SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the quarterly period ended June 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 0-27314
CITYSCAPE FINANCIAL CORP.
Delaware
(State or other jurisdiction of 11-2994671
incorporation or organization) (IRS Employer Identification No.)
565 Taxter Road, Elmsford, New York 10523-5200
(Address of principal executive offices, including zip code)
(914) 592-6677
(Registrant's telephone number, including area code)
--------------------------------------------
(Former name, former address and former fiscal year if changed since last
report)
Indicate by check whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No __
APPLICABLE ONLY TO CORPORATE ISSUERS:
29,627,452 shares $.01 par value, of
Common Stock, as of August 5, 1996
<PAGE>
CITYSCAPE FINANCIAL CORP.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Six Months Ended June 30, 1996
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Financial Condition at June 30, 1996
and December 31, 1995 2
Consolidated Statements of Operations for the six months and the
three months ended June 30, 1996 and 1995 3
Consolidated Statements of Cash Flows for the six months ended June 30,
1996 and 1995 4
Notes to Consolidated Financial Statements 5 - 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8 - 14
Part II - OTHER INFORMATION 15 - 22
<PAGE>
CITYSCAPE FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
June 30, 1996 December 31, 1995
(Unaudited) (Audited)
------------- -------------
<S> <C> <C>
Assets
Cash and cash equivalents $ 6,860,183 $ 3,598,549
Cash held in escrow 10,885,667 5,920,118
Prepaid commitment fees 37,034,000 --
Marketable equity securities 9,818,190 --
Mortgage servicing receivables 117,274,653 22,059,107
Interest-only and residual certificates 45,414,617 15,571,455
Mortgages held for sale, net 114,348,602 74,223,393
Mortgages held for investment, net 4,510,991 1,024,204
Equipment and leasehold improvements, net 6,254,176 2,380,571
Goodwill 78,266,028 19,258,011
Other assets 32,326,110 6,352,619
============= =============
Total assets $ 462,993,217 $ 150,388,027
============= =============
Liabilities
Warehouse financing facilities $ 72,796,772 $ 74,901,975
Accounts payable and other liabilities 42,005,248 16,410,833
Income taxes payable 38,529,219 1,204,803
Standby financing facility 7,966,292 771,361
Notes payable 38,000,000 --
Convertible subordinated debentures 143,750,000 --
------------- -------------
Total liabilities 343,047,531 93,288,972
------------ -------------
Stockholders' Equity
Preferred stock, $.01 par value, 5,000,000 shares authorized;
no shares issued and outstanding -- --
Common stock, $.01 par value, 50,000,000 shares
authorized; 29,626,452 and 28,900,732 issued and outstanding
at June 30, 1996 and December 31, 1995, respectively 296,264 289,007
Additional paid-in capital 57,435,086 44,838,143
Foreign currency translation adjustment 448,168 (6,219)
Unrealized gain on marketable securities 5,670,044 --
Retained earnings 56,096,124 11,978,124
------------- -------------
Total stockholders' equity 119,945,686 57,099,055
------------- -------------
Commitments and contingencies
============= =============
Total liabilities and stockholders' equity $ 462,993,217 $ 150,388,027
============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
2
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CITYSCAPE FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
Three Months Ended June 30, Six Months Ended June 30,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues
Gain on sale of loans $ 80,143,968 $ 8,591,851 $104,236,706 $ 12,471,351
Mortgage origination income 1,355,553 785,476 2,191,649 1,404,636
Interest 6,460,688 1,067,926 9,478,371 2,133,758
Servicing income 795,149 73,939 1,355,853 98,688
Earnings from partnership 110,000 196,639 260,000 431,000
Other 514,343 30,870 636,190 43,440
------------ ------------ ------------ ------------
Total revenues 89,379,701 10,746,701 118,158,769 16,582,873
------------ ------------ ------------ ------------
Expenses
Salaries and employee benefits 15,270,243 2,281,875 20,652,588 4,084,079
Interest expense 4,683,682 1,392,875 6,381,727 2,332,864
Selling expenses 3,011,939 607,473 4,374,906 917,903
Other operating expenses 5,762,177 1,655,884 9,806,575 2,690,706
Amortization of goodwill 1,033,794 -- 1,527,588 --
------------ ------------ ------------ ------------
Total expenses 29,761,835 5,938,107 42,743,384 10,025,552
------------ ------------ ------------ ------------
Earnings before minority interest and income 59,617,866 4,808,594 75,415,385 6,557,321
Minority interest -- 845,608 -- 845,608
------------ ------------ ------------ ------------
Earnings before income taxes 59,617,866 3,962,986 5,711,713
Provision for income taxes 24,773,010 1,585,194 31,297,385 2,284,685
------------ ------------ ------------ ------------
Net earnings $ 34,844,856 $ 2,377,792 $ 44,118,000 $ 3,427,028
============ ============ ============ ============
Primary earnings per share
Net earnings per share of common stock $ 1.14 $ 0.11 $ 1.46 $ 0.16
============ ============ ============ ============
Fully diluted earnings per share
Net earnings per share of common stock $ 1.05 -- $ 1.41 --
============ ============ ============ ============
Weighted average number of shares outstanding
and common stock equivalents
Primary 30,452,048 22,081,628 30,152,067 22,081,628
============ ============ ============ ============
Fully Diluted 33,841,939 -- 31,940,693 --
============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
CITYSCAPE FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
(Unaudited)
Six Months Ended June 30,
1996 1995
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 44,118,000 $ 3,427,028
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 3,042,608 113,711
Income taxes payable 39,055,460 1,457,372
Earnings from partnership interest (260,000) (431,000)
Increase in mortgage servicing receivables (97,164,591) (5,438,021)
Increase in interest-only and residual certificates (29,843,162) (4,277,266)
Net changes in operating assets and liabilities:
Increase in accrued interest receivable (1,621,521) (82,267)
(Increase) decrease in accounts receivable (10,472,041) 406,962
(Increase) decrease in mortgages receivable 322,327 (8,013,995)
(Increase) decrease in other assets (9,292,045) 11,147
Increase in accounts payable & other liabilities 15,793,508 2,109,193
Other, net (978,875) 827,058
------------- -------------
Net cash used in operating activities (47,300,332) (9,890,078)
------------- -------------
Cash flows from investing activities:
Acquisition of J&J and Heritable (82,068,974) --
Net purchases of equipment (3,389,575) (284,582)
Net (advances) distributions from partnership 908,315 141,168
Increase in mortgages held for investment (713,787) --
Increase in real estate owned (180,472) --
------------- -------------
Net cash used in investing activities (85,444,493) (143,414)
------------- -------------
Cash flows from financing activities:
Increase (decrease) in warehouse financings and notes payable (2,104,760) 8,832,791
Increase (decrease) in standby financing facility (1,138,261) 2,049,302
Net proceeds from issuance of subordinated debentures 139,134,125 --
Net proceeds from issuance of common stock 115,355 500,000
------------- -------------
Net cash provided by financing activities 136,006,459 11,382,093
------------- -------------
Net increase in cash and cash equivalents 3,261,634 1,348,601
Cash and cash equivalents at beginning of period 3,598,549 919,291
============= =============
Cash and cash equivalents at end of period $ 6,860,183 $ 2,267,892
============= =============
Supplemental disclosure of cash flow information:
Income taxes paid during the period $ 2,925,028 $ 1,463,625
============= =============
Interest paid during the period $ 2,357,385 $ 1,437,812
============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
CITYSCAPE FINANCIAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
1. Organization
Cityscape Financial Corp. ("Cityscape" or the "Company") is a consumer
finance company that, through its wholly-owned subsidiary, Cityscape Corp.
("CSC"), engages in the business of originating, purchasing, selling and
servicing mortgage loans secured primarily by one- to four-family residences.
The majority of the Company's loans are made to owners of single family
residences who use the loan proceeds for such purposes as debt consolidation,
financing of home improvements and educational expenditures, among others. In
the United States, the Company is licensed to do business in 37 states and the
District of Columbia. The Company commenced operations in the United Kingdom in
May 1995 with the formation of City Mortgage Corporation Limited ("CSC-UK"), an
English corporation that originates, sells and services loans in England,
Scotland and Wales in which the Company initially held a 50% interest and
subsequently purchased the remaining 50% on September 30, 1995 (See Note 3).
CSC-UK had no operations and no predecessor prior to May 1995.
2. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q and do not include all
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments consisting of normal recurring accruals, considered necessary for a
fair presentation of the results for the interim period have been included.
Operating results for the six months ended June 30, 1996 are not necessarily
indicative of the results that may be expected for the year ended December 31,
1996. The accompanying consolidated financial statements and the information
included under the heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations" should be read in conjunction with the
consolidated financial statements and related notes of the Company for the year
ended December 31, 1995.
The consolidated financial statements of the Company include the accounts
of CSC and its wholly-owned subsidiaries and beginning in May 1995, CSC-UK. All
significant intercompany balances and transactions have been eliminated in
consolidation. The CSC Acquisition, the UK Acquisition, the J&J Acquisition and
the Heritable Acquisition (as such terms are defined below) have been accounted
for under the purchase method of accounting and, more specifically with respect
to the CSC Acquisition only, a "reverse acquisition" as described in Note 3
below.
Certain amounts in the statements have been reclassified to conform with
the 1996 classifications.
3. Acquisitions
On April 27, 1994, Mandi of Essex, Ltd., ("Essex") acquired all of the
capital stock of CSC in an acquisition in which the shareholders of CSC acquired
beneficial ownership of 16,560,000 shares or 92% of Essex's common stock (the
"CSC Acquisition"). In connection with the CSC Acquisition, Essex changed its
name to Cityscape Financial Corp. From the date of its formation through the
date of the CSC Acquisition, Essex's activities were limited to (i) the sale of
initial shares in connection with its organization, (ii) a registered public
offering of securities and (iii) the pursuit of a combination, by merger or
acquisition. The CSC Acquisition was effective as of January 1, 1994 for
financial reporting purposes.
The CSC Acquisition and the issuance of common stock to the former CSC
shareholders resulted in the former shareholders of CSC obtaining a majority
voting interest in the Company. Generally accepted accounting principles require
that the company whose shareholders retain the majority interest in a combined
business be treated as the acquirer for accounting purposes. As a consequence,
the CSC Acquisition has been accounted for as a "reverse acquisition" for
financial reporting purposes and CSC is deemed to have acquired 100% interest in
the Company, as of the date of the acquisition.
5
<PAGE>
In January 1994, CSC acquired Astrum Funding Corp. ("Astrum") in exchange
for 6.25% of the outstanding shares of the Company. This transaction was
accounted for using the purchase method of accounting. The Astrum acquisition
resulted in the Company acquiring net assets of $1,185 and obtaining licenses to
act as a mortgage banker in 11 states in which it had not previously been
licensed. No additional fair market value was assigned to the net assets
received. Although the Company acquired the new licenses earlier than if it had
applied for licensing on its own, the Company assigned no value to such licenses
because they could have been obtained independently. Further, the Company
determined that due to the illiquidity of the Company's stock as well as the
relatively minimal interest granted to the Astrum shareholders, the Company's
stock had no fair value in excess of the net assets received in the acquisition.
In May 1995, the Company and three principals of a privately held United
Kingdom-based mortgage banker formed CSC-UK. CSC-UK operates in the United
Kingdom (excluding Northern Ireland, the "UK"), and lends to individuals who are
unable to obtain mortgage financing from conventional mortgage sources such as
banks and building societies because of impaired or unsubstantiated credit
histories and/or unverifiable income. On September 29, 1995, the Company entered
into an agreement with the three other shareholders of CSC-UK to acquire their
50% interest in CSC-UK not then owned by the Company through the issuance of
3,600,000 shares of the Company's Common Stock valued at $21.6 million (the "UK
Acquisition"). The UK Acquisition was completed as of September 30, 1995. The UK
Acquisition resulted in the recognition of $19.7 million of goodwill. In
addition to the goodwill, the Company acquired assets of $9.0 million,
consisting primarily of mortgage servicing receivables, and assumed $4.1 million
of liabilities. The UK Acquisition was accounted for as a purchase transaction.
No additional fair market value was assigned to the net assets received in the
UK Acquisition.
On April 23, 1996, CSC-UK acquired all the outstanding stock of J&J
Securities Limited ("J&J") a London-based mortgage banker for (pound)15.0
million ($22.7 million) and 548,000 shares of the Company's Common Stock valued
at $9.8 million (the "J&J Acquisition"). Of the $22.7 million in cash, $17.9
million was paid at closing, $3.1 million was payable subject to the resolution
of certain tax issues related to J&J and $1.7 million is payable based upon the
performance of certain mortgage loans held by J&J. J&J has become a wholly-owned
subsidiary of CSC-UK. The J&J Acquisition was accounted for as a purchase
transaction. J&J provides secured mortgage loans to UK borrowers who are similar
to the Company's UK borrowers. The J&J Acquisition resulted in the recognition
of $19.2 million of goodwill. In addition to the goodwill, the Company acquired
assets of $53.8 million, consisting primarily of mortgage loans held for sale,
and assumed $38.8 million of liabilities. No additional fair market value was
assigned to the net assets received in the J&J Acquisition.
On June 14, 1996, CSC-UK acquired all of the outstanding stock of Heritable
Group Limited ("Heritable") for approximately $66.0 million, including 99,362
shares of the Company's Common Stock valued at $2.5 million (the "Heritable
Acquisition"). Heritable, a UK-based mortgage finance company, operates as a
wholly-owned subsidiary of CSC-UK. The Heritable Acquisition was accounted for
as a purchase transaction. Heritable originates a full range of mortgage loan
products secured primarily by single family residences geared towards borrowers
on the upper-end of the credit spectrum. The Heritable Acquisition resulted in
the recognition of $41.2 million of goodwill. In addition to the goodwill, the
Company acquired assets of $221.2 million, consisting primarily of mortgage
loans held for sale, and assumed $193.2 million of liabilities. No additional
fair market value was assigned to the net assets received in the Heritable
Acquisition.
4. New Accounting Pronouncement
On January 1, 1996, the Company adopted Statement of Financial Accounting
Standard ("SFAS") No. 123 "Accounting for Stock-Based Compensation". This SFAS
encourages the adoption of a new accounting method for employee stock-based
compensation plans and applies to all arrangements whereby an employee receives
stock or other equity instruments of an employer based on the price of an
employer's stock. These arrangements include restricted stock options and stock
appreciation rights. The SFAS also permits the retention of the Company's
current method of accounting for these plans under Accounting Principles Board
Opinion No. 25. The Company will continue its current method of accounting for
stock
6
<PAGE>
based compensation and therefore, pro forma disclosures in footnotes will be
provided on an annual basis. The adoption of this SFAS had no impact on the
Company's results of operations or its financial condition.
5. Earnings Per Share
Primary earnings per share are based on the net earnings applicable to
common stock divided by the weighted average number of common shares and common
stock equivalents outstanding during the period, after giving effect to a 100%
stock dividend effected on September 29, 1995 and a 100% stock dividend effected
on July 1, 1996. Fully diluted earnings per share are based on the net earnings
applicable to common stock adjusted for the after-tax interest expense on the
Convertible Debentures (as defined below), divided by the weighted average
number of common shares and common stock equivalents outstanding during the
period increased by the assumed conversion of the Convertible Debentures into
shares of Common Stock.
6. Convertible Debentures
In May 1996, the Company issued $143.8 million of 6% Convertible
Subordinated Debentures due 2006 (the "Convertible Debentures"), convertible at
any time prior to redemption or maturity, at the holder's option, into shares of
the Company's Common Stock at a conversion price of $26.25, subject to
adjustment. The Convertible Debentures may be redeemed, at the option of the
Company, in whole or in part, at any time after May 15, 1999 at predetermined
redemption prices together with accrued and unpaid interest to the date fixed
for redemption. The coupon at 6% per annum, is payable semi-annually on each May
1 and November 1, commencing November 1, 1996. The terms of the indenture
governing the Convertible Debentures do not limit the incurrence of additional
indebtedness by the Company, nor do they limit the Company's ability to make
payments such as dividends.
7
<PAGE>
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
The Company is a consumer finance company engaged in the business of
originating, purchasing, selling and servicing mortgage loans secured primarily
by one- to four-family residences. The Company primarily generates income from
gains recognized from premiums on loans sold through whole loan sales to
institutional purchasers, gain on sale of loans sold through securitizations,
interest earned on loans held for sale and mortgage servicing receivables,
origination fees received as part of the loan application process and fees
earned on loans serviced. Gain on sale of loans includes the fair value of the
interest-only and residual certificate that the Company receives upon the sale
of loans through securitizations in the US and the value of mortgage servicing
receivables that it receives on UK securitizations and on sales into the US
Greenwich Facility and the UK Greenwich Facility (as such terms are defined in
the Liquidity and Capital Resources section). Gain recorded on loans sold with
servicing retained represents the excess of the interest rate payable by an
obligor on a loan over the interest rate passed through to the purchaser
acquiring an interest in such loan, less applicable recurring fees. Gain on sale
of loans constituted approximately 88.2% of total revenues for the six months
ended June 30, 1996 and 75.2% of total revenues for the six months ended June
30, 1995. The Company completed its first US securitization in March of 1995 and
its first UK securitization in March of 1996. The Company anticipates that it
will continue to sell a substantial portion of its loans through securitizations
with the balance sold in whole loan sales to institutional purchasers.
Results of Operations
Three Months Ended June 30, 1996 Compared to Three Months Ended June 30,
1995
Total revenues increased $78.7 million or 735.5% to $89.4 million for the
three months ended June 30, 1996 from $10.7 million for the comparable period in
1995. This increase was primarily the combined result of higher gains on sale of
loans resulting from the combined US and UK increased loan origination and
purchase volume and volume of loans sold compared to the prior period, an
increase in net mortgage origination income due to an increased loan origination
volume and an increase in servicing income.
Gain on sale of loans increased $71.5 million or 831.4% to $80.1 million
for the three months ended June 30, 1996 from $8.6 million for the comparable
period in 1995. This increase was a result of the increase in CSC-UK's gain on
loan sales of $66.2 million representing a 26.6% gain on the $248.5 million of
loan sales during the period compared to gain on loan sales of $2.7 million
representing a 35.5% gain on the $7.5 million on loan sales during the
comparable period in 1995. The lower average gain recognized during the three
months ended June 1996 was a result of the lower average gain recognized on the
sale of the Heritable loan portfolios. In addition, the increase was a result of
the increased volume of US loan sales at lower average gains during the three
months ended June 30, 1996 ($270.9 million of loan sales at a weighted average
gain of 5.2% ($14.0 million) as compared to a weighted average gains of 7.7%
($5.9 million) on $76.9 million loan sales during the three months ended June
30, 1995). The lower average gain recognized during the three months ended June
1996 was a result of the lower average margins from bulk purchases begun during
the second quarter of 1996, as well as lower margins from shifts of interest
rates during the second quarter of 1996. Included in the CSC-UK gain on loan
sales were $21.8 million and $29.2 million of gains on the sale of the loan
portfolios acquired as a result of the J&J Acquisition and the Heritable
Acquisition.
Mortgage origination income increased $570,077 or 72.6% to $1.4 million for
the three months ended June 30, 1996 from $785,476 for the comparable period in
1995. This increase was primarily a result of (i) the increase in US loan
origination and purchase volume to $290.0 million for the three months ended
June 30, 1996 from $87.7 million for the comparable period in 1995, partially
offset by lower average origination fees earned and (ii) the increase in
mortgage origination income from CSC-UK. It is anticipated that the Company's
domestic origination fees as a percentage of loans originated will continue to
decrease in the future.
8
<PAGE>
Interest income increased $5.4 million or 490.9% to $6.5 million for the
three months ended June 30, 1996 from $1.1 million for the comparable period in
1995. This increase was due primarily to the increased balance of loans held for
sale during the 1996 period resulting from the increased loan origination and
purchase volume in excess of loans sold during the period as well as income
recognized on mortgage servicing receivables.
Servicing income increased $721,210 or 975.4 % to $795,149 for the three
months ended June 30, 1996 from $73,939 for the comparable period in 1995. This
increased income was due primarily to an increase in the average balances of US
loans serviced to $587.9 million for the period ending June 30, 1996 from $96.6
million for the period ending June 30, 1995 and the increase in the average
balances of UK loans serviced to $198.4 million for the period ending June 30,
1996 from $5.5 million for the period ending June 30, 1995.
Earnings from partnership interest decreased $96,639 or 49.1% to $110,000
for the three months ended June 30, 1996 from $196,639 million for the
comparable period in 1995 as a result of lower earnings recognized from the
equity interest in Industry Mortgage Company, L.P. for the three months ended
June 30, 1996.
Total expenses increased $23.9 million or 405.1% to $29.8 million for the
three months ended June 30, 1996 from $5.9 million for the comparable period in
1995. This increase was a result of increased salaries, selling expenses and
operating expenses related to increased loan origination and purchase volume
during the 1996 period. Total expenses as a percentage of total revenues
decreased to 33.3% for the three months ended June 30, 1996 from 55.1% for the
comparable period in 1995. During the three months ended June 30, 1996,
amortization of goodwill related to the UK Acquisition, the J&J Acquisition and
the Heritable Acquisition totaled $1.0 million.
Salaries and employee benefits increased $13.0 million or 565.2% to $15.3
million for the three months ended June 30, 1996 from $2.3 million for the
comparable period in 1995. This increase was primarily due to increased staffing
levels to 367 US employees at June 30, 1996 compared to 167 US employees for the
comparable period in 1995, the increased staffing levels associated with the UK
operations, severance costs associated with the J&J Acquisition and the
Heritable Acquisition, growth in loan origination and purchase volume and
geographic expansion, as well as increased loans serviced.
Interest expense increased $3.3 million or 235.7%, to $4.7 million for the
three months ended June 30, 1996 from $1.4 million for the comparable period in
1995. The increase was primarily attributable to the interest costs associated
with the $143.8 million Convertible Debentures issued during the second quarter
of 1996 as well as an increased balance of loans held pending sale during the
three months ended June 30, 1996 resulting from the increased loan origination
and purchase volume during the period.
Other expenses increased $6.5 million or 282.6% to $8.8 million for the
three months ended June 30, 1996 from $2.3 million for the comparable period in
1995. This was primarily a result of increased selling costs of $2.4 million or
395.1% to $3.0 million for the three months ended June 30, 1996 from $607,473
for the comparable period in 1995, and increased professional fees, travel and
entertainment and occupancy costs incurred to support the increased loan
origination and purchase volume.
Net earnings increased $32.4 million or 1,350.0% to $34.8 million for the
three months ended June 30, 1996 from $2.4 million for the comparable period in
1995. The growth in net earnings was due primarily to the inclusion of
non-recurring, after-tax earnings of $23.1 million from the sale of the loan
portfolios acquired as a result of the J&J Acquisition and the Heritable
Acquisition, as well as increased revenues resulting from an increase in US and
UK loan origination and purchase volume and volume of loans sold during the
three months ended June 30, 1996.
Six Months Ended June 30, 1996 Compared to Six Months Ended June 30, 1995
Total revenues increased $101.6 million or 612.0% to $118.2 million for the
six months ended June 30, 1996 from $16.6 million for the comparable period in
1995. This increase was primarily the combined result of higher gains on sale of
loans resulting from the combined US and UK increase in loan origination
9
<PAGE>
and purchase volume and volume of loans sold compared to the prior period, the
inclusion of the operating results of CSC-UK, not in existence until May 1995
and was 50% owned in the second quarter of 1995, an increase in net mortgage
origination income due to an increased loan origination volume and an increase
in servicing income.
Gain on sale of loans increased $91.7 million or 733.6% to $104.2 million
for the six months ended June 30, 1996 from $12.5 million for the comparable
period in 1995. This increase was a result of the inclusion of CSC-UK's gain on
loan sales of $78.4 million representing a 28.4% gain on the $275.9 million of
loan sales during the period as compared to gain on loan sales of $2.7 million
representing a 35.5% gain on the $7.5 million of loan sales during the
comparable period in 1995. The lower average gain recognized during the six
months ended June 30, 1996 was a result of the lower average gain recognized on
the sale of the Heritable loan portfolios. In addition, the increase was a
result of the increased volume of US loan sales at lower average gains during
the six months ended June 30, 1996 ($446.7 million of loan sales at a weighted
average gain of 5.8% ($25.8 million) as compared to a weighted average gains of
7.3% ($9.8 million) on $133.6 million of loan sales during the six months ended
June 30, 1995). The lower average gain recognized during the six months ended
June 30, 1996 was a result of the lower average margins from bulk purchases
begun during the second quarter of 1996, as well as lower margins from shifts of
interest rates during the second quarter of 1996. Included in the CSC-UK gain on
loan sales were $21.8 million and $29.2 million of gains on the sale of the loan
portfolios acquired as a result of the J&J Acquisition and the Heritable
Acquisition.
Mortgage origination income increased $787,013 or 56.0% to $2.2 million for
the six months ended June 30, 1996 from $1.4 million for the comparable period
in 1995. This increase was primarily a result of (i) the increase in US loan
origination and purchase volume to $457.7 million for the six months ended June
30, 1996 from $148.5 million for the comparable period in 1995, partially offset
by lower average origination fees earned and (ii) the increase in mortgage
origination income from CSC-UK. It is anticipated that the Company's origination
fees as a percentage of loans originated will continue to decrease in the
future.
Interest income increased $7.4 million or 352.4% to $9.5 million for the
six months ended June 30, 1996 from $2.1 million for the comparable period in
1995. This increase was due primarily to the increased balance of loans held for
sale during the 1996 period resulting from the increased loan origination and
purchase volume in excess of loans sold during the period as well as income
recognized on mortgage servicing receivables.
Servicing income increased $1.3 million or 1,317.3% to $1.4 for the six
months ended June 30, 1996 from $98,688 for the comparable period in 1995. This
increased income was due primarily to an increase in the average balances of US
loans serviced to $500.9 million for the period ending June 30, 1996 from $71.6
million for the period ending June 30, 1995 and the increase in the average
balance of UK loans serviced to $128.2 million for the period ending June 30,
1996 from $5.5 million for the period ending June 30, 1995.
Earnings from partnership interest decreased $171,000 or 39.7% to $260,000
for the six months ended June 30, 1996 from $431,000 for the comparable period
in 1995 as a result of lower earnings recognized from the equity interest in
Industry Mortgage Company, L.P. during the six months ended June 30, 1996.
Total expenses increased $32.7 million or 327.0% to $42.7 million for the
six months ended June 30, 1996 from $10.0 million for the comparable period in
1995. This increase was a result of increased salaries, selling expenses and
operating expenses related to increased loan origination and purchase volume
during the 1996 period, as well as inclusion of the operating results of CSC-UK,
as compared to the six months ended June 30, 1995. Total expenses as a
percentage of total revenues decreased to 36.2% for the six months ended June
30, 1996 from 60.2% for the comparable period in 1995. During the six months
ended June 30, 1996, amortization of goodwill related to the CSC-UK Acquisition,
the J&J Acquisition and the Heritable Acquisition totaled $1.5 million.
Salaries and employee benefits increased $16.6 million or 404.9% to $20.7
million for the six months ended June 30, 1996 from $4.1 million for the
comparable period in 1995. This increase was primarily due to increased staffing
levels to 367 US employees at June 30, 1996 compared to 167 US employees for the
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comparable period in 1995, the increased staffing levels associated with the UK
operations, severance costs associated with the J&J Acquisition and the
Heritable Acquisition, growth in loan origination and purchase volume and
geographic expansion, as well as an increase in loans serviced.
Interest expense increased $4.1 million or 178.3%, to $6.4 million for the
six months ended June 30, 1996 from $2.3 million for the comparable period in
1995. The increase was primarily attributable to the interest costs associated
with the $143.8 million Convertible Debentures issued during the second quarter
of 1996 as well as an increased balance of loans held pending sale during the
six months ended June 30, 1996 resulting from the increased loan origination and
purchase volume during the period.
Other expenses increased $10.6 million or 294.4% to $14.2 million for the
six months ended June 30, 1996 from $3.6 million for the comparable period in
1995 This increase was primarily a result of increased selling costs of $3.5
million or 376.6% to $4.4 million for the six months ended June 30, 1996 from
$917,903 for the comparable period in 1995, and increased professional fees,
travel and entertainment and occupancy costs incurred to support the increased
loan origination and purchase volume and the inclusion of the operating results
of CSC-UK during the period.
Net earnings increased $40.7 million or 1,197.1% to $44.1 million for the
six months ended June 30, 1996 from $3.4 million for the comparable period in
1995. The growth in net earnings was due primarily to the inclusion of
non-recurring, after-tax earnings of $23.1 million from the sale of the loan
portfolios acquired as a result of the J&J Acquisition and Heritable
Acquisition, increased revenues resulting from an increase in loan origination
and purchase volume and volume of loans sold during the six months ended June
30, 1996 as the Company expanded its geographic base to 37 states and the
District of Columbia and further penetrated existing markets.
Financial Condition
June 30, 1996 Compared to December 31, 1995
Cash and cash equivalents increased $3.3 million or 91.7% to $6.9 million
at June 30, 1996 from $3.6 million at December 31, 1995.
Prepaid commitment fees were recorded as an asset at March 31, 1996 as a
result of the UK Greenwich Facility entered into by CSC-UK and Greenwich
International Ltd., a subsidiary of Greenwich Capital Markets, Inc. (referred to
herein, including any subsidiaries as "Greenwich") in March 1996. The balance at
June 30, 1996 was $37.0 million. There was no corresponding asset at December
31, 1995.
Marketable equity securities in the amount of $9.8 million were recorded as
an asset at June 30, 1996 as a result of the Company's 5.82% equity interest in
IMC Mortgage Company ("IMC"). Prior to June 1996, the Company had recorded a
9.09% limited partnership interest in Industry Mortgage Company, L.P., the
predecessor to IMC. At December 31, 1995, the Company's investment in
partnerships was $758,315 and was recorded as other assets. In June 1996, IMC
converted into corporate form and effected a public offering of common stock. As
a result of the offering, the Company's interest in IMC is no longer accounted
for under the equity method of accounting, whereby the Company recognized its
relative portion of the partnership earnings as revenues, but rather as
marketable securities available for sale in accordance with SFAS No. 115.
Available for sale securities are reported on the statement of financial
condition at fair market value with any corresponding change in value reported
as an unrealized gain or loss (if assessed to be temporary) as an element of
stockholders' equity after giving effect for taxes.
Mortgage servicing receivables increased $95.2 million or 430.8% to $117.3
million at June 30, 1996 from $22.1 million at December 31, 1995 primarily due
to the increase of loan sales with servicing retained, partially offset by
amortization expenses.
Interest-only and residual certificates increased $29.8 million or 191.0%
to $45.4 million at June 30, 1996 from $15.6 million at December 31, 1995 as a
result of the $109.7 million and $252.0 million of US securitizations completed
during the first six months of 1996.
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Mortgage loans held for sale, net increased $40.1 million or 54.0% to
$114.3 million at June 30, 1996 from $74.2 million at December 31, 1995 due
primarily to the volume of US loans originated exceeding loan sale volume in the
first six months of 1996 and loans acquired as part of the J&J Acquisition and
the Heritable Acquisition which were not yet sold.
Mortgage loans held for investment, net increased $3.5 million or 350.0% to
$4.5 million at June 30, 1996 from $1.0 million at December 31, 1995. This
increase was a result of the Company's increased loan origination and purchase
volume and the inclusion of $2.7 million of mortgages held for investment by
CSC-UK. As a percentage of total assets, mortgage loans held for investment
increased to 1.0% at June 30, 1996 from 0.7% at December 31, 1995.
Goodwill and other intangibles net of amortization increased $59.0 million
or 305.7% to $78.3 million at June 30, 1996 from $19.3 million at December 31,
1995 primarily as a result of the goodwill recorded in connection with the J&J
Acquisition and the Heritable Acquisition of $19.2 million and $41.2 million,
respectively, offset by $1.5 million of amortization during the period..
Other assets increased $25.9 million or 404.7% to $32.3 million at June 30,
1996 from $6.4 million at December 31, 1995. This was primarily the result of
the inclusion at June 30, 1996 of subwarehouse loan receivables of $5.6 million,
deferred costs of $4.5 million related to the issuance of the Convertible
Debentures, CSC-UK receivables related to loan sales to Greenwich of
approximately $9.3 million and other assets of CSC-UK of $6.2 million.
Warehouse financing facilities outstanding decreased $2.1 million or 2.8%
to $72.8 million at June 30, 1996 from $74.9 million at December 31, 1995
primarily as a result of an increased volume of loans directly funded by the
Company with proceeds from the Convertible Debenture offering.
Accounts payable and other liabilities increased $25.6 million or 156.1% to
$42.0 million at June 30, 1996 from $16.4 million at December 31, 1995. This was
primarily the result of the inclusion of CSC-UK and increased escrow balances
associated with the increased loan servicing portfolio.
Notes payable totaled $38.0 million at June 30, 1996 representing the $38.0
million note payable recorded in connection with the UK Greenwich Facility.
Stockholders' equity increased $62.8 million or 110.0% to $119.9 million at
June 30, 1996 from $57.1 million at December 31, 1995 primarily as a result of
net earnings of $44.1 million for the six months ended June 30, 1996, in
addition to a $5.7 million unrealized gain on marketable securities and a
foreign currency translation adjustment of $448,168.
Liquidity and Capital Resources
The Company uses its cash flow from whole loan sales, loans sold through
securitizations, pre-funding mechanisms through its securitizations, loan
origination fees, processing fees, net interest income and borrowings under its
warehouse facility, US purchase facilities, standby facility and UK purchase
facility to meet its working capital needs. The Company's cash requirements
include the funding of loan originations and purchases, payment of interest
expenses, funding the over-collateralization requirements for securitizations,
operating expenses, income taxes and capital expenditures.
Adequate credit facilities and other sources of funding, including the
ability of the Company to sell loans, are essential to the continuation of the
Company's ability to originate and purchase loans. As a result of increased loan
originations and purchases and its growing securitization program, the Company
has operated, and expects to continue to operate, on a negative cash flow basis.
During the six month periods ended June 30, 1996 and 1995, the Company used
operating cash of approximately $47.3 million and $9.9 million, respectively.
Additionally, during the same periods, the Company used $85.4 million and
$143,414 in investing activities, primarily to fund the Company's acquisitions
of J&J and Heritable in the 1996 period. The Company's sale of loans through
securitizations has resulted in a gain on securitization recognized by the
Company. The recognition of this gain on securitization has a negative impact on
the cash flow of the Company because significant costs are incurred upon closing
of the transactions giving rise to such gain and the Company is required to pay
state and federal income taxes on the gain on
12
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securitization in the period recognized, although the Company does not receive
the cash representing the gain until later periods as the related loans are
repaid or otherwise collected. During the same periods, the Company received
cash of $136.0 million and $11.4 million, respectively. The Company borrows
funds on a short-term basis to support the accumulation of loans prior to sale.
These short-term borrowings are made under a warehouse line of credit with a
group of banks for which CoreStates Bank, N.A. ("CoreStates") serves as agent
(the "Warehouse Facility"). Pursuant to the Warehouse Facility, the Company has
available a secured revolving credit line of $72.0 million to finance the
Company's origination or purchase of loans, pending sale to investors or for
holding certain loans in its own portfolio (the "Revolving Credit Line"). The
Revolving Credit Line is settled on a revolving basis in conjunction with
ongoing loan sales and bears interest at a variable rate (8.35% at June 30,
1996) based on (i) 25 basis points over the higher of either the prime rate or
the federal funds rate plus 50 basis points or (ii) LIBOR (A) divided by the
result of one minus the stated maximum rate at which reserves are required to be
maintained by Federal Reserve System member banks, (B) plus 175 basis points, as
periodically elected by the Company. The outstanding balance of this portion of
the Warehouse Facility was $55.9 million at June 30, 1996. The Revolving Credit
Line extends through June 1997. In addition, the Warehouse Facility provides for
a secured revolving working capital credit line of up to $3.0 million to be used
by the Company for general corporate purposes (the "Working Capital Credit
Line"). The Working Capital Credit Line operates as a revolving facility until
January 1, 1997 at which time any outstanding balance under the Working Capital
Credit Line converts to a term loan. The Working Capital Credit Line bears
interest at a variable rate (9.25% at June 30, 1996) based on 100 basis points
over the higher of either the prime rate or the federal funds rate plus 50 basis
points. There was no outstanding balance under the Working Capital Credit Line
at June 30, 1996. The Working Capital Credit Line terminates on December 31,
1998.
The Warehouse Facility also permits the Company to use up to $10.0 million
of the Revolving Credit Line to provide subwarehouse lines of credit to certain
loan correspondents from whom the Company purchases loans. In July 1995, the
Company began lending funds on a short-term basis to assist in the funding of
loans originated by certain of the Company's loan correspondents. Each borrowing
under these subwarehouse credit lines has a term of not more than 30 days. The
Company requires personal guarantees of the credit line from the principals of
the related loan correspondents. At June 30, 1996, the aggregate balance of
loans outstanding under this program was $4.8 million, with applications pending
for an additional $12.6 million of loans.
The Company has a $50.0 million loan purchase agreement (the "US Purchase
Facility") with ContiTrade Services Corporation ("ContiTrade") whereby the
Company originates and then sells loans and retains the rights to repurchase
loans at a future date for whole loan sales to institutional investors or for
sales through securitizations. This agreement extends through June 1999. The
aggregate principal balance of loans sold to and retained by ContiTrade at June
30, 1996 under the US Purchase Facility was $11.7 million. The Company also has
a standby financing arrangement with ContiTrade (the "Standby Facility") whereby
ContiTrade provides the Company up to $10.0 million line of credit which is
secured by the interest-only and residual certificates the Company receives upon
loan sales through securitizations. As of June 30, 1996, the Company had $2.0
million available under the Standby Facility. The Standby Facility bears
interest at a variable rate based on LIBOR plus 200 basis points (7.4375% at
June 30, 1996) and the agreement extends through June 1999.
In June 1996, the Company entered into a $1.0 billion purchase and sale
agreement with Greenwich, effective as of February 2, 1996 (the "US Greenwich
Facility"), whereby the Company originates and then sells loans to Greenwich for
subsequent inclusion in securitizations. The facility expires on the earlier to
occur of $1.0 billion in loans sold into the facility or February 2, 1998. The
Company had approximately $604.0 million available under the facility at June
30, 1996. The Company retains servicing on all loans sold into the facility.
In March 1996, CSC-UK and Greenwich entered into a new mortgage loan
purchase agreement effective as of January 1, 1996 that includes a working
capital facility with respect to the funding of variable rate, residential
mortgage loans originated or purchased by CSC-UK in the UK (the "UK Greenwich
Facility") and terminated a previous facility with Greenwich. Pursuant to the UK
Greenwich Facility and with certain exceptions, CSC-UK sells all of the loans it
originates to Greenwich which must buy such loans. CSC-UK and/or Greenwich will
subsequently resell these loans through whole loan sales or securitizations. The
UK Greenwich Facility includes a working capital facility pursuant to which
CSC-UK
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is advanced amounts based on a percentage of the principal balance of loans
originated or purchased by CSC-UK and sold to Greenwich, which advance may not
exceed (pound)10.0 million in the aggregate outstanding at any time. Outstanding
amounts under this working capital facility bear interest at a rate of LIBOR
plus 255 basis points (7.3859% at June 30, 1996). The outstanding balance under
this working capital facility was (pound)10.0 million ($15.5 million) at June
30, 1996. This agreement expires on December 31, 2015. Both CSC-UK and Greenwich
are prohibited from entering into substantially similar transactions with other
parties. CSC-UK agreed to pay a fee to Greenwich in connection with the UK
Greenwich Facility in the aggregate amount of $38.0 million, evidenced by a note
bearing interest at a rate of 6.2%, payable in installments of $13.0 million on
December 15, 1996 and $25.0 million on December 15, 1997. Such fee is amortized
over the life of the UK Greenwich Facility.
In May 1996, the Company issued Convertible Debentures in the aggregate
principal amount of $143.8 million. Proceeds from the Convertible Debentures
were used to repay the indebtedness incurred in connection with the J&J
Acquisition, to finance the Heritable Acquisition and for general corporate
purposes.
As of June 30, 1996, the Company had available a $30.0 million term loan
with the First National Bank of Boston to fund loan originations and working
capital needs. The term loan matures on December 31, 1996 and bears interest at
a rate of 11.0% per annum. As of August 12, 1996, the outstanding balance of the
term loan was $24.5 million.
The Company also has a loan and security agreement with CoreStates whereby
CoreStates agrees to lend the Company up to $10.0 million to fund loan
originations and purchases. Borrowings under the agreement bear interest at the
prime rate plus 25 basis points and are due upon demand. The agreement
terminates on June 30, 1997.
The Company is required to comply with various operating and financial
covenants as defined in the agreements described above. The continued
availability of funds provided to the Company under these agreements is subject
to the Company's continued compliance with these covenants.
The Company's business requires continual access to short- and long-term
sources of debt and equity capital. While management believes that it has
sufficient funds to finance its operations and will be able to refinance or
otherwise repay its debt in the normal course of business, there can be no
assurance that existing lines can be extended or refinanced or that funds
generated from operations will be sufficient to satisfy such obligations. Future
financing may involve the issuance of additional debt or equity securities.
The Company's cash requirements may be significantly influenced by possible
acquisitions or strategic alliances, although no particular acquisition or
strategic alliance has been agreed upon or become the subject of any letter of
intent or agreement in principle other than the J&J Acquisition completed in
April 1996 and the Heritable Acquisition completed in June 1996.
The Company anticipates that it will need to arrange for additional cash
resources prior to the end of 1996 through additional debt or equity financing
or additional bank borrowings. The Company has no commitments for additional
bank borrowings or additional debt or equity financing, and there can be no
assurance that the Company will be successful in consummating any such financing
transaction in the future on terms the Company would consider to be favorable.
All references herein to "$" are to United States dollars; all references
to "(pound)" are to British Pounds Sterling. Unless otherwise specified,
translation of amounts from British Pounds Sterling to United States dollars for
the convenience of the reader has been made herein at (pound)1.00 = $1.55.
14
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is a party to various routine legal proceedings arising out of
the ordinary course of its business. Management believes that none of these
actions, individually or in the aggregate, will have a material adverse effect
on the results of operations or financial condition of the Company.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company's Annual Meeting of Stockholders was held on June 12, 1996.
(b) Elected eight directors into one of three classes, to hold office until the
1997, 1998 or 1999 Annual Meeting, as the case may be, and until their
successors have been elected and qualified.
DIRECTORS FOR AGAINST UNVOTED
Class III Directors
(Hold office until the 1999 Annual
Meeting):
Robert Grosser 13,196,727 800 1,559,501
Robert C. Patent 13,196,727 800 1,559,501
Asher Fensterheim 13,196,707 820 1,559,501
Class II Directors
(Hold office until the 1998 Annual
Meeting):
Jonah L. Goldstein 13,196,727 800 1,559,501
Arthur P. Gould 13,196,707 820 1,559,501
Hollis W. Rademacher 13,196,727 800 1,559,501
Class I Directors
(Hold office until the 1997 Annual
Meeting):
Robert M. Stata 13,196,727 800 1,559,501
David A. Steene 13,196,727 800 1,559,501
(c) Stockholders ratified the selection by the Company's Board of Directors of
KPMG Peat Marwick LLP as independent accountants of the Company for the
fiscal year ending December 31, 1996 as follows:
Number of votes for 13,177,977
Number of votes against 250
Number of abstentions 19,300
Number of shares not voted 1,559,501
Item 5. Other Information
None
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Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number
- --------- Description of Exhibit
3.1 Certificate of Incorporation of the Company, as amended, incorporated
by reference to Exhibit 3.1 to the Company's Registration Statement on
Form S-1 as declared effective by the Commission on December 20, 1995.
3.2 Bylaws of the Company, as amended, incorporated by reference to
Exhibit 3.2 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
4.1 Purchase and Sale Agreement, dated as of June 24, 1994, between CSC
and ContiTrade incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
4.2 Indenture, dated as of May 7, 1996, between the Company and The Chase
Manhattan Bank, N.A.
4.3 Registration Rights Agreement, dated as of April 26, 1996, among
the Company, NatWest Securities Limited, Bear, Stearns & Co. Inc.,
CIBC Wood Gundy Securities Corp. and Wasserstein Perella
Securities, Inc.
10.1 Lease Agreement, dated as of September 30, 1993, between CSC and
Taxter Park Associates, as amended by the First Amendment to Lease,
dated as of April 19, 1994, and the Second Amendment to Lease, dated
as of May 12, 1995, incorporated by reference to Exhibit 10.1 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.2 Sublease Agreement between KLM Royal Dutch Airlines and CSC, dated as
of December 5, 1994, incorporated by reference to Exhibit 10.2 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.3 Employment Agreement, dated as of January 1, 1995, between CSC and
Robert Grosser, incorporated by reference to Exhibit 10.3 to the
Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.4 Employment Agreement, dated as of January 1, 1995, between CSC and
Robert C. Patent, incorporated by reference to Exhibit 10.4 to the
Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.5 Employment Agreement, dated as of November 1, 1992, between CSC and
Robert M. Stata, as amended by the Amendment Agreement, dated as of
January 1, 1994, incorporated by reference to Exhibit 10.5 to the
Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.6 Employment Agreement, dated as of July 1, 1995, between CSC and Cheryl
P. Carl, incorporated by reference to Exhibit 10.6 to the Company's
Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.7 Employment Agreement, dated as of July 1, 1995, between CSC and Eric
S. Goldstein, incorporated by reference to Exhibit 10.7 to the
Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
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10.8 Employment Agreement, dated as of July 1, 1995, between CSC and Steven
Weiss, incorporated by reference to Exhibit 10.8 to the Company's
Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.9 Letter agreement, dated as of August 18, 1994, between CSC and Tim S.
Ledwick, incorporated by reference to Exhibit 10.9 to the Company's
Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.10 Employment Agreement, dated as of July 1, 1995, between CSC and Jonah
L. Goldstein, incorporated by reference to Exhibit 10.10 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.11 Agreement of Limited Partnership of Industry Mortgage Company, L.P.,
dated as of July 1, 1993, between Industry Mortgage Corporation and
the Limited Partners of Industry Mortgage Company, L.P., including
CSC, as amended by the First Amended and Restated Agreement of Limited
Partnership of Industry Mortgage Company, L.P., dated as of January 1,
1994, by the First Amendment to First Amended and Restated Agreement
of Limited Partnership of Industry Mortgage Company, L.P., dated as of
March, 1994, and the Second Amendment to First Amended and Restated
Agreement of Limited Partnership of Industry Mortgage Company, L.P.,
dated as of July 1994, incorporated by reference to Exhibit 10.11 to
the Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.12 Master Agreement for Sale and Purchase of Mortgages, dated as of July
1, 1993, between CSC and Industry Mortgage Company L.P., incorporated
by reference to Exhibit 10.12 to the Company's Registration Statement
on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.13 Master Agreement for Sale and Purchase of Mortgage Loans, dated as of
March 11, 1994, between CSC and The First National Bank of Boston,
incorporated by reference to Exhibit 10.13 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.14 ContiMortgage Wholesale Second Mortgage Program Master Agreement for
Sale and Purchase of Mortgages, dated as of August 23, 1991, between
CSC and ContiMortgage Corporation, as amended by the First Amendment
to Master Agreement for Purchase and Sale, dated as of November 22,
1993, by the Second Amendment to Master Agreement for Purchase and
Sale, dated as of January 28, 1994 and by the Third Amendment, dated
as of November 9, 1994, incorporated by reference to Exhibit 10.14 to
the Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.15 Standby Financing and Investment Banking Services Agreement, dated as
of June 24, 1994, between CSC and ContiTrade, incorporated by
reference to Exhibit 10.15 to the Company's Registration Statement on
Form S-1 as declared effective by the Commission on December 20,
1995.
10.16 Ongoing Agreement of Purchase and Sale of Mortgage Loans, dated as of
November 12, 1993, between CSC and NationsCredit Financial Services
Corporation of America, incorporated by reference to Exhibit 10.16 to
the Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.17 Letter agreement, dated as of December 15, 1994, from NationsCredit
Corporation and CSC, incorporated by reference to Exhibit 10.17 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.18 Promissory Note, dated as of December 9, 1993, between CSC and Center
Capital Corporation, incorporated by reference to Exhibit 10.18 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
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<PAGE>
10.19 Revolving Credit, Security, and Term Loan Agreement, dated as of June
30, 1995 among CSC, the Company, CoreStates Bank, N.A., Harris Trust
and Savings Bank, NBD Bank and NatWest Bank N.A., as amended by
Amendment No. 1 to the Revolving Credit Agreement, dated as of August
30, 1995, incorporated by reference to Exhibit 10.19 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.20 The Company's 1995 Stock Option Plan, incorporated by reference to
Exhibit 10.20 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
10.21 The Company's 1995 Non-Employee Directors Stock Option Plan,
incorporated by reference to Exhibit 10.21 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.22 Pooling and Servicing Agreement, dated as of March 10, 1995, among
CSC, ContiTrade and Chemical Bank, incorporated by reference to
Exhibit 10.22 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
10.23 Indemnification Agreement, dated as of March 30, 1995, among CSC,
ContiTrade and Municipal Bond Investors Assurance Corporation,
incorporated by reference to Exhibit 10.23 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.24 Insurance Agreement, dated as of March 10, 1995, among CSC, Chemical
Bank and Municipal Bond Investors Assurance Corporation, incorporated
by reference to Exhibit 10.24 to the Company's Registration Statement
on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.25 Purchase Price Letter, dated as of March 30, 1995, between CSC and
ContiTrade, incorporated by reference to Exhibit 10.25 to the
Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.26 Pooling and Servicing Agreement, dated as of July 31, 1995, between
CSC and Harris Trust and Savings Bank, incorporated by reference to
Exhibit 10.26 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
10.27 Indemnification Agreement, dated as of August 24, 1995, between CSC,
ContiFinancial Services Corporation and Financial Security Assurance
Inc., incorporated by reference to Exhibit 10.27 to the Company's
Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.28 Insurance and Indemnity Agreement, dated as of July 31, 1995, between
CSC and Financial Security Assurance Inc., incorporated by reference
to Exhibit 10.28 to the Company's Registration Statement on Form S-1,
as amended as declared effective by the Commission on December 20,
1995.
10.29+ Mortgage Loan Purchase Agreement, dated as of May 26, 1995, between
CSC-UK and Greenwich, incorporated by reference to Exhibit 10.29 to
the Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.30+ Letter, dated as of May 26, 1995, from Greenwich to CSC-UK regarding
purchase commitment with respect to first and second mortgage loans
located in the United Kingdom, incorporated by reference to Exhibit
10.30 to the Company's Registration Statement on Form S-1 as declared
effective by the Commission on December 20,
1995.
18
<PAGE>
10.31+ Servicing Agreement, dated as of May 26, 1995, among CSC-UK, City
Mortgage Servicing Limited and Greenwich, incorporated by reference to
Exhibit 10.31 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
10.32 Stock Purchase Agreement, dated as of September 29, 1995, among the
Company, David Steene, Martin Brand and Gerald Epstein, incorporated
by reference to Exhibit 10.32 to the Company's Registration Statement
on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.33 Service Agreement, dated as of April 5, 1995, between CSC-UK and David
Steene, incorporated by reference to Exhibit 10.33 to the Company's
Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.34 Service Agreement, dated as of April 5, 1995, between CSC-UK and
Martin Brand, incorporated by reference to Exhibit 10.34 to the
Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.35 Service Agreement, dated as of April 5, 1995, between CSC-UK and
Gerald Epstein, incorporated by reference to Exhibit 10.35 to the
Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.36 Agreement, dated as of May 1, 1995, between CSC-UK and J.L.B.
Equities, Inc., incorporated by reference to Exhibit 10.36 to the
Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.37 Lease, dated as of August 2, 1995, among The Standard Life Assurance
Company, City Mortgage Servicing Limited and CSC-UK, incorporated by
reference to Exhibit 10.37 to the Company's Registration Statement on
Form S-1 as declared effective by the
Commission on December 20, 1995.
10.38 Agreement and Plan of Reorganization, dated as of April 12, 1994,
among Essex, CSC and Shareholders of CSC, incorporated by reference to
Exhibit 10.38 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
10.39 Stock Purchase Agreement, dated November 15, 1993, between CSC and
Spectrum Financial Consultants, Inc., incorporated by reference to
Exhibit 10.39 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
10.40 Pooling and Servicing Agreement, dated as of November 27, 1995, among
CSC, ContiTrade Services L.L.C. and Harris Trust and Savings Bank,
incorporated by reference to Exhibit 10.40 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.41 Insurance and Indemnity Agreement, dated as of November 27, 1995,
between CSC and Financial Security Assurance Inc., incorporated by
reference to Exhibit 10.41 to the Company's Registration Statement on
Form S-1 as declared effective by the Commission on December 20, 1995.
10.42 Indemnification Agreement, dated as of December 6, 1995, among CSC,
Financial Security Assurance Inc. and ContiFinancial Services
Corporation, incorporated by reference to Exhibit 10.42 to the
Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.43 Purchase Price Letter, dated as of December 6, 1995, between CSC and
ContiTrade Services L.L.C., incorporated by reference to Exhibit 10.43
to the Company's Registration Statement on Form S-1 as declared
effective by the Commission on December 20, 1995.
19
<PAGE>
10.44 Stock Option Agreement, dated as of March 6, 1996, by and among the
Company, CSC-UK and Messrs. Jaye and Johnson, incorporated by
reference to Exhibit 2.1 to the Company's Current Report on Form 8-K
filed with the Commission on March 14, 1996.
10.45 Asset Purchase Agreement, dated March 6, 1995, by and among CSC-UK,
J&J, UK Credit Corporation Limited ("UK Credit") and certain
shareholders of UK Credit, incorporated by reference to Exhibit 2.2 to
the Company's Current Report on Form 8-K filed with the
Commission on March 14, 1996.
10.46++ Letter Agreement, dated as of March 28, 1996, from Greenwich
International, Ltd. to CSC-UK regarding purchase commitment with
respect to first and second mortgage loans located in the United
Kingdom, incorporated by reference to Exhibit 10.46 to the Company's
Annual Report on Form 10-K filed with the Commission on
April 1, 1996.
10.47 Letter Agreement, dated March 28, 1996, between Greenwich and CSC-UK
regarding termination of prior agreement, incorporated by reference to
Exhibit 10.46 to the Company's Annual Report on Form 10-K filed with
the Commission on April 1, 1996.
10.48 Subscription Agreement, dated April 26, 1996, among the Company,
NatWest Securities Limited, Bear, Stearns & Co. Inc., CIBC Wood
Gundy Securities Corp. and Wasserstein Perella Securities, Inc.
10.49 Agreement for the Sale and Purchase of the Entire Issued Share Capital
of Heritable Group Limited, dated June 14, 1996, incorporated by
reference to Exhibit 2.1 to the Company's Current Report on Form 8-K
filed with the Commission on June 28, 1996.
10.50* Service Deed, dated as of April 23, 1996, between J&J and Michael
Robin Jaye.
10.51* Service Deed, dated as of April 23, 1996, between J&J and Alec David
Johnson.
10.52* Covenant Letter, dated April 11, 1996 among the Company, CSC,
Cityscape Funding Corp. and the First National Bank of Boston and the
related Letter Agreement, Pledge Agreement, Stock Pledge Agreement,
Collateral Assignment of Note and Charge Agreement, Commercial
Promissory Note and Guaranty, as amended by the Letter Agreement,
dated June 13, 1996, and the related Commercial Promissory Note and
Confirmation of Guaranty.
10.53* Third Amendment to Lease, dated as of April 17, 1996, between CSC and
Taxter Park Associates.
10.54* Lease, dated as of April 18, 1996, among The Standard Life Assurance
Company, City Mortgage Servicing Limited and CSC-UK.
10.55* Purchase and Sale Agreement, dated February 2, 1996, between CSC
and Greenwich Capital Financial Products, Inc.
10.56* Lease Agreement, dated as of July 7, 1996, between CSC and Robert
Martin Company.
11.1* Computation of Earnings Per Share
27.1* Financial Data Schedule
___________________
* Filed herewith
+ Confidential treatment granted
++ Confidential treatment requested
20
<PAGE>
(b) Reports on Form 8-K:
1. Form 8-K dated April 8, 1996 revising the Company's results for the year
ended December 31, 1995.
2. Form 8-K dated May 2, 1996 reporting the Company's first quarter 1996
results.
3. Form 8-K dated May 2, 1996 reporting the Company's acquisition of J&J.
4. Form 8-K dated May 2, 1996 reporting the Company's offering of its 6%
Convertible Subordinated Debentures due 2006.
5. Form 8-K dated June 14, 1996 reporting the Company's acquisition of
Heritable.
21
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Cityscape Financial Corp.
Date: August 14, 1996 By /s/Tim S. Ledwick
------------------------
Tim S. Ledwick
Title: Chief Financial Officer
(as chief accounting officer and
on behalf of the registrant)
22
DATED APRIL 23, 1996
(1) MICHAEL ROBIN JAYE
AND
(2) J&J SECURITIES LIMITED
--------------------------
SERVICE DEED
--------------------------
Messrs Howard Kennedy,
23 Harcourt House, 19 Cavendish Square,
London WlA 2AW
Tel:071-636 1616
Ref: 18/933452
<PAGE>
THIS DEED is made the 23rd day of April, 1996
BETWEEN:-
(1) J&J SECURITIES LIMITED a company registered in England under number
1335672 whose registered office is situate at [Sherbourne House,
Croxley Business Park, Watford, Herts, WD1 8YE] ("the Company");
(2) MICHAEL ROBIN JAYE of 12 Finchley Road, London, NW8 6E ("the
Appointee")
NOW THIS DEED WITNESSETH as follows:-
1. DEFINITIONS
In this Deed and the Schedule (unless it is expressly otherwise
provided or the context otherwise requires):-
1.1 the following expressions shall have the following meanings:
1.1.1 "the Appointment" means the appointment of the Appointee by the
Company under this Deed.
1.1.2 "the Board" means the board of directors of the Company for the time
being and includes any duly appointed Committee of the Board.
1.1.3 "Group Company" means any company which is for the time being the
Company's parent undertaking (as defined by Section 258 of the
Companies Act 1985) or a subsidiary undertaking (as so defined) of the
Company or a subsidiary undertaking of the Company's parent
undertaking (other than the Company) or any of them.
1.1.4 "month" means calendar month.
1.1.5 "the Salary" means the salary payable to the Appointee under Clause 5
of this Deed.
1.1.6 "year" means calendar year.
2
<PAGE>
1.1.7 "Termination Date" means the date of termination of this Deed
howsoever caused.
1.2 References to statutory provisions shall be construed as references to
those provisions as respectively amended or re-enacted from time to
time (whether before or after the date hereof) and shall include any
provisions of which they are re-enactments (whether with or without
modification) and any subordinate legislation made under such
provisions.
1.3 References to Clauses and Schedules are to those of this Deed.
1.4 The Schedule(s) form(s) part of this Deed and shall be deemed to be
incorporated herein and any reference to this Deed shall include the
Schedules(s).
1.5 Reference to the singular number shall include the plural number and
vice versa and those denoting one gender only shall include the other.
1.6 Headings are inserted for convenience only and shall not affect the
construction or interpretation of this Deed.
2. APPOINTMENT AND TERM
2.1 With effect from the date hereof, the Company hereby appoints the
Appointee and the Appointee agrees to serve the Company as the [ ]
Director of the Company or in such other capacity consistent with his
status as the Board may determine and the Director may agree and the
duties of the Appointee may relate to the Company and/or any Group
Company (if the Board so determines and the Appointee so agrees) upon
the terms of this Deed.
2.2 The Appointment shall be for a term of 3 (three) years from the date
hereof and shall be terminable by either party serving upon the other
12 months' notice in writing such notice not to expire before the
third anniversary hereof.
3
<PAGE>
2.3 During the course of any applicable notice period the Company may
require the Appointee to continue to be available to perform his
duties at all times during usual working hours and whether at his home
or at the offices of the Company or any Group Company (subject to
clause 4.1 below) PROVIDED HOWEVER that
i) for a period of not exceeding 6 (six) months during such period the
Company shall not be obliged to assign or continue to assign any
duties to the Appointee whether or not this results in the Appointee
being inactive or his duties being wholly or partly performed by other
employees;
ii) during such notice period the Appointee shall be entitled to be
paid and receive his remuneration and all other benefits to which he
is contractually entitled thereunder;
iii) during the notice period the provisions of Clause 13.1.3 shall
apply as if the Appointment had been terminated.
2.4 The Appointee warrants that by virtue of entering into this Agreement
he will not be in breach of any express or implied terms of any
contract with or of any other obligation to any third party binding
upon him.
3. DUTIES
3.1 The Appointee shall during the Appointment exercise such powers and
shall comply with and perform such reasonable directions and duties
consistent with his status in relation to the businesses and affairs
of the Company and (if he so reasonably agrees) any Group Company as
may from time to time be vested in or given to him by the Board and
with any standing orders or other regulations for the time being in
force.
4
<PAGE>
3.2 The Appointee undertakes well and faithfully to serve the Company and
to use his best endeavors to advance promote and develop the
businesses and interests of the Company and the Group Companies.
3.3 The Appointee shall, unless prevented by sickness or accident, devote
his full time attention and abilities during normal business hours to
his duties thereunder.
3.4 The Company may, without the Appointee's consent second him to be
employed by any Group Company without prejudice to his rights under
this Agreement.
4. LOCATION
4.1 The Appointee's place of work (when not engaged on business travel)
shall be at the above registered office of the Company or within 50
miles of Watford, Herts.
4.2 The Appointee shall travel to such other places (whether inside or
outside the United Kingdom) for such purposes and on such occasions as
may reasonably be required for the proper fulfillment of his duties
thereunder.
5. REMUNERATION
5.1 The Company shall pay to the Appointee (which shall include any
remuneration payable to the Appointee as a Director or other officer
of the Company or any Group Company or any office held by him as
nominee or representative of the Company or any Group Company) a
salary payable by equal monthly installments in arrears on the last
business day of each month at the rate of (pound)50,000 per annum
together with the rights and benefits referred to in the Schedule.
5.2 The Salary is deemed to accrue from day to day and the first monthly
installment will be calculated from the date hereof and the last
monthly
5
<PAGE>
installment will be calculated down to the date of termination of the
Appointment.
5.3 The Salary is subject to upwards only review on each anniversary of
the date hereof at the discretion of the Board provided that the
Salary shall be increased on 1st January in each year by the
percentage increase (if any) in the Retail Prices Index in the
preceding year.
5.4 Contemporaneously with the execution of this Deed the Appointee shall
enter into a Stock Option Agreement with Cityscape Financial Corp.
substantially on the terms attached hereto and initialed by the
parties for identification purposes.
6. EXPENSES
6.1 The Company shall promptly reimburse to the Appointee on a monthly
basis all reasonable traveling hotel and other out-of-pocket expenses
properly incurred by him in the performance of his duties thereunder
provided that receipts for such expenses or other evidence thereof is
produced to the Company to the reasonable satisfaction of the Board.
6.2 Where the Company issues a company sponsored credit or charge card to
the Appointee he shall use such card only for expenses reimbursable
under Clause 7.1 above, and shall return it to the Company forthwith
on the termination of his employment.
7. HOLIDAYS
7.1 The Appointee shall be entitled to paid leave of absence for holiday
for thirty working days during each year of the Appointment (and pro
rata as regards each part of a year) to be taken by the Appointee at
such time or times as the Board shall approve (such approval not to be
unreasonably withheld or delayed) in addition to bank and public
holidays.
6
<PAGE>
7.2 The Appointee may not carry forward any unused holiday entitlement
from one year to the next without the prior consent of the Board (such
approval not to be unreasonably withheld or delayed).
7.3 On termination of the Appointment the Appointee shall be entitled to
payment in lieu of any holiday entitlement accrued due as at the
Termination Date and in determining the amount of such payment one
day's holiday pay will be calculated as 1/26th of the Appointee's
annual salary.
8. SICKNESS OR ACCIDENT
8.1 During any period in which the Appointee may be incapacitated from
performing his duties hereunder due to sickness (including mental
disorder) or accident the Company shall pay to the Appointee a
sickness allowance at the following rates:
8.1.1 during the first six consecutive months of such incapacity an
allowance of an amount which is equal to the Salary which would
otherwise be payable to the Appointee; and
8.1.2 during the next six consecutive months of such incapacity (up to and
including the twelfth month) an allowance of an amount which is equal
to one-half of the Salary which would otherwise be payable to the
Appointee;
8.1.3 after the twelfth consecutive month of such incapacity an allowance at
the Board's discretion. Provided always that such remuneration shall
be inclusive of any Statutory Sick Pay to which the Appointee is
entitled under the provisions of the Social Security and Housing
Benefits Act 1982 and any Social Security Sickness Benefit or other
benefits recoverable by the Appointee (whether or not recovered) may
be deducted therefrom and that the benefits to be provided to the
Appointee in accordance with the Schedule shall still continue to be
provided to him.
7
<PAGE>
8.2 If after the twelfth consecutive month of absence by reason of such
incapacity the Appointee continues to be so absent the Company may
terminate the Appointment at any time by not less than twelve weeks
notice in writing to the Appointee.
8.3 In the event of absence through sickness or injury the Appointee must
notify the Company of the date of commencement and the nature of the
sickness or injury or arrange for such notification to be made on his
or her behalf on the first working day of absence either by telephone
or in writing to the Company.
8.4 In addition to notification in accordance with this Clause the
Appointee must submit to the Company a completed certificate of
sickness every seventh day of absence (or not later than the day of
return to work if the period of absence is less than seven days). In
the case of absences from work for seven days or more certificates of
sickness must be produced from the Appointee's G.P. or other medical
adviser recognized by the Company.
8.5 Monday to Friday shall be "qualifying days" for purposes of
calculating the amount of Statutory Sick Pay for any period of
sickness.
9. CONFIDENTIALITY
9.1 The Appointee shall not at any time whether during the continuance of
the Appointment or at any time after its termination divulge to any
third party whatsoever (except insofar as it may be necessary to do so
in the performance of his duties hereunder or in strict confidence to
professional advisers or as required by law or the rules of any
regulatory authority) or use take away conceal destroy or retain for
his own or another's advantage or to the detriment of the Company or
any Group Company any of the trade secrets accounts financial or
trading information or other confidential information which the
Appointee may receive or obtain in relation to the businesses finances
dealings or affairs
8
<PAGE>
of the Company or any Group Company including any information
regarding the products processes formulae research projects or other
technical data or the customers suppliers, borrowers, brokers or
agents of the Company or any Group Company and including any drawings
plans models designs papers or records howsoever recorded (whether in
writing or print or by photographic electrical magnetic symbolic or
other means) save to the extent that such information is (or becomes
other than through a breach by the Appointee of this Clause) within
the public domain.
9.2 All notes, memoranda, records and writing made by the Appointee
relating to the business of the Company or any Group Companies shall
be and remain the property of the Company or any Group Company to
whose business they relate and shall be delivered by him to the
company to which they belong forthwith upon request.
9
<PAGE>
10. INVENTIONS/COPYRIGHT
If at any time during the Appointment the Appointee either alone or
jointly makes discovers or acquires any invention development
improvement process or secret whatsoever or any interest therein
(whether the subject of letters patent or not) which relates to or
concerns any of the products of the Company or any Group Company or
creates or produces any artistic or other work which may be the
subject of copyright or other form of intellectual property protection
in any jurisdiction (except only those works and designs originated
conceived written or made by the Appointee wholly outside his normal
working hours and wholly unconnected with the Appointment) (hereafter
together referred to as "an Invention") or if details of any Invention
are communicated to the Appointee by any other employee of the Company
or any Group Company then:-
10.1 the Appointee shall forthwith in writing communicate full details
thereof including all necessary plans and models to the Board or as
the Board may direct;
10.2 any such Invention made or discovered by the Appointee or his share
therein if made or discovered jointly belongs to and is the absolute
property of the Company;
10.3 at the request of the Company and either during the Appointment or
after its termination the Appointee shall at the expense of the
Company or its nominee as part of his duties hereunder join with and
assist the Company or its nominee in obtaining and/or renewing letters
patent design and/or trade mark registrations or other like protection
in such countries as the Board may direct for any such Invention and
shall execute such deeds and documents and carry out such acts as may
be necessary for vesting in the Company or its nominee as the case may
be the sole beneficial right in any such Invention;
10
<PAGE>
10.4 the Company is under no liability to account to the Appointee for any
revenue or profit derived or resulting from any such Invention;
10.5 the Appointee hereby irrevocably and unconditionally waives in favor
of the Company any and all moral rights conferred on him by Chapter IV
of Part I of the Copyright Designs and Patents Act 1988 for any work
in which copyright or design right is vested in the Company by Clause
10; and
10.6 the Appointee hereby irrevocably and by way of security appoints any
Director of the Company to be his attorney and in his name and on his
behalf to do and execute any such act or instrument as may be
necessary for the purpose of implementing the provisions of this
Clause.
11. TERMINATION OF AGREEMENT
11.1 The Company may terminate the Appointment forthwith by notice in
writing to the Appointee in any of the following circumstances:-
11.1.1 if the Appointee is guilty of any fraud or material dishonesty
(whether or not connected with his employment) gross misconduct
(connected with his employment) or willful neglect of duty (otherwise
than as a result of sickness (including mental or accident)) or shall
commit any continued material breach of the terms of this Deed which
material breach (if capable of remedy) shall continue unremedied for
at least 30 days of the Appointee being given written notice by the
Company requiring such breach to be remedied;
11.1.2 if the Appointee is convicted of any criminal offense (excluding any
offense under road traffic legislation or any offense for which the
Appointee is not sentenced to any term of imprisonment (whether
suspended or not));
11.1.3 if the Appointee becomes bankrupt or makes any arrangement or
composition with his creditors;
11
<PAGE>
11.1.4 if the Appointee is made the subject of an order under the Mental
Health Act 1983; or
11.1.5 if the Appointee is convicted of an offense under the Criminal Justice
Act 1993.
11.2 The Appointee has no claim (other than as provided in this Agreement)
against the Company or any Group Company for damages or otherwise by
reason of termination under this Clause or under Clause 8.2. Any delay
or, forbearance by the Company in exercising any such right of
termination shall not constitute a waiver of that right.
11.3 In order to investigate a complaint against the Appointee of
misconduct the Company shall be entitled to suspend the Appointee on
full pay and benefits for so long as may be necessary to carry out a
proper investigation and hold a disciplinary hearing provided that
such suspension shall not be for a period longer than 30 days.
12. NO OTHER INTERESTS
12.1 The Appointee shall not at any time during the continuance of the
Appointment be or become a Director of any company (other than the
Company or any Group Company) or be engaged concerned or interested
directly or indirectly in any other business trade or occupation.
12.2 Nothing in this Deed prevents the Appointee from:-
12.2.1 being engaged concerned or interested in any other business trade or
occupation with the prior written consent of the Board; or
12.2.2 holding or being beneficially interested in not more than five percent
of any class of securities in any company if such class of securities
is listed on a recognized Stock Exchange.
13. RESTRICTIONS
13.1 The Appointee hereby covenants with and undertakes to the Company that
he will not:-
12
<PAGE>
13.1.1 at any time during the continuance of the Appointment or within the
period of twelve months after its termination induce solicit or
endeavor to entice away from the Company or any Group Company with
which the Appointee was actively engaged during the period of one year
prior to termination of the Appointment on his own behalf or on behalf
of any third party any person firm or company who or which is or was
at any time during the period of one year prior to termination of the
Appointment a customer of or in the habit of dealing with the Company
or any such Group Company;
13.1.2 at any time during the continuance of the Appointment or within the
period of twelve months after its termination induce solicit or
endeavor to entice away from the Company or any Group Company any
person who is an employee of the Company or any Group Company; or
13.1.3 at any time after the termination of the Appointment hold himself out
as being in anyway connected with the Company or any of the Group
Companies or use any name which is identical or similar to or likely
to be confused with the name of the Company or any Group Company or of
any business carried on by any such company or any product or service
produced or provided by any such company or which might suggest a
connection with any such company or any of its products or services.
13.2 Each of the covenants in Clause 13.1 above constitutes a separate and
independent covenant and is to be construed independently of the other
covenants in Clause 13.1.
13.3 The Appointee shall not, and shall ensure that any member of his
immediate family shall not, (i) buy or sell securities in Cityscape
Financial Corp. or other publicly traded securities, including without
limitation purchasing, selling, selling short and purchasing or
writing options on the securities or as to any rights, option,
warrants or Convertible securities related to the said securities,
when in possession of material information
13
<PAGE>
about Cityscape Financial Corp. or any of its subsidiaries which has
not been publicly disseminated ("Inside Information") in a manner that
would violate applicable US securities laws or (ii) pass the Inside
Information along to others.
14. PROTECTION OF GOODWILL
The Appointee hereby covenants with and undertakes to the Company that
he will not within the period of one year after the termination of the
Appointment be engaged concerned or interested whether directly or
indirectly and whether as director employee sub-contractor partner
consultant proprietor or agent in any business trade or occupation
which shall in any way be in competition with any of the businesses of
the Company or any Group Company being businesses with which the
Appointee was actively engaged during the period of one year prior to
termination of the Appointment Provided always that the provisions of
this Clause shall not apply in the event that the Appointee's
employment hereunder is terminated by the Company in breach of
contract or in circumstances which amount to unfair or constructive
dismissal.
15. DOCUMENTS AND OTHER PROPERTY
All documents records correspondence price lists accounts statistics
equipment or other property relating to the businesses or affairs of
the Company or any Group Company including all those items referred to
in Clause 9 above kept in the possession or under the control of the
Appointee and all copies thereof or extracts therefrom made by or on
behalf of the Appointee are and remain the property of the Company and
will be delivered up to the Company on termination of the Appointment.
16. DIRECTORSHIPS OF THE APPOINTEE
14
<PAGE>
If the Appointee shall be a director of the Company or any Group
Company the Board on, or after the Termination Date may give him
notice in writing requesting him to and he shall forthwith resign such
directorship and if the appropriate resignation or resignations shall
not be signed and delivered by the Appointee to the Board within seven
days after such request the Board may appoint any director of the
Company to sign notices of resignation as attorney for and on behalf
of any such director as his attorney for such purpose but such
resignation shall not terminate this Agreement.
17. REORGANISATIONS ETC.
If the Appointee shall have been offered but shall unreasonably have
refused or unreasonably failed to agree to the transfer of this Deed
by way of novation to a company which as a result of a re-organization
or reconstruction has acquired or agreed to acquire the whole or
substantially the whole of the undertaking and assets of or the whole
or not less than 90 per cent of the equity share capital of the
Company the Appointee shall have no claim against the Company in
respect of the termination of the Appointment by reason of the
subsequent voluntary winding up of the Company or of the disclaimer of
this Agreement by the Company within three months after such
unreasonable refusal or unreasonable failure to agree.
18. PRIOR AGREEMENTS AND CONTINUOUS PERIOD OF EMPLOYMENT
18.1 This Deed is in substitution for and supersedes a11 former and
existing agreements or arrangements for the employment of the
Appointee by the Company all of which are deemed to have been canceled
with effect from the date of commencement of this Deed.
18.2 The Appointee's employment with the Company which began on 2nd August
1990 counts as part of the Appointee's continuous period of
15
<PAGE>
employment with the Company for the purpose of the Employment
Protection (Consolidation) Ad 1978 (as amended).
19. DISCIPLINARY RULES AND GRIEVANCE PROCEDURE
19.1 There are no set disciplinary rules applicable to the Appointee.
19.2 If the Appointee is dissatisfied with any disciplinary decision
relating to him or wishes to seek redress for any grievance relating
to the Appointment he should apply to the Board in writing or in
person by prior appointment. The Board shall than consider his
grievance notify its decision to him afford him an opportunity of
commenting there on and shall thereafter take such action as it
considers appropriate.
20. DIRECTORS INSURANCE
The Company shall effect and maintain insurance for the benefit of the
Appointee against any liability incurred by him in respect of any
actual omission in the actual or purported exercise, execution and/or
discharge of his powers of duties and/or otherwise in relation to his
duties, powers or officers in relation to the Company and any Group
Company of which he shall become a director. The terms and conditions
of such insurance shall not be materially less advantageous to the
Appointee than that enjoyed by him immediately prior to this
Agreement.
21. NOTICES
Any notice required to be given hereunder is deemed duly served if
delivered by hand or sent by registered or recorded delivery post to
the Company at its registered office for the time being or to the
Appointee at his last known address and is deemed to be served at the
time when the same is delivered to such address or if served by post
forty-eight hours after the time of posting.
16
<PAGE>
22. GOVERNING LAW
This Deed shall be governed by and construed in all respect in
accordance with the laws of England and the parties agree to submit to
the exclusive jurisdiction of the courts of England.
23. VARIATION
This Deed shall only be capable of being varied by a supplemental deed
signed by or on behalf of the parties.
17
<PAGE>
AS WITNESS the parties have executed this Deed the day and year first above
written.
EXECUTED and DELIVERED )
as a DEED by J & J SECURITIES )
LIMITED acting by - )
Director
Director/Secretary
EXECUTED as a DEED and )
DELIVERED by MICHAEL ROBIN )
JAYE in the presence of:- )
18
<PAGE>
THE SCHEDULE
(Referred to in Clause 5)
RIGHTS AND BENEFITS
1. During the Appointment:-
1.1 Subject to the Appointee holding a current full driving license the
Company shall provide the Appointee with a motor car to a value of not
less than (pound)40,000 for the sale use of the Appointee and his
spouse in connection with the performance of his duties under this
Agreement. Such motor car shall be replaced in accordance with Company
policy from time to time in force;
1.2 the expenses of taxing insuring repairing maintaining and where
appropriate the full operating lease charges and (in so far as
attributable to the use of the said motor car for the purposes of the
business of the Company or any Group Company) the expenses of running
the said motor car shall be borne by the Company;
1.3 the Appointee shall ensure that at all times when the said motor car
is driven on the road it is in the state and condition required by law
and that if so required a current test certificate is in force in
respect of it. The Appointee shall also at all times be the holder of
a current driving license entitling him to drive motor cars in the
United Kingdom and shall produce it to the Company on request; and
1.4 the Appointee (and his spouse) shall be solely entitled to use the
said motor car privately. Such use shall (subject to paragraph 1.2 of
this; Schedule) be at the sole expense of the Appointee,
2. During the Appointment the Company shall also provide at its expense
for the benefit of the Appointee, his spouse and children medical
insurance with such Organization as currently provide such insurance
to the Appointee and
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provided that the level of such benefit shall not be materially less
advantageous than that enjoyed by the Appointee in his employment by
the company immediately prior to the date hereof.
20
DATED 23 April 1996
(1) ALEC DAVID JOHNSON
AND
(2)J&J SECURITIES LIMITED
SERVICE DEED
Messrs Howard Kennedy,
23 Harcourt House,
19 Cavendish Square,
London WlA 2AW
Tel:071-636 1616
Ref:18/933452
<PAGE>
THIS DEED is made the 23rd day of April 1996
BETWEEN:-
(1) J&J SECURITIES LIMITED a company registered in England under number
1335672 whose registered office is situate at [Shelbourne House,
Croxley Business Park, Watford, Herts, WD1 8YE] ("the Company");
(2) ALEC DAVID JOHNSON of 12 The Witherings, Emerson Park, Hornchurch,
Essex, RM11 2RA ("the Appointee")
NOW THIS DEED WITNESSETH as follows:-
1. DEFINITIONS
In this Deed and the Schedule (unless it is expressly otherwise
provided or the context otherwise requires):-
1.1 the following expressions shall have the following meanings:-
1.1.1 "the Appointment" means the appointment of the Appointee by the
Company under this Deed.
1.1.2 "the Board" means the board of directors of the Company for the time
being and includes any duly appointed committee of the Board.
1.1.3 "Group Company" means any company which is for the time being the
Company's parent undertaking (as defined by Section 258 of the
Companies Act 1985) or a subsidiary undertaking (as so defined) of the
Company or a subsidiary undertaking of the Company's parent
undertaking (other than the Company) or any of them.
1.1.4 "month" means calendar month.
1.1.5 "the Salary" means the salary payable to the Appointee under Clause 5
of this Deed
1.1.6 "year" means calendar year.
2
<PAGE>
1.1.7 "Termination Date" means the date of termination of this Deed
howsoever caused.
1.2 References to statutory provisions shall be construed as references to
those provisions as respectively amended or re-enacted from time to
time (whether before or after the date hereof) and shall include any
provisions of which they are re-enactments (whether with or without
modification) and any subordinate legislation made under such
provisions.
1.3 References to Clauses and Schedules are to those of this Deed.
1.4 The Schedule(s) form(s) part of this Deed and shall be deemed to be
incorporated herein and any reference to this Deed shall include the
Schedules(s)
1.5 Reference to the singular number shall include the plural number and
vice versa and those denoting one gender only shall include the other
1.6 Headings are inserted for convenience only and shall not affect the
construction or interpretation of this Deed.
2. APPOINTMENT AND TERM
2.1 With effect from the date hereof, the Company hereby appoints the
Appointee and the Appointee agrees to serve the Company as the [ ]
Director of the Company or in such other capacity consistent with his
status as the Board may determine and the Director may agree and the
duties ot the Appointee rnay relate to the Company and/or any Group
Company (if the Board so determines and the Appointee so agrees) upon
the terms of this Deed.
2.2 The Appointment shall be for a term of 3 (three) years from the date
hereof and shall be terminable by either party serving upon the other
12 months' notice in writing such notice not to expire before the
third anniversary hereof
3
<PAGE>
2.3 During the course of any applicable notice period the Company may
require the Appointee to continue to be available to perform his
duties at all times during usual working hours and whether at his home
or at the offices of the Company or any Group Company (subject to
clause 4.1 below) PROVIDED HOWEVER that
i) for a period of not exceeding 6 (six) months during such period the
Company shall not be obliged to assign or continue to assign any
duties to the Appointee whether or not this results in the Appointee
being inactive or his duties being wholly or partly performed by other
employees;
ii) during such notice period the Appointee shall be entitled to be
paid and receive his remuneration and all other benefits to which he
is contractually entitled hereunder.
iii) during the notice period the provisions of Clause 13.1.3 shall
apply as if the Appointment had been terminated.
2.4 The Appointee warrants that by virtue of entering into this Agreement
he will not be in breach of any express or implied terms of any
contract with or of any other obligation to any third party binding
upon him.
3. DUTIES
3.1 The Appointee shall during the Appointment exercise such powers and
shall comply with and perform such reasonable directions and duties
consistent with his status in relation to the businesses and affairs
of the Company and (if he so reasonably agrees) any Group Company as
may from time to time be vested in or given to him by the Board and
with any standing orders or other regulations for the time being in
force.
4
<PAGE>
3.2 The Appointee undertakes well and faithfully to serve the Company and
to use his best endeavours to advance promote and develop the
businesses and interests of the Company and the Group Companies.
3.3 The Appointee shall, unless prevented by sickness or accident, devote
his full time attention and abilities during normal business hours to
his duties hereunder.
3.4 The Company may, without the Appointee's consent second him to be
employed by any Group Company without prejudice to his rights under
this Agreement.
4. LOCATION
4.1 The Appointee's place of work (when not engaged on business travel)
shall be at the above registered office of the Company or within 50
miles of Watford, Herts
4.2 The Appointee shall travel to such other places (whether inside or
outside the United Kingdom) for such purposes and on such occasions as
may reasonably be required for the proper fulfilment of his duties
hereunder.
5. REMUNERATION
5.1 The Company shall pay to the Appointee (which shall include any
remuneration payable to the Appointee as a Director or other officer
of the Company or any Group Company or any office held by him as
nominee or representative of the Company or any Group Company) a
salary payable by equal monthly instalments in arrear on the last
business day of each month at the rate of (pound)l5O,OOO per annum
together with the rights and benefits referred to in the Schedule.
5.2 The Salary is deemed to accrue from day to day and the first monthly
instalment will be calculated from the date hereof and the last
monthly
5
<PAGE>
instalment will be calculated down to the date of termination of the
Appointment.
5.3 The Salary is subject to upwards only review on each anniversary of
the date hereof at the discretion of the Board provided that the
Salary shall be increased on 1st January in each year by the
percentage increase (if any) in the Retail Prices Index in the
preceding year.
5.4 Contemporaneously with the execution of this Deed the Appointee shall
enter into a Stock Option Agreement with Cityscape Financial Corp
substantially an the terrns attached hereto and initialled by the
parties for identification purposes.
6. EXPENSES
6.1 The Company shall promptly reimburse to the Appointee on a monthly
basis all reasonable travelling hotel and other out--of-pocket
expenses properly incurred by him in the performance of his duties
hereunder provided that receipts for such expenses or other evidence
thereof is produced to the Company to the reasonable satisfaction of
the Board.
6.2 Where the Company issues a company sponsored credit or charge card to
the Appointee he shall use such card only for expenses reimbursable
under Clause 7.1 above, and shall return it to the Company forthwith
on the termination of his employment.
7. HOLIDAYS
7.1 The Appointee shall be entitled to paid leave of absence for holiday
for thirty working days during each year of the Appointrnent (and pro
rata as regards each part of a year) to be taken by the Appointee at
such time or times as the Board shall approve (such approval not to be
unreasonably withheld or delayed) in addition to bank and public
holidays.
6
<PAGE>
7.2 The Appointee may not carry forward any unused holiday entitlement
from one year to the next without the prior consent of the Board (such
approval not to be unreasonably withheld or delayed.
7.3 On termination of the Appointment the Appointee shall be entitled to
payment in lieu of any holiday entitlement accrued due as at the
Termination Date and in determining the amount of such payment one
day's holiday pay will be calculated as 1/260th of the Appointes's
annual salary.
8. SICKNESS OR ACCIDENT
8.1 During any period in which the Appointee may be incapacitated from
performing his duties hereunder due to sickness (including mental
disorder) or accident the Company shall pay to the Appointee a
sickness allowance at the following rates:-
8.1.1 during the first six consecutive months of such incapacity an
allowance of an amount which is equal to the Salary which would
otherwise be payable to the Appointee; and
8.1.2 during the next six consecutive months of such incapacity (up to and
including the twelfth month) an allowance of an amount which is equal
to one-half of the Salary which would otherwise be payable to the
Appointee;
8.1.3 after the twelfth consecutive month of such incapacity an allowance at
the Board's discretion.
Provided always that such remuneration shall be inclusive of any
Statutory Sick Pay to which the Appointee is entitled under the
provisions of the Social Security and Housing Benefits Act 1982 and
any Social Security Sickness Benefit or other benefits recoverable by
the Appointee (whether or not recovered) may be deducted therefrom and
that the benefits to be provided to the Appointee in accordance with
the Schedule shall still continue to be provided to him.
7
<PAGE>
8.2 If after the twelfth consecutive month of absence by reason of such
incapacity the Appointee continues to be so absent the Company may
terminate the Appointment at any time by not less than twelve weeks
notice in writing to the Appointee.
8.3 In the event of absence through sickness or injury the Appointee must
notify the Company of the date of commencement and the nature of the
sickness or injury or arrange for such notification to be made on his
or her behalf on the first working day of absence either by telephone
or in writing to the Company.
8.4 In addition to notification in accordance with this Clause the
Appointee must submit to the Company a completed certificate of
sickness every seventh day of absence (or not later than the day of
return to work if the period of absence is less than seven days). In
the case of absences from work for seven days or more certificates of
sickness must be produced from the Appointee's G.P. or other medical
adviser recognised by the Company.
8.5 Monday to Friday shall be "qualifying days" for purposes of
calculating the amount of Statutory Sick Pay for any period of
sickness.
9. CONFIDENTIALITY
9.1 The Appointee shall not at any time whether during the continuance of
the Appointment or at any time after its termination divulge to any
third party whatsoever (except insofar as it may be necessary to do so
in the performance of his duties hereunder or in strict confidence to
professional advisers or as required by law or the rules of any
regulatory authority) or use take away conceal destroy or retain for
his own or another's advantage or to the detriment of the Company or
any Group Company any of the trade secrets accounts financial or
trading information or other confidential information which the
Appointee may receive or obtain in relation to the businesses finances
dealings or affairs
8
<PAGE>
of the Company or any Group Company including any information
regarding the products processes formulae research projects or other
technical data or the customers suppliers, borrowers, brokers or
agents of the Company or any Group Company and including any drawings
plans models designs papers or records howsoever recorded (whether in
writing or print or by photographic electrical magnetic symbolic or
other means) save to the extent that such information is (or becomes
other than through a breach by the Appointee of this Clause) within
the public domain.
9.2 All notes, memoranda, records and writing made by the Appointee
relating to the business of the Company or any Group Companies shall
be and remain the property of the Company or any Group Company to
whose business they relate and shall be delivered by him to the
company to which they belong forthwith upon request.
9
<PAGE>
10. INVENTIONS/COPYRIGHT
If at any time during the Appointment the Appointee either alone or
jointly makes discovers or acquires any invention development
improvement process or secret whatsoever or any interest therein
(whether the subject of letters patent or not) which relates to or
concerns any of the products of the Company or any Group Company or
creates or produces any artistic or other work which may be the
subject of copyright or other form of intellectual property protection
in any jurisdiction (except only those works and designs originated
conceived written or made by the Appointee wholly outside his normal
working hours and wholly unconnected with the Appointment) (hereafter
together referred to as "an Invention") or if details of any Invention
are communicated to the Appointee by any other employee of the
Company or any Group Company then:-
10.1 the Appointee shall forthwith in writing communicate full details
thereof including all necessary plans and models to the Board or as
the Board may direct;
10.2 any such Invention made or discovered by the Appointee or his share
therein if made or discovered jointly belongs to and is the absolute
property of the Company;
10.3 at the request of the Company and either during the Appointment or
after its termination the Appointee shall at the expense of the
Company or its nominee as part of his duties hereunder join with and
assist the Company or its nominee in obtaining and/or renewing letters
patent design and/or trade mark registrations or other like protection
in such countries as the Board may direct for any such Invention and
shall execute such deeds and documents and carry out such acts as may
be necessary for vesting in the Company or its nominee as the case may
be the sole beneficial right in any such Invention;
10
<PAGE>
10.4 the Company is under no liability to account to the Appointee for any
revenue or profit derived or resulting from any such Invention;
10.5 the Appointee hereby irrevocably and unconditionally waives in favour
of the Company any and all moral rights conferred on him by Chapter IV
of Part I of the Copyright Designs and Patents Act 1988 for any work
in which copyright or design right is vested in the Company by Clause
10; and
10.6 the Appointee hereby irrevocably and by way of security appoints any
Director of the Company to be his attorney and in his name and on his
behalf to do and execute any such act or instrument as may be
necessary for the purpose of implementing the provisions of this
Clause.
11. TERMINATION OF AGREEMENT
11.1 The Company may terminate the Appointment forthwith by notice in
writing to the Appointee in any of the following circumstances:-
11.1.1 if the Appointee is guilty of any fraud or material dishonesty
(whether or not connected with his employment) gross misconduct
(connected with his employment) or wilful neglect of duty (otherwise
than as a result of sickness (including mental or accident)) or shall
commit any continued material breach of the terms of this Deed which
material breach (if capable of remedy) shall continue unremedied for
at least 30 days of the Appointee being given written notice by the
Company requiring such breach to be remedied
11.1.2 if the Appointee is convicted of any criminal offence (excluding any
offence under road traffic legislation or any offence for which the
Appointee is not sentenced to any term of imprisonment (whether
suspended or not);
11.1.3 if the Appointee becomes bankrupt or makes any arrangement or
composition with his creditors;
11
<PAGE>
11.1.4 if the Appointee is made the subject of an order under the Mental
Health Act 1983; or
11.1.5 if the Appointee is convicted of an offence under the Criminal Justice
Act 1993
11.2 The Appointee has no claim (other than as provided in this Agreement)
against the Company or any Group Company for damages or otherwise by
reason of termination under this Clause or under Clause 8.2. Any delay
or forbearance by the Company in exercising any such right of
termination shall not constitute a waiver of that right.
11.3 In order to investigate a complaint against the Appointee of
misconduct the Company shall be entitled to suspend the Appointee on
full pay and benefits for so long as may be necessary to carry out a
proper investigation and hold a disciplinary hearing provided that
such suspension shall not be for a period longer than 30 days.
12. NO OTHER INTERESTS
12.1 The Appointee shall not at any time during the continuance of the
Appointment be or become a Director of any company (other than the
Company or any Group Company) or be engaged concerned or interested
directly or indirectly in any other business trade or occupation.
12.2 Nothing in this Deed prevents the Appointee from:-
12.2.1 being engaged concerned or interested in any other business trade or
occupation with the prior written consent of the Board; or
12.2.2 holding or being beneficially interested in not more than five per
cent of any class of securities in any company if such class of
securities is listed on a recognised Stock Exchange
13. RESTRICTIONS
13.1 The Appointee hereby covenants with and undertakes to the Company that
he will not:-
12
<PAGE>
13.1.1 at any time during the continuance of the Appointment or within the
period of twelve months after its termination induce solicit or
endeavour to entice away from the Company or any Group Company with
which the Appointee was actively engaged during the period of one year
prior to termination of the Appointment on his own behalf or on behalf
of any third party any person firm or company who or which is or was
at any time during the period of one year prior to termination of the
Appointment a customer of or in the habit of dealing with the Company
or any such Group Company:
13.1.2 at any time during the continuance of the Appointment or within the
period of twelve months after its termination induce solicit or
endeavour to entice away from the Company or any Group Company any
person who is an employee of the Company or any Group Company; or
13.1.3 at any time after the termination of the Appointment hold himself out
as being in any way connected with the Company or any of the Group
Companies or use any name which is identical or similar to or likely
to be confused with the name of the Company or any Group Company or of
any business carried on by any such company or any product or service
produced or provided by any such company or which might suggest a
connection with any such company or any of its products or services.
13.2 Each of the covenants in Clause 13.1 above constitutes a separate and
independent covenant and is to be construed independently of the other
covenants in Clause 13. 1.
13.3 The Appointee shall not, and shall ensure that any member of his
immediate family shall not, (i) buy or sell securities in Cityscape
Financial Corp. or other publicly traded securities, including without
limitation purchasing, selling, selling short and purchasing or
writing options on the securities or as to any rights, options,
warrants or convertible securities related to the said securities,
when in possession of material information
13
<PAGE>
about Cityscape Financial Corp. or any of its subsidiaries which has
not been publicly disseminated ("Inside Information") in a manner that
would violate applicable US securities laws or (ii) pass the Inside
Information along to others.
14. PROTECTION OF GOODWILL
The Appointee hereby covenants with and undertakes to the Company that
he will not within the period of one year after the termination of the
Appointment be engaged concerned or interested whether directly or
indirectly and whether as director employee sub-contractor partner
consultant proprietor or agent in any business trade or occupation
which shall in any way be in competition with any of the businesses of
the Company or any Group Company being businesses with which the
Appointee was actively engaged during the period of one year prior to
termination of the Appointment Provided always that the provisions of
this Clause shall not apply in the event that the Appointee's
employment hereunder is terminated by the Company in breach of
contract or in circumstances which amount to unfair or constructve
dismissal.
15. DOCUMENTS AND OTHER PROPERTY
All documents records correspondence price lists accounts statistics
equipment or other property relating to the businesses or affairs of
the Company or any Group Company including all those items referred to
in Clause 9 above kept in the possession or under the control of the
Appointee and all copies thereof or extracts therefrom made by or on
behalf of the Appointee are and remain the property of the Company and
will be delivered up to the Company on termination of the Appointment.
16. DIRECTORSHIPS OF THE APPOINTEE
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<PAGE>
If the Appointee shall be a director of the Company or any Group
Company the Board on or after the Termination Date may give him notice
in writing requesting him to and he shall forthwith resign such
directorship and if the appropriate resignation or resignations shall
not be signed and delivered by the Appointee to the Board within seven
days after such request the Board may appoint any director of the
Company to sign notices of resignation as attorney for and on behalf
of any such director as his attorney for such purpose but such
resignation shall not terminate this Agreement.
17. REORGANISATIONS ETC
If the Appointee shall have been offered but shall unreasonably have
refused or unreasonably failed to agree to the transfer of this Deed
by way of novation to a company which as a result of a re-organisation
or reconstruction has acquired or agreed to acquire the whole or
substantially the whole of the undertaking and assets of or the whole
or not less than 90 per cent of the equity share capital of the
Company the Appointee shall have no claim against the Company in
respect of the termination of the Appointment by reason of the
subsequent voluntary winding up of the Company or of the disclaimer of
this Agreement by the Company within three months after such
unreasonable refusal or unreasonable failure to agree.
18. PRIOR AGREEMENTS AND CONTINUOUS PERIOD OF EMPLOYMENT
18.1 This Deed is in substitution for and supersedes all former and
existing agreements or arrangements for the employment of the
Appointee by the Company all of which are deemed to have been
cancelled with effect from the date of commencement of this Deed.
18.2 The Appointee's employment with the Company which began on 2nd August
1990 counts as part of the Appointee's continuous period of
15
<PAGE>
employment with the Company for the purposes of the Employment
Protection (Consolidation) Act 1978 (as amended).
19. DISCIPLINARY RULES AND GRIEVANCE PROCEDURE
19.1 There are no set disciplinary rules applicable to the Appointee.
19.2 If the Appointee is dissatisfied with any disciplinary decision
relating to him or wishes to seek redress of any grievance relating to
the Appointment he should apply to the Board in writing or in person
by prior appointment. The Board shall then consider his grievance
notify its decision to him afford him an opportunity of commenting
thereon and shall thereafter take such action as it considers
appropriate.
20. DIRECTORS INSURANCE
The Company shall effect and maintain insurance for the benefit of the
Appointee against any liability incurred by him in respect of any
actual omission in the actual or purported exercise, execution and/or
discharge of his powers of duties and/or otherwise in relation to his
duties, powers or officers in relation to the Company and any Group
Company of which he shall become a director. The terms and conditions
of such insurance shall not be materially less advantageous to the
Appointee than that enjoyed by him immediately prior to this
Agreement.
21. NOTICES
Any notice required to be given hereunder is deemed duly served if
delivered by hand or sent by registered or recorded delivery post to
the Company at its registered office for the time being or to the
Appointee at his last known address and is deemed to be served at the
time when the same is delivered to such address or if served by post
forty-eight hours after the time of posting.
16
<PAGE>
22. GOVERNING LAW
This Deed shall be governed by and construed in all respect in
accordance with the laws England and the parties agree to submit to
the exclusive jurisdiction of the Courts of England.
23. VARIATION
This Deed shall only be capable of being varied by a supplemental deed
signed by or on behalf of the parties.
17
<PAGE>
AS WITNESS the parties have executed this Deed the day and year first above
written.
EXECUTED and DELIVERED )
as a DEED by J & J SECURITIES- )
LIMITED acting by :- )
Director
Director /Secretary
SIGNED as a DEED and )
DELIVERED by ALEC DAVID )
JOHNSON )
18
<PAGE>
THE SCHEDULE
(Referred to in Clause 5)
RIGHTS AND BENEFITS
1. During the Appointment:-
1.1 subject to the Appointee holding a current full driving licence the
Company shall provide the Appointee with a motor car to a value of not
less than (pound)40,000 for the sole use of the Appointee and his
spouse in connection with the performance of his duties under this
Agreement. Such motor car shall be replaced in accordance with Company
policy from time to time in force;
1.2 the expenses of taxing insuring repairing maintaining and where'
appropriate the full operating lease charges and (in so far as
attributable to the use of the said motor car for the purposes of the
business of the Company or any Group Company) the expense of running
the said motor car shall be borne by the Company;
1.3 the Appointee shall ensure that at all times when the said motor car
is driven on the road it is in the state and condition required by law
and that if so required a current test certificate is in force in
respect of it. The Appointee shall also at all times be the holder of
a current driving licence entitling him to drive motor cars in the
United Kingdom and shall produce it to the Company on request; and
1.4 the Appointee (and his spouse) shall be solely entitled to use the
said motor car privately. Such use shall (subject to paragraph 1.2 of
this Schedule) be at the sole expense of the Appointee.
2. During the Appointment the Company shall also provide at its expense
for the benefit of the Appointee, his spouse and children medical
insurance with such organisation as currently provide such insurance
to the Appointee and
19
<PAGE>
provided that the level of such benefit shall not be materially
advantageous than that enjoyed by the Appointee in his employment by
the Company immediately prior to the date hereof
20
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
<PAGE>
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
<PAGE>
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.
<PAGE>
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;
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<PAGE>
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
<PAGE>
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;
<PAGE>
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.
<PAGE>
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:________________________
<PAGE>
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:___________________________
<PAGE>
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
<PAGE>
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
<PAGE>
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: _________________________
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<PAGE>
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
<PAGE>
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:________________________
<PAGE>
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").
<PAGE>
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
<PAGE>
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
<PAGE>
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;
<PAGE>
(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)
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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:________________________
<PAGE>
The First National Bank of Boston
By:___________________________
Title:________________________
<PAGE>
ANNEX A
250,000 shares of common stock of Cityscape Funding Corporation, a
Delaware corporation evidenced by Certificate No. _______________.
<PAGE>
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
<PAGE>
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.
<PAGE>
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,
<PAGE>
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.
<PAGE>
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:________________________
<PAGE>
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,
------------------------------
<PAGE>
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:
<PAGE>
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
<PAGE>
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;
<PAGE>
(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.
<PAGE>
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
<PAGE>
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.
<PAGE>
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:___________________
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
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-
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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.
----------------------------
<PAGE>
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:
<PAGE>
(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
<PAGE>
(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
<PAGE>
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:
<PAGE>
THE FIRST NATIONAL BANK OF BOSTON
By:_________________________
Name:_______________________
Title:______________________
<PAGE>
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: _____________________
<PAGE>
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
<PAGE>
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;
<PAGE>
(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.
<PAGE>
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
<PAGE>
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.
<PAGE>
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:___________________
<PAGE>
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,
<PAGE>
Cityscape Financial Corp.
By:_________________________
Name:_______________________
Title:______________________
THIRD AMENDMENT TO LEASE
This Third Amendment to lease ("Third Amendment") made and entered into this 17
day of April 1996, by and between TAXTER PARK ASSOCIATES ("Landlord") and
CITYSCAPE CORPORATION ("Tenant") is attached to and made a part of that certain
lease agreement dated September 30, 1993 by and between Landlord and Tenant as
amended by that certain First Amendment to Lease dated April 19, 1994 and that
certain Second Amendment to Lease dated May 12, 1995 (as amended, the "Lease").
WITNESSETH:
WHEREAS, pursuant to the Lease, Landlord leases to Tenant certain office
space (the "Premises") containing 24,540 rentable square feet on the fourth
floor in the building ("Building") located at 565 Taxter Road, Elmsford,
Westchester County, New York;
WHEREAS, Tenant desires to lease an additional 5,380 rentable square feet
of office space comprising the remaining space on the fourth floor of the
Building and Landlord is willing to lease such additional space to Tenant;
WHEREAS, in connection with the foregoing, Landlord and Tenant mutually
desire to enter into this Third Amendment to further expand the Premises leased
to Tenant by Landlord and to appropriately increase the Annual Base Rent and
additional rent payable by Tenant to Landlord, upon all of the terms,
conditions, covenants, provisions and obligations set forth below;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, Landlord and
Tenant, intending to be legally bound hereby, do hereby agree as follows:
1. RECITALS. The above recitals are true and correct and are made a part
hereof.
2. In connection with the foregoing, Landlord does hereby lease to Tenant
and Tenant does hereby lease from Landlord the remainder of the fourth floor of
the Building totaling 5,380 rentable square feet (the "Remaining Space").
3. Landlord shall make the Remaining Space available immediately for the
commencement of construction of any improvement work in such Remaining Space.
4. Tenant has provided Landlord with a complete set of working drawings
suitable for the filing for a permit to construct any improvement work in the
Remaining Space.
<PAGE>
5. The Rent and other associated obligations of the Remaining Space shall
commence on the earlier to occur of (a) the date Tenant first occupies the
Remaining Space or (b) June 1, 1996, unless Tenant is delayed in occupying the
Remaining Space until after June 1, 1996 due to delays caused by Landlord's
contractor, in which case the commencement of the Rent and other associated
obligations shall be postponed one day for each day that Tenant is delayed in
occupying the Remaining Space after June 1, 1996 due to delays caused by
Landlord's contractor.
6. Tenant shall pay Annual Base Rent for the Remaining Space equal to
$20.00 per rentable square foot of the Remaining Space (as more fully provided
below) and Landlord's total obligation for all costs (i.e., architectural,
engineering and construction) related to the Additional Expansion Premises shall
not exceed Twenty and 00/100 Dollars ($20.00) per rentable square foot (the
"Remaining Space Allowance") (as more fully provided below).
7. [deleted]
8. Section 2.01 is hereby amended to provide that Annual Base Rent shall be
increased, in accordance with Paragraph 6 of this Third Amendment, as follows:
Commencing on the date that Tenant shall commence paying Annual Base Rent
for the Remaining Space in accordance with Paragraph 5 of this Third Amendment
and continuing through, August 31, 2000, Annual Base Rent shall be increased by
One Hundred Seven Thousand Six Hundred and 00/100 Dollars ($107,600.00) to Five
Hundred Forty Thousand Nine Hundred Sixty-Eight and 00/100 Dollars
($540,968.00), payable in equal monthly installments of Forty-Five Thousand
Eighty and 67/100 Dollars ($45,080.67).
9. The first sentence of the second paragraph of Section 2.02 (as
previously amended) is hereby amended by inserting the following immediately
before the period at the end of such sentence: "and as and when such number of
net rentable square feet leased by Tenant is increased again pursuant to the
Third Amendment to Lease".
10. The third sentence of the first paragraph of Section 6. 01 of the
Lease's hereby amended by inserting the following immediately before the words
"as payment of electricity," where they appear: "and as such Premises are
"increased again pursuant to the Third Amendment to Lease".
11. Pursuant to Paragraph 6 of this Third Amendment the total maximum
obligation for costs (i.e., architectural, engineering and construction) related
to this Third Amendment shall not exceed One Hundred Seven Thousand Six Hundred
and 00/100 Dollars ($107,600.00).
<PAGE>
12. Upon the dates that Landlord makes available the Remaining Space, such
Remaining Space shall be added to and deemed to be a part of the Premises and
all references to the Premises shall be deemed to include the Remaining Space,
subject to all terms, conditions, covenants, provisions and obligations of the
Lease, as amended by this Third Amendment.
13. Tenant covenants, represents and warrants that Tenant has had no
dealings with any real estate broker or other agent in connection with the
negotiation and execution of this Third Amendment other than Abrams, Benisch,
Riker Inc. and that Tenant knows of no other person, entity or party who is or
might be entitled to any commission or fee with respect to the negotiation and
execution of this Third Amendment. Tenant agrees to indemnify and hold Landlord
harmless from and against any commission or fee claimed by any other person,
party or entity with respect to the negotiation or execution of this Third
Amendment if such claim(s) are based in whole or in part on dealings with Tenant
or its agents, contractors, representatives or employees. Tenant's indemnity
shall cover, also all expenses which Landlord incurs to defend against any such
claim, including all attorneys and other legal fees up to the maximum (if any)
permitted by law.
14. BINDING EFFECT. The amendments made to the Lease pursuant to this Third
Amendment shall be binding upon and shall inure to the benefit of Landlord and
Tenant and their respective successors and assigns
15. MUTUAL ACKNOWLEDGMENT OF NON EXISTENCE OF CLAIMS. Landlord and Tenant
hereby acknowledge and agree that as of the date of this Third Amendment there
were no known claims by either party against the other arising from or in
connection with their relationship as Landlord and Tenant pursuant to the terms
of the Lease. In furtherance thereof, Tenant hereby waives any and all claims
with respect to its supplemental air conditioning dry cooler located on the roof
of the building and to the heat pumps located in the Premises which are supplied
by such dry cooler.
16. The amendments made to the Lease pursuant to paragraphs 1 through 15
above shall constitute the only amendments to the effectuated and, except as
amended herein, all other provisions of the Lease are hereby ratified by both
parties shall remain in place as originally constituted and shall continue
unamended and in full force and effect. To the extent that there is any conflict
between the terms of this Third Amendment and the Lease, the terms of this Third
Amendment will prevail, govern and control.
IN WITNESS WHEREOF, Landlord and Tenant have duly entered into this Third
Amendment to Lease by their duly authorized officers under seal as of the day
and year first above written.
[signatures on next page]
<PAGE>
LANDLORD:
TAXTER PARK ASSOCIATES
DEAN WITTER REALTY INCOME
PARTNERSHIP II, L.P., its
General Partner
DEAN WITTER REALTY INCOME
PROPERTIES II, INC., its
Managing General Partner
/s/ Davisson Hardman, Jr
- -------------------------
E. Davisson Hardman, Jr.
President
TAXTER PARK ASSOCIATES
DEAN WITTER REALTY INCOME
PARTNERSHIP III, L.P., its
General Partner
DEAN WITTER REALTY INCOME
PROPERTIES III, INC., its
Managing General Partner
/s/ Davisson Hardman, Jr
- -------------------------
E. Davisson Hardman. Jr.
President
TAXTER PARK ASSOCIATES
DEAN WITTER REALTY INCOME
PARTNERSHIP IV, L.P., its
General Partner
DEAN WITTER REALTY FOURTH INCOME
PROPERTIES, INC., its
Managing General Partner
/s/ Davisson Hardman, Jr
- -------------------------
E. Davisson Hardman, Jr.
President
TENANT:
CITYSCAPE CORP,
a New York corporation
/s/ Robert C. Patent
- -------------------------
Robert C. Patent
Executive Vice President
Exhibit 10.54
Lease
DATED 18th April, 1996
(1) THE STANDARD LIFE ASSURANCE COMPANY
(2) CITY MORTGAGE SERVICING LIMITED
(3) CITY MORTGAGE CORPORATION LIMITED
AGREEMENT FOR LEASE
of Malvern House
Croxley Business Park
Herbert Smith
Exchange House
Primrose Street
London EC2A 2HS
Tel: 0171-374 8000
Fax: 0171-496 0043
Ref: 65/30580257
11th April 1996
<PAGE>
TABLE OF CONTENTS
CLAUSE HEADING PAGE
1. DEFINITIONS .......................................... 1
2. INTERPRETATION ....................................... 3
3. LANDLORD'S OBLIGATION ................................ 3
4. ACCESS FOR THE CATEGORY B WORKS ...................... 3
5. CATEGORY B WORKS ..................................... 5
6. ALLOWANCE FOR THE CATEGORY C WORKS ................... 8
7. CAPITAL ALLOWANCES ................................... 10
8. CERTIFICATES ......................................... 10
9. INSURANCE ............................................ 11
10. OCCUPATION PENDING GRANT OF LEASE .................... 12
11. GRANT OF LEASE ....................................... 12
12. EXISTING LEASES ...................................... 14
13. TITLE ................................................ 14
14. ALIENATION ........................................... 15
15. MISCELLANEOUS ........................................ 15
16. NOTICES .............................................. 15
17. TERMINATION .......................................... 16
18. GUARANTEE OF PERFORMANCE OF TENANT'S
OBLIGATIONS .......................................... 16
19. CONFIDENTIALITY ...................................... 19
Annexures: ........................................................... 20
"A"- Lease
"B"- Deed of Deposit
"C"- Specification
"D"- Deed of Warranty (Tenant's Contractor)
"E"- Deed of Warranty (Specialist sub-contractor Specialist
M&E Consultant)
"F"- Deed of Warranty (Tenant's Consultant)
<PAGE>
AGREEMENT dated the 18th day of April, 1996
BETWEEN:
(1) THE STANDARD LIFE ASSURANCE COMPANY of 3 George Street Edinburgh EH2
2XZ
(2) CITY MORTGAGE SERVICING LIMITED whose registered office is at 19
Cavendish Square London W1A 2AW
(3) CITY MORTGAGE CORPORATION LIMITED whose registered office is at 19
Cavendish Square London W1A 2AW
WHEREBY IT IS AGREED as follows:-
1. DEFINITIONS
In this Agreement unless the context otherwise requires the following
expressions shall have the following meanings respectively:-
"Building" means the building known as Malvern House Croxley Business
Park shown for the purpose of identification edged red on Plan No. 1A
Plan No. 1B and Plan No. 1C and also edged yellow on Plan No. 2
"CDM Regulations" means the Construction (Design and Management)
Regulations 1994 or any remaking thereof and any amendment to a
regulation therein and any approved code of practice issued in relation
thereto
"Category A Works" means the works as described in the Specification
"Category B Works" means the works to be undertaken by the Tenant in
accordance with this Agreement for the purposes of fitting out the
Building (which shall include the Category A Works as omitted varied or
added to in accordance with clause 5.5)
"Category C Works" means that part of the Category B Works which
comprises Category A Works as omitted varied or added to in accordance
with Clause 5.5
"Certificate of Completion of the Category B Works" means the
certificate to be issued by the Tenant's Consultant signifying the
practical completion of the Category B Works
"Code" means the Code of Measuring Practice prepared by the Royal
Institution of Chartered Surveyors and Incorporated Society of Valuers
and Auctioneers (Third Edition) dated January 1990 or any subsequent
edition from time to time prepared by the said Institution
"Commissioning Engineer" means Dome Limited of Hat and Mitre Court
London EC1M 4EH or such other firm or company as may be appointed by
the Landlord and agreed by the Tenant such agreement not to be
unreasonably withheld or delayed
"Completion Date" means the fifteenth Working Day after the Target Date
(or earlier as may be agreed the parties)
"Deed of Deposit" means the Deed of Deposit in the form of the draft at
annexure B
1
<PAGE>
"Defect" means any defect in the Building (but excluding the Category B
Works and except(1) all plant and machinery) which is attributable to
faulty design or faulty workmanship or faulty materials or faulty
supervision of the construction of the Building (excluding as
aforesaid) in the context of good standards of design workmanship
materials or supervision at the time the relevant work was carried out
but excluding any defect which might reasonably be expected to have
been discernible by a competent professional person from a visual
inspection of the Building (whether or not undertaken in fact)
immediately before the date hereof or from any plans or other documents
copies of which were supplied by the Landlord to the Tenant before the
date hereof or which was otherwise within the actual or constructive
knowledge of the Tenant
"Existing Leases" means (i) a Lease dated 2nd August 1995 made between
the Landlord (1) the Tenant (2) and the Guarantor (3) of premises known
as part first floor Wing B Sherbourne House Croxley Business Park and
(ii) a Lease dated 22nd November 1995 made between the same parties of
premises known as part first floor Wing A Sherbourne House Croxley
Business Park
"Guarantor" means the party or parties (if any) of the third part
hereto and (if more than one) the expression shall be construed in the
plural and all obligations undertaken by such parties under this
Agreement are undertaken by them jointly and severally
"Landlord" means the party of the first part hereto
"Landlord's M and E Consultants" means Blyth & Blyth Associates of The
Blyth Building Redheughs Rigg Edinburgh EH12 9HL
"Landlord's Solicitors" means Herbert Smith of Exchange House Primrose
Street London EC2A 2HS (Ref. 65)
"Landlord's Building Surveyor" means Powell Williams Partnership of 9
White Friars Chester CH1 1NZ or such other firm or company as may be
notified in writing by the Landlord to the Tenant
"Landlord's Measurement Surveyor" means Stimpsons of 30 The Avenue
Watford or such other firm or company as may be notified in writing by
the Landlord to the Tenant
"Lease" means the Lease to be granted by the Landlord to the Tenant in
accordance with the provisions of this Agreement in the form of the
draft at annexure A
"Net Internal Area" means in relation to the Building the whole of the
areas shown edged red on Plan No. 1A Plan No. 1B and Plan No. 1C
measured in accordance with the Code but (notwithstanding the
provisions of the Code) including areas below atrium voids save that in
case of a conflict between the definition of (i) Net Internal Area and
(ii) any definition in the Code the former shall prevail
"Permitted Access Date" means the date hereof
"Specification" means the specification at annexure C
- --------------------
(1) The purposes of clause 5.13.4
2
<PAGE>
"Target Date" means 3rd September 1996
"Tenant" means the party of the second part hereto
"Tenant's Consultant" means Altonwood Project Services Limited of 2
Hobbs House Harrovian Business Village Bessborough Road Harrow HA1 3EX
"Tenant's Contractor" means Morgan Lovell West Limited of Ascot Road
Doncastle Bracknell Berks RG12 8CE
"Tenant's Solicitors" means Howard Kennedy of 19 Cavendish Square
London W1A 2AW (Ref. 33.SRP.940823)
"Working Day" means any day other than Saturdays Sundays and bank and
other public holidays
2. INTERPRETATION
2.1 Terms defined in the Lease shall have the corresponding meanings when
used herein
2.2 Clause headings and indices are for convenience only and shall not
affect the construction of this Agreement
2.3 In this Agreement references to clauses and schedules are to clauses
and schedules of this Agreement
2.4 If any party comprises two or more persons their obligations and
liabilities are joint and several
2.5 Reference to a party agreeing not to do or omit any act or thing shall
include references to that party not permitting or suffering it to be
done or omitted
3. LANDLORD'S OBLIGATION
3.1 The Landlord shall make good to the reasonable satisfaction of the
Tenant any Defect which becomes manifest by the first Review Date
3.2 The Landlord shall pay to the Tenant on the Completion Date the sum of
Pound Sterling 20,000 (exclusive of VAT) as consideration for the
Tenant accepting full responsibility under the terms of the Lease (to
the exclusion of the Landlord) for the repair and maintenance of all
plant and machinery not comprised in the Category B Works
4. ACCESS FOR THE CATEGORY B WORKS
4.1 Following the Permitted Access Date the Landlord shall grant to the
Tenant its contractors agents advisers workmen and all others
authorised by the Tenant and engaged in the execution of the Category B
Works access at all times by way of licence to the Building and where
appropriate the Block for the purpose only of commencement and
execution of the Category B Works and the Tenant its contractors agents
advisers workmen and all others so authorised and engaged shall comply
with all reasonable restrictions and regulations in relation to such
access imposed by the Landlord or which may be imposed by any competent
authority or the insurers and have been notified to the Tenant
3
<PAGE>
4.2 The Tenant shall submit to the Landlord for and obtain the Landlord's
approval (such approval not to be unreasonably withheld or delayed) of
a programme and method statement in writing (which programme and method
statement may from time to time with the like approval be amended
revised or updated with the approval of the Landlord such approval not
to be unreasonably withheld or delayed) containing the following
information:-
4.2.1 details of the proposed order and timing of the Category B
Works and by whom they are proposed to be carried out
4.2.2 proposals for regular liaison co-ordination and co-operation
between the Landlord's Building Surveyor and the Tenant's
Consultant and contractors for the Category B Works including
the name of the individual who will have daily responsibility
therefor on behalf of the Tenant
4.2.3 proposals for the means of access to the Building
4.2.4 proposals for the method by which on a daily basis surplus
materials and refuse and rubbish of the Tenant its contractors
servants and agents are to be removed from the Building and
the Estate
4.3 In carrying out the Category B Works the Tenant its contractors agents
advisers and workmen (as the Tenant shall procure) shall at all times:-
4.3.1 comply in all respects with the reasonable requirements and
procedures of the Landlord in respect of industrial relations
and hours of working details of which must be agreed prior to
the commencement of the Category B Works
4.3.2 comply with the programme and method statement (as amended
updated and revised from time to time)
4.3.3 not obstruct any escape route serving the Building and use
their reasonable endeavours to procure that all vehicles
visiting the Building in connection with the Category B Works
go directly to the unloading points (if any) reasonably
designated to the Tenant for such purpose from time to time by
the Landlord and leave the Building as soon as reasonably
practicable after unloading has been completed
4.3.4 comply in all respects with the reasonable requirements and
procedures (if any) of the Landlord notified in writing to the
Tenant in respect of the delivery of materials for use in
connection with the Category B Works including the days and
hours on and within which deliveries may be made
4.3.5 comply in all respects with the reasonable safety and floor
loading requirements (if any) of the Landlord notified in
writing to the Tenant in respect of the storage of materials
in connection with the Category B Works
4.3.6 comply in all respects with the reasonable requirements (if
any) of the Landlord notified in writing to the Tenant in
respect of the security and protection of the Building and
make arrangements reasonably satisfactory to the Landlord for
the security and protection of the Category B Works and the
materials being used in relation thereto
4
<PAGE>
4.3.7 not damage or cause or permit any other persons to damage the
Building or the Block and in particular (but without
limitation thereto) not interfere or permit such persons to
interfere with or do or permit to be done by any such persons
any act or thing which may adversely affect any installation
forming part thereof and shall not make or permit to be made
by any such persons any connections with or to any such
installation without the prior approval of the Landlord such
approval not to be unreasonably withheld or delayed
4.3.8 comply in all respects with legislation in respect of safety
health and welfare and the reasonable safety requirements of
the Landlord
4.4
4.4.1 The Tenant shall take such steps as the Landlord shall
reasonably require to make good forthwith at the Tenant's cost
any damage or injury to the Building or the Block caused by
the Tenant or any company or firm for whom the Tenant is
directly responsible but if the Tenant fails to make good any
such damage or injury within a reasonable period the Landlord
may do so at the Tenant's cost
4.4.2 (Without prejudice to any other right or remedy the Landlord
may have) the Tenant shall pay or reimburse to the Landlord
the cost of making good any such damage or injury mentioned in
Clause 4.4.1 on demand (and if unpaid within 10 Working Days
of demand the Tenant shall pay Interest thereon from the date
of demand until the date of actual payment in cleared funds)
5. CATEGORY B WORKS
5.1 Having first complied with the provisions of clause 4.2 and having
obtained all requisite approvals and consents and subject to the
provisions of this clause 5 the Tenant shall commence and diligently
proceed to carry out and complete the Category B Works
5.2 As soon as reasonably practicable after the date hereof and in any
event prior to the commencement of each relevant part of the Category B
Works the Tenant shall cause to be prepared and delivered to the
Landlord copies of detailed plans drawings and specifications of each
relevant part of the Category B Works with additional copies to the
Landlords M and E Consultant (where the subject matter relates to plant
and machinery) and to the Landlord's Building Consultant
5.3 The Landlord shall be deemed to have approved such detailed plans
drawings and specifications unless the Landlord or the Landlord's M and
E Consultant or the Landlord's Building Surveyor has notified the
Tenant of any objection thereto within 2 Working Days of delivery
thereof in accordance with Clause 5.2
5.4 The Tenant shall not commence any works relating to plant and machinery
or to the proposed spiral staircase prior to such approval or deemed
approval of detailed plans drawings and specifications
5.5 In formulating its proposals for the Category B Works the Tenant may
with the consent of the Landlord omit vary or add to such item or items
of the Category A Works as it may require and the Landlord shall not
unreasonably withhold or delay its
5
<PAGE>
consent to any such omission variation or addition which the Tenant
undertakes to replace with an alternative item of substantially
comparable quality and effect and which would not in the reasonable
opinion of the Landlord result in a lower standard of finish than is
described in the Specification or would not materially prejudice the
effective working of the Building or its value as an investment
5.6 For the purpose of carrying out the Category B Works the Tenant shall
enter into contracts (the form of which shall have first been approved
by the Landlord (such approval (not to be unreasonably withheld or
delayed) with such trade contractors professional advisers or other
persons first approved by the Landlord (such approval not to be
unreasonably withheld or delayed) as the Tenant may require for the
execution of the Category B Works and in particular (but without
prejudice to the generality of the foregoing) the Tenant shall procure
that as soon as practicable after the date hereof the Tenant's
Contractor executor and delivers to the Landlord a Deed substantially
in the form at annexure D together with duly executed Deeds from any
specialist M&E subcontractor and design consultant substantially in the
form at annexure E and that the Tenant's Consultant executes and
delivers to the Landlord a Deed substantially in the form at annexure F
5.7 The Tenant shall carry out or cause to be carried out the Category B
Works
5.7.1 in a good and workmanlike manner
5.7.2 using good quality materials of their several kinds
5.7.3 in accordance with
(A) all relevant permissions and licences of the town
planning local and other competent authorities
necessary for the execution thereof and to the extent
that such permissions and licences have not yet been
obtained the Tenant will with all due speed apply for
such permissions and licences and diligently pursue
such applications; and
(B) all Acts of Parliament now or hereafter passed
(including any instrument order or regulation or
other subordinate legislation deriving validity from
any Act) which shall affect the execution thereof
5.7.4 in accordance with the terms of this Agreement and
5.7.5 to the reasonable satisfaction of the Landlord
5.8 Without prejudice to the provisions of clause 5.5 the Tenant may make
minor variations amendments and additions to those of the Category B
Works which do not comprise Category C Works where the same:
5.8.1 are mutually agreed upon in writing (the Landlord's agreement
not to be unreasonably withheld or delayed) or
5.8.2 are rendered necessary or desirable by reason of the direction
of any competent authority or
5.8.3 arise out of unavailability or short or uncertain supplies of
materials where materials of substantially equivalent quality
are substituted
6
<PAGE>
PROVIDED THAT in relation to any such variation amendments and
additions the Tenant shall supply to the Landlord full particulars
thereof together with if so requested not more than three copies of any
relevant drawings specifications and details of materials
5.9.1 The Tenant shall subject to compliance by the Landlord with
its obligations contained in clause 5.9.2
(A) comply with the obligations imposed on the client by
the CDM Regulations and procure compliance by any
designer or contractor employed by the Tenant in
connection with the Category B Works under the CDM
Regulations
(B) procure that whoever the Tenant appoints to act as
the planning supervisor and the principal contractor
and any person appointed in relation to the Category
B Works as designer or contractor shall in every case
have the necessary competence and adequate resources
to comply with their respective obligations under the
CDM Regulations
(C) notwithstanding the generality of clause 5.9.1.
procure that the Landlord is supplied with the
relevant information in relation to the Category B
Works in order to ensure that the health and safety
plan and health and safety file can be updated in
compliance with the CDM Regulations
(D) indemnify the Landlord from any cost claim action or
proceedings instituted by any third party in relation
to any breach of the CDM Regulations by the Tenant or
any contractor in relation to the Category B Works
5.9.2 The Landlord shall supply the Tenant with all relevant
information concerning the Building to enable the Tenant to
comply with its obligations contained in clause 5.9.1
5.10 The Tenant by way of indemnity only hereby covenants with the Landlord
that in the carrying out of the Category B Works it shall at all times
take all reasonable measures to prevent (but having due regard to the
nature and extent of the Category B Works) any nuisance on the Estate
and/or anything which may cause annoyance inconvenience or disturbance
to the Landlord or to the owners or occupiers of any land or buildings
adjoining or neighbouring the Building
5.11 The Tenant shall in respect of the Category B Works and without
prejudice to any other obligation on its part herein keep the Landlord
fully and effectually indemnified against
5.11.1 any breach of the conditions or requirements imposed by or
pursuant to the terms of this Agreement and
5.11.2 all claims actions damages demands losses expenses costs and
other liabilities whatsoever suffered by the Landlord which
arise out of the carrying out of the Category B Works
7
<PAGE>
5.12 The Landlord the Landlord's Building Surveyor and the Landlord's M and
E Consultant shall be entitled at reasonable times to enter upon the
Building in order to inspect the Category B Works provided that neither
the Landlord nor its contractors agents advisers workmen and others
shall give or purport to give any instructions to any person engaged in
and about the Category B Works and any comment which the Landlord or
its representatives may wish to make in relation thereto shall be
directed only to the Tenant's Consultant
5.13
5.13.1 The Landlord and the Tenant shall jointly commission on terms
agreed between them the Commissioning Engineer to test and
performance prove in accordance with the specifications
relating thereto all plant and machinery the supply or fixing
of which is included in the Building as at the date hereof and
to test and commission all plant and machinery the supply or
fixing of which is included in the Category B Works
respectively both separately and as a combined system with
such of the said plant and machinery as was installed by the
other of the Landlord or the Tenant as the case may be and the
fees of the Commissioning Engineer (together with any VAT
thereon) incurred in testing performance proving and
commissioning following completion of the Category B Works
shall be borne equally between the Landlord and the Tenant
(but for the avoidance of doubt it is hereby agreed that the
Landlord shall pay such fees and the Tenant will indemnify the
Landlord against one half of such fees and any VAT thereon)
5.13.2 Such testing performance proving and commissioning (as the
case may be) shall be carried out both prior to commencement
of those parts of the Category B Works as relate to plant and
machinery (for which purposes the Tenant shall allow such
access as is reasonably necessary and the parties shall use
reasonable endeavours to ensure that such is carried out
within ten Working Days of the date hereof) and following
completion of the Category B Works
5.13.3 The Commissioning Engineer shall be instructed to issue copies
of the certificates issued on both such occasions under both
contracts of engagement to both the Landlord and the Tenant
5.13.4 If as a result of such testing performance proving and
commissioning carried out prior to the commencement of those
parts of the Category B Works as relate to plant and machinery
the Commissioning Engineer considers that there is any Defect
in the plant and machinery the Landlord shall as soon as
reasonably practicable and co-ordinating at all times with the
Tenant's method statement make good such Defect in a way that
is compatible with the Category B Works to the reasonable
satisfaction of the Tenant.
6. ALLOWANCE FOR THE CATEGORY C WORKS
6.1 Subject to the remaining provisions of this clause 6 the Landlord shall
pay to the Tenant the sum of Pound Sterling 1.93 million together with
Value Added Tax thereon as a contribution towards the Category C Works
8
<PAGE>
6.2 The Tenant shall within 10 Working Days after the date of this
Agreement apply for a certificate from the Board of Inland Revenue that
the Tenant is excepted from the provisions of section 559(1) Income and
Corporation Taxes Act 1988 and use all reasonable endeavours to procure
the same and shall deliver a certified copy of the same to the
Landlord's Solicitors as soon as practicable after its issue
6.3 The Tenant shall ensure that the Tenant's Consultant prepares separate
monthly valuation certificates showing the value exclusive of VAT of
those elements of the Category C Works which have been carried out
during the period to which the certificate relates and subject to such
separate valuation certificates being agreed by the Landlord's Building
Surveyor such agreement not to be unreasonably withheld or delayed and
subject to application for payment being received by the Landlord not
less than 10 Working Days prior to the due date for payment to the
contractors professional advisers or other persons employed by the
Tenant in connection with the Category B Works (which date shall be
specified in the applications) the Landlord will on or before such date
pay or reimburse to the Tenant the amount properly payable according to
such valuation certificates but in any event not exceeding Pound
Sterling 1.93 million together with (against delivery of a valid VAT
invoice addressed to the Landlord) Value Added Tax thereon in the
aggregate
6.4 Save as aforesaid the Landlord shall not have any obligation to the
Tenant to carry out or contribute to or meet the costs of the Category
C Works or any part or parts thereof
6.5 If the Tenant shall fail to carry out and complete the Category C Works
within three months after the Target Date the Landlord may with all
necessary workmen contractors and others enter upon the Premises and
carry out and complete the Category C Works and in doing so the
Landlord shall expend for the purpose any balance unpaid of the said
sum of Pound Sterling 1.93 million and if the costs of carrying out and
completing the Category C Works shall exceed such unpaid balance an
amount equal to the excess shall be paid by the Tenant to the Landlord
(as the case may be) on demand and until paid shall carry Interest as
well after as before judgment
6.6
6.6.1 In the event of any dispute as to the amount of any sums
payable under this clause 6 such dispute shall be determined
by a chartered quantity surveyor experienced in the
construction of property comparable with the Building who
shall act as an expert and who shall be appointed in default
of agreement between the Landlord and the Tenant on the
application of either of them by the President for the time
being of the Royal Institution of Chartered Surveyors
6.6.2 If such expert shall die delay or become unwilling or
incapable of acting or if for any other reason the said
President or the person acting on his behalf shall in his
absolute discretion think fit the said President or person
acting on his behalf as aforesaid may by writing discharge the
surveyor and appoint another in his place
6.6.3 The surveyor's fees shall be borne as the expert may direct
and his decision shall be final and binding save in case of
manifest error
9
<PAGE>
6.7 The Landlord shall pay to the Tenant Interest on any payment due from
the Landlord pursuant to this clause 6 during the period commencing 10
Working Days from the date of receipt by the Landlord of the relevant
certificate prepared pursuant to clause 6.3 to the date of actual
payment by the Landlord
7. CAPITAL ALLOWANCES
7.1 The Tenant shall as soon as is practicable after the issue of the
Certificate of Completion of the Category B Works prepare (or procure
the preparation) of a statement ("the Statement") which shall be
produced to the Landlord
7.2 The Statement shall:
(A) specify the total expenditure on the Category C Works;
(B) identify each item of plant and machinery comprised in the
Category C Works in respect of which a claim to capital
allowances could be made together with the expenditure
incurred in relation to that item including (where
appropriate) attributable professional costs fees and
disbursements
7.3 The Tenant shall not in any circumstances make a claim for capital
allowances in respect of any element of the Category C Works
7.4 The Landlord shall not in any circumstances make a claim for capital
allowances in respect of any element of the Category B Works which does
not comprise Category C Works
8. CERTIFICATES
8.1 The Tenant shall procure that the Landlord's Building Surveyor shall be
given not less than 5 Working Days' notice of the intention for the
first time of the Tenant's Consultant to inspect the Category B Works
with a view to the issue of the Certificate of Completion of the
Category B Works (and thereafter not less than 24 hours' notice of each
occasion on which he intends to so inspect the Category B Works) and
that the Landlord's Building Surveyor and the Landlord's M and E
Consultant will be given the opportunity to accompany the Tenant's
Consultant on the final inspection prior to the issue of such
certificate in order that they may (but shall not be bound to) make
whatever representations they think fit to the Tenant's Consultant as
to whether or not the Category B Works have been practically completed
and the Tenant shall procure that the Tenant's Consultant will pay due
regard to any such representations made before issuing the Certificate
of Completion of the Category B Works and shall forthwith supply to the
Landlord a copy of such certificate when issued
8.2 As soon as reasonably possible following practical completion of the
Category B Works the Tenant shall (unless previously delivered) deliver
to the Landlord a full set of "as built" plans relating to the Category
B Works together with copies of all operational manuals and
commissioning reports (if any) relating to the Building and the plant
and equipment therein or serving the same
10
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9. INSURANCE
9.1 From the date hereof until the grant of the Lease the Landlord shall
insure or procure the insurance of the Building in its full
reinstatement cost for the time being against the risks usually covered
by a contractor's "all risks" type policy (including but without
prejudice to the generality thereof the Insured Risks but excluding
trade fixtures and fittings installed in the Premises which would not
fall to be insured by the Landlord under the Lease if the Lease had
been granted)
9.2 The Tenant will notify to the Landlord the date on which it intends to
commence the Category B Works ("the Commencement Date")
9.3 (Subject to clause 9.6) from the Commencement Date until the grant of
the Lease the Landlord will insure or procure the insurance of the
Category B Works (including materials delivered but unfixed) against
all risks usually covered by a contractor's "all risk" type policy
(including but without prejudice to the generality thereof the Insured
Risks)
9.4 The Tenant shall pay or reimburse to the Landlord on demand the cost of
insuring in accordance with the provisions of clause 9.1 and 9.3
9.5 If so requested by the Tenant the Landlord will produce to the Tenant
from time to time the policy of insurance or a certified copy of the
relevant provisions thereof and the current premium receipt or other
satisfactory evidence of payment and the Landlord will notify the
Tenant in writing of any material change in the conditions of such
insurance and shall ensure that the interest of the Tenant is noted on
the policy either specifically or by way of an "other interests" clause
9.6 The Tenant shall at intervals not less frequently than quarterly notify
the Landlord of the reinstatement value of each and every part of the
Category B Works then completed or expected to be completed during the
relevant quarterly period and the Landlord shall be entitled to rely on
such notification of value (and the identification made) in effecting
the insurance pursuant to this clause and shall not be liable to the
Tenant for any breach of its obligations under this clause where such
breach arises by reason of the Tenant's failure to notify or make the
relevant identification in accordance with this sub-clause 9.6 nor
shall the Landlord be obliged to insure any part of the Category B
Works unless it shall have been notified of the initial reinstatement
value of the relevant part of the Category B Works
9.7 In case of damage or destruction caused by any of the risks covered by
the contractor's "all risks" type policy as aforesaid:-
9.7.1 to the Building and the Category C Works the Landlord will
with all convenient speed expend all monies received by it
under any such insurance as aforesaid in or towards
reinstating such damage or destruction so far as practicable
(making up any deficiency out of the Landlord's own
resources); and
9.7.2 to any of the Category B Works which do not comprise Category
C Works the Landlord shall pay to the Tenant the amount of the
insurance proceeds received by the Landlord pursuant to any
policy effected by the Landlord
11
<PAGE>
pursuant to the provisions of this clause attributable to the
damage or destruction of such works and the Tenant will with
all convenient speed expend such amount in or towards
reinstating such damage or destruction so far as practicable
and the Landlord shall make up any deficiency out of the
Landlord's own resources unless such deficiency is due to the
Tenant's failure to notify or to make the relevant
identification or to make the correct valuation in accordance
with the provisions of clause 9.6 in which case the Tenant
shall make up any deficiency out of the Tenant's own resources
9.8 The Tenant will comply with the terms and conditions of all insurance
policies effected pursuant to this clause and will not without the
previous written consent of the Landlord effect any additional
insurance against any of the Insured Risks upon or in respect of the
Premises
9.9 For the avoidance of doubt the obligations of the Landlord to effect
insurance pursuant to the provisions of this clause shall pending the
rant of the Lease prevail over the obligation of the Landlord under the
Lease to effect insurance pursuant to the Lease
10. OCCUPATION PENDING GRANT OF LEASE
Pending the grant of the Lease the Tenant shall when the Building or
any part or parts thereof shall be ready for occupation be at liberty
to occupy the same for the purpose of transacting business upon the
following terms and conditions:-
10.1 the Tenant's occupation shall be as licensee only of the Landlord
subject to the like exceptions and reservations covenants stipulations
conditions and other provisions on the part of the Landlord and the
Tenant under the Lease as would have applied (other than those as to
payment of rent) if the Lease had then been granted save to the extent
(if at all) that such provisions are inconsistent with the respective
obligations of the parties herein
10.2 the Tenant shall notify the Landlord in writing as soon as reasonably
practicable after its occurrence of the date when business is commenced
from any part of the Building
10.3 the Tenant shall pay to the Landlord by way of licence fee as from the
Target Date such sums at such times and in such manner as would have
been payable by way of rent (including without limitation items in
respect of insurance and services) if the Lease had then been granted
provided that any such sums paid by way of licence fee shall on
completion of the Lease be credited as payment of any such rents
payable under the Lease in respect of the like period
10.4 the Landlord shall have and be entitled to all remedies by distress
action or otherwise for recovering any licence fee in arrear and for
any breach of any of the covenants conditions or other obligations on
the part of the Tenant referred to in clause 10.1 as if the Lease had
actually been granted
11. GRANT OF LEASE
11.1 The Landlord shall grant and the Tenant shall accept and the Guarantor
shall execute a Lease of the Building in accordance with the following
provisions of this clause 11
12
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11.2 The Lease shall be granted by the Landlord free from any encumbrances
save those as already disclosed at the date hereof and the Lease shall
be completed on the Completion Date (provided that the Court Order
referred to in the Lease has first been obtained which the parties
shall use reasonable endeavours to obtain) at the offices of the
Landlord's Solicitors or at such other address in the United Kingdom as
they shall reasonably require and (provided that the same shall have
been supplied to the Tenant's Solicitors at least 15 Working Days
previously) upon completion the Tenant shall deliver to the Landlord's
Solicitors a counterpart of the Lease and the Deed of Deposit duly
executed by the Tenant and the Guarantor together with in cleared funds
a sum equal to the Deposit Sum (as defined in the Deed of Deposit)
11.3 The Lease shall be in the form of the Lease and
11.3.1 the term shall commence on the quarter day preceding the
Target Date;
11.3.2 the rent firstly reserved by the Lease shall be determined in
accordance with clause 11.4 (exclusive of Value Added Tax);
11.3.3 the review dates shall be each successive fifth anniversary of
the commencement of the term;
11.3.4 the rent first secondly and thirdly reserved by the Lease
shall be due and commence from the Target Date
11.4
11.4.1 As soon as the Category B Works have been sufficiently
completed for the purpose and as soon as practicable following
the issue of the Certificate of Completion of the Category B
Works (if not before) the Landlord and the Tenant shall
procure that the Net Internal Area shall be measured in
accordance with the Code by the Landlord's Measurement
Surveyor and the Tenant's Consultant who shall attend upon the
Building and effect such measurement jointly
11.4.2 The Landlord's Measurement Surveyor and the Tenant's
Consultant shall be instructed to endeavour to agree upon the
Net Internal Area (measured as aforesaid) but if they are
unable to reach agreement by 10 Working Days before the Target
Date either of them may require the areas on which they have
been unable to agree to be measured by an independent surveyor
acting as an expert to be appointed by agreement between them
or in the absence of such agreement within 6 weeks after the
date of such measurement to be appointed on the application of
either of them by the President for the time being of the
Royal Institution of Chartered Surveyors. Such independent
surveyor shall invite the Landlord and the Tenant within such
period as he shall consider appropriate to make written
representations and counter-representations of their
respective views on the matter in dispute and the decision of
such independent surveyor shall be binding on the parties
(save in case of manifest error) and his costs shall be borne
as he shall direct
11.4.3 The rent firstly referred by the Lease shall be calculated by
multiplying the Net Internal Area so agreed or determined
(expressed in square feet) by Pound Sterling 13
13
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11.5 The parties agree that if the Category B Works include one or more
chiller units to be constructed outside the Building it will be
necessary to provide for the use access maintenance repair insurance
and reinstatement thereof by means of a licence for Alterations Outside
the Demise which shall be in a form reasonably required by the Landlord
and such Licence shall be completed simultaneously with completion of
the Lease
12. EXISTING LEASES
12.1
12.1.1 The Tenant may by written notice require the Landlord to
accept a surrender of either or both of the Existing Leases on
a Working Day being not less than one calendar month after
service of such notice provided that if notice is served prior
to completion of the Lease it shall not take effect until (at
the earliest) the Lease has been completed
12.1.2 If such notice is given the Tenant shall procure that vacant
possession of the premises comprised in the Existing Leases
(or as the case may require that one of them in respect of
which notice is given) and that such premises are left clean
and tidy and that any damage caused by the removal of any
tenant's fixtures or fittings is made good to the reasonable
satisfaction of the Landlord and for the avoidance of doubt
the Tenant shall not be obliged to remove any such tenants
fixtures or fittings and/or reinstate the premises comprised
in the Existing Leases to their state and condition prior to
any alterations that have been carried out by the Tenant at
any time
12.1.3 Such surrender shall be effected by operation of law and the
Tenant shall on completion thereof ("the Surrender Date")
deliver to the Landlord all documents of title and keys in its
possession
12.1.4 Upon completion of each such surrender or surrenders as the
case may be the Landlord shall reimburse to the Tenant all
sums paid by way of rent service charges insurance rent and
Value Added Tax thereon paid on such payments in respect of
any periods subsequent to the Surrender Date together with any
sums held pursuant to two Deeds of Deposit dated 2nd August
1995 and 22nd November 1995 including for the avoidance of
doubt accrued interest (or as the case may require the
relevant one which relates to either of the Existing Leases
which is to be surrendered) after deduction therefrom of any
sums properly owed to The Landlord as at the Surrender Date
13. TITLE
13.1 The Landlord's title to grant the Lease having been deduced in
accordance with Section 110 of the Land Registration Act 1925 the
Tenant shall not be entitled to raise any requisition or objection in
respect of the same save in relation to any matters arising subsequent
to 17th November 1995
13.2 On or before the completion of the Lease the Landlord shall place its
land certificate on deposit at H.M. Land Registry to meet registration
of the Lease
14
<PAGE>
13.3 On or before the date hereof the Landlord shall place its land
certificate on deposit at H.M. Land Registry to meet the registration
of a notice of this Agreement for Lease on the Charges Register of the
Landlord's freehold title number HD16 7467 for inter alia the Building
14. ALIENATION
The Tenant shall not assign underlet or part with the benefit of this
Agreement before the grant of the Lease and the Landlord shall not do
so whilst any sums due to the Tenant under clause 6 remain unpaid
15. MISCELLANEOUS
It is hereby expressly agreed and declared that:
15.1 this Agreement shall remain in full force and effect as regards the
obligations which may remain to be performed notwithstanding the grant
of the Lease
15.2 neither any approval of specifications relating to the Category B Works
nor any inspections of the Category B Works by or on behalf of the
Landlord shall relieve the Tenant the Tenant's Consultant or any of its
trade contractors or professional advisers employed or appointed in
relation to the Category B Works of any liability under this Agreement
15.3 the Tenant hereby admits that no representation whether oral or written
(save in any written reply to preliminary enquiries given by the
Landlord's Solicitors or in any correspondence ancillary thereto) has
been made to the Tenant prior to the date hereof by or on behalf of the
Landlord concerning the Building or any part thereof which has
influenced induced or persuaded the Tenant to enter into this Agreement
or any agreement collateral herewith
15.4 the Lease will be granted subject to all existing charges notices
orders directions regulations restrictions and other matters whatsoever
arising under the Town and Country Planning Act 1990 and the Tenant
shall be deemed to accept the Lease with the full knowledge thereof and
the existing authorised use of the Building for the purpose of such Act
and shall not raise any requisition enquiry or objection with regard
thereto
16. NOTICES
16.1 Any notice required to be served on any party shall be validly served
if left at or sent by ordinary pre-paid post or telex or facsimile
transmission to its registered office or principal place of business or
stated address for service in the United Kingdom
16.2 Any facsimile transmission shall be deemed to have been served at the
time of despatch on a Working Day but if not on a Working Day it shall
be deemed to have been served at the opening of business on the Working
Day next following the date of despatch provided that in either case
the outgoing facsimile transmission indicates its receipt by the
facsimile machine of the party to whom it is sent through the automatic
response of such party's number and answer back
15
<PAGE>
16.3 Any notice sent by post shall be deemed to have been served on the
second Working Day next following the Working Day on which the envelope
containing the same is posted (or if it is not posted on a Working Day
then the third Working Day next following the day on which it is
posted) and in proving such service it shall be sufficient to prove
that the envelope containing the same was properly addressed and either
delivered to a Post Office or put into a Post Office letter box
17. TERMINATION
17.1 If:
17.1.1 the Tenant or the Guarantor fails to perform or observe any of
its obligations in this Agreement; or
17.1.2 any event occurs which had the Lease been granted would have
entitled the Landlord to re-enter the Building
and if such failure or event is capable of remedy but the Tenant does
not proceed to diligently remedy after the service on the Tenant of a
written notice specifying the failure or event and requiring the same
to be remedied within a reasonable time or if it is incapable of remedy
the Landlord may determine this Agreement by written notice served on
the Tenant who shall thereupon forfeit all interest in the Building and
in any fixtures installed in it and shall give up and cause to be given
up occupation of the Building without the Landlord making to the Tenant
any compensation or allowance whatsoever and the termination shall not
prejudice the Landlord's retention of any rights of action or remedy in
respect of any antecedent breach by the Tenant or the Guarantor
17.2 In the event of such determination the Tenant shall forthwith cancel or
procure the cancellation of any notice or other entry registered at HM
Land Registry relating to the interest of the Tenant in this Agreement
or the Building
18. GUARANTEE OF PERFORMANCE OF TENANT'S OBLIGATIONS
The Guarantor in consideration of the Landlord entering into this
Agreement at the request of the Guarantor unconditionally and
irrevocably agrees with and in favour of the Landlord as follows:-
18.1 If the Tenant shall fail in any respect to observe and perform the
terms and provisions of this Agreement or any of them the Guarantor
will fully observe perform and discharge the same AND without prejudice
to the generality of the foregoing the Guarantor hereby further
covenants to pay and make good to the Landlord forthwith on demand any
losses costs damages and expenses occasioned to the Landlord arising
out of or by reason of any default of the Tenant in respect of any of
its obligations under the terms and provisions of this Agreement (the
Guarantor expressly acknowledging and undertaking for all purposes of
this Agreement that in case of such failure or default on the part of
the Tenant then the Guarantor shall forthwith thereupon be liable and
required to remedy such failure or default and pay and make good the
sums and amounts expressed to be payable under this clause 18 AND
PROVIDED that any neglect or forbearance on the part of the Landlord in
enforcing or giving time for or other indulgence in respect of the
observance or performance of
16
<PAGE>
any of the said agreements provisions and conditions other than a
release given under seal shall not release the Guarantor from its
liability under the agreement or guarantee on its part contained in
this clause 18)
18.2 If:-
8.2.1 the Tenant fails to observe or perform any of its obligations
in this Agreement; or
18.2.2 any event occurs which had the Lease been granted would have
entitled the Landlord to re-enter the Building; or
18.2.3 the Tenant shall cease for any other reason to be or to remain
liable under this Agreement; or
18.2.4 the Tenant shall fail to execute the Lease in accordance with
the provisions of clause 11
the Landlord may within 3 months following any such event by notice in
writing require the Guarantor to enter into an Agreement in the like
form as this Agreement (in accordance (if appropriate) with the proviso
hereto) but with the Guarantor substituted for the Tenant or if the
Lease is due to be executed but for any reason has not been so executed
to enter into the Lease of the Building in its then actual state and
condition for the term and at the rents and subject to the covenants
provisions and conditions therein as substitute in all respects for the
Tenant under this Agreement and the Guarantor shall thereupon execute
and deliver to the Landlord a counterpart of the Lease in exchange for
the Lease executed by the Landlord and contemporaneously therewith or
otherwise (if later) when the first instalment falls due under the
Lease the Guarantor as tenant shall pay the first instalment of the
rents due PROVIDED THAT where in consequence of any circumstance or
event (whether of default or otherwise) as provided in this clause 18
relating to the Tenant the Landlord shall become entitled to enforce
all or any of its rights or remedies against the Guarantor requiring
the Guarantor to enter into an Agreement or into a Lease in pursuance
of this sub-clause then the Guarantor shall assume all the obligations
and have all the rights of the Tenant as if the Guarantor had been an
original contracting party of the second part to this Agreement in
place of the Tenant (in addition to the Guarantor's actual capacity
hereunder) and the Guarantor shall assume all the obligations and
liabilities and have all the rights of the Tenant under this Agreement
18.3 It will enter into the Lease as guarantor for the obligations of the
Tenant under the Lease
18.4 The Landlord shall not be obliged before enforcing any of its rights or
remedies against the Guarantor to take any proceedings or obtain any
judgment against the Tenant in any Court or to make or file any claim
in any bankruptcy or liquidation of the Tenant and the liabilities of
the Guarantor under this clause 18 may be enforced irrespective of
whether any demands steps or proceedings are being or have been taken
against the Tenant and the terms of this clause 18 shall be a
continuing guarantee and shall remain in full force and effect until
each and every part of the obligations and covenants on the part of the
Tenant shall have been discharged and performed in full (subject to any
release under seal as aforesaid)
17
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18.5 The Guarantor shall rank in respect of any sums paid under this clause
and in respect of any other rights which accrue howsoever to the
Guarantor in respect of any sums so paid or liabilities incurred
hereunder or in the observance performance or discharge of the
obligations and covenants on the part of the Tenant and be entitled to
enforce the same only after all the said obligations and covenants
shall have been observed performed and discharged in full and until
such observance performance and discharge the Guarantor shall not:-
18.5.1 seek to recover whether directly or by way of set-off lien
counter-claim or otherwise or accept any money or other
property or security or exercise any rights in respect of any
sum which may be or become due to the Guarantor on account of
failure by the Tenant to observe perform or discharge the said
obligations or covenants or the obligations of the Guarantor
hereunder from the Tenant or any third party
18.5.2 claim prove for or accept any payment in any composition by or
winding up or liquidation of the Tenant in competition with
the Landlord for any amount whatsoever owing to the Guarantor
by the Tenant on any account whatsoever
18.5.3 exercise any right or remedy in respect of any amount paid by
the Guarantor hereunder or any liability incurred by the
Guarantor in observing performing or discharging the said
obligations and covenants on the part of the Tenant and the
Guarantor warrants that it has not taken and will not without
the prior consent of the Landlord take any security from the
Tenant in connection with this guarantee and any security so
taken shall be held in trust for the Landlord as security for
the respective liabilities or the Guarantor and the Tenant
hereunder and the Guarantor shall not be entitled to any right
of proof in the bankruptcy or liquidation of the Tenant or any
other right of a guarantor discharging its liability in
respect of the said obligations and covenants unless and until
all of the same shall first have been paid observed performed
and discharged in full
18.6 Without prejudice to the rights of the Landlord against the Tenant the
Guarantor shall be a principal obligor in respect of its obligations
under this clause 18 and not merely a surety and accordingly the
Guarantor shall not be discharged nor shall its liability hereunder be
affected by any act or thing or means whatsoever by which its said
liability would not have been discharged if it had been a primary
debtor
18.7 The Guarantor shall pay all charges properly incurred by the Landlord
in relation to the Landlord's enforcement of this guarantee and
indemnity against the Guarantor or for enforcing payment by the
Guarantor of amounts indemnified by it hereunder
18.8 The liability of the Guarantor hereunder shall not be released reduced
affected or prejudiced by reason of:-
18.8.1 any legal limitation immunity disability incapacity occurrence
of insolvency or the winding-up of the Tenant or
18.8.2 (without limitation to the foregoing) any other act or thing
which (but for this provision) the Guarantor would have been
discharged or released (in each case in whole or in part) from
liability under this guarantee and indemnity
18
<PAGE>
or any combination of any two or more of such matters
19. CONFIDENTIALITY
The Parties hereby agree that they will not disclose any details of the
terms of the Agreement and/or the Lease without first notifying the
other parties of the terms of such disclosure
IN WITNESS whereof this Deed has been executed by the parties hereto and is
intended to be and is hereby delivered on the date first above written
SIGNED and DELIVERED as a deed )
by )
as the Attorney of THE STANDARD )
LIFE ASSURANCE COMPANY (in )
exercise of a Power of Attorney under its )
Seal dated 22nd May 1995) in the presence )
of: )
SIGNED and DELIVERED as a deed )
by )
CITY MORTGAGE SERVICING LIMITED )
acting by )
Director
/Secretary
SIGNED and DELIVERED as a deed )
by )
CITY MORTGAGE CORPORATION LIMITED )
acting by )
Director
Director/Secretary
19
<PAGE>
Annexures:
20
<PAGE>
DATED _______________________ 1996
THE STANDARD LIFE ASSURANCE COMPANY
and
CITY MORTGAGE SERVICING LIMITED
and
CITY MORTGAGE CORPORATION LIMITED
DRAFT 10 APRIL 1996
LEASE
of premises known as Malvern House
Croxley Business Park
THIS LEASE IS A NEW TENANCY FOR THE PURPOSES OF THE
LANDLORD AND TENANT (COVENANTS) ACT 1995
HERBERT SMITH
Exchange House
Primrose Street
London EC2A 2HS
Tel: 0171 374-8000
Fax: 0171 496-0043
Ref: 65/NEW
<PAGE>
TABLE OF CONTENTS
CLAUSE HEADINGS PAGE
1. DEFINITIONS AND INTERPRETATION ....................... 2
2. DEMISE AND RENTS ..................................... 7
3. TENANT'S COVENANTS ................................... 7
4. LANDLORD'S COVENANTS ................................. 14
5. IT IS AGREED AND DECLARED THAT:- ..................... 16
6. RENT REVIEW .......................................... 21
7. SERVICE RENT ......................................... 23
8. GUARANTEE AND GUARANTOR'S INDEMNITY .................. 24
9. JURISDICTION ......................................... 26
THE FIRST SCHEDULE PART I (THE PREMISES) ............................. 26
PART II ...................................................... 26
PART III ..................................................... 27
THE SECOND SCHEDULE .................................................. 28
PART I (ESTATE SERVICES) ..................................... 28
PART II (ADDITIONAL SERVICES) ................................ 29
PART III (BLOCK SERVICES) .................................... 29
THE THIRD SCHEDULE (REGULATIONS) ..................................... 30
THE THIRD SCHEDULE (REGULATIONS) ..................................... 33
<PAGE>
TABLE OF CONTENTS
CLAUSE HEADINGS PAGE
1. DEFINITIONS AND INTERPRETATION ....................... 2
2. DEMISE AND RENTS ..................................... 7
3. TENANT'S COVENANTS ................................... 7
4. LANDLORD'S COVENANTS ................................. 14
5. IT IS AGREED AND DECLARED THAT:- ..................... 16
6. RENT REVIEW .......................................... 21
7. SERVICE RENT ......................................... 23
8. GUARANTEE AND GUARANTOR'S INDEMNITY .................. 24
9. JURISDICTION ......................................... 26
THE FIRST SCHEDULE PART I (THE PREMISES) ............................. 26
PART II ...................................................... 26
PART III ..................................................... 27
THE SECOND SCHEDULE .................................................. 28
PART I (ESTATE SERVICES) ..................................... 28
PART II (ADDITIONAL SERVICES) ................................ 29
PART III (BLOCK SERVICES) .................................... 29
THE THIRD SCHEDULE (REGULATIONS) ..................................... 30
THE THIRD SCHEDULE (REGULATIONS) ..................................... 33
<PAGE>
THIS LEASE is made on the Lease Date
BETWEEN
(1) the Landlord;
(2) the Tenant; and
(3) the Guarantor
PARTICULARS DEFINITIONS AND INTERPRETATION
PARTICULARS
A. "LEASE DATE" is 1996
B. "LANDLORD" is The Standard Life Assurance Company of 3 George Street
Edinburgh EH2 2XZ
C. "TENANT" is City Mortgage Servicing Limited whose registered office is
at 19 Cavendish Square London W1A 2AW (Company Registration No.
3043775)
D. "GUARANTOR" is City Mortgage Corporation Limited whose registered
office is at 19 Cavendish Square London W1A 2AW (Company Registration
No. 3043776)
E. "PREMISES" are the land and buildings more particularly described in
Part I of the First Schedule to this Lease and shortly known as Malvern
House Croxley Business Park Watford Hertfordshire
F. "Plan No. 1A" "Plan No. 1B" "Plan No. 1C" "Plan No. 2" and "Plan No. 3"
are the plans annexed hereto and marked Plan No. 1A Plan No. 1B Plan
No. 1C Plan No. 2 and Plan No. 3 respectively
G. "RENT COMMENCEMENT DATE" is 1996
H. "TERM DATE" is [ ] 1996
I. "TERM" is twenty-five years calculated from and including the Term Date
J. "PRINCIPAL RENT" for the period commencing on the Rent Commencement
Date and ending immediately before the fifth anniversary of the Term
Date is [ ] pounds [(pounds sterling )] and for the
remainder of the Term is the Review Rent per annum fixed in accordance
with clause 6
K. "PERMITTED USE" is any use within Class B1 of the Town and Country
Planning (Use Classes) Order 1987 or for any other use or uses first
approved in writing by the Landlord (such approval not to be
unreasonably withheld or delayed) for which the Premises may from time
to time be used without contravention of the Town and Country Planning
Acts 1971-1990 the Local Government Planning and Land Act 1980 and
the Local Government and Planning (Amendment) Act 1981
L. "ESTATE" means the land (of which the Premises forms part) and all
buildings and other structures of whatsoever nature from time to time
erected thereon or on some part or parts thereof and the appurtenances
thereof which land is known as Croxley
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Business Park Watford and for the purpose of identification is shown
edged blue on Plan No. 3 PROVIDED ALWAYS THAT if the Landlord from time
to time so reasonably requires the said expression shall mean such land
including the Premises (whether of greater or lesser extent than the
land aforesaid) as the relevant requirement may specify together with
all structures of whatsoever nature from time to time thereon
M. "BLOCK" means that part of the Estate shown for the purpose of
identification edged brown on Plan No. 2
N. "ESTATE SERVICE RENT" means 10.3% (or such other percentage as may be
assessed and notified to the Tenant from time to time in accordance
with Clause 7.5 hereof) of the Estate Service Expenditure
O. "ADDITIONAL SERVICE RENT" means 6.05% (or such other percentage as may
be assessed and notified to the Tenant from time to time in accordance
with Clause 7.5 hereof) of the Additional Service Expenditure
P. "BLOCK SERVICE RENT" means 100% (or such other percentage as may be
assessed and notified to the Tenant from time to time in accordance
with Clause 7.5 hereof) of the Block Service Expenditure
Q. "SERVICE RENT" means an amount equivalent to the aggregate of the
Estate Service Rent the Additional Service Rent and the Block Service
Rent for any relevant Service Period
R. "PROVISIONAL SUM" in relation to the first Service Period is a due
proportion of the sum of Thirty eight thousand seven hundred pounds
(pounds sterling 38,700) and in relation to each other Service Period
means an amount calculated by the Landlord's managing agents acting
as experts and not arbitrators as their reasonable and proper
estimate of the likely Service Rent for the relevant Service Period
S. "REVERSIONARY OBLIGATIONS" are the covenants declarations and other
matters affecting the Premises specified in the Property and Charges
Registers of Title No. HD 167464
T. "REGULATIONS" means the regulations set out in the Third Schedule and
any reasonable modifications thereof or additions thereto and notified
in writing to the Tenant made from time to time by the Landlord
U. Having been authorised to do so by an Order of the Shoreditch County
Court (No. ) made on the 1996 under Section
38(4)(a) Landlord and Tenant Act 1954 the parties agree that the
provisions of Sections 24 to 28 Landlord and Tenant Act 1954 shall
be excluded in relation to this Lease
1. DEFINITIONS AND INTERPRETATION
1.1 The following expressions and those contained in the particulars have
the meanings specified
1.1.1 "ADJOINING PREMISES" means any land or buildings adjoining or
near to the Premises whether or not comprised in the Estate
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1.1.2 "Enactment" means every Act of Parliament and all subordinate
legislation made under such Acts
1.1.3 "CONDUITS" means pipes sewers drains mains ducts and all other
conducting media and ancillary equipment
1.1.4 "INSURERS" means the insurance office or underwriters with
whom the Premises are insured
1.1.5 "INSURED RISKS" means:-
(A) loss damage or destruction whether total or partial
caused by fire and other perils against which the
Landlord from time to time thinks fit to insure
except for such exclusions and limitations as may be
imposed by the Insurers;
(B) property owners liability; and
(C) loss of not less than three years' Principal Rent
Service Rent and Value Added Tax thereon
1.1.6 "INSURANCE RENT" means in respect of any period for which the
same is required to be calculated an amount equal to the
aggregate of the total premium and other costs incurred by the
Landlord for insuring the Premises against the Insured Risks
1.1.7 "INTEREST" means interest during the period from the date on
which the relevant payment is due to the date of payment (both
before and after any judgment) calculated on a daily basis at
the rate of 4% per annum above the base rate for the time
being of the Bank of Scotland or of some other leading
clearing bank in the UK as constituted at the date of this
Lease nominated in writing from time to time by the Landlord
1.1.8 "PUBLIC AUTHORITY" means the Secretary of State and any
government department public local or any other authority or
institution and any court of law or any of them or any of
their duly authorised officers
1.1.9 "ESTATE SERVICES" means the services set out in Part I of the
Second Schedule hereto
1.1.10 "ADDITIONAL SERVICES" means the services set out in Part II of
the Second Schedule hereto
1.1.11 "BLOCK SERVICES" means the services set out in Part III of the
Second Schedule hereto
1.1.12 "SERVICES" means the Estate Services the Additional Services
and the Block Services
1.1.13 "ESTATE SERVICE EXPENDITURE" means the aggregate expenditure
incurred by the Landlord in any Service Period in carrying out
or providing the carrying out of the Estate Services
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1.1.14 "ADDITIONAL SERVICE EXPENDITURE" means the aggregate
expenditure incurred by the Landlord in any Service Period in
carrying out or providing the carrying out of the Additional
Services
1.1.15 "BLOCK SERVICE EXPENDITURE" means the aggregate expenditure
incurred by the Landlord in any Service Period in carrying out
or providing the carrying out of the Block Services
1.1.16 "SERVICE EXPENDITURE" means the aggregate of the Estate
Service Expenditure the Additional Service Expenditure and the
Block Service Expenditure and all other expenditure reasonably
and properly incurred by the Landlord in connection with the
Estate and/or Block or any part or parts thereof and without
prejudice to the generality of the foregoing:-
(A) the reasonable cost incurred of employing any
accountant and surveyor and agent or any of them
employed to determine record and certify the cost of
providing the Estate Services the Additional Services
and Block Services the Provisional Sum and the
Service Rent; and
(B) a reasonable charge by the Landlord of the costs of
employing managing agents
but excluding any expenditure on any part of the Estate and/or
Block for which the Tenant or any other tenant or the Landlord
in respect of any unlet or unoccupied parts shall be
responsible
1.1.17 "GROSS INTERNAL AREA" for the meaning ascribed to that
expression by the Code of Measuring Practice published on
behalf of the Royal Institution of Chartered Surveyors and the
Incorporated Society of Valuers and Auctioneers which is in
common use at the relevant time
1.1.18 "PERMITTED PART" means any part of the Premises comprising
either
(A) the whole of one or more complete floor levels as
shown edged red on Plan 1A Plan 1B and Plan 1C;
(B) the whole of one or more complete wings (the extent
of a complete wing to be agreed at the relevant time
by the parties acting reasonably) of any such floor
level excluding in either case the structural and
load bearing parts of the Premises the ground floor
entrance lobby area and all circulation areas and
plant and equipment which are common to that part and
the remainder of the Premises
1.1.19 "LANDLORD'S SPECIFICATION" means the specification attached
hereto so entitled
1.1.20 RENT REVIEW DEFINITIONS
"REVIEW DATE" means each of the fifth tenth fifteenth and
twentieth anniversary of the Term Date
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"CURRENT RENT" means in relation to any Review Date the
Principal Rent payable under this Lease immediately before
that Review Date
"MARKET RENT" means in relation to the Review Date the yearly
market rack rental value which might reasonably be expected to
be payable following the expiry of any reasonable period at
the beginning of the term which might be negotiated in the
open market but only for the purposes of fitting out during
which no rent or a concessionary rent is payable if the
Premises had been let as a whole with vacant possession on the
relevant Review Date in the open market by a willing lessor to
a willing lessee without fine or premium for a term equal to
the residue of the Term from the relevant Review Date and
otherwise upon the provisions (save as to the amount of the
rent first reserved by this lease but including the provisions
for rent review) contained in this lease and on the assumption
if not a fact that the said provisions have been fully
complied with and on the further assumptions that:
(A) the Permitted Use and the Premises comply with
Planning Law and every other Enactment free from any
onerous condition restriction and limitation and that
the lessee may lawfully implement and carry on the
Permitted Use;
(B) the Premises have been fined out and equipped or
described in the Landlord's Specification;
(C) no work has been carried out to the Premises which
has diminished their rental value;
(D) in case the Premises or any of the Common Parts have
been destroyed or damaged they have been fully
restored;
but disregarding any effect on rent of:
(i) the fact that the Tenant or any underlessee or other
occupier or their respective predecessors in title
has been or is in occupation of the Premises;
(ii) any goodwill attached to the Premises by the carrying
on in them of the business of the Tenant or any
underlessee or their respective predecessors in title
or other occupier;
(iii) any works carried out to the Premises during the Term
by the Tenant or any permitted underlessee in either
case at its own expense in pursuance of a licence
granted by the Landlord and otherwise than in
pursuance of any obligation to the Landlord (but
nevertheless without prejudice to paragraphs (B) and
(C) of this definition);
(iv) Notwithstanding paragraph (iii) of this definition
all works carried out by the Tenant pursuant to an
Agreement for Lease between the parties hereto dated
[ ] (but nevertheless without prejudice
to paragraphs (B) and (C) of this definition); and
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(v) any contingent obligation on the Tenant to carry out
works of reinstatement and restoration at the end of
the Term;
"REVIEW RENT" means in relation to the relevant Review Date
the higher of the Current Rent and the Market Rent
"INTERIM RENT" means a yearly sum and proportionately for any
part of a year equivalent to the aggregate of the following
amounts:-
(i) an amount equivalent to sixty-six and two thirds per
centum of the sum (if any) by which the Landlord's
initial opinion (as notified in writing at any time
by the Landlord to the Tenant for the purposes
hereof) of the Market Rent at the relevant Review
Date exceeds the Current Rent; and
(ii) an amount equivalent to the Current Rent
"ARBITRATOR" means a person appointed by agreement between the
Landlord and the Tenant or (in default of agreement within
fourteen days of one party giving notice to the other of its
nomination) by nomination by or on behalf of the President for
the time being of the Royal Institution of Chartered Surveyors
on the application of either party made on or at any time
after three months before the relevant Review Date who is an
independent Chartered Surveyor who has not less than ten years
practice next before the date of his appointment and recent
substantial experience in the letting and valuation of
premises of a similar character and quality to those of the
Premises and in the locality of the Premises and who is a
partner or director of a leading firm or company of surveyors
having specialist market and valuation knowledge of such
premises
1.2 Singular words include the plural and vice versa and the masculine
gender includes the neuter gender and vice versa and each includes the
feminine gender
1.3 Where two or more persons comprise the "Tenant" and "Guarantor" such
persons covenant with the Landlord jointly and severally
1.4 The Tenant by covenanting not to do or omit any act or thing also
covenants not to permit or suffer it to be done or omitted
1.5 References in this Lease to:-
1.5.1 any consent licence or approval of the Landlord or words to
similar effect mean a consent licence or other approval in
writing signed by or on behalf of the Landlord
1.5.2 the Premises (except in clauses 5.2 and 5.3) shall be
construed as extending to any part of the Premises
1.5.3 a specific Enactment includes every statutory modification
consolidation and re-enactment and statutory extension of it
for the time being in force
1.5.4 the Landlord's managing agents may include the Landlords' own
employees
1.6 Any rent (whether or not defined in the Particulars or in clause 1.1)
and other amounts which may be or become payable to the Landlord under
this Lease are exclusive of all
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Value Added Tax which may be or become chargeable on the relevant
supply by the Landlord
2. DEMISE AND RENTS
The Landlord DEMISES with Full Title Guarantee the Premises to the
Tenant for the Term YIELDING and PAYING:
2.1 FIRST yearly and proportionately for any part of a year the Principal
Rent payable by equal quarterly payments in advance on the usual
quarter days in each year without deduction the first payment or a
proportionate part for the period commencing on the Rent Commencement
Date (calculated on an annual basis) to be made on the Lease Date
2.2 SECONDLY with effect from the Lease Date as additional yearly rent the
Insurance Rent payable without deduction within fourteen days of demand
2.3 THIRDLY with effect from the Lease Date as additional yearly rent the
Service Rent (including the Provisional Sum on account) payable in
accordance with clause 7
2.4 FOURTHLY as additional rent from time to time such sums as the Landlord
may expend following any default by the Tenant in expending them in
pursuance of its obligations to do so under this Lease the payment of
which shall be made without deduction within fourteen days on demand
2.5 FIFTHLY as additional rent Interest payable on demand on any sum of
whatsoever nature:-
2.5.1 due from the Tenant to the Landlord (whether as rent or
otherwise) which shall not be received by the Landlord within
fourteen days after the sum is due
2.5.2 properly or reasonably incurred by the Landlord in connection
with and following some default by the Tenant under this Lease
2.6 SIXTHLY as additional rent all Value Added Tax payable in accordance
with clause 3.2.3
3. TENANT'S COVENANTS
The Tenant covenants with the Landlord
3.1 PAYMENT OF RENTS
3.1.1 To pay the rents reserved by this Lease on the days and in the
manner set out in clause 2
3.1.2 To pay the Principal Rent by banker's standing order to such
bank as the Landlord may from time to time reasonably nominate
in the United Kingdom as constituted at the date of this Lease
3.2 PAYMENT OF OUTGOINGS
3.2.1 To pay (or if the Landlord shall require to repay the
Landlord) all existing and future rates taxes (including Value
Added Tax) duties charges and other
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outgoings whatsoever whether recurring non-recurring usual or
novel which are now or at any time during the Term shall be
payable by the owner landlord tenant or occupier in respect of
the Premises excluding all sums payable by the Landlord in
respect of any dealing with the reversion of this Lease or of
the Landlord's receipt of income
3.2.2 To pay all costs and charges whatsoever incurred for gas
electric current and power and water supplied to the Premises
3.2.3 (Without prejudice to the provisions of paragraph 3.2.1) to
pay any Value Added Tax (or any tax of a similar nature which
may be substituted for or levied in addition to it) which is
now or may become payable in respect of the rents reserved by
this Lease and of any other amount payable by the Tenant to
the Landlord under or in connection with this Lease and of any
supplies whether of goods or services (including an amount
equivalent to any such tax (but only to the extent that the
Landlord does not obtain credit therefor pursuant to Sections
25 and 26 Value Added Tax Act 1994 or any regulations made
thereunder) on any sums which the Tenant may be liable to
reimburse to the Landlord) provided that the Landlord supplies
to the Tenant a VAT invoice in respect of such rents and other
sums the payment by the Tenant of Value Added Tax to be made
contemporaneously with any rents or other sums to which it
relates
3.3 PAYMENT OF COST OF NOTICES CONSENTS ETC.
To pay all reasonable costs charges and expenses (including counsel's
solicitors' and surveyors' fees) incurred by the Landlord in and
incidental to:
3.3.1 the preparation and service of a notice under section 146 Law
of Property Act 1925 or in or in contemplation of any
proceedings under section 146 or 147 of that Act
notwithstanding that forfeiture is avoided otherwise than by
relief granted by the court and
3.3.2 every step taken during or within three months after the
expiration of the Term and in contemplation of or in
connection with or with the actual service of all notices and
schedules of dilapidations relating to the Tenant's
obligations and
3.3.3 every application for consent or licence or approval under
this Lease unless such consent or approval is unreasonably
withheld or delayed and/or unlawfully withheld or delayed
3.4 REPAIR
To keep the Premises and all lighting and drainage systems water gas
and other installations fire fighting equipment and all other machinery
in the Premises in good repair and condition (damage to the Premises by
any Insured Risk excepted to the extent the insurance or the payment of
insurance money has not been invalidated solely or in part because of
some act or default of the Tenant or by any person claiming through it
or for whom it is responsible)
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3.5 DECORATION AND GENERAL CONDITION
3.5.1 To keep the Premises clean and tidy and in good decorative
order in conformity with the principles of good estate
management and (without prejudice to the foregoing):
(A) in the fifth year of the Term and during the last six
months thereof to prepare paint or otherwise treat
the internal parts of the Premises usually or which
ought properly to be so dealt with in a good and
workmanlike manner with appropriate materials of good
quality (in a colour scheme first approved by the
Landlord in the case of decoration in the last six
months of the Term such consent not to be
unreasonably withheld or delayed) to the Landlord's
reasonable satisfaction
(B) in the third year of the Term and during the last six
months thereof to prepare paint or otherwise treat
the external parts of the Premises usually or which
ought properly to be so dealt with in a good and
workmanlike manner with appropriate materials of good
quality (in a colour scheme first approved by the
Landlord in the case of decoration in the last six
months of the Term such consent not to be
unreasonably withheld or delayed) to the Landlord's
reasonable satisfaction
3.5.2 To keep all glazing in the Premises properly clean at all
times
3.6 ADDITIONS ALTERATIONS AND SIGNS
3.6.1 Not to erect any new buildings or other structures at the
Premises and not to cut injure remove or alter or carry out
other work affecting the walls beams columns or other load
bearing elements or change the existing external design or
appearance of the Premises and not to commit any waste
3.6.2 Not to make any other alteration or addition except with the
Landlord's consent (which will not be unreasonably withheld or
delayed) and (if the consent is given) to carry the work out
in a good and workmanlike manner PROVIDED THAT the
installation and removal of internal demountable partitioning
shall not require the Landlord's consent and notwithstanding
anything herein contained the Tenant shall not require the
Landlord's approval to any non-structural alterations that do
not affect the external appearance of the Premises PROVIDED
FURTHER THAT the Tenant shall provide to Landlord full details
of any such works within 14 days of completion of such works
3.6.3 Not to attach to or exhibit in or on the Premises (including
the windows) any sign which is visible from the outside
without the Landlord's consent such consent not to be
unreasonably withheld or delayed other than a signboard or
nameplate stating the Tenant's name and the business of a size
and design and in a location that will be prescribed by the
Landlord
3.6.4 Without prejudice to the foregoing provisions of this clause
the Tenant may with the Landlord's prior consent such consent
not to be unreasonably withheld
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or delayed and subject to compliance with clause 3.7 change
the name of the building erected on the Premises
3.6.5 At the expiration of the Term if and to the extent required by
the Landlord unless otherwise expressly agreed in writing to
remove all alterations additions and signs made to or
installed on the Premises by the Tenant after the date hereof
(but without prejudice to the obligation in clause 3.19) and
to restore and make good the Premises to the plan and design
which existed before the alterations additions or
installations were made
3.7 COMPLIANCE WITH ENACTMENTS
3.7.1 To comply with all Enactments and with the requirements of
every Public Authority in respect of the Premises and their
use and any permitted work being carried out to them and not
to do or omit anything by which the Landlord may become liable
to make any payment or do anything under any Enactment or
requirement of a Public Authority
3.7.2 Forthwith on receipt of any communication or proposal from any
Public Authority relating to the Premises to send the Landlord
a copy of it
3.8 LANDLORD'S RIGHT TO ENTER FOR VARIOUS PURPOSES
3.8.1 To permit the Landlord and all others authorised by it at
reasonable times on reasonable prior notice (except in an
emergency) to enter and remain on the Premises with or without
equipment for all purposes in connection with the Premises or
any Adjoining Premises and to carry out works thereon which
are necessary or in all the circumstances reasonable and to
allow the Landlord to affix (but not so as to interfere
materially with the Tenant's use and enjoyment of the
Premises) notices to the Premises
3.8.2 To permit the Landlord and its surveyors and agents and others
with the written authorisation of the Landlord on its behalf
or any of them to enter upon the Premises in the last six
months of the term hereby granted (whether by effluxion of
time or sooner determination) to view the Premises at
reasonable times by prior arrangement with the Tenant
3.9 COMPLIANCE WITH NOTICES RELATING TO REPAIR OR CONDITION
If within two months after service of a notice from the Landlord to
remedy any breach of covenant relating to the state of repair or
condition of the Premises (or earlier in the case of emergency) the
Tenant shall not have commenced and be proceeding expeditiously with
the remedial work or if in the Landlord's reasonable opinion the Tenant
is unlikely to have completed or has not completed the relevant work by
the expiry of four months (or any shorter period in the case of
emergency) after service of the notice to permit the Landlord to enter
the Premises and as the Tenant's agent remedy the breach and to pay the
Landlord the cost of doing so and all expenses incurred (including
solicitors costs and surveyors fees) within seven days of demand
3.10 USE
Not to use the Premises or any tenant's fixtures or chattels in them:-
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3.10.1 for any purpose (and not to do anything in or to the Premises)
which may be or become or cause a nuisance disturbance
obstruction or damage to any person or property
3.10.2 for any dangerous noxious noisy illegal or offensive trade
business or activity or for residential purposes and not to
create unnecessary noise or vibration or exhaust fumes on any
parts of the Estate
3.10.3 (without prejudice to the preceding paragraphs of this
sub-clause) except for the Permitted Use and to carry on the
Permitted Use in the Premises
3.11 MACHINERY AND LOADING
Not to affix to the ceilings walls and floors in the Premises any plant
or machinery (other than desk-top office equipment) without the
Landlord's previous written consent which shall not be unreasonably
withheld or delayed PROVIDED ALWAYS that no equipment machinery or
apparatus shall be installed or operated in the Premises and nothing
shall be done or omitted in the Premises which may cause the efficiency
of the heating ventilation air conditioning and cooling system (if any)
installed in the Building to be diminished or impaired in any way
whatsoever or the balance thereof in any way interfered with
3.12 ARTICLES OUTSIDE BUILDING
Not to store anything outside any part of the Premises save as
permitted elsewhere in this Lease
3.13 PARKING/GOODS DELIVERY
3.13.1 Not at any time to load or unload or park any vehicle outside
the part or parts of the Estate allocated for those purposes
from time to time by the Landlord nor to obstruct the
entrances and exits to and from the Estate or the adjacent
highways nor permit any vehicle to park on any part of any
roadway
3.13.2 In relation to the use of the loading unloading and parking
areas from time to time allocated to the Tenant pursuant to
Part III of the First Schedule hereto (hereinafter referred to
as "the relevant areas"):
(A) not to use the parking spaces for any purpose other
than the parking of one vehicle in any one space and
not to use the loading and unloading areas other than
for those purposes
(B) to keep the relevant areas in a clean and tidy
condition and free from oil waste and any other
deleterious matter or thing whatsoever
(C) forthwith to make good to the satisfaction of the
Landlord all damage caused to the relevant areas and
any other parts of the Premises and/or the Estate and
to any other property caused by such uses
3.14 Alienation
3.14.1 Not to assign underlet or otherwise part with or share
possession or occupation of the Premises or any part of them
except that the Tenant may assign the
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3.16.1 or damage or use any area leading to the Premises in a way
which causes nuisance damage or annoyance
3.16.2 the means of escape in case of emergency from or to the
Premises
3.16.3 or discharge any deleterious matter into any Conduit serving
the Premises and to keep them clear and functioning properly
3.16.4 not to carry out any repairs or maintenance works (except
minor repairs in case of emergency) to vehicles
3.16.5 stop-up or darken the windows and other openings of the
Premises
3.16.6 any notice erected by the Landlord under clause 3.8 nor to
overload or cause undue strain to the Premises or to any
Conduit
3.17 PRESERVATION OF EASEMENTS
3.17.1 To preserve all rights of light and other easements belonging
to the Premises and not to give any acknowledgement that they
are enjoyed by consent
3.17.2 Not to do or omit anything which might subject the Premises to
the creation of any new easement and to give notice to the
Landlord of any encroachment known to the Tenant which might
have that effect forthwith on becoming aware of the same
3.18 DEFECTIVE PREMISES
Forthwith on becoming aware of the same to give notice to the Landlord
of any defect in the Premises which might give rise to:-
3.18.1 an obligation on the Landlord to do or refrain from doing
anything in relation to the Premises; or
3.18.2 any duty of care or the need to discharge such duty imposed by
the Defective Premises Act 1972 or otherwise
and at all times to display and maintain all notices which the Landlord
may from time to time reasonably require to be displayed at the
Premises in relation to their state of repair and condition
3.19 YIELD UP
3.19.1 At the expiration of the Term to yield up the Premises to the
Landlord in such state and condition as shall in all respects
be consistent with a substantial performance by the Tenant of
the covenants on its part herein contained (tenant's fixtures
and fittings only excepted subject to the Tenant making good
all damage to the Premises occasioned by their removal) and
upon such yielding up the Tenant shall if so required by the
Landlord in writing
(A) forthwith remove all signs nameplates and any other
items indicating the connection or former connection
of the Tenant with the Premises and
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(B) (to the extent the Landlord may require) take out and
remove from the Premises all works not in accordance
with the Landlord's Specification and install or
reinstate (as the case may be) such works (or the
equivalent thereof) as are necessary to ensure that
the Premises conform to the Landlord's Specification
all such works of installation to be carried out
within three months of such expiration or sooner
determination in a good and workmanlike manner to the
reasonable satisfaction of the Landlord
and for the avoidance of doubt it is agreed that the
obligation contained in this clause 3.19 shall survive any
such expiration or sooner determination of the Term or of this
Lease
3.19.2 To reimburse the Landlord on demand all expenditure (including
without limitation all fees properly incurred in connection
therewith) reasonably incurred by the Landlord within twelve
months after the expiration of the Term in repairing painting
reinstating or otherwise treating and decorating the Premises
so as to put them into the condition commensurate with the due
performance of the Tenant's covenants herein contained
3.19.3 Upon removal of any tenant's fixtures and fitting as are
connected to or take supplies from any of the Conduits to
remove and seal off such Conduits as the Landlord shall
reasonably require such removal and sealing off to be carried
out so as not to interfere with the continued function of the
remainder of the Conduits
3.20 COVENANTS
To observe and perform:-
3.20.1 the obligations of the grantee or licensee contained in every
consent licence or approval granted in pursuance of this
Lease; and
3.20.2 the Reversionary Obligations and Regulations in so far as they
are still subsisting and relate to and/or affect the Premises
4. LANDLORD'S COVENANTS
The Landlord covenants with the Tenant:
4.1 QUIET ENJOYMENT
That if the Tenant observes and performs its covenants contained in
this Lease the Tenant may peaceably and quietly hold and enjoy the
Premises without any lawful interruption by the Landlord or any person
rightfully claiming through under or in trust for it
4.2 INSURANCE
4.2.1 To keep the Premises (except any demountable partitioning and
floor and decorative wall surface covers not installed by the
Landlord and fixtures which are strictly trade fixtures)
insured against the Insured Risks and (in relation to the
risks described in paragraph (i) of the definition of Insured
Risks) in a sum
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equivalent to the full rebuilding cost (but not necessarily
the facsimile reinstatement cost) of the Premises TOGETHER
WITH Value Added Tax (or any tax of a similar nature which may
be substituted for or levied in addition to it) which is now
or may become payable by the Landlord in respect of any such
rebuilding costs and any professional fees relating thereto
4.2.2 on request to supply the Tenant with evidence of such
insurance
4.2.3 if and whenever during the Term the Premises are damaged or
destroyed by an Insured Risk and the payment of the insurance
monies is not refused in whole or in part by reason of any act
or default of the Tenant or of any person claiming through it
or for whom it is responsible the Landlord will (subject to
clause 5.5) with all convenient speed diligently take the
necessary steps to obtain any requisite planning permissions
and consents and if they are obtained to lay out all monies
received in respect of such insurance (except sums in respect
of public liability and loss of rent) in and towards replacing
but not necessarily in facsimile reinstatement the damaged or
destroyed parts (except as mentioned in clause 4.2.1) as soon
as reasonably practicable in a manner consistent with and
appropriate for the use of the Premises for the Permitted Use
and where such replacement is not facsimile reinstatement with
the consent of the Tenant (such consent not to be unreasonably
withheld or delayed) in relation to any works installed by the
Tenant at the Tenant's cost whether carried out before or
after the date of this Lease and will make up any deficiency
out of its own money PROVIDED ALWAYS THAT the Landlord shall
not be liable to replace any damaged or destroyed building if
it is unable (having used all reasonable endeavours) to obtain
every planning permission and consent necessary to execute the
relevant work in which event the Landlord shall be entitled to
retain all the insurance monies received by it
PROVIDED ALWAYS THAT the Landlord's obligation to insure does not
extend to any work installed in the Premises by or through the Tenant
in respect of which it has failed to comply with clause 3.15.1 and in
relation to such work any insurance or replacement obligation on the
Landlord is limited to the amount of the last valuation provided under
that clause (allowing for reasonable inflation)
4.3 SERVICES
4.3.1 To perform the Services in accordance with the principles of
good estate management PROVIDED ALWAYS THAT the Landlord shall
not be liable to the Tenant in respect of any failure or
interruption in any of the Services by reason of necessary
repair replacement or maintenance of any installation or its
damage or destruction or by reason of mechanical or other
defect or breakdown or any other cause beyond the Landlord's
control
4.3.2 The Landlord may from time to time withhold add or extend and
vary or make any alteration in the nature of matters
previously performed as Services if the Landlord reasonably
considers it necessary or in the interest of good estate
management provided that such changes do not substantially
diminish the availability and/or quality of the Services to
the Estate and/or the Tenant's use and occupation and
enjoyment of the Premises
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5. IT IS AGREED AND DECLARED THAT:-
5.1 RE-ENTRY
Without prejudice to any other remedies and powers contained in this
Lease or otherwise available to the Landlord if
5.1.1 the whole or part of the rents shall be unpaid for twenty-one
days after becoming payable (in the case of the Principal Rent
whether formally demanded or not); or
5.1.2 any of the Tenant's covenants in this Lease are not performed
or observed; or
5.1.3 the Tenant (or if more than one person any one of them being a
company) is the subject of a petition for its winding up or
enters into liquidation whether voluntarily (except for
reconstruction or amalgamation of a solvent company) or
compulsorily or has a provisional liquidator or receiver
(including an administrative receiver) appointed or is the
subject of an administration order or petition for one or of a
voluntary arrangement or proposal for one under Part I
Insolvency Act 1986 or is unable to pay its debts within the
meaning of Section 123 Insolvency Act 1986 or is otherwise
insolvent or having been registered with unlimited liability
acquires limited liability; or
5.1.4 the Tenant (or if more than one person any one of them being
an individual) is the subject of a bankruptcy petition or
bankruptcy order or of any application or order or appointment
under Section 253 or Section 273 or Section 286 Insolvency Act
1986 or otherwise becomes bankrupt or insolvent; or
5.1.5 the Tenant enters into or makes any proposal to enter into any
arrangement or composition for the benefit of his creditors
then the Landlord may at any time thereafter (and notwithstanding the
waiver of any previous right of re-entry) re-enter the Premises
whereupon this Lease shall absolutely determine but without prejudice
to any Landlord's right of action in respect of any antecedent breach
of the Tenant's covenants in this Lease
5.2 ASSIGNMENT
5.2.1 So long as the conditions set out in this clause are first
satisfied the Tenant may assign the whole of the Premises
5.2.2 The conditions (which are specified for the purposes of
Section 19(1)(A) of the Landlord and Tenant Act 1927) are:-
(A) that subject as provided in sub-clause 5.2.2(B) and
if the Landlord so reasonably requires the proposed
assignee procures one but not both of the following:
(1) covenants with the Landlord by a guarantor
or guarantor not being the Tenant or any
guarantor of the Tenant approved by the
Landlord (who shall act reasonably and
without delay in giving its approval) in the
same terms (mutatis mutandis) as contained
in clause 8 hereof; or
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(2) a deposit with the Landlord of an amount
equal to the then current yearly rent first
reserved by this Lease and an amount
equivalent to VAT thereon the terms of such
deposit to be governed by a document which
requires an increase in the deposit amount
to cover any increase in the yearly rent
(including VAT) following a rent review and
which otherwise is on terms which the
Landlord reasonably requires; and
(B) if the proposed assignment is to a Group Company:
(1) if the Tenant's obligations under this Lease
are guaranteed by another Group Company that
such Group Company covenants with the
Landlord in the same terms (mutatis
mutandis) as those contained in Clause 8; or
(2) if there is no guarantor of the Tenant's
obligations under this Lease and if the
assignee is not in the Landlord's reasonable
opinion of equivalent or greater financial
standing as the Tenant that the proposed
assignee procures covenants in a form which
the Landlord reasonably requires by a Group
Company which is not the Tenant or the
assignee and which is in the Landlord's
reasonable opinion of equivalent or greater
financial standing as the Tenant; or
(3) if the Tenant's obligations under this Lease
are secured by a deposit security the
proposed assignee procures a deposit with
the landlord of the amount and on terms
described in subclause 5.2.2(A)(2) above;
and
and in this sub-clause 5.2.2(B) the expression Group
Company means either the holding company of the
Tenant or a wholly-owned subsidiary of the Tenant or
of the Tenant's holding company (as those expressions
are defined in Section 736 Companies Act 1985)
(C) that the Landlord's consent is issued within three
months before completion of the assignment which
consent (subject to compliance with the foregoing
conditions) shall not be unreasonably withheld or
delayed
(D) that the conditions are satisfied on or before the
date of the assignment
(E) that the Tenant enters into an authorised guarantee
agreement as defined in Section 16 of the Landlord
and Tenant (Covenants) Act 1995 with the Landlord in
a form which the Landlord reasonably requires; and
(F) that any guarantor of the Tenant's obligations under
this Lease guarantees to the Landlord that the Tenant
will comply with that agreement in a form which the
Landlord reasonably requires
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5.3 UNDERLETTING
5.3.1 So long as the conditions set out in this clause are first
satisfied the Tenant may underlet the whole of the Premises or
any Permitted Part (each being referred to in this sub-clause
as the premises)
5.3.2 The conditions are:
(A) before the underletting the underlessee shall have
given to the Landlord a covenant to observe and
perform the Tenant's obligations under this lease to
the extent they relate to the premises (other than
the payment of rents) and a covenant not to assign
the whole of the premises without the Landlord's
consent (which shall not be unreasonably withheld or
delayed if in relation to the assignment the
conditions which are referred to in clause 5.2.2 are
first satisfied) and an unqualified covenant not to
assign part of the premises or to underlet or
otherwise part with possession or share the
occupation of the premises or any part of them;
(B) the underlease shall reserve as a yearly rent without
payment of a fine or premium (in addition to the
service and insurance and other rents payable under
this lease except the rent first hereby reserved or
(in the case of underletting of a Permitted Part) a
pro rata proportion of them) an amount equal to:
(1) (in the case of an underletting of the
Premises) the then open market rack rental
value of the Premises
(2) (in the case of an underletting of a
Permitted Part) the then open market rack
rental value of the Permitted Part
in all cases such rent to be approved by the Landlord
prior to the underletting (such approval not to be
unreasonably withheld or delayed) and payable by
equal quarterly instalments in advance on the usual
quarter days;
(C) the form of underlease (which shall not express the
rents or any rent review or other sum to be payable
or otherwise assessed simply by reference to a
percentage or proportion of the rent or any rent
review or of any other sum payable under this lease
but which shall require them to be payable and
assessed in accordance with the same principles as
are required by this lease) shall be approved by the
Landlord such approval not to be unreasonably
withheld or delayed if the other provisions of this
paragraph are observed;
(D) the underlease shall:-
(1) provide for the principal rent reserved by
the underlease to be reviewed upwards only
at each of those Review Dates which will
occur during the sub-term in accordance with
the same principles (mutatis mutandis) as
apply to the review of the rent first
reserved by this lease;
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(2) require the underlessee to observe and
perform all the covenants and other
provisions binding on the Tenant under this
lease (other than the covenant by the Tenant
to pay rents) to the extent they relate to
the premises; and provide for:
(a) a condition for re-entry by the
underlessor on breach of any
covenant by the underlessee;
(b) a qualified covenant not to assign
the whole of the premises (subject
to prior compliance with conditions
in the same terms as those set out
in clause 5.2.2) and an absolute
covenant not to assign part of the
premises or to underlet or
otherwise part with possession or
share the occupation of the
premises or any part of them;
(c) the exclusion of sections 24 to 28
inclusive Landlord and Tenant Act
1954 in relation to the underlease
in pursuance of an Order duly made
under section 38(4) of that Act
before the grant of the underlease
5.4 RENT CESSER
If and whenever during the Term:-
5.4.1 the Premises are destroyed or damaged by an Insured Risk so
that they are unfit for occupation and use; and
5.4.2 the insurance of the Premises and the payment of any insurance
money has not been vitiated by the act neglect default or
omission of the Tenant or of any person claiming through it or
for whom it is responsible
the Principal Rent and Service Rent or a fair proportion of them
according to the nature and extent of the damage sustained shall be
suspended and cease to be payable from the date of destruction or
damage until the date on which the Premises are made fit for
substantial occupation and use or until the third anniversary of the
date of destruction or damage whichever shall first occur and any
dispute about such suspension and cesser shall be referred to the award
of a single arbitrator to be appointed in default of agreement on the
application of either parity by the President for the time being of the
Royal Institution of Chartered Surveyors in accordance with the
Arbitration Acts 1950 and 1979
5.5 NOTICES
In addition to any other mode of service any notice required or
authorised to be given under this Lease shall be validly served if
served in accordance with Section 196 Law of Property Act 1925 as
amended by the Recorded Delivery Service Act 1962
5.6 DETERMINATION; DESTRUCTION
If the Premises shall be so destroyed or damaged by an Insured Risk as
to be unfit for occupation and use and have not been replaced in
accordance with the Landlord's obligation in clause 4.23 within a
period of two years and six months from the date of
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such destruction or damage the Landlord or the Tenant may determine
this Lease on the giving of not less than one month's notice to the
other to expire no later than the date which is three years after the
date of such destruction or damage and upon the expiry of such notice
this Lease and the Term shall determine without prejudice to any rights
or remedies which may have accrued to either party in respect of any
breach of any of the covenants or obligations contained in this Lease
and in the event of such determination the Landlord having previously
claimed under the policy maintained by it pursuant to its covenant
contained in clause 4.2 which it hereby covenants to do any insurance
proceeds received by the Landlord under such policy and attributable to
the works carried out to the Premises by the Tenant either before or
after the date of this Lease at its cost shall be paid by the Landlord
to the Tenant within seven days of the expiry of such Notice or receipt
of such insurance monies by the Landlord if later
5.7 DETERMINATION; CONTRACTUAL
5.7.1 Subject to the provisions of this sub-clause the Tenant may
determine this Lease as at the tenth anniversary of the Term
Date
5.7.2 The Tenant shall give the Landlord written notice of its
intention to determine at least twelve months before the tenth
anniversary of the Term Date
5.7.3 If the Tenant serves any notice under this clause it shall
procure that vacant possession of the Premises will be
available on the tenth anniversary of the Term Date free of
occupation by and of any estate or interest vested in the
Tenant and any third party and the Lease shall not determine
as a result of any notice served by the Tenant if it is in
arrears of any of the rents reserved by this Lease at the
tenth anniversary of the Term Date
5.7.4 If a notice is duly served and if (to the extent applicable)
the requirements of clause 5.7.3 are first satisfied this
Lease and the Term shall determine on the tenth anniversary of
the Term Date without prejudice to any rights or remedies
which may have accrued to either party in respect of any
breach of any of the covenants or obligations contained in
this Lease including obligations under this clause which shall
continue to bind the parties
5.7.5 Time is of the essence of all dates and periods referred to in
this sub-clause
5.8 CONSTRUCTION (DESIGN AND MANAGEMENT) REGULATIONS 1994
5.8.1 In this sub-clause
(A) the expression "Regulations" means the Construction
(Design and Management) Regulations 1994 and any
expressions appearing in this sub-clause which are
defined in the Regulations have the same meaning
(B) the expression "relevant work" means any construction
work which is undertaken by the Tenant or by a person
claiming under it in pursuance of an obligation or a
right (whether or not requiring the Landlord's
consent) under this lease and for the purposes of
the Regulations the Tenant irrevocably acknowledges
that it and not the Landlord arranges the design
carrying out and construction of relevant work
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notwithstanding that the Landlord may be entitled to
require the Tenant to do so
5.8.2 The Tenant irrevocably acknowledges that it will be and will
remain the only client in respect of any relevant work
5.8.3 Before any relevant work is commenced, the Tenant shall make a
declaration in accordance with Regulation 4(4) and shall
forthwith serve it on the Executive and a copy of it on the
Landlord
5.8.4 The Tenant shall comply with its obligations as client in
respect of any relevant work
5.8.5 The provisions of this sub-clause shall apply notwithstanding
that any consent issued by the Landlord in respect of any
relevant work does not refer to the said provisions or to the
Regulations
5.9 OVERRIDING LEASE
If at any time during the Term the Landlord shall grant a tenancy of
the reversion immediately expectant on the determination of this Lease
whether pursuant to Section 19 Landlord and Tenant (Covenants) Act 1995
or otherwise any covenant on the part of the Tenant to obtain the
consent of the Landlord under this Lease to any dealing shall be deemed
to include a further covenant also to obtain the consent of the lessor
under such tenancy to such dealing such consent not to be unreasonably
withheld or delayed where consent is expressed not to be unreasonably
withheld or delayed under this Lease
6. RENT REVIEW
6.1 The Market Rent as at any Review Date may be agreed in writing at any
time between the Landlord and the Tenant or (in the absence of
agreement) determined by the Arbitrator acting as an arbitrator
6.2 Any arbitration shall be conducted in accordance with the Arbitration
Acts 1950 and 1979
6.3 When the Market Rent as at any Review Date has been ascertained in
accordance with this Lease memoranda of the relevant Review Rent
payable from the Review Date shall be signed by or on behalf of the
Landlord and the Tenant (at their own cost) and annexed to this Lease
and its counterpart
6.4 If the Market Rent has not been ascertained by the relevant Review Date
the Tenant will:
6.4.1 continue to pay the Current Rent until such time (if any) as
the Tenant becomes liable by virtue of sub-clause 6.4.2 to pay
the Interim Rent
6.4.2 (if the Landlord shall at any time have notified the Tenant of
the Landlord's estimate of the relevant Review Rent at the
Review Date) pay the Interim Rent by equal quarterly
instalments at the times and in the manner as required for the
Current Rent the first payment or a proportionate part thereof
(being apportioned in the manner required by clause 2.1 from
the later of the relevant
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Review Date and the date of notification of the estimate and
taking into account any sums paid by the Tenant in respect of
the Current Rent aforesaid for the apportioned period) to be
made on whichever is the later of the relevant Review Date and
the seventh day next after the date of notification of the
estimate
6.4.3 pay the Landlord within seven days after the agreement or
assessment of the Review Rent:-
(A) a sum equal to the amount (if any) by which the
aggregate of the equal quarterly instalments of the
Review Rent which would have been payable in respect
of the period commencing immediately before the
Review Date and ending immediately before the usual
quarter day next following the date of agreement or
assessment had the Review Rent been agreed or
assessed at the commencement of that period exceeds
the payments made by the Tenant under paragraphs (a)
and (b) of this clause 6.4 in respect of the same
period; and
(B) a sum equal to interest at 4% below the Interest Rate
calculated by dividing the sum payable under
sub-sub-clause (i) hereof by the number of usual
quarter days occurring in the period therein
mentioned and by assuming that such divided amounts
were severally payable on the successive quarter days
aforesaid and by aggregating the Interest on each
such amount from the quarter day on which it was
notionally payable until the date on which the sum
payable under sub-sub-clause (i) hereof is paid
6.5 If the Review Rent is agreed or assessed at an amount less than the
Interim Rent the Landlord shall pay the Tenant within seven days after
the Review Rent has been ascertained:-
6.5.1 a sum equal to the amount (if any) by which the payments made
by the Tenant under paragraphs 6.4.1 and 6.4.2 in respect of
the period commencing immediately before the Review Date and
ending immediately before the usual quarter day next following
the date of agreement or assessment exceeds the aggregate of
the equal quarterly instalments of the Review Rent which would
have been payable in respect of the same period had the Review
Rent been agreed or assessed at the commencement thereof; and
6.5.2 a sum equal to two percent above Interest calculated by
dividing the sum payable under paragraph 6.5.1 by the number
of usual quarter days occurring in the period therein
mentioned and by assuming that such divided amounts were
severally payable on the successive quarter days aforesaid and
by aggregating the sum so derived on each such amount from the
quarter day on which it was notionally payable until the date
on which the sum payable under paragraph 6.5.1 is paid
PROVIDED ALWAYS THAT if any sums due to the Tenant under this clause
6.5 shall not have been paid by the Landlord to the Tenant by the
quarter day next following the said date of agreement or assessment the
Tenant shall be allowed to deduct the amount so owing from the
quarterly payment of Rent then due
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PROVIDED FURTHER THAT if the said quarterly payment is less than the
amount the Tenant is entitled to deduct the Tenant shall be entitled to
deduct the amount of the deficit from the next quarterly payment
7. SERVICE RENT
7.1 For the purposes of this Lease:-
7.1.1 "ACCOUNT DATE" means 30th June in every year of the Term or
such other date as the Landlord may from time to time nominate
7.1.2 "SERVICE PERIOD" means the period:-
(A) from the Lease Date to (and including) the first
Account Date; and thereafter
(B) between two consecutive Account Dates (excluding the
first and including the second); and thereafter
(C) commencing immediately after the last Account Date of
the Term and ending on the expiration of the Term
7.2 The Landlord shall as soon as convenient after each Account Date
prepare an account showing the Service Expenditure for the Service
Period ended on that Account Date and containing a fair summary of the
expenditure referred to and upon the account being certified by the
Landlord's managing agents it shall be conclusive evidence for the
purposes of this Lease of all matters of fact referred to except in
case of manifest error
7.3 The Tenant shall pay the Landlord on account of Service Rent the
Provisional Sum in relation to each Service Period the first payment
(being a proportionate sum in respect of the period commencing on the
Lease Date and ending immediately before the quarter day next after the
Lease Date) to be made on the Lease Date and the subsequent payments to
be made by equal instalments in advance on the usual quarter days
7.4 If the Service Rent for any Service Period:-
7.4.1 exceeds the Provisional Sum for that Service Period the excess
shall be due to the Landlord on demand; or
7.4.2 is less than the Provisional Sum for that Service Period the
overpayment shall be credited to the Tenant against subsequent
payments on account of Service Rent until the overpayment is
balanced
7.5 The Landlord may from time to time require a reasonable adjustment to
any of the percentages mentioned in the Particulars "N" "O" and "P" of
this Lease and to any other percentage which may have then been
adjusted hereunder if in its reasonable discretion the Landlord
considers that such an adjustment is warranted by a change in the
extent of the Estate (whether by reduction or increase) and the
Landlord or its agents shall serve the Tenant with written notice of
any such requirement and shall state therein the adjusted percentage
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8. GUARANTEE AND GUARANTOR'S INDEMNITY
The Guarantor at the request of the Tenant and in consideration of the
grant of this lease covenants and agrees with the Landlord that:-
8.1 The rents reserved by this lease (whether or not ascertained as to
amount) will be duly paid and that all the Tenant's obligations
contained in it will be performed and observed in the manner and at the
times herein specified and that if there is any default in paying the
rents or in performing and observing the Tenant's obligations
(notwithstanding any time or indulgence granted by the Landlord to the
Tenant or compromise neglect or forbearance on the part of the Landlord
in enforcing the observance and performance of the Tenant's obligations
in this lease or any refusal by the Landlord to accept rents tendered
by or on behalf of the Tenant) the Guarantor will observe and perform
the obligations in respect of which the Tenant shall be in default and
will on demand and on a full indemnity basis pay to the Landlord an
amount equivalent to the rents or other amounts not paid and/or any
loss damage costs charges expenses or any other liability incurred or
suffered by the Landlord as a result of the default (and in the event
of non-payment shall pay Interest from the date of demand to the
Guarantor until the date of payment) and will otherwise indemnify and
hold harmless the Landlord against all actions claims costs damages
demands expenses losses and proceedings arising from or incurred by the
Landlord as a result of such non-performance or non-observance
8.2 If any liquidator or other person having power to do so disclaims this
lease or if it shall be forfeited or if the Tenant ceases to exist and
if the Landlord by written notice served within three months after the
date of disclaimer or forfeiture or the Landlord having actual
knowledge of the cesser of existence of the Tenant (the "Trigger
Event") requires the Guarantor to accept a lease of the Premises for a
term computed from the date of the Trigger Event to the date on which
the Term would have expired by effluxion of time and at the same rents
and subject to the same covenants stipulations conditions and
provisions (except that the Guarantor shall not be required to procure
that any other person is made party to that lease as guarantor) as are
reserved by and contained in this lease immediately before the Trigger
Event and with a coincidental Review Date (the said new lease and the
rights and liabilities thereunder to take effect as from the date of
such Trigger Event) the Guarantor shall forthwith accept such lease
accordingly and execute and deliver to the Landlord a counterpart of it
and indemnify the Landlord upon demand against the costs incurred on
the grant of the new lease PROVIDED THAT the Guarantor shall first do
all necessary acts and things to join in an application for and seek to
obtain without delay an order of the Court to the like effect as that
referred to in Particular U but so that the Landlord may elect at any
time prior to the making of the said Court Order that the said new
lease shall not contain a provision equivalent to Particular U
8.3 The liability of the Guarantor hereunder shall not be released reduced
affected or prejudiced by reason of:-
8.3.1 any variation or waiver of or addition to the terms of this
lease or any of them agreed between the Landlord and the
Tenant or
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8.3.2 the surrender by the Tenant of part of the Premises (in which
event the liability of the Guarantor shall continue in
relation to the Tenant's obligations in respect of the part of
the Premises not so surrendered) or
8.3.3 any legal limitation immunity disability incapacity occurrence
of insolvency or the winding-up of the Tenant or
8.3.4 (without limitation to the foregoing) any other act or thing
by which (but for this provision) the Guarantor would have
been discharged or released (in each case in whole or in part)
from liability under this guarantee and indemnity
or any combination of any two or more of such matters
8.4 Without prejudice to the rights of the Landlord against the Tenant the
Guarantor shall be a principal obligor in respect of its obligations
under this clause and not merely a surety and accordingly the Guarantor
shall not be discharged nor shall its liability hereunder be affected
by any act or thing or means whatsoever by which its said liability
would not have been discharged if it had been a primary debtor
8.5 The Guarantor shall pay all reasonable charges (including reasonable
legal and other costs on a full indemnity basis) incurred by the
Landlord in relation to the Landlord's enforcement of this guarantee
and indemnity against the Guarantor or for enforcing payment by the
Guarantor of amounts indemnified by it hereunder
8.6 The Landlord may at its option enforce the terms of this guarantee and
indemnity against the Guarantor without having first enforced the
covenants and terms of this lease against the Tenant and also without
first having recourse to any other rights or security which the
Landlord may have obtained in relation to this lease
8.7 The Guarantor shall not be entitled to participate in any security held
by the Landlord in respect of the obligations of the Tenant under this
lease or to any right of subrogation in respect of any such security
until all the obligations owed to the Landlord by the Tenant and the
Guarantor hereunder have been fully and unconditionally fulfilled and
discharged
8.8 The Guarantor shall not claim in any liquidation bankruptcy composition
or scheme of arrangement in respect of the Tenant in competition with
the Landlord and if and to the extent that it receives the same shall
remit to (and until remission shall hold in trust for) the Landlord all
and any monies received from any liquidator trustee receiver or out of
any composition or arrangement or from any supervisor thereof until all
the obligations of the Tenant and the Guarantor hereunder owed to the
Landlord have been fully and unconditionally fulfilled and discharged
8.9 This guarantee and indemnity shall enure for the benefit of the
Landlord's successors in title under this lease without the necessity
for any assignment thereof
9. JURISDICTION
The Lease shall be governed by and construed in all respects with the
laws of England and the parties hereto submit to the non-exclusive
jurisdiction of the English Courts
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IN WITNESS whereof this Deed has been executed as a deed by the parties hereto
the day and year first before written
THE FIRST SCHEDULE
PART I
(The Premises)
ALL THAT the Premises known as Malvern House aforesaid which are for the purpose
of identification edged red on Plan No. 1A Plan No. 1B and Plan No. 1C and are
also shown edged yellow on Plan No. 2
EXCEPT and RESERVED as mentioned in Part II of this schedule and TOGETHER WITH
the rights mentioned in Part III of this schedule
PART II
EXCEPT AND RESERVED to the Landlord (and all other persons authorised by the
Landlord or having like rights) the free and uninterrupted rights:-
(1) to the passage and running of water soil gas electricity telephone and
other services or supply to and from any Adjoining Premises through the
Conduits in or under the Premises
(2) for the Landlord to enter the Premises for the purposes mentioned in
this Lease and in particular:-
(i) the right at all reasonable times on at least 48 hours' prior
written notice and by prior appointment (except in the case of
emergency) to enter upon the Premises with or without
appliances and workmen and others as often as may be necessary
for all the purposes for which the Tenant covenants hereunder
to permit entry and for all purposes in connection with the
carrying out by the Landlord of the Services and for the
purposes of complying with any statutory requirements; and
(ii) the right at all reasonable times on at least 48 hours' prior
written notice and by prior appointment (except in case of
emergency) in order to examine and repair any Adjoining
Premises
(3) of light air support and protection now or after the date of this Lease
enjoyed by any Adjoining Premises
(4) at any time hereafter to alter rebuild make connections to or demolish
any building on any Adjoining Premises in such manner as the person
exercising the right shall think fit provided the same shall not
substantially obstruct affect or interfere with the amenity of or the
passage of light and air to the Premises or have a substantial effect
on the means of access to them
(5) to erect and retain (for a reasonable period only) scaffolding
notwithstanding that it may temporarily restrict but not prevent the
access to or enjoyment and use of the Premises
26
<PAGE>
(6) the right to affix to the outside walls of the Building and retain
without interference a notice for the disposal or letting of the
Premises provided that light and access to the Premises is not
materially impaired
PROVIDED THAT if the Landlord exercises any of the above rights by carrying out
work or entering on the Premises it shall cause as little interference to the
Premises as possible and shall forthwith make good any damage caused to the
Premises unless the right has been exercised because of some breach by the
Tenant
PART III
TOGETHER WITH the benefit of the rights:-
(a) to the passage and running of water soil gas electricity telephone and
other services or supply to and from the Premises through the Conduits
in or under the Estate
(b) support and protection as is now enjoyed from any Adjoining Premises on
the Estate
(c) at convenient times and upon reasonable notice (except in emergency) to
enter any Adjoining Premises of the Landlord if it shall be necessary
to do so in order to view the state of condition of the land and
buildings described in Part I of this schedule and to make good all
damage and disturbance caused
(d) (in common with the Landlord and all other persons having a like right)
for the purposes of access to and egress from the Premises to pass and
repass at all times with or without vehicles over all roadways on the
Estate and to pass and repass on foot only over all pavements on the
Estate and for all purposes connected with the Permitted Use (but not
otherwise) PROVIDED THAT the roadway marked Beggars Bush Lane on Plan
No. 3 shall not be used for vehicular traffic other than in accordance
with the directions of the Highway Authority and PROVIDED FURTHER THAT
such use shall be subject to such restrictions (whether as to weight or
size of vehicles hours of use or otherwise and including but not
limited to physical restrictions) as the Highway Authority shall
require or as the Landlord shall reasonably require in the interests of
good estate management
(e) to use 292 car parking spaces (the positions whereof being shown edged
green on Plan No. 2 which position or positions may be temporarily
altered by the Landlord in cases of emergency only on notice to the
Tenant)
(f) the right to use the skip compound in such position on the Estate as
may from time to time be directed by the Landlord's managing agents
(g) the right for the Tenant's name to be placed on the Landlord's notice
board situated at the entrance to the Estate
(h) the right to use the area immediately adjacent to the goods entrance to
the Premises for the purposes only of loading and unloading
27
<PAGE>
THE SECOND SCHEDULE
Details of Services
PART I
(Estate Services)
(1) Save to the extent that the same are expressly referred to in Parts II
and III of this Schedule the maintenance repair renewal redecoration
cleansing lighting and replenishment of the Estate and all fixtures and
fittings thereon and therein and all boundary walls and fences of the
Estate
(2) The maintenance repair cleansing and flood control of the River Gade
(3) The insurance of such parts of the Estate which shall be used in common
by the various tenants of the Estate and the provision of insurance of
any staff employed by the Landlord and by its agents or by any of them
in the management and maintenance thereof together with public
liability insurance
(4) The provision of and payment of all reasonable fees to managing agents
(including in that expression the services of the Landlord) and the
payment of all value added tax thereon
(5) The provision and maintenance of traffic control services and
landscaping within the Estate
(6) The provision of such staff (including caretakers and gardeners) for
the maintenance management and landscaping of the Estate including all
payments due under or in respect of related contracts of employment as
well as the provision of equipment materials and any other things as
may be requisite in relation thereto or for the purposes thereof
(7) Refuse collection and the cost thereof
(8) Paying all rates taxes assessments and outgoings from time to time
payable in respect of the Estate to the extent that such cost is not
wholly reimbursed to the Landlord by any third party
(9) Providing accommodation to house vehicles equipment and personnel
employed in providing services to the Estate
(10) The enforcement whenever and as often as the Landlord shall think fit
of any covenant or condition contained in any lease underlease licence
or agreement relating to the Estate or any part thereof where in the
reasonable opinion of the Landlord such enforcement would be in the
interests of good estate management
(11) The provision of other reasonable or requisite acts matters or things
which the Landlord may at any time and from time to time provide for or
in connection with the Estate
28
<PAGE>
PART II
(ADDITIONAL SERVICES)
(1) Until such time (if any) that the same become highways maintainable at
the public expense the maintenance repair cleansing and keeping tidy of
the roads marked "Blackmoor Lane" and "Beggars Bush Lane" on Plan No. 3
and all associated landscaping (including without prejudice to the
generality of the foregoing the area between the said Beggars Bush Lane
and the Grand Union Canal) street lighting drainage and barriers
PROVIDED THAT the Landlord shall not be obliged to put or keep the said
Beggars Bush Lane in any better condition than it is now in
(2) The maintenance repair and keeping tidy of the service zone which is
shown hatched brown on Plan No. 3
PART III
(BLOCK SERVICES)
(1) The maintenance repair cleansing lighting and the keeping tidy of the
car parking spaces allocated to the Block from time to time and the
loading and unloading areas and skip compound within the Block
(2) The provision maintenance replacement planting cultivation and keeping
in good order and condition of all ornamental garden and landscaped
areas and all floral arboreal pictorial and artistic displays within
the Block
including:
(a) the employment of such independent contractors agents
consultants professional advisers and workmen as in the
reasonable and proper opinion of the Landlord may be requisite
in respect of the provision or carrying out of any service to
the Block referred to in paragraphs (1) and (2) above
(b) the reasonable and proper fees and expenses of the Landlord
and its managing agents in performing and carrying out the
services referred to in paragraphs (1) and (2) above
(c) the reasonable and proper salaries wages pensions and pension
contributions and other emoluments and the social security
contributions or other statutory levies of all personnel
directly employed by the Landlord or its managing agents on
duties at the Block in connection with those matters referred
to in paragraphs (1) and (2) above
(d) the reasonable provision and supply of any necessary uniforms
protective clothing tools appliances plant equipment and
materials as the Landlord may in its proper discretion deem
desirable or necessary for use in the provision and execution
of any service to the Block referred to in paragraphs (1) and
(2) above
29
<PAGE>
PLAN NO. 1A
[GROUND FLOOR PLAN
CROXLEY CENTRE PHASE V,
BLOCK 2,
MALVERN HOUSE]
<PAGE>
PLAN NO. 1B
[FIRST FLOOR PLAN
OF BLOCK 2,
MALVERN HOUSE]
<PAGE>
PLAN NO. 1C
[SECOND FLOOR PLAN
CROXLEY CENTRE PHASE V,
BLOCK 2, MALVERN HOUSE]
<PAGE>
PLAN NO. 2
[CROXLEY CENTER
LAYOUT DIAGRAM]
<PAGE>
PLAN NO. 3
[CROXLEY CENTRE
THE PAVILLIONS
LAYOUT/DIAGRAM]
<PAGE>
THE THIRD SCHEDULE
(REGULATIONS)
1. No loud speakers television sets radios or other devices shall be used
in a manner so as to be heard outside the Premises
2. No article object or thing of any kind shall be attached to supported
on or placed on any part or parts of the Conduits
[ORIGINAL]
SIGNED and DELIVERED as a deed )
by )
as the Attorney of THE STANDARD LIFE )
ASSURANCE COMPANY (in exercise )
of a Power of Attorney under its Seal dated )
22nd May 1995) in the presence of:- )
SIGNED and DELIVERED as a deed )
by CITY MORTGAGE SERVICING )
LIMITED in the presence of:- )
Director
Director/Secretary
SIGNED and DELIVERED as a deed )
by CITY MORTGAGE CORPORATION )
LIMITED in the presence of:- )
Director
Director/Secretary
30
<PAGE>
DATED 1996
- --------------------------------------------------------------------------------
(1) THE STANDARD LIFE ASSURANCE COMPANY
and
(2) CITY MORTGAGE SERVICING LIMITED
and
(3) CITY MORTGAGE CORPORATION LIMITED
---------------------------------------------
DEED OF DEPOSIT
supplemental to a Lease
dated 1996 relating to
Malvern House
Croxley Business Park Watford
---------------------------------------------
Herbert Smith
Exchange House
Primrose Street
London EC2A 2HS
Tel: 0171 374 8000
Fax: 0171 496 0043
Ref: 65/30580257
DE00000000061295
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
CLAUSE HEADING PAGE
- ------ ------- ----
<S> <C> <C>
1. DEFINITIONS AND INTERPRETATION 1
Default 1
Deposit Account 1
Deposit Balance 2
Deposit Sum 2
Expiry of the Term 2
Guarantor 2
Initial Deposit 2
Interest 2
Landlord 2
Lease 3
Premises 3
Tenant 3
2. INITIAL DEPOSIT PAYMENT 3
3. DURATION OF DEPOSIT ARRANGEMENTS 4
4. STATEMENT OF DEPOSIT BALANCE 7
5. MAINTENANCE OF DEPOSIT SUN 7
6. WITHDRAWALS 8
7. INTEREST 8
8. EXPENSES 10
9. ASSIGNMENT 10
10. SERVICE OF NOTICES 11
11. JURISDICTION 12
12. DECLARATIONS 12
13. GUARANTOR'S COVENANTS 13
</TABLE>
<PAGE>
THIS DEED made the day of One thousand nine hundred and
ninety-six BETWEEN the Landlord (1) and the Tenant (2) and the Guarantor (3)
supplemental to the Lease
WITNESSES as follows:-
1. DEFINITIONS AND INTERPRETATION
(1) In this deed the following words and expressions shall unless
the context otherwise requires have the following meanings:
"DEFAULT" means any failure by the Tenant to pay
(whether or not any formal demand has
been made) the whole or any part of the
rents reserved by the Lease or any money
(including interest) payable pursuant to
the Lease or any expense incurred by the
Landlord or due to the Landlord in
consequence of any failure by the Tenant
to observe and perform the covenants and
obligations of and the conditions
binding the Tenant contained in the
Lease
"DEPOSIT ACCOUNT" means an interest bearing account opened
in the name of the Landlord with such
clearing bank as the Landlord from time
to time in its absolute discretion may
select wherein the Deposit Sum is for
the time being lodged in accordance with
the terms of this deed PROVIDED THAT on
any disposal of the reversion expectant
upon the determination of the Term by
The Standard Life Assurance Company any
successor in title shall ensure that the
Deposit Sum is held in an interest
bearing account in the joint
1
<PAGE>
names of the Landlord and the Tenant
with a clearing bank
"DEPOSIT BALANCE" means the amount from time to time
standing to the credit of the Deposit
Account (being the property of the
Landlord)
"DEPOSIT SUM" means an amount equivalent to six
months' Principal Rent from time to time
reserved and payable under the Lease and
an amount equivalent to Value Added Tax
thereon save that for the first five
years of the Term the Deposit Sum is the
Initial Deposit
"EXPIRY OF THE TERM" means the expiry or sooner contractual
determination of the Term otherwise than
by termination of the Term by forfeiture
or disclaimer
"GUARANTOR" means City Mortgage Corporation Limited
whose registered office is at 19
Cavendish Square London W1A 2AW (Co.
Regn. No. 3043776)
"INITIAL DEPOSIT" means [ ] Pounds [ ]
and an amount equivalent to Value Added
Tax thereon being a total of [
]
"INTEREST" means all interest credited to the
Deposit Account from time to time
"LANDLORD" means The Standard Life Assurance
Company whose office is at 3 George
Street Edinburgh EH2 2XZ
2
<PAGE>
"LEASE" means a lease dated 1996
between (1) the Landlord (2) the Tenant
and (3) the Guarantor
"PREMISES" means the premises demised by the Lease
"TENANT" means City Mortgage Servicing Limited
whose registered office is at 19
Cavendish Square London W1A 2AW (Co.
Regn. No. 3043775)
(2) The expressions "Principal Rent" "Term" "Term Date" and "Review
Date" shall have the meanings ascribed to them by the Lease
(3) References in this deed to any clause are references to the
relevant clause in this deed and clause headings shall not
affect the Construction of this deed
2. INITIAL DEPOSIT PAYMENT
(1) In consideration of the grant of the Lease the Tenant has paid
the Initial Deposit to the Landlord and the Landlord shall
forthwith pay the Initial Deposit into the Deposit Account
(2) The Landlord may from time to time until the Deposit Balance
shall be repaid to the Tenant select the Deposit Account wherein
the Deposit Sum shall be lodged but in doing so shall have
regard to the interests of the parties under this deed and shall
notify the Tenant in writing of any change of Deposit Account
from time to time
(3) The Tenant Warrants to the Landlord that the Initial Deposit is
free from any charge or encumbrance
3
<PAGE>
3. DURATION OF DEPOSIT ARRANGEMENTS
(1) The Deposit Balance shall be held by the Landlord (subject to
the Landlord's prior right to withdraw and retain all or any
part of the Deposit Balance in or towards all liabilities of the
Tenant from time to time outstanding in respect of a Default by
the Tenant) until the giving of written confirmation by the
Landlord to the Tenant that Satisfactory Accounts as defined in
clause 3(2) have been delivered to the Landlord in respect of
the Tenant PROVIDED THAT the Landlord will not unreasonably
withheld or delay the giving of such written confirmation
(2) (a) "Satisfactory Accounts" means accounts in respect of the
Tenant which have been audited by a person firm or company
satisfactory to the Landlord which show both that:-
(i) for the three immediately preceding accounting
reference periods the post tax profits of the Tenant
in respect of each such accounting reference period
exceeded a sum calculated by multiplying by three the
amount of Principal Rent reserved by the Lease
payable at the date upon which such accounts are
delivered to the Landlord (provided that in any case
the Principal Rent for such purpose shall not be less
than that reserved under the Lease for the period
commencing on the second anniversary of the Term Date
and ending immediately before the Review Date); and
(ii) the aggregate of the share capital and reserves and
the retained profit as stated in such accounts for
the immediately preceding accounting reference period
exceeds a sum calculated by multiplying by three the
amount of Principal Rent reserved by the Lease
payable at the date upon which such accounts are
delivered to the Landlord (provided that in any case
the Principal Rent for such purpose shall not be less
than that reserved under the Lease for the
4
<PAGE>
period commencing on the second anniversary of the
Term Date and ending immediately before the Review
Date)
(b) The items referred to in clauses 3(2)(a)(i) and (ii)
shall be together referred to as the "Tenant's Net
Assets"
(c) If any of the accounting reference periods of the
Tenant referred to in clauses 3(2)(a)(i) and (ii)
represent a period of time which is either longer or
shorter than a period of twelve calendar months the
tests referred to in clauses 3(2)(a)(i) and (ii)
shall be applied to:-
(i) the Tenant's Net Assets (as required by the
relevant test) as shown in the accounts for any
such accounting reference period in relation to
the aggregate Principal Rent reserved by the
Lease payable in respect of such accounting
reference period; and
(ii) such number of the Tenant's accounting
reference periods as is equal to or exceeds a
period of three years
(3) If the event referred to in clause 3(1) does not occur prior to
the Expiry of the Term the Deposit Balance shall be held by the
Landlord (on the terms hereof) until the earliest of the
following:-
(a) a lawful assignment of the Lease by the Tenant;
(b) fourteen days after the Expiry of the Term; and
(c) six months after the disclaimer or forfeiture of the Lease
(4) The Deposit Account shall be closed and the Deposit Balance
shall be paid to the Tenant after first being applied in
satisfaction of all costs or losses or claims which have been
5
<PAGE>
4. STATEMENT OF DEPOSIT BALANCE
The Landlord shall on repaying the Deposit Balance to the Tenant under
clause 3(5) supply the Tenant with a statement showing all deposits and
withdrawals made by the Landlord and all Interest accrued and paid over to
the Tenant in accordance with the terms of this deed
5. MAINTENANCE OF DEPOSIT SUM
(1) If at any time the Deposit Balance shall be less than the
Deposit Sum either as a result of:-
(a) a withdrawal pursuant to clauses 6(1) or 6(2); or
(b) any review of the Principal Rent reserved by the Lease
the Tenant shall pay the difference to the Landlord within seven
days of notice from the Landlord to the Tenant to that effect
(but subject to clause 5(3)) and notwithstanding any dispute of
any kind whatsoever as to any withdrawal from the Deposit
Account by the Landlord
(2) If and so long as the Deposit Balance is less than the Deposit
Sum Interest accrued on the Deposit Balance shall not be paid to
the Tenant pursuant to clause 7 but shall be added to the
Deposit Balance until such time as the Deposit Balance equals
the Deposit Sum howsoever that may be effected
(3) If an increase in the Deposit Balance is required solely as the
result of a review of the Principal Rent reserved by the Lease
the Landlord shall not be obliged to give notice to the Tenant
requiring an increase in the Deposit Balance and the Tenant
shall forthwith upon the assessment of the reviewed rent
discharge its obligations in accordance with this clause
7
<PAGE>
6. WITHDRAWALS
(1) If at any time for any reason whatsoever the Tenant fails to pay
the whole or any part of the Principal Rent or other rents or
any other sum payable in accordance with the terms of the Lease
the Landlord may make withdrawals from the Deposit Account equal
to the rent or (as the case may be) other sums due including any
interest and Value Added Tax thereon pursuant to provisions in
that behalf contained in the Lease which the Tenant shall have
failed to pay; and
(2) If the Tenant shall be in Default of any of the covenants and
obligations of and the conditions binding the Tenant contained
in the Lease (other than a Default as described in clause 6(1))
and such breach shall not have been remedied by the earliest
of:-
(a) a lawful assignment of the Lease by the Tenant
(b) fourteen days after notice to the Tenant of such breach; and
(c) the Expiry of the Term; and
(d) the disclaimer or forfeiture of the Lease
the Landlord may make withdrawals from the Deposit Account of
such sums as will meet or (if the Deposit Balance is
insufficient) go towards meeting the reasonable and proper cost
to or loss suffered by the Landlord in respect of the Default
7. INTEREST
(1) Subject to clause 5(2) all Interest shall beneficially accrue to
the Tenant and (in so far as it is necessary so to do for such
accrual) the Landlord hereby assigns to the Tenant but subject
always to the provisions of this deed the right to receive the
Interest
8
<PAGE>
(2) The Tenant as beneficial owner of the Interest charges the
assignment created by clause 7(1):-
(a) until such time as the Deposit Account shall be closed in
accordance with clause 3; and
(b) as security for money payable to the Landlord in the event
of Default
(3) The Tenant shall make a return in respect of the Interest in
full to the Inland Revenue and the tax assessed thereon shall be
paid by the Tenant accordingly
(4) Subject to clause 5(2) the Interest (less any amounts retained
by the Landlord pursuant to clause 8) shall be released from the
Deposit Account half yearly to the Tenant within twenty-eight
days of the Interest being credited to the Deposit Account
PROVIDED ALWAYS THAT:-
(a) no Interest shall be released unless and until the Landlord
has received the quarter's rent due immediately prior to the
date of the Interest being credited to the Deposit Account
or if there is any Default by the Tenant or the Tenant is
otherwise in breach of any of the terms of the Lease; and
(b) Interest shall be released to the Tenant only to the extent
that if credited to the Deposit Account the Interest would
cause the Deposit Balance to exceed the Deposit Sum; and
(c) nothing in this deed shall preclude the Landlord from making
a return to the Inland Revenue of the name and address of
and the amount of the Interest beneficially accruing to the
Tenant; and
9
<PAGE>
(d) if and so long as the provisions of section 349(3)(a) of the
Income and Corporation Taxes Act 1988 or any statutory
modification or re-enactment thereof applies to the
liability to account for tax on any Interest accruing to the
Deposit Account the Landlord shall deduct the relevant tax
before accounting for the Interest in accordance with the
provisions of this deed
8. EXPENSES
All reasonable expenses incurred by the Landlord in maintaining the
Deposit Account including (without prejudice to the generality of the
foregoing):-
(1) any tax assessable on the Tenant but required to be paid by the
Landlord as the person in receipt of the Interest; and
(2) any tax required to be deducted by the Landlord before any
account is made for Interest
shall be paid (or indemnified as the case may be) by the Tenant to the
Landlord on demand and if not so paid within fourteen days of such demand
may be withdrawn by the Landlord from the Deposit Account any such
withdrawal being first set against any accrued Interest and to the extent
that the Interest is insufficient to meet the said expenses thereafter set
against the Deposit Balance
9. ASSIGNMENT
(1) On any disposal of the reversion expectant upon the
determination of the Term the Landlord may pay the Deposit
Balance to the successor in title PROVIDED THAT on any dealing
or intended dealing with the reversion expectant on the
determination of the Term the Landlord shall first transfer by
way of a novation its rights and obligations pursuant to this
deed to its successor in title ("the New Landlord") by the
execution and delivery by each of the Landlord the New landlord
the Tenant and the Guarantor of a deed in the form set out in
10
<PAGE>
the Schedule hereto ("the Substitution Deed") such delivery to
be conditional only upon the completion of the relevant dealing
(2) The procedure set out in Clause 9(1) shall be implemented on
each and every dealing by the Landlord with the reversion
expectant on the determination of the Term
(3) Any person to whom the Landlord pays the Deposit Balance
pursuant to clause 9(1) shall have power to give a good receipt
for payment thereof and such receipt shall be deemed to have
been given by or on behalf of the Tenant
10. SERVICE OF NOTICES
(1) In addition to any other mode of service any notices to be
served under this deed shall be validly served if served in
accordance with section 196 Law of Property Act 1925 as amended
by the Recorded Delivery Service Act 1962 or (in the case of any
notice to be served on the Tenant) by sending it to the Tenant
at the Premises
(2) If the Tenant the Guarantor or any other guarantor comprises
more than one person it shall be sufficient for all purposes if
notice is served on one of them but a notice duly served on the
Tenant will not need to be served on the Guarantor or any other
guarantor
11. JURISDICTION
This deed shall be governed by and construed in all respects in accordance
with the law of England and the Tenant and Guarantor submit to the
exclusive jurisdiction of the English Courts and irrevocably agree that
any process may be served on them by leaving a copy of the relevant
document at the Premises and each party undertakes to notify the other in
advance of any change from time to time of such address for service and to
maintain an appropriate address at all times
11
<PAGE>
12. DECLARATIONS
It is hereby agreed and declared that:
(1) the provisions of this deed shall in no way fetter the exercise
by the Landlord of any of its rights duties powers or
discretions as landlord under the Lease
(2) The liability of neither the Tenant nor the Guarantor pursuant
to the Lease from time to time shall not be limited to the
Deposit Balance
(3) The Tenant and Guarantor by way of security for the proper
performance of the Tenant's obligations contained in this deed
hereby appoint the Landlord or delegates of the Landlord to act
as their respective attorney in their name and on their behalf
to take any action in the name of the Tenant or the Guarantor
and to sign or execute seal and deliver every document the
completion of which is or may be expedient to ensure the
performance of the Tenant's or (as the case may be) the
Guarantor's obligations hereunder and each further agrees to
ratify anything that shall be reasonably and properly done by
the Landlord conformably with the purport of this power and
further declares this power to be Irrevocable
(4) The provisions of this deed shall have no effect upon value for
the purposes of any review of the rent first reserved by the
Lease
13. GUARANTOR'S COVENANTS
The Guarantor covenants with the Landlord that payments required to be
made by this deed (whether or not yet ascertained as to amount) will be
duly paid and that all the Tenant's obligations contained in this deed
will be performed and observed and that if there is any default in making
such payments or in performing or observing the obligations
(notwithstanding any forbearance or time or compromise afforded by the
12
<PAGE>
Landlord) the Guarantor will remedy the default and make good to the
Landlord all losses costs damages and expenses occasioned by it
IN WITNESS whereof this deed has been executed by the parties hereto and is
intended to be and is hereby delivered on the day and year first above
written
THE SCHEDULE
FORM OF THE SUBSTITUTION DEED
THIS DEED made the day of 199
BETWEEN
the Landlord (1)
the New Landlord (2)
the Tenant (3)
the Guarantor (4)
SUPPLEMENTAL TO:-
(1) the Lease
(2) the Rent Deposit Deed
WITNESSETH as follows:-
1. DEFINITIONS AND INTERPRETATION
(1) In this Substitution Deed the expression "Rent Deposit Deed"
shall mean a deed dated [ ] 1996 and made between (1) the
Landlord (2) the Tenant and (3) the Guarantor
13
<PAGE>
(2) "Guarantor" means City Mortgage Corporation Limited whose
registered office is at 19 Cavendish Square London W1A 2AW (Co.
Regn. No. 3043776)
(3) "Landlord" means The Standard Life Assurance Company whose head
office is at 3 George Street Edinburgh EH2 2XZ
(4) "New Landlord" means [ ] whose
registered office [address] is at [
] (Co. Regn. No. )
(5) "Tenant" means City Mortgage Services Limited whose registered
office is at 19 Cavendish Square London W1A 2AW (Co. Regn. No.
3043775)
(6) Save where inconsistent with the express provisions of this
Substitution Deed words and expressions used in the Rent Deposit
Deed shall have the same meanings when used in this Substitution
Deed
(7) The provisions of Clause 11 of the Rent Deposit Deed shall apply
to this Substitution Deed
2. NOVATION
(1) The New Landlord covenants with the Landlord and as a separate
covenant with the Tenant that from the date of this Substitution
Deed it will perform and observe all the covenants and
obligations of the Landlord contained in the Rent Deposit Deed
(2) From the date of this Substitution Deed the Tenant and the
Guarantor shall accept the New Landlord as a party to the Rent
Deposit Deed in substitution for the Landlord with respect to
all those rights covenants and obligations which by the terms of
this Substitution Deed will be assumed by the New Landlord from
the date of this Substitution Deed
14
<PAGE>
3. RELEASE
The Tenant and the Guarantor hereby release the Landlord from all
covenants and obligations undertaken by the Landlord in the Rent Deposit
Deed and all liability in respect thereof
IN WITNESS whereof this Deed has been executed by the parties hereto and is
intended to be and is hereby delivered on the date first above written
THE COMMON SEAL of THE NEW LANDLORD)
was hereunto affixed in the )
presence of:- )
Director
Secretary
THE COMMON SEAL of THE TENANT )
was hereunto affixed in the )
presence of:- )
Director
Secretary
15
<PAGE>
THE COMMON SEAL of THE GUARANTOR)
was hereunto affixed in the )
presence of:- )
Director
Secretary
THE COMMON SEAL of THE LANDLORD )
was hereunto affixed in the )
presence of:- )
Director
Secretary
16
<PAGE>
********************************
SIGNED and DELIVERED as a Deed )
by )
as the Attorney of THE STANDARD )
LIFE ASSURANCE COMPANY (in exercise)
of a Power of Attorney under its )
Seal dated 22nd May 1995) in the )
presence of:- )
17
<PAGE>
SPECIFICATION OF WORKS, GROUND, FIRST AND SECOND FLOORS
MALVERN HOUSE
CROXLEY BUSINESS PARK
WATFORD
CATEGORY A WORKS
OFFICE AREAS
Wall Finishes
1 Blockwork to perimeter walls and internal columns to be plastered or dry
lined and also to include post formed laminated window boards.
2 Core walls to offices to be plastered or dry lined.
3 Finishes to perimeter walls and core walls to be 1 mist coat, 2 full
coats vinyl silk.
4 M D F skirtings to perimeter walls and core walls finished with 1 primer
coat, 2 undercoat and 1 gloss coat to finish.
Floor Finishes
5 "Propafloor Spacedeck Medium TR" or equal approved raised floor with
600mm x 600mm panels and service outlet boxes on pedestals at 600mm c/c
250mm gross depth. Raised floor to be erected in strict accordance with
the manufacturers instructions. Raised floor to be in accordance with PSA
MOB PF2 PS/SPU in all respects. Carpet tiles to be 600mm x 600mm
Miliken Colours Affinity carpet tiles or equal approved.
Carpet tiles to be fixed strictly in accordance with manufacturers
recommendation. Allow for cutting 600 No. holes to raised floor for
floor boxes including fitting carpets.
Ceiling
6 Provide Unistrut secondary grid to high pitched roof areas to provide
support framework for ceiling ductwork and suspended ductwork.
7 Suspended ceiling to be Armstrong Ultima (Tegular) mineral fibre board or
equal approved. White (with light texture) 600mm x 600mm. Exposed grid
system by Armstrong vivid white on galvanised suspension wires. Edge
trim vivid white 32mm x 40mm Armstrong or equal approved.
Tea Station
8 Landlord to provide 1 No. tea station per wing per floor (8 in total)
comprising a local electric water heater, a ???????? Flex PA37 sink, taps
and drainers by Leisure and local extract duct. Location of the tea
station to be finalised with the occupier to have regard for the existing
drainage runs and partitions. Fittings to include 2 No. 13 Amp RCD switch
socket outlets. 1 drainage connection to suit equipment. Hot and cold
mains water. (Hot water from the local electric heater) cold water from
mains system. Ceramic tile splash back to wall above work top, 3 three
courses high, white grout applied to tile joints and a polysulphide
mastic seal between tile and worktop abutments. Provide 3 No. 600 x 300 x
900 wall cupboards and 1 No. 600 x 300 x 600 cupboard per tea station.
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GENERAL ITEMS
9 Fire barriers to be provided to underside of raised floor and voids above
suspended ceilings in accordance with Building Regulations to suit open
plan office layout, fire barriers to be Rockwool quilt or similar
approved by Landlord to floor void and Rockwool foil faced cavity carrier
or equal approved, above suspended ceiling taken at 20 metre centres.
10 Provisional sum of pound sterling 1000 allowed for sundry items such as
touching up paintwork to exposed pipework.
11 Prepare, prime and apply 1 No. primer 2 undercoats and 1 No. gloss
coat of oil based paint to existing painted door sets.
SERVICES
12 Services category A works to be as below. It is assumed that
buildersworks items relating to the services elements are included
within the services Specifications.
12.1 MECHANICAL SERVICES
12.1.1 L.P.H.W. HEATING INSTALLATION:
A natural gas supply shall be extended from the ground floor
plantroom to the roof top boiler room to serve 4 No. modular
gas fired boilers.
The boiler plant shall service VAV zone reheaters around the
perimeter of the building arranged to offset the fabric loss
within the offices. The boiler plant shall also service the
Air Handling Unit heating coils, reheat coils, entrance area
underfloor heating and D.H.W.S. heating requirements.
12.1.2 AIR CONDITIONING INSTALLATION:
A packaged air cooled water chiller shall provide chilled
water to serve the cooling coils within each of the air
handling stations installed in the local plantrooms. Each
floor of each wing of office accommodation shall thereby be
provided with its own independent air handling unit.
The air handling units shall serve a ductwork distribution
system to the variable air volume terminals throughout the
office areas. The VAV terminals located around the perimeter
of the office areas shall be fitted with terminal reheaters
and all VAV terminals shall be fitted with direct digital
control units connected to the B.M.S. System. The return air
shall be extracted through the luminaires, into the office
ceiling void and back to the air handling unit.
Fresh Air and exhaust requirements shall be via a vertical
louvre serving each plantroom.
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Each air handling unit shall incorporate a heating coil for
the morning warm up cycle.
12.1.3 AUTOMATIC CONTROLS INSTALLATION:
A fully automated control system shall serve the Mechanical
services installation. The control panels serving the
mechanical services shall be located in each of the ground
floor wing plantrooms and in the rooftop plantroom. A
building management system shall be provided in order to
control and monitor the installation efficiently. A remote
alarm facility shall be provided at the main reception desk.
Provision shall also be allowed for the capability of
monitoring the service via the central control BMS computer
located in the Business Park Management Office should this
facility be required in the future.
12.1.4 GENERAL DESIGN PARAMETERS:
The L.P.H.W. hearing system will be designed to maintain a
temperature of 21 degrees C in the toilets and lobbies when
the external temperature is -4 degrees C assuming a minimum
number of air changes to the general areas and 6 air changes
per hour to the toilets.
The Central Reception area will be designed to maintain a
temperature of 21 degrees C when the external temperature
is -4 degrees C.
The office areas to the Ground, First and Second floors will
be provided with comfort cooling by way of variable air
volume system and integrated with a I.P.H.W. perimeter
heating system designed on the following basis:
12.1.5 OUTSIDE SUMMER DESIGN TEMPERATURE:
19 degrees C wet bulb: 27 degrees C dry bulb
12.1.6 OUTSIDE WINTER DESIGN TEMPERATURE:
-4 degrees C 100% relative humidity
12.1.7 SUMMER MAXIMUM INTERNAL TEMPERATURE:
22 degrees C + /-2 degrees C
12.1.8 WINTER MINIMUM INTERNAL TEMPERATURE:
21 degrees C + /-2 degrees C
12.1.9 PEOPLE DENSITY IN COOLING CALCULATIONS:
One person per 10m(2) (Office Areas)
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12.1.10 FRESH AIR QUANTITY PER PERSON HAS BEEN ALLOWED:
1.3 litres per second per m(2) (Office Areas)
12.1.11 SMALL POWER CAPACITY ALLOWED IN COOLING CALCULATIONS:
20 watts per m(2) (Office Areas)
The whole of the lighting load will be allowed in cooling
calculations within office areas.
The solar glass has been utilised in cooling calculations,
without the provision for blinds.
12.1.12 MAXIMUM SIZE OF PERIMETER CONTROL ZONE BEING UTILISED:
6.0 metres wide x 6.0 metres deep
12.1.13 MAXIMUM SIZE OF INTERNAL CONTROL ZONE BEING UTILISED:
Up to a maximum of 67m(2)
12.1.14 GENERAL
The installation has been designed in accordance with the
relevant by-laws, the requirements of the relevant Statutory
Authorities, Building Regulations, Colne Valley Water
Authority by-laws, British Standards and codes of practice
of the Chartered Institute of Building Services guides.
12.2 ELECTRICAL SERVICES:
12.2.1 MAIN SWITCHBOARD AND CABLING:
The Eastern Electricity Board shall provide a high voltage
supply to the landlords transformer located outside the main
building. A low voltage supply will be taken from this point
via underground ducts to the switchroom.
The main switchboard will be located in this switchroom and
contained the main switch for the building, landlord
supplies together with 8 No. tenant supplies and meters.
All sub-main cabling shall be carried out using multicore
XLPE/SWE/PVC cables, clipped to cable tray or building
structure.
Distribution boards shall be provided in each suite for
tenants lighting and power systems.
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12.2.2 GENERAL POWER INSTALLATION:
General purpose power outlets shall be provided for both the
landlord and tenant areas. The landlords installation shall
comprise of 15A switched socket outlets in the entrance
areas, plantrooms and stairwells.
Each office floor shall have 13 Amp switched socket outlets
installed in flush floor 3 compartment service boxes
supplied from local, distribution boards. These outlet boxes
have a density of 1 per 10m(2) and have the facility to
receive data and telecommunications outlets and are served
from an underfloor distribution system which allows boxes to
be relocated as required. The underfloor distribution system
shall comprise of either 75 x 75mm galvanised cable trunking
with twin socket outlets at 3m intervals or a proprietory
underfloor busbar system with a 4 bar configuration.
12.2.3 PRIMARY LIGHTING INSTALLATION:
The primary lighting installation shall comprise of both
functional and decorative luminaires.
The entrance area shall be illuminated by low voltage
tungsten halogen luminaires recessed in the ceiling and
controlled via a scene setting dimmer located in the
switchroom.
Suite lighting will be provided by Modular recessed 600 x
600mm fluorescent luminaires complete with High Frequency
control gear and LG3 Category 2 low luminance louvres. The
illumination level shall be 500 lux (average) at 0.9m above
floor level.
12.2.4 EMERGENCY LIGHTING
The emergency lighting installation shall comprise of a
combination of self-contained luminaires augmented by
"primary" luminaires fitted with inverter packs to conform
with the Fire Officer's recommendations.
12.2.5 CONTAINMENT SYSTEMS FOR COMMUNICATIONS SYSTEMS:
Cable tray will be provided in the core and tenant areas to
contain the tenants data and telecommunications cabling
between suites or between suites and the telecommunications
room.
The 2 No. 225mm cable trays in the suites have been arranged
to provide wiring to floor boxes on the density of 1 per
10m(2).
12.2.6 FIRE ALARMS:
A zoned fire alarm system will be provided to serve the
entire building. The main panel will be situated within the
main control desk at reception.
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A zone connection box will be provided at each tenant area
to facilitate extensions of the system, using approved
equipment by the tenant to suit individual requirements to
conform with the Fire Officers recommendations.
The system shall comprise of manual alarm controls with
automatic smoke and heat detectors.
12.3 GENERAL
The M & E Services installation systems shall be modular in design to
allow the building to be multi-let up to a number of 8 suites plus the
Landlords areas.
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CONTRACTOR
THIS DEED is made the day of 199
BETWEEN:-
1. MORGAN LOVELL WEST LIMITED of Ascot House Doncastle Road Bracknell
Berkshire RG12 8PE (the "Contractor")
2. STANDARD LIFE ASSURANCE COMPANY incorporated by Act of Parliament and
having its head office at 3 George Street, Edinburgh, EH2 2XZ (the
"Landlord" which expression shall include its successors in title and
assigns and those deriving title under it or them)
WHEREAS:-
(A) CITY MORTGAGE SERVICING LIMITED whose registered office is at 19
Cavendish Square London W1A 2AW ("the Client" which expression shall
include its successors in title and assigns and those deriving title
under it or them) is carrying out certain works (more particularly
described in the Building Contract) (the "Project") at Malvern House
Croxley Business Park (the "Premises").
(B) The Landlord has entered into an agreement for lease whereby the
Landlord has inter alia agreed to grant and the Client has agreed to
take a lease of the Premises subject to satisfactory completion of the
Project.
(C) The Client is the employer under a building contract dated [ ]
(the "Building Contract") entered into with the Contractor for the
carrying out and completion of the Project (which expression shall
include any additional works carried out by the Contractor under the
Building Contract in connection with any modifications or variations
made thereunder).
NOW THIS DEED WITNESSETH AS FOLLOWS:-
1. OBLIGATIONS
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1. The Contractor warrants and undertake to the Landlord that -
1.1 the Contractor has duly carried out and completed and/or will duly
carry out and complete the Project in accordance with the Building
Contract and that it has complied and/or will comply in all respects
with all its obligations under the Building Contract;
1.2 to the extent that the Contractor has selected and/or will select
materials and/or goods for the Project they are or will be of good
quality;
1.3 insofar as the Contractor is required by the terms of the Building
Contract to provide information to the Client and/or any consultant of
the Client such information shall be supplied properly and in a timely
manner;
1.4 insofar as the Contractor is required pursuant to the Building Contract
to adopt or to undertake or to accept responsibility for works of
design in connection with the Project the Contractor has and will
continue to exercise all the reasonable skill and care to be expected
of a properly qualified and competent contractor experienced in
adopting undertaking or accepting responsibility for such works of
design in projects of a similar sire type scope and complexity to the
Project;
1.5 the Project satisfies or will when completed satisfy the specification
or requirement included in or referred to in the Building Contract;
1.6 none of the following have been or shalt be specified by the Contractor
for use in the Project and that the Contractor has not and shall not
authorise cause to be used use or suffer the use in or about the
Project of any of the following:
1.6.1 high alumina cement in structural elements;
1.6.2 wood wool slabs in permanent formwork to concrete or in structural
elements;
1.6.3 calcium chloride in admixtures for use in reinforced concrete;
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1.6.4 calcium silicate bricks or tiles;
1.6.5 asbestos or asbestos-containing products;
1.6.6 aggregates for use in reinforced concrete which do not comply with
British Standard Specification 882:1983 and aggregates for use in
concrete which do not comply with the provisions of British
Standard Specification 8110; 1985;
1.6.7 lead or any materials containing lead which may be ingested
inhaled or absorbed except where copper alloy fittings containing
lead are specifically required in drinking water pipework by any
relevant statutory requirement;
1.6.8 urea formaldehyde foam or materials which may release formaldehyde
in quantities which may be hazardous with reference to the limits
set at the date hereof by the Health and Safety Executive;
1.6.9 slipbricks;
1.6.10 vermiculite plaster;
1.6.11 polyisocyanurate foam;
1.6.12 extruded polystyrene other than low ozone depletion materials;
1.6.13 materials which are generally composed of mineral fibres either
man-made or naturally occurring which have a diameter of 3 microns
or less and a length of 200 microns or less or which contain any
fibres not sealed or otherwise stabilised to ensure that fibre
migration is prevented;
1.6.14 other substances recognised by the Building Research Establishment
known to be deleterious at the time of their specification; and
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1.6.15 other substances not in accordance with British Standards or Codes
of Practice where such exist or such other equivalent standards or
requirements at the time of specification.
2. DOCUMENTS
2.1 The Contractor hereby grants to the Landlord an irrevocable
royalty-free licence to copy and use all technical information drawings
models specifications schedules detail plans programs calculations
working papers or other documents work or things whatsoever provided or
to be provided by the Contractor in connection with the Project (the
"Documents") for all purposes related to the Project including but
without limitation the construction completion reconstruction
alteration extension maintenance letting promotion advertisement
reinstatement use and repair of the Project or of the Landlord's
interest in it provided that for the avoidance of doubt the copyright
in the Documents shall remain in the Contractor. The Landlord shall be
entitled to grant sub-licences and the Landlord's licence and such
sub-licences shall be transferable to others PROVIDED ALWAYS that the
Contractor shall have no liability in event the Documents are used for
a purpose other than that for which they were originally prepared.
2.2 The Contractor hereby irrevocably waives any rights it may have
pursuant to Chapter IV (Moral Rights) of Part I of the Copyright
Designs and Patents Act 1988 in relation to the Project or any part
thereof or to any Documents and shall obtain a written waiver from its
employees from time to time of any rights they have in respect of the
same provided that the Contractor shall with the Landlord's consent
such consent not to be unreasonably withheld or delayed be entitled to
use the Documents in connection with the publication of its work and
the marketing of its services.
2.3 The Contractor shall provide the Landlord at its request and upon
reimbursement of the reasonable costs of producing the same such copies
of all or any of the Documents as are required by the Landlord.
3. INSURANCE
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3.1 The Contractor shall without prejudice to its obligations under this
Deed and/or at law and/or otherwise take out and use its best
endeavours to maintain: -
3.1.1 such insurance as the Contractor is required to maintain pursuant
to the terms of the Building Contract
3.1.2 for a period of twelve years from the date of the Certificate of
Practical Completion issued under the Building Contract for the whole
of the Project or equivalent event for the purposes of the Building
Contract such professional indemnity insurance as is required by
Building Contract to cover the Contractor's obligations and liabilities
relating to design under or in connection with this Deed with a limIt
of indemnity of not less than 5,000,000 Pound Sterling for each and
every claim and in aggregate plus one automatic reinstatement subject
to an excess of 50,000 Pound Sterling each and every claim provided
that the said insurance remains available in the UK market place at
commercially reasonable rates. The Contractor shall immediately inform
the Landlord if such insurance is not or ceases to be available at
commercially reasonable rates in order that the Contractor and the
Landlord can discuss the means of best protecting themselves in the
absence of such insurance.
3.2 The Contractor shall as and when it is reasonably required to do so by
the Landlord make available for inspection by the Landlord documentary
evidence that such insurance is being properly maintained and the
Contractor shall forthwith inform the Landlord if such insurance ceases
to be available.
4. ASSIGNMENT
4.1 The Landlord shall be entitled to assign or transfer all or any of the
rights arising under this teed on two separate occasions only to any
person company or other entity acquiring the whole of the Landlord's
interest in the Premises provided that notice in writing of such
assignment shall be given to the Contractor.
4.2 The Contractor shall not be entitled to assign transfer charge or
otherwise dispose of the rights or liabilities arising under this Deed
to any other party.
5. NON-WAIVER
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The obligations of the Contractor hereunder shall not be released or
diminished by the appointment of any person by the Landlord to carry
out any independent enquiry into any matter in relation to the Project
or the failure by the Tenant to make such appointment.
6. LAW
Any and all disputes and claims between the Tenant and the Contractor
as to the construction interpretation validity and application of this
Deed and any and all matters or things of whatsoever nature arising out
of or in connection therewith shall be governed by English law and the
jurisdiction of the English Courts and shall be and are hereby referred
to the English Courts.
7. LIMITATION
Notwithstanding the date hereof the Contractor shall have no liability
hereunder after the expiry of twelve years from the date of the last
Certificate of Practical Completion issued for the whole of the Project
under the Building Contract.
8. ENTIRE AGREEMENT
This Deed represents the entire agreement between the Contractor and
the Tenant with respect to those matters to which the Deed refers.
IN WITNESS WHEREOF the parties have executed these presents as a Deed the day
and year first before written.
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SUB-CONTRACTOR
THIS DEED is made the day of 199
BETWEEN:
1. [ ] (Registered Number [
]) whose registered office is situated at [
] (or) [of
] (the "Sub-Contractor" which
expression shall include a Sub-Consultant)
2. STANDARD LIFE ASSURANCE COMPANY incorporated by Act of Parliament and
having its head office at 3 George Street Edinburgh EH2 2XZ (the
"Landlord" which expression shall include its successors in title and
assigns and those deriving title under it or them);
3. CITY MORTGAGE SERVICING LIMITED whose registered office is at 19
Cavendish Square London W1A 2AW (the "Client" which expression shall
include its successors in title and assigns and those deriving title
under it or them);
4. MORGAN LOVELL WEST LIMITED Ascot House Doncastle Road Bracknell
Berkshire RG12 8PE (the "Contractor")
WHEREAS:-
(A) The Landlord has an interest in Malvern House Croxley Business Park
Watford ("the Premises").
(B) The Landlord has entered into an agreement for lease with the Client
under which (inter alia) the Client has agreed to take a lease of the
Premises subject to completion of certain Works (the "Project").
(C) The Client is the employer under a building contract dated [
] (the "Building Contract") entered into with the Contractor for the
carrying out and completion of the Project (which expression shall
include any additional works
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<PAGE>
carried out by the Contractor under the Building Contract in connection
with any modifications or variations made thereunder).
(D) The Contractor has entered into a contract dated [ ]
(the "Sub-Contract") with The Sub-Contractor for the carrying out and
completion of works as defined in the Sub-Contract (the "Sub-Contract
Works") in relation to the Project.
(E) The Contractor has undertaken to procure that the Sub-Contractor enters
into this Deed and the Sub-Contractor has agreed to provide this Deed.
NOW THIS DEED WITNESSETH as follows: -
1. OBLIGATIONS
1. The Sub-Contractor warrants to the Landlord and separately to the
Client that:-
1.1 the Sub-Contractor has duly carried out and completed and/or will duly
carry out and complete the Sub-Contract Works in accordance with the
Sub-Contract and that it has complied and/or will comply in all
respects with all its obligations under the Sub-Contract;
1.2 to the extent that the Sub-Contractor has selected and/or will select
materials and/or goods for the Sub-Contract Works they are or will be
of good quality;
1.3 insofar as the Sub-Contractor is required by the terms of the
Sub-Contract to provide information to the Contractor and/or any
consultant of the Contractor such information shall be supplied
properly and in a timely manner;
1.4 insofar as the Sub-Contractor is required pursuant to the Sub-Contract
to adopt or to undertake or to accept responsibility for works of
design in connection with the Sub-Contract Works the Sub-Contractor has
and will continue to exercise all the reasonable skill and care to be
expected of a properly qualified and Competent subcontractor
experienced in adopting
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undertaking or accepting responsibility for such works of design in
sub-contract works of a similar size type scope and complexity to the
Sub-Contract Works;
1.5 the Sub-Contract Works satisfy or will when completed satisfy the
performance or other specification or requirement included in or
referred to in the Sub-Contract;
1.6 none of the following have been or shall be specified by the
Sub-Contractor for use in the Sub-Contract Works and that the
Sub-Contractor has not and shall not authorise cause to be used use or
suffer the use in or about the Sub-Contract Works of any of the
following:-
1.6.1 high alumina cement in structural elements;
1.6.2 wood wool slabs in permanent formwork to concrete or in structural
elements;
1.6.3 calcium chloride in admixtures for use in reinforced concrete;
1.6.4 calcium silicate bricks or tiles;
1.6.5 asbestos or asbestos-containing products;
1.6.6 aggregates for use in reinforced concrete which do not comply with
British Standard Specification 882: 1983 and aggregates for use in
concrete which do not comply with the provisions of British
Standard Specification 8110: 1985;
1.6.7 lead or any materials containing lead which may be ingested
inhaled or absorbed except where copper alloy fittings containing
lead are specifically required in drinking water pipework by any
relevant statutory requirement;
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<PAGE>
1.6.8 urea formaldehyde foam or materials which may release formaldehyde
in quantities which may be hazardous with reference to the limits
set at the date hereof by the Health and Safety Executive;
1.6.9 slipbricks;
1.6.10 vermiculite plaster;
1.6.11 polyisocyanurate foam;
1.6.12 extruded polystyrene other than low ozone depletion materials;
1.6.13 materials which are generally composed of mineral fibres either
man-made or naturally occurring which have a diameter of 3
microns or less and a length of 200 microns or less or which
contain any fibres not sealed or otherwise stabilised to ensure
that fibre migration is prevented;
1.6.14 other substances generally known to be deleterious at the time of
their specification; and
1.6.15 other substances not in accordance with British Standards or Codes
of Practice where such exist or such other equivalent standards or
requirements.
2 DOCUMENTS
2.1 The Sub-Contractor hereby grants to the Landlord and separately to the
Client an irrevocable royalty-free licence to copy and use all
technical information drawings models specifications schedules details
plans programmes calculations working papers or other documents work or
things whatsoever provided or to be provided by the Sub-Contractor in
connection with the Sub-Contract Works (the "Documents") and to
reproduce the works designs and inventions contained in the Documents
for all purposes related to the Sub-Contract Works including but
without limitation the construction completion reconstruction
alteration extension maintenance letting
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promotion advertisement reinstatement use and repair of the
Sub-Contract Works or of the Client's or the Landlord's respective
interest in it provided that for the avoidance of doubt the copyright
in the Documents shall remain in the Sub-Contractor. The Client and/or
the Landlord shall be entitled to grant sub-licences and the Client's
and the Landlord's licence and such sub-licences shall be transferable
to others PROVIDED ALWAYS that the Sub-Contractor shall have no
liability in the event the Documents are used for a purpose other than
that for which they were prepared.
2.2 The Sub-Contractor hereby irrevocably waives any rights it may have
pursuant to Chapter IV (Moral Rights) of Part 1 of the Copyright
Designs and Patents Act 1988 in relation to the Sub-Contract Works or
any part thereof or to any Documents and shall obtain a written waiver
from its employees from time to time of any rights they have in respect
of the same, provided that the Sub-Contractor shall with the Client's
and the Landlord's consent such consents not to be unreasonably
withheld or delayed be entitled to use the Documents in connection with
the publication of its work and the marketing of its services.
2.3 The Sub-Contractor shall provide the Client and separately the Landlord
at its or their request and upon reimbursement of the reasonable costs
of producing the same such copies of all or any of the Documents as are
required by the Client and the Landlord respectively.
3. INSURANCE
3.1 The Sub-Contractor shall without prejudice to its obligations under
this Deed and/or at law and/or otherwise take out and use its best
endeavours to maintain:-
3.1.1 such insurance as the Sub-Contractor is required to maintain
pursuant to the terms of the Sub-Contract;
3.1.2 for a period or twelve years from the date of Certificate of
Practical Completion issued under the Building Contract for the
whole of the Project or equivalent event for the purposes of the
Building Contract such professional indemnity insurance as is
required by the Sub-Contract to cover the Sub-
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Contractor's obligations and liabilities relating to design under
or in connection with this Deed with a limit of indemnity of not
less than 1,000,000 Pounds Sterling each and every claim except
with pollution and contamination where 1,000,000 Pounds Sterling
in aggregate
3.2 The Sub-Contractor shall as and when it is reasonably required to do so
by the Client and/or the Landlord make available for inspection by the
Client and/or the Landlord as appropriate documentary evidence that
such insurance is being properly maintained and the Sub-Contractor
shall inform the Client and the Landlord if such insurance ceases to be
available.
4. WARRANTIES
4.1 If and whenever so required in writing by the Client and/or the
Landlord the Sub-Contractor shall forthwith execute a deed or deeds in
the form set out at Appendix 1 hereto in favour of any person or
persons acquiring all or part of the Client's or the Landlord's
respective interests in the Premises or any part or parts thereof.
4.2 In the event of the appointment of the Contractor under the Building
Contract at any time being determined by the Client for whatsoever
reason and howsoever arising and a replacement contractor (the
"Replacement Contractor") being appointed by the Client for the
carrying out and completion of the Project as and when requested by the
Client:-
4.2.1 the Sub-Contractor shall forthwith execute a deed in the form of
this Deed mutatis mutandis with the Client and the Replacement
Contractor in substitution for the Contractor; and
4.2.2 the Contractor and the Sub-Contractor shall forthwith execute with
the Replacement Contractor a novation agreement by which agreement
the Replacement Contractor shall replace the Contractor as though
the Replacement Contractor was and always has been the employer of
the Sub-Contractor under the Sub-Contract.
5. ASSIGNMENT
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5.1 The Client and the Landlord shall be fully entitled to assign or
transfer all or any of their respective rights arising under this Deed
on two separate occasions only to any person company or other entity
acquiring the Client's and the Landlord's respective interests in the
Project provided that notice in writing of such assignment shall be
given to the Contractor.
5.2 The Sub-Contractor shall not be entitled to assign or transfer all or
any of its rights arising under this Deed to any other party.
6. NON-WAIVER
The obligations of the Sub-Contractor hereunder shall not be released
or diminished by the appointment of any person by the Client and/or the
Landlord to carry out any independent enquiry into any matter in
relation to the Sub-Contract Works or the failure by the Client and/or
the Landlord to make such appointment.
7. LAW
Any and all disputes and claims between the Client the Landlord and the
Sub-Contractor as to the construction interpretation validity and
application of this Deed and any and all matters or things of
whatsoever nature arising out of or in connection therewith shall be
governed by English law and the jurisdiction of the English Courts and
shall be and are hereby referred to the English Courts.
8. LIMITATION
Notwithstanding the date hereof the Sub-Contractor shall have no
liability hereunder after the expiry of twelve years from the date of
Practical Completion Certificate issued for the whole of the Project
under the Building Contract.
IN WITNESS WHEREOF the parties have executed these presents as a Deed the day
and year first before written.
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<PAGE>
PROJECT MANAGER
THIS DEED is made the day of 19
BETWEEN:-
1. STANDARD LIFE ASSURANCE COMPANY incorporated by Act of Parliament and
having its head office at 3 George Street, Edinburgh, EH2 2XZ (the
"Landlord" which expression shall include its successors in title and
its permitted assigns and those deriving title under it or them) and
2. ALTONWOOD PROJECT SERVICES LIMITED of 2 Hobbs House Harrovian Business
Village Bessborough Road Harrow HA1 3EX (the "Consultant").
WHEREAS
(a) The Landlord has an interest in Malvern House Croxley Business Park
Watford ("the Premises").
(b) The Landlord has entered into an agreement for lease with City Mortgage
Servicing Limited whose registered office is at 19 Cavendish Square,
London, W1A 2AW (the "Client") under which (inter alia) the Client has
agreed to take a lease of the Premises subject to completion of certain
works (the "Project").
(c) The Client has entered into:-
(i) a contract dated with the Consultant for the
provision of services (the "Services") including without
limitation the certification of costs in relation to the
Project; and
(ii) an appointment dated with the Consultant
whereunder the Consultant has agreed to act as the
Employer's Agent as defined under a Building Contract dated
[ ] made between the Client (1) and Morgan
Lovell Limited (2)
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(together "the Appointments") copies of each document being annexed hereto
NOW THIS DEED WITNESSETH as follows:-
1. THE SERVICES
1.1 The Consultant warrants to the Landlord that the Consultant has
complied with and/or shall comply with all the Consultant's obligations
under the Appointments in accordance therewith and that the Consultant
has exercised and will continue to exercise in the performance of the
Services all the reasonable skill care and diligence to be expected of
a properly qualified Project Manager and Employer's Agent experienced
in carrying out services for projects of a similar size scope and
complexity to the Project.
1.2 The Consultant contracts with the Landlord that it will be liable to
pay to the Tenant its "Net Contribution" (as defined in this clause)
caused by failure to exercise the reasonable skill and care referred to
in clause 1.1 in the performance of its duties and responsibilities
under the Appointments.
1.2.1 The "Net Contribution" shall be such sum as shall be agreed
between the Consultant and the Landlord or adjudged by a Court to
be the proportion of the proper cost to the Landlord of remedying
physical defects to the Project directly caused by the
Consultant's failure to exercise reasonable skill and care in the
performance of its duties and responsibilities under the
Appointments. The Consultant's liability under this Deed shall be
limited to that proportion of the Landlord's losses and damage
costs and expenses which it would be just and equitable to require
the Consultant to pay having regard to the extent of the
Consultant's responsibility for the same and on the basis that the
Mechanical and Electrical Sub-Consultant appointed in connection
with the Project and the Contractor appointed in respect of the
design and/or construction of the Project shall be deemed to have
provided contractual undertakings to the Landlord in respect of
their services in connection with the Project in terms similar to
those of this Deed and shall be deemed to have paid to the
Landlord such proportion which it would be
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just and equitable for them to pay having regard to the extent of
their respective responsibilities.
1.2.2 The Consultant shall owe no greater duties or obligations in time
or in nature and shall have no greater liabilities hereunder to
the Landlord than those it owes under the Appointments.
1.2.3 Any agreement or arrangement made pursuant to the Appointments in
respect of the Consultant's duties shall likewise bind the
Landlord.
2. The Consultant further warrants that none of the following have been or
shall be specified by the [Contractor] [Sub-Contractor] for use in the
Project.
2.1 high alumina cement in structural elements;
2.2 wood wool slabs in permanent framework to concrete or in
structural elements;
2.3 calcium chloride in admixtures for use in reinforced concrete;
2.4 aggregate for use in reinforced concrete which do not comply with
British Standard Specification 882: 1983 and aggregates for use in
concrete which do not comply with the provisions of British
Standard Specification 8110: 1985;
2.5 calcium silicate bricks or tiles;
2.6 asbestos or asbestos-containing products;
2.7 lead or any materials containing lead which may be ingested
inhaled or absorbed except where copper alloy fittings containing
lead are specifically required in drinking water pipework by any
relevant statutory requirement;
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2.8 urea formaldehyde foam or materials which may release formaldehyde
in quantities which may be hazardous with reference to the limits
set at the time of specification by the Health & Safety Executive;
2.9 slipbricks;
2.10 vermiculite plaster;
2.11 polyisocyanurate foam;
2.12 extruded polystyrene other than low ozone depletion materials;
2.13 materials which are generally composed of mineral fibres either
man-made or naturally occurring which have a diameter of 3 microns
or less and a length of 200 microns or less or which contain any
such fibres not sealed or otherwise stabilised to ensure that
fibre migration is prevented;
2.14 other substances which not later than one month prior to their
incorporation into the Project have been published in the Building
Research Establishment Digest as deleterious to Health & Safety or
deleterious to the durability of the property in the particular
circumstances in which they are used.
2.15 other substances not in accordance with British Standards or Codes
of Practice or such other equivalent standards as are notified to
the Client at the time of specification and agreed by the Client
in writing.
2.16 The Consultant shall also notify the Landlord of any material
which it has come to his attention has been designated as
deleterious at any time during the project.
3. PROVISION OF DOCUMENTS
The Consultant shall provide to the Landlord on demand and on payment
of the Consultant's reasonable costs of producing the same copies of
any technical information drawings models bills of quantities
specifications schedules details plans and other similar documents (the
"Documents") provided by the Consultant in
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connection with the Project. The Consultant hereby grants to the
Landlord an irrevocable royalty-free licence to copy and use the
Documents and to reproduce the works designs and inventions contained
In the documents for all purposes related to the Project including but
without limitation the construction completion reconstruction
alteration maintenance letting promotion advertisement reinstatement
use and repair of the Project or the Landlord's interest in it and the
Landlord shall be entitled to grant sub-licences and the Landlord's
licence and such sub-licences shall be transferable to others provided
that the Consultant shall not be liable for the consequences of any use
of the Documents by the Landlord or any other party for any purpose
other than that for which they ware prepared and provided by the
Consultant.
4. INSURANCE
The Consultant shall without prejudice to its obligations and
warranties under this Deed and/or at law or otherwise take out and
maintain appropriate insurance with a well established insurance
company or underwriter of repute to cover the Consultant's liabilities
under or in connection with this Deed until the expiry of twelve years
from the issue of the final certificate or equivalent document under
the Building Contract to be issued in respect of the Project with a
limit of indemnity of not less than [ONE MILLION POUNDS (Pounds
Sterling 1,000,000] for each and every claim provided that such
insurance continues to be available in the insurance market at
reasonable commercial premium rates. The Consultant shall as and when
it is reasonably required to do so by the Landlord on renewal for the
renewal period make available for inspection by the Landlord
documentary evidence that such insurance is being property maintained.
The Consultant shall immediately inform the Landlord if such insurance
ceases to be maintained and/or available in the insurance market at
reasonable commercial premium rates.
5. ASSIGNMENTS
The Landlord shall be fully entitled to assign by way of absolute legal
assignment only all of its rights under this Deed at any time during
the currency of this Deed to any person taking all of the Landlord's
interest in the Project without the consent of the Consultant. No other
assignment is permitted.
6. INDEPENDENT INSPECTION
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The liability of the Consultant under this Deed shall not be modified
released diminished or in any way affected by any independent
inspection investigation or enquiry into any relevant matter which may
be made or carried out by or for the Landlord nor by any failure or
omission to carry out any such inspection investigation or enquiry nor
by the appointment by the Landlord or failure so to appoint any
independent firm company or party whatsoever to review the progress of
or otherwise report to the Landlord in respect of the Project not by
any action or omission of any such firm company or party whether or not
such action or omission might give rise to any independent liability of
such firm company or party to the Landlord. Provided always that
nothing in this clause shall modify or affect any rights which the
Consultant might have but for the existence of this clause to claim
contribution from any third party whether under statute or at common
law.
7. LIMITATION
Notwithstanding the date hereof the Consultant shall have no liability
hereunder after the expiry of twelve years from the date of Practical
Completion of the Project as certified under the Building Contract.
8. LAW
Any and all disputes and claims between the Landlord and the Consultant
as to the construction interpretation validity and application of this
Deed and any and all matters or things of whatsoever nature arising out
of or in connection therewith shall be governed by English Law and the
jurisdiction of the English Courts and shall be and are hereby referred
to the English Courts.
IN WiTNESS WHEREOF the Consultant has executed these presents as a Deed the day
and year first before written.
THE COMMON SEAL of [
] was
affixed to this Deed in the presence
of:
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Director
Secretary
Executed as a Deed
7
<PAGE>
CONTRACTOR
THIS DEED is made the day of 199
BETWEEN: -
1. MORGAN LOVELL WEST LIMITED (Registered Number [ ]) whose
registered office is situated at [
] (or) [of
] (the "Contractor")
2. STANDARD LIFE ASSURANCE COMPANY incorporated by Act of Parliament and
having its head office at 3 George Street, Edinburgh, EH2 2XZ (the
"Landlord" which expression shall include its successors in title and
assigns and those deriving title under it or them)
WHEREAS:-
(A) CITY MORTGAGE SERVICING LIMITED whose registered office is at 19
Cavendish Square London W1A 2AW ("the Client" which expression shall
include its successors in title and assigns and those deriving title
under it or them) is carrying out certain works (more particularly
described in the Building Contract) (the "Project") at Malvern House
Croxley Business Park (the "Premises").
(B) The Landlord has entered into an agreement for lease whereby the
Landlord has inter alia agreed to grant and the Client has agreed to
take a lease of the Premises subject to satisfactory completion of the
Project.
(C) The Client is the employer under a building contract dated [ ]
(the "Building Contract") entered into with the Contractor for the
carrying out and completion of the Project (which expression shall
include any additional works carried out by the Contractor under the
Building Contract in connection with any modifications or variations
made thereunder).
NOW THIS DEED WITNESSETH as follows:-
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1. OBLIGATIONS
1. The Contractor warrants and undertake to the Landlord that: -
1.1 the Contractor has duly carried out and completed and/or will duly
carry out and complete the Project in accordance with the Building
Contract and that it has complied and/or will comply in all respects
with all its express and implied obligations under the Building
Contract;
1.2 to the extent that the Contractor has selected and/or will select
materials and/or goods for the Project they are or will be of good
quality and reasonably fit for their intended purpose;
1.3 insofar as the Contractor is required by the terms of the Building
Contract to provide information to the Client and/or any consultant of
the Client such information shall be supplied properly and in a timely
manner;
1.4 insofar as the Contractor is required pursuant to the Building Contract
to adopt or to undertake or to accept responsibility for works of
design in connection with the Project the Contractor has and will
continue to exercise all the reasonable skill and care to be expected
of a properly qualified and competent contractor experienced in
adopting undertaking or accepting responsibility for such works of
design in projects of a similar size type scope and complexity to the
Project;
1.5 the Project satisfies or will when completed satisfy any performance or
other specification or requirement included in or referred to in the
Building Contract;
1.6 none of the following have been or shall be specified by the Contractor
for use in the Project and that the Contractor has not and shall not
authorise cause to be used use or suffer the use in or about the
Project of any of the following:
1.6.1 high alumina cement in structural elements:
1.6.2 wood wool slabs in permanent formwork to concrete or in structural
elements;
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1.6.3 calcium chloride in admixtures for use in reinforced concrete;
1.6.4 calcium silicate bricks or tiles;
1.6.5 asbestos or asbestos-containing products;
1.6.0 aggregates for use in reinforced concrete which do not comply with
British Standard Specification 882: 1983 and aggregates for use in
concrete which do not comply with the provisions of British
Standard Specification 8110: 1985;
1.6.7 lead or any materials containing lead which may be ingested
inhaled or absorbed except where copper alloy fittings containing
lead are specifically required in drinking water pipework by any
relevant statutory requirement;
1.6.8 urea formaldehyde foam or materials which may release formaldehyde
in quantities which may be hazardous with reference to the limits
set at the date hereof by the Health and Safety Executive;
1.6.9 slipbricks;
1.6.10 vermiculite plaster;
1.6.11 polyisocyanurate foam;
1.6.12 extruded polystyrene other than low ozone depletion materials;
1.6.13 materials which are generally composed of mineral fibres either
man-made or naturally occurring which have a diameter of 3 microns
or less and a length of 200 microns or less or which contain any
fibres not sealed or otherwise stabilised to ensure that fibre
migration is prevented;
1.6.14 other substances recognised by the Building Research Establishment
known to be deleterious at the time of their specification; and
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1.6.15 other substances not in accordance with British Standards or Codes
of Practice where such exist or such other equivalent standards or
requirements at the time of specification.
2. DOCUMENTS
2.1 The Contractor hereby grants to the Landlord an irrevocable
royalty-free licence to copy and use all technical information drawings
models bills of quantity specifications schedules detail plans programs
budgets reports calculations working papers or other documents work or
things whatsoever provided or to be provided by the Contractor in
connection with the Project (the "Documents") for all purposes related
to the Project including but without limitation the construction
completion reconstruction alteration extension maintenance letting
promotion advertisement reinstatement use and repair of the Project or
of the Landlord's interest in it provided that for the avoidance of
doubt the copyright in the Documents shall remain in the Contractor.
The Landlord shall be entitled to grant sub-licences and the Landlord's
licence and such sub-licences shall be transferable to others PROVIDED
ALWAYS that the Contractor shall have no liability in event the
Documents are used for a purpose other than that for which they were
originally prepared.
2.2 The Contractor hereby irrevocably waives any rights it may have
pursuant to Chapter IV (Moral Rights) of Part 1 of the Copyright
Designs and Patents Act 1988 in relation to the Project or any pan
thereof or to any Documents and shall obtain a written waiver from its
employees from time to time of any rights they have in respect of the
same provided that the Contractor shall with the Landlord's consent
such consent not to be unreasonably withheld or delayed be entitled to
use the Documents in connection with the publication of its work and
the marketing of its services.
2.3 The Contractor shall provide the Landlord at its request and upon
reimbursement of the reasonable costs of producing the same such copies
of all or any of the Documents as are required by the Landlord.
3. INSURANCE
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3.1 The Contractor shall without prejudice to its obligations under this
Deed and/or at law and/or otherwise take out and use its best
endeavours to maintain:-
3.1.1 such insurance as the Contractor is required to maintain pursuant
to the terms of the Building Contract
3.1.2 for a period of twelve years from the date of the last Certificate of
Practical Completion issued under the Building Contract for the whole
of the Project or equivalent event for the purposes of the Building
Contract such professional indemnity insurance as is required by
Building Contract to cover the Contractor's obligations and liabilities
relating to design under or in connection with this Deed with a limit
of indemnity of not less than 5,000,000 Pound Sterling for each and
every claim provided that the said insurance remains available in the
UK market place at commercially reasonable rates. The Contractor shall
immediately inform the Landlord if such insurance is not or ceases to
be available at commercially reasonable rates in order that the
Contractor and the Landlord can discuss the means of best protecting
themselves in the absence of such insurance.
3.2 The Contractor shall as and when it is reasonably required to do so by
the Landlord make available for inspection by the Landlord documentary
evidence that such insurance is being properly maintained and the
Contractor shalt forthwith inform the Landlord if such insurance ceases
to be available.
4. ASSIGNMENT
4.1 The Landlord shall be entitled to assign or transfer all or any of the
rights arising under this Deed at any time to any person company or
other entity acquiring the whole of the Landlord's interest in the
Premises provided that notice in writing of such assignment shall be
given to the Contractor.
4.2 The Contractor shall not be entitled to assign transfer charge or
otherwise dispose of the rights or liabilities arising under this Deed
to any other party.
5. NON-WAIVER
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The obligations of the Contractor hereunder shall not be released or
diminished by the appointment of any person by the Landlord to carry
out any independent enquiry into any matter in relation to the Project
or the failure by the Tenant to make such appointment.
6. LAW
Any and all disputes and claims between the Tenant and the Contractor
as to the construction interpretation validity and application of this
Deed and any and all matters or things of whatsoever nature arising out
of or in connection therewith shall be governed by English law and the
jurisdiction of the English Courts and shall be and are hereby referred
to the English Courts.
7. LIMITATION
Notwithstanding the date hereof the Contractor shall have no liability
hereunder after me expiry of twelve years from the date of the last
Certificate of Practical Completion issued for the whole of the Project
under the Building Contract.
8. ENTIRE AGREEMENT
This need represents the entire agreement between the Contractor and
the Tenant with respect to those matters to which the Deed refers.
IN WITNESS WHEREOF the parties have executed these presents as a Deed the day
and year first before written.
6
PURCHASE AND SALE AGREEMENT
Between
CITYSCAPE CORP.
and
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
Dated as of February 2, 1996
<PAGE>
TABLE OF CONTENTS
Section I. Definitions Page
1.01. "Adjusted Tranche Amount"....................................... 1
1.02. "Aggregate Adjusted Tranche Amount"............................. 1
1.03. "Available Amount".............................................. 1
1.04. "Business Day".................................................. 1
1.05. "Change of Control"............................................. 2
1.06. "Collateral".................................................... 2
1.07. "Co-Managed Amount"............................................. 2
1.08. "Custodian"..................................................... 2
1.09. "Custodial Agreement"........................................... 2
1.10. "Default Rate".................................................. 2
1.11. "Detailed Mortgage Asset Schedule".............................. 2
1.12. "Eligible Assets"............................................... 2
1.13. "Event of Termination".......................................... 2
1.14. "FHA"........................................................... 2
1.15. "FHLMC"......................................................... 2
1.16. "FNMA".......................................................... 3
1.17. "GAAP".......................................................... 3
1.18. "Greenwich Change of Control"................................... 3
1.19. "Guarantor"..................................................... 3
1.20. "Guaranty"...................................................... 3
1.21. "Home Equity Mortgage Assets"................................... 3
1.22. "Home Improvement Assets"....................................... 3
1.23. "HUD"........................................................... 3
1.24. "Independent Whole Loan Trade".................................. 3
1.25. "Initial Tranche Amount"........................................ 3
1.26. "LIBOR"......................................................... 3
1.27. "Losses"........................................................ 4
1.28. "Market Movement Allowance"..................................... 4
1.29. "Market Value Percentage"....................................... 4
1.30. "Monoline Insurance Company".................................... 4
1.31. "Mortgage"...................................................... 4
1.32. "Mortgage Assets"............................................... 4
1.33. "Mortgage Asset Schedule"....................................... 4
1.34. "Mortgage File"................................................. 5
1.35. "Mortgage Loan"................................................. 5
1.36. "Mortgage Loan Documents"....................................... 5
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1.37. "Mortgage Note"................................................. 5
1.38. "Mortgaged Property"............................................ 5
1.39. "Mortgagor"..................................................... 5
1.40. "Net Securities Amount"......................................... 5
1.41. "Pass-Through Transfer"......................................... 5
1.42. "Principal"..................................................... 6
1.43. "PUD"........................................................... 6
1.44. "Purchase"...................................................... 6
1.45. "Purchase Date"................................................. 6
1.46. "Purchase Price Percentage"..................................... 6
1.47. "Purchase Request".............................................. 6
1.48. "Reconstitution Agreement"...................................... 6
1.49. "Recourse Amount"............................................... 6
1.50. "Reference Bank"................................................ 6
1.51. "Reference Bank Rate"........................................... 6
1.52. "Repurchase Price".............................................. 7
1.53. "Required Sale Event"........................................... 7
1.54. "SEC"........................................................... 7
1.55. "Shareholders' Equity".......................................... 7
1.56. "Shortfall Payment"............................................. 7
1.57. "SM/MU Assets".................................................. 7
1.58. "Spread Deficiency Account"..................................... 7
1.59. "Spread Deficiency Amount"...................................... 7
1.60. "Spread Deficiency Factor"...................................... 7
1.61. "Spread Percentage"............................................. 8
1.62. "Subordinated Debt"............................................. 8
1.63. "Taxes"......................................................... 8
1.64. "Termination Date".............................................. 8
1.65. "Tranche"....................................................... 8
1.66. "Tranche Period"................................................ 8
1.67. "Tranche Rate".................................................. 9
1.68. "Tranche Remittance Date"....................................... 9
1.69. "Tranche Term".................................................. 9
1.70. "Underwater Assets"............................................. 9
1.71. "Unsecured Debt"................................................ 9
1.73. "Whole Loan Transfer"........................................... 9
Section II. Procedures for Purchases of Eligible Assets;
Conditions Precedent; Settlements
2.01. Purchase and Sale.............................................. 9
2.02. Delivery of Documents; Initial Purchase of
Eligible Assets ............................................... 10
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2.03. Delivery of Documents; Subsequent Purchases of
Eligible Assets................................................. 11
2.04. Purchase Requests................................................ 11
2.05. Tranche Selection................................................ 12
2.06. Survival of Representations...................................... 12
2.07. Proceeds of Eligible Assets...................................... 12
Section III. Distributions
Section IV. Transfers of Eligible Assets by Purchaser
4.01. Purchaser Sale................................................... 13
4.02. Market Value..................................................... 14
4.03. Required Sale Event.............................................. 15
4.04. Bankruptcy Event................................................. 15
4.05. Proceeds Shortfall............................................... 15
Section V. Intent of Parties; Security Interest
Section VI. Representations and Warranties
6.01. Representations and Warranties of Seller......................... 16
6.02. Representations and Warranties Regarding
Eligible Assets................................................. 18
6.03. Representations and Warranties of Purchaser...................... 27
6.04. Remedies for Breach of Representations and
Warranties; Repurchase Obligation............................... 28
Section VII. Covenants and Warranties of Seller
7.01. Affirmative Covenants............................................ 29
7.02. Negative Covenants............................................... 32
Section VIII. Removal of Eligible Assets from Inclusion
Under this Agreement Upon a Whole Loan
Transfer or a Pass-Through Transfer;
Independent Whole Loan Trades
8.01. Removal of Eligible Assets from Inclusion
Under this Agreement Upon a Whole Loan
Transfer or a Pass-Through Transfer.............................. 33
8.02 Repurchases...................................................... 37
8.03. Independent Whole Loan Trade..................................... 37
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Section IX. Seller's Servicing Obligations
Section X. Fees and Other Costs
10.01. Net Securities Amount............................................ 38
10.02. Hold Harmless.................................................... 38
10.03. Definition of Taxes.............................................. 38
10.04. After-Tax Calculation............................................ 39
10.05. Contest, Payment, Interest....................................... 39
10.06. Definition of "After-Tax Basis"; Tax Savings..................... 39
Section XI. Events of Termination
11.01. Failure to Perform............................................. 40
11.02. Failure of Representation or Warranty.......................... 41
11.03. Failure of Covenant............................................ 41
11.04. Bankruptcy Event............................................... 41
11.05. Seller Default................................................. 41
11.06. Material Adverse Change........................................ 41
11.07. Cross-Default.................................................. 41
11.08. Change of Control.............................................. 42
11.09. Pre-Existing Condition......................................... 42
Section XII. Payment
12.01. Method of Payment............................................... 42
12.02. Late Payments................................................... 42
Section XIII. Greenwich Change of Control
Section XIV. Remedies
Section XV. Termination Resulting from Competition.
Section XVI. Term
Section XVII. Exclusive Benefit of Parties; Assignment..................... 43
Section XVIII.Amendment; Waivers
Section XIX. Execution in Counterparts.................................... 43
Section XX. Effect of Invalidity of Provisions........................... 44
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Section XXI. Governing Law................................................ 44
Section XXII. Notices...................................................... 44
Section XXIII.Entire Agreement............................................. 44
Section XXIV. Indemnities.................................................. 44
Section XXV. RESPA Obligations............................................ 46
Section XXVI. Survival..................................................... 46
Section XXVII.Right of Set-off............................................. 46
Section XXVIII Consent to Service.......................................... 46
Section XXIX. Submission to Jurisdiction; Waiver of Trial by
Jury......................................................... 47
Section XXX. Construction................................................. 47
Section XXXI. Further Agreements........................................... 47
Exhibits
Exhibit A: Seller's Underwriting Guidelines for Home Equity
Loans and Home Improvement Loans
Exhibit B: Seller's Underwriting Guidelines for SM/MU Assets
Exhibit C: Receipt and Assignment
Exhibit D: Purchase Request
Exhibit E: Opinion of Counsel to Seller
Exhibit F: Mortgage Asset Schedule
Exhibit G: Guaranty of Cityscape Financial Corp.
Exhibit H: Officer's Certificate of Seller
Exhibit I: Form of Mortgage and Form of Mortgage Note
Exhibit J: Opinion of Counsel to Guarantor
Exhibit K: Whole Loan Agreement
Exhibit L: Form of Custodial Agreement
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PURCHASE AND SALE AGREEMENT ("Agreement") dated as of February 2, 1996
between GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware corporation
("Purchaser"), and CITYSCAPE CORP., a New York corporation ("Seller").
WHEREAS, Seller desires to sell from time to time to Purchaser certain
Eligible Assets (as hereinafter defined), and Purchaser desires to purchase such
Eligible Assets, each in accordance with the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, the parties, in consideration of good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, hereby agree as follows:
I. Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
1. "Adjusted Tranche Amount": As of any date of determination in respect of any
Tranche, the difference between (i) the Initial Tranche Amount with respect
thereto and (ii) all payments of principal received by Purchaser in respect of
the related Eligible Assets on or prior to such date.
2. "Aggregate Adjusted Tranche Amount": At any date, the aggregate sum of the
Adjusted Tranche Amounts for each Tranche as of such date, in respect of
Purchases as to which the related Eligible Assets have not been disposed of by
Purchaser (other than to an affiliate of Purchaser pursuant to this Agreement).
3. "Available Amount": $1,000,000,000, less the aggregate principal of Eligible
Assets sold by the Purchaser pursuant to a Whole Loan Transfer or a Pass-Through
Transfer other than the Co-Managed Amount relating to any such Pass-Through
Transfer. Notwithstanding the foregoing, if at any point in time the Aggregate
Adjusted Tranche Amount is equal to or exceeds the Available
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Amount, the Purchaser shall have no obligation to purchase, and the Seller shall
have no obligation to sell, additional Eligible Assets until the point in time
at which the Aggregate Adjusted Tranche Amount is less than the Available
Amount.
4. "Business Day": A day on which banks are open for business in New York, New
York and on which dealings in United States dollars are carried on in the London
interbank market.
5. "Change of Control": means either (i) both Robert Patent and Robert Grosser
leave the employ of Seller or (ii) there occurs a change of "control" of Seller
as such term is defined in the Securities Exchange Act of 1934, as amended.
6. "Collateral": As defined in Section 5 hereof.
7. "Co-Managed Amount": As defined in Section 8.01.
8. "Custodian": Harris Trust and Savings Bank.
9. "Custodial Agreement": The Custodial Agreement, dated as of February 2,
1996, by and among the Custodian, Purchaser and Seller, a form of which is
attached hereto as Exhibit L.
11. "Default Rate": As defined in Section 12.02 hereof.
12. "Detailed Mortgage Asset Schedule": The schedule of Mortgage Assets
identifying each Mortgage Asset by the address of the Mortgaged Property and the
name of the mortgagor and setting forth as to each Mortgage Asset all of the
information set forth in Exhibit F hereof.
13. "Eligible Assets":
(i) With respect to Home Equity Mortgage Assets or Home Improvement
Assets, the type and quality usually included in a securitized pool
consisting of such assets which pool would be eligible for credit
enhancement by a Monoline Insurance Company and which would be expected to
support a security which would be rated, without the benefit of such credit
enhancement, in one of the investment grade generic rating
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categories by any nationally recognized statistical rating agency; or
(ii) With respect to SM/MU Assets, the type and quality usually
included in a securitized pool consisting of or including such assets which
pool would be eligible for credit enhancement by a Monoline Insurance
Company and which would be expected to support a security which would be
rated, without the benefit of such credit enhancement, in one of the
investment grade generic rating categories by any nationally recognized
statistical rating agency.
14. "Event of Termination": As defined in Section 11 hereof.
15. "FHA": The Federal Housing Administration or its successors in interest.
16. "FHLMC": The Federal Home Loan Mortgage Corporation or its successors in
interest.
17. "FNMA": The Federal National Mortgage Association or its successors in
interest.
18. "GAAP": means generally accepted accounting principles, consistently
applied.
19. "Greenwich Change of Control": means the sale by The Long-Term Credit Bank
of Japan, Limited of either (i) Greenwich Capital Holdings, Inc., the parent of
Greenwich Capital Financial Products, Inc. or (ii) Greenwich Capital Financial
Products, Inc.
20. "Guarantor": Cityscape Financial Corp., a Delaware corporation.
21. "Guaranty": A guaranty in substantially the form of Exhibit G hereto,
executed by Guarantor in favor of Purchaser.
22. "Home Equity Mortgage Assets": All of Seller's right, title and interest in
and to mortgage loans secured by mortgages on one- to four-family residences,
which shall bear either fixed or adjustable rates of interest and shall have
been underwritten in accordance with the underwriting guidelines attached as
Exhibit
3
<PAGE>
A or otherwise approved by Purchaser, other than Home Improvement Assets and
SM/MU Assets.
23. "Home Improvement Assets": All of Seller's right, title and interest in and
to conventional and Title I home improvement loans secured by mortgages on one-
to four-family residences which shall have been underwritten in accordance with
the underwriting guidelines attached as Exhibit A or otherwise approved by
Purchaser.
24. "HUD": The United States Department of Housing and Urban Development.
25. "Independent Whole Loan Trade": As defined in Section 8.03.
26. "Initial Tranche Amount": With respect to any Purchase hereunder, the
purchase amount paid for the related Eligible Assets by the Purchaser on the
related Purchase Date, such purchase amount being equal to the product of (x)
the Principal of the related Eligible Assets as of such Purchase Date and (y)
the related Purchase Price Percentage.
27. "LIBOR": As of any date of determination, the 30, 60 or 90 day (consistent
with the frequency of the LIBOR Reset Date) London Interbank Offering Rate as of
such date, as indicated on the Bloomberg screen or Telerate and as determined by
the Purchaser. If the Purchaser cannot so determine LIBOR, then LIBOR shall mean
the Reference Bank Rate.
28. "Losses": Any and all out-of-pocket losses, claims, damages, liabilities or
expenses (including reasonable attorneys' fees and disbursements) directly
incurred by any person specified in this Agreement, resulting from transactions
entered into under this Agreement (other than liability for Taxes). Losses must
be accounted for and presented for reimbursement documented in reasonable detail
and within a reasonable time.
29. "Market Movement Allowance": For each Purchase, the amount of diminution in
the Market Value of the related Eligible Assets (expressed as a percentage) that
may occur before the occurrence of a Required Sale Event with respect to such
Eligible Assets, as described in Section 4.02 hereof.
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30. "Market Value Percentage": For each date of determination in respect of a
Purchase, the market value (expressed as a percentage of par) of the related
Eligible Asset as determined by Purchaser (subject to the provisions of Section
4.02 hereof) and taking into account (i) credit rating; (ii) credit worthiness
of the account debtor, lessee or other obligors (including third party credit
enhancements); (iii) realizable distress sale liquidation value; (iv)
impediments (legal or otherwise) to prompt and effective enforcement; (v)
general industry and overall economic conditions; (vi) current interest rates;
(vii) availability of purchasers; and (viii) such other considerations as
reasonably appropriate in the circumstances. Provided the initial Purchase Date
is not later than February 2, 1996, the initial Market Value Percentage shall be
103%.
31. "Monoline Insurance Company": Municipal Bond Investors Assurance
Corporation ("MBIA"), Financial Guaranty Insurance Company ("FGIC"), Capital
Markets Assurance Corporation ("CapMAC"), Financial Security Assurance Inc.
("FSA"), GE Mortgage Insurance Company ("GEMICO") or AMBAC Indemnity Corporation
("AMBAC").
32. "Mortgage": The mortgage, deed of trust or other instrument creating a
first, second or third lien on or first, second or third priority ownership
interest in an estate in fee simple in real property securing a Mortgage Note or
in a leasehold interest.
33. "Mortgage Assets": Home Equity Mortgage Assets, Home Improvement Assets and
SM/MU Assets, collectively.
34. "Mortgage Asset Schedule": Each schedule of Mortgage Assets delivered by
the Seller to the Purchaser and the Custodian, such schedule identifying each
Mortgage Asset by the address of the Mortgaged Property and the name of the
mortgagor and setting forth as to each Mortgage Asset the following information:
(i) the current principal balance, (ii) the account number, (iii) the original
principal amount with respect to any Mortgage Asset originated by the Seller and
the principal amount purchased by the Seller with respect to a Mortgage Asset
acquired by the Seller subsequent to its origination, (iv) the combined
loan-to-value ratio as of the date of the origination of the related Mortgage
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Asset, (v) the paid through date, (vi) the mortgage interest rate, (vii) the
final maturity date under the mortgage note and (viii) the monthly payment.
35. "Mortgage File": The documents described in Section 3 of the Custodial
Agreement.
36. "Mortgage Loan": Any of the first, second or third lien mortgage loans sold
by the Seller to the Purchaser pursuant to this Agreement, as set forth on the
Detailed Eligible Asset Schedule.
37. "Mortgage Loan Documents": The documents listed in Section 1 of the
Custodial Agreement pertaining to any Mortgage Loan.
38. "Mortgage Note": The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
39. "Mortgaged Property": The property underlying a Mortgage Asset.
40. "Mortgagor": The obligor on a Mortgage Note.
41. "Net Securities Amount": With respect to any Tranche Period which has
terminated, the amount produced for the related Tranche corresponding to such
Tranche Period by application of the following:
TR x TA x AD
360
Where
TR = the Tranche Rate applicable to such Tranche
TA = the Adjusted Tranche Amount with respect to such Tranche
AD = the actual number of days elapsed during such Tranche Period (assuming
twelve 30-day months).
42. "Pass-Through Transfer": The sale or transfer of some or all of the
Eligible Assets to a trust to be formed as part of a
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publicly or privately traded pass-through transaction, which transaction may
contain certain requirements of and be rated by one or more statistical credit
rating agencies, pursuant to a Reconstitution Agreement retaining the Seller as
servicer thereunder.
43. "Principal": With respect to any Eligible Asset as of any date of
determination, the unamortized principal balance of such Eligible Asset as of
such date.
44. "PUD": A planned unit development.
45. "Purchase": Any purchase of Eligible Assets by Purchaser from Seller
pursuant to the terms hereof and of the applicable Purchase Request.
46. "Purchase Date": With respect to any Purchase, the date on which Purchaser
purchases the related Eligible Assets from Seller.
47. "Purchase Price Percentage": With respect to any Purchase, the Market Value
Percentage of the Principal paid by Purchaser for the related Eligible Assets,
expressed as a percentage of par, as set forth in the related Purchase Request.
48. "Purchase Request": A request for the purchase of Eligible Assets in the
form of Exhibit D hereto.
49. "Reconstitution Agreement": The agreement or agreements entered into by the
Seller and the Purchaser and/or certain third parties with respect to any or all
of the Eligible Assets purchased hereunder, in connection with a Whole Loan
Transfer or a Pass-Through Transfer as set forth in Section VIII, including, but
not limited to, a Pooling Agreement or such other form of agreement that shall
have been entered into between the Purchaser (or an affiliate of the Purchaser)
and the Seller following the initial Purchase Date. Such agreement or agreements
shall prescribe the rights and obligations of the Seller in servicing the
related Eligible Assets.
50. "Recourse Amount": As of any date of determination, 10 percent of the
Aggregate Adjusted Tranche Amount as of such date; provided, however, in each
case, that the Recourse Amount shall be fixed upon the earlier of (i) the first
date on which a Required
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Sale Event has occurred and (ii) the first date on which an Event of Termination
has occurred.
51. "Reference Bank": Three major banks that are engaged in the London
interbank market, as selected by the Purchaser.
52. "Reference Bank Rate": The arithmetic mean (rounded upwards, if necessary,
to the nearest one sixteenth of a percent) of the offered rates for United
States dollar deposits for one month which are offered by the Reference Banks as
of 11:00 a.m., London time, on the second Business Day prior to the date of
determination to prime banks in the London interbank market for a period of one
month.
53. "Repurchase Price": The product of (x) the Principal of the related
Eligible Assets as of the related Repurchase Date and (y) the related Purchase
Price Percentage for the related Eligible Assets as specified on the Purchase
Request related to each such Eligible Asset plus the applicable Net Securities
Amount less any payments of principal already received by the Purchaser.
54. "Required Sale Event": As described in Section 4.02.
55. "SEC": The Securities and Exchange Commission and any successor thereto.
56. "Shareholders' Equity": The sum of (i) the aggregate "assets" of Seller
less the aggregate "liabilities" of Seller, with the term "asset" having the
meaning ascribed to such term by GAAP and the term "liabilities" being those
obligations or liabilities of Cityscape which, in accordance with GAAP, would be
included on the liability side of Cityscape's balance sheet plus (ii) the
Subordinated Debt of Seller, in accordance with GAAP.
57. "Shortfall Payment": As defined in Section 10.07.
58. "SM/MU Assets": All of Seller's right, title and interest in and to small
residential multi-family residences and mixed-use mortgage loans which bear
fixed rates of interest and which were underwritten in accordance with the
underwriting guidelines attached as Exhibit B or otherwise approved by
Purchaser, and none of which shall exceed $1,000,000 in principal amount, unless
otherwise agreed to by Purchaser and Seller.
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60. "Spread Deficiency Account": A nonsegregated memorandum account maintained
by the Purchaser to which shall be credited the Spread Deficiency Amounts.
61. "Spread Deficiency Amount" means, on any date of determination, the amount
by which (A) the product, expressed in dollars, of (i) the Spread Deficiency
Factor with respect to such Eligible Assets and (ii) the Principal of such
Eligible Assets on their respective Purchase Date or Dates exceeds (B) the sum
of (i) the dollar value (over zero) of any hedges or other interest rate
protection instruments with respect to Underwater Assets (I) to which Seller is
a party, (II) the value of which Seller has assigned to Purchaser and (III)
under which Purchaser would be entitled on the date of determination to receive
such dollar value and (ii) the dollar amount of any deposits made by Seller to,
and retained by Purchaser on the date of determination in, the Spread Deficiency
Account with respect to previous Spread Deficiency calculations.
62. "Spread Deficiency Factor" means, on any date of determination, the amount,
expressed as a percentage, by which (A) exceeds ((B) minus (C))
where (A) equals the Spread Percentage
(B) equals the weighted average interest rate of the Eligible
Assets (i) sold to and retained by Purchaser under
this Agreement, and (ii) included on a Purchase
Request to be sold on the related Purchase Date,
if any; and
(C) equals the yield, expressed as a percentage, of Four Year
Treasury Securities.
62. "Spread Percentage" means, on any date of determination, the sum, expressed
as a percentage, of (A) plus ((B) minus (C))
where (A) equals 4.00%
(B) equals the pricing spread on pass-through certificates
issued in the private
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placement market for pools of mortgages with
characteristics similar to the Eligible Assets
either sold to and retained by Purchaser under
this Agreement, or included on a Purchase Request
to be sold on the related Purchase Date, as the
case may be, as reasonably determined solely by
Purchaser based upon market considerations; and
(C) equals the lesser of (i) "(B)", and (ii) 1.45%.
63. Subordinated Debt": Indebtedness of the Seller which (a) is subordinated to
other indebtedness and liabilities of the Seller, (b) has a maturity of at least
three years and (c) as a percentage of total Shareholder's Equity does not
exceed 50%.
64. "Taxes": As defined in Section 10.03 hereof.
65. Termination Date": The earlier to occur of the second anniversary of the
date hereof and the date on which the Available Amount is reduced to zero.
66. "Tranche": The Eligible Assets specified on any particular Purchase
Request.
67. "Tranche Period": The period commencing on the day Purchaser receives a
distribution of principal or interest with respect to the Eligible Assets in the
related Tranche in accordance with Section III and ending on (and including) the
day preceding the day on which the next such distribution is received. For
purposes of the initial Tranche Period, Purchaser shall be deemed to have
received such a distribution with respect to the Eligible Assets in the related
Tranche on the related Purchase Date. The date upon which Purchaser disposes of
an Eligible Asset shall also end the Tranche Period with respect thereto.
68. "Tranche Rate": The Tranche Rate shall equal LIBOR plus 175 basis points.
The Tranche Rate shall reset on the first day of each Tranche Period.
69. "Tranche Remittance Date": With respect to any Tranche, the monthly
calendar date specified in the related Purchase
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Request for the remittance of collections on the related Eligible Assets to the
Purchaser in accordance with Section III hereof.
70. "Tranche Term": With respect to a Tranche, a period of one, two or three
months, or such other period as may be mutually agreeable to the parties hereto,
commencing on a Business Day selected by Seller and Purchaser pursuant to this
Agreement.
71. "Underwater Assets": Means the aggregate of those Eligible Assets which,
taken individually, would yield a Spread Deficiency Amount.
72. "Unsecured Debt": As of any date of determination, the dollar amount of all
obligations and liabilities of Seller which, (i) in accordance with GAAP, would
be included in determining total liabilities as shown on the liability side of
Seller's balance sheet and (ii) are not secured by the grant of a lien upon or
security interest in, any collateral.
73. "Unsecured Debt to Equity Ratio": The ratio of total Unsecured Debt of
Seller to its Shareholders' Equity.
74. "Whole Loan Transfer": The sale or transfer to a third party of some or
all of the Eligible Assets in a whole loan format or a certificated
participation format pursuant to a Reconstitution Agreement retaining the Seller
as servicer thereunder.
II. Procedures for Purchases of Eligible Assets; Conditions Precedent;
Settlements.
2. Purchase and Sale. From time to time pursuant to the terms of this
Agreement, Seller shall deliver and at the request of Seller, Purchaser shall
purchase Eligible Assets in an aggregate unpaid principal amount up to the
Available Amount. Each such purchase shall be initiated by Seller pursuant to
the delivery to Purchaser of a Purchase Request in the manner set forth in
Section 2.04; provided, however, that each Initial Tranche Amount with respect
to Home Equity Mortgage Assets shall be at least $5,000,000 and with respect to
Home Improvement Assets shall be at least $500,000; and provided, further, that
no Spread Deficiency Amount shall exist with respect to Eligible Assets
previously sold to and still retained by Purchaser; and provided, further,
however, that
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Purchaser shall only purchase Eligible Assets if, immediately, following such
purchase, (i) the Available Amount would not be less than zero; (ii) the Amount
of Eligible Assets sold to and still retained by Purchaser which consist of Home
Equity Loans or Home Improvement Assets would not exceed $200,000,000; and (iii)
the amount of Eligible Assets which consist of SM/MU Assets sold to and still
retained by Purchaser hereunder would not exceed $15,000,000.
3. Delivery of Documents; Initial Purchase of Eligible Assets. Prior to the
initial Purchase of Eligible Assets:
(a) Seller shall have delivered to the Custodian the "Mortgage Loan
File" (as defined in the Custodial Agreement) for each of the Eligible
Assets.
(b) Purchaser shall have received a Mortgage Asset Schedule pertaining
to the related Eligible Assets.
(c) Purchaser shall have received copies of the resolutions of the
Board of Directors of each of Seller and Guarantor, certified by its
respective Secretary, approving this Agreement and the Guaranty Agreement,
respectively.
(d) Purchaser shall have received the Articles of Incorporation of
Seller certified by the Secretary of State of the State of New York and the
Articles of Incorporation of Guarantor, certified by the Secretary of State
of the State of Delaware.
(e) Purchaser shall have received certificates of each of the
Secretary or Assistant Secretary of Seller and Guarantor, as set forth in
Exhibit H hereto, certifying (i) the names and signatures of the officers
authorized on its behalf to execute this Agreement, and any other documents
to be delivered by it hereunder (on which Purchaser may conclusively rely
until such time as Purchaser shall receive from Seller a revised
certificate meeting the requirements of this item (e)) and (ii) a copy of
Seller's By-laws.
(f) Purchaser shall have received a certificate from the Custodian
certifying that it has reviewed the mortgage notes relating to the Eligible
Assets and has found no
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discrepancies between the information listed on the related Mortgage Asset
Schedule and the information set forth in such mortgage notes.
(g) Purchaser shall have received an opinion of counsel to Seller, in
substantially the form of Exhibit E hereto and an opinion of counsel to
Guarantor, in substantially the form of Exhibit J hereto.
(h) Seller shall have instructed the applicable trustee, paying agent,
authenticating agent, transfer agent, registrar, predecessor in interest,
owner (if the Eligible Assets are in the form of a security agreement), or
servicer, if any, in respect of the related Eligible Assets to reflect on
their books and records the transfer of such Eligible Assets to Purchaser,
as owner or secured party (if the Eligible Assets are in the form of a
security agreement).
(i) Purchaser shall have received the most recent available standard
servicing or like reports in summary form, if any, with respect to all of
the mortgages in Seller's portfolio similar to the Eligible Assets.
(j) The bond power or transfer instrument for the related Eligible
Asset have been executed by appropriate officers of the Seller.
(k) The Purchaser shall be permitted to perform its standard loan
review of each Eligible Asset to be purchased.
4. Delivery of Documents; Subsequent Purchases of Eligible Assets. Prior to any
Purchase of Eligible Assets after the initial Purchase of Eligible Assets, the
actions, conditions and deliveries specified in subsections 2.02(a), (b), (f),
(h), (i), (j) and (k) shall have been taken or made, as the case may be.
5. Purchase Requests. Seller shall deliver to Purchaser a Purchase Request at
least three Business Days prior to the proposed Purchase Date for any Purchase
(unless otherwise agreed by the parties). Purchaser shall indicate its
acceptance or declination of each Purchase Request by completing the appropriate
section of the Purchase Request and returning the copy thereof to Seller;
provided, however, that Purchaser hereby agrees to accept
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<PAGE>
each Purchase Request if such acceptance would not cause the aggregate of the
Initial Tranche Amounts to exceed the Available Amount and if all of the
conditions to such Purchase provided for in this Agreement (including, without
limitation, Section 2.02 hereof) have been satisfied. Unless otherwise agreed to
by Purchaser, no single Purchase Request shall include both (i) Home Equity
Mortgage Assets and Home Improvement Assets and (ii) SM/MU Assets.
With respect to all Purchase Requests, if Purchaser does not send a copy of
a completed Purchase Request to Seller within at least three Business Days prior
to the proposed Purchase Date (five Business Days, if the related Purchase
Request was received by Purchaser at least two calendar weeks prior to the
proposed Purchase Date), Purchaser shall be deemed to have accepted such
Purchase Request. Each Purchase Request accepted by Purchaser shall be
irrevocable and binding on Purchaser and Seller. Seller shall indemnify
Purchaser and hold it harmless against any Losses incurred by Purchaser as a
result of any failure by Seller to timely deliver the Eligible Assets subject to
such Purchase. Each Purchase shall cover the Eligible Assets identified in a
Mortgage Asset Schedule attached to the related Purchase Request. Each Purchase
Request shall specify the type of Eligible Asset, the Purchase Price Percentage,
the Performance Deposit Amount, Tranche Remittance Date, Purchase Date, the
Initial Tranche Amount, together with the Tranche Term and Tranche Rate
requested by Seller with respect thereto in accordance with Section 2.05 hereof,
the Market Movement Allowance, Recourse Amount and such other matters as may be
specified on the form of the Purchase Request attached hereto as Exhibit D or as
may be reasonably requested by Purchaser from time to time in accordance with
the terms hereof. On the applicable Purchase Date, the Purchaser shall either
(i) pay or (ii) cause the Custodian, pursuant to the terms of the Custodial
Agreement, to pay to Seller the Initial Tranche Amount for the related Eligible
Assets against receipt of the documents required to be delivered by Seller
pursuant to either Section 2.02 or 2.03, as the case may be.
6. Tranche Selection. Seller shall, at least three Business Days prior to the
expiration of any Tranche Term, provide Purchaser with a notice requesting a new
Tranche Term for application to the related Tranche (a "Tranche Selection
Notice"). The Tranche Selection Notice may be oral, promptly confirmed by Seller
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<PAGE>
in writing, and shall be deemed to be an irrevocable offer by Seller to
Purchaser to apply the requested Tranche Term to the related Tranche. Failure to
provide written confirmation of an oral Tranche Selection Notice shall not
affect the irrevocability of any such Notice. Notwithstanding the foregoing
provisions of this Section, Purchaser, in its reasonable discretion, may select
a new Tranche Term if (i) Seller fails to provide a Tranche Selection Notice on
a timely basis or (ii) Purchaser determines in its reasonable discretion that
any Tranche Term requested by Seller is unavailable or would not yield efficient
execution to Purchaser.
7. Survival of Representations. The terms and conditions of the purchase of
each Eligible Asset shall be as set forth in this Agreement. Seller will be
deemed on each Purchase Date to have made to Purchaser the representations and
warranties set forth in Section 6 hereof and such representations and warranties
of Seller shall be true and correct on and as of such Purchase Date and
throughout the term of this Agreement for as long as Eligible Assets are held by
Purchaser. Each Purchase Request made by Seller shall be deemed to be a
restatement of each of the covenants of Seller made pursuant to Section 7 of
this Agreement. In addition, Seller shall reaffirm the representations and
warranties contained in Section 6 on the date of disposition of the Eligible
Assets by the Purchaser (either through a securitization or a whole loan sale of
such assets).
8. Proceeds of Eligible Assets. The transfer and sale hereby of all of the
Seller's right, title and interest in and to each Eligible Asset shall include
all proceeds, products and profits derived therefrom, including, without
limitation, all scheduled payments of principal of and interest on such Eligible
Assets and other amounts due or payable or to become due or payable in respect
thereof and proceeds thereof including, without limitation, all moneys, goods
and other tangible or intangible property received upon the liquidation or sale
thereof. Seller shall retain all rights with respect to any interest accrued and
unpaid with respect to any Eligible Assets to, but not including, the related
Purchase Date.
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III. Distributions.
With respect to each Tranche, Seller shall instruct the applicable paying
agent, servicer or other appropriate party with respect to each Eligible Asset
Purchased hereunder to remit to Purchaser by wire transfer in immediately
available funds, all distributions thereon or with respect thereto in accordance
with Purchaser's payment instructions on the related Tranche Remittance Date.
Upon receipt by Purchaser of any payment of principal with respect to any
Eligible Asset, Purchaser shall apply such principal payment so received to
reduce the Adjusted Tranche Amount of the applicable Tranche.
Upon receipt by Purchaser of any payment of principal or interest with
respect to any Eligible Assets, the prior Tranche Period shall terminate and a
new Tranche Period shall begin, and the Purchaser shall compute and either remit
to Seller or, at Seller's option, deposit in an account maintained by Purchaser
on behalf of Seller the amount by which the aggregate amount of any interest
payment received by Purchaser exceeds the Net Securities Amount with respect to
the Tranche Period then ending.
Notwithstanding the foregoing provisions of this Section III, Purchaser
hereby grants a waiver with respect to Seller's obligation to remit all payments
in respect of (i) interest in excess of the Net Securities Amount, (ii)
scheduled payments of principal and (iii) any amounts advanced or expended by
Seller in its capacity as servicer for which it is entitled to be reimbursed in
accordance with the terms hereof in its capacity as servicer of any Eligible
Asset (the "Forbearance Waiver"). Any payment so held by Seller shall be paid to
Purchaser immediately upon the termination of the Forbearance Waiver. The
Forbearance Waiver shall terminate upon the earlier to occur of (i) the
occurrence of any default by Seller hereunder and (ii) Purchaser's delivery of a
written notice to Seller terminating such Forbearance Waiver.
IV. Transfers of Eligible Assets by Purchaser.
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2. Purchaser Sale. Purchaser may, at its election, and without the consent of
Seller, at any time during this Agreement sell, transfer, convey, pledge or
assign any or all of its right, title and interest in, to or under, or grant a
security interest in, any Eligible Assets purchased by Purchaser hereunder.
Prior to effecting any sale or other disposition (other than a pledge or a
transfer pursuant to a repurchase agreement) of its right, title and interest in
any Eligible Asset, Purchaser shall offer to Seller between the hours of 8:00
a.m. and 6:00 p.m. on any Business Day (by oral notice to such effect, promptly
confirmed in writing), the right to purchase the offered Eligible Assets in
whole from it at the Repurchase Price (which has not been theretofore paid
pursuant to Section 8.01) on the related Eligible Assets. Within the time
periods specified below, Seller shall notify Purchaser of its intent to so
purchase the offered Eligible Assets:
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If Purchaser makes Seller shall notify
offer to sell to Purchaser of intent
Seller to Purchase
- ---------------------- ---------------------
Between 8:00 a.m. and Before noon on the
10:00 a.m on any next succeeding
Business Day Business Day
Between 10:00 a.m. and 6:00 p.m. on any Before noon on the
Business Day second succeeding
Business Day
If Seller fails to notify Purchaser of its intention to purchase the related
Eligible Assets within the time periods set forth above, then Seller shall be
deemed to have declined Purchaser's offer to purchase the related Eligible
Assets. If Seller determines to effect such a purchase, Seller shall, on the
fifth Business Day next succeeding the Business Day on which Seller accepted the
offer to purchase the related Eligible Assets from Purchaser pursuant to this
Section, pay to Purchaser the applicable Repurchase Price for the related
Eligible Assets required to be paid pursuant to Section 8.01 hereof. If
Purchaser disposes of any Eligible Assets which Seller declines to purchase, and
Purchaser later reacquires such Eligible Assets for any reason, then prior to
any subsequent sale of such Eligible Assets, Purchaser shall afford Seller the
right to purchase such Eligible Assets pursuant to this Section 4.01 at the
Purchaser's reacquisition price plus applicable costs and expenses. This right
to purchase the Eligible Assets reacquired by Purchaser shall be extinguished
upon Seller's second refusal to purchase any Eligible Asset(s).
3. Market Value. On a weekly basis, Purchaser, in respect of each Purchase,
shall determine the Market Value of each Eligible Asset which has been purchased
by the Purchaser and not disposed of, and shall notify Seller thereof. If Seller
shall in good faith disagree with the Market Value of any such Eligible Asset as
so determined by Purchaser, Seller shall notify Purchaser and Purchaser and
Seller shall endeavor in good faith to reach an agreement on the Market Value of
such Eligible Assets. If Purchaser and Seller cannot agree on the Market Value,
a Required Sale Event will be deemed to have occurred. If, in respect of any
Purchase, the Market Value of the Eligible Assets at any time has declined from
the Market Value of the Eligible Assets as of the
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relevant Purchase Date by an amount exceeding the applicable Market Movement
Allowance, a Required Sale Event shall be deemed to have occurred.
4. Required Sale Event. Upon the occurrence of a Required Sale Event, Purchaser
shall in a commercially reasonable manner sell the Eligible Assets, subject to
Seller's obligation to indemnify Purchaser against any resulting Losses from
such sale up to the then-applicable Recourse Amount. Prior to effecting any such
sale, Purchaser shall offer to Seller the right to purchase such Eligible Assets
from it at the Adjusted Tranche Amount, plus any Net Securities Amount payable
pursuant to Section 8.01 hereof. If Seller fails to exercise its right of
purchase within the time set forth in Section 4.01 and Purchaser sells the
Eligible Assets (through private or public sale) to a third party, Purchaser
shall promptly provide a notification to Seller of such event, setting forth the
net sales proceeds inclusive of accrued interest received (after giving effect
to all selling and related expenses, including the fees and expenses of any
consultants, brokers or attorneys) and shall notify Seller of all Losses
incurred and invoice Seller (with supporting detail) for the amount due to
Purchaser, up to the amount of the Recourse Amount. Upon receipt of such
invoice, Seller shall pay to Purchaser the Recourse Amount to the extent
necessary to indemnify Purchaser against the Losses sustained. If, as a result
of the sale of the Eligible Assets, the net realized sales proceeds, inclusive
of accrued interest, if any, on the related Eligible Assets exceed the
applicable Adjusted Tranche Amount plus the applicable Net Securities Amount
plus the fee payable upon a Whole Loan Transfer, then Purchaser shall pay any
such excess to Seller.
5. Bankruptcy Event . With respect to Seller's right of purchase set forth in
Section 4.01 and Section 4.03, if a bankruptcy event occurs, as described in
Section 11.04 below, involving Seller, during the period after which Seller has
notified Purchaser of its intention to purchase the offered Eligible Assets but
before the expiration of the five Business Day period in which Seller has to
effect such purchase, Purchaser shall be released from its obligation to sell
such Eligible Assets to Seller and any other obligations set forth in Section
4.01 and may sell such Eligible Assets (through private or public sale) to any
third party.
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6. Proceeds Shortfall. If Purchaser sells Eligible Assets to any third party
for an amount less than the applicable Adjusted Tranche Amount plus the
applicable Net Securities Amount, then Seller shall pay to Purchaser any such
shortfall (the "Proceeds Shortfall"). Until the Proceeds Shortfall is repaid,
Purchaser shall be entitled to deduct from the proceeds owed to Seller as a
result of any subsequent sales of Eligible Assets (to Seller or to any third
party), the amount, up to the Proceeds Shortfall, by which the proceeds of any
such subsequent sale exceeds the Adjusted Tranche Amount plus the Net Securities
Amount, in each case applicable to such subsequent sale.
V. Intent of Parties; Security Interest.
Purchaser and Seller confirm that the transactions contemplated herein are
intended as purchases and sales rather than as loan transactions. In the event,
for any reason, and solely in such event, any transaction hereunder is construed
by any court or regulatory authority as a loan or other than a purchase and sale
of the related Eligible Assets, Seller shall be deemed to have hereby pledged to
Purchaser as security for the performance by Seller of all of its obligations
from time to time arising hereunder and under any and all Purchases effected
pursuant thereto, and shall be deemed to have granted to Purchaser a security
interest in, the related Eligible Assets and all distributions in respect
thereof, and the proceeds of any and all of the foregoing (collectively, the
"Collateral"). Seller shall, with respect to each Purchase, execute a Receipt
and Assignment substantially in the form of Exhibit C hereto, as applicable,
pursuant to which Seller shall reconfirm its grant to Purchaser of a first
priority security interest in, and lien upon, the Collateral. In furtherance of
the foregoing, (i) this Agreement shall constitute a security agreement, (ii)
Purchaser shall have all of the rights of a secured party with respect to the
Collateral pursuant to applicable law and (iii) Seller shall execute all
documents, including but not limited to financing statements under the Uniform
Commercial Code as in effect in any applicable jurisdictions, as the Purchaser
may reasonably require to effectively perfect and evidence Purchaser's first
priority security interest in the Collateral. Seller also covenants not to
pledge, assign or grant any security interest to any other party in any Eligible
Asset sold to Purchaser.
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VI. Representations and Warranties.
1. Representations and Warranties of Seller. The Seller represents, warrants
and covenants to the Purchaser as of the Initial Purchase Date and each
subsequent Purchase Date that:
(i) the Seller is duly organized, validly existing and in good
standing under the laws of the State of New York and is duly authorized and
qualified to transact any and all business contemplated by this Agreement
to be conducted by the Seller in any state in which a Mortgaged Property is
located to the extent necessary to ensure the enforceability of each
Eligible Asset and the servicing of the Eligible Asset in accordance with
the terms of this Agreement;
(ii) the Seller has the full corporate power and authority to service
each Eligible Asset, and to execute, deliver and perform, and to enter into
and consummate the transactions contemplated by this Agreement and the
execution, delivery and performance of this Agreement by the Seller has
been duly authorized by all necessary corporate action on the part of the
Seller; and this Agreement, assuming the due authorization, execution and
delivery thereof by the Purchaser, constitutes a legal, valid and binding
obligation of the Seller, enforceable against the Seller in accordance with
its respective terms, except to the extent that (a) the enforceability
thereof may be limited by federal or state bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought;
(iii) the execution and delivery of this Agreement by the Seller, the
servicing of the Eligible Assets by the Seller hereunder, the consummation
by the Seller of the transactions herein contemplated, and the fulfillment
by the Seller of or compliance by the Seller with the terms hereof will not
(A) result in a breach of any term or provision of the charter or by-laws
of the Seller or (B) conflict with, result in a breach, violation or
acceleration of, or result
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in a default under, the terms of any other material agreement or instrument
to which the Seller is a party or by which it may be bound, or any statute,
order or regulation applicable to the Seller of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Seller, which breach, violation, default or non-compliance would have a
material adverse effect on (a) the business, operations, financial
condition, properties or assets of the Seller taken as a whole or (b) the
ability of the Seller to perform its obligations under this Agreement; and
the Seller is not a party to, bound by, or in breach or violation of any
material indenture or other material agreement or instrument, or subject to
or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to the
Seller's knowledge, would in the future reasonably be expected to
materially and adversely affect, (x) the ability of the Seller to perform
its obligations under this Agreement or (y) the business, operations,
financial condition, properties or assets of the Seller taken as a whole;
(iv) the Seller is, and currently intends to remain, in good standing
and qualified to do business in each jurisdiction where failure to be so
qualified or licensed would have a material adverse effect on (a) the
business, operations, financial condition, properties or assets of the
Seller taken as a whole or (b) the enforceability of any Eligible Asset or
the servicing of the Eligible Assets in accordance with the terms of this
Agreement;
(v) there is no litigation pending or, to the Seller's actual
knowledge, overtly threatened against the Seller that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or the ability of the Seller to service the Eligible Assets or
for the Seller to perform any of its other obligations hereunder in
accordance with the terms hereof;
(vi) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this
Agreement or the
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consummation of the transactions contemplated hereby (except for such
consents, approvals, authorizations, or orders to be obtained following
each Purchase Date with respect to future transactions to be consummated
hereunder), or if any such consent, approval, authorization or order not
relating to a future transaction is required, the Seller has obtained the
same; and
(vii) the Seller has caused to be performed any and all acts required
to preserve the rights and remedies of the Purchaser in any insurance
policies of the Seller or a Mortgagee applicable to the Eligible Assets
sold by the Seller.
2. Representations and Warranties Regarding Eligible Assets. (a) With respect to
the Eligible Assets subject to any Purchase Request, Seller represents and
warrants to Purchaser as of the related Purchase Date with respect to each such
Eligible Asset as follows:
(i) The information set forth on the Detailed Mortgage Asset Schedule
with respect to such Eligible Asset is true and correct as of the Purchase
Date in all material respects;
(ii) All payments due prior to the related Purchase Date have been
made and none of such Eligible Assets will have been contractually
delinquent for 60 or more days more than once in the twelve months
preceding the related Purchase Date;
(iii) Each related Mortgage is a valid and enforceable first, second
or third lien on the Mortgaged Property subject only to (a) the lien of
nondelinquent current real property taxes and assessments, (b) covenants,
conditions and restrictions, rights of way, easements and other matters of
public record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection
with the origination of such Eligible Asset, and (c) other matters to which
like properties are commonly subject which do not materially interfere with
the benefits of the security intended to be provided by such Mortgage;
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(iv) As of the Purchase related to each Eligible Asset, the Seller had
good title to, and was the sole owner of, each Eligible Asset free and
clear of any pledge, lien, encumbrance or security interest and had full
right and authority, subject to no interest or participation of, or
agreement with, any other party, to sell and assign the same;
(v) To the best of the Seller's knowledge, there was no delinquent tax
or assessment lien against any related Mortgaged Property;
(vi) To the best of the Seller's knowledge, there is no valid offset,
defense or counterclaim to any related Mortgage Note or Mortgage, including
the obligation of the Mortgagor to pay the unpaid principal of or interest
on such Mortgage Note;
(vii) To the best of the Seller's knowledge, there are no mechanics'
liens or claims for work, labor or material affecting any related Mortgaged
Property which are or may be a lien prior to, or equal with, the lien of
such Mortgage, except those which are insured against by the title
insurance policy referred to in (11) below;
(viii) To the best of the Seller's knowledge, each related Mortgaged
Property is free of material damage and is in good repair;
(ix) The origination of such Eligible Asset complied in all material
respects with applicable state and federal laws, including, without
limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws, relating to the
origination of mortgage loans and consummation by the Seller of the
transactions contemplated hereby will not involve the violation of any such
laws;
(xi) Neither the Seller nor any prior holder of any related Mortgage
has modified such Mortgage in any material respect (except that such an
Eligible Asset may have been modified by a written instrument which has
been recorded, if necessary, to protect the interests of the Purchaser and
which has been delivered
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to the Custodian); satisfied, cancelled or subordinated such Mortgage in
whole or in part; released the related Mortgaged Property in whole or in
part from the lien of such Mortgage; or executed any instrument of release,
cancellation, modification or satisfaction with respect thereto except as
has been disclosed to Purchaser prior to Purchase Date, in which case a
copy of such modification agreement will have been delivered to the Seller
and the Custodian;
(xii) A lender's policy of title insurance together with a condominium
endorsement, if applicable, and extended coverage endorsement and, if
applicable, an adjustable rate mortgage endorsement in an amount at least
equal to the principal balance as of the related Purchase Date of each such
Eligible Asset or a commitment (binder) to issue the same was effective on
the date of the origination of such Eligible Asset, each such policy is
valid and remains in full force and effect, and each such policy was issued
by a title insurer qualified to do business in the jurisdiction where the
related Mortgaged Property is located and acceptable to FNMA or FHLMC and
in a form acceptable to FNMA or FHLMC, which policy insures the Seller and
successor owners of indebtedness secured by the insured related Mortgage,
as to the first or second priority lien of such Mortgage; to the best of
the Seller's knowledge, no claims have been made under such mortgage title
insurance policy and no prior holder of such Mortgage, including the
Seller, has done, by act or omission, anything which would impair the
coverage of such mortgage title insurance policy;
(xiii) Such Eligible Asset was originated by the Seller or, if not
originated by the Seller, was purchased by the Seller subject to materially
the same standards and procedures used by the Seller in originating
mortgage loans directly;
(xiv) To the best of the Seller's knowledge, all of the improvements
which were included for the purpose of determining the Appraised Value of
the related Mortgaged Property lie wholly within the boundaries and
building restriction lines of such property, and no improvements on
adjoining properties encroach upon such Mortgaged Property unless the
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applicable title insurance policy for such Mortgaged Property affirmatively
insures against loss or damage by reason of any encroachment that is
disclosed or would have been disclosed by an accurate survey;
(xv) To the best of the Seller's knowledge, no improvement located on
or being part of related Mortgaged Property is in violation of any
applicable zoning law or regulation. To the best of the Seller's knowledge,
all inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of such Mortgaged Property and, with
respect to the use and occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting certificates, have been
made or obtained from the appropriate authorities and to the best of the
Seller's knowledge, such Mortgaged Property was lawfully occupied under
applicable law at origination and is lawfully occupied under applicable law
as of the Purchase Date;
(xvi) All parties which have had any interest in any related Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws
of the state wherein the related Mortgaged Property is located, and (2)(A)
organized under the laws of such state, (B) qualified to do business in
such state, (C) federal savings and loan associations or national banks
having principal offices in such state, or (D) not doing business in such
state;
(xvii) The related Mortgage Note and the related Mortgage are genuine,
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and with applicable laws except to
the extent that the enforceability thereof may be limited by (a) federal or
state bankruptcy, insolvency, moratorium and other similar laws relating to
creditors' rights generally and (b) the availability of the remedy of
specific performance and injunctive and other forms of equitable relief and
by the discretion of the court before which any proceeding therefor may be
brought; provided, however, that none of the foregoing will affect the
ultimate realization of the benefits of the lien of the related Mortgage on
the related Mortgaged Property.
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All parties to the related Mortgage Note and the related Mortgage had legal
capacity to execute such Mortgage Note and such Mortgage and such Mortgage
Note and such Mortgage have been duly and properly executed by such
parties;
(xviii) The proceeds of such Eligible Asset have been fully disbursed,
except in certain circumstances relating to SM/MU Assets where Seller has
held back amounts until improvements to property have been made, such
amounts so withheld will in no case be in excess of $10,000, there is no
requirement for future advances thereunder and any and all requirements as
to completion of any on-site or off-site improvements and as to
disbursements of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making, closing or recording such
Eligible Assets were paid;
(xix) The related Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the related Mortgaged Property of the
benefits of the security, including, (i) if such Mortgage is designated as
a deed of trust, by trustee's sale and (ii) otherwise by judicial
foreclosure. No homestead or other exemption available to the related
Mortgagor will materially interfere with the right to sell such Mortgaged
Property at a trustee's sale or the right to foreclose such Mortgage;
(xx) With respect to any related Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as such, has
been properly designated and currently so serves and is named in such
Mortgage, and no fees or expenses are or will become payable by the
Purchaser to the trustee under the deed of trust, except in connection with
a trustee's sale after default by the related Mortgagor;
(xxi) The related Mortgage Note and the related Mortgage is in
substantially the form attached as Exhibit I hereto with such revisions as
are necessary to comply with applicable state law. The related Mortgaged
Property is suitable for year-round occupancy for its geographic location;
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(xxii) There exist no deficiencies with respect to escrow deposits and
payments, if such are required by the related Mortgage or Mortgage Note,
for which customary arrangements for repayment thereof have not been made,
and no escrow deposits or payments of other charges or payments due the
Seller have been capitalized under the related Mortgage or the related
Mortgage Note;
(xxiii) The origination, underwriting and collection practices used by
the Seller with respect to such Eligible Asset have been in all respects
legal, proper, prudent and customary in the mortgage lending and servicing
business with respect to mortgage loans similar to such Eligible Asset;
(xxiv) The related Mortgage Note is not secured by any collateral,
pledged account or other security except for the lien of the related
Mortgage or a third party guaranty. In addition, certain financing
statements may have been filed with respect to the fixtures or furniture
contained in the property securing an SM/MU Asset;
(xxv) Such Eligible Asset does not have a shared appreciation feature,
or other contingent interest feature;
(xxvi) Such Eligible Asset contains a "due-on-sale" clause unless
prohibited by applicable law;
(xxvii) The improvements upon the related Mortgaged Property are
covered by a valid and existing hazard insurance policy with a generally
acceptable carrier that provides for fire extended coverage and such other
hazards as are customary in the area where the Mortgaged Property is
located representing coverage not less than the lesser of (i) the minimum
amount required to compensate for damage or loss on a replacement cost
basis, (ii) the outstanding principal balance of the related Eligible Asset
or (iii) the maximum allowed. All individual insurance policies and flood
policies referred to in clause (27) below contain a standard mortgagee
clause naming the Seller or the original mortgagee, and its successors in
interest, as mortgagee, and the Seller has received no notice that any
premiums due and payable thereon have not been paid; the related Mortgage
obligates the related Mortgagor thereunder to maintain all such
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insurance, including flood insurance, at the Mortgagor's cost and expense,
and upon the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at the Mortgagor's cost and
expense and to seek reimbursement therefor from the Mortgagor;
(xxviii) If the related Mortgaged Property is in a Federal Flood
Hazard Zone, a flood insurance policy in a form meeting the requirements of
the current guidelines of the Flood Insurance Administration is in effect
with respect to such Mortgaged Property with a generally acceptable carrier
in an amount representing coverage not less than the least of (A) the
original outstanding principal balance of the Eligible Asset, (B) the
minimum amount required to compensate for damage or loss on a replacement
cost basis or (C) the maximum amount of insurance that is available under
the Flood Disaster Protection Act of 1973;
(xxix) To the best of the Seller's knowledge, there is no proceeding
pending or threatened for the total or partial condemnation of the related
Mortgaged Property, nor is such a proceeding currently occurring, and such
property is undamaged by waste, fire, earthquake or earth movement;
(xxx) To the best of Seller's knowledge, there is no default, breach,
violation or event of acceleration existing under the related Mortgage or
the related Mortgage Note; and the Seller has not waived any default,
breach, violation or event of acceleration;
(xxxi) The related Mortgaged Property is improved by either (i) a one-
to four-family residential dwelling, including condominium units, dwelling
units in PUDs and manufactured housing, which, to the best of the Seller's
knowledge, does not include cooperatives and does not constitute other than
real property under state law or (ii) a small residential multi-family
residence and mixed-use structure;
(xxxii) Unless otherwise specified in the related Purchase Request,
each Eligible Asset is being serviced by the Seller;
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(xxxiii) There is no obligation on the part of the Seller or any other
party under the terms of the related Mortgage or related Mortgage Note to
make payments in addition to those made by the related Mortgagor;
(xxxiv) Any future advances made prior to the related Purchase Date
have been consolidated with the outstanding principal amount secured by the
related Mortgage, and the secured principal amount, as consolidated, bears
a single interest rate and single repayment term reflected on the Detailed
Mortgage Asset Schedule. The consolidated principal amount does not exceed
the original principal amount of such Eligible Asset. The related Mortgage
Note does not permit or obligate the Seller to make future advances to the
related Mortgagor at the option of the Mortgagor;
(xxxv) To the best of the Seller's knowledge, there are no defaults in
complying with the terms of the Mortgage, and all taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges,
leasehold payments or ground rents which previously became due and owing
have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid. The Seller has
not advanced funds, or induced, solicited or knowingly received any advance
of funds by a party other than the related Mortgagor, directly or
indirectly, for the payment of any amount required by the related Mortgage
except for (A) payments in the nature of escrow payments, including without
limitation, taxes and insurance payments, and (B) interest accruing from
the date of the related Mortgage Note or date of disbursement of the
related Mortgage proceeds, whichever is later, to the day which precedes by
one month the Due Date of the first installment of principal and interest;
(xxxvi) All amounts received with respect to such Eligible Assets to
which the Purchaser is entitled have been transferred to the Purchaser;
(xxxvii) Such Eligible Asset was underwritten in accordance with the
Seller's underwriting guidelines;
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(xxxviii) The related Mortgage File contains an appraisal of the
related Mortgaged Property signed by an appraiser which meets the minimum
FNMA or FHLMC requisite qualifications for appraisers, duly appointed by
the originator, who had no interest, direct or indirect in the related
Mortgaged Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of such
Eligible Asset; the appraisal is in a form acceptable to FNMA and FHLMC,
with such riders as are acceptable to FNMA or FHLMC, as the case may be,
and satisfies the requirements of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989;
(xxxix) Unless otherwise specified in the related Purchase Request,
such Eligible Asset is not a graduated payment mortgage loan or a growing
equity mortgage loan, nor is such Eligible Asset subject to a temporary
buydown or similar arrangement. If the Eligible Asset has an adjustable
rate, it is not convertible at the option of the related Mortgagor to a
fixed rate mortgage loan;
(xl) With respect to such Eligible Asset, no loan junior in lien
priority to such Eligible Asset and secured by the related Mortgaged
Property was originated by the Seller at the time of origination of such
Eligible Asset unless specifically set forth on the Purchase Request and
expressly approved by the Purchaser;
(xli) At origination either (i) the related Mortgaged Property was not
located within a 1 mile radius of any site with environmental or hazardous
waste of which the Seller had actual knowledge, or (ii) as to any related
Mortgaged Property located within a 1 mile radius of any site as to which
the Seller has actual knowledge of environmental or hazardous waste, the
related Eligible Asset was reviewed in accordance with the Seller's
established environmental review procedures;
(xlii) The characteristics of the related Eligible Asset are as set
forth in the form of Exhibit F delivered in respect of the related Purchase
Date; and
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(xliii) To the best of the Seller's knowledge, no error, omission,
misrepresentation, negligence, fraud or similar action occurred on the part
of any person in connection with the origination of any Eligible Asset.
(b) Seller represents and warrants to Purchaser with respect to each Home
Equity Mortgage Asset or Home Improvement Asset consisting of an interest in a
residential property in a pool of Eligible Assets that each such Eligible Asset
shall have been originated in conformity with and meets, as of the Purchase
Date, underwriting guidelines no less stringent than those specified in Exhibit
A attached hereto.
(c) Seller represents and warrants to Purchaser with respect to each SM/MU
Asset consisting of a small multi-family residence/mixed-use property in a pool
of Eligible Assets that each such SM/MU Asset shall have been originated in
conformity with and meets, as of the date of Purchase, underwriting guidelines
no less stringent than those specified in Exhibit B attached hereto; provided,
however, that from time to time, based on market conditions, Purchaser or Seller
shall propose and the other shall accept, reasonable changes to such
underwriting guidelines as a further condition to purchases of SM/MU Assets.
(d) (A) Seller represents and warrants to Purchaser with respect to each
Home Improvement Asset which is insured by FHA:
(i) The Seller is approved by FHA and is in good standing to service
mortgages and has not been suspended as a mortgagee or servicer by the FHA.
(ii) With respect to Home Improvement Assets which are Title I Home
Improvement Assets, the Seller has complied and shall comply with the
applicable provisions of the National Housing Act, as amended and
supplemented, all rules and regulations issued thereunder, and all
administrative publications published pursuant thereto including all FHA
requirements for FHA Title I loans.
(iii) The amount and the original term to maturity of each Home
Improvement Asset comply with the FHA Regulations at the time of
origination unless the requirements with
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respect to such Home Improvement Asset are specifically waived by HUD with
respect to such Home Improvement Asset;
(iv) Each Home Improvement Asset was originated or acquired and
underwritten by the Seller in accordance with the underwriting criteria
established by the Seller, the FHA and HUD for FHA Title I loans:
(v) Each Home Improvement Asset (i) is an FHA Title 1 property
improvement loan (as defined in 24 CFR Section 201.2(aa)) underwritten by
the Seller or an entity which at the time of origination was a lender
approved by the FHA for participation in the programs under Title I of the
National Housing Act, in accordance with the FHA requirements for the Title
I loan program as set forth in 24 CFR Parts 201 and 202, and is the subject
of FHA insurance, (ii) was originated and underwritten in accordance with
applicable FHA requirements, and (iii) was made to provide financing for
eligible home improvements for a residential dwelling;
(vi) The related Mortgage Note and, if applicable, the related
Mortgage are on forms acceptable to FHA;
(vii) The Home Improvement Asset was originated and has been serviced
in a manner such that the Loan will be eligible for the maximum amount of
insurance made available by the FHA pursuant to Title I of the National
Housing Act (subject to the aggregate limitation on the amount of FHA
insurance available for the Seller), without any right of offset,
counterclaim or any other defense by the FHA. The Seller has reported the
origination of the Loan to the FHA and has obtained or shall obtain a case
number for the Loan from the FHA;
(viii) With respect to each Home Improvement Asset originated by a
dealer or contractor, the Seller is in possession of the completion
certificate for the related improvement as required by FHA for the Home
Improvement Asset;
(ix) Seller has or will cause an amount of FHA Insurance Reserves with
respect to the Home Improvement Assets equal to 10% of the outstanding
principal balance of
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such Loans as of the related Purchase Date to be transferred or approved
for transfer on or prior to the related Purchase Date to the Purchaser's
account maintained by the FHA; and
(x) No FHA insurance premiums are due and unpaid, and all such
premiums for subsequent periods shall be timely paid.
(B) Seller represents and warrants to Purchaser with respect to each Home
Improvement Asset which is not insured by FHA:
(i) Each Home Improvement Asset was originated or acquired and
underwritten by the Seller in accordance with the underwriting criteria
established by the Seller for its Home Improvement Assets which are not
insured by FHA;
(ii) The related Mortgage Note and, if applicable, the related
Mortgage are on forms acceptable to the Seller; and
(iii) With respect to each Home Improvement Asset originated by a
dealer or contractor, the Seller is in possession of the completion
certificate for the related improvement for the Home Improvement Asset;
3. Representations and Warranties of Purchaser. Purchaser hereby makes the
following representations and warranties, each of which representations and
warranties (i) is material and being relied upon by Seller and (ii) is true in
all respects as of the date of this Agreement:
(1) Purchaser has been duly organized and is validly existing as a
corporation under the laws of the State of Delaware.
(2) Purchaser 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, this Agreement to be
performed by it.
(3) This Agreement has been duly authorized and executed by Purchaser,
is valid, binding and enforceable against Purchaser in accordance with its
terms, and the
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execution, delivery and performance by Purchaser of this Agreement does not
conflict with any material term or provision of any other agreement to
which Purchaser is a party or any term or provision of the Charter or
By-laws of Purchaser, or any law, rule, regulation, order, judgment, writ,
injunction or decree applicable to Purchaser of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
Purchaser.
(4) 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 and delivery by
Purchaser of this Agreement.
(5) There is no action, proceeding or investigation pending or to the
best knowledge of Purchaser, threatened against Purchaser before any court,
administrative agency or other tribunal (i) asserting the invalidity of
this Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement, or (iii) which is likely to
materially and adversely affect the performance by Purchaser of its
obligations under, or the validity or enforceability of, this Agreement.
4. Remedies for Breach of Representations and Warranties; Repurchase Obligation.
(a) It is understood and agreed that the representations and warranties set
forth in Subsections 6.01 and 6.02 shall survive each sale of Eligible Assets to
the Purchaser and shall inure to the benefit of the Purchaser and subsequent
transferees (unless the Seller has entered into a Reconstitution Agreement
pursuant to which the Seller has restated such representations and warranties as
of the date of such Agreement, in which case such Agreement shall govern)
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. With respect to the representations and warranties contained in
Subsections 6.01 and 6.02 which are made to the best of the Seller's knowledge
or to the actual knowledge of the Seller, if it is discovered by either the
Seller or the Purchaser that the substance of such representation and warranty
is inaccurate and such inaccuracy materially and adversely affects the value of
the related Eligible Asset or the Purchaser's
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interest therein, then notwithstanding the Seller's lack of knowledge with
respect to the inaccuracy at the time the representation or warranty was made,
the Seller shall repurchase the related Eligible Asset in accordance with this
Subsection 6.04 as if the applicable representation or warranty was breached.
Upon discovery by either the Seller or the Purchaser of a breach of any of the
foregoing representations and warranties which materially and adversely affects
the value of the Eligible Assets or the interest of the Purchaser (or which
materially and adversely affects the interests of the Purchaser in the related
Eligible Asset in the case of a representation and warranty relating to a
particular Eligible Asset), the party discovering such breach shall give prompt
written notice to the others.
Within 60 days of the earlier of either discovery by or notice to the
Seller of any breach of a representation or warranty which materially and
adversely affects the value of any Eligible Asset or the Purchaser's interest
therein, the Seller shall use its best efforts promptly to cure such breach in
all material respects and, if such breach cannot be cured or is not cured or is
not being diligently pursued in a manner acceptable to the Purchaser, as
evidenced by the Purchaser's agreement thereto, at the end of such 60-day
period, the Seller shall, at the Purchaser's option, repurchase such Eligible
Asset at the Repurchase Price.
At the time of repurchase, the Purchaser and the Seller shall arrange for
the assignment of such Eligible Asset to the Seller and the delivery to the
Seller of any documents held by the Custodian relating thereto. In the event of
a repurchase, the Seller shall, simultaneously with such assignment, give
written notice to the Purchaser that such repurchase has taken place, and amend
the Detailed Mortgage Asset Schedule to reflect the withdrawal of such Eligible
Asset from this Agreement.
In addition to such cure and repurchase obligation, the Seller shall
indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach of
the representations and warranties contained in this Section VI (notwithstanding
any limitation in such representation and
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warranty as to the Seller's knowledge). It is understood and agreed that the
obligations of the Seller set forth in this Subsection 6.04(a) to cure or
repurchase a defective Eligible Asset and to indemnify the Purchaser as provided
in this Subsection 6.04(a) constitute the sole remedies of the Purchaser
respecting a breach of the foregoing representations and warranties.
Any cause of action against the Seller relating to or arising out of the
breach of any representations and warranties made in Subsections 6.01 or 6.02
shall accrue as to any Eligible Asset upon (i) discovery of such breach by the
Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by the
Seller to cure such breach or repurchase such Eligible Asset as specified above,
and (iii) demand upon the Seller by the Purchaser for compliance with the
relevant provisions of this Agreement.
(b) If, prior to the resale of an Eligible Asset to a third party unrelated
to the Purchaser, pursuant to a Pass-Through Transfer or a Whole Loan Transfer,
any Monthly Payment has been more than 90 days delinquent more than once during
the preceding twelve-month period, and a determination is made by the Seller at
any time thereafter to foreclose upon or otherwise comparably convert the
ownership of the related Mortgaged Property or that no further proceeds are
recoverable with respect to any such defaulted Eligible Asset, then upon making
such determination, the Seller shall repurchase the affected Eligible Asset at
the Repurchase Price.
(c) In the event that the principal balance due on an Eligible Asset is
paid in full prior to resale then the Seller shall repurchase the affected
Eligible Asset at the Repurchase Price.
VII. Covenants and Warranties of Seller.
So long as the Agreement remains in effect or Seller shall have any
obligations hereunder, Seller hereby covenants and agrees with Purchaser as
follows:
1. Affirmative Covenants. (a) Seller shall maintain a senior debt to
Shareholders' Equity ratio of not greater than eight to one. Seller shall
maintain Shareholders' Equity in an amount not
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less than $25,000,000. As of the beginning of each subsequent fiscal year, the
minimum Shareholders' Equity less Subordinated Debt to be maintained by the
Seller going forward shall step up to be the greater of (x) $25,000,000 or (y)
80% of the Shareholders' Equity less Subordinated Debt as of the end of the
prior fiscal year.
(b) Until the later to occur of (i) the discharge and payment of all of
Seller's obligations under this Agreement and (ii) the Termination Date of this
Agreement, Seller shall, and shall cause Guarantor to, promptly upon
preparation, but in no event later than 60 days following the end of each such
party's first three fiscal quarters, deliver to Purchaser its unaudited
company-prepared financial statements as of the end of each such fiscal quarter,
prepared in accordance with GAAP. Seller shall, and shall cause Guarantor to,
promptly upon preparation, but in no event later than 90 days following the end
of such party's fourth fiscal quarter, deliver to Purchaser its audited and
certified financial statements, prepared in accordance with GAAP, as of the end
of the most recently ended fiscal year, which audits and certifications shall
each be prepared by a nationally recognized independent accounting firm or by a
regionally recognized independent accounting firm with the prior written consent
of Purchaser, which consent shall not be unreasonably withheld. In all cases,
financial statements shall include, without limitation, a balance sheet, a
profit and loss statement and a statement of cash flows. Notwithstanding
anything in this Agreement to the contrary, if the audited and certified
financial statements described in the immediately preceding sentence are (x) not
delivered within the above-specified 90 days, (y) Seller or Guarantor are
diligently using their best efforts to deliver such financial statements, and
(z) Seller provides Purchaser with a notice specifying the reason for the delay
and a date, within a reasonable time period (as determined by Purchaser), on
which such financial statements will be delivered, and they are so delivered;
then failure to deliver such financial statements within the above-specified 90
days, as the case may be, shall not be deemed to be an Event of Termination of
this Agreement.
(c) Seller and Guarantor shall each, promptly upon filing, deliver to
Purchaser copies of all material public filings made by Seller or Guarantor with
any governmental or quasi-governmental body.
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(d) Seller shall (i) with respect to any Mortgage Assets serviced by Seller
or any of its affiliates or otherwise use its best efforts to cause to be
delivered to Purchaser monthly, the report, if any, prepared by the relevant
trustee or servicer setting forth payment activity, defaults and delinquencies
with respect to the underlying loans or receivables in respect of each Eligible
Asset acquired by Purchaser, (ii) prepare and deliver reports each month,
detailing, with respect to all Purchases, such information as the Purchaser may
from time to time reasonably request and (iii) deliver to the Purchaser on the
fifth day of each month a Detailed Mortgage Asset Schedule.
(e) Seller shall comply in all material respects with all laws, rules and
regulations to which it is or may become subject.
(f) Seller shall do all things necessary to remain duly incorporated,
validly existing and in good standing as a domestic corporation in its
jurisdiction of incorporation and maintain all requisite authority to conduct
its business in each jurisdiction in which its business is conducted except
where failure to maintain such authority would not have a material adverse
effect on the ability of Seller to conduct its business or to perform its
obligations under this Agreement.
(g) At all times during this Agreement, Seller shall possess sufficient net
capital and liquid assets (or ability to access the same) to satisfy its
obligations as they become due in the normal course of business.
(h) Seller will notify Purchaser in writing of any of the following
promptly upon learning of the occurrence thereof, describing the same and, if
applicable, any remedial steps being taken with respect thereto:
(A) The occurrence or likelihood of occurrence of an Event of
Termination hereunder;
(B) The institution of any litigation, arbitration proceeding or
governmental proceeding which, in the opinion of counsel to Seller, will
have a material adverse effect on Seller or the Eligible Assets;
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(C) The entry of any judgment or decree against Seller if the
aggregate amount of all judgments and decrees then outstanding against
Seller exceeds $500,000 after deducting (i) the amount with respect to
which Seller is insured and with respect to which the insurer has assumed
responsibility in writing, and (ii) the amount for which Seller is
otherwise indemnified if the terms of such indemnification are reasonably
satisfactory to Purchaser; or
(D) The occurrence or likelihood of any event which would allow the
obligee under any material loan agreement to which Seller is bound to
declare an event of default or accelerate the obligations of Seller
thereunder.
(i) With respect to each Eligible Asset, the Seller shall comply with all
document delivery requirements set forth in the Custodial Agreement.
(j) If, at any time, a Spread Deficiency Amount exists with respect to the
Home Equity Mortgage Assets or Home Improvement Assets owned at such time by
Purchaser, then Seller shall within five Business Days deposit with Purchaser
for credit to the Spread Deficiency Account an amount equal to the Spread
Deficiency Amount. In the event the Spread Deficiency Amount is, for a period of
three Business Days, less than zero, then Purchaser shall return to Seller such
excess Spread Deficiency Amount to Seller from such amounts deposited in the
Spread Deficiency Account pursuant to this Agreement.
(k) Seller and Guarantor shall each permit the Purchaser or its
accountants, attorneys or other agents access to all of their books and records
relating to Eligible Assets purchased and retained by Purchaser for inspection
and copying during normal business hours at all places where Seller conducts
business.
2. Negative Covenants.
- Seller shall not assign or attempt to assign this Agreement or any rights
hereunder, without first obtaining the specific written consent of Purchaser.
- Seller shall not amend its Articles of Incorporation or By-laws, which
amendment shall have or is likely to have an
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adverse effect upon Purchaser or its interests under this Agreement, without the
prior written consent of Purchaser.
- There shall be no Change of Control, and Seller shall not merge or
consolidate with or into, any other entity without the prior written consent of
Purchaser, which consent shall not be unreasonably withheld.
- During the term of this Agreement, Seller shall not engage in any
business other than as a consumer and mortgage finance lender and servicer,
except with the prior written consent of Purchaser.
- Neither Seller nor Guarantor shall (a) dissolve or terminate its
existence or (b) transfer any assets, except (i) intercompany loans to an
affiliate and/or Guarantor or (ii) dividends to Guarantor, to any affiliate
except as otherwise expressly permitted or contemplated hereby.
- Except in the ordinary course of business or to fulfill the obligations
of wholly owned subsidiaries, Seller 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 contribution, advance or loan for the purposes of paying or
discharging any indebtedness or obligation of such other person or otherwise;
provided, however, that nothing contained herein shall prevent Seller from
indemnifying its officers, directors and agents pursuant to its By-laws and its
Articles of Incorporation.
- Seller will not commit any act in violation of applicable laws, or
regulations promulgated pursuant thereto that relate to the Eligible Assets or
that materially and adversely affect the operations or financial conditions of
Seller.
- The sum of (i) the aggregate principal balance of Independent Whole Loan
Trades (as defined in Section 8.03) and (ii) the aggregate Co-Managed Amount,
shall not exceed 25% of the Eligible Assets sold by the Seller to the Purchaser
hereunder
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during the period from the date hereof up to the Termination Date. In addition,
the principal balance of any such Eligible Assets so sold will not be subtracted
from the Available Amount hereunder.
VIII. Removal of Eligible Assets from Inclusion Under this Agreement Upon a
Whole Loan Transfer or a Pass-Through Transfer; Independent Whole Loan Trades.
8.01. Removal of Eligible Assets from Inclusion Under this Agreement Upon a
Whole Loan Transfer or a Pass-Through Transfer. It is the intent of the Seller
and the Purchaser that with respect to the Eligible Assets, prior to the
Termination Date, the Purchaser shall effect either:
(1) one or more Whole Loan Transfers; and/or
(2) one or more Pass-Through Transfers;
provided, however, that without the prior written consent of the Seller, no
Eligible Asset shall be the subject of more than one Whole Loan Transfer or one
Pass-Through Transfer hereunder, except for those Eligible Assets repurchased by
the Seller pursuant to the terms hereof. The Seller and the Purchaser agree that
in no event will the Seller be required to remit funds or send reports to more
than four (4) persons at any given time with respect to any Whole Loan Transfer.
With respect to each Whole Loan Transfer or Pass-Through Transfer, as the
case may be, entered into by the Purchaser, the Seller agrees:
(i) to cooperate fully with the Purchaser and any prospective purchaser
with respect to all reasonable requests and due diligence procedures
including participating in meetings with rating agencies, credit
enhancers and such other parties as the Purchaser shall designate and
participating in meetings with prospective purchasers of the Eligible
Assets or interests therein and providing information reasonably
requested by such purchasers;
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(ii) to execute all Reconstitution Agreements provided that each of the
Seller and the Purchaser is given an opportunity to review and
reasonably negotiate in good faith, the content of such documents not
specifically referenced or provided for herein;
(iii)with respect to any Whole Loan Transfer or Pass-Through Transfer
occurring within 12 months (unless otherwise specified in the related
Purchase Request) of the related Purchase Date, the Seller shall make
the representations and warranties set forth herein regarding the
Seller and the Eligible Assets as of the date of the Whole Loan
Transfer or Pass-Through Transfer, to the extent true as of such date,
but modified to the extent necessary to accurately reflect the pool
statistics of the Eligible Assets as of the date of such Whole Loan
Transfer or Pass-Through Transfer;
(iv) to deliver to the Purchaser for inclusion in any prospectus or other
offering material such publicly available information regarding the
Seller, its financial condition and the mortgage loan delinquency,
foreclosure and loss experience of its portfolio as is customarily set
forth in a prospectus supplement with respect to a comparable mortgage
pool, the underwriting of mortgage loans, the servicer, the servicing
and collection of mortgage loans, lending activities and loan sales of
the servicer, regulatory matters and delinquency and loss experience
and any additional information reasonably requested by the Purchaser,
and to deliver to the Purchaser unaudited consolidated financial
statements of the Seller, in which case the Purchaser shall bear the
cost of having such statements audited by certified public accountants
if the Purchaser desires such an audit, or as is otherwise reasonably
requested by the Purchaser and which the Seller is capable of
providing without unreasonable effort or expense, and to indemnify the
Purchaser and its affiliates
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for material misstatements or omissions contained in such information;
(v) to deliver to the Purchaser and to any Person designated by the
Purchaser, at the Purchaser's expense, such statements and audit
letters issued by reputable, certified public accountants pertaining
to information provided by the Seller pursuant to clause (iv) above as
shall be reasonably requested by the Purchaser (it being acknowledged
by Purchaser that the delivery of such statements and letters is
subject to the consent of such accountants);
(vi) to deliver to the Purchaser, and to any Person designated by the
Purchaser, such legal documents and in-house opinions of counsel as
are customarily delivered by originators or servicers, as the case may
be, and reasonably determined by the Purchaser to be necessary in
connection with Whole Loan Transfers or Pass-Through Transfers, as the
case may be, it being understood that the cost of any opinions of
outside special counsel that may be required for a Whole Loan Transfer
or Pass-Through Transfer, as the case may be, shall be the
responsibility of the Seller;
(vii)to cooperate fully with the Purchaser and any prospective purchaser
with respect to the preparation of Eligible Asset documents and other
documents and with respect to servicing requirements reasonably
requested by the rating agencies and credit enhancers;
(viii) to negotiate and execute one or more subservicing agreements between
the Seller and any master servicer which is generally considered to be
a prudent master servicer in the secondary mortgage market designated
by the Purchaser in its sole discretion after consultation with the
Seller and/or one or more custodial and servicing agreements among the
Purchaser, the Seller and a third party custodian/trustee which is
generally
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considered to be a prudent custodian/trustee in the secondary mortgage
market designated by the Purchaser in its sole discretion after
consultation with the Seller, in either case for the purpose of
pooling the Eligible Assets with other Eligible Assets for resale or
securitization; and
(ix) in connection with any securitization of any Eligible Assets, to
execute a Reconstitution Agreement among the Purchaser, the Seller and
a trustee, which is generally considered to be a prudent trustee in
the secondary mortgage market, to be selected by the Purchaser in its
sole discretion after consultation with the Seller, which
Reconstitution Agreement may, at the Purchaser's direction, contain
contractual provisions including, but not limited to, a 24-day
certificate payment delay (54-day total payment delay), servicer
advances of delinquent payments of interest through liquidation
(unless deemed non-recoverable by the Servicer) and prepayment
interest shortfalls (to the extent of the monthly servicing fee
payable thereto), servicing and mortgage loan representations and
warranties which in form and substance conform to the representations
and warranties in this Agreement and to secondary market standards for
securities backed by mortgage loans similar to the Eligible Assets (as
reasonably determined by the Purchaser), and such provisions with
regard to servicing responsibilities, investor reporting, segregation
and deposit of principal and interest payments, custody of the
Eligible Assets, and other covenants as are required by the Purchaser
and one or more nationally recognized rating agencies for mortgage
pass-through transactions with the highest ratings from such
nationally recognized rating agencies which are "mortgage related
securities" for the purposes of the Secondary Mortgage Market
Enhancement Act of 1984, unless otherwise mutually agreed.
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With respect to each Pass-Through Transfer, Purchaser agrees that Seller
may direct the Purchaser to engage certain third parties as co-managers with
respect to a portion of Pass-Through Transfers (the aggregate of such portion,
"the Co-Managed Amount"). Any fees of such co-managers shall be paid by
Purchaser.
This Agreement shall terminate with respect to all Eligible Assets sold or
transferred pursuant to a Whole Loan Transfer, an Independent Whole Loan Trade
or a Pass-Through Transfer. All Eligible Assets not sold or transferred pursuant
to a Whole Loan Transfer, an Independent Whole Loan Trade or Pass-Through
Transfer shall continue to be subject to this Agreement and shall continue to be
serviced in accordance with the terms hereof and with respect thereto this
Agreement shall remain in full force and effect.
With respect to any disposition of the initial $500,000,000 of Eligible
Assets, other than Home Improvement Assets, as provided in this Section VIII,
the Seller shall pay to the Purchaser either (a) with respect to any Whole Loan
Transfer, 0.35% of the principal balance of such Eligible Assets on the date of
such Whole Loan Transfer or (b) with respect to a Pass-Through Transfer, 0.35%
of the principal balance of such Eligible Assets on the date of such
Pass-Through Transfer, payable in the form of an underwriting fee paid to an
affiliate of the Purchaser. With respect to the disposition of Eligible Assets
in excess of the initial $500,000,000, the fees payable to the Purchaser shall
be negotiated by the Purchaser and the Seller. With respect to the disposition
of the initial $100,000,000 of Home Improvement Assets pursuant to this Section
VIII, the Seller shall pay the Purchaser 1.00% of the principal balance of such
Home Improvement Assets. With respect to the disposition of Home Improvement
Assets in excess of the initial $100,000,000, the fees payable to the Purchaser
shall be negotiated by the Purchaser and the Seller. There will be no fee
payable on any Independent Whole Loan Trade.
With respect to any disposition of Eligible Assets as provided in this
Section VIII, the Purchaser shall have the right subject to Section 4.01 to
choose the method of disposition which, in its sole discretion, will optimize
the proceeds payable to the Seller.
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8.02 Repurchases. The Seller shall, at the Purchaser's request in
connection with the consummation of a Whole Loan Transfer or Pass-Through
Transfer, repurchase such Eligible Assets on the date of such Whole Loan
Transfer or Pass-Through Transfer at the Repurchase Price for each such Eligible
Asset.
8.03. Independent Whole Loan Trade. Prior to the Termination Date, the
Seller may instruct the Purchaser to sell Eligible Assets previously sold to the
Purchaser to an independent third party on a whole loan basis by notifying the
Purchaser of its intent and paying the Purchaser the Repurchase Price (an
"Independent Whole Loan Trade"). Notwithstanding the foregoing, the sum of (i)
the aggregate principal balance of such Independent Whole Loan Trades and (ii)
the aggregate Co-Managed Amount shall not exceed 25% of the Eligible Assets sold
by the Seller to the Purchaser hereunder during the period from the date hereof
up to the Termination Date. In addition, the principal balance of any such
Eligible Assets so sold will not be subtracted from the Available Amount
hereunder.
IX. Seller's Servicing Obligations.
The Seller, as independent contract servicer, shall service and administer
the Mortgage Loans in accordance with the terms and provisions set forth in
Article V, VI, VII and VIII of the Whole Loan Agreement attached as Exhibit K
which sections are hereby incorporated in this Agreement in their entirety
(with, however, the changes and adjustments as provided in this Agreement) as if
the same were contained in this Section IX.
With respect to the following provisions set forth in the Whole Loan
Agreement attached as Exhibit K, the Seller shall service the Mortgage Loans and
be subject to all of the obligations as required by the "Seller" pursuant to the
Whole Loan Agreement and the Purchaser shall have all the rights as afforded the
"Certificateholder" thereunder:
5.01 Seller to Act as Servicer.
5.02 Liquidation of Mortgage Loans.
5.03 Collection of Mortgage Loan Payments.
5.04 Establishment of Certificate Accounts;
Deposits in Certificate Accounts.
5.05 Withdrawals from the Certificate Account.
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5.06 Transfer of Accounts.
5.07 Maintenance of Hazard Insurance.
5.08 Fidelity Bond; Errors and Omissions Insurance.
5.09 Liquidation Reports.
5.10 Notification of Adjustments (to the extent the Mortgage Loans are
Adjustable Rate Mortgage Loans).
6.01 Distributions.
6.02 Statements to the Certificateholders.
6.03 Advances by the Seller.
6.04 Prepayment Interest Shortfalls.
7.01 Assumption Agreements.
7.02 Satisfaction of Mortgages and Release of Mortgage Files.
7.03 Servicing Compensation.
7.04 Annual Statement as to Compliance.
7.05 Annual Independent Certified Public Accountants' Servicing Report.
7.06 Certificateholders' Right to Examine Seller Records.
8.01 Seller Shall Provide Access and Information as Reasonably Required.
8.02 Financial Statements.
Any cross references in Exhibit K in the sections listed above to other
sections set forth in Exhibit K are likewise incorporated herein and made a part
hereof.
To the extent any provision or definition set forth in Exhibit K shall
conflict with any provision set forth in this Agreement, the provision or
definition in this Agreement shall govern.
X. Fees and Other Costs.
2. Net Securities Amount. Seller agrees to pay Purchaser during the term of
this Agreement, on the last business day of any calendar month the Net
Securities Amount owed to Purchaser, if any, with respect to the applicable
Tranche. Seller shall invoice Purchaser for such amount three business days
prior to the last business day of such calendar month.
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3. Hold Harmless. Seller hereby agrees to pay, and to indemnify, protect, save
and hold harmless, on an After-Tax Basis (as defined in Section 10.06 below),
Purchaser from and against any and all Taxes (as defined in Section 10.03 below)
other than (i) income taxes of Purchaser, (ii) Taxes that result from the
misconduct or negligence of Purchaser or from the failure of Purchaser to file
tax returns or certificates of exemption from withholding or other reports,
properly and on a timely basis or to claim a deduction or credit and (iii) Taxes
that are based on or measured by fees or compensation received by the Purchaser,
which may at any time be imposed or asserted by reason of, in connection with or
in respect of the Eligible Assets or any transactions contemplated hereby,
whether imposed on Purchaser, Seller, or the Eligible Assets or otherwise,
whether collected directly from the party upon which the tax is imposed, by
withholding or otherwise whether arising by reason of the acts to be performed
by Seller hereunder or otherwise.
4. Definition of Taxes. For purposes of this Section 10, the term "Taxes" shall
mean all taxes, charges, fees, levies or other assessments including, without
limitation, excise, property and sale taxes (including, in each such case, any
interest, penalties or additions attributable to or imposed on or with respect
to any such assessment) imposed by the United States, any state or political
subdivision thereof, any foreign government or any other jurisdiction or taxing
authority.
5. After-Tax Calculation. For purposes of this Section 10, in determining the
additional amount necessary so that any payment hereunder is paid on an
After-Tax Basis, such calculation shall be based on Purchaser's effective tax
rate in effect from time to time under applicable law.
6. Contest, Payment, Interest. In the event that Purchaser becomes aware that a
taxing jurisdiction has made or is making a claim with respect to any Tax for
which Seller may be liable under this Section 10, Purchaser shall promptly
notify Seller thereof; provided, however, that if Purchaser fails to promptly
notify Seller thereof, such failure shall not relieve Seller of its obligations
hereunder, except and only to the extent that Seller is materially prejudiced by
such failure. If reasonably requested by Seller within 30 days of receipt of
such notice, Seller shall, at its expense, be entitled to contest the imposition
of such Tax.
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All payments due pursuant to this Section 10 shall be paid no later than the
later of (i) five Business Days after the date of such notice or (ii) five
Business Days before the date the Tax to which such amount payable hereunder
relates is due or is to be paid accompanied by a written statement (which
written statement shall, at the request of Seller, be verified by a nationally
recognized independent accounting firm mutually acceptable to the Seller and
Purchaser, such verification to be at the Seller's expense unless such
accountants determine that the amount payable by the Seller is less than
ninety-five percent (95%) of the amount shown on such written statement)
describing in reasonable detail the Tax and the computation of the amount
payable; provided, however, that Seller shall not be entitled to any payment in
respect of accountants' fees and expenses incurred in connection with the
contest of a taxing authority assessment. Without in any way limiting
Purchaser's remedies, any such amount not paid when due, shall bear interest at
a rate equal to the Default Rate.
7. Definition of "After-Tax Basis"; Tax Savings. For purposes of this Section
10, the term "After-Tax Basis" shall mean an amount which after deduction of the
net increase in federal, state and foreign income taxes required to be paid by
Purchaser with respect to the receipt of such amount is equal to the payment
required under the provision of this Section 11 which requires payment to be
made on an After-Tax Basis. If Purchaser subsequently realizes a tax deduction
or credit (including foreign tax credit and any reduction in Taxes) not
previously taken into account in computing such payment, Purchaser shall
promptly pay to Seller an amount equal to the sum of (I) the actual reduction in
Taxes, if any, realized by Purchaser which is attributable to such deduction or
credit and (II) the actual reduction in Taxes, if any, realized by Purchaser as
a result of any payment made by Purchaser pursuant to this sentence.
8. Additional Fees and Expenses. The Purchaser shall pay any commissions due its
salesmen and the legal fees and expenses of its attorneys. All other costs and
expenses incurred in connection with the transfer and delivery of the Eligible
Assets pursuant to this Agreement or any Reconstitution Agreement, including
without limitation recording fees, fees for title policy endorsements and
continuations, and fees for recording intervening assignments of Mortgage, shall
be paid by the Seller. The Seller shall pay the on-going fees of any custodian
or trustee under a
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Reconstitution Agreement out of its Servicing Fee (which Servicing Fee is
0.50%). The Seller shall pay (i) the acceptance and file review fees of any
custodian or trustee under this Agreement or any Reconstitution Agreement and
(ii) the costs of legal counsel and legal opinions, accounting comfort letters
and fees, printing of disclosure documents, rating agency fees, credit
enhancement provider up-front fees, SEC filing fees and the costs of any and all
related document preparations associated with any Reconstitution Agreement
unless stated otherwise in the Purchase Request; provided, however, that the
fees and expenses payable by the Seller in connection with the preparation of
this Agreement shall not exceed $15,000.
The Seller shall pay one-half of the costs associated with the reasonable
reunderwriting and reappraisals performed by the Purchaser in connection with
any purchase of Eligible Assets.
On the Termination Date whether as a result of an Event of Termination or
otherwise, if the Seller has not provided sufficient Eligible Assets to reduce
the Available Amount to zero, the Seller shall pay to the Purchaser an amount
(the "Shortfall Payment") equal to (i) 0.20% multiplied by (ii) the Available
Amount as of the Termination Date as reduced by any amounts purchased by the
Purchaser pursuant to the terms hereof and not yet disposed of through either an
Independent Whole Loan Trade, a Pass-Through Transfer or a Whole Loan Transfer.
XI. Events of Termination.
Each of the following events shall constitute an "Event of Termination"
hereunder (whatever the reason for such Event of Termination and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body).
2. Failure to Perform. Failure of Seller to deliver to Purchaser or its
designee the relevant Eligible Assets on the relevant Purchase Date; or failure
of Seller to pay when due any sums or amount equal to or greater than $100,000
payable hereunder or under any Purchase or to pay within one Business Day of the
due
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date any sums or amount less than $100,000 payable hereunder or under any
Purchase.
3. Failure of Representation or Warranty. Any of the representations and
warranties made by Seller herein, or in any certificate or other document
delivered pursuant to or in connection with this Agreement or any transaction
contemplated hereby, shall prove to be untrue in any material respect when made
or deemed made.
4. Failure of Covenant. Failure of Seller to observe and perform any material
non-monetary covenant, condition or other agreement on its part to be observed
or performed hereunder and such default shall continue unremedied for five
Business Days.
5. Bankruptcy Event. (a) Appointment of a receiver, conservator, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official) of
Seller, or of any substantial part of its Property, the ordering of the
winding-up or liquidation of its affairs, or the entry of a decree or order for
relief by a court having jurisdiction in the premises in respect of Seller in
any involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect which such order remains undischarged or
unstayed, as the case may be, for 60 days; or
- Commencement by Seller of a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or the
consent by Seller to the entry of an order for relief in an involuntary case
under any such law or to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of Seller or of any substantial part of Seller's property, or the
making by Seller of any general assignment for the benefit of creditors, or the
failure of Seller generally to pay its debts as such debts become due, or the
taking of corporate action by Seller in furtherance of any of the foregoing.
6. Seller Default. Default by Seller whether as principal, guarantor or surety,
in the payment of any principal or interest on any indebtedness or any other
obligation of Seller in the amount of $250,000 or more.
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7. Material Adverse Change. A material adverse change in the condition
(financial or otherwise) of Seller shall have occurred which, in the reasonable
judgment of Purchaser, materially impairs the ability of Seller to perform its
obligations hereunder.
8. Cross-Default. The occurrence and continuance of an "event of default" or of
an "event of termination" on the part of Seller or Guarantor under either (i)
any material agreement of Seller or Guarantor, or (ii) any other agreement
between Seller or Guarantor, on the one hand, and Purchaser or any of its
affiliates on the other hand, which has not been waived by the Purchaser.
9. Change of Control. Any Change of Control of the Seller.
10. Pre-Existing Condition. The discovery by the Purchaser during its continuing
due diligence of the Seller of a condition or event which existed at or prior to
the execution hereof and which the Purchaser, in its sole reasonable discretion,
determines materially and adversely affects:
(i) the condition (financial or otherwise) of the Seller, its
subsidiaries or affiliates; or
(ii) the ability of either the Seller or the Purchaser to fulfill its
respective obligations under this Agreement.
XII. Payment.
2. Method of Payment. Any payment due under this Agreement shall be made
promptly and by wire transfer.
3. Late Payments. Any late payments shall bear interest at a rate of "Prime" (as
then set forth in The Wall Street Journal) plus 400 basis points (the "Default
Rate"), except that payments made one Business Day late shall bear interest at
the then "federal funds" rate plus any customary margin.
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XIII. Greenwich Change of Control.
If a change of control (as such term is defined in the Securities Exchange
Act of 1934, as amended) shall occur with respect to Greenwich the Seller shall
have the right to terminate this Agreement and shall not be obligated to make
any Shortfall Payment pursuant to Section 10.07; provided, however, if the
surviving entity has substantially the same management as in place prior to such
change, no change of control shall be deemed to have occurred.
XIV Remedies.
If an Event of Termination occurs and is continuing, Purchaser may, to the
extent provided or permitted by applicable law and this Agreement, pursue any
available legal remedy including the sale or other disposition of some or all of
the Eligible Assets and related Collateral in accordance with the provisions of
Section 4.01; provided, however, Purchaser shall not be obligated to offer the
relevant Eligible Asset to Seller for purchase pursuant to the right of first
refusal contained in Section 4 if any of the events described in subsections
11.04, 11.07(ii) or 11.09 hereof or any monetary default of the Seller in its
obligations hereunder have occurred and are continuing. Following an Event of
Termination, no further Purchase hereunder shall occur, unless such Event of
Termination shall have been waived by the Purchaser.
XV. Termination Resulting from Competition.
If Greenwich Capital Holdings, Inc. or any wholly-owned subsidiary thereof
materially competes directly with the principal business lines of the Seller as
of the date hereof, the Seller shall have the right to terminate this Agreement
and shall not be obligated to make any Shortfall Payment pursuant to Section
10.07.
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XVI. Term.
This Agreement shall terminate on the earlier to occur of an Event of
Termination or the Termination Date. In the event this agreement expires on the
Termination Date and at that time there exists no Event of Termination, then,
immediately prior to such Termination Date, as to all Eligible Assets then owned
by Purchaser, a Required Sale Event shall be deemed to occur unless this
Agreement is extended.
XVII. Exclusive Benefit of Parties; Assignment.
This Agreement is for the exclusive benefit of the parties hereto and their
respective successors and assigns and shall not be deemed to give any legal or
equitable right to any other person. This Agreement may not be assigned by any
party hereto without the prior written consent of the other party hereto.
XVIII. Amendment; Waivers.
This Agreement may be amended from time to time only by written agreement
of Seller and Purchaser. Any forbearance, failure, or delay by a party in
exercising any right, power, or remedy hereunder shall not be deemed to be a
waiver thereof, and any single or partial exercise by a party of any right,
power or remedy hereunder shall not preclude the further exercise thereof. Every
right, power and remedy of a party shall continue in full force and effect until
specifically waived by it in writing. No right, power or remedy shall be
exclusive, and each such right, power or remedy shall be cumulative and in
addition to any other right, power or remedy, whether conferred hereby or
hereafter available at law or in equity or by statute or otherwise.
XIX. Execution in Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, and all of which shall constitute one and the same
instrument.
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XX. Effect of Invalidity of Provisions.
In case any one or more of the provisions contained in this Agreement
should be or become invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall in no way be affected, prejudiced or disturbed thereby.
XXI. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to its rules regarding conflict of
laws.
XXII. Notices.
Any notices, consents, directions, demands and other communications given
under this Agreement (unless otherwise specified herein) shall be in writing and
shall be deemed to have been duly given when personally delivered at or
telefaxed to the respective addresses or facsimile numbers, as the case may be,
set forth on the signature page hereof for Seller and Purchaser, or to such
other address or facsimile number as either party shall give notice to the other
party pursuant to this Section. Notices, consents, etc. may also be effected by
first class mail, postage prepaid sent to the foregoing addresses and will be
effective upon receipt by the intended recipient.
XXIII Entire Agreement.
This Agreement, including the Exhibits hereto, contains the entire
agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements between them, whether oral
or written, of any nature whatsoever with respect to the subject matter hereof.
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XXIV. Indemnities.
Without limiting any other rights which Purchaser or Seller may have
hereunder or under applicable law, and in addition to any other indemnity
provided hereunder, Seller hereby agrees to indemnify Purchaser and its
respective officers, directors, agents and employees (each, an "Indemnified
Party") from and against any and all Losses incurred by any of them relating to
or resulting from:
(i) any representation or warranty made by Seller (or any officers,
employees or agents of Seller) under or in connection with this Agreement,
any periodic report required to be furnished hereunder or any other
information or document delivered by Seller pursuant hereto, which shall
have been false or incorrect in any material respect when made or deemed
made;
(ii) the failure by Seller to (a) comply with any applicable law, rule
or regulation with respect to any Purchase or (b) perform or observe any
material obligation or covenant hereunder; or
(iii) the failure by Seller (if so requested by Purchaser) to execute
and properly file, or any delay in executing and properly filing, financing
statements or other similar instruments or documents under the Uniform
Commercial Code of any applicable jurisdiction or other applicable laws
with respect to the Eligible Assets.
Promptly after receipt by an indemnified party under this Section XXIV of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section XXIV, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability that it may have to any indemnified party otherwise than
under this Section XXIV. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and to
the extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified party,
to assume the defense thereof, with
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counsel satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party or parties shall have reasonably
concluded that there may be legal defenses available to it or them and/or other
indemnified parties that are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
elect separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall have
employed separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by you in the case of paragraph (a) of
this Section XXIV, representing the indemnified parties under such paragraph (a)
who are parties to such action), (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party; and except
that, if clause (i) or (iii) is applicable, such liability shall only be in
respect of the counsel referred to in such clause (i) or (iii).
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XXV. RESPA Obligations.
Seller agrees to discharge on Purchaser's behalf all obligations, including
without limitation, all disclosure obligations, which Purchaser may have under
the Real Estate Settlement Procedures Act of 1974, as amended, in connection
with Purchaser's purchases of Eligible Assets hereunder. Purchaser agrees to
provide Seller with such information as is reasonably necessary for Seller to
discharge such obligations and hereby appoints Seller as its agent in its name
for the purposes of, and only for the purposes of, performing such obligations.
Seller hereby agrees to indemnify Purchaser and its respective officers,
directors, agents and employees from any losses suffered by any such party in
connection with Seller's obligations under this Section 25.
XXVI. Survival.
The sole indemnification with respect to Taxes, as defined in Section 10
hereof, is that set forth in Section 10 hereof. All indemnities and undertakings
of Seller and Purchaser hereunder shall survive the termination of this
Agreement.
XXVII. Right of Set-off.
Upon the occurrence of any event or circumstance which requires Seller to
make a payment hereunder, Purchaser is hereby authorized then or at any time or
times thereafter, without notice to Seller (any such notice being expressly
waived by Seller), to set-off and apply any and all deposits (general or
special, time or demand, provisional or final), including without limitation,
the Performance Deposit Amount, at any time held and other indebtedness at any
time owing by Purchaser to or for the credit or the account of Seller against
any and all of the obligations of Seller now or hereafter existing hereunder,
irrespective of whether or not Purchaser shall have made any demand hereunder.
Purchaser agrees promptly to notify Seller after any such set-off and
application made by Purchaser, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
Purchaser under this Section 27 are in addition to other rights and remedies
which Purchaser may have.
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XXVIII. Consent to Service.
Each party irrevocably consents to the service of process by registered or
certified mail, postage prepaid, to it at its address given pursuant to Section
22 hereof.
XXIX. Submission to Jurisdiction; Waiver of Trial by Jury.
With respect to any claim arising out of this Agreement each party
irrevocably submits to the exclusive jurisdiction of the courts of the State of
New York and the United States District Court located in the Borough of
Manhattan, City of New York, and each party irrevocably waives any objection
which it may have at any time to the laying of venue of any suit, action or
proceeding arising out of or relating hereto brought in any such court,
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in any inconvenient forum and further
irrevocably waives the right to object, with respect to such claim, suit, action
or proceeding brought in any such court, that such court does not have
jurisdiction over such party, provided that service of process is made as set
forth in Section 28 hereof, or by any other lawful means. To the extent
permitted by applicable law, Purchaser and Seller each irrevocably waive all
right of trial by jury in any action, proceeding or counterclaim arising out of
or in connection with this Agreement or any matter arising hereunder.
XXX. Construction.
The headings in this Agreement are for convenience only and are not
intended to influence its construction. References to Sections, Schedules and
Exhibits in this Agreement are to the Sections of and Schedules and Exhibits to
this Agreement. The Schedules and Exhibits are hereby incorporated into and form
a part of this Agreement. In this Agreement, the singular includes the plural,
the plural the singular, the words "and" and "or" are used in the conjunctive or
disjunctive as the sense and circumstances may require and the word "including"
means "including, but not limited to." Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding."
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XXXI. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to the other
such reasonable and appropriate additional documents, instruments or agreements
as may be necessary or appropriate to effectuate the purposes of this Agreement.
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IN WITNESS WHEREOF, the Purchaser and the Seller have caused their names to
be signed hereto by their respective officers thereunto duly authorized, all as
of the date first written above.
GREENWICH CAPITAL FINANCIAL
PRODUCTS, INC.
By:
Name:
Title:
Phone: (203) 622-3881
Facsimile: (203) 629-4640
CITYSCAPE CORP.
By:
Name:
Title:
Phone: (914) 592-6677
Facsimile: (914) 592-7060
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Exhibit 10.56
Lease Agreement
STANDARD FORM OF MULTI-TENANT
LEASE AND RIDER
Table of Contents
<TABLE>
ARTICLE PAGE
<S> <C> <C>
1. Rent.............................................................. 1
2. Occupancy......................................................... 1
3. Tenant Alterations................................................ 1
4. Maintenance and Repairs........................................... 1
5. Window Cleaning................................................... 1
6. Requirements of Law, Fire Insurance, Floor Loads.................. 1
7. Subordination..................................................... 2
8. Property-Loss, Damage, Reimbursement, Indemnity................... 2
9. Destruction, Fire and Other Casualty.............................. 2
10. Eminent Domain.................................................... 2
11. Assignment, Mortgage, Etc......................................... 2
12. Electric Current.................................................. 2
13. Access to Premises................................................ 2
14. Vault, Vault Space, Etc........................................... 3
15. Occupancy......................................................... 3
16. Bankruptcy........................................................ 3
17. Default........................................................... 3
18. Remedies of Owner and Waiver of Redemption........................ 3
19. Fees and Expenses................................................. 3
20. Building Alterations and Management............................... 3
21. No Representation by Owner........................................ 3
22. End of Term....................................................... 4
23. Quiet Enjoyment................................................... 4
24. Failure to Give Possession........................................ 4
25. No Waiver......................................................... 4
26. Waiver of Trail by Jury........................................... 4
27. Inability to Perform.............................................. 4
28. Intentionally Omitted............................................. 4
29. Water Charges..................................................... 4
30. Sprinklers........................................................ 4
31. Elevators, Heat, Cleaning......................................... 4
32. Security.......................................................... 5
33. Captions.......................................................... 5
34. Definitions....................................................... 5
35. Adjacent Excavation-Shoring....................................... 5
36. Intentionally Omitted............................................. 5
37. Glass............................................................. 5
38. Estoppel Certificate.............................................. 5
39. Intentionally Omitted............................................. 5
40. Successors and Assigns............................................ 5
41. Additional Definitions............................................ 6
42. Term; Preparation for Occupancy and Possession.................... 7
43. Rent.............................................................. 15
44. Parking........................................................... 16
45. Tax Escalation.................................................... 17
46. Common Area Maintenance Charge.................................... 19
47. Cleaning; Trash Removal........................................... 20
48. Utilities......................................................... 20
49. Amendments for Financing; Information for Mortgagees............... 21
50. Broker............................................................ 21
51. Signs............................................................. 21
52. Holdover.......................................................... 22
53. Insurance and Indemnity........................................... 22
54. Exculpation....................................................... 24
55. Rules and Regulations............................................. 24
56. Tenant's Alterations and Maintenance.............................. 24
57. Notice............................................................ 25
58. Miscellaneous..................................................... 25
59. Amendments to Printed Form........................................ 27
60. Option to Extend.................................................. 31
61. Option For Fourth Additional Premises............................. 34
Exhibit A - Rules and Regulations
Exhibit B - Work Specifications
Exhibit C - Floor Plan
</TABLE>
<PAGE>
STANDARD FORM OF LOFT LEASE
The Real Estate Board of New York, Inc.
Copyright 1992. All Rights Reserved.
Reproduction in whole or in part prohibited.
AGREEMENT OF LEASE, made as of this day of May 1996, between ROBERT MARTIN
COMPANY, a New York partnership, having an office at 100 Clearbrook Road,
Elmsford, New York 10523
party of the first part, hereinafter referred to as OWNER, and CITYSCAPE CORP.,
a New York corporation, having an office at 565 Taxter Road, Elmsford, New York
10523
party of the second part, hereinafter referred to as TENANT,
WITNESSETH: Owner hereby leases to Tenant and Tenant hereby hires from Owner
(i) the area of the upper level shown on the floor plan containing
approximately 17,000 square feet (the "Initial Premises") in the building known
as Eight Skyline Drive, Hawthorne, New York (the "Building") for a term
commencing on the Commencement Date (as defined in Section 42(a)) and expiring
on the Expiration Date (as defined in Section 42(a)), (ii) the area of the
upper level in the Building shown on the floor plan attached hereto containing
approximately 8,200 square feet (the "First Additional Premises") for a term
commencing on the First Additional Premises Commencement Date (as defined in
Section 42(d)) and expiring on the Expiration Date, (iii) the area of the
ground floor in the Building shown on the floor plan attached hereto containing
approximately 5,710 square feet (the "Second Additional Premises") for a term
commencing on the Second Additional Premises Commencement Date (as defined in
Section 42(f)) and expiring on the Expiration Date and (iv) the area of the
ground floor in the Building shown on the floor plan attached hereto containing
approximately 4,300 square feet (the "Third Additional Premises") for a term
commencing on the Third Additional Premises Commencement Date (as defined in
Section 42(g)) and expiring on the Expiration Date, which Initial Premises,
First Additional Premises, Second Additional Premises and Third Additional
Premises combine to form the demised premises containing approximately 35,210
square feet (the Initial Premises, First Additional Premises, Second Additional
Premises and Third additional Premises are collectively hereinafter referred to
as the "demised premises", except that the demised premises shall not be deemed
to include the First Additional Premises until the First Additional Premises
Commencement Date, the Second Additional Premises until the Second Additional
Premises Commencement Date and the Third Additional Premises until the Third
Additional Premises Commencement Date).
The annual rental rate (the "Fixed Annual Rent") shall be $246,500.00 per annum
for the period commencing on the Commencement Date and shall be increased by
(i) $118,900.00 per annum for the period commencing on the First Additional
Premises Commencement Date, (ii) $82,795.00 per annum for the period commencing
on the Second Additional Premises Commencement Date and (iii) $62,350.00 per
annum for the period commencing on the Third Additional Premises Commencement
Date.
The "Rentable Area" as used herein shall mean approximately 17,000 square feet
for the period commencing on the Commencement Date and shall be increased by
(i) approximately 8,200 square feet for the period commencing on the First
Additional Premises Commencement Date, (ii) approximately 5,710 square feet for
the period commencing on the Second Additional Premises Commencement Date and
(iii) approximately 4,300 square feet for the period commencing on the Third
Additional Premises Commencement Date.
which Tenant agrees to pay in lawful money of the United States which shall be
legal tender in payment of all debts and dues, public and private, at the time
of payment, in equal monthly installments in advance on the first day of each
month during said term, at the office of Owner or such other place as Owner may
designate, without any set off or deduction whatsoever, except that Tenant
shall pay the first monthly installment(s) on the execution hereof (unless
this lease be a renewal).
The parties hereto, for themselves, their heirs, distributees, executors,
administrators, legal representatives, successors and assigns, hereby convenant
as follows:
OCCUPANCY
1. Tenant shall pay the rent as above and as hereinafter provided.
2. Tenant shall use and occupy demised premises for general office and storage
of office files and for no other purpose.
ALTERATIONS:
3. Tenant shall make no changes in or to the demised premises of any nature
without Owner's prior written consent. Notwithstanding the foregoing, Tenant may
make nonstructural alterations provided that such alterations do not (i)
adversely affect the utility or mechanical systems servicing the Building, (ii)
require a building permit or (iii) exceed, in the aggregate, $50,000.00 in cost.
Subject to the prior written consent of Owner, and to the provisions of this
article, Tenant at Tenant's expense, may make other alterations, installations,
additions or improvements which are non-structural and which do not affect
utility services or plumbing and electrical lines, in or to the interior of the
demised premises using contractors or mechanics first approved by Owner which
approval shall not be unreasonably withheld or delayed. Tenant shall, at its
expense, before making any alterations, additions, installations or improvements
obtain all permits, approval and certificates required by any governmental or
quasi governmental bodies and (upon completion) certificates of final approval
thereof and shall deliver promptly duplicates of all such permits, approvals and
certificates to Owner. Tenant agrees to carry and will cause Tenant's
contractors and sub-contractors to carry such workman's compensation, general
liability, personal and property damage insurance as Owner may require. If any
mechanic's lien is filed against the demised premises, or the building of which
the same forms a part, for work claimed to have been done for, or materials
furnished to Tenant, whether or not done pursuant to this article, the same
shall be discharged by Tenant within ten days thereafter, at Tenant's expense,
by filing the bond required by law or otherwise. All fixtures and all paneling,
partitions, railings and like installations, installed in the premises at any
time, either by Tenant or by Owner on Tenant's behalf, shall, upon installation,
become the property of Owner and shall remain upon and be surrendered with the
demised premises unless Owner, by notice to Tenant no later than twenty days
prior to the date fixed as the termination of this lease, elects to relinquish
Owner's right thereto and to have them removed by Tenant, in which event the
same shall be removed from the demised premises by Tenant prior to the
expiration of the lease, at Tenant's expense. Nothing in this Article shall be
construed to give Owner title to or to prevent Tenant's removal of trade
fixtures, moveable office furniture and equipment, but upon removal of any such
from the premises or upon removal of other installations as may be required by
Owner, Tenant shall immediately and at its expense, repair and restore the
premises to the condition existing prior to installation and repair any damage
to the demised premises or the building due to such removal. All properly
permitted or required to be removed, by Tenant at the end of the term remaining
in the premises after Tenant's removal shall be deemed abandoned and may, at the
election of Owner, either be retained as Owner's property or removed from the
premises by Owner, at Tenant's expense. (See Article 56)
REPAIRS:
4. Owner shall maintain and repair the exterior of and the public portions of
the building in a first class manner. Tenant shall, throughout the term of this
lease, take good care of the demised premises including the bathrooms and
lavatory facilities and the windows and window frames and, the fixtures and
appurtenance therein and at Tenant's sole cost and expense promptly make all
repairs thereto and to the building, whether structural or non-structural in
nature, caused by or resulting from the carelessness, omission, neglect or
improper conduct of Tenant, Tenant's servants, employees, invitees, or
licensees, and whether or not arising from such Tenant conduct or omission, when
required by other provisions of this lease, including Article 6. Tenant shall
also repair all damage to the building and the demised premises caused by the
moving of Tenant's fixtures, furniture or equipment. All the aforesaid repairs
shall be of quality or class equal to the original work or construction. If
Tenant fails, after ten days notice, to proceed with due diligence to make
repairs required to be made by Tenant, the same may be made by the Owner at the
expense of Tenant, and the reasonable and actual expenses thereof actually
incurred by Owner shall be collectible, as additional rent, after rendition of a
reasonable bill or statement therefor. If the demised premises be or become
infested with vermin caused by Tenant, Tenant shall, at its expense, cause the
same to be exterminated. Tenant shall give Owner prompt notice of any defective
condition in any plumbing, heating system or electrical lines located in the
demised premises and following such notice, Owner shall remedy the condition
with due diligence, but at the expense of Tenant, if repairs are necessitated by
damage or injury attributable to Tenant, Tenant's servants, agents, employees,
invitees or licensees as aforesaid. In performing any work in the demised
premises, Owner shall use its reasonable efforts to minimize interference with
Tenant's use of the demised premises. Except as specifically provided in Article
9 or elsewhere in this lease, there shall be no allowance to the Tenant for a
diminution of rental value and no liability on the part of Owner by reason of
inconvenience, annoyance or injury to business arising from Owner, Tenant or
others making or failing to make any repairs, alterations, additions or
improvements in or to any portion of the building or the demised premises or in
and to the fixtures, appliances or equipment thereof. The provisions of this
Article 4 with respect to the making of repairs shall not apply in the case of
fire or other casualty with regard to which Article 9 hereof shall apply. (See
Article 5)
WINDOW CLEANING:
5. Tenant will not clean nor require, permit, suffer or allow any window in
the demised premises to be cleaned from the outside in violation of Section 202
of the New York State Labor Law or any other applicable law, or of any other
body having or asserting jurisdiction.
REQUIREMENTS OF LAW, FIRE INSURANCE, FLOOR LOADS:
6. Prior to the commencement of the lease term, if Tenant is then in
possession, and at all times thereafter, Tenant shall, at Tenant's sole cost and
expense, promptly comply with all present and future laws, orders and
regulations of all state, federal, municipal and local governments, departments,
commissions and boards and any direction of any public officer pursuant to law,
and all orders, rules and regulations of the New York Board of Fire
Underwriters, or the Insurance Services Office, or any similar body which shall
impose any violation, order or duty upon Owner or Tenant with respect to the
demised premises, whether or not arising out of Tenant's use or manner of use
thereof, or, with respect to the building or building systems, if arising out of
Tenant's use or manner of use of the demised premises or the building (including
the use permitted under the
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lease). Except as provided in Article 29 hereof, nothing herein shall require
Tenant to make structural repairs or alterations unless Tenant has, by its
manner of use of the demised premises or method of operation therein, violated
any such laws, ordinances, orders, rules, regulations or requirements with
respect therein. Tenant shall not do or permit any act or thing to be done in or
to the demised premises or the Building or any property adjacent thereto which
is contrary to law, or which will invalidate or be in conflict with public
liability, fire or other policies of insurance at any time carried by or for the
benefit of Owner. Tenant shall not knowingly keep anything in the demised
premises except as now or hereafter permitted by the Fire Department, Board of
Fire Underwriters, Fire Insurance Rating Organization and other authority having
jurisdiction, and then only in such manner and such quantity so as not to
increase the rate for fire insurance applicable to the building, nor use the
premises in a manner which will increase the insurance rate for the building or
any property located therein over that in effect as if Tenant were not occupying
the Building. If by reason of failure to comply with the foregoing the fire
insurance rate shall, at the beginning of this lease or at any time thereafter,
be higher than it otherwise would be, then Tenant shall reimburse Owner, as
additional rent hereunder, for that portion of all fire insurance premiums
thereafter paid by Owner which shall have been charged because of such failure
by Tenant. In any action or proceeding wherein Owner and Tenant are parties, a
schedule or "make-up" or rate for the building or demised premises issued by a
body making fire insurance rates applicable to said premises shall be conclusive
evidence of the facts therein stated and of the several items and charges in the
fire insurance rates then applicable to said premises. Tenant shall not place a
load upon any floor of the demised premises exceeding the floor load per square
foot area which it was designed to carry and which is allowed by law. Owner
reserves the right to prescribe the weight and position of all safes, business
machines and mechanical equipment. Such installations shall be placed and
maintained by Tenant, at Tenant's expense, in settings sufficient, in Owner's
judgement, to absorb and prevent vibration, noise and annoyance.
(See Article 59)
SUBORDINATION:
7. This lease is subject and subordinate to all ground or underlying leases
and to all mortgages which may now or hereafter affect such leases or the real
property of which demised premises are a part and to all renewals,
modifications, consolidations, replacements and extensions of any such
underlying leases and mortgages. This clause shall be self-operative and no
further instrument or subordination shall be required by any ground or
underlying lessor, or by any mortgagee affecting any lease or the real property
of which the demised premises are a part. In confirmation of such subordination,
Tenant shall execute promptly any certificate that Owner may request. Owner
shall use its reasonable efforts to obtain for Tenant's benefit a
non-disturbance agreement from the holder of any mortgage or ground or
underlying lease which is superior to this lease, in the form then customarily
used by the grantor of said agreement, providing in substance that so long as
Tenant is not in default under this lease beyond any applicable grace period,
then the grantor will not terminate this lease or take any action to recover
possession of the demised premises, notwithstanding any foreclosure of the
mortgage or default under, or terminate of, the ground or underlying lease. Any
fees or costs imposed by the grantor or its attorney, shall be paid by Owner.
(See Article 59)
PROPERTY -- LOSS, DAMAGE, REIMBURSEMENT, INDEMNITY:
8. Owner or its agents shall not be liable for any damage to property of
Tenant or of others entrusted to employees of the building, nor for loss of or
damage to any property of Tenant by theft or otherwise, nor for any injury or
damage to persons or property resulting from any cause whatsoever nature, unless
caused by or due to the negligence of Owner, its agents, servants or employees;
Owner or its agents shall not be liable for any damage caused by other tenants
or persons in, upon or about said building or caused by operations in connection
of any private, public or quasi public work. If at any time any windows of the
demised premises are temporarily closed, darkened or bricked up (or permanently
closed, darkened, or bricked up, if required by law) for any reason whatsoever
including, but not limited to Owner's own acts. Owner shall not be liable for
any damage Tenant may sustain thereby and Tenant shall not be entitled to any
compensation therefor nor abatement or diminution of rent nor shall the same
release Tenant from its obligations hereunder nor constitute an eviction. Owner
shall not brick up the windows any longer than is reasonably required. Tenant
shall indemnify and save harmless Owner against and from all liabilities,
obligations, damages, penalties, claims, costs and expenses for which Owner
shall not be reimbursed by insurance, including reasonable attorney's fees,
paid, suffered or incurred as a result of any breach by Tenant, Tenant's agents,
contractors, employees, invitees, or licensees, of any covenant or condition of
this lease, or the carelessness, negligence or improper conduct of the Tenant,
Tenant's agents, contractors, employees, invitees or licensees. Tenant's
liability under this lease extends to the acts and omissions of any sub-tenant,
and any agent, contractor, employee, invitee or licensee of any sub-tenant. In
case any action or proceeding is brought against Owner by reason of any such
claim, Tenant, upon written notice from Owner, will, at Tenant's expense, resist
or defend such action or proceeding by counsel approved by Owner in writing,
such approval not to be unreasonably withheld.
DESTRUCTION, FIRE AND OTHER CASUALTY:
9. (a) If the demised premises or any part thereof shall be damaged by fire
or other casualty, Tenant shall give immediate notice thereof to Owner and the
lease shall continue in full force and effect except as hereinafter set forth.
(b) If the demised premises are partially damaged or rendered partially unusable
by fire or other casualty, the damages thereto shall be repaired by and at the
expense of Owner and the rent, until such repair shall be substantially
completed, shall be apportioned from the day following the casualty according
to the part of the premises which is usable. (c) If the demised premises are
totally damaged or rendered wholly unusable by fire or other casualty, then the
rent shall be proportionately paid up to the time of the casualty and
thenceforth shall cease until the date when the premises shall have been
repaired and restored by Owner, subject to Owner's right to elect not
to restore the same as hereinafter provided. (d) If the demised premises are
rendered wholly unusable or (whether or not the demised premises are damaged in
whole or in part) if the building shall be so damaged that Owner shall decide to
demolish it or to rebuild it, then, in any of such events, Owner may elect to
terminate this lease by written notice to Tenant, given within 90 days after
such fire or casualty, specifying a date for the expiration of the lease, which
date shall not be more than 60 days after the giving of such notice, and upon
the date specified in such notice the term of this lease shall expire as fully
and completely as if such date were the date set forth above for the termination
of this lease and Tenant shall forthwith quit, surrender and vacate the premises
without prejudice however, to Owner's rights and remedies against Tenant under
the lease provisions in effect prior to such termination, and any rent owing
shall be paid up to the date of destruction and any payments of rent made by
Tenant which were on account of any period subsequent to such date shall be
returned to Tenant, unless Owner shall serve a termination notice as provided
for herein, Owner shall make the repairs and restorations under the conditions
of (b) and (c) hereof, with all reasonable expedition, subject to delays due to
adjustment of insurance claims, labor troubles and causes beyond Owner's
control. After any such casualty, Tenant shall cooperate with Owner's
restoration by removing from the premises as promptly as reasonably possible,
all of Tenant's salvageable inventory and movable equipment, furniture, and
other property. Tenant's liability for rent shall resume thirty (30) days after
written notice from Owner that the premises are substantially ready for Tenant's
occupancy. (e) Nothing contained hereinabove shall relieve Tenant from liability
that may exist as a result of damage from fire or other casualty.
Notwithstanding the foregoing, each party shall look first to any insurance in
its favor before making any claim against the other party for recovery for loss
or damage resulting from fire or other casualty, and to the extent that such
insurance is in force and collectible and to the extent permitted by law, Owner
and Tenant each hereby releases and waives all right of recovery against the
other or any one claiming through or under each of them by way of subrogation or
otherwise. The foregoing release and waiver shall be in force only if both
releasers' insurance policies contain a clause providing that such a release or
waiver shall not invalidate the insurance. If, and to the extent, that such
waiver can be obtained only by the payment of additional premiums, then the
party benefitting from the waiver shall pay such premium within ten days after
written demand or shall be deemed to have agreed that the party obtaining
insurance coverage shall be free of any further obligation under the provisions
hereof with respect to waiver of subrogation. Tenant acknowledges that Owner
will not carry insurance on Tenant's furniture and or furnishings or any
fixtures or equipment, improvements, or appurtenances removable by Tenant and
agrees that Owner will not be obligated to repair any damage thereto or replace
the same. (f) Tenant hereby waives the provisions of Section 227 of the Rent
Property Law and agrees that the provisions of this article shall govern and
control in lieu thereof.
EMINENT DOMAIN:
10. If the whole or any part of the demised premises shall be acquired or
condemned by Eminent Domain for any public or quasi public use or purpose, then
and in that event, the terms of this lease shall cease and terminate from the
date of title vesting in such proceeding and Tenant shall have no claim for the
value of any unexpired term of said lease. Owner has not received any notices of
eminent domain affecting the Real Property.
ASSIGNMENT, MORTGAGE, ETC.:
11. Tenant, for itself, its heirs, distributees, executives, administrators,
legal representatives, sucessors and assigns, expressly covenants that it shall
not assign, mortgage or encumber this agreement, nor underlet, or suffer or
permit the demised premises or any part thereof to be used by others, without
the prior written consent of Owner in each instance. Transfer of the majority of
the stock of a corporate Tenant shall be deemed an assignment. If this lease be
assigned, or if the demised premises or any part thereof be underlet or occupied
by anybody other than Tenant, Owner may, after default by Tenant, collect rent
from the assignee, under-tenant or occupant, and apply the net amount collected
to the rent herein reserved, but no such assignment, underletting, occupancy or
collection shall be deemed a waiver of this covenant, or the acceptance of the
assignee, under-tenant or occupant as tenant, or a release of Tenant from the
further performance by Tenant of covenants on the part of Tenant herein
contained. The consent by Owner in an assignment or underletting shall not in
any wise be construed to relieve Tenant from obtaining the express consent in
writing of Owner to any further assignment or underletting. (See Article 59)
ELECTRIC CURRENT:
12. Rates and conditions in respect to submetering or rent inclusion, as the
case may be, to be added in RIDER attached herein. Tenant covenants and agrees
that at all times its use of electric current shall not exceed the capacity of
existing feeders to the building or the risers or wiring installation and Tenant
may not use any electrical equipment which, in Owner's opinion, reasonably
exercised, will overload such installations or interfere with the use thereof by
other tenants of the building. The change at any time of the character of
electric service shall in no wise make Owner liable or responsible to Tenant,
for any loss, damages or expenses which Tenant may sustain. Notwithstanding
anything contained herein, Tenant is presently receiving electricity directly
from the utility company pursuant to Article 48. (See Article 48)
ACCESS TO PREMISES:
13. Owner or Owner's agents shall have the right (but shall not be obligated)
to enter the demised premises in any emergency at any time, and, at other
reasonable times, upon reasonable notice to examine the same and to make such
repairs, replacements and improvements as Owner may deem necessary and
reasonably desirable to any portion of the building or which Owner may elect to
perform in the premises after Tenant's failure to make repairs or perform any
work which Tenant is obligated to perform under this lease, or for the purpose
of complying with laws, regulations and other directions of governmental
authorities. Tenant shall permit Owner to use and maintain and replace pipes,
ducts and conduits in and through the demised premises and to erect new pipes,
ducts and conduits therein provided, wherever possible, whether they are within
walls or otherwise concealed. Owner may, during the progress of any work in the
demised premises, take all necessary materials and equipment into said premises
without the same constituting an eviction nor shall the Tenant be entitled to
any abatement of rent while such work is in progress nor to any damages by
reason of loss or interruption of business or otherwise. In performing such
work, Owner shall use reasonable efforts to minimize interference with Tenant's
use of the demised premises. Throughout the term hereof Owner shall have the
right to enter the demised premises at reasonable hours for the purpose of
showing the same to prospective purchasers or mortgagees of the building, and
during the last six months of the term for the purpose of showing the same to
prospective tenants and may, during said six months period, place upon the
premises the usual notices "To Let" and "For Sale" which notices Tenant
shall permit to remain thereon without molestation. If Tenant is not present to
open and permit an entry into the premises, Owner or Owner's agents may enter
the same whenever such entry may be necessary or permissible by master key or
forcibly and provided reasonable care is exercised to safeguard Tenant's
property, such entry shall not render Owner or its agents liable therefor, nor
in any event shall the obligations of Tenant hereunder be affected. If during
the last month of the term Tenant shall have removed all or substantially all
of Tenant's property therefrom. Owner may immediately enter, alter, renovate or
redecorate the demised premises without limitation or abatement of rent, or
incurring liability to Tenant for any compensation and such act shall have no
effect on this lease or Tenant's obligations hereunder.
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VAULT, VAULT SPACE, AREA:
14. No Vaults, vault space or area, whether or not enclosed or covered, not
within the property line of the building is leased hereunder, anything contained
in or indicated on any sketch, blue print or plan, or anything contained
elsewhere in this lease to the contrary notwithstanding. Owner makes no
representation as to the location of the property line of the building. All
vaults and vault space and all such areas not within the property line of the
building, which Tenant may be permitted to use and/or occupy, is to be used
and/or occupied under a revocable license, and if any such license be revoked,
or if the amount of such space or area be diminished or required by any federal,
state or municipal authority or public utility, Owner shall not be subject to
any liability nor shall Tenant be entitled to any compensation or diminution or
abatement of rent, nor shall such revocation, diminution or requisition be
deemed constructive or actual eviction. Any tax, fee or charge of municipal
authorities for such vault or area shall be paid by Tenant, if used by Tenant,
whether or not specifically leased hereunder.
OCCUPANCY:
15. Tenant will not at any time use or occupy the demised premises in violation
of the certificate of occupancy issued for the building of which the demised
premises are a part. Owner represents that the Certificate of Occupancy covering
the demised premises on the Commencement Date shall permit Tenant's use of the
demised premises as set forth in Article 2. Tenant has inspected the premises
and accepts them as is, subject to the riders annexed hereto with respect to
Owner's work, if any. In any event, Owner makes no representation as to the
condition of the premises and Tenant agrees to accept the same subject to
violations, whether or not of record. If any governmental license or permit
shall be required for the proper and lawful conduct of Tenant's business, Tenant
shall be responsible for and shall procure and maintain such license or permit.
BANKRUPTCY:
16. (a) Anything elsewhere in this lease to the contrary notwithstanding, this
lease may be cancelled by Owner by sending of a written notice to Tenant within
a reasonable time after the happening of any one or more of the following
events: (1) the commencement of a case in bankruptcy or under the laws of any
state naming Tenant as the debtor; or (2) the making by Tenant of an assignment
or any other arrangement for the benefit of creditors under any state statute.
Neither Tenant nor any person claiming through or under Tenant, or by reason of
any statute or order of court, shall thereafter be entitled to possession of the
premises demised but shall forthwith quit and surrender the premises. If this
lease shall be assigned in accordance with is terms, the provisions of this
Article 16 shall be applicable only to the party then owning Tenant's interest
in this lease.
(b) It is stipulated and agreed that in the event of the termination of
this lease pursuant to (a) hereof, Owner shall forthwith, notwithstanding any
other provisions of this lease to the contrary, be entitled to recover from
Tenant as and for liquidated damages an amount equal to the difference between
the rental reserved hereunder for the unexpired portion of the term demised and
the fair and reasonable rental value of the demised premises for the same
period. In the computation of such damages the difference between any
installment of rent becoming due hereunder after the date of termination and the
fair and reasonable rental value of the demised premises for the period for
which such installment was payable shall be discounted to the date of
termination at the rate of four percent (4%) per annum. If such premises or any
part thereof be relet by the Owner for the unexpired term of said lease, or any
part thereof, before presentation of proof of such liquidated damages to any
court, commission or tribunal, the amount of rent reserved upon such reletting
shall be deemed to be the fair and reasonable rental value for the part or the
whole of the premises so re-let during the term of the re-letting. Nothing
herein contained shall limit or prejudice the right of the Owner to prove for
and obtain as liquidated damages by reason of such termination, an amount equal
to the maximum allowed by any statute or rule of law in effect at the time when,
and governing the proceedings in which, such damages are to be proved, whether
or not such amount be greater, equal to, or less than the amount of the
difference referred to above. (See Article 59)
DEFAULT:
17. (1) If Tenant defaults in fulfilling any of the covenants of this lease
other than the covenants for the payment of rent or additional rent; or if the
demised premises becomes vacant or deserted or if Tenant shall fail more than 3
times during any 12 month period during the term of this lease to make timely
payments of rent or if this lease be rejected under S235 of Title II of the U.S
Code (bankruptcy code); or if any execution or attachment shall be issued
against Tenant or any of Tenant's property whereupon the demised premises shall
be taken or occupied by someone other than Tenant; or if Tenant shall make
default with respect to any other lease between Owner and Tenant; or if Tenant
shall have failed, after ten (10) days notice in the case of monetary default
and thirty (30) days notice in the case of nonmonetary default, written
notice,to redeposit with Owner any portion of the security deposited hereunder
which Owner has applied to the payment of any rent and additional rent due and
payable hereunder or failed to move into or take possession of the premises
within thirty (30) days after the commencement of the term of this lease, of
which such Owner shall be the sole judge; then in any one or more of such
events, upon Owner serving a written ten (10) days notice in the case of
monetary default and thirty (30) days notice in the case of nonmonetary default
notice upon Tenant specifying the nature of said default and upon the expiration
of said ten (10) days notice in the case of monetary default and thirty (30)
days notice in the case of nonmonetary default, if Tenant shall have failed to
comply with or remedy such default, or if the said default or omission
complained of shall be of a nature that the same cannot be completely cured or
remedied within said ten (10) days notice in the case of monetary default and
thirty (30) days notice in the case of nonmonetary default, and if Tenant shall
not have diligently commenced curing such default within such ten (10) days
notice in the case of monetary default and thirty (30) days notice in the case
of nonmonetary default period, and shall not thereafter with reasonable
diligence and in good faith, proceed to remedy or cure such default, and in the
case of failure of Tenant to pay rent or additional rent, Owner shall give
Tenant ten (10) additional days notice of such failure to pay and if Tenant
shall fail to pay within such ten (10) day period, then Owner may serve a
written five (5) days' notice of cancellation of this lease upon Tenant, and
upon the expiration of said five (5) days this lease and the terms thereunder
shall end and expire as fully and completely as if the expiration of such five
(5) day period were the day herein definitely fixed for the end and expiration
of this lease and the term thereof and Tenant shall then quit and surrender the
demised premises to Owner but Tenant shall remain liable as hereinafter
provided.
(2) If the notice provided for in (1) hereof shall have been given and
applicable grace periods have expired and the term shall expire as aforesaid; or
if Tenant shall make default in the payment of the rent reserved herein or any
term of additional rent herein mentioned or any part of either or in making any
other payment herein required; then an in any of such events Owner may without
notice, re-enter the demised premises either by force or otherwise, and
disposses Tenant by summary proceedings or otherwise, and the legal
representative of Tenant or other occupant of demised premises and remove their
effects and hold the premises as if this lease had not been made, and Tenant
hereby waives the service of notice of intention to re-enter or to institute
legal proceedings to that end. If Tenant shall not default hereunder prior to
the date fixed as the commencement of or renewal or extension of this lease,
Owner may cancel and terminate such renewal or extension agreement by written
notice.
REMEDIES OF OWNER AND WAIVER OF REDEMPTIONS:
18. In case of any such default, to entry, expiration and/or dispossess by
summary proceedings or otherwise, (a) the rent, and additional rent, shall
become due thereupon and be paid up to the time of such re-entry, dispossess
and/or expiration, (b) Owner may re-let the premises or any part or parts
thereof, either in the name of Owner or otherwise, for a term or terms, which
may at Owner's option be less than or exceed the period which would otherwise
have constituted the balance of the term of this lease and may grant concessions
or free rent or charge a higher rental than that in this lease, (c) Tenant or
the legal representatives of Tenant shall also pay Owner as liquidated damages
for the failure of Tenant to observe and perform said Tenant's covenants herein
contained, any deficiency between the rent hereby reserved and or covenanted to
be paid and the net amount, if any, of the rents collected on account of the
subsequent lease or leases of the demised premises for each month of the period
which would otherwise have constituted the balance of the term of this lease.
The failure of Owner to re-let the premises or any part of parts thereof shall
not release or affect Tenant's liability for damages. In computing such
liquidated damages there shall be added to the said deficiency such expenses as
Owner may incur in connection with re-letting, such as legal expenses,
attorneys' fees, brokerage, advertising and for keeping the demised premises in
good order or for preparing the same for re-letting. Any such liquidated damages
shall be paid in monthly installments by Tenant on the rent day specified in
this lease and any suit brought to collect the amount of the deficiency for any
month shall not prejudice in any way the rights of Owner to collect the
deficiency for any subsequent month by a similar proceeding. Owner, in putting
the demised premises in good order or preparing the same for re-rental may, at
Owner's option, make such alterations, repairs, replacements, and/or decorations
in the demised premises as Owner, in Owner's sole judgment, considers advisable
and necessary for the purpose of re-letting the demised premises, and the making
of such alterations, repairs, replacements, and/or decorations shall not operate
or be construed to release Tenant from liability hereunder as aforesaid. Owner
shall in no event be liable in any way whatsoever for failure to re-let the
demised premises, or in the event that the demised premises are re-let, for
failure to collect the rent thereof under such re-letting, and in no event shall
Tenant be entitled to receive any excess, if any, of such net rents collected
over the sums payable by Tenant to Owner hereunder. In the event of a breach or
threatened breach by Tenant of any of the covenants or provisions hereof. Owner
shall have the right of injunction and the right to invoke any remedy allowed at
law or in equity as if re-entry, summary proceedings and other remedies were not
herein provided for. Mention in this lease of any particular remedy, shall not
preclude Owner from any other remedy, in law or in equity. Tenant hereby
expressly waives any and all rights of redemption granted by or under any
present or future laws.
FEES AND EXPENSES:
19. If Tenant shall default in the observance or performance of any term or
covenant on Tenant's part to be observed or performed under or by virtue of any
of the terms and provisions in any article of this lease, then unless otherwise
provided elsewhere in this lease. Owner may immediately or at any time
thereafter and without notice perform the obligation of Tenant thereunder. If
Owner, in connection with the foregoing or in connection with any defaults by
Tenant in the covenant to pay rent hereunder, makes any expenditures or actually
incurs any obligations for the payment of money, including but not limited to
reasonably attorney's fees, in instituting, prosecuting or defending any action
or proceedings, then Tenant will reimburse Owner for such sums so paid or
obligations incurred with interest and costs. The foregoing expenses incurred by
reason of tenant's default shall be deemed to be additional rent hereunder and
shall be paid by Tenant to Owner within five (5) days of rendition of any bill
or statement in Tenant therefor. If Tenant's lease term shall have expired at
the time of making of such expending or incurring of such obligations, such sums
shall be recoverable by Owner as damages.
BUILDING ALTERATIONS AND MANAGEMENT:
20. Owner shall have the right at any time without the same constituting an
eviction and without incurring liability to Tenant therefor to change the
arrangement and or location of public entrances, passageways, doors, doorways,
corridors, elevators, stairs, toilets or other public parts of the building and
to change the name, number or designation by which the building may be known.
Such changes shall not unreasonably interfere with Tenant's use of the demised
premises. There shall be no allowance to Tenant for elimination of rental value
and no liability on the part of Owner by reason of inconvenience, annoyance or
injury to business arising from Owner or other Tenant making any repairs to the
building or any such alterations, additions and improvements. Furthermore,
Tenant shall not have any claim against Owner by reason of Owner's imposition of
any controls of the manner of access to the building by Tenants's social or
business visitors as the Owner may deem necessary for the security of the
building and its occupants.
NO REPRESENTATIONS BY OWNER:
21. Except as set forth herein, neither Owner nor Owner's agents have made any
representations or promises with respect to the physical condition of the
building, the land upon which it is erected or the demised premises, the rents,
leases, expenses of operation or any other matter or thing affecting or related
to the demised premises or the building except as herein expressly set forth and
no rights, casements or licenses are acquired by Tenant by implication or
otherwise except as expressly set forth in the provisions of this lease. Tenant
has inspected the building and the demised premises and is thoroughly
reacquainted with their condition and agrees to take the same "as is" on the
date possession is tendered and acknowledges that the taking of possession of
the demised premises by Tenant shall be conclusive evidence that the said
premises and the building of which the same form a part were in good and
satisfactory condition at the time such possession was so taken, except as to
intent defects. All understandings and agreements heretofore made between the
parties hereto are merged in this contract, which alone fully and completely
expresses the agreement between Owner and Tenant and any executory agreement
hereafter made shall be ineffective to
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change, modify, discharge or effect an abandonment of it in whole or in part,
unless such executory agreement is in writing and signed by the party against
whom enforcement of the change, modification, discharge or abandonment is
sought.
END OF TERM:
22. Upon the expiration or other termination of the term of this lease, Tenant
shall quit and surrender to Owner the demised premises, broom clean, in good
order and condition, ordinary wear and damages which Tenant is not required to
repair as provided elsewhere in this lease excepted, and Tenant shall remove all
its property from the demised premises. Tenant's obligation to observe or
perform this covenant shall survive the expiration or other termination of this
lease.
QUIET ENJOYMENT:
23. Owner covenants and agrees with Tenant that upon Tenant paying the rent and
additional rent and observing and performing all the terms, covenants and
conditions, on Tenant's part to be observed and performed. Tenant may peaceably
and quietly enjoy the premises hereby demised, subject, nevertheless, to the
terms and conditions of this lease including, but not limited to, Article 24
hereof and to the ground leases, underlying leases and mortgages hereinbefore
mentioned.
FAILURE TO GIVE POSSESSION:
24. If Owner is unable to give possession of the demised premises on the date
of the commencement of the term hereof, because of the holding-over or retention
of possession of any tenant, undertenant or occupants or if the demised premises
are located in a building being constructed, because such building has not been
sufficiently completed to make the premises ready for occupancy or because of
the fact that a certificate of occupancy has not been procured or if Owner has
not completed any work required to be performed by Owner, or for any other
reason. Owner shall not be subject to any liability for failure to give
possession on said date and the validity of the lease shall not be impaired
under such circumstances, nor shall the same be construed in any sense to extend
the term of this lease, but the rent payable hereunder shall be abated (provided
Tenant is not responsible for Owner's inability to obtain possession or complete
any work required) until after Owner shall have given Tenant notice that the
premises are substantially ready for Tenant's occupancy. If permission is given
to Tenant to enter into the possession of the demised premises or to occupy
premises other than the demised premises prior to the date specified as the
commencement of the term of this lease, Tenant covenants and agrees that such
occupancy shall be deemed to be under all terms, covenants, conditions and
provisions of this lease, except as to the covenant to pay rent. The provisions
of this article are intended to constitute "an express provision to the
contrary" within the meaning of Section 221-a of the New York Real Property Law.
NO WAIVER:
25. The failure of Owner to seek redress for violation of, or to insist upon
the strict performance of any covenant or condition of this lease or of any of
the Rules or Regulations, set forth or hereafter adopted by Owner, shall not
prevent a subsequent act which would have originally constituted a violation
from having all the force and effect of an original violation. The receipt by
Owner of rent with knowledge of the breach of any covenant of this lease shall
not be deemed a waiver of such breach and no provision of this lease shall be
deemed to have been waived by Owner unless such waiver be in writing signed by
Owner. No payment by Tenant or receipt by Owner of a lesser amount than the
monthly rent herein stipulated shall be deemed to be other than on account of
the earliest stipulated rent, nor shall any endorsement or statement of any
check or any letter accompanying any check or payment as rent be deemed an
accord and satisfaction, and Owner may accept such check or payment without
prejudice to Owner's right to recover the balance of such rent or pursue any
other remedy to this lease provided. All checks tendered to Owner as and for the
rent of the demised premises shall be deemed payments for the account of Tenant.
Acceptance by Owner of rent from anyone other than Tenant shall not be deemed to
operate as an attainment to Owner by the payor of such rent or as a consent by
Owner to an assignment or subletting by Tenant of the demised premises to such
payor, or as a modification of the provisions of this lease. No act or thing
done by Owner or Owner's agents during the term hereby demised shall be deemed
an acceptance of a surrender of said premises and no agreement to accept such
surrender shall be valid unless in writing signed by Owner. No employee of Owner
or Owner's agent shall have any power to accept the keys of said premises prior
to the termination of the lease and the delivery of keys to any such agent or
employee shall not operate as a termination of the lease or a surrender of the
premises.
WAIVER OF TRIAL BY JURY:
26. It is mutually agreed by and between Owner and Tenant that the respective
parties hereto shall and they hereby do waive trial by jury to any action,
proceeding or counterclaim brought by either of the parties herein against the
other (except for personal injury or property damage) or any matters whatsoever
arising out of or in any way connected with this lease, the relationship of
Owner and Tenant, Tenant's use of or occupancy of said premises, and any
emergency statutory or any other statutory remedy. It is further mutually
agreed that in the event Owner commences any summary proceeding for possession
of the premises, Tenant will not interpose any counterclaim of whatever nature
or description in any such proceeding.
INABILITY TO PERFORM:
27. This Lease and the obligation of Tenant to pay rent hereunder and perform
all of the other covenants and agreements hereunder on part of Tenant to be
performed shall in no wise be affected, impaired or excused because Owner is
unable to fulfill any of its obligations under this lease or to supply or is
delayed in supplying any service expressly or impliedly to be supplied or is
unable to make, or is delayed in making any repair, additions, alterations or
decorations or is unable to supply or is delayed in supplying any equipment or
fixtures if Owner is prevented or delayed from so doing by reason of strike or
labor troubles of any cause whatsoever beyond Owner's sole control including,
but not limited to, government preemption in connection with a National
Emergency or by reason of any rule, order or regulation of any department or
subdivision thereof of any government agency or by reason of the conditions of
supply and demand which have been or are affected by war or other emergency.
This lease and the obligations of Owner to perform hereunder shall in no wise be
effected, impaired or excused because Tenant is unable to fulfill any of its
obligations under this lease, other than the payment of Fixed Annual Rent or
additional rent, by reason of unavoidable delays.
BILLS AND NOTICES:
28. (See Article 57)
WATER CHARGES:
29. Owner shall furnish water to the demised premises for ordinary lavatory
and kitchen use without charge. If Tenant requires, uses or consumes water for
any purpose in addition to ordinary lavatory purposes (of which fact Tenant
constitutes Owner to be the sole judge) Owner may install a water meter and
thereby measure Tenant's water consumption for all purposes. Tenant shall pay
Owner for the cost of the meter and the cost of the installation, thereof and
throughout the duration of Tenant's occupancy. Tenant shall keep said meter and
installation equipment in good working order and repair at Tenant's own cost
and expense in default of which Owner may cause such meter and equipment to be
replaced or repaired and collect the cost thereof from Tenant as additional
rent. Tenant agrees to pay for water consumed, as shown on said meter as and
when bills are rendered, and on default in making such payment Owner may pay
such charges and collect the same from Tenant as additional rent. Tenant
covenants and agrees to pay, as additional rent the sewer rent, charge or any
other tax, rent, levy or charge which now or hereafter is assessed, imposed or
a lien upon the demised premises or the realty of which they are part pursuant
to law, order or regulation made or issued in connection with the use,
consumption, maintenance or supply of water, water system or sewage or sewage
connection or system. If the building or the demised premises or any part
thereof is supplied with water through a meter through which water is also
supplied to other premises Tenant shall pay to Owner, as additional rent, on
the first day of each month, Owner's reasonable estimate of Tenant's share of
the total meter charges as Tenant's portion. Independently of and in addition
to any of the remedies reserved to Owner hereinabove or elsewhere in this lease.
Owner may sue for and collect any monies to be paid by Tenant or paid by Owner
for any of the reasons or purposes hereinabove set forth.
SPRINKLERS:
30. Anything elsewhere in this lease to the contrary notwithstanding, if the
New York Board of Fire Underwriters or the New York Fire Insurance Exchange or
any bureau, department or official of the federal, state or city government
recommend or require the installation of a sprinkler system or that any
changes, modifications, alterations, or additional sprinkler heads or other
equipment be made or supplied in an existing sprinkler system by reason of
Tenant's business, or the location of partitions, trade fixtures, or other
contents of the demised premises, or for any other reason, or if any such
sprinkler system installations, modifications, alterations, additional
sprinkler heads or other such equipment, become necessary to prevent the
imposition of a penalty or charge against the full allowance for a sprinkler
system in the fire insurance rate set by any said Exchange or by any life
insurance company. Tenant shall, at Tenant's expense, promptly make such
sprinkler system installations, changes, modifications, alterations, and supply
additional sprinkler heads or other equipment as required whether the work
involved shall be structural of non-structural in nature. Tenant shall pay to
Owner as additional rent 34% for the period commencing on the Commencement Date
and shall be increased by (i) 16.40% for the period commencing on the First
Additional Premises Commencement Date, (ii) 11.42% for the period commencing on
the Second Additional Premises Commencement Date and (iii) 8.60% for the period
commencing on the Third Additional Premises Commencement Date of the contract
price for sprinkler supervisory service and alarm service.
ELEVATORS, HEAT, CLEANING:
31. As long as Tenant is not in default under any of the covenants of this
lease beyond applicable notice and grace periods, Owners shall: clean the public
halls and public portions of the building which are used in common by all
tenants. Tenant shall, at Tenant's expense, keep the demised premises,
including the windows, clean and in order, to the reasonable satisfaction of
Owner, and for that purpose shall employ the person or persons, or corporation
approved by Owner. Owner reserves the right to stop service of the heating,
plumbing and electric systems, when necessary, by reason of accident, or
emergency, or for repairs, alterations, replacements or improvements. In the
judgment of Owner desirable or necessary to be made, until said repairs,
alterations, replacements or improvements shall have been completed. Owner
shall use its reasonable and diligent efforts to cause such services to be
restored as expeditiously as possible.
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SECURITY:
32. Tenant has deposited with Owner the sum of $61,625.00 as security for the
faithful performance and observance by Tenant of the terms, provisions and
conditions of this lease; it is agreed that in the event Tenant defaults in
respect of any of the terms, provisions and conditions of this lease after the
expiration of applicable notice and grace periods including, but not limited
to, the payment of rent and additional rent. Owner may use, supply or retain
the whole or any part of the security so deposited to the extent required for
the payment of any rent and additional rent or any other sum as to which tenant
is in default or for any sum which Owner may expend or may be required to
expend by reason of Tenant's default in respect of any of the terms, covenants
and conditions of this lease, including but not limited to, any damages or
deficiency in the re-letting of the premises, whether such damages or
deficiency accrued before or after summary proceedings or other re-entry by
Owner. If Owner so uses, applies or retains any part of the security so
deposited, Tenant, upon demand, shall deposit with Owner the amount so used,
applied or retained, so that Owner shall have the full deposit on hand at all
times during the term of this lease. In the event that Tenant shall fully and
faithfully comply with all of the terms, provisions, covenants and conditions
of this lease, the security shall be returned to Tenant after the date fixed as
the end of the Lease and after delivery of entire possession of the demised
premises to Owner. In the event of a sale of the land and building or leasing
of the building, of which the demised premises form a part, Owner shall have
the right to transfer the security to the vendee or lessee and Owner shall
thereupon be released by Tenant from all liability for the return of such
security; and Tenant agrees to look to the new Owner solely for the return of
said security, and it is agreed that the provisions hereof shall apply to every
transfer or assignment made of the security to a new Owner. Tenant further
covenants that it will not assign or encumber or attempt to assign or encumber
the monies deposited herein as security and that neither Owner nor its
successors or assigns shall be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance. On or before the First
Additional Premises Commencement Date, Tenant shall deposit with Owner, as
additional security, $29,725.00. On or before the Second Additional Premises
Commencement Date, Tenant shall deposit with Owner, as additional security,
$20,698.00. On or before the Third Additional Premises Commencement Date,
Tenant shall deposit with Owner, as additional security, $15,587.50. Such
additional sums shall be held by Owner in accordance with the provisions of
this Article 32. The security deposited hereunder shall be placed in an
interest bearing account. Interest earned by Owner on the security deposit shall
be distributed to Tenant annually provided that Tenant shall not be in default
hereunder. Owner shall retain 1% of the security deposit annually as an
administrative fee.
CAPTIONS:
33. The Captions are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope of this lease nor
the intent of any provision thereof.
DEFINITIONS:
34. The term "Owner" as used in this lease means only the owner of the fee or
of the leasehold of the building, or the mortgagee in possession, for the time
being of the land and building for the owner of a lease of the building or of
the land and building of which the demised premises form a part, so that in the
event of any sale or sales of said land and building or of said lease, or in
the event of a lease of said building, or of the land and building, the said
Owner shall be and hereby is entirely freed and relieved of all covenants and
obligations of Owner hereunder, and it shall be deemed and consigned without
further agreement between the parties or their successors in interest, or
between the parties and the purchaser, at any such sale, or the said lessee of
the building, or of the land and building, that the purchaser or the lessee of
the building has assumed and agreed to every and any and all covenants and
obligations of Owner hereunder. The words "re-enter" and "re-entry" as used in
this lease are not restricted to their technical legal meaning. The term "rent"
includes the annual rental rate whether so-expressed or expressed in monthly
installments, and "additional rent." "Additional rent" means all sums which
shall be due to new Owner from Tenant under this lease, in addition to the
annual rental rate. The term "business days" as used in this lease, shall
exclude Saturdays, Sundays and all days observed by the State or Federal
Government as legal holidays and those designated as holidays by the applicable
building service union employees service contract or by the applicable
Operating Engineers contract with respect to HVAC service.
ADJACENT EXCAVATION -- SHORING:
35. If an excavation shall be made upon land adjacent to the demised premises,
or shall be authorized to be made, Tenant shall afford to the person causing or
authorized to cause such excavation, license to enter upon the demised premises
for the purpose of doing such work as said person shall deem necessary to
preserve the wall or the building of which demised premises form a part from
injury or damage and to support the same by proper foundations without any claim
for damages or indemnity against Owner, or diminution or abatement or rent.
RULES AND REGULATIONS:
36. (See Article 55)
GLASS:
37. Owner shall replace, at the expense of the Tenant, any and all plate and
other glass damaged or broken from any cause whatsoever in and about the demised
premises. Owner may insure, and keep insured, at Tenant's expense, all plate and
other glass in the demised premises for and in the name of Owner. Bills for the
premiums therefor shall be rendered by Owner to Tenant at such times as Owner
may elect, and shall be due from, and payable by, Tenant when rendered, and the
amount thereof shall be deemed to be, and be paid, as additional rent.
ESTOPPEL CERTIFICATE:
38. Tenant, at any time, and from time to time, upon at least 10 days' prior
notice by Owner, shall execute, acknowledge and deliver to Owner, and/or to any
other person, firm or corporation specified by Owner, a statement certifying
that this Lease is unmodified in full force and effect (or if there have been
modifications, that the same is in full force and effect as modified and
stating the modifications), stating the dates to which the rent and additional
rent have been paid, and stating whether or not there exists any default by
Owner under this lease, and if so, specifying each such default.
DIRECTORY BOARD LISTING:
39. (See Article 51)
SUCCESSORS AND ASSIGNS:
40. The covenants, conditions and agreements contained in this lease shall
bind and inure to the benefit of Owner and Tenant and their respective heirs,
distributees, executors, administrators, successors, and except as otherwise
provided in this lease, their assigns.
IN WITNESS WHEREOF, Owner and Tenant have respectively signed and sealed
this lease as of the day and year first above written.
Witness for Owner: ROBERT MARTIN COMPANY
-------------------------------CORP.
SEAL
By:
- ----------------------------------- -------------------------------(L.S.)
President
Witness for Tenant: CITYSCAPE CORP.
-------------------------------CORP.
SEAL
By: [SIGNATURE ILLEGIBLE]
- ----------------------------------- -------------------------------(L.S.)
Exec. Vice President
FEDERAL I.D. # / SOCIAL SECURITY #
-------------------------------
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MULTI/MAS 88
Striking out or deletion of any portion of this lease (and the insertion of
asterisks at various points) was done as a matter of convenience in preparing
the lease for execution. The language omitted (as well as the use or placement
of such asterisks) is not to be given any effect in construing this lease,
RULES & REGULATIONS - Exhibit A
WORK SPECIFICATIONS - Exhibit B
FLOOR PLAN - Exhibit C
TEMPORARY LEASE AGREEMENT - Exhibit D
STANDARD FORM OF RIDER TO STANDARD FORM OF LOFT LEASE
Date of Lease: May , 1996
Owner: ROBERT MARTIN COMPANY
Tenant: CITYSCAPE CORP.
Building: EIGHT SKYLINE DRIVE, HAWTHORNE, NY
Rentable Area: approximately 17,000 square feet for the period commencing on
the Commencement Date and shall be increased by (i)
approximately 8,200 square feet for the period commencing on
the First Additional Premises Commencement Date, (ii)
approximately 5,710 square feet for the period commencing on
the Second Additional Premises Commencement Date and (iii)
approximately 4,300 square feet for the period commencing on
the Third Additional Premises Commencement Date.
41. Additional Definitions. For all purposes of this lease, and all
agreements supplemental hereto, the terms defined in this Article shall have the
meanings specified unless the context otherwise requires:
(a) The term laws and requirements of public authorities shall mean
laws and ordinances of federal, state, city, town, and county governments, and
rules, regulations, orders and directives of departments, subdivisions, bureaus,
agencies or offices thereof, or any other governmental, public or quasi-public
authorities having jurisdiction over the Building, and the directions of any
public officer pursuant to law.
(b) The word invitee shall mean any employee, agent, visitor,
customer, contractor, licensee, or other party claiming under, or in the
Building, or in the Park, if applicable, by permission or sufferance of, Owner
or Tenant.
(c) The term requirements of insurance bodies shall mean rules,
regulations, orders and other requirements of the New York Board of Fire
Underwriters or New York Fire Insurance Rating Organization or any similar body
performing the same or similar functions.
(d) The term unavoidable delays shall mean delays due to strikes or
labor troubles, fire or other casualty, governmental restrictions, enemy action,
civil commotion, war or other emergency, acts of God or nature, or any cause
beyond the reasonable control of either party whether or not similar to any of
the causes stated above, but not the inability of either party to obtain
financing which may be necessary to carry out its obligations.
(e) The term Real Property shall mean the tax lot of which the demised
premises is a part. The Building is assessed with 10 Skyline Drive. For the
purposes of this lease, the Building is allocated of 71.1% of the Taxes for the
Real Property based on the relative square footage of each building.*
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MULTI/MAS 88
(f) The term lease year shall mean the 12 month period commencing with
the Commencement Date (as defined in paragraph (a) of Article 42), and ending
the day preceding the first anniversary of the Commencement Date (except that if
the Commencement Date shall occur on a day other than the first day of a
calendar month, such period shall commence with the Commencement Date and end
with the last day of the 12th full calendar month thereafter) and each 12 month
period thereafter, all or part of which falls within the term of this lease.
(g) The word rent shall mean the Fixed Annual Rent and such other sums
due Owner pursuant to this lease. All sums due Owner, other than Fixed Annual
Rent, are included in the term additional rent.
(h) The term Hazardous Materials shall mean (i) any chemical, material
or substance defined as or included in the definitions of "hazardous substance",
"hazardous materials", "extremely hazardous waste", "restricted hazardous
waste", "toxic substance" or words of similar import, under any applicable
local, state, or federal laws, including but not limited to the Federal Water
Pollution Act (33 U.S.C. Section 1251 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.), the Resources Conservation
and Recovery Act (42 U.S.C. 6901 et seq., 42 U.S.C. Section 7401 et seq.) and
CERCLA (42 U.S.C. 9601 et seq.), all as may be amended from time to time; (ii)
petroleum; (iii) asbestos; (iv) polychlorinated biphenyls; (v) radioactive
materials; and (vi) radon gas. Notwithstanding anything contained in this lease
to the contrary, Tenant may use ordinary cleaning materials in reasonable
quantities in the demised premises.*
(i) The term business days as used in this lease shall exclude
Saturdays, Sundays and all days observed by the State or Federal Government as
legal holidays and all days designated as holidays by the applicable building
service union employees service contract.
(j) The term Executive Park or Park shall mean Mid Westchester
Executive Park, located in the Town of Mount Pleasant, County of Westchester and
State of New York.
42. Term; Preparation for Occupancy and Possession.
(a) The term of this lease and the estate hereby granted shall
commence on a date (the "Commencement Date") which shall be the earlier of the
day (i) on which the Initial Premises shall be deemed to be completed as such
term is defined in paragraph (c) of this Article (of which date Tenant shall be
given 5 days notice), or (ii) Tenant (or anyone claiming under or through
Tenant) shall occupy the Initial Premises. The term shall expire on the last day
of the month five (5) years after the month in which the Commencement Date
occurs (the "Expiration Date") or on such earlier date upon which said term may
expire or be terminated pursuant to any provision of this lease or law. Promptly
following the determination of the Commencement Date, the parties shall enter
into a supplementary written agreement setting forth the Commencement and
Expiration Dates.
(b) The Initial Premises shall be completed and initially prepared by
Owner in the manner set forth in, and subject to the provisions of, the attached
Work Specifications and Floor Plan. Tenant and its contractors shall be entitled
to access to the Initial Premises prior to the completion of Owner's work,
subject to Owner's prior approval, and only so long as they work in conformity
with and do not interfere, in Owner's judgment, with Owner or its contractors in
the completion of Owner's work, and provided they accept the administrative
supervision of Owner. If Tenant's work interferes with Owner's work, in Owner's
judgment,
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MULTI/MAS 88
Owner may withdraw the license granted to Tenant pursuant to this paragraph upon
24 hours notice. Tenant's selection of contractors must be in compliance with
the provisions of this lease.
(c) The Initial Premises shall be deemed completed on the date on
which Owner's work in the Initial Premises has been substantially completed
(notwithstanding the fact that minor or insubstantial details of construction,
mechanical adjustment or decoration remain to be performed, the non-completion
of which would not materially interfere with Tenant's use of the Initial
Premises) and a (temporary or final) certificate of occupancy is issued for the
Initial Premises. If Owner shall obtain a temporary certificate of occupancy,
the Initial Premises shall be substantially completed only if such temporary
certificate of occupancy shall permit Tenant to use the Initial Premises in
accordance with Article 2, and Owner shall proceed diligently to obtain a final
certificate of occupancy. If completion of the Initial Premises by Owner is
delayed by reason of:
(i) any act or omission of Tenant or any or its employees,
agents or contractors, including failure of Tenant to comply with any
of its obligations under the Work Specifications, or
(ii) Tenant's failure to plan or execute Tenant's work with
reasonable speed and diligence, or
(iii) Tenant's failure to make selections required by the Work
Specifications, or
(iv) Tenant's changes by Tenant in its drawings or
specifications or changes or substitutions requested by Tenant, or
(v) Tenant's failure to submit or approve drawings, plans or
specifications timely, or
(vi) Tenant's failure to deliver to Owner the first month's
rent (if required by the provisions on the first page of this lease),
and the security deposit required by Article 32 (if any),
then the Initial Premises shall be deemed completed, the Commencement Date shall
be deemed to have occurred (and Tenant shall commence paying rent) on the date
when it would have been completed and rent would have been due and payable but
for such delay, and Tenant shall pay Owner all costs and damages which Owner may
sustain by reason of such delay.*
Owner shall use its best efforts to cause the Initial Premises to be deemed
complete within 60 days after the date of this lease, provided that Owner shall
have no liability for its failure to cause the Initial Premises to be deemed
complete by such date.*
In the event the Initial Premises are not ready for occupancy (for reasons other
than as set forth in this Paragraph (c)) within 150 days after the date hereof,
Tenant may elect to terminate this lease, provided that notice of such election
shall be given to Owner no later than 160 days after the date hereof, time being
of the essence in the giving of such notice. If Tenant shall so elect, the
parties shall then be released of all liabilities hereunder, each to the other.*
(d) (A) The First Additional Premises Commencement Date shall be the
earlier of the day (i) on which the First Additional Premises shall be deemed to
be completed as such term is defined in paragraph (c) of this Article (of which
date Tenant shall be given 15 days notice), or (ii) Tenant (or anyone claiming
under or
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MULTI/MAS 88
through Tenant) shall occupy the First Additional Premises. Promptly following
the determination of the First Additional Premises Commencement Date, the
parties shall enter into a supplementary written agreement setting forth the
First Additional Premises Commencement Date.*
(B) The First Additional Premises shall be completed and initially
prepared by Owner in the manner set forth in, and subject to the provisions of,
the attached or to be attached Work Specifications and Floor Plan. Tenant and
its contractors shall be entitled to access to the First Additional Premises
prior to the completion of Owner's work, subject to Owner's prior approval
(which approval shall not be unreasonably withheld), and only so long as they
work in conformity with and do not interfere, in Owner's reasonable judgment,
with Owner or its contractors in the completion of Owner's work, and provided
they accept the administrative supervision of Owner. If Tenant's work interferes
with Owner's work, in Owner's reasonable judgment, Owner may withdraw the
license granted to Tenant pursuant to this paragraph upon 24 hours notice.
Tenant's selection of contractors must be in compliance with the provisions of
this lease.*
(C) The First Additional Premises shall be deemed completed on the
date on which Owner's work in the First Additional Premises has been
substantially completed (notwithstanding the fact that minor or insubstantial
details of construction, mechanical adjustment or decoration remain to be
performed, the non-completion of which would not materially interfere with
Tenant's use of the First Additional Premises) and a (temporary or final)
certificate of occupancy is issued for the First Additional Premises. If Owner
shall obtain a temporary certificate of occupancy, the First Additional Premises
shall be substantially completed only if such temporary certificate of occupancy
shall permit Tenant to use the First Additional Premises in accordance with
Article 2, and Owner shall proceed diligently to obtain a final certificate of
occupancy. If completion of the First Additional Premises by Owner is delayed by
reason of:
(i) any act or omission of Tenant or any of its employees,
agents or contractors, including failure of Tenant to comply with any
of its obligations under the Work Specifications, or
(ii) Tenant's failure to plan or execute Tenant's work with
reasonable speed and diligence, or
(iii) Tenant's failure to make selections required by the Work
Specifications, or
(iv) Tenant's changes by Tenant in its drawings or
specifications or changes or substitutions requested by Tenant, or
(v) Tenant's failure to submit or approve drawings, plans or
specifications, including layout specifications, timely, or
(vi) Tenant's failure to deliver to Owner the first month's rent
(if required by the provisions on the first page of this lease), and
the security deposit required by Article 32 (if any), or
(vii) Tenant's failure to approve construction drawings for the
First Additional Premises within 15 days after the delivery of the
drawings from Owner to Tenant,
then the First Additional Premises shall be deemed completed, the First
Additional Premises Commencement Date shall be deemed to have
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MULTI/MAS 88
occurred (and Tenant shall commence paying rent) on the date when it would have
been completed and rent would have been due and payable but for such delay, and
Tenant shall pay Owner all costs and damages which Owner may sustain by reason
of such delay.*
Owner shall use its best efforts to cause the First Additional Premises to be
deemed complete on or before November 1, 1996, provided that Owner shall have no
liability for its failure to cause the First Additional Premises to be deemed
complete by such date. Owner shall notify Tenant if Owner is unable to deliver
the First Additional Premises by November 1, 1996.*
In the event the First Additional Premises are not delivered by Owner (for
reasons other than delays caused by any of the events set forth in clauses (i) -
(vii) of this subparagraph (C)) by February 1, 1997, Tenant, as its sole remedy,
may elect to terminate this lease, provided that notice of such election shall
be given to Owner no later than February 11, 1997, time being of the essence in
the giving of such notice. If Tenant shall so elect, the parties shall then be
released of all liabilities hereunder, each to the other. If Tenant shall
terminate this lease pursuant to this paragraph, the effective date of
termination shall be August 31, 1997.*
Owner shall contribute an amount equal to $108,650.00 ("Owner's Contribution").
If the cost of Owner's work in the First Additional Premises exceeds Owner's
Contribution, then Tenant shall be required to pay such additional monies to
Owner within 30 days after Owner sends an invoice to Tenant. Tenant shall not be
entitled to any reimbursement, refund or credit if the cost of Owner's work in
the First Additional Premises is less than Owner's Contribution.*
(e) The Second Additional Premises Commencement Date shall be the
earlier of (i) the date Owner shall deliver the Second Additional Premises to
Tenant or (ii) Tenant (or anyone claiming under or through Tenant) shall occupy
the Second Additional Premises. Promptly following the determination of the
Second Additional Premises Commencement Date, the parties shall enter into a
supplementary written agreement setting forth the Second Additional Premises
Commencement Date. Owner shall notify Tenant as promptly as possible if Owner is
unable to deliver the Second Additional Premises or Third Additional Premises by
March 31, 1998. Owner shall notify Tenant on or before June 30, 1997, if the
existing tenant in the Second Additional Premises elected to exercise its option
to renew. If Owner delivers the Third Additional Premises prior to the Second
Additional Premises, the Second Additional Premises Commencement Date shall be
the earlier of (i) the date Owner shall deliver the Second Additional Premises
to Tenant or (ii) Tenant (or anyone claiming under or through Tenant) shall
occupy the Second Additional Premises. Promptly following the determination of
the Second Additional Premises Commencement Date, the parties shall enter into a
supplementary written agreement setting forth the Second Additional Premises
Commencement Date.*
In the event that Owner fails to deliver either the Second Additional Premises
or the Third Additional Premises by May 31, 1998, Owner, as expeditiously as is
reasonably possible, shall use its best efforts to provide Tenant with temporary
space having a rentable area of at least 5,000 square feet in a building within
the Park ("Temporary Space"). Tenant shall have no obligation to pay rent for
the Temporary Space, and Tenant may occupy the Temporary Space until Owner shall
be able to deliver either the Second Additional Premises or the Third Additional
Premises. In addition, Tenant shall have the right to use 25 parking spaces in
connection with its occupancy of the Temporary Space to be reasonably allocated
between executive and employee spaces by
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Owner. Owner shall have no obligation to perform any work in the Temporary
Space, provided that the Temporary Space is reasonably suited to permit Tenant
to reasonably operate its business on a temporary basis within the Temporary
Space. The Temporary Space shall be substantially similar to the Initial
Premises, reasonable wear and tear excepted (e.g., broom clean, carpeted
(although such carpeting need not be new, it shall be in reasonably good
condition), air conditioned, hung ceiling, etc.). Tenant shall be responsible to
pay for any utilities consumed by Tenant in the Temporary Space and office
cleaning in the Temporary Space. Owner shall notify Tenant on or before March
31, 1998, if Owner shall be unable to deliver the Temporary Space by May 31,
1998. Owner shall give Tenant at least 30 days prior notice of when Tenant shall
move from the Temporary Space to either the Second Additional Premises or Third
Additional Premises, as the case may be. The parties shall enter into a
temporary leasing agreement in the form annexed hereto as Exhibit D.*
In the event that Owner notifies Tenant by March 31, 1998 that Owner is unable
to deliver either the (i) Temporary Space, (ii) Second Additional Premises or
(iii) Third Additional Premises by May 31, 1998 (for reasons other than the
events set forth in clauses (i)-(vii) of Section (f) (C) of this paragraph),
Tenant, as its sole remedy, may elect to terminate this lease, provided that
notice of such election shall be given to Owner no later than April 10, 1998,
time being of the essence in the giving of such notice. If Tenant shall so
elect, the parties shall then be released of all liabilities hereunder, each to
the other. If Tenant shall terminate this lease pursuant to this paragraph, the
effective date of termination shall be no earlier than 90 days after the date of
Tenant's notice to Owner to terminate this lease and no later than 150 days
after the date of Tenant's notice to Owner to terminate this lease.*
In the event that Owner is unable to deliver either the (i) Temporary Space,
(ii) Second Additional Premises or (iii) Third Additional Premises by May 31,
1998 (for reasons other than the events set forth in clauses (i)-(vii) of
Section (f)(C) of this paragraph), Tenant, as its sole remedy, may elect to
terminate this lease, provided that notice of such election shall be given to
Owner no later than June 10, 1998, time being of the essence in the giving of
such notice. If Tenant shall so elect, the parties shall then be released of all
liabilities hereunder, each to the other. If Tenant shall terminate this lease
pursuant to this paragraph, the effective date of termination shall be no
earlier than 90 days after the date of Tenant's notice to Owner to terminate
this lease and no later than 150 days after the date of Tenant's notice to Owner
to terminate this lease.*
Tenant shall accept the Second Additional Premises "as is". Such term
shall mean in the same condition and repair in which the prior tenant vacated
such space, and Tenant shall be responsible for any demolition and removal of
any improvements existing in the Second Additional Premises in connection with
the prior tenant's occupancy, and all other work as may be necessary to convert
the Second Additional Premises to Tenant's requirements. Owner shall not be
responsible for performing any work with respect to such space, except as set
forth in the Work Specifications. Any other work, changes or improvements made
to such space shall be performed at Tenant's expense in accordance with the
terms of this lease. Notwithstanding anything contained in this paragraph to the
contrary, Owner shall reimburse Tenant in an amount not to exceed Owner's Second
Additional Premises Reimbursement (as defined below) for work to be performed by
Tenant in the Second Additional Premises. Owner's Second Additional Premises
Reimbursement shall be made promptly after Owner's receipt of paid invoices
evidencing the cost of Tenant's work in the Second Additional Premises. "Owner's
Second Additional Premises Reimbursement" shall mean the
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product of (x) $75,657.50 multiplied by (z) a fraction, the numerator of which
shall be the number of days between the Second Additional Premises Commencement
Date and the Expiration Date of the initial term of this lease and the
denominator of which shall be 1,825. In the event that Tenant shall employ Owner
to perform Tenant's work in the Second Additional Premises, then in lieu of
reimbursing Tenant for the cost of Tenant's work, Owner shall credit Tenant in
an amount equal to Owner's Second Additional Reimbursement against the cost of
the work to be performed by Owner in the Second Additional Premises.*
In the event that Owner fails to deliver the Second Additional Premises by May
31, 2000, Owner, as expeditiously as is reasonably possible, shall use its best
efforts to provide Tenant with temporary space having a rentable area of at
least 5,000 square feet in a building within the Park ("Temporary Space").
Tenant shall have no obligation to pay rent for the Temporary Space, and Tenant
may occupy the Temporary Space until Owner shall be able to deliver the Second
Additional Premises. In addition, Tenant shall have the right to use 25 parking
spaces in connection with its occupancy of the Temporary Space to be reasonably
allocated between executive and employee spaces by Owner. Owner shall have no
obligation to perform any work in the Temporary Space, provided that the
Temporary Space is reasonably suited to permit Tenant to reasonably operate its
business on a temporary basis within the Temporary Space. The Temporary Space
shall be substantially similar to the Initial Premises, reasonable wear and tear
excepted (e.g., broom clean, carpeted (although such carpeting need not be new,
it shall be in reasonably good condition), air conditioned, hung ceiling, etc.).
Tenant shall be responsible to pay for any utilities consumed by Tenant in the
Temporary Space and office cleaning in the Temporary Space. Owner shall notify
Tenant on or before March 31, 2000, if Owner shall be unable to deliver the
Temporary Space by May 31, 2000. Owner shall give Tenant at least 30 days prior
notice of when Tenant shall move from the Temporary Space to the Second
Additional Premises. The parties shall enter into a temporary leasing agreement
in the form annexed hereto as Exhibit D.*
In the event that Owner notifies Tenant by March 31, 2000 that Owner is unable
to deliver the Second Additional Premises by May 31, 2000 (for reasons other
than the events set forth in clauses (i)-(vii) of Section (f)(C) of this
paragraph), Tenant, as its sole remedy, may elect to terminate this lease,
provided that notice of such election shall be given to Owner no later than
April 10, 2000, time being of the essence in the giving of such notice. If
Tenant shall so elect, the parties shall then be released of all liabilities
hereunder, each to the other. If Tenant shall terminate this lease pursuant to
this paragraph, the effective date of termination shall be no earlier than 90
days after the date of Tenant's notice to Owner to terminate this lease and no
later than 150 days after the date of Tenant's notice to Owner to terminate this
lease.*
In the event that Owner is unable to deliver the Second Additional Premises by
May 31, 2000 (for reasons other than the events set forth in clauses (i)-(vii)
of Section (f)(C) of this paragraph), Tenant, as its sole remedy, may elect to
terminate this lease, provided that notice of such election shall be given to
Owner no later than June 10, 2000, time being of the essence in the giving of
such notice. If Tenant shall so elect, the parties shall then be released of all
liabilities hereunder, each to the other. If Tenant shall terminate this lease
pursuant to this paragraph, the effective date of termination shall be no
earlier than 90 days after the date of Tenant's notice to Owner to terminate
this lease and no later than 150 days after the date of Tenant's notice to Owner
to terminate this lease.*
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(f) (A) The Third Additional Premises Commencement Date shall be the
earlier of the day (i) on which the Third Additional Premises shall be deemed
to be completed as such term is defined in paragraph (C) of this Section (of
which date Tenant shall be given 15 days notice), or (ii) Tenant (or anyone
claiming under or through Tenant) shall occupy the Third Additional Premises.
Promptly following the determination of the Third Additional Premises
Commencement Date, the parties shall enter into a supplementary written
agreement setting forth the Third Additional Premises Commencement Date.*
(B) The Third Additional Premises shall be completed and
initially prepared by Owner in the manner set forth in, and subject to the
provisions of, the Work Specifications and Floor Plan to be mutually agreed upon
by Owner and Tenant. Tenant and its contractors shall be entitled to access to
the Third Additional Premises prior to the completion of Owner's work, subject
to Owner's prior approval (which approval shall not be unreasonably withheld),
and only so long as they work in conformity with and do not interfere, in
Owner's reasonable judgment, with Owner or its contractors in the completion of
Owner's work, and provided they accept the administrative supervision of Owner.
If Tenant's work interferes with Owner's work, in Owner's reasonable judgment,
Owner may withdraw the license granted to Tenant pursuant to this paragraph upon
24 hours notice. Tenant's selection of contractors must be in compliance with
the provisions of this lease.*
(C) The Third Additional Premises shall be deemed completed on
the date on which Owner's work in the Third Additional Premises has been
substantially completed (notwithstanding the fact that minor or insubstantial
details of construction, mechanical adjustment or decoration remain to be
performed, the non-completion of which would not materially interfere with
Tenant's use of the Third Additional Premises) and a (temporary or final)
certificate of occupancy is issued for the demised premises. If Owner shall
obtain a temporary certificate of occupancy, the Third Additional Premises shall
be substantially completed only if such temporary certificate of occupancy shall
permit Tenant to use the Third Additional Premises in accordance with Article 2,
and Owner shall proceed diligently to obtain a final certificate of occupancy.
If completion of the Third Additional Premises by Owner is delayed by reason of:
(i) any act or omission of Tenant or any of its employees,
agents or contractors, including failure of Tenant to comply with any
of its obligations under the Work Specifications, or
(ii) Tenant's failure to plan or execute Tenant's work with
reasonable speed and diligence, or
(iii) Tenant's failure to make selections required by the Work
Specifications, or
(iv) Tenant's changes by Tenant in its drawings or specifications
or changes or substitutions requested by Tenant, or
(v) Tenant's failure to submit or approve drawings, plans or
specifications, including layout specifications, timely, or
(vi) Tenant's failure to deliver to Owner the first month's rent
(if required by the provisions on the first page of this lease), and
the security deposit required by Article 32 (if any), or
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(vii) Tenant's failure to approve construction drawings for the
Third Additional Premises within 15 days after the delivery of the
drawings from Owner to Tenant,
then the Third Additional Premises shall be deemed completed, the Third
Additional Premises Commencement Date shall be deemed to have occurred (and
Tenant shall commence paying rent) on the date when it would have been completed
and rent would have been due and payable but for such delay, and Tenant shall
pay Owner all costs and damages which Owner may sustain by reason of such
delay.*
If the Third Additional Premises Commencement Date occurs on or before February
1, 1997, Tenant's obligation to pay the portion of the Fixed Annual Rent
applicable to the Third Additional Premises shall commence February 1, 1997,
provided however, if Owner is able to deliver at least 3,000 rentable square
feet of the Initial Premises and provide Tenant with access to the roof of the
Building to install a satellite dish on or before July 7, 1996, Tenant's
obligation to pay the portion of the Fixed Annual Rent applicable to the Third
Additional Premises shall commence on the later of (i) the Third Additional
Premises Commencement Date and (ii) January 1, 1997. Owner shall notify Tenant
as promptly as possible if Owner is unable to deliver the Third Additional
Premises by January 31, 2000.*
In the event that Owner fails to deliver the Third Additional Premises by April
30, 2000, Owner, as expeditiously as is reasonably possible, shall use its best
efforts to provide Tenant with temporary space having a rentable area of at
least 5,000 square feet in a building within the Park ("Temporary Space").
Tenant shall have no obligation to pay rent for the Temporary Space, and Tenant
may occupy the Temporary Space until Owner shall be able to deliver the Third
Additional Premises. In addition, Tenant shall have the right to use 25 parking
spaces in connection with its occupancy of the Temporary Space to be reasonably
allocated between executive and employee spaces by Owner. Owner shall have no
obligation to perform any work in the Temporary Space, provided that the
Temporary Space is reasonably suited to permit Tenant to reasonably operate its
business on a temporary basis within the Temporary Space. The Temporary Space
shall be substantially similar to the Initial Premises, reasonable wear and tear
excepted (e.g., broom clean, carpeted (although such carpeting need not be new,
it shall be in reasonably good condition), air conditioned, hung ceiling, etc.).
Tenant shall be responsible to pay for any utilities consumed by Tenant in the
Temporary Space and office cleaning in the Temporary Space. Owner shall notify
Tenant on or before February 29, 2000, if Owner shall be unable to deliver the
Temporary Space by April 30, 2000. Owner shall give Tenant at least 30 days
prior notice of when Tenant shall move from the Temporary Space to the Second
Additional Premises. The parties shall enter into a temporary leasing agreement
in the form annexed hereto as Exhibit D.*
In the event that Owner is unable to deliver either the Temporary Space or Third
Additional Premises by June 30, 2000 (for reasons other than delays caused by
any of the events set forth in clauses (i)-(vii) of this subparagraph (C)),
Tenant, as its sole remedy, may elect to terminate this lease, provided that
notice of such election shall be given to Owner no later than July 10, 2000,
time being of the essence in the giving of such notice. If Tenant shall so
elect, the parties shall then be released of all liabilities hereunder, each to
the other. If Tenant shall terminate this lease pursuant to this paragraph, the
effective date of termination shall be January 31, 2001.*
Owner shall contribute an amount equal to the product of (x) $70,000.00
multiplied by (z) a fraction, the numerator of which shall be the number of days
between the Third Additional Premises
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Commencement Date and the Expiration Date of the initial term of this lease and
the denominator of which shall be 1,825 ("Owner's Third Additional Premises
Contribution"). If the cost of Owner's work in the Third Additional Premises
exceeds Owner's Third Additional Premises Contribution, then Tenant shall be
required to pay such additional monies to Owner within 30 days after Owner sends
an invoice to Tenant. Tenant shall not be entitled to any reimbursement, refund
or credit if the cost of Owner's work in the Third Additional Premises is less
than Owner's Third Additional Premises Contribution.*
(g) The Floor Plan attached hereto or to be attached hereto may be
revised by Owner in order to comply with laws and requirements of public
authorities and requirements of insurance bodies. Such changes shall not
unreasonably interfere with Tenant's intended use of the demised premises. If
any of such revisions or changes are due to Tenant's use of the demised
premises, Tenant shall pay for the cost or implementing same. If any common
foyers, exit foyers or exit passages mandated by such requirements are used by
more than one tenant, the rental value therefore shall be apportioned to Tenant
in relation to the Tenant's Rentable Area (as compared to the square footage
occupied by all such tenants) and Tenant's Fixed Annual Rent shall be increased
accordingly.*
(h) Owner may close or change the arrangement and/or location of exits,
entrances, passageways, doors, doorways, corridors, elevators, stairs, toilets
and other parts of the Building whenever necessary to comply with laws or
requirements of public authorities and requirements of insurance bodies. Tenant
shall pay the cost thereof where the requirement for such change is due to
Tenant's use of the demised premises.
43. Rent.
(a) If the Commencement Date is other than the first day or a calendar
month, the first monthly installment of Fixed Annual Rent shall be prorated to
the end of said calendar month.
(b) All rent shall be paid by currently dated, unendorsed check of
Tenant, payable to the order of Owner or to an agent designated by Owner, and
drawn on a bank or trust company which is a member of the New York Clearing
House.
(c) Tenant shall pay the Fixed Annual Rent without notice or demand. If
no date shall be set forth herein for the payment of any other sum due Owner,
then such sum shall be due and payable within 10 business days after the date
upon which Owner makes written demand for such payment.
(d) If at any time during the term the rent, or any part thereof, shall
not be fully collectible by reason of any laws and requirements of public
authorities, Tenant shall enter into such agreements and take such actions as
Owner may request to permit Owner to collect the maximum rents which may, during
the continuance of such legal rent restriction, be legally permissible (but not
in excess of the amounts reserved under this lease). Upon termination of such
rent restriction prior to the Expiration Date (i) the rent shall become and
thereafter be payable in accordance with the amounts reserved in this lease for
the period of the term following such termination, and (ii) Tenant shall pay
Owner, if legally permissible, an amount equal to (y) the rent which would have
been paid pursuant to this lease but for such legal rent restriction less (z)
the rents paid by Tenant for the period during which such rent restriction was
in effect.
(e) If any installment of Fixed Annual Rent is not paid when due, or if
any other monies owing by Tenant are not paid within 10
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days of the date due and payable, Tenant shall pay Owner, in compensation for
Owner's loss of use of such rent, the additional administrative, bookkeeping and
collection expenses incurred by reason of such overdue sum, a sum calculated by
multiplying the late payment by three percentage points above the prime rate
then established by Chemical Bank (but limited to the maximum legal rate),
dividing the product by 365 and multiplying the quotient by the number of days
between the date such payment was due and the date such payment is in fact paid.
Such compensation shall be without prejudice to any of Owner's other rights and
remedies hereunder.*
(f) If any check tendered by Tenant, for any payment due, shall be
dishonored by the payor bank, Tenant shall pay Owner, without prejudice to any
of Owner's other rights and remedies, in compensation for the additional
administrative, bookkeeping and collection expenses incurred by reason of such
dishonored check, the sum of $100. If during any twelve month period during the
term of this lease, two or more checks tendered by Tenant, for any payment due,
shall be dishonored by the payor bank, Owner may at any time thereafter require
that all future payments of rent by Tenant shall be made by certified or
official bank checks.
44. Parking.
(a) Throughout the term, so long as Tenant shall have performed all of
the agreements on Tenant's part to be performed beyond applicable notice and
grace periods, Owner shall make available to Tenant the following number of
parking spaces, on a non-exclusive basis:*
ten (10) spaces for executive cars, which shall be reasonably close to
the front entrance to the demised premises for the period commencing on the
Commencement Date and shall be increased by (i) four (4) spaces for executive
cars for the period commencing on the First Additional Premises Commencement
Date, (ii) three (3) spaces for executive cars for the period commencing on the
Second Additional Premises Commencement Date and (iii) two (2) spaces for
executive cars for the period commencing on the Third Additional Premises
Commencement Date.*
ninety-two (92) spaces for employee cars, which shall be not more than
500 yards from an entrance to the demised premises (as shown on the attached
site plan), unless otherwise provided for herein for the period commencing on
the Commencement Date and shall be increased by (i) thirty (36) spaces for
employee cars for the period commencing on the First Additional Premises
Commencement Date, (ii) twenty-five (25) spaces for employee cars for the period
commencing on the Second Additional Premises Commencement Date and (iii)
nineteen (19) spaces for employee cars for the period commencing on the Third
Additional Premises Commencement Date.*
If Tenant or its invitees use more than the specified number of spaces
set forth above, then after 5 days notice from Owner, Tenant shall, at the
option or Owner, either (i) pay Owner's then current charge per month for each
additional space used for each month during which such excess use takes place
(even if for less than the full month) (as of the date of this lease, Owner's
current monthly charge is $40.00 per space), or (ii) cease and desist
immediately from using said additional spaces. If Owner selects the first of
such options, Owner may revoke such choice on 30 days notice.
(b) As necessary, Owner shall (between 7:00 a.m. and 10:00 p.m. on
business days), light, clean, remove snow from and otherwise maintain, the
parking area. In addition, Owner shall remove snow from the parking areas on
Saturdays between 8:00 A.M. and 1:00 P.M.. Tenant shall be responsible for
repairing damage to
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the parking areas caused by Tenant or its invitees. Owner shall not be obligated
to remove snow unless the accumulation exceeds 3 inches. In no event shall Owner
be obligated to remove snow from areas obstructed by parked vehicles at the time
Owner's equipment is servicing such areas. Notwithstanding anything herein to
the contrary, Tenant shall be responsible for lighting its entrances to the
demised premises and loading areas and for removing snow and ice at its
entrances and other walkways and areas reserved or designated for Tenant's
exclusive use.*
(c) Tenant shall require its invitees to park only in areas designated
by Owner, and not to obstruct the parking areas of other tenants. Tenant shall,
upon request, furnish to Owner the license numbers of the automobiles operated
by Tenant, its executives and other employees. Owner may use any lawful means to
enforce the parking regulations established pursuant to Article 55, including,
but not limited to, the towing away of improperly parked or unauthorized cars
and pasting of warning notices on car windows and windshields.
(d) Owner may temporarily close any area not leased to Tenant in order
to make repairs or changes, to prevent the acquisition of public rights, or to
discourage unauthorized parking. Owner may do such other acts in and to such
areas as, in its judgment, may be desirable to improve same.
(e) The parking areas for trucks and delivery vehicles in front of
loading docks or loading areas (if any) adjacent to the demised premises are not
to be used by Tenant or its invitees, as parking spaces, unless otherwise
directed by Owner. Such loading docks or loading areas are provided solely for
the loading and unloading of Tenant's goods and no vehicles may be parked in
such areas longer than necessary, in Owner's reasonable judgment, for the
efficient discharge of such purposes. If the use of any loading dock at the
Building interferes with the use of another loading dock, the tenant occupying
more rentable area in the Building shall have priority in use of the loading
docks. In no event shall access to any loading dock be blocked for more than 15
minutes.
(f) Neither Tenant nor its invitees shall park automobiles, trucks or
other motor vehicles overnight within the park.
45. Tax Escalation.
(i) Definitions. As used in this lease:
(a) "Taxes" shall mean the total amount of real estate taxes and
assessments now or hereafter levied, imposed, confirmed or assessed
against the Real Property, (or, during any period the Real Property is
owned by an industrial development agency, such as would be levied,
imposed, confirmed or assessed as if Owner named herein were the fee
owner), including but not limited to city, county, town, village,
school and transit taxes, water fees and sewer and refuse disposal
charges, or taxes, assessments or charges levied, imposed, confirmed or
assessed against, or a lien on, the Real Property by any taxing
authority, whether general or specific, ordinary or extraordinary,
foreseen or unforeseen and whether for public betterments, improvements
or otherwise. If, due to any change in the method of taxation, any
franchise, capital stock, capital, income, profit, sales, rental, use
or occupancy tax or charge shall be levied, assessed, confirmed or
imposed upon Owner in lieu of, or in addition to, any real estate taxes
or assessments upon or with respect to the Real Property, such tax
shall be included in the term Taxes. Penalties and interest on Taxes
(except to the extent imposed upon timely payments of assessments that
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may be, and are in fact, paid in installments) and income, franchise,
transfer, inheritance and capital stock taxes shall be deemed excluded
from Taxes except to the extent provided in the immediately preceding
sentence.
(b) "Base Tax" is the product of the tax rates set forth on tax
bills rendered for each Tax for the Tax Year during which July 1, 1996
occurs, multiplied by the assessed valuations of the Real Property for
the Tax Year during which July 1, 1996 occurs. "Tax Year" shall mean
the fiscal period for each Tax. Any and all tax abatements shall be for
the benefit of Owner.*
(c) "Tenant's Proportionate Share" shall mean 34% for the period
commencing on the Commencement Date and shall be increased by (i) 16.40% for the
period commencing on the First Additional Premises Commencement Date, (ii)
11.42% for the period commencing on the Second Additional Premises Commencement
Date and (iii) 8.60% for the period commencing on the Third Additional Premises
Commencement Date.*
(ii) Tax Payments. (a) If Taxes for any Tax Year during the lease term
("Tax Comparison Year") shall exceed the Base Tax, Tenant shall pay Owner, as
additional rent for each such Tax Comparison Year, Tenant's Proportionate Share
of such excess ("Tax Payment").
(b) Subsequent to Owner's receipt of the tax bills for each Tax
Comparison Year, Owner shall submit to Tenant a statement showing (i) the Tax
Payments due for such Tax Comparison Year, and (ii) the basis of calculations
("Owner's Tax Statement"). Tenant shall (y) pay Owner the unpaid portion (if
any) of the Tax Payment within 30 days after receipt of Owner's Tax Statement,
and (z) on account of the immediately following Tax Comparison Year, pay Owner
commencing as of the first day of the month during which Owner's Tax Statement
is rendered, and on the first day of each month thereafter until a new Owner's
Tax Statement is rendered, 1/12th of the total payment for the current Tax
Comparison Year. The monthly payments based on the total payment for the current
Tax Comparison Year shall be adjusted from time to time to reflect Owner's
reasonable estimate of increases in Taxes for the immediately following Tax
Comparison Year.
(iii) Reduction of Comparison Year Taxes. If Taxes for a Tax Comparison
Year are reduced, the amount of Owner's costs and expenses of obtaining such
reduction (including legal, appraisers' and consultants' fees) shall be added to
and deemed part of Taxes for such Tax Comparison Year. If Owner obtains a refund
of Taxes for a Tax Comparison Year for which a Tax Payment has been made, Owner
shall credit against Tenant's next succeeding payment(s) of rent, Tenant's
Proportionate Share of the refund (but not more than the Tax Payment that was
the subject of the refund). If no payment(s) of rent shall thereafter be due,
Owner shall pay Tenant's Proportionate Share of such refund to Tenant within 30
days after Owner's receipt of the refund.*
(iv) Reduction of Base Tax. If Owner obtains a reduction in the Base
Tax, the Base Tax shall be reduced (such reduction to include the expenses
incurred by Owner in obtaining such reduction, including legal, appraisers' and
consultants' fees), prior Tax Payments (if any) shall be recalculated and Tenant
shall pay Owner, within 30 days after billing, Tenant's Proportionate Share of
the increased amount of Tax Payment for each prior Tax Comparison Year.
(v) Tax Protests. While proceedings for reduction in assessed
valuations are pending, the computation and payment of Tax Payments shall be
based upon the original assessments for the years in question. Tenant shall have
no right to institute or
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participate in any tax proceedings or other proceedings of a similar nature. The
commencement, maintenance, settlement and conduct thereof shall be in the sole
discretion of Owner.
(vi) Assessment with Other Properties. If, at any time, the Real
Property shall include buildings other than the Building, the Taxes shall
include the Building's equitable portion of the Taxes on all such buildings,
based upon an informal apportionment by the tax assessors, or if such
apportionment is not available, as shall be reasonably determined by Owner.
(vii) Tenant's Improvements. In the event an increase in assessed
valuation of the Real Property is caused by Tenant's improvements to the demised
premises, not including the work set forth in the Work Specifications and the
Floor Plan, Tenant shall pay the entire increase in Taxes attributable to such
improvements. If the assessed valuation for such improvements are not separately
stated, Tenant's obligation under this subparagraph shall be reasonably
determined by Owner.*
(viii) No Credit. If in a Tax Comparison Year the Taxes are less than
the Base Tax, the Tenant shall not be entitled to receive a credit, by way of a
reduction in Fixed Annual Rent, a refund of all or a portion of prior (or a
credit against future) Tax Payments or otherwise.
(ix) Partial Comparison Year. If the Expiration Date or earlier date
upon which the term may expire or terminate shall be a date other than the last
day of a Tax Comparison Year, Tenant's Tax Payment for such partial Tax
Comparison Year shall be prorated, (based upon Owner's reasonable estimate of
the tax payments for such Tax Comparison Year if same have not been established
as of such date).
46. Common Area Maintenance Charge.
(i) For the purposes of this Article:
(a) "Index" shall mean the Revised Consumer Price Index for
Urban Wage Earners and Clerical Workers for the New York - Northeastern New
Jersey Area, 1967 = 100, published by the United States Department of Labor,
Bureau of Labor Statistics.
(b) "Base Index" shall mean the Index for the first full
calendar month preceding the date of execution of this lease.
(ii) There is included in the Fixed Annual Rent an amount equal to
$1.50 per square foot to cover the initial cost to Owner of the expenses of
common area maintenance.
(iii) In the manner and at the times hereinafter set forth, Tenant
shall pay Owner as additional rent, for each lease year, for common area
maintenance, a sum computed by multiplying $1.50 per square foot (i.e.
$25,500.00 for the period commencing on the Commencement Date and shall be
increased by (i) $12,300.00 for the period commencing on the First Additional
Premises Commencement Date, (ii) $8,565.00 for the period commencing on the
Second Additional Premises Commencement Date and (iii) $6,450.00 for the period
commencing on the Third Additional Premises Commencement Date) by the percentage
increase, if any, by which the Index for the month preceding the last month of
such lease year exceeds the Base Index. In no event shall any such adjustment
result in a decrease of the Fixed Annual Rent as set forth on page 1 of this
lease.*
(iv) Within 135 days after the end of each lease year, Owner shall
deliver to Tenant a statement setting forth the amount (and supporting
calculations) of additional rent due to Owner for
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such prior lease year in accordance with the provisions of clause (iii) above
("Owner's Statement"). Tenant shall (x) make payment of any unpaid portion of
such additional rent within 30 days after receipt of Owner's Statement, and (y)
pay to Owner on account of the then current lease year, within 30 days after
receipt of Owner's Statement, an amount equal to the product obtained by
multiplying the total payment required for the preceding lease year by a
fraction, the denominator of which shall be 12 and the numerator of which shall
be the number of months of the current lease year which shall have elapsed prior
to the first day of the month immediately following the rendition of Owner's
Statement, and (z) pay Owner on account of the then current lease year,
commencing as of the first day of the month immediately following the rendition
of Owner's Statement and on the first day of each month thereafter until a new
Owner's Statement is rendered, 1/12 of the total payment for the preceding lease
year. The monthly payments based on the total payment for the preceding lease
year shall be adjusted from time to time during a lease year to reflect Owner's
reasonable estimate of increases in the Index. The payments required to be made
under clauses (y) and (z) above shall be subject to adjustment as and when
Owner's Statement for such lease year is rendered by Owner. If the payments
required to be made under clauses (y) and (z) above exceed the amount due for
such lease year pursuant to Owner's Statement, such excess shall be credited
against the next required payments due hereunder. If no such payments shall
thereafter be due, Owner shall pay such excess to Tenant.
(v) If any lease year shall be a period of less than 12 months,
Tenant's liability under this Article shall be prorated.
(vi) If the Index is altered, modified, converted or revised such
that it is no longer comparable to the Base Index then the Index shall be
adjusted to the figure that would have been arrived at had the change in the
manner of computing the Index not been altered. If such Index shall no longer be
published, then any substitute or successor index published by the Bureau of
Labor Statistics or other governmental agency of the United States, and
similarly adjusted as aforesaid, shall be used. If such Index (or a successor or
substitute index similarly adjusted) is not available, a reliable governmental
or other reputable publication selected by Owner shall be used.
47. Cleaning; Trash Removal.
(a) Tenant shall, at Tenant's expense, keep the demised premises clean
and in good order, to the satisfaction of Owner. Tenant shall, at Tenant's
expense, hire a reputable cleaning contractor to clean the office portion of the
demised premises, if any.
(b) Tenant shall pay the cost of removal of Tenant's refuse and
rubbish from the Building. Tenant shall contract for the removal of such refuse
and rubbish. Owner reserves the right to select a refuse disposal contractor to
serve the Building. The name of such contractor shall be available from Owner
upon request, and Tenant shall employ no other refuse disposal or carting
contractor without prior written approval from Owner. The removal of refuse and
rubbish shall be subject to such rules and regulations as in the judgment of
Owner are necessary for the proper operation of the Building and of the Park.
48. Utilities.
(a) Tenant shall obtain all utilities necessary for its use of the
demised premises directly from the utility companies or vendors servicing the
demised premises. The cost of such services shall be paid by Tenant directly to
such companies. Owner shall
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permit electric feeders, risers and wiring servicing the demised premises to be
used by Tenant to the extent available and safely capable of being used for such
purpose.
(b) Notwithstanding anything herein to the contrary, Owner may
redistribute or furnish electricity and/or gas ("utilities") to the demised
premises in a manner and in such reasonable quantities as may be required by
Tenant to service Tenant's permitted use in the demised premises. In such event,
Tenant shall pay to Owner within 30 days after billing, as additional rent, a
sum ("Utility Rent") determined in the manner set forth below. Such sum shall be
determined by an independent engineer or consulting firm selected by Owner (the
"Engineer"). The Engineer shall make a survey of Tenant's utility usage in the
demised premises, to determine the Utility Rent. In the event Tenant disputes
any such determination, Tenant may employ a consultant to make a survey of the
cost of such utility to the demised premises. The determination of such
consultant shall be promptly submitted to Owner. If Owner's and Tenant's
consultants cannot mutually agree as to the cost of such utility, the matter
shall be submitted to arbitration to the office of the American Arbitration
Association nearest the Building, in accordance with rules of such American
Arbitration Association. Pending such determination, Tenant shall continue to
pay the charges as billed by Owner. Each party shall pay the cost of its own
consultant. Any final adjustment shall be made at the time of the arbitration
award. In any event, the rate charged by Owner to Tenant shall not exceed the
rate that would be charged to Tenant by the utility company had Tenant purchased
the utility directly.*
(c) If either the quantity or character of the utility service is
changed by the utility company supplying such service to the Building, or is no
longer available or suitable for Tenant's requirements, or if there shall be a
change, interruption or termination of such service due to a failure or defect
on the part of the utility company, no such change, unavailability,
unsuitability, failure or defect shall constitute an actual or constructive
eviction, in whole or in part, or entitle Tenant to any payment from Owner for
any loss, damage or expense, or to abatement or diminution of Fixed Annual Rent
or additional rent, or otherwise relieve Tenant from any of its obligations
under this lease, or impose any obligation upon Owner or its agents. In no event
shall Owner be responsible for any failures of the utility providing such
service or the negligence or other acts of third parties causing any such
interruption.
49. Amendments for Financing; Information for Mortgagees.
(a) If, in connection with obtaining or renewing financing for the Real
Property, an institutional lender shall request modifications in this lease as a
condition to such financing, Tenant will not withhold, delay or defer its
consent thereto, provided that such modifications are not material and neither
increase the monetary obligations of Tenant nor decrease the size of the demised
premises, the number of parking spaces provided for in Article 44 or the service
required to be provided by Owner.*
(b) Tenant shall, within a reasonable time after being requested,
submit such financial information as may be reasonably required by Owner's
mortgagee(s).
50. Broker. Tenant represents that, in the negotiation of this lease,
it dealt with no broker or any other person legally entitled to claim a
brokerage commission or finder's or consultant's fee with respect to this
transaction. Tenant shall indemnity, defend and hold Owner harmless from and
against all losses, costs, damages, expenses, claims and liabilities (including
court costs and attorneys' fees and disbursements) arising out of any inaccuracy
or alleged inaccuracy of this representation.
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51. Signs.
(a) Owner shall, upon Tenant's request, list on the Building's
directory ("Directory"), if any, the name of Tenant.
(b) No sign, advertisement, notice or other lettering shall be
exhibited, inscribed, painted or affixed by or in behalf of Tenant on any part
of the outside of the demised premises or the Building or on the inside of the
demised premises if the same is visible from the outside of the demised
premises, without the prior written consent of Owner. Requests for such signs
shall be accompanied by a sketch of the sign, its size, type and manner of
mounting, specifying the manner of mounting, and the materials and finishes
employed in the manufacture of same. Owner consents to Tenant's installation of
a ground mounted sign in a location visible from Skyline Drive to be determined
by Owner. The cost of such sign shall be shared equally by Owner and Tenant,
provided that Tenant's share of the cost of such sign shall not exceed
$2,000.00. Such sign shall have a black background and red or white lettering.
The sign shall be (i) 3 feet in height, 4 feet in length and 5 to 6 inches in
depth and (ii) concrete base mounted. The height of the sign, including the base
shall not exceed 4 feet in height. Approval by Owner shall not constitute
approval for purposes of complying with laws and requirements of public
authorities. It shall be Tenant's obligation to secure such approvals at
Tenant's expense. In the event of the installation of any sign by Tenant in
violation of the foregoing, Owner may remove same without liability and may
charge the expense incurred by such removal to Tenant.*
(c) Owner shall have the right, from time to time, to designate a name
for the Building and to change the name and/or address of the Building.
52. Holdover. Tenant acknowledges that possession of the demised
premises must be surrendered at the expiration or sooner termination of the
term, time being of the essence. Tenant shall indemnify, defend and save Owner
harmless against all liabilities, obligations, damages, penalties, claims,
costs, charges and expenses, including reasonable attorneys' fees and claims
made by a successor tenant based upon the failure or refusal of Tenant to
surrender the demised premises in a timely fashion. The parties agree that the
damage to Owner resulting from failure by Tenant to surrender possession of the
demised premises timely will be extremely substantial, will exceed the amount of
rent payable hereunder and will be impossible of accurate measurement.
Consequently, Tenant shall pay Owner for each month and for any portion of a
month during which Tenant holds over in the demised premises after expiration or
sooner termination of the term of this lease, a sum equal to 150% of the average
monthly rent which was payable per month under this lease during the last 3
months of the term. Nothing contained herein shall be deemed to authorize Tenant
to remain in occupancy of the demised premises after the expiration or sooner
termination of the term.
53. Insurance and Indemnity.
(a) Tenant shall provide, prior to entry upon the demised premises, and
maintain throughout the term of this lease, at its own cost, and with companies
rated not less than B+ Class IX by A.M. Best Company, Inc., or its successor and
authorized to do business in the State of New York (i) public liability and
property damage insurance in an amount not less than $2,000,000 combined single
limit for personal injury, death and property damage arising out of any one
occurrence, protecting Owner and Tenant against all claims for personal injury,
death or property damage occurring in, upon or adjacent to the demised premises
and any part thereof, or arising from, related to, or in any way connected with
the conduct
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and operation of Tenant's use or occupancy of the demised premises, which
insurance shall be written on an occurrence basis and name Owner (and at Owner's
request, Owner's mortgagees) as additional insureds, and (ii) workers'
compensation insurance covering all persons employed by Tenant or its
contractors in connection with work performed by or for Tenant. Tenant's
insurance shall be in a form reasonably satisfactory to Owner and provide that
it shall not be cancelled, terminated or changed except after 20 days' written
notice to Owner. All such policies or certificates (with evidence of payment of
the premium) shall be deposited with Owner not less than 30 days prior to the
day such insurance is required to be in force and upon renewals not less than 30
days prior to the expiration of the term of coverage. Owner shall have the right
from time to time during the term, on not less than 30 days notice, to require
that Tenant increase the amount and/or types of coverage required to be
maintained under this Article to the amounts and/or types generally required of
tenants in comparable buildings in Westchester County. The minimum limits of
liability insurance required pursuant to clause (i) shall in no way limit or
diminish Tenant's liability under paragraph (d) of this Article.
(b) Tenant shall not commit or permit anything to be done in, to or
about the demised premises, the Building, the Real Property, the Park, if
applicable, or any adjacent property, contrary to law, or which will invalidate
or be in conflict with the insurance policies carried by Owner or by others for
Owner's benefit, or do or permit anything to be done, or keep, or permit
anything to be kept, in the demised premises, which (i) could result in
termination of any of such policies, (ii) could adversely affect Owner's right
of recovery under any such policies, (iii) could subject Owner to any liability
or responsibility to any person, or (iv) would result in reputable and
independent insurance companies refusing to insure the Building or property of
Owner therein or in the Park, if applicable, in amounts satisfactory to its
mortgagees. If any such action by Tenant, or any failure by Tenant to comply
with the requirements of insurance bodies or to perform Tenant's obligations
hereunder, or any use of the demised premises by Tenant shall result in the
cancellation of any such insurance or an increase in the rate of premiums
payable with respect to such policies, Tenant shall indemnify, defend and hold
Owner harmless against all losses, including but not limited to any loss which
would have been covered by such insurance and the resulting additional premiums
paid by Owner. Tenant shall make such reimbursement within 30 days after receipt
of notice and evidence from Owner that such additional premiums have been paid,
without limiting Owner's rights otherwise provided in this lease.
(c) Tenant shall procure a clause in, or endorsement on, each of its
policies for fire or extended coverage insurance covering the demised premises
or personal property, fixtures or equipment located therein, pursuant to which
the insurance company waives subrogation or consents to a waiver of right of
recovery against Owner. Tenant agrees not to make claims against, or seek to
recover from, Owner for loss or damage to its property or property of others
covered by such insurance. To the extent Tenant shall be a self-insurer, Tenant
waives the right of recovery, if any, against Owner, its agents and employees,
for loss, damages or destruction of Tenant's property.
(d) Tenant shall defend, indemnify and save harmless Owner, its agents
and employees from and against any and all liabilities, obligations, damages,
penalties, claims, costs, charges and expenses, including reasonable attorneys'
fees, which may be imposed or incurred by or asserted against Owner and/or its
agents or employees by reason of any of the following occurring during the term,
or during any time prior to the Commencement Date that Tenant has access to or
possession of any part of the demised premises: (i) any work or thing done in,
on or about the demised premises by
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or at the instance of Tenant, or its invitees, (ii) any negligence or wrongful
act or omission on the part of Tenant or its invitees, (iii) any accident,
injury or damage to any person or property occurring in, on or about the demised
premises, or vault, passageway or space adjacent thereto caused by the
negligence of Tenant or its invitees, and (iv) any failure by Tenant to perform
or comply with any of the covenants, agreement, terms, provisions, conditions or
limitations in this lease to be performed or complied with by Tenant. If any
action or proceeding is brought against Owner by reason of any such claim,
Tenant shall, upon the request of Owner and at Tenant's expense, resist or
defend such action or proceeding by counsel reasonably acceptable to Owner.
Counsel selected by Tenant's approved insurance companies shall be deemed
acceptable.
54. Exculpation. Tenant shall look solely to the estate and interest of
Owner, its successors and assigns, in the Building for the collection of any
judgment (or other judicial process) recovered against Owner and based upon
breach by Owner of any of the terms, conditions or covenants of this lease on
the part of Owner to be performed. No other property or assets of Owner shall be
subject to levy, execution or other enforcement procedures for the satisfaction
of Tenant's remedies under or with respect to either this lease, the
relationship of landlord and tenant hereunder, or Tenant's use and occupancy of
the demised premises.
55. Rules and Regulations. Tenant and Tenant's invitees shall observe
and comply with the Rules and Regulations attached as Exhibit A, and such
additional reasonable Rules and Regulations as Owner or Owner's agents may from
time to time adopt. Notice of additional Rules and Regulations shall be given to
Tenant. Owner shall have no duty or obligation to enforce the Rules and
Regulations or the terms, covenants or conditions in any other lease, against
any other tenant of the Building or in the Park, if applicable, and Owner shall
not be liable to Tenant for violation of the same by any other tenant or its
invitees. In the event of a conflict between the Rules and Regulations and the
provisions of the lease, the provisions of the lease shall prevail. Owner shall
not discriminate against Tenant in its enforcement or promulgation of the Rules
and Regulations.*
56. Tenant's Alterations and Maintenance. (a) Tenant shall not employ
contractors in connection with any services, provisions, alterations or
maintenance, unless Owner has consented in writing to the contractor, it being
the intention of Owner to limit the number of such contractors employed in the
Building or Park, if applicable. If such consent has not been obtained Tenant
shall, if requested by Owner, forthwith cancel such contract. Owner's
disapproval of any contractor selected by Tenant must be accompanied by the
designation of one or more contractors acceptable to Owner, whose prices must be
reasonably competitive. If Owner does not approve or disapprove Tenant's
contractor within 7 business days after receipt of written request therefor, the
contractor so selected by Tenant shall be deemed approved by Owner. Tenant shall
not employ persons in connection with any such services, provisions, alterations
or maintenance the employment of whom would cause a strike, work stoppage or
slowdown by employees of contractors of Owner in the Building or Park, if
applicable. Owner does not consent to the reservation of title by any
conditional vendor, or the retention of a security interest by a secured party,
to any property which may be affixed to the realty.
(b) Alterations performed by Tenant in accordance with the provisions
of Article 3 must be performed in a good and workmanlike manner, in accordance
with the plans and specifications prepared by Tenant, at its expense, which
plans and specifications shall be subject to Owner's approval prior to the
performance of any such alteration. If Owner does not approve or disapprove such
plans and
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specifications within 15 business days after Tenant shall have submitted five
sets thereof to Owner, Owner shall be deemed to have approved same. The quality
standards applicable to such alterations shall in no event be less than Owner's
standards for the Building at the time such work is performed. Upon completion
of the alterations Tenant shall, at its expense, deliver to Owner five sets of
"as-built" drawings with respect thereto.
(c) If due to Tenant's alterations, changes in the Building's
sprinklers, passages, exits or other common areas or systems, are required,
Tenant shall perform same, pursuant to the provisions of this lease. In no
event, however, shall Tenant perform any work or cause any work to be done which
shall, in Owner's opinion, adversely affect the Building. In no event shall
Tenant make any installation on or through the roof of the Building without the
prior consent of Owner. Owner may, at its sole discretion, make such rules and
regulations as it deems necessary regarding access to or through the roof. Owner
makes no representation as to the load bearing capacity of the roof.
57. Notice.
(a) At the request of the holder(s) of any mortgage encumbering the
Real Property, Tenant shall serve upon such mortgagee(s) a copy of all notices
given by Tenant to Owner pursuant to paragraph (b) below, such service to be by
registered or certified mail addressed to such mortgagee(s) at the address
provided by such mortgagee(s) to Tenant.
(b) Except for rent bills, any notice, approval, consent, bill,
statement or other communication required or permitted to be given, rendered or
made by either party hereto to the other, pursuant to this lease or pursuant to
any applicable law or requirement or public authority (collectively, "notices"),
shall be in writing and shall be delivered personally or by registered or
certified mail, addressed to the other party at the address hereinabove set
forth. All notices given by either party pursuant to this Article may be given
by such party, their agents or attorneys. Either party may, by notice as
aforesaid, designate a different address or addresses for notices intended for
it. All notices given pursuant to this Article shall be deemed given on the
second business day after posting if mailed in Westchester County, and on the
third business day after posting if mailed outside of Westchester County, or
upon delivery if made personally. On and after the Commencement Date notices
directed to Tenant shall be addressed to Tenant at the Building.
58. Miscellaneous.
(a) Whenever it is provided that Owner shall not unreasonably withhold
or delay consent or approval or shall exercise its judgment reasonably (such
consent or approval and such exercise of judgment being collectively referred to
as "consent"), if Owner shall delay or refuse such consent, unless such delay or
refusal was in bad faith, Tenant shall not be entitled to make any claim, and
Tenant waives any claim for money damages (nor shall Tenant claim any money
damage by way of setoff, counterclaim or defense) based upon any claim or
assertion that Owner unreasonably withheld or delayed consent. Tenant's sole
remedy shall be an action or proceeding for specific performance, injunction or
declaratory judgment to enforce any such provision, but any such equitable
remedy which can be cured by the expenditure of money may be enforced personally
against Owner only to the extent of interest in the Building. Failure on the
part of Tenant to seek relief within 30 days after the date upon which Owner has
withheld its consent shall be deemed a waiver of any right to dispute the
reasonableness of such withholding of consent.*
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(b) Owner shall have no liability or responsibility if any service or
utility required to be provided by Owner is interrupted or stopped by reason of
unavoidable delays.
(c) If Tenant shall request the consent or approval of Owner to the
making of any alterations or to any other thing, and Owner shall seek and pay a
separate fee for the opinion of Owner's counsel, architect, engineer or other
representative or agent as to the form or substance thereof, Tenant shall pay
Owner, as additional rent, within 30 days after demand, all reasonable costs and
expenses of Owner incurred in connection therewith, including, in case of any
alterations, costs and expenses of Owner in reviewing plans and specifications.
There shall be no charge to Tenant for Owner's in-house staff.*
(d) This lease is submitted to Tenant for signature with the
understanding that it shall not bind Owner unless and until it has been executed
by Owner and delivered to Tenant or Tenant's attorney.
(e) Whenever reference is made to public halls, elevators, corridors,
etc. and if none such are present on or about the premises demised herein then
such reference shall have no relevance to the terms herein.
(f) In the event of any conflict between the printed provisions of the
lease and the Rider to the lease, the provisions of this Rider shall prevail.
(g) Owner's failure to prepare and/or deliver any statement or bill
required to be delivered to Tenant, or Owner's failure to make demand for
payment of Fixed Annual Rent or additional rent shall not be a waiver of, or
cause Owner to forfeit or surrender its rights to collect, any rent due.
Tenant's liability for all such payments shall continue unabated during the term
and shall survive the expiration or sooner termination of the term.
(h) The heating and air conditioning units are exclusive units
servicing the demised premises only. Tenant shall repair and replace, as
necessary, and maintain in good working order, Tenant's exclusive heating and
air conditioning units and systems servicing the demised premises. Such
maintenance shall include changing the systems filters not less frequently than
four times per year. Tenant shall enter into contracts for service and
maintenance pursuant to Article 56 and submit to Owner copies of such agreements
as well as copies of all invoices indicating dates of service and work
performed. All heating and air conditioning units servicing the demised premises
shall be delivered to Tenant in good working order.*
(i) Tenant shall not substantially vacate the demised premises during
the term of this lease unless it shall give Owner at least 10 days written
notice prior to such vacating. Notwithstanding the above, in the event Tenant
vacates the demised premises prior to the Expiration Date or such earlier date
upon which said term may expire or be terminated, Tenant shall remove all
fixtures, and installations (including but not limited to telephone systems,
communication systems and security systems), unless Owner has otherwise notified
Tenant pursuant to Article 3.
After such vacating, Owner may, but shall not be obligated to, enter
the demised premises, at anytime, to make such repairs, replacements and
improvements as Owner may deem necessary. Notwithstanding the foregoing,
Tenant's obligations under this lease shall remain in full force and effect,
including the obligation to maintain and secure the demised premises.
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(j) The Certificate of Occupancy for the Building shall be for a
building of Low Hazard Occupancy as defined by the New York State Building Code.
(k) Tenant shall not cause (or allow any of its contractors, agents or
other persons or entities over whom or which it exercises any degree of control
to cause) to occur within the demised premises, or the Building or Park, if
applicable, the use, presence, discharge, spillage, disposal, uncontrolled loss,
generation, seepage or filtration of Hazardous Materials. Notwithstanding the
foregoing, Tenant may use ordinary cleaning materials in reasonable quantities
in the demised premises. Tenant shall, from time to time and upon Owner's
request, submit to Owner a written report with respect to Hazardous Materials
upon the demised premises (and within the Building and Executive Park) as a
result of the activities of Tenant (its contractors, agents or other persons or
entities over whom it exercises any degree of control). Such report shall be in
such form as may be prescribed by Owner and shall be submitted to Owner within
ten (10) days after request by Owner (or immediately upon receipt of any notice
of violation received from any governmental agency). Owner shall have the right
at all times during the term of this lease to (i) inspect the demised premises,
and (ii) conduct (or cause to be conducted) tests and investigations to
determine whether Tenant is in compliance with the provisions of this Section.
The cost of all such inspections, tests and investigations shall be borne by
Tenant. Owner's consent to Tenant's use or maintenance of Hazardous Materials
within the demised premises shall in no way limit Tenant's indemnification
obligations as otherwise set forth in this lease.
If Tenant obtains knowledge of the actual or suspected release of
Hazardous Materials, then Tenant shall promptly notify Owner of such actual or
suspected release. Tenant shall immediately notify Owner of any inquiry, test,
investigation or enforcement proceeding by or against Tenant involving a
release. If Tenant or its agents, employees or contractors shall cause or permit
a release, Tenant shall promptly notify Owner of such release and immediately
begin investigation and remediation of such release, as required by all
applicable laws and requirements of public authorities and insurance bodies.
(l) Anything herein to the contrary notwithstanding, if the first
month's rent or the security deposit shall not have been delivered to Owner upon
execution and delivery of this lease by Tenant to Owner (if required by the
provisions of this lease), then (in addition to such other remedies available to
Owner hereunder, at law or in equity) Owner shall not be obligated to commence
preparation of the demised premises for occupancy (if required by the provisions
of this lease) until much sums shall have been delivered to Owner.
(m) Tenant agrees not to disclose the terms, covenants, conditions or
other facts with respect to this lease, including, but not limited to, the Fixed
Annual Rent, to any person, corporation, partnership, association, newspaper,
periodical or other entity, except pursuant to a valid business purpose or as
required by laws and requirements of public authorities. This non-disclosure
and confidentiality agreement shall be binding upon Tenant without limitation as
to time, and a breach of this paragraph shall constitute a material breach under
this lease.*
(n) Owner, at its sole cost and expense, shall refurbish and maintain
the landscaping surrounding the main entrance and upper level of the demised
premises in a manner consistent with a first class executive park. Such work
shall cost approximately $10,000.00 and shall be performed by Owner at a time to
be determined by Owner but in any event prior to June 30, 1996.*
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59. Amendments to Printed Form.
(a) Article 6 is further amended by adding the following at the end
thereof:
In the event of any increase in the fire insurance rate on the
Building and/or its contents during the term of this lease, caused by Tenant or
the nature or conduct of Tenant's use of the demised premises, Tenant shall pay
to Owner, the amount of the increase in the cost of such insurance to Owner and
other tenants of the Building, within ten (10) days after Owner has submitted to
Tenant a statement setting forth the amount due. In determining whether Tenant's
use or occupancy has resulted in an increase in the rate of fire insurance
applicable to the Building or any property located therein, the basis of
comparison shall be the rate which would be in effect were the Tenant not
occupying the Building.
Tenant, at Tenant's sole cost and expense, shall provide, keep and
maintain fire extinguishers and any other nonstructural fire safety equipment
required by laws and requirements of public authorities. At the expiration or
earlier termination of the term of this lease, Tenant may remove from the
demised premises any fire extinguishers provided by Tenant.
(b) Article 7 is amended by adding the following paragraph:
Notwithstanding anything contained herein to the contrary, and at
the election of the holder of any current or future mortgage encumbering all or
a portion of the demised premises, such mortgage shall be subordinate to this
lease with the same force and effect as if this lease had been executed,
delivered and recorded prior to the execution, delivery and recording of the
said mortgage, except however that the said subordination of the mortgage to the
lease shall not affect nor be applicable to and does expressly exclude:
(i) The prior right, claim or lien of the said mortgagee in,
to and upon any award or other compensation heretofore or hereafter to
be made for any taking by eminent domain of any part of the mortgaged
premises, and to the right of disposition thereof in accordance with
the provisions of the said mortgage;
(ii) The prior right, claim and lien of the said mortgagee in,
to and upon any proceeds payable under all policies of fire and rent
insurance upon the said mortgaged premises and as to the right of
disposition thereof in accordance with the terms of the said mortgage;
and
(iii) Any lien, right, power or interest, if any, which may
have arisen or intervened in the period between the recording of the
said mortgage and the execution of this lease, or any lien or judgment
which may arise at any time under the terms of this lease.
Although this clause shall be self-operative upon the election of any
such mortgagee, in confirmation hereof, Tenant shall execute promptly any
certificate that Owner or such mortgagee may request.
(c) Article 9 is amended by adding the following:
"Notwithstanding the provisions of Article 9, if the demised
premises or a major part thereof shall be totally, or substantially, damaged or
destroyed or rendered completely, or substantially, untenantable on account of
fire, casualty or other
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cause (other than fire, casualty or other cause relating to Tenant's act or
failure to act where it had a duty to act), the rent and additional rent shall
completely abate as of the date of the damage or destruction and until Owner
shall repair, restore, replace and rebuild the demised premises (subject to
Owner's right to elect not to restore the same); provided, however, that should
Tenant reoccupy a portion of the demised premises for the purpose of conducting
business during the period the restoration work is taking place and prior to the
date that the same is made completely tenantable, rent and additional rent shall
be apportioned and payable by Tenant in proportion to the part of the demised
premises occupied by it. Nevertheless, in case of any substantial damage or
destruction to the demised premises, Tenant, as its sole remedy, may cancel this
lease by written notice to Owner, if (i) within 30 days from the date of the
damage or destruction, Owner does not deliver to Tenant a written certification
to the effect that the restoration can be completed within six months from the
date of the casualty; (ii) within 90 days of the date of damage of destruction
Owner does not let a contract which shall provide for the complete restoration
of the demised premises within a period of six (6) months from the date of the
damage or destruction; (iii) work under such contract or contracts has not
commenced within 120 days of the date of said damage or destruction; or (iv)
said work is not prosecuted with reasonable diligence to its completion within
six (6) months of the date of damage or destruction; provided that Tenant shall
not be entitled to cancel this lease pursuant to this sentence more than 10 days
after Owner shall have given written notice to Tenant that the state of facts
specified in clauses (i), (ii) or (iii) of this sentence, as the case may be,
has occurred. The period for the completion of the required repairs and
restoration work shall be extended by the number of days lost in the event such
loss results from unavoidable delays, or any cause beyond the reasonable control
of Owner."*
(d) Article 11 is amended by adding the following paragraph:
(1) Notwithstanding the foregoing provision of this Article,
Tenant may sublet all of the demised premises, but not less than all, to one
subtenant, for occupancy and use as permitted by Article 2, provided however,
that Tenant shall first obtain the consent of Owner, which consent shall not be
unreasonably withheld or delayed. In addition, Tenant may sublet each of the
Initial Premises, First Additional Premises, Second Additional Premises and/or
Third Additional Premises as separate units, to one subtenant each, for
occupancy and use as permitted by Article 2; provided however, that Tenant shall
first obtain the consent of Owner, which consent shall not be unreasonably
withheld or delayed. The consent by Owner to any subletting shall not in any way
be considered to relieve Tenant from obtaining the express consent of Owner to
any further subletting.*
(2) If Tenant shall have a bona fide intention to sublet the
demised premises, as stated above, it shall first notify Owner of such fact and
of the terms of Tenant's proposed subrental and other terms of subletting, and:
(i) If Tenant intends to sublet all or the demised premises,
then and in such event Owner shall have the option, exercisable by
notice within 30 days after the date of Tenant's notice, to elect to
cancel this lease, effective as of 6 months from the last day of the
month in which Owner shall have given such notice. Upon any such
cancellation of this lease by Owner, Tenant shall have no further
obligations to Owner with respect to this lease except for obligations
accrued up to the date of cancellation.
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MULTI/MAS 88
If Tenant intends to sublet less than all of the demised premises
as permitted under Section (1) above for a term that expires within six
months prior to the Expiration Date of this lease, Owner shall have the
option, exercisable by notice within 30 days after the date of Tenant's
notice, to elect to delete from the demised premises the space which
Tenant proposes to sublet. If space is deleted from the demised
premises, then effective as of the date of such deletion of space, the
Fixed Annual Rent hereunder shall abate proportionately according to
the ratio that the number of square feet of Rentable Area in the
deleted space bears to the number of square feet of Rentable Area in
the entire demised premises and all other provisions of this lease
shall be appropriately amended (and the parties shall execute and
deliver an amendment to this lease) so as to reflect such diminished
square footage of Rentable Area of the demised premises. Upon any such
deletion of space by Owner, Tenant shall have no further obligation to
Owner with respect to the deleted space, except for obligations accrued
up to the date of space deletion. Any reasonable costs incurred by
Owner in separating the deleted space from the remainder of the demised
premises, including but not limited to, the erection of demising walls,
the installation and/or separation of meters, restrooms, doorways, etc.
shall be borne by Tenant.
(ii) If Owner shall not have elected to cancel or delete
space as aforedescribed, and if within a period of 6 months from the
date of Tenant's notice, Tenant has not requested Owner's consent to a
specific subletting, then the provisions of this Article requiring
Tenant to give notice to Owner of intended subletting, and any Owner's
rights to elect, shall again prevail.
(iii) If Owner shall not exercise the option to cancel this
lease or delete space, Tenant may actively seek to obtain an
appropriate subtenant, and Tenant shall submit (x) the name and address
of such proposed subtenant, (y) reasonably satisfactory information as
to the nature and character of the business of the proposed subtenant,
and as to the proposed nature of its proposed use of the space, and (z)
banking, financial and other information relating to the proposed
subtenant reasonably sufficient to enable Owner to determine the
financial responsibility and character of the proposed subtenant.
(iv) In determining whether or not to consent to a proposed
subletting, Owner may take into consideration all relevant factors
surrounding the proposed sublease, including the following:
a. The business reputation of the proposed subtenant.
b. The nature of the business and the proposed use of the
demised premises by the proposed subtenant.
c. The financial condition of the proposed subtenant.
d. Restrictions contained in leases of other tenants of the
Building (but said restrictions shall not prohibit the
use of the demised premises specified in Article 2).
e. Not more than four subtenants, shall occupy the demised
premises at any one time.
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(3) If such proposed subletting is effected by Tenant, Tenant shall pay
to Owner a sum equal to 50% of (i) any rent or other considerations paid to
Tenant by any subtenant less expenses or such subleasing (including but not
limited to brokerage commissions and costs of improvements) in excess of the
rent allocable to the demised premises which is then payable by Tenant to Owner
pursuant to the terms hereof, and (ii) any other profit or gain realized by
Tenant from any such subletting. All sums payable hereunder by Tenant shall be
payable to Owner upon receipt thereof by Tenant. Notwithstanding the foregoing,
at the option of the holder of any mortgage encumbering the Building, this
Section shall be inapplicable during any period that such holder is Owner
hereunder. This Section shall not be applicable to any assignment of this lease
by reason of a merger, consolidation or other corporate reorganization by
Tenant.*
(4) Tenant shall not knowingly advertise its space for subletting at a
rental rate lower than the greater of the then comparable rental rate for such
space in the Town of Mount Pleasant or the rental rate under this lease for such
space. When Owner or an affiliate of Owner has other equivalent space available
for leasing for a comparable term by Owner or an affiliate of Owner, Tenant
shall not sublet all or any portion of the demised premises to an occupant of
any space in the Building (or the Park if applicable), or to any party which has
negotiated with Owner or an affiliate of Owner for any space during the 9 months
immediately preceding Tenant's request for Owner's consent.*
(5) Tenant may not exercise its rights under this Article prior to the
Commencement Date.
(6) No sublease of the demised premises shall be effective unless and
until Tenant delivers to Owner duplicate originals of the instrument of sublease
(containing the provisions required by section (7)) and any accompanying
documents. Any such sublease shall be subject and subordinate to this lease.
(7) All subleases shall (i) be expressly subject to all of Tenant's
obligations hereunder, (ii) provide that the sublease shall not be assigned,
encumbered or otherwise transferred, that the premises thereunder shall not be
further sublet by the sublessee, in whole or in part, and that the sublease
shall neither suffer nor permit any portion of the sublet premises to be used or
occupied by others without the prior consent of Owner in each instance and (iii)
contain substantially the following provision:
"In the event a default under any superior lease of all or any portion
of the premises demised hereby results in the termination of such
superior lease, this lease shall, at the option of the lessor under any
such superior lease, remain in full force and effect and the tenant
hereunder shall attorn to and recognize such lessor as Owner hereunder
and shall promptly upon such lessor's request, execute and deliver all
instruments necessary or appropriate to confirm such attornment and
recognition. The lessee hereunder hereby waives all rights under any
present or future laws or otherwise to elect, by reason of the
termination of such superior lease, to terminate this sublease or
surrender possession of the premises demised hereby."
(8) Tenant shall remain fully responsible and liable for all acts and
omissions of any subtenant or anyone claiming under or through any subtenant
which shall be in violation of any of the obligations of Tenant hereunder and
any such violation shall be deemed a violation by Tenant. Tenant shall pay Owner
on demand any reasonable expenses incurred by Owner in acting upon any request
for consent to subletting pursuant to this Article.
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MULTI/MAS 88
(9) Whether or not Owner shall give its consent to any proposed
sublease, Tenant shall indemnity, defend and save harmless Owner against and
from any and all liabilities, obligations, damages, penalties, claims, costs,
charges and expenses (including reasonable attorney's fees) resulting from any
claims that may be made against Owner by the proposed sublessee, or by any
brokers or other persons claiming a commission or similar compensation in
connection with the proposed or final sublease.*
60. Option to Extend.
(a) If the term of this lease shall then be in full force and effect
and Tenant is not in default hereunder beyond applicable notice and grace
periods, Tenant shall have the option to extend the term of this lease for a
period of five (5) years (the "Extension Term") commencing on the day
immediately following the Expiration Date, provided however that Tenant shall
give Owner notice of its election to extend the term no earlier than 15 months
prior to the Expiration Date nor later than 9 months prior to the Expiration
Date of the initial term. Time shall be of the essence in connection with the
exercise of Tenant's option pursuant to this Article.
(b) Such extension of the term of this lease shall be upon the same
covenants and conditions, as herein set forth except for the Fixed Annual Rent
(which shall be determined in the manner set forth below), and except that
Tenant shall have no further right to extend the term of this lease after the
exercise of the single option described in paragraph (a) of this Section,
subject, however, to the provisions of clause (w) of Section 61(A)(i). If Tenant
shall duly give notice of its election to extend the term of this lease, the
Extension Term shall be added to and become a part of the term of this lease
(but shall not be considered a part of the initial term), and any reference in
this lease to the "term of this lease", the "term hereof", or any similar
expression shall be deemed to include such Extension Term, and, in addition, the
term "Expiration Date" shall thereafter mean the last day of such Extension
Term. Owner shall have no obligation to perform any alteration or preparatory or
other work in and to the demised premises and Tenant shall continue possession
thereof in its "as is" condition.
(c) If Tenant exercises its option for the Extension Term, the Fixed
Annual Rent during the Extension Term shall be 95% of the fair market rent for
the demised premises, as hereinafter defined.
(d) Owner and Tenant shall use their best efforts, within 30 days after
Owner receives Tenant's notice of its election to extend the term of this lease
for the Extension Term ("Negotiation Period"), to agree upon the Fixed Annual
Rent to be paid by Tenant during the Extension Term. If Owner and Tenant shall
agree upon the Fixed Annual Rent for the Extension Term, the parties shall
promptly execute an amendment to this lease stating the Fixed Annual Rent for
the Extension Term.
(e) If the parties are unable to agree on the Fixed Annual Rent for the
Extension Term during the Negotiation Period, then within 15 days after notice
from the other party, given after expiration of the Negotiation Period, each
party, at its cost and upon notice to the other party, shall appoint a person to
act as an appraiser hereunder, to determine the fair market rent for the
premises for the Extension Term. Each such person shall be a real estate broker
or appraiser with at least ten years' active commercial real estate appraisal or
brokerage experience (involving the leasing of office space as agent for both
landlords and tenants) in Westchester County. If a party does not appoint a
person to act as an appraiser within said 15 day period, the person appointed by
the other party shall be the sole appraiser and shall
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MULTI/MAS 88
determine the aforesaid fair market rent. Each notice containing the name of a
person to act as appraiser shall contain also the person's address. Before
proceeding to establish the fair market rent, the appraisers shall subscribe and
swear to an oath fairly and impartially to determine such rent.
If the two appraisers are appointed by the parties as stated in the
immediately preceding paragraph, they shall meet promptly and attempt to
determine the fair market rent. If they are unable to agree within 45 days after
the appointment of the second appraiser, they shall attempt to select a third
person meeting the qualifications stated in the immediately preceding paragraph
within 15 days after the last day the two appraisers are given to determine the
fair market rent. If they are unable to agree on the third person to act as
appraiser within said 15 day period, the third person shall be appointed by the
American Arbitration Association, upon the application of Owner or Tenant to the
office of the Association nearest the Building. The person appointed to act as
appraiser by the Association shall be required to meet the qualifications stated
in the immediately preceding paragraph. Each of the parties shall bear 50% of
the cost of appointing the third person and of paying the third person's fees.
The third person, however selected, shall be required to take an oath similar to
that described above.
The three appraisers shall meet and determine the fair market rent. A
decision in which two of the three appraisers concur shall be binding and
conclusive upon the parties. In deciding the dispute, the appraisers shall act
in accordance with the rules then in force of the American Arbitration
Association, subject however to such limitations as may be placed on them by
the provisions of this lease.
Notwithstanding the foregoing, in no event shall the Fixed Annual Rent
during the Extension Term be less than the Fixed Annual Rent during the last
year of the initial term of this lease.
(f) After the fair market rent for the Extension Term has been
determined by the appraiser or appraisers and the appraiser or appraisers shall
have notified the parties, at the request of either party, both parties shall
execute and deliver to each other an amendment of this lease stating the Fixed
Annual Rent for the Extension Term.
(g) If the Fixed Annual Rent for the Extension Term has not been agreed
to or established prior to the commencement of the Extension Term, then Tenant
shall pay to Owner an annual rent ("Temporary Rent") which Temporary Rent shall
be equal to 150% of the Fixed Annual Rent payable by Tenant for the last year of
the initial term. Thereafter, if the parties shall agree upon a Fixed Annual
Rent, or the Fixed Annual Rent shall be established upon the determination of
the fair market rent by the appraiser or appraisers, at a rate at variance with
the Temporary Rent (i) if such Fixed Annual Rent is greater than the Temporary
Rent, Tenant shall promptly pay to Owner the difference between the Fixed Annual
Rent determined by agreement or the appraisal process and the Temporary Rent, or
(ii) if such Fixed Annual Rent is less than the Temporary Rent, Owner shall
credit to Tenant's subsequent monthly installments of Fixed Annual Rent the
difference between the Temporary Rent and the Fixed Annual Rent determined by
agreement or the appraisal process.
(h) In describing the fair market rent during the Extension Term, the
appraiser or appraisers shall be required to take into account the rentals at
which leases are then being concluded (as of the last day of the initial term)
(for 5 year leases without renewal options with the lessor and lessee each
acting prudently, with knowledge and for self-interest, and assuming that
neither is
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MULTI/MAS 88
under undue duress) for comparable space in the Building and in comparable
buildings in the Town of Mount Pleasant.
(i) The option granted to Tenant under this Article 60 nay be exercised
only by Tenant, its affiliates, permitted successors and assigns, and not by any
subtenant or any successor to the interest of Tenant by reason of any action
under the Bankruptcy Code, or by any public officer, custodian, receiver, United
States Trustee, trustee or liquidator of Tenant or substantially all of Tenant's
property. Tenant shall have no right to exercise this option subsequent to the
date Owner shall have the right to give the notice of termination referred to in
Article 17 unless Tenant cures the default within the applicable grace period.
Notwithstanding the foregoing, Tenant shall have no right to extend the term if,
at the time it gives notice of its election (i) Tenant shall not be in occupancy
of substantially all of the Demised Premises or (ii) the demised premises or any
part thereof shall be the subject of a sublease. If Tenant shall have elected to
extend the term, such election shall be deemed withdrawn if, at any time after
the giving of notice of such election and prior to the commencement of the
Extension Term, Tenant shall sublease all or any portion of the demised
premises.*
61. Option For Fourth Additional Premises. A. (i) Subject to the
provisions of this Article, Tenant shall have the option to lease from Owner the
space designated as Fourth Additional Premises on the attached floor plan,
consisting of approximately 14,255 square feet, ("Fourth Additional Premises")
for a term commencing on the earlier of (i) the expiration or termination of the
existing space lease for such Fourth Additional Premises or (ii) November 1,
1999. In no event shall Owner fail to deliver the Fourth Additional Premises by
November 1, 1999, unless such failure is caused by (i) unavoidable delays or
(ii) the tenant presently occupying the Fourth Additional Premises holds over in
the Fourth Additional Premises without Owner's permission. In such event, if
Tenant has exercised its option as set forth herein, Owner shall use its best
efforts to evict the existing tenant as expeditiously as possible. Owner shall
notify Tenant if Owner shall be unable to deliver the Fourth Additional Premises
by November 1, 1999.
In the event the Fourth Additional Premises are not delivered by Owner (for
reasons other than that the present tenant occupying the Fourth Additional
Premises holds over in the Fourth Additional Premises) by February 1, 2000,
Tenant, as its sole remedy, may elect to terminate this lease, provided that
notice of such election shall be given to Owner no later than February 11, 2000,
time being of the essence in the giving of such notice. If Tenant shall so
elect, the parties shall then be released of all liabilities hereunder, each to
the other. If Tenant shall terminate this lease pursuant to this paragraph, the
effective date of termination shall be August 31, 2000.
If Tenant shall not be in default beyond applicable notice and cure periods on
the expiration or termination date of the existing space lease for the Fourth
Additional Premises and the date upon which Tenant shall exercise the option
hereinafter referred to, Tenant shall have the option to lease all, but not less
than all of the Fourth Additional Premises on an as-is basis, provided Tenant
gives Owner written notice of such election within 30 days after Tenant shall
receive Owner's notice that such Fourth Additional Premises is available for
leasing to Tenant. If Tenant fails or refuses to exercise this option within the
time period set forth above (time being of the essence), then and in such event
Tenant shall have no further rights under this Section with respect to such
Fourth Additional Premises. If Tenant shall elect to lease said Fourth
Additional Premises: (t) said Fourth Additional Premises shall be deemed
incorporated within and part of the demised premises on the date that Owner
shall notify Tenant that such Fourth Additional
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MULTI/MAS 88
Premises is ready for occupancy by Tenant, (u) the Fixed Annual Rent payable
under the lease shall be increased by an amount such that during the balance of
the term of this lease the Fixed Annual Rent for said Fourth Additional Premises
shall be 95% of the then fair market rent for the Fourth Additional Premises, as
determined in the manner set forth in clause (ii) below, (v) provided that
Tenant shall have a net worth (as determined in accordance with generally
accepted accounting principles) at the time it exercises its option hereunder in
an amount at least equal to 95% of the net worth of Tenant on the date of this
lease (as determined in accordance with generally accepted accounting
principles), Owner shall reimburse Tenant in an amount not to exceed the product
of (x) $188,878.75 multiplied by (z) a fraction, the numerator of which shall be
the number of days between the date that Tenant shall take occupancy of the
Fourth Additional Premises and the Expiration Date of the three year extension
term of this lease (as determined by clause (w) below) and the denominator of
which shall be 1,825 ("Owner's Fourth Additional Premises Reimbursement"), for
work to be performed by Tenant in the Fourth Additional Premises; such
reimbursement to be made promptly after Owner's receipt of paid invoices
evidencing the cost of Tenant's work in the Fourth Additional Premises (Tenant
shall submit certified financial statements of Tenant to Owner at the time of
its exercise of its option hereunder evidencing Tenant's net worth), provided,
however, that in the event that Tenant shall employ Owner to perform Tenant's
work in the Fourth Additional Premises, then in lieu of reimbursing Tenant for
the cost of Tenant's work, Owner shall credit Tenant in an amount equal to
Owner's Fourth Additional Reimbursement against the cost of the work to be
performed by Owner in the Fourth Additional Premises, (w)(1) the term of this
lease shall be deemed automatically extended for a period of three (3) years
commencing on the day immediately following the Expiration Date and (2) Article
60 shall remain in full force and effect, mutatis mutandis, except that Article
60 shall be amended so that Tenant shall have an option to extend the term of
this lease for an additional period of two (2) years instead of five (5) years,
(x) the number of parking spaces for executive cars shall be increased by seven
(7) spaces and the number of parking spaces for employee cars shall be increased
by sixty-four (64) spaces, (y) Tenant's Proportionate Share shall be increased
by 28.51%, and (z) all other terms and provisions set forth in the lease shall
apply, except that Owner not be required to perform any work with respect to
said Fourth Additional Premises (except Tenant may use Owner's architectural
design services in connection with Tenant's work in the Fourth Additional
Premises without additional charge). If the term of this lease is deemed
extended pursuant to clause (w) above, the Fixed Annual Rent payable by Tenant
for the entire demised premises during such extension term shall be 95% of the
fair market rent for the demised premises as determined by clause (ii) below,
mutatis mutandis. The fair market rent for the Fourth Additional Premises and
the fair market rent for the entire demised premises during the extension term
shall be determined at the same time.*
The parties shall promptly execute an amendment of this lease
confirming Tenant's election to lease said Fourth Additional Premises, the
incorporation of said Fourth Additional Premises into the demised premises and,
if applicable, the extension of the term of this lease.*
(ii) Owner and Tenant shall use their beat efforts, within 30 days
after Owner receives Tenant's notice of its election to lease said Fourth
Additional Premises, ("Negotiation Period") to agree upon the Fixed Annual Rent
to be paid by Tenant for said Fourth Additional Premises. If Owner and Tenant
shall agree upon the Fixed Annual Rent, the parties shall promptly execute an
amendment to this lease stating the Fixed Annual Rent for the Fourth Additional
Premises.
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MULTI/MAS 88
If the parties are unable to agree on the Fixed Annual Rent for said
Fourth Additional Premises during the Negotiation Period, then within 15 days
notice from the other party, given after expiration of the Negotiation Period,
each party, at its cost and upon notice to the other party, shall appoint a
person to act as an appraiser hereunder, to determine the fair market rent for
the Fourth Additional Premises. Each such person shall be a real estate broker
or appraiser with at least ten years' active commercial real estate appraisal or
brokerage experience (involving the leasing of similar space as agent for both
landlords and tenants) in Westchester County. If a party does not appoint a
person to act as an appraiser within said 15 day period, the person appointed by
the other party shall be the sole appraiser and shall determine the aforesaid
fair market rent. Each notice containing the name of a person to act as
appraiser shall contain the person's address. Before proceeding to establish the
fair market rent, the appraisers shall subscribe and swear to an oath fairly and
impartially to determine such rent.
If the two appraisers are appointed by the parties as stated in the
immediately preceding paragraph, they shall meet promptly and attempt to
determine the fair market rent. If they are unable to agree within 45 days after
the appointment of the second appraiser, they shall attempt to select a third
person meeting the qualifications stated in the immediately preceding paragraph
within 15 days after the last day the two appraisers are given to determine the
fair market rent. If they are unable to agree on the third person to act as
appraiser within said 15 day period, the third person shall be appointed by the
American Arbitration Association, upon the application of Owner or Tenant to the
office of the Association nearest the Building. The person appointed to act as
appraiser by the Association shall be required to meet the qualifications stated
in the immediately preceding paragraph. Each of the parties shall bear 50% of
the cost of appointing the third person and of paying the third person's fees.
The third person, however selected, shall be required to take an oath similar to
that described above.*
The three appraisers shall meet and determine the fair market rent. A
decision in which two of the three appraisers concur shall be binding and
conclusive upon the parties. In deciding the dispute, the appraisers shall act
in accordance with the rules then in force of the American Arbitration
Association, subject however, to such limitations as may be placed on them by
the provisions of this lease.
After the Fixed Annual Rent for the Fourth Additional Premises has been
determined by the appraiser or appraisers and the appraiser or appraisers shall
have notified the parties, at the request of either party, both parties shall
execute and deliver to each other an amendment of this lease stating the Fixed
Annual Rent for the Fourth Additional Premises.
If the Fixed Annual Rent for said Fourth Additional Premises has not
been agreed to or established prior to the incorporation of said Fourth
Additional Premises in the demised premises, then Tenant shall pay to Owner an
annual rent ("Temporary Rent") which Temporary Rent on a per square foot basis
shall be equal to the Fixed Annual Rent, on a per square foot basis, then being
paid by Tenant for the demised premises.
Thereafter, if the parties shall agree upon a Fixed Annual Rent, or the
Fixed Annual Rent shall be established upon the determination of the fair market
rent by the appraiser or appraisers, at a rate at variance with the Temporary
Rent (i) if such Fixed Annual Rent is greater than the Temporary Rent, Tenant
shall promptly pay to Owner the difference between the Fixed Annual Rent
determined by agreement or the appraisal process and the
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MULTI/MAS 88
Temporary Rent, or (ii) if such Fixed Annual Rent is less than the Temporary
Rent, Owner shall credit to Tenant's subsequent monthly installments of Fixed
Annual Rent the difference between the Temporary Rent and the Fixed Annual Rent
determined by agreement or the appraisal process.
In determining the fair market rent for said Fourth Additional
Premises, the appraiser or appraisers shall be required to take into account the
rentals at which leases are then being concluded for comparable space in the
Building and in comparable buildings in the Town of Mount Pleasant. In no event
shall the Fixed Annual Rent for the Fourth Additional Premises, on a per square
foot basis, be less than the Fixed Annual Rent for the demised premises, on a
per square foot basis.
B. The option granted to Tenant under this Article 61 may be exercised
only by Tenant, its permitted successors and assigns, and not by any subtenant
or any successor to the interest of Tenant by reason of any action under the
Bankruptcy Code, or by any public officer, custodian, receiver, United States
Trustee, trustee or liquidator of Tenant or substantially all of Tenant's
property. Tenant shall have no right to exercise any of such options subsequent
to the date Owner shall have the right to give the notice of termination
referred to in Article 17. Notwithstanding the foregoing, Tenant shall have no
right to exercise the option granted to Tenant hereunder if, at the time it
gives notice of such election (i) Tenant shall not be in occupancy of
substantially all of the demised premises or (ii) the demised premises or any
part thereof shall be the subject of a sublease. If Tenant shall have elected to
exercise its option hereunder, such election shall be deemed withdrawn if, at
any time after the giving of notice of such election and prior to the occupancy
of the Fourth Additional Premises, Tenant shall sublease all or any part of the
demised premises.*
- 37 -
<PAGE>
MULTI/MAS 88
Exhibit "A"
Rules and Regulations
1. Tenant shall keep the Tenant's loading dock areas, if any, free of refuse
and debris.*
2. The sidewalks, entrances, passages, lobbies, elevators, vestibules,
stairways, corridors and halls shall not be obstructed or encumbered by
Tenant or used for any purpose other than ingress and egress to and from
the demised premises. Tenant shall not permit any of its invitees to
congregate in any of said areas. No door mat shall be placed or left in any
public hall (or outside any entry door of the demised premises). No
property of Tenant may be kept or placed outside the demised premises.
3. Tenant and its invitees shall not litter any portion of any public area of
the Building, the Park, if applicable, or the Real Property.
4. Tenant shall not mark, paint, drill into or in any way deface any part of
the demised premises or the Building, except pursuant to Articles 3 and 56
of this lease. No boring, cutting or stringing of wires shall be permitted,
except with the prior consent of Owner, and as Owner may direct.*
5. The sashes, sash doors, skylights, windows and doors that reflect or admit
light and air into the halls, passageways and other public places shall not
be covered or obstructed by Tenant, except for window blinds or other
window decorations. Bottles, parcels and other articles shall not be placed
on window sills by Tenant.*
6. No showcases or other articles shall be put in front of or affixed to any
part of the exterior of the Building, nor placed in the halls, corridors or
vestibules by Tenant.
7. Tenant shall not discharge or permit to be discharged any materials, which
may cause damage, into waste lines, vents or flues. The water and wash
closets and other plumbing fixtures shall not be used for any purpose other
than those for which they were designed and constructed, and no sweepings,
rubbish, rags, corrosives, acids or other substances shall be thrown or
deposited therein. All damages resulting from any misuse of such fixtures
shall be borne by the tenant who, or whose invitees, shall have caused the
same.
8. No unreasonable noise (including, but not limited to, music or the playing
of musical instruments, recordings, radio or television) which, in Owner's
judgment, might disturb other tenants in the Building or the Park, if
applicable, shall be made or permitted by Tenant. Nothing shall be done or
permitted in the demised premises by Tenant which would unreasonably impair
or interfere with the use or enjoyment by any other tenant of any other
space in the Building or the Park, if applicable. Tenant shall not throw
anything out of the doors, windows or skylights or into the passageways.*
9. No equipment which generates unreasonable noise or vibration may be
installed in the demised premises except with the prior consent of Owner,
and as Owner may direct. Any condition which causes transmission of sounds,
noise or vibrations outside of the demised premises shall be corrected by
Tenant.*
10. Neither Tenant nor its invitees shall bring or keep upon the demised
premises any explosive fluid, chemical or substance.
- 38 -
<PAGE>
MULTI/MAS 88
nor any flammable or combustible objects or materials, except pursuant to
Section 58(k) of this lease.*
11. No awnings or other projections shall be attached to the outside walls of
the Building. No curtains, blinds, shades, or screens shall be attached to
or hung in, or used in connection with, any window or door of the demised
premises, without the prior consent of Owner. Such curtains, blinds, shades
or screens must be of a quality, type, design and color, and attached in
the manner, approved by Owner.
12. No sign, insignia, advertisements, object, notice or other lettering shall
be exhibited, inscribed, painted or affixed by any Tenant on any part of
the outside or inside of the demised premises or the Building without the
prior written consent of Owner, except pursuant Article 51 of this lease.
In the event of the violation of the foregoing by Tenant, Owner may remove
the same without any liability, and may charge the expense incurred in such
removal to Tenant. Interior signs and lettering on doors and directory
tablets shall, if and when approved by Owner, be inscribed, painted or
affixed by Owner at the expense of Tenant, and shall be of a size, color
and style acceptable to Owner.*
13. Owner reserves the right to rescind, alter or waive any Rule or Regulation
at any time prescribed for the Building, when, in its reasonable judgment,
it deems it necessary or desirable for the reputation, safety, care or
appearance of the Building, Real Property or the Park, if applicable, or
the preservation of good order therein, or the operation or maintenance of
the Building, or the Park, if applicable, or the equipment thereof, or the
comfort of tenants or others in the Building. No recision, alteration or
waiver of any Rule or Regulation in favor of one tenant shall operate as a
rescission, alteration or waiver in favor of any other tenant. Owner shall
not discriminate against Tenant in the promulgation or enforcement of the
Rules and Regulations.*
14. Tenant shall, upon the termination of its tenancy, turn over to Owner all
keys of the demised premises and stores, offices and toilet rooms, either
furnished to, or otherwise procured by, Tenant and in the event of the loss
of any keys, Tenant shall pay to Owner the cost of replacing the locks and
keys.
15. The demised premises shall not be used for lodging or sleeping or for any
immoral or illegal purpose. Canvassing, soliciting and peddling in the
Building are prohibited and Tenant shall cooperate to prevent the same.
Tenant shall not cause or permit any odors of cooking or other processes or
any odors to emanate from the demised premises which would annoy other
tenants or create a public or private nuisance. No cooking shall be done in
the demised premises except as is expressly permitted in the lease.
16. Tenant shall keep all windows in the demised premises clean at all times.
However, Tenant shall not be required to clean windows more often than once
every two (2) months.
17. Owner shall not unreasonably withhold or delay from Tenant any approval
provided for in the Rules and Regulations.
- 39 -
<PAGE>
MULTI/MAS 88
Exhibit "B"
WORK SPECIFICATIONS
Premises will be delivered in broom clean condition finished substantially "as
is" except as set forth under Additional Work Specifications hereinbelow, if
any, and the Floor Plans attached.
Walls, doors, ceilings and floors shall be as currently installed. All
alterations, additions or deletions called for in the Additional Work
Specifications or in the floor plan attached hereto shall be furnished and
prepared to the standards now existing on the premises.
Convenience wall outlets, lighting switches, and lighting fixtures shall be as
installed. Supplementary or replacement lamping by Tenant. Tenant shall not
overload electric circuits.
Standard duplex convenience outlets, ceiling lighting, lighting switches,
heating and air conditioning equipment, meter and main control panel shall be
wired and operative. Any wiring distribution other than for the above may be
used by Tenant to the extent serviceable but is not warranted by Owner as to
operating condition.
Heating and air conditioning equipment has been installed and will be turned
over to Tenant in good operating condition. Tenant shall be responsible for the
maintenance thereof in accordance with Article 58 (i) of this Lease.
Heating equipment is designed for maintaining 70-degrees F. when outside
temperature is 0-degrees F. and wind velocity is 15 MPH. Air conditioning
equipment is designed to maintain a 15-degrees temperature draw-down when the
outside temperature is 95-degrees F. dry bulb and 75-degrees F. wet bulb. Air
conditioning specifications are designed on the basis of doors and windows being
closed as well as all windows in the air conditioned premises being provided
with venetian blinds, shades or drapes which shall be closed, depending on the
position of the sun. Tenant shall install, repair or supplement such window
coverings as necessary. Existing window blinds shall remain throughout the
demised premises.
Electric Service
The premises shall be equipped with an electric meter and control panel capable
of supplying a minimum of 500 Amperes, 120/208V, 3 phase 4 wire to the premises.
Floor Load
Tenant shall not impose a floor load greater than 75 lbs. per square foot on the
upper level and 300 lbs. per square foot on the lower level, except as may
otherwise be set forth on the attached Floor Plan.
Rest Rooms
Rest rooms are as shown on the attached floor plan.
Additional Work Specifications
Owner, at its sole cost and expense, shall (i) paint the Initial Premises and
First Additional Premises in a color to be chosen by Tenant from Owner's
standard paint selection chart, (ii) carpet the Initial Premises and First
Additional Premises in a color to be chosen by Tenant from Owner's standard
carpet selection chart, and
- 40 -
<PAGE>
MULTI/MAS 88
(iii) install new ceiling tile (Owner's standard) in the Initial Premises and
First Additional Premises.
All selections or designations to be made by Tenant are to be made within five
(5) business days after request by Owner. If Tenant has not made such
designations or selections within said period, the Owner shall be authorized to
do so on behalf of Tenant.
- 41 -
CITYSCAPE FINANCIAL CORP.
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ---------------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
PRIMARY
<S> <C> <C> <C> <C>
Net earnings applicable to common stock $34,844,856 $2,377,792 $44,118,000 $3,427,028
========== ========== ========== ==========
Weighted average common shares 29,399,898 20,216,504 29,170,432 20,216,504
Adjustment to common shares:
Assume exercise of stock options or warrants 1,052,150 1,865,124 981,635 1,865,124
---------- ---------- ---------- ----------
Weighted average primary shares 30,452,048 22,081,628 30,152,067 22,081,628
========== ========== ========== ==========
EARNINGS PER COMMON SHARE $1.14 $0.11 $1.46 $0.16
========== ========== ========== ==========
Three Months Ended Six Months Ended
June 30, 1996 June 30, 1996
-------------------- --------------------
FULLY DILUTED (1)
<S> <C> <C>
Net earnings applicable to common stock $34,844,856 $44,118,000
Adjustment to net earnings:
Add: After-tax interest expense from Convertible
Debentures 800,353 800,353
------------ -----------
Adjusted net earnings applicable to common stock $35,645,209 $44,918,353
============ ===========
Weighted average common shares 29,399,898 29,170,432
Adjustment to common shares:
Assume conversion of Convertible Debentures 3,309,786 1,654,892
Assume exercise of stock options 1,132,255 1,115,369
------------ ----------
Weighted average primary shares 33,841,939 31,940,693
============ ==========
EARNINGS PER COMMON SHARE $1.05 $1.41
============ ==========
</TABLE>
(1) Fully diluted earnings per share were not presented for the 1995 periods
because the Convertible Debentures were not issued until 1996.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 6,860,183
<SECURITIES> 55,232,807
<RECEIVABLES> 117,274,653
<ALLOWANCES> 0
<INVENTORY> 114,348,602
<CURRENT-ASSETS> 0<F1>
<PP&E> 6,254,176
<DEPRECIATION> 0<F1>
<TOTAL-ASSETS> 462,993,217
<CURRENT-LIABILITIES> 0
<BONDS> 181,750,000
0
0
<COMMON> 296,264
<OTHER-SE> 119,649,422
<TOTAL-LIABILITY-AND-EQUITY> 462,993,217
<SALES> 0
<TOTAL-REVENUES> 118,158,769
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 36,361,657
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,381,727
<INCOME-PRETAX> 75,415,385
<INCOME-TAX> 31,297,385
<INCOME-CONTINUING> 44,118,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 44,118,000
<EPS-PRIMARY> 1.46
<EPS-DILUTED> 1.41
<FN>
<F1> The Company makes use of an unclassified balance sheet style due to
the nature of its businesss. Current Assets and Current Liabilities
are therefore reflected as zero in accordance with the instructions of
Appendix E to the EDGAR Filer Manual.
</FN>
</TABLE>
