A: Indebtedness
EXHIBIT B: Contingent Obligations
EXHIBIT C: Encumbrances
EXHIBIT D: Investments
EXHIBIT E: Loans
The First National Bank of Boston
April 11, 1996
Page 1
April 11, 1996
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attention: Diversified Finance
Gentlemen:
The undersigned, Cityscape Corp., a New York corporation (the "Borrower"),
is this day entering into a loan arrangement with The First National Bank of
Boston (the "Bank") pursuant to which the Bank is making a loan to the Borrower
in the principal amount of $30,000,000.00 (the "Loan"). The Borrower had agreed
to pay the Bank an Advisory Fee of $675,000.00 in connection with the Loan.
However, the Borrower has advised the Bank that the Borrower anticipates that
the Loan will be repaid substantially prior to its scheduled maturity and has
requested that the Bank defer and/or waive a portion of the Advisory Fee (which
the Bank is willing to do).
In anticipation of the closing of the Loan, the Bank made an advance (the
"Bridge Loan") to the Borrower on March 28, 1996 in the sum of $4,000,000.00.
The Bridge Loan will be repaid by the Loan. At the time of the closing of the
Bridge Loan, the Borrower paid the Bank an Advisory Fee in the sum of
$575,000.00 (which fee will reduce the Advisory Fee payable in connection with
the Loan). Accordingly, the balance of the Advisory Fee due in connection with
the Loan is $100,000.00.
While the Promissory Note executed by the Borrower in favor of the Bank in
connection with the Loan reflects that the Note matures on December 31, 1996,
the Borrower has advised the Bank that the Borrower anticipates that the Loan
will be repaid in full on or before May 31, 1996. If the Loan has been fully and
unconditionally paid in full by that date, the Bank will waive the payment of
the
balance of the Advisory Fee. However, the Borrower agrees that if its
obligations to the Bank under the Loan have not been fully and unconditionally
paid in full by May 31, 1996, the Borrower shall pay to the Bank on that date
the balance of the Advisory Fee in the sum of $100,000.00. The failure of the
Borrower to make such payment on that date shall constitute an Event of Default
under the terms of the Borrower's Promissory Note and other loan documents and
the Bank shall be entitled to exercise all rights and remedies upon default on
account hereof.
If the foregoing correctly sets forth our understanding, please indicate
your assent below.
This is intended to take effect as a sealed instrument.
CITYSCAPE CORP.
By: ____________________________
Name: __________________________
Title: _________________________
AGREED:
THE FIRST NATIONAL BANK OF BOSTON
By: ____________________________
Name: __________________________
Title: _________________________
PLEDGE AGREEMENT
This PLEDGE AGREEMENT is made as of this 11th day of April, 1996, between
Cityscape Corp. (the "Pledgor"), and THE FIRST NATIONAL BANK OF BOSTON (the
"Bank").
WHEREAS, the Pledgor has entered into a loan arrangement with the Bank
evidenced by a Commercial Promissory Note of even date (the "Note") in the
original principal amount of $30,000,000.00, pursuant to which the Bank, subject
to the terms and conditions contained therein, is to make loans or otherwise to
extend credit to the Pledgor; and
WHEREAS, it is a condition precedent to the Bank's making any loans or
otherwise extending credit to the Pledgor that the Pledgor execute and deliver
to the Bank a pledge agreement in substantially the form hereof; and
WHEREAS, the Pledgor wishes to grant pledges, assignments and security
interests in favor of the Bank as herein provided;
NOW, THEREFORE, in consideration of the premises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Collateral.
The Pledgor hereby pledges, assigns, grants a security interest in,
and delivers to the Bank the following collateral:
All Residual Interests and I/O Interests now owned or hereafter
acquired and all proceeds thereof
together with all necessary instruments of assignment executed in blank,
endorsements, instructions to or approvals by brokers or other financial
intermediaries or other book-entry custodians or other instructions or
confirmations as may have been requested by the Bank as necessary or appropriate
for the Bank's security interest in such collateral to attach, become perfected,
achieve priority over competing claimants and otherwise be preserved.
2. Definitions. All capitalized terms used herein without definition shall
have the respective meanings provided therefor in the Note. Terms used herein
and not defined in the Note or otherwise defined herein that are defined in the
Uniform Commercial Code as from time to time in effect in the Commonwealth of
Massachusetts have such defined meanings herein, unless the context otherwise
indicates or requires, and the following additional terms shall have the
following meanings:
Collateral: The property at any time assigned or pledged to the Bank
hereunder (whether described herein or not) and all income therefrom,
increases therein and proceeds thereof.
I/O Interests: The certificate or certificates representing the
interest-only interest or interests of one or more securitized mortgage pools
originated by the Pledgor, which pools have been sold in a public offering or
private placement securitization; provided that I/O Interests shall not include
interest-only interests held by City Funding Corporation.
Residual Interests: The certificate or certificates representing the
residual interests in one or more securitized mortgage pools originated by the
Pledgor, which pools have been sold in a public offering or private placement
securitization; provided that Residual Interests shall not include residual
interests held by City Funding Corporation.
ss.3. Security for Obligations. This Agreement and the security
interest in and assignment and pledge of the Collateral hereunder are made
with and granted to the Bank as security for the payment and performance in
full of all the Obligations.
ss.4. Interest, Dividends, Etc.
Any sums or other property paid or distributed upon or with respect
to any of the Collateral, whether by dividend, interest or redemption or upon
the liquidation or dissolution of the issuer thereof or otherwise, shall be paid
over and delivered to the Bank to be applied by the Bank toward the Obligations
in such order and manner as provided in ss.6 hereof.
ss.5. Warranty of Title; Authority. The Pledgor hereby represents and
warrants that: (a) the Pledgor has good and marketable title to the Collateral
described in ss.1, subject to no pledges, liens, security interests, charges,
options, restrictions or other encumbrances or other adverse claims except the
pledge, assignment and security interest created by this Agreement, (b) the
Pledgor has full power, authority and legal right to execute, deliver and
perform its obligations under this Agreement and to pledge, assign and grant a
security interest in all of the Collateral pursuant to this Agreement, and (c)
the execution, delivery and performance hereof and the pledge and assignment of
and granting of a security interest in the Collateral hereunder have been duly
authorized by all necessary corporate or other action of the Pledgor and do not
contravene any law, rule or regulation or any provision of the Pledgor's charter
documents or by-laws or other governing documents or of any judgment, decree or
order of any tribunal or of any agreement or instrument to which the Pledgor is
a party or by which the Pledgor or any of the Pledgor's property is bound or
affected or constitute a default thereunder. The Pledgor covenants that the
Pledgor will defend the Bank's rights and security interest in the Collateral
created and existing in accordance with the terms hereof against the claims and
demands of all persons whomsoever (other than against any lien in favor of
Greenwich Capital Financial Products, Inc. which is permitted under the
documents evidencing the Obligations). The Pledgor further covenants that the
Pledgor will have the like title to and right to pledge and assign and grant a
security interest in the Collateral hereafter
pledged or assigned or in which a security interest is granted to the Bank
hereunder and will likewise defend the Bank's rights, pledge, assignment and
security interest thereof and therein.
ss.6. Remedies.
(a) If an Event of Default shall have occurred and be continuing,
the Bank shall thereafter have the following rights and remedies (to the extent
permitted by applicable law) in addition to the rights and remedies of a secured
party under the Uniform Commercial Code of Massachusetts, all such rights and
remedies being cumulative, not exclusive, and enforceable alternatively,
successively or concurrently, at such time or times as the Bank deems expedient:
(i) the Bank may demand, sue for, collect or make any
compromise or settlement the Bank deems reasonable in respect of any of
the Collateral;
(ii) the Bank may sell, resell, assign and deliver or
otherwise dispose of any or all of the Collateral, for cash or credit or
both and upon such terms at such place or places, at such time or times
and to such entities or other persons as the Bank thinks reasonable, all
without demand for performance by the Pledgor or any notice or
advertisement whatsoever except as expressly provided herein or as may
otherwise be required by law;
(iii) the Bank may cause all or any part of the Collateral held
by it to be transferred into its name or the name of its nominee or
nominees and, for such purpose, without limitation upon any other rights
or remedies available to the Bank, may give instructions to such effect to
any issuer of any of the Collateral or any broker or other financial
intermediary or book-entry custodian in possession of any of the
Collateral or upon whose books any of the Collateral is then registered;
and
(iv) the Bank may, regardless of the adequacy of any other
collateral held by the Bank, set off or otherwise apply against any of the
Obligations any and all sums deposited with it or held by it.
(b) In the event of any disposition of any of the Collateral as
provided in clause (ii) of ss.6(a), the Bank shall give to the Pledgor at least
five Business Days prior written notice of the time and place of any public sale
of such Collateral or of the time after which any private sale or any other
intended disposition is to be made. The Pledgor hereby acknowledges that five
Business Days prior written notice of such sale or other disposition shall be
reasonable notice. The Bank may enforce its rights hereunder without any other
notice and without compliance with any other condition precedent now or
hereunder imposed by statute, rule of law or otherwise (all of which are hereby
expressly waived by the Pledgor, to the fullest extent permitted by law). The
Bank may buy any part or all of the Collateral at any public sale and if any
part or all of the
Collateral is of a type customarily sold in a recognized market or is of the
type which is the subject of widely-distributed standard price quotations, the
Bank may buy at private sale and may make payments thereof by any means.
(c) The Bank may apply the cash proceeds actually received from any
sale or other disposition or collection of any of the Collateral to the
reasonable expenses of retaking, holding, preparing for sale, selling and the
like, to reasonable attorneys' fees, travel and all other expenses which may be
incurred by the Bank in attempting to collect any of the Obligations or to
enforce this Agreement or in the prosecution or defense of any action or
proceeding related to the subject matter of this Agreement, and then to the
Obligations in such order or preference as the Bank may determine after proper
allowance for any Obligations not then due. Only after such applications and the
Obligations have been paid in full in cash, and after payment by the Bank of any
amount required by ss.9-504(1)(c) of the Uniform Commercial Code of the
Commonwealth of Massachusetts, need the Bank account to the Pledgor for any
surplus. To the extent that any of the Obligations are to be paid or performed
by a person other than the Pledgor, the Pledgor waives and agrees not to assert
any rights or privileges which it may have under ss.9-112 of the Uniform
Commercial Code of the Commonwealth of Massachusetts.
ss.7. Marshalling. The Bank shall not be required to marshal any present
or future collateral security for (including but not limited to this Agreement
and the Collateral), or other assurances of payment of, the Obligations or any
of them, or to resort to such collateral security or other assurances of payment
in any particular order. All of the Bank's rights and remedies hereunder and in
respect of such security and other assurances of payment shall be cumulative and
in addition to all other rights, however existing or arising. To the extent that
the Pledgor lawfully may, the Pledgor hereby agrees that the Pledgor will not
invoke any law relating to the marshalling of collateral that might cause delay
in or impede the enforcement of the Bank's rights under this Agreement or under
any other instrument evidencing any of the Obligations or under which any of the
Obligations is outstanding or by which any of the Obligations is secured or
payment thereof is otherwise assured, and to the extent that it lawfully may the
Pledgor hereby irrevocably waives the benefits of all such laws.
ss.8. Pledgor's Obligations Not Affected. The obligations of the Pledgor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any exercise or nonexercise, or any waiver, by the Bank of
any right, remedy, power or privilege under or in respect of any of the
Obligations or any collateral security therefor (including this Agreement); (b)
any amendment to or modification of any of the other loan documents or any of
the Obligations; (c) any amendment to or modification of any instrument (other
than this Agreement) securing any of the Obligations; or (d) the taking of
additional security for, or any other assurances of payment of, any of the
Obligations or the release or discharge or termination of any security or other
assurances of payment or performance for any of
the Obligations; whether or not the Pledgor shall have notice or knowledge of
any of the foregoing.
ss.9. Transfer, Etc. by Pledgor. Without the prior written consent of
the Bank, the Pledgor will not sell, assign, transfer or otherwise dispose
of, grant any option with respect to, or pledge or grant any security
interest in or otherwise encumber or restrict any of the Collateral or any
interest therein, except for the pledge and assignment thereof and security
interest therein provided for in this Agreement.
ss.10. Further Assurances. The Pledgor will do all such acts, and will
furnish to the Bank all such financing statements, certificates, legal opinions
and other documents and will obtain all such governmental consents and corporate
or other approvals and will do or cause to be done all such other things as the
Bank may reasonably request from time to time in order to give full effect to
this Agreement and to secure, preserve and protect the rights of the Bank
hereunder, all without any cost or expense to the Bank. If the Bank so elects, a
photocopy of this Agreement may at any time and from time to time be transmitted
to any issuer of any of the Collateral or any broker or other financial
intermediary or book-entry custodian in possession of any of the Collateral or
on whose books any of the Collateral is registered or be filed by the Bank as a
financing statement in any recording office in any jurisdiction.
ss.11. Bank's Exoneration. Under no circumstances shall the Bank be deemed
to assume any responsibility for or obligation or duty with respect to any part
or all of the Collateral or any nature or kind or any matter or proceedings
arising out of or relating thereto, other than (a) to exercise reasonable care
in the physical custody of the Collateral and (b) after an Event of Default
shall have occurred and be continuing to act in a commercially reasonable
manner. The Bank shall not be required to take any action of any kind to
collect, preserve or protect its or the Pledgor's rights in any of the
Collateral or against other parties thereto. The Bank's prior recourse to any
part or all of the Collateral shall not constitute a condition of any demand,
suit or proceeding for payment or collection of any of the Obligations.
ss.12. No Waiver, Etc. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a written instrument
expressly referring to this Agreement and to the provisions so modified or
limited, and executed by the party to be charged. No act, failure or delay by
the Bank shall constitute a waiver of its rights and remedies hereunder or
otherwise. No single or partial waiver by the Bank of any default or right or
remedy that it may have shall operate as a waiver of any other default, right or
remedy or of the same default, right or remedy on a future occasion. The Pledgor
hereby waives acceptance and notice of acceptance of this Agreement and
presentment, notice of dishonor and protest of all instruments, included in or
evidencing any of the Obligations or any of the Collateral, and any and all
other notices and demands whatsoever.
ss.13. Notice, Etc. All notices, requests and other communications
hereunder shall be made, if to the Pledgor, at the Pledgor's address on the
signature page hereof or at such other address as the Pledgor may have
provided to the Bank by like notice.
ss.14. Termination. Upon final payment and performance in full in cash of
all of the Obligations, this Agreement shall terminate and the Bank shall, at
the Pledgor's request and expense, return such Collateral in the possession or
control of the Bank as has not theretofore been disposed of pursuant to the
provisions hereof, together with any moneys and other property at the time held
by the Bank hereunder.
ss.15. Overdue Amounts. Until paid, all amounts due and payable by the
Pledgor hereunder shall be a debt secured by the Collateral and shall bear,
whether before or after judgment, interest at the rate of interest for
overdue principal set forth in the Note.
ss.16. Governing Law; Consent to Jurisdiction. THIS AGREEMENT IS INTENDED
TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. The Pledgor
agrees that any suit for the enforcement of this Agreement may be brought in the
courts of the Commonwealth of Massachusetts or any federal court sitting therein
and consents to the non-exclusive jurisdiction of such court and to service of
process in any such suit being made upon the Pledgor by mail at the address
referred to in ss.13. The Pledgor hereby waives any objection that the Pledgor
may now or hereafter have to the venue of any such suit or any such court or
that such suit is brought in an inconvenient court.
ss.17. Waiver of Jury Trial. EACH PARTY HERETO WAIVES ITS RIGHT TO A JURY
TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE
PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, each
party hereto waives any right which it may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. The Pledgor (a) certifies that neither the Bank nor any
representative, agent or attorney of the Bank, has represented, expressly or
otherwise, that the Bank would not, in the event of litigation, seek to enforce
the foregoing waivers and (b) acknowledges that, in entering into the other loan
documents to which the Bank is a party, the Bank is relying upon, among other
things, the waivers and certifications contained in this ss.17.
ss.18. Miscellaneous. The headings of each section of this Agreement are
for convenience only and shall not define or limit the provisions thereof. This
Agreement and all rights and obligations hereunder shall be binding upon the
Pledgor and the Pledgor's respective successors and assigns, and shall inure to
the benefit of the Bank and its successors and assigns. If any term of this
Agreement shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall be in no way
affected thereby, and this Agreement shall be construed and be enforceable as if
such invalid, illegal or unenforceable term had not been included herein. The
Pledgor acknowledges receipt of a copy of this Agreement.
IN WITNESS WHEREOF, intending to be legally bound, the Pledgor and the
Bank have caused this Agreement to be executed as of the date first above
written.
Cityscape Corp.
By:___________________________
Title:________________________
Address:______________________
______________________________
THE FIRST NATIONAL BANK OF BOSTON
By:___________________________
Title:________________________
STOCK PLEDGE AGREEMENT
This STOCK PLEDGE AGREEMENT is made as of this 11th day of April, 1996, by
and between Cityscape Corp. (the "Pledgor"), and The First National Bank of
Boston, a national banking association (the "Bank").
WHEREAS, the Pledgor is the direct or indirect legal and beneficial owner
of the issued and outstanding shares of the capital stock of the corporations
described on Annex A (the "Companies"); and
WHEREAS, the Pledgor has entered into a loan arrangement dated as of the
date hereof, with the Bank, pursuant to which the Bank, subject to the terms and
conditions contained therein, is to make loans or otherwise to extend credit to
the Pledgor, the proceeds of which will directly benefit the Pledgor and its
business operations; and
WHEREAS, it is a condition precedent to the Bank's making any loans or
otherwise extending credit to the Pledgor that the Pledgor execute and deliver
to the Bank a pledge agreement in substantially the form hereof to secure the
Obligations; and
WHEREAS, the Pledgor wishes to grant pledges and security interests in
favor of the Bank as herein provided;
NOW, THEREFORE, in consideration of the premises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ss.1. Pledge of Stock, Etc.
The Pledgor hereby pledges, assigns, grants a security interest in, and
delivers to the Bank, all of the shares of capital stock described on Annex A
hereto, subject to the terms and conditions hereinafter set forth. The
certificates for such shares, accompanied by stock powers or other appropriate
instruments of assignment thereof duly executed in blank by the Pledgor, have
been delivered to the ContiTrade Services Corporation ("CSC") as bailee for the
Bank (in such capacity, the "Bailee").
ss.2. Definitions. The term "Obligations" shall have the meaning provided
therefor in the Pledgor's Commercial Promissory Note of even date in the
principal sum of $30,000,000.00 (the "Note") and shall also include the
Pledgor's obligations hereunder. All other capitalized terms used herein without
definition shall have the respective meanings provided therefor in the Note.
Terms used herein and not defined in the Note or otherwise defined herein that
are defined in the Uniform Commercial Code as from time to time in effect in the
Commonwealth of Massachusetts have such defined meanings herein, unless the
context otherwise indicated or requires, and the following terms shall have the
following meanings:
Stock. The shares of stock described in Annex A attached hereto and any
additional shares of stock at any time pledged to the Bank hereunder.
Stock Collateral. The property at any time pledged to the Bank hereunder
(whether described herein or not) and all products, proceeds, substitutions,
additions, interest, dividends, stock-splits, income and other distributions
therefrom, but excluding from the definition of "Stock Collateral" any income,
increases or proceeds received by the Pledgor to the extent expressly permitted
by ss.6.
ss.3. Security for Obligations. This Agreement and the security interest in
and pledge of the Stock Collateral hereunder are made with and granted to the
Bank as security for the payment and performance in full of all the Obligations.
ss.4. Liquidation, Recapitalization, Etc.
Any sums or other property paid or distributed upon or with respect to any
of the Stock, whether by dividend, stock-split or redemption or upon the
liquidation or dissolution of the issuer thereof or otherwise, shall be paid
over and delivered to the Bank to be applied by the Bank toward the Obligations
in accordance with the provisions of ss.6 hereof. In case, pursuant to the
recapitalization or reclassification of the capital of the issuer thereof or
pursuant to the reorganization thereof, any distribution of capital shall be
made on or in respect of any of the Stock or
any property shall be distributed upon or with respect to any of the Stock, the
property so distributed shall be delivered to the Bank to be held by it as
security for the Obligations. Except to the limited extent provided in ss.6, all
sums of money and property paid or distributed in respect of the Stock, whether
as a dividend or upon such a liquidation, dissolution, recapitalization or
reclassification or otherwise, that are received by the Pledgor shall, until
paid or delivered to the Bank, be held in trust for the Bank as security for the
payment and performance in full of all of the Obligations.
ss.5. Warranty of Title; Authority. (a) The Pledgor hereby represents and
warrants that: (i) the Pledgor has good and marketable title to the Stock
described in ss.1, subject to no pledges, liens, security interests, charges,
options, restrictions or other encumbrances except (A) the pledge and security
interest created by this Agreement, (B) a pledge and security interest in favor
of CSC and (C) securities laws restrictions imposed on the Stock, (ii) the
Pledgor has full power, authority and legal right to execute, deliver and
perform its obligations under this Agreement and to pledge and grant a security
interest in all of the Stock Collateral pursuant to this Agreement, and the
execution, delivery and performance hereof and the pledge of and granting of a
security interest in the Stock Collateral hereunder and does not contravene any
judgment, decree or order of any tribunal or of any agreement or instrument to
which the Pledgor is a party or by which it or any of its property is bound or
affected or constitute a default thereunder, and (iii) the information set forth
in Annex A attached hereto relating to the Stock is true, correct and complete
in all respects. The Pledgor covenants that it will defend the Bank's rights and
security interest in such Stock Collateral created and existing in accordance
with the terms hereof against the claims and demands of all persons whomsoever,
but subject to the security interest of CSC described above. The Pledgor further
covenants that it will have the like title to and right to pledge and grant a
security interest in the Stock Collateral hereafter pledged or in which a
security interest is granted to the Bank hereunder and will likewise defend the
Bank's rights, pledge and security interest thereof and therein.
(b) Notwithstanding the foregoing or any other provision of this Agreement,
the Bank acknowledges that the Stock has been previously pledged to and is
subject to the lien of CSC and the Bank's rights with respect to the Stock and
the Stock Collateral are subject to the rights of CSC as set forth in a
certain Intercreditor Agreement to be entered into between CSC and the Bank.
ss.6. Dividends, Voting, Etc., Prior to Maturity. So long as no Event of
Default shall have occurred and be continuing, the Pledgor shall be entitled to
vote the Stock and to give consents, waivers and ratifications in respect of the
Stock; provided, however, that no vote shall be cast or consent waiver or
ratification given by the Pledgor if the effect thereof would impair any of the
Stock Collateral or be inconsistent with or result in any violation of any of
the provisions of the Note or any of the other loan documents. All such rights
of the Pledgor to vote and give consents, waivers and ratifications with respect
to the Stock shall, at the Bank's option, as evidenced by the Bank's notifying
the Pledgor of such election, cease in case an Event of Default shall have
occurred and be continuing.
ss.7. Remedies
(a) If an Event of Default shall have occurred and be continuing, the Bank
shall have the following rights and remedies (to the extent permitted by
applicable law) in addition to the rights and remedies of a secured party under
the Uniform Commercial Code of Massachusetts, all such rights and remedies being
cumulative, not exclusive, and enforceable alternatively, successively or
concurrently, at such time or times as the Bank deems expedient:
(i) if the Bank so elects and gives notice of such election to the
Pledgor, the Bank may vote any or all shares of the Stock (whether or not
the same shall have been transferred into its name or the name of its
nominee or nominees) for any lawful purpose, including, without
limitation, if the Bank so elects, for the liquidation of the assets of
the issuer thereof, and give all consents, waivers and ratifications in
respect of the Stock and otherwise act with respect thereto as though it
were the outright owner thereof (the Pledgor hereby irrevocably
constituting and appointing the Bank the proxy and attorney-in-fact of the
Pledgor, with full power of substitution, to do so);
(ii) the Bank may demand, sue for, collect or make any compromise or
settlement the Bank deems reasonable in respect of any Stock Collateral;
(iii) the Bank may sell, resell, assign and deliver, or otherwise
dispose of any or all of the Stock Collateral, for cash or credit or both
and upon such terms at such place or places, at such time or times and to
such entities or other persons as the Bank thinks reasonable, all without
demand for performance by the Pledgor or any notice or advertisement
whatsoever except as expressly provided herein or as may otherwise be
required by law;
(iv) the Bank may cause all or any part of the Stock held by it to
be transferred into its name or the name of its nominee or nominees; and
(v) the Bank may regardless of the adequacy of any other collateral
held by the Bank, set off against the Obligations any and all sums
deposited with it or held by it.
(b) In the event of any disposition of the Stock Collateral as provided in
clause (iii) of ss.7(a), the Bank shall give to the Pledgor at least five
Business Days prior written notice of the time and place of any public sale of
the Stock Collateral or of the time after which any private sale or any other
intended disposition is to be made. The Pledgor hereby acknowledges that five
Business Days prior written notice of such sale or sales shall be reasonable
notice. The Bank may enforce its rights hereunder without any other notice and
without compliance with any other condition precedent now or hereunder imposed
by statute, rule of law or otherwise (all of which are hereby expressly waived
by the Pledgor, to the fullest extent permitted by law). The Bank may buy any
part or all of the Stock Collateral at any public sale and if any part or all of
the Stock Collateral is of a type customarily sold in a recognized market or is
of the type which is the subject of widely-distributed standard price
quotations, the Bank may buy at private sale and may make payments thereof by
any means. The Bank may apply the cash proceeds actually received from any sale
or other disposition to the reasonable expenses of retaking, holding, preparing
for sale, selling and the like, to reasonable attorneys fees, travel and all
other expenses which may be incurred by the Bank in attempting to collect the
Obligations or to enforce this Agreement or in the prosecution or defense of any
action or proceeding related to the subject matter of this Agreement, and then
to the Obligations in the order set forth in such order or preference as the
Bank may determine after proper allowance for Obligations not then due. Only
after such applications, and after payment by the Bank of any amount required by
ss.9-504(1)(c)
of the Uniform Commercial Code of the Commonwealth of Massachusetts, need the
Bank account to the Pledgor for any surplus. To the extent that any of the
Obligations are to be paid or performed by a person other than the Pledgor, the
Pledgor waives and agrees not to assert any rights or privileges which it may
have under ss.9-112 of the Uniform Commercial Code of the Commonwealth of
Massachusetts.
(c) If the Bank shall determine to exercise its right to sell any or all
of the Stock pursuant to this ss.7, and if in the opinion of counsel for the
Bank it is necessary, or if in the reasonable opinion of the Bank it is
advisable, to have the Stock, or that portion thereof to be sold, registered
under the provisions of the Securities Act of 1933, as amended (the "Securities
Act"), the Pledgor agrees to use its best efforts to cause the issuer or issuers
of the Stock contemplated to be sold to execute and deliver, and cause the
directors and officers of such issuer to execute and deliver, all at the
Pledgor's expense, all such instruments and documents, and to do or cause to be
done all such other acts as may be necessary or, in the reasonable opinion of
the Bank, advisable to register such Stock under the provisions of the
Securities Act and to cause the registration statement relating thereto to
become effective and to remain effective for a period of 6 months from the date
such registration statement becomes effective, and to make all amendments
thereto or to the related prospectus or both that, in the reasonable opinion of
the Bank, are necessary or advisable, all in conformity with the requirements of
the Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. The Pledgor agrees to use its best efforts to
cause such issuer or issuers to comply with the provisions of the securities or
"Blue Sky" laws of any jurisdiction which the Bank shall designate and to cause
such issuer or issuers to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which will
satisfy the provisions of Section 11(a) of the Securities Act.
(d) The Pledgor recognizes that the Bank may be unable to effect a public
sale of the Stock by reason of certain prohibitions contained in the Securities
Act, federal banking laws, and other applicable laws, and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers.
The Pledgor agrees that any such private sales may be at prices and other terms
less favorable to the seller than if sold at public sales and if conducted in a
manner that the Bank in good faith believes to be commercially reasonable under
the circumstances, that such private sales shall not by reason
thereof be deemed not to have been made in a commercially reasonable manner. The
Bank shall be under no obligation to delay a sale of any of the Stock for the
period of time necessary to permit the issuer of such securities to register
such securities for public sale under the Securities Act, or such other federal
banking or other applicable laws, even if the issuer would agree to do so.
Subject to the foregoing, the Bank agrees that any sale of the Stock shall be
made in a commercially reasonable manner.
(e) The Pledgor further agrees to do or cause to be done all such other
acts and things as may be reasonably necessary to make any sales of any portion
or all of the Stock pursuant to this ss.7 valid and binding and in compliance
with any and all applicable laws (including, without limitation, the Securities
Act, the Securities Exchange Act of 1934, as amended, the rules and regulations
of the Securities and Exchange Commission applicable thereto and all applicable
state securities or "Blue Sky" laws), regulations, orders, writs, injunctions,
decrees or awards of any and all courts, arbitrators or governmental
instrumentalities, domestic or foreign, having jurisdiction over any such sale
or sales, all at the Pledgor's expense. The Pledgor further agrees that a breach
of any of the covenants contained in this ss.7 will cause irreparable injury to
the Bank, that the Bank has no adequate remedy at law in respect of such breach
and, as a consequence, agrees that each and every covenant contained in this
ss.7 shall be specifically enforceable against the Pledgor and the Pledgor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants.
ss.8. Marshalling. The Bank shall not be required to marshal any present
or future security for (including but not limited to this Agreement and the
Stock Collateral), or other assurances of payment of, the Obligations or any of
them, or to resort to such security or other assurances of payment in any
particular order. All of the Bank's rights hereunder and in respect of such
security and other assurances of payment shall be cumulative and in addition to
all other rights, however existing or arising. To the extent that it lawfully
may, the Pledgor hereby agrees that it will not invoke any law relating to the
marshaling of collateral that might cause delay in or impede the enforcement of
the Bank's rights under this Agreement or under any other instrument evidencing
any of the Obligations or under which any of the Obligations is outstanding or
by which any of the Obligations is secured or payment thereof is otherwise
assured, and to the
extent that it lawfully may the Pledgor hereby irrevocably waives the benefits
of all such laws.
ss.9. Pledgor's Obligations Not Affected. The obligations of the Pledgor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by (a) any exercise or nonexercise, or any waiver, by the Bank of
any right, remedy, power or privilege under or in respect of any of the
Obligations or any security thereof (including this Agreement); (b) any
amendment to or modification of the Note, the other loan documents or any of the
Obligations; (c) any amendment to or modification of any instrument (other than
this Agreement) securing any of the Obligations; or (d) the taking of additional
security for, or any other assurances of payment of, any of the Obligations or
the release or discharge or termination of any security or other assurances of
payment or performance for any of the Obligations; whether or not the Pledgor
shall have notice or knowledge of any of the foregoing.
ss.10. Transfer, Etc., by Pledgor. Without the prior written consent of the
Bank, the Pledgor will not sell, assign, transfer or otherwise dispose of, grant
any option with respect to, or pledge or grant any security interest in or
otherwise encumber or restrict any of the Stock Collateral or any interest
therein, except for the pledge thereof and security interest therein provided
for in this Agreement.
ss.11. Further Assurances. The Pledgor will do all such acts, and will
furnish to the Bank all such financing statements, certificates, legal opinions
and other documents and will obtain all such governmental consents and corporate
approvals and will do or cause to be done all such other things as the Bank may
reasonably request from time to time in order to give full effect to this
Agreement and to secure the rights of the Bank hereunder, all without any cost
or expense to the Bank. If the Bank so elects, a photocopy of this Agreement may
at any time and from time to time be filed by the Bank as a financing statement
in any recording office in any jurisdiction.
ss.12. Bank's Exoneration. Under no circumstances shall the Bank be deemed
to assume any responsibility for or obligation or duty with respect to any part
or all of the Stock Collateral of any nature or kind or any matter or
proceedings arising out of or relating thereto, other than (a) to exercise
reasonable care in the physical custody of the Stock Collateral, and (b) after
an Event of Default shall have occurred and be continuing to act in a
commercially reasonable manner. The Bank shall not be required to take any
action of any kind to collect, preserve or
protect its or the Pledgor's rights in the Stock Collateral or against other
parties thereto. The Bank's prior recourse to any part or all of the Stock
Collateral shall not constitute a condition of any demand, suit or proceeding
for payment or collection of any of the Obligations.
ss.13. No Waiver, Etc.. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a written instrument
expressly referring to this Agreement and to the provisions so modified or
limited, and executed by the party to be charged. No act, failure or delay by
the Bank shall constitute a waiver of its rights and remedies hereunder or
otherwise. No single or partial waiver by the Bank of any default or right or
remedy that it may have shall operate as a waiver of any other default, right or
remedy or of the same default, right or remedy on a future occasion. The Pledgor
hereby waives presentment, notice of dishonor and protest of all instruments,
included in or evidencing any of the Obligations or the Stock Collateral, and
any and all other notices and demands whatsoever (except as expressly provided
herein.
ss.14. Notices, Etc. All notices, requests and other communications
hereunder shall be made in the manner set forth in the Note.
ss.15. Termination. Upon final payment and performance in full of the
Obligations, this Agreement shall terminate and the Bank shall, at the Pledgor's
request and expense, return such Stock Collateral in the possession or control
of the Bank as has not theretofore been disposed of pursuant to the provisions
hereof, together with any moneys and other property at the time held by the Bank
hereunder.
ss.16. Overdue Amounts. Until paid, all amounts due and payable by the
Pledgor hereunder shall be a debt secured by the Stock Collateral and shall
bear, whether before or after judgment, interest at the default rate of interest
provided for in the Note.
ss.17. Governing Law; Consent to Jurisdiction. THIS AGREEMENT IS INTENDED
TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. The Pledgor
agrees that any suit for the enforcement of this Agreement may be brought in the
courts of the Commonwealth of Massachusetts or any federal court sitting therein
and consents to the non-exclusive jurisdiction of such court and to service of
process in any such suit being made
upon the Pledgor by certified mail return receipt requested at the address
referred to in Section 14. The Pledgor hereby waives any objection that it may
now or hereafter have to the venue of any such suit or any such court or that
such suit is brought in an inconvenient court.
ss.18. Waiver of Jury Trial. EACH PARTY HERETO WAIVES ITS RIGHT TO A JURY
TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE
PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, each
party hereto waives any right which it may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. The Pledgor (a) certifies that neither the Bank nor any
representative, agent or attorney of the Bank has represented, expressly or
otherwise, that the Bank would not, in the event of litigation, seek to enforce
the foregoing waivers, and (b) acknowledges that, in entering into the Note and
the other loan documents to which the Bank is a party, the Bank is relying upon,
among other things, the waivers and certifications contained in this ss.18.
ss.19. Miscellaneous. The headings of each section of this Agreement are
for convenience only and shall not define or limit the provisions thereof. This
Agreement and all rights and obligations hereunder shall be binding upon the
Pledgor and its respective successors and assigns, and shall inure to the
benefit of the Bank and its successors and assigns. If any term of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity of
all other terms hereof shall be in no way affected thereby, and this Agreement
shall be construed and be enforceable as if such invalid, illegal or
unenforceable term had not been included herein. The Pledgor acknowledges
receipt of a copy of this Agreement.
IN WITNESS WHEREOF, intending to be legally bound, the Pledgor and the Bank
have caused this Agreement to be executed as a sealed instrument as of the date
first above written.
Cityscape Corp.
By:___________________________
Title:________________________
The First National Bank of Boston
By:___________________________
Title:________________________
ANNEX A
250,000 shares of common stock of Cityscape Funding Corporation, a
Delaware corporation evidenced by Certificate No. _______________.
COLLATERAL ASSIGNMENT OF NOTE AND CHARGE AGREEMENT
Date: April 11, 1996
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which
are hereby acknowledged, Cityscape Corp., a New York corporation (hereinafter,
the "Assignor") hereby grants, assigns and transfers to The First National Bank
of Boston, a national banking association with its principal place of business
at 100 Federal Street, Boston, Massachusetts 02110 (hereinafter, the "Assignee")
all of the Assignor's right, title and interest in and to a certain Promissory
Note dated April 11, 1996 in the original principal amount of $____________ (the
"Promissory Note") made by City Mortgage Corporation Limited (hereinafter, the
"Borrower") payable to the Assignor and any and all extensions, renewals,
modifications, amendments, or replacements of the same (hereinafter, the
"Promissory Note"), and a certain Charge and Assignment by Way of Security
granted by the Borrower to the Assignor dated April 11, 1996 encumbering certain
assets of the Borrower (the "Agreement").
1. Assignment as Security. This Assignment is to secure the Assignor's
obligations and liabilities to the Assignee under a certain Commercial
Promissory Note of even date made by the Assignor payable to the Assignee in the
original principal amount of $30,000,000.00, and any extensions, amendments,
renewals, modifications or restatements thereof (hereinafter, the
"Liabilities"). All capitalized terms used herein and not otherwise defined
shall have the same meaning herein as in the above referenced Commercial
Promissory Note.
2. Assignor's Representations, Warranties and Covenants
2.1. The Assignor shall direct the Borrower to make all payments under the
Promissory Note directly to the Assignee to be promptly applied in reduction of
the Liabilities, and the Assignor shall take all such action and execute all
such documents as the Assignee may reasonably request to effectuate such direct
payment.
2.2. The Assignor represents that the Borrower currently is not in default
under the terms of the Promissory Note.
2.3. The Assignor represents that all signatures on the Promissory Note are
genuine and that there are no claims, defenses, offsets, or counterclaims of the
Borrower against the Assignor under the Promissory Note or otherwise.
2.4. The Assignor covenants that it will not exercise any rights or
remedies under the Promissory Note, or amend, modify, release, or discharge the
Promissory Note or any collateral therefor prior to full payment of the
Promissory Note without the prior written consent of the Assignee.
2.5. The Assignor represents that the Promissory Note is valid and
enforceable against the Borrower.
2.6. The Assignor has not made and will not make any other assignment of
the Assignor's rights under the Promissory Note.
2.7. The Assignor agrees that the Assignee may designate from time to time
an agent to collect when due amounts under the Promissory Note.
2.8. The Assignor will undertake all such actions as may be reasonably
requested by the Assignee in furtherance of the rights of the Assignee
hereunder.
2.9. The Assignor will promptly advise the Assignee of all events of which
the Assignor has or obtains knowledge regarding the Promissory Note or the
collateral therefor which may have a material effect upon the Promissory Note,
such collateral or the rights of the Assignee therein.
3. TERMS AND CONDITIONS
3.1. The Assignor agrees that whether or not an Event of Default has
occurred and is continuing, all payments with respect to the Promissory Note
including, without limitation, the final payment of the outstanding balance due
under the Promissory Note and accrued interest thereon, shall be paid to the
Assignee for prompt application toward the Liabilities of the Assignor.
Notwithstanding the foregoing, if the Assignor receives any payments under the
Promissory Note, such payments shall be held in trust by the Assignor for the
Assignee and shall be delivered to the Assignee upon receipt for prompt
application to the Liabilities. Whether or not an Event of Default has occurred
and is continuing, upon request of the Assignee, Assignor shall deliver or cause
to be delivered to the Borrower such notices as the Assignee may direct
notifying the Borrower of the Assignee's rights with respect to the Promissory
Note and directing the Borrower to make all payments with respect to the
Promissory Note directly to the Assignee.
3.2. The Assignee may, at its option, and after the occurrence of an Event
of Default which is then continuing, without notice to the Assignor, enforce any
and all rights of the Assignor under the Promissory Note, may collect all sums
when due, including those past due and unpaid, according to the terms of the
Promissory Note, and may enter into such further agreements concerning the
Promissory Note as the Assignee, in its reasonable discretion, shall determine.
The Assignee shall also have and may exercise at any time after the occurrence
of an Event of Default which is then continuing, all rights, remedies, powers,
privileges and discretions of the Assignor with respect to the Promissory Note
and any collateral therefor. The Assignor does hereby designate and appoint the
Assignee and its successors and assigns, as the true and lawful attorney of the
Assignor with power, at the sole cost and expense of the Assignor, to ask,
demand, receive, and give releases for any and all amounts which may become
payable or due by the Borrower on account of the Promissory Note, and in the
Assignee's discretion to file any claim or take any other action or proceeding
relative to such claim, either in the Assignee's own name or in the name of the
Assignor, or otherwise, which the Assignee, or any successor or assignee
thereof, may deem necessary or desirable in order to collect or enforce the
payment of any and all amounts due and owing or which may hereafter be or become
due or owing on account of the Promissory Note. The appointment, being coupled
with an interest, is irrevocable until terminated by a duly authorized officer
of the Assignee.
3.3. The Assignee shall have and may exercise at any time all rights,
remedies, powers, privileges and discretions to which the Assignor is entitled
pursuant to Article 9 of the Uniform Commercial Code, as enacted in the
Commonwealth of Massachusetts.
3.4. Absent the gross negligence or willful misconduct of the Assignee, the
Assignee shall not be liable for any loss sustained by Assignor resulting from
the exercise by the Assignee of any of its rights hereunder or from any other
act or omission of the Assignee with respect to the Promissory Note or any
collateral therefor, nor shall the Assignee undertake to perform or discharge
any obligation, duty, or liability of the Assignor under the Promissory Note
arising by reason of this Assignment. The Assignor agrees to indemnify the
Assignee for, and to hold the Assignee harmless from, any liability, loss, or
damage which may be incurred under or by reason of this Assignment and from any
claims and demands which may be asserted against the Assignee by reason of any
alleged obligations or undertakings to perform or discharge any of the terms,
covenants, or agreements contained in the Promissory Note, any collateral
therefor or any agreement in connection therewith, other than claims, demands,
or Liabilities resulting from the Assignee's own gross negligence or willful
misconduct. In the event that the Assignee incurs any such liability under the
Promissory Note or any other agreement, or under or by reason of this Assignment
or in defense of any such claims or demands, the amount thereof, including
costs, expenses, and reasonable attorneys' fees, shall be secured by this
Assignment, and the Assignor shall reimburse the Assignee therefor immediately
upon demand.
3.5. No delay by the Assignee in the exercise of its rights hereunder shall
constitute a waiver of such rights.
3.6. This Assignment shall be binding upon and shall inure to the benefit
of the respective successors and assigns of the parties hereto. Any assignee of
the Assignee and any subsequent assignee shall have the full rights and remedies
of the Assignee under this and other related agreements between the Assignee and
the Assignor.
3.7. This Assignment and all rights, duties, and obligations arising
herefrom shall be construed in accordance with the laws of the Commonwealth of
Massachusetts. The Assignor submits to the jurisdiction of the Courts of said
Commonwealth for all purposes with respect to this Assignment.
3.8. The Assignor shall pay on demand all reasonable expenses of the
Assignee incurred in connection with the preparation of this Assignment, or
which the Assignee may hereafter incur in connection with the protection or
enforcement of any of the Assignee's rights hereunder.
3.9. Any determination that any provision of this Assignment is invalid,
illegal, or unenforceable in any respect shall not affect the validity,
legality, or enforceability of such provision in any other instance, nor the
validity, legality, or enforceability of any other provisions of this
Assignment.
IN WITNESS WHEREOF, the Assignor has caused this instrument to be executed
and its seal to be hereto affixed as of the date first above written.
Cityscape Corp.
By:___________________________
Title:________________________
The First National Bank of Boston
By:___________________________
Title:________________________
"BORROWER"
City Mortgage Corporation Limited
By:___________________________
Title:________________________
------------------------------
_____________, ss. April __, 1996
Then personally appeared the above-named __________________, the
__________________ of Cityscape Corp. and acknowledged the foregoing to be
the free act and deed of ______________________________, before me,
------------------------------
Notary Public
My Commission Expires:
COMMONWEALTH OF MASSACHUSETTS
_____________, ss. April __, 1996
Then personally appeared the above-named __________________, the
__________________ of The First National Bank of Boston and acknowledged the
foregoing to be the free act and deed of The First National Bank of Boston,
before me,
------------------------------
Notary Public
My Commission Expires:
------------------------------
_____________, ss. April __, 1996
Then personally appeared the above-named __________________, the
__________________ of City Mortgage Corporation Limited and acknowledged the
foregoing to be the free act and deed of City Mortgage Corporation Limited,
before me,
------------------------------
Notary Public
My Commission Expires:
COMMERCIAL PROMISSORY NOTE
$30,000,000.00 Boston, Massachusetts
April 11, 1996
FOR VALUE RECEIVED, the undersigned, promises to pay to the order of THE
FIRST NATIONAL BANK OF BOSTON (together with any successors or assigns, the
"Bank") at the Head Office of the Bank, 100 Federal Street, Boston,
Massachusetts THIRTY MILLION DOLLARS ($30,000,000.00), together with interest at
a rate per annum equal to the fixed rate of twelve and one quarter percent
(12.25%).
Interest shall be payable monthly in arrears on the first day of each month
commencing May 1, 1996. Interest shall be calculated on the basis of a 360-day
year for the actual number of days elapsed including holidays and days on which
the Bank is not open for the conduct of banking business.
The entire outstanding principal balance of this Note, together with
accrued and unpaid interest thereon shall be due and payable in full on December
31, 1996.
SECTION 1. PAYMENT TERMS.
1.1 PAYMENTS. All payments hereunder shall be made by the undersigned to
the Bank in United States currency at the Bank's address specified above (or at
such other address as the Bank may specify), in immediately available funds, on
or before 2:00 p.m. (Boston, Massachusetts time) on the due date thereof.
Payments received by the Bank prior to the occurrence of an Event of Default
will be applied first to fees, expenses and other amounts due hereunder
(excluding principal and interest); second, to accrued interest; and third to
outstanding principal. After the occurrence of an Event of Default payments will
be applied to the Obligations under this Note as the Bank determines in its sole
discretion.
1.2 PREPAYMENTS. The principal balance of this Note may be prepaid in whole
or in part without penalty or premium. Amounts prepaid may not be reborrowed.
1.3 DEFAULT RATE. To the extent permitted by applicable law, upon and after
the occurrence of an Event of Default (whether or not the Bank has accelerated
payment of this Note), interest on principal and overdue interest shall, at the
option of the Bank, be payable on demand at a rate per annum (the "Default
Rate") equal to 4% per annum above the rate of interest otherwise payable
hereunder.
1.4 LATE PAYMENT CHARGE. Without limiting the foregoing Section 1.3, if any
payment due hereunder is not made on its due date, the Borrower shall pay a late
charge equal to one (1%) percent per month of any payment not made when due,
including the payment of the entire outstanding balance upon the maturity date
hereof. Nothing in the preceding sentence shall affect the Bank's right to
accelerate the maturity of this Note in the event of any default in the payment
of this Note.
SECTION 2. DEFAULTS AND REMEDIES.
2.1 DEFAULT. The occurrence of any of the following events or conditions
shall constitute an "Event of Default" hereunder:
(a) (i) default in the payment when due of the principal of or
interest on this Note or (ii) any other default in the payment or
performance of this Note or of any other Obligation or (iii) default in the
payment or performance of any obligation of any Obligor to others for
borrowed money in excess of $500,000.00 or in respect of any extension of
credit or accommodation or under any lease in excess of $500,000.00;
(b) failure of any representation or warranty of any Obligor hereunder
or under any agreement or instrument constituting or relating to any
collateral for the Obligations or of any material representation or
material warranty, statement or information in any documents or financial
statements delivered to the Bank in connection herewith to be true and
correct in all material respects;
(c) default or breach of any material condition under any mortgage,
security agreement, assignment of lease, or other agreement securing or
otherwise relating to the Obligations or to any collateral for the
Obligations;
(d) failure to furnish the Bank promptly on request with financial
information about, or to permit inspection by the Bank of any books,
records and properties of, the undersigned;
(e) any Obligor generally not paying its debts as they become due;
(f) dissolution, termination of existence, insolvency, appointment of
a receiver or other custodian of any part of the property of, assignment
for the benefit of creditors by, or the commencement of any proceedings
under any bankruptcy or insolvency laws by or against, or any change in
control of any Obligor; or
(g) material adverse change in the condition or affairs (financial or
otherwise) of any Obligor or in the value or condition of any collateral
securing this Note.
2.2 REMEDIES. Upon the occurrence and during the continuance of an Event of
Default, at the option of the Bank, all Obligations of the undersigned may
become immediately due and payable without notice or demand and the Bank shall
be entitled all rights and remedies provided by agreement or at law or in
equity. All rights and remedies of the Bank are cumulative and are exclusive of
any rights or remedies provided by law or any other agreement, and may be
exercised separately or concurrently.
SECTION 3. DEFINITIONS.
For purposes of this Note, the following definitions shall apply:
"Obligation" means any obligation hereunder or otherwise of any Obligor to
the Bank or to any of its affiliates, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising; and
"Obligor" means the undersigned, any guarantor or any other person
primarily or secondarily liable hereunder or in respect hereof, including any
person or entity who has pledged or granted to the Bank a security interest or
other lien in property on behalf of the undersigned to constitute collateral for
the Obligations.
SECTION 4. MISCELLANEOUS.
4.1 WAIVER, AMENDMENT. No delay or omission on the part of the Bank in
exercising any right hereunder shall operate as a waiver of such right or of any
other right under this Note. No waiver of any right or amendment hereto shall be
effective unless in writing and signed by the Bank nor shall a waiver on one
occasion be construed as a bar to or waiver of any such right on any future
occasion. Each Obligor waives presentment, demand, notice, protest, and all
other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note or of any collateral for the
Obligations, and assents to any extensions or postponements of the time of
payment or any and all other indulgences under this Note or with respect to any
such collateral, to any and all substitutions, exchanges or releases of any such
collateral, or to any and all additions or releases of any other parties or
persons primarily or secondarily liable hereunder, which from time to time may
be granted by the Bank in connection herewith regardless of the number or period
of any extensions.
4.2 SECURITY; SET-OFF. The undersigned grants to the Bank, as security for
the full and punctual payment and performance of the Obligations, a continuing
lien on and security interest in all securities or other property belonging to
the undersigned now or hereafter held by the Bank and in all deposits (general
or special, time or demand, provisional or final) and other sums credited by or
due from the Bank to the undersigned or subject to withdrawal by the
undersigned; and regardless of the adequacy of any collateral or other means of
obtaining repayment of the Obligations, the Bank is hereby authorized at any
time and from time to time, without notice to the undersigned (any such notice
being expressly waived by the undersigned) and to the fullest extent permitted
by law, to set off and apply such deposits and other sums against the
Obligations of the undersigned, whether or not the Bank shall have made any
demand under this Note and although such Obligations may be contingent or
unmatured.
4.3 TAXES. The undersigned agrees to indemnify the Bank from and hold it
harmless from and against any transfer taxes, documentary taxes, assessments or
charges made by any governmental authority by reason of the execution, delivery,
and performance of this Note and any collateral for the Obligations.
4.4 EXPENSES. The undersigned will pay on demand all expenses of the Bank
in connection with the preparation, administration, default, collection or
enforcement of this Note or any
collateral for the Obligations, or any waiver or amendment of any provision
of any of the foregoing, including, without limitation, reasonable attorneys
fees of outside legal counsel or the allocation costs of in-house legal counsel,
and including without limitation any fees or expenses associated with any travel
or other costs relating to any appraisals, examinations, administration of the
Obligations or any collateral therefor, and the amount of all such expenses
shall, until paid, bear interest at the rate applicable to principal hereunder
(including any default rate) and be an Obligation secured by any such
collateral.
4.5 BANK RECORDS. The entries on the records of the Bank (including any
appearing on this Note) shall be prima facie evidence of the aggregate principal
amount outstanding under this Note and interest accrued thereon.
4.6 GOVERNING LAW, CONSENT TO JURISDICTION. This Note is intended to take
effect as a sealed instrument and shall be governed by, and construed in
accordance with, the laws of The Commonwealth of Massachusetts, without regard
to its conflicts of laws rules. The undersigned agrees that any suit for the
enforcement of this Note may be brought in the courts of The Commonwealth of
Massachusetts or any Federal Court sitting in such Commonwealth and consents to
the non-exclusive jurisdiction of each such court and to service of process in
any such suit being made upon the undersigned by mail at the address specified
below. The undersigned hereby waives any objection that it may now or hereafter
have to the venue of any such suit or any such court or that such suit was
brought in an inconvenient court.
4.7 SEVERABILITY; AUTHORIZATION TO COMPLETE; PARAGRAPH HEADINGS. If any
provision of this Note shall be invalid, illegal or unenforceable, such
provisions shall be severable from the remainder of this Note and the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby. The Bank is hereby authorized, without further
notice, to fill in any blank spaces on this Note, and to date this Note as of
the date funds are first advanced hereunder. Paragraph headings are for the
convenience of reference only and are not a part of this Note and shall not
affect its interpretation.
4.8 JURY WAIVER. THE BANK (BY ITS ACCEPTANCE OF THIS NOTE) AND THE
UNDERSIGNED AGREE THAT NEITHER OF THEM, INCLUDING ANY ASSIGNEE OR SUCCESSOR
SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER
LITIGATION PROCEDURE BASED UPON, OR ARISING OUT OF, THIS NOTE, ANY RELATED
INSTRUMENTS, ANY COLLATERAL OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG
ANY OF THEM. NEITHER THE BANK NOR THE UNDERSIGNED SHALL SEEK TO CONSOLIDATE ANY
SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE
BANK AND THE UNDERSIGNED, AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. NEITHER THE BANK NOR THE UNDERSIGNED HAS AGREED WITH OR REPRESENTED
TO THE OTHER THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN
ALL INSTANCES.
Witness: CITYSCAPE CORP.
___________________________ By:______________________
Name:____________________
Title:___________________
GUARANTY
GUARANTY, dated as of April 11, 1996 by Cityscape Financial Corp., a
Delaware corporation (the "Guarantor"), in favor of THE FIRST NATIONAL BANK OF
BOSTON, a national banking association with its head office at 100 Federal
Street, Boston, Massachusetts 02110, and its foreign branches (the "Bank"). In
consideration of the Bank's giving, in its discretion, time, credit or banking
facilities or accommodations to Cityscape Corp. (together with its successors,
the "Customer"), the Guarantor agrees as follows:
1. GUARANTY OF PAYMENT AND PERFORMANCE. The Guarantor hereby guarantees to
the Bank the full and punctual payment when due (whether at maturity, by
acceleration or otherwise), and the performance, of all liabilities, agreements
and other obligations of the Customer to the Bank, whether direct or indirect,
absolute or contingent, due or to become due, secured or unsecured, now existing
or hereafter arising or acquired (whether by way of discount, letter of credit,
lease, loan, overdraft or otherwise) (the "Obligations"). This Guaranty is an
absolute, unconditional and continuing guaranty of the full and punctual payment
and performance of the Obligations and not of their collectibility only and is
in no way conditioned upon any requirement that the Bank first attempt to
collect any of the Obligations from the Customer or resort to any security or
other means of obtaining their payment. Should the Customer default in the
payment or performance of any of the Obligations, the obligations of the
Guarantor hereunder with respect to such Obligations shall become immediately
due and payable to the Bank, without demand or notice of any nature, all of
which are expressly waived by the Guarantor. Payments by the Guarantor hereunder
may be required by the Bank on any number of occasions.
2. GUARANTOR'S AGREEMENT TO PAY. Should the Customer default in the payment
or performance of any of the Obligations, the Guarantor further agrees, as the
principal obligor and not as a guarantor only, to pay to the Bank, on demand,
all costs and expenses (including court costs and reasonable legal expenses)
incurred or expended by the Bank in connection with the Obligations (exclusive
of the Bank's internal administrative expenses), this Guaranty and the
enforcement thereof.
3. UNLIMITED GUARANTY. The liability of the Guarantor hereunder shall be
unlimited.
4. WAIVERS BY GUARANTOR; BANK'S FREEDOM TO ACT. The Guarantor agrees that
the Obligations will be paid and performed strictly in accordance with their
respective terms regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the Bank
with respect thereto. The Guarantor waives presentment, demand, protest, notice
of acceptance, notice of Obligations incurred and all other notices of any kind,
all defenses which may be available by virtue of any valuation, stay, moratorium
law or other similar law now or hereafter in effect, any right to require the
marshaling of assets of the Customer, and all suretyship defenses generally.
Without limiting the generality of the foregoing, the Guarantor agrees to the
provisions of any instrument evidencing, securing or otherwise executed in
connection with any Obligation and agrees that the obligations of the Guarantor
hereunder shall not be released or discharged, in whole or in part, or otherwise
affected by (i) the failure of the Bank to assert any claim or demand or to
enforce any right or remedy against the Customer; (ii) any extensions or
renewals of any Obligation; (iii) any rescissions, waivers, amendments or
modifications of any of the terms or provisions of any agreement evidencing,
securing or otherwise executed in connection with any Obligation; (iv) the
substitution or release of any entity primarily or secondarily liable for any
Obligation; (v) the adequacy of any rights the Bank may have against any
collateral or other means of obtaining repayment of the Obligations; (vi) the
impairment of any collateral securing the Obligations, including without
limitation the failure to perfect or preserve any rights the Bank might have in
such collateral or the substitution, exchange, surrender, release, loss or
destruction of any such collateral; or (vii) any other act or omission which
might in any manner or to any extent vary the risk of the Guarantor or otherwise
operate as a release or discharge of the Guarantor, all of which may be done
without notice to the Guarantor.
5. UNENFORCEABILITY OF OBLIGATIONS AGAINST CUSTOMER. If for any reason the
Customer has no legal existence or is under no legal obligation to discharge any
of the Obligations (other than by reason of indefeasible payment in full of such
Obligations), or if any of the Obligations have become irrecoverable from the
Customer by operation of law or for any other reason, this
Guaranty shall nevertheless be binding on the Guarantor to the same extent as if
the Guarantor at all times had been the principal obligor on all such
Obligations. Without limiting the generality of the foregoing, interest and
costs of collection shall continue to accrue and continue to be deemed
Obligations hereunder notwithstanding any stay to the enforcement thereof
against the Customer or disallowance of any claim therefor against the Customer.
In the event that acceleration of the time for payment of the Obligations is
stayed upon the insolvency, bankruptcy or reorganization of the Customer, or for
any other reason, all such amounts otherwise subject to acceleration under the
terms of any agreement evidencing, securing or otherwise executed in connection
with any Obligation shall be immediately due and payable by the Guarantor.
6. SUBROGATION; SUBORDINATION. The Guarantor shall not exercise any rights
against the Customer arising as a result of payment by the Guarantor hereunder,
by way of subrogation or otherwise, and will not prove any claim in competition
with the Bank or its affiliates in respect of any payment hereunder in
bankruptcy or insolvency proceedings of any nature; the Guarantor will not claim
any set-off or counterclaim against the Customer in respect of any liability of
the Guarantor to the Customer; and the Guarantor waives any benefit of and any
right to participate in any collateral which may be held by the Bank or any such
affiliate. The payment of any amounts due with respect to any indebtedness of
the Customer now or hereafter held by the Guarantor is hereby subordinated to
the prior payment in full of the Obligations. The Guarantor agrees that whether
or not any default in the payment or performance of the Obligations has
occurred, the Guarantor will not demand, sue for or otherwise attempt to collect
any such indebtedness of the Customer to the Guarantor until the Obligations
shall have been paid in full. If, notwithstanding the foregoing sentence, the
Guarantor shall collect, enforce or receive any amounts in respect of such
indebtedness, such amounts shall be collected, enforced and received by the
Guarantor as trustee for the Bank and be paid over to the Bank on account of the
Obligations without affecting in any manner the liability of the Guarantor under
the other provisions of this Guaranty.
7. SECURITY; SET-OFF. The Guarantor grants to the Bank, as security for the
full and punctual payment and performance of the Guarantor's obligations
hereunder, a continuing lien on and security interest in all securities or other
property belonging to the Guarantor now or hereafter held by the Bank and in ail
deposits (general or special, time or demand, provisional or
final) and other sums credited by or due from the Bank to the Guarantor or
subject to withdrawal by the Guarantor; and regardless of the adequacy of any
collateral or other means of obtaining repayment of the Obligations, the Bank is
hereby authorized at any time and from time to time, without notice to the
Guarantor (any such notice being expressly waived by the Guarantor) and to the
fullest extent permitted by law, to set off and apply such deposits and other
sums against the obligations of the Guarantor under this Guaranty, whether or
not the Bank shall have made any demand under this Guaranty and although such
obligations may be contingent or unmatured.
8. FINANCIAL STATEMENTS AND OTHER INFORMATION. Guarantor hereby represents
and warrants to the Bank that the consolidated financial statements of financial
condition of Guarantor as of December 31, 1995 and the related statement of
earnings and cash flows for the year ended December 31, 1995 heretofore
delivered by Guarantor to the Bank are true and correct in all material
respects, have been prepared in accordance with generally accepted accounting
principles consistently applied, and fairly present the financial condition of
Guarantor as of the date thereof; that no material adverse change has occurred
in the assets, or financial condition of Guarantor reflected therein since the
date thereof; and that Guarantor has no material liabilities or known contingent
liabilities which are not reflected in such financial statements or referred to
in the notes thereto other than Guarantor's obligations under this Guaranty and
obligations arising in the ordinary course of business since December 31, 1995.
Guarantor hereby agrees that until the earlier of (i) all indebtedness
guaranteed hereby has been completely repaid and all obligations and
undertakings of the Customer under, by reason of, or pursuant to the Note and
the Loan Documents have been completely performed, or (ii) the termination of
this Guaranty in accordance with the provisions of Section 10 hereof, Guarantor
will deliver to the Bank all financial information the Bank may reasonably
request.
9. FURTHER ASSURANCES. The Guarantor agrees to do all such things and
execute all such documents, including financing statements, as the Bank may
consider necessary or desirable to give full effect to this Guaranty and to
perfect and preserve the rights and powers of the Bank hereunder.
10. TERMINATION; REINSTATEMENT. This Guaranty shall remain in full force
and effect until the Bank is given written notice of the Guarantor's intention
to discontinue this Guaranty, notwithstanding any intermediate or temporary
payment or settle-
ment of the whole or any part of the Obligations. No such notice shall affect
any rights of the Bank or of any affiliate hereunder including, without
limitation, the rights set forth in Sections 4 and 6, with respect to
Obligations incurred prior to the receipt of such notice or Obligations incurred
pursuant to any contract or commitment in existence prior to such receipt, and
all checks, drafts, notes, instruments (negotiable or otherwise) and writings
made by or for the account of the Customer and drawn on the Bank or any of its
agents purporting to be dated on or before the date of receipt of such notice,
although presented to and paid or accepted by the Bank after that date, shall
form part of the Obligations. This Guaranty shall continue to be effective or be
reinstated, notwithstanding any such notice, if at any time any payment made or
value received with respect to an Obligation is rescinded or must otherwise be
returned by the Bank upon the insolvency, bankruptcy or reorganization of the
Customer, or otherwise, all as though such payment had not been made or value
received.
11. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon the
Guarantor, its successors and assigns, and shall inure to the benefit of and be
enforceable by the Bank and its successors, transferees and assigns. Without
limiting the generality of the foregoing sentence, the Bank may assign or
otherwise transfer any agreement or any note held by it evidencing, securing or
otherwise executed in connection with the Obligations, or sell participations in
any interest therein, to any other person or entity, and such other person or
entity shall thereupon become vested, to the extent set forth in the agreement
evidencing such assignment, transfer or participation, with all the rights in
respect thereof granted to the Bank herein.
12. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of this
Guaranty shall be effective unless the same shall be in writing and signed by
each of the Bank and the Guarantor. No consent to any departure by the Guarantor
from the provisions of this Guaranty shall be effective unless the same shall be
in writing and signed by the Bank. No failure on the part of the Bank to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right.
13. NOTICES. All notices and other communications called for hereunder
shall be made in writing and, unless otherwise specifically provided herein,
shall be deemed to have been duly
made or given when delivered by hand or mailed first class mail postage prepaid
or, in the case of telegraphic or telexed notice, when transmitted, answer back
received, addressed as follows: if to the Guarantor, at the address set forth
beneath its signature hereto, with a copy to Asher Fensterheim, P.C., 565 Taxter
Road, Elmsford, New York 10523 and if to the Bank, at 100 Federal Street,
Boston, Massachusetts 02110, Telex: 940581 BOSTONBK BSN Attention: Mr. Robert F.
Duggan, with a copy to David S. Berman, Esquire, Riemer & Braunstein, Three
Center Plaza, Boston, Massachusetts 02108 or at such address as either party may
designate in writing.
14. GOVERNING LAW; CONSENT TO JURISDICTION. This Guaranty is intended to
take effect as a sealed instrument and shall be governed by, and construed in
accordance with, the laws of The Commonwealth of Massachusetts. The Guarantor
agrees that any suit for the enforcement of this Guaranty may be brought in the
courts of The Commonwealth of Massachusetts or any Federal Court sitting therein
and consents to the non-exclusive jurisdiction of such court and to service of
process in any such suit being made upon the Guarantor by mail at the address
specified in Section 13 hereof. The Guarantor hereby waives any objection that
it may now or hereafter have to the venue of any such suit or any such court or
that such suit was brought in an inconvenient court.
15. MISCELLANEOUS. This Guaranty constitutes the entire agreement of the
Guarantor with respect to the matters set forth herein. The rights and remedies
herein provided are cumulative and not exclusive of any remedies provided by law
or any other agreement, and this Guaranty shall be in addition to any other
guaranty of the Obligations. The invalidity or unenforceability of any one or
more sections of this Guaranty shall not affect the validity or enforceability
of its remaining provisions. Captions are for the ease of reference only and
shall not affect the meaning of the relevant provisions. The meanings of all
defined terms used in this Guaranty shall be equally applicable to the singular
and plural forms of the terms defined.
16. JURY WAIVER. THE BANK (BY ITS ACCEPTANCE HEREOF) AND THE GUARANTOR
AGREE THAT NEITHER OF THEM, INCLUDING ANY ASSIGNEE OR SUCCESSOR SHALL SEEK A
JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION
PROCEDURE BASED UPON, OR ARISING OUT OF, THIS GUARANTY, ANY RELATED INSTRUMENTS,
ANY COLLATERAL OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG ANY OF THEM.
NEITHER THE BANK NOR THE GUARANTOR SHALL SEEK TO CONSOLIDATE ANY SUCH ACTION
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
THE PROVISIONS OF THIS
PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE BANK AND THE GUARANTOR, AND THESE
PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NEITHER THE BANK NOR THE GUARANTOR
HAS AGREED WITH OR REPRESENTED TO THE OTHER THAT THE PROVISIONS OF THIS
PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
IN WITNESS WHEREOF, the Guarantor has executed and delivered this Guaranty,
or caused this Guaranty to be executed and delivered by its duly authorized
officer, as of the date appearing on page one.
WITNESS:
CITYSCAPE FINANCIAL CORP.
______________________________ By:___________________________
Name:_________________________ Title:________________________
Print/Type Full Name
CERTIFICATE
The undersigned certifies to The First National Bank of Boston that;
1. He/She is the Secretary of the Guarantor which executed the foregoing
Guaranty and in that capacity has the authority to make this certificate on
behalf of the Guarantor.
2. The Guarantor is a Delaware corporation, validly organized or formed and
existing in good standing and in the full enjoyment of its powers and franchises
under the laws of Israel.
3. The foregoing Guaranty has been duly executed and delivered on behalf of
the Guarantor, such actions have been duly authorized by all necessary corporate
or other action, and the execution, delivery and performance of the Guaranty by
the Guarantor will not contravene any existing law, rule or regulation, or any
provision of its certificate of incorporation or by-laws or other document or
documents evidencing its establishment or governing the conduct of its affairs
or any agreement to which it is a party or by which it is bound.
IN WITNESS WHEREOF, the undersigned has made this certificate on behalf of
the Guarantor this _____ day of April, 1996.
----------------------------
June 13, 1996
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attention: Diversified Finance
Gentlemen:
On April 11, 1996, Cityscape Corp., a New York corporation (the "Borrower")
entered into a loan arrangement with The First National Bank of Boston (the
"Bank"), pursuant to which the Bank loaned the Borrower the principal sum of
$30,000,000 (the "Original Loan"). In May, 1996, the Original Loan was paid in
full. The Borrower now desires to reborrow from the Bank the principal sum of
$30,000,000 (the "Loan"). To induce the Bank to make the Loan to the Borrower,
the Borrower hereby warrants, represents, covenants and agrees as follows:
1. Amendment to Loan Documents. In connection with the Original Loan,
the Borrower executed and delivered to the Bank, among other instruments,
documents or agreements, the following:
Covenant letter dated April 11, 1996.
Pledge Agreement dated April 11, 1996.
Stock Pledge Agreement dated April 11, 1996.
Collateral Assignment of Note and Charge
Agreement dated April 11, 1996.
(together with all other instruments, documents and agreements
executed in connection with the Original Loan, the "Loan
Documents").
The Borrower acknowledges and agrees that the Loan Documents are hereby
amended as follows:
(a) The term "Note" or "Commercial Promissory Note" as used in
the Loan Documents shall mean and refer to the $30,000,000
Commercial Promissory Note to be executed by the Borrower this
date to evidence the Loan, together with all modifications,
amendments, extensions, renewals, supplements and restatements
thereof.
(b) The Collateral Assignment of Note and Charge Agreement is
hereby amended as follows:
(i) The definition of the "Promissory Note" which is
collaterally assigned to the Bank thereunder is modified to
also include a certain Promissory Note dated June __, 1996
in the original principal amount of $__________ made by City
Mortgage Corporation Limited payable to Cityscape Corp. The
definition of Promissory Note shall for all purposes be
deemed to include, individually and collectively, the
Promissory Note described in the original Collateral
Assignment and that described herein.
(ii) All references to the "Agreement" shall mean and refer
to the Charge and Assignment by Way of Security dated April
11, 1996, as amended by an agreement of even date herewith.
(iii) All references to the "Liabilities" shall mean and
include the Borrower's obligations and liabilities to the
Bank under the Borrower's Commercial Promissory Note of even
date in the principal amount of $30,000,000.00 to evidence
the Loan and any extensions, amendments, renewals,
modifications or restatements thereof.
2. Ratification of Loan Documents. The Borrower further acknowledges and
agrees that, notwithstanding the prepayment of the Original Loan, except as
specifically amended hereby, each of the Loan Documents remain in full
force and effect applicable to the Loan. The Borrower ratifies, confirms
and reaffirms all of the representations, warranties, and covenants made in
the Loan Documents.
3. Ratification of Collateral. The Borrower hereby ratifies and confirms that
all collateral granted by the Borrower to the Bank under the Loan Documents
(as modified hereby) remains in full force and effect and shall secure all
Obligations of the Borrower to the Bank, including, without limitation,
those under the Loan.
4. Advisory Fees. In consideration of the Bank's making the Loan to the
Borrower, the Borrower agrees to pay to the Bank the following advisory
fees:
(a) Upon the execution of this Agreement, the Borrower shall pay the Bank
the sum of $50,000.00.
(b) Upon the date that the Bank first makes an advance under the Loan (the
"Funding Date"), the Borrower shall pay the Bank the additional sum of
$200,000.00; and
(c) In the event that the Loan is not paid in full within sixty days after
the Funding Date, the Borrower shall pay to the Bank the additional
sum of $200,000.00 on the sixty first (61st) day after the Funding
Date; and
(d) In the event the Loan is not paid in full within one hundred twenty
(120) days after the Funding Date, the Borrower shall pay to the Bank
the additional sum of $200,000.00 on the one hundred twenty-first
(121st) day after the Funding Date.
In the event of the occurrence of an Event of Default under the Loan,
all sums set forth in subparagraphs (a) - (d) inclusive shall become
immediately due and payable without notice or demand. Any fees payable
under this paragraph shall be deemed fully earned on the date when due
and shall not be refunded or rebated under any circumstances,
including, without limitation, on account of the prepayment of the
Loan, whether upon the acceleration of the Loan upon the occurrence of
an Event of Default or otherwise.
5. Conditions Precedent to the Making of the Loan. Precedent to the Bank's
making of the Loan each of the following conditions shall have been satisfied:
(a) The Borrower shall have executed and delivered to the Bank a
Commercial Promissory Note in the form of Exhibit A annexed hereto,
this agreement, and all instruments, documents, and agreements as
counsel for the Bank may deem necessary or appropriate;
(b) The Borrower shall have paid the initial Advisory Fees due to the Bank
under paragraph 4 hereof;
(c) The Bank shall have received the original Promissory Note from City
Mortgage Corporation Limited payable to the Borrower in the principal
amount of U.S. $_________________, duly endorsed to the Bank, such
Note to be in form and substance satisfactory to the Bank;
(d) The Bank shall have received an Amendment to the Charge and Assignment
By Way of Security from City Mortgage Corporation Limited to the
Borrower in form and substance satisfactory to the Bank;
(e) The Bank's security interest in all Residual Interests and I/O
Interests (as each is defined in the Pledge Agreement dated April 11,
1996 from the Borrower) shall be in full force and effect and all
steps necessary to be undertaken for the
perfection of the Bank's security interest therein shall have been
completed to the satisfaction of the Bank;
(f) The Bank shall have received an opinion from the Borrower's counsel in
form and substance satisfactory to the Bank;
(g) The Bank shall have received written confirmation of the continued
effectiveness of the Guaranty by Cityscape Financial Corp. with
respect to the Loan; and
(h) The Bank shall have received a Certificate from the Borrower's
Secretary of the due adoption, continued effectiveness and setting
forth the text of, each corporate resolution adopted in connection
with the establishment of the Loan and attesting to the signatures of
the persons authorized as a signatory to any of the Loan Documents.
If the foregoing correctly sets forth our understanding, please indicate
your assent below.
Very truly yours,
CITYSCAPE CORP.
By:_________________________
Name:_______________________
Title:______________________
CITYSCAPE FINANCIAL CORP.
By:_________________________
Name:_______________________
Title:______________________
CITYSCAPE FUNDING CORP.
By:_________________________
Name:_______________________
Title:______________________
Agreed:
THE FIRST NATIONAL BANK OF BOSTON
By:_________________________
Name:_______________________
Title:______________________
The First National Bank of Boston
May 14, 1996
Page 1
June 13, 1996
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attention: Diversified Finance
Gentlemen:
The undersigned has this day entered into a loan arrangement with The First
National Bank of Boston (hereinafter, the "Bank"), pursuant to which the
undersigned has delivered to the Bank its promissory note in the face amount of
$30,000,000.00. This letter is to authorize the Bank to disburse the proceeds
under the Note as follows:
To: Riemer & Braunstein ..................................$
To: The First National Bank
of Boston as a Closing Fee ...........................$
To: Cityscape Corp.........................................$
Very truly yours,
Cityscape Corp.
By:________________________
Name:_______________________
Title: _____________________
COMMERCIAL PROMISSORY NOTE
$30,000,000.00 Boston, Massachusetts
June 13, 1996
FOR VALUE RECEIVED, the undersigned, promises to pay to the order of THE
FIRST NATIONAL BANK OF BOSTON (together with any successors or assigns, the
"Bank") at the Head Office of the Bank, 100 Federal Street, Boston,
Massachusetts THIRTY MILLION DOLLARS ($30,000,000.00), together with interest at
a rate per annum equal to the fixed rate of eleven percent (11%).
Interest shall be payable monthly in arrears on the first day of each month
commencing July 1, 1996. Interest shall be calculated on the basis of a 360-day
year for the actual number of days elapsed including holidays and days on which
the Bank is not open for the conduct of banking business. Interest shall accrue
from the date on which advances are made hereunder.
The entire outstanding principal balance of this Note, together with
accrued and unpaid interest thereon shall be due and payable in full on December
31, 1996.
SECTION 1. PAYMENT TERMS.
1.1 PAYMENTS. All payments hereunder shall be made by the undersigned to
the Bank in United States currency at the Bank's address specified above (or at
such other address as the Bank may specify), in immediately available funds, on
or before 2:00 p.m. (Boston, Massachusetts time) on the due date thereof.
Payments received by the Bank prior to the occurrence of an Event of Default
will be applied first to fees, expenses and other amounts due hereunder
(excluding principal and interest); second, to accrued interest; and third to
outstanding principal. After the occurrence of an Event of Default payments will
be applied to the Obligations under this Note as the Bank determines in its sole
discretion.
1.2 PREPAYMENTS. The principal balance of this Note may be prepaid in whole
or in part without penalty or premium. Amounts prepaid may not be reborrowed.
1.3 DEFAULT RATE. To the extent permitted by applicable law, upon and after
the occurrence of an Event of Default (whether or not the Bank has accelerated
payment of this Note), interest on principal and overdue interest shall, at the
option of the Bank, be payable on demand at a rate per annum (the "Default
Rate") equal to 4% per annum above the rate of interest otherwise payable
hereunder.
1.4 LATE PAYMENT CHARGE. Without limiting the foregoing Section 1.3, if any
payment due hereunder is not made on its due date, the Borrower shall pay a late
charge equal to one (1%) percent per month of any payment not made when due,
including the payment of the entire outstanding balance upon the maturity date
hereof. Nothing in the preceding sentence shall affect the Bank's right to
accelerate the maturity of this Note in the event of any default in the payment
of this Note.
SECTION 2. DEFAULTS AND REMEDIES.
2.1 DEFAULT. The occurrence of any of the following events or conditions
shall constitute an "Event of Default" hereunder:
(a) (i) default in the payment when due of the principal of or
interest on this Note or (ii) any other default in the payment or
performance of this Note or of any other Obligation or (iii) default in the
payment or performance of any obligation of any Obligor to others for
borrowed money in excess of $500,000.00 or in respect of any extension of
credit or accommodation or under any lease in excess of $500,000.00;
(b) failure of any representation or warranty of any Obligor hereunder
or under any agreement or instrument constituting or relating to any
collateral for the Obligations or of any material representation or
material warranty, statement or information in any documents or financial
statements delivered to the Bank in connection herewith to be true and
correct in all material respects;
(c) default or breach of any material condition under any mortgage,
security agreement, assignment of lease, or other agreement securing or
otherwise relating to the Obligations or to any collateral for the
Obligations;
(d) failure to furnish the Bank promptly on request with financial
information about, or to permit inspection by the Bank of any books,
records and properties of, the undersigned;
(e) any Obligor generally not paying its debts as they become due;
(f) dissolution, termination of existence, insolvency, appointment of
a receiver or other custodian of any part of the property of, assignment
for the benefit of creditors by, or the commencement of any proceedings
under any bankruptcy or insolvency laws by or against, or any change in
control of any Obligor; or
(g) material adverse change in the condition or affairs (financial or
otherwise) of any Obligor or in the value or condition of any collateral
securing this Note.
2.2 REMEDIES. Upon the occurrence and during the continuance of an Event of
Default, at the option of the Bank, all Obligations of the undersigned may
become immediately due and payable without notice or demand and the Bank shall
be entitled all rights and remedies provided by agreement or at law or in
equity. All rights and remedies of the Bank are cumulative and are exclusive of
any rights or remedies provided by law or any other agreement, and may be
exercised separately or concurrently.
SECTION 3. DEFINITIONS.
For purposes of this Note, the following definitions shall apply:
"Obligation" means any obligation hereunder or otherwise of any Obligor to
the Bank or to any of its affiliates, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising; and
"Obligor" means the undersigned, any guarantor or any other person
primarily or secondarily liable hereunder or in respect hereof, including any
person or entity who has pledged or granted to the Bank a security interest or
other lien in property on behalf of the undersigned to constitute collateral for
the Obligations.
SECTION 4. MISCELLANEOUS.
4.1 WAIVER, AMENDMENT. No delay or omission on the part of the Bank in
exercising any right hereunder shall operate as a waiver of such right or of any
other right under this Note. No waiver of any right or amendment hereto shall be
effective unless in writing and signed by the Bank nor shall a waiver on one
occasion be construed as a bar to or waiver of any such right on any future
occasion. Each Obligor waives presentment, demand, notice, protest, and all
other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note or of any collateral for the
Obligations, and assents to any extensions or postponements of the time of
payment or any and all other indulgences under this Note or with respect to any
such collateral, to any and all substitutions, exchanges or releases of any such
collateral, or to any and all additions or releases of any other parties or
persons primarily or secondarily liable hereunder, which from time to time may
be granted by the Bank in connection herewith regardless of the number or period
of any extensions.
4.2 SECURITY; SET-OFF. The undersigned grants to the Bank, as security for
the full and punctual payment and performance of the Obligations, a continuing
lien on and security interest in all securities or other property belonging to
the undersigned now or hereafter held by the Bank and in all deposits (general
or special, time or demand, provisional or final) and other sums credited by or
due from the Bank to the undersigned or subject to withdrawal by the
undersigned; and regardless of the adequacy of any collateral or other means of
obtaining repayment of the Obligations, the Bank is hereby authorized at any
time and from time to time, without notice to the undersigned (any such notice
being expressly waived by the undersigned) and to the fullest extent permitted
by law, to set off and apply such deposits and other sums against the
Obligations of the undersigned, whether or not the Bank shall have made any
demand under this Note and although such Obligations may be contingent or
unmatured.
4.3 TAXES. The undersigned agrees to indemnify the Bank from and hold it
harmless from and against any transfer taxes, documentary taxes, assessments or
charges made by any governmental authority by reason of the execution, delivery,
and performance of this Note and any collateral for the Obligations.
4.4 EXPENSES. The undersigned will pay on demand all expenses of the Bank
in connection with the preparation, administration, default, collection or
enforcement of this Note or any
collateral for the Obligations, or any waiver or amendment of any provision of
any of the foregoing, including, without limitation, reasonable attorneys fees
of outside legal counsel or the allocation costs of in-house legal counsel, and
including without limitation any fees or expenses associated with any travel or
other costs relating to any appraisals, examinations, administration of the
Obligations or any collateral therefor, and the amount of all such expenses
shall, until paid, bear interest at the rate applicable to principal hereunder
(including any default rate) and be an Obligation secured by any such
collateral.
4.5 BANK RECORDS. The entries on the records of the Bank (including any
appearing on this Note) shall be prima facie evidence of the aggregate principal
amount outstanding under this Note and interest accrued thereon.
4.6 GOVERNING LAW, CONSENT TO JURISDICTION. This Note is intended to take
effect as a sealed instrument and shall be governed by, and construed in
accordance with, the laws of The Commonwealth of Massachusetts, without regard
to its conflicts of laws rules. The undersigned agrees that any suit for the
enforcement of this Note may be brought in the courts of The Commonwealth of
Massachusetts or any Federal Court sitting in such Commonwealth and consents to
the non-exclusive jurisdiction of each such court and to service of process in
any such suit being made upon the undersigned by mail at the address specified
below. The undersigned hereby waives any objection that it may now or hereafter
have to the venue of any such suit or any such court or that such suit was
brought in an inconvenient court.
4.7 SEVERABILITY; AUTHORIZATION TO COMPLETE; PARAGRAPH HEADINGS. If any
provision of this Note shall be invalid, illegal or unenforceable, such
provisions shall be severable from the remainder of this Note and the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby. The Bank is hereby authorized, without further
notice, to fill in any blank spaces on this Note, and to date this Note as of
the date funds are first advanced hereunder. Paragraph headings are for the
convenience of reference only and are not a part of this Note and shall not
affect its interpretation.
4.8 JURY WAIVER. THE BANK (BY ITS ACCEPTANCE OF THIS NOTE) AND THE
UNDERSIGNED AGREE THAT NEITHER OF THEM, INCLUDING ANY ASSIGNEE OR SUCCESSOR
SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER
LITIGATION PROCEDURE BASED UPON, OR ARISING OUT OF, THIS NOTE, ANY RELATED
INSTRUMENTS, ANY COLLATERAL OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG
ANY OF THEM. NEITHER THE BANK NOR THE UNDERSIGNED SHALL SEEK TO CONSOLIDATE ANY
SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE
BANK AND THE UNDERSIGNED, AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. NEITHER THE BANK NOR THE UNDERSIGNED HAS AGREED WITH OR REPRESENTED
TO THE OTHER THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN
ALL INSTANCES.
Witness: CITYSCAPE CORP.
___________________________ By:______________________
Name:____________________
Title:___________________
CONFIRMATION OF GUARANTY
June 13, 1996
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts
Attention: Diversified Finance
Gentlemen:
The undersigned, Cityscape Financial Corp. (the "Guarantor") has executed
and delivered a Guaranty (the "Guaranty") of the Obligations (as therein
defined) of Cityscape Corp. (the "Borrower") to The First National Bank of
Boston (the "Bank"). The Borrower is about to enter into a loan arrangement with
the Bank pursuant to which the Bank will lend to the Borrower the principal sum
of $30,000,000. However, the Bank has indicated that it will not enter into such
loan arrangement unless, among other things, the Guarantor executes and delivers
this letter to the Bank. Therefore, to induce the Bank to enter into the loan
arrangement with the Borrower, the Guarantor hereby warrants, represents,
covenants, and agrees as follows:
1. The Guarantor hereby ratifies and confirms its obligations to the Bank
under its Guaranty and acknowledges that the "Obligations" guaranteed by
the Guarantor include, without limitation, all obligations of the Borrower
to the Lender under the Commercial Promissory Note of even date in the
principal amount of $30,000,000, as such Note may hereinafter be modified,
amended, supplemented or restated.
2. The Guarantor hereby acknowledges and agrees that it has no offsets,
defenses, or counterclaims against the Bank with respect to its obligations
under its Guaranty or otherwise, and to the extent that the Guarantor has
any such offsets, defenses, or counterclaims, the Guarantor hereby waives
and releases the same.
3. The Guarantor further acknowledges that pursuant to the terms of the
Guaranty, the Guarantor previously guaranteed the payment of all
Obligations of the Borrower to the Bank, that this acknowledgment is being
executed as a confirmation of the Guarantor's Obligations to Bank under the
Guaranty and that the Guarantor shall remain liable for all of the
Borrower's obligations, now existing or hereafter arising, whether or not
any similar confirmation letter is executed in the future.
This letter is intended to take effect as a sealed instrument.
Very truly yours,
Cityscape Financial Corp.
By:_________________________
Name:_______________________
Title:______________________