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Exhibit 10.3
AMENDMENT NO.7 TO
REVOLVING CREDIT AGREEMENT
THIS AMENDMENT ("Amendment"), dated as of October 31, 1997, is by and
among CITYSCAPE CORP. (the "Borrower"), CITYSCAPE FINANCIAL CORP. (the
"Guarantor") and CORESTATES BANK, N.A. ("CoreStates"), and XXXXXX TRUST AND
SAVINGS BANK ("Xxxxxx") (CoreStates and Xxxxxx are referred to herein as a
"Bank" or the "Banks"), and CORESTATES BANK, N.A. as Agent for the Banks (the
"Agent").
BACKGROUND
A. The Borrower, the Guarantor, the Banks and certain other lenders were
parties to that certain Revolving Credit, Security and Term Loan Agreement dated
June 30, 1995, as amended by Amendments Nos. 1, 2, 3, 4, 5 and 6 to Revolving
Credit Agreement dated August 31, 1995, September 27, 1996, April 25, 1997,
April 30, 1997, June 30, 1997, and September 30, 1997 respectively (as the same
has been, is hereby and may hereafter be amended from time to time, the
"Agreement").
B. The Agreement and the Commitments of CoreStates and Xxxxxx expire on
October 31, 1997. The Loan Parties have requested that the Banks agree to
continue the Agreement and extend their respective Commitments until November
30, 1997.
C. All capitalized terms used herein and not otherwise defined herein
shall have the meanings given to them in the Agreement.
NOW, THEREFORE, the foregoing Background Section being incorporated by
reference, the parties hereto agree as follows:
Section 1. Amendments to the Agreement. The Agreement is hereby amended as
follows:
(a) Amendment to Section 1.01 (Definitions).
(1) The definition of Collateral Value of Eligible Mortgages is
hereby amended by deleting the reference to 98% contained therein and
replacing it with "95%".
(2) The definition of Expiration Date contained in Section 1.01 of
the Agreement is amended by deleting the reference to October 31, 1997
therein and replacing it with "November 30, 1997".
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(3) The definition of "Revolving Credit Commitment" contained in
Section 1.01 of the Agreement is amended by adding the following to the
end of such definition: "In addition to any other reductions to the
Revolving Credit Commitment set forth herein, the Revolving Credit
Commitment shall reduce by the sum of Six Million Eight Hundred
Seventy-Five Thousand Dollars ($6,875,000) on each of November 7, 1997,
November 14, 1997, November 21, 1997 and November 28, 1997. Each reduction
shall reduce the Banks' Commitments pro rata.
(4) The definition of "Majority Banks" is hereby amended by deleting
the period at the end of such definition and adding the following: ";
provided that, following the sale of Xxxxxx'x Note, Majority Banks shall
mean those Banks which are then in compliance with their obligations
hereunder holding not less than 66_% of the outstanding Loans."
(b) Amendment to Section 6.08. Section 6.08 of the Agreement is
hereby amended by adding a new subsection 18 to the end of such Section as
follows:
(18) Weekly Reporting. Weekly, no later than Tuesday of each week, a
production report for the preceding week and a report of the daily amounts
outstanding under the Borrower's credit facility with Bear Xxxxxxx for the
preceding week.
(c) Amendment to Section 9.01. Section 9.01 is hereby amended by
adding a two new subsections to the end of such Section as follows:
"(10) Termination of Existing Facilities. Either the Borrower's
repurchase facility with Greenwich Capital or the Borrower's credit
facility with Bear Xxxxxxx are terminated whether following a default
thereunder or otherwise.
(11) Subordination Agreement. The Guarantor shall have executed a
subordination agreement providing for the full subordination of all Debt
of the Borrower to the Guarantor to the Loans on terms and conditions
satisfactory to the Banks on or before November 7, 1997."
Section 2. Termination of LIBO Loan Option. As of the expiration of any
existing LIBO Loans, the Borrower's ability to borrow at the Adjusted LIBO Rate
shall terminate and all future Loans shall be made at the Base Rate.
Section 3. Reduction in Maximum Warehouse Period. From and after the date
hereof, the maximum warehouse period for all Mortgage Loans pledged to the Agent
under the Agreement shall be sixty (60) days.
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Section 4. Extension Fee. As a condition to the effectiveness of this
Amendment and in consideration of extension of the Commitments, the Borrower
shall pay to CoreStates an extension fee of $10,000 and to Xxxxxx an extension
fee of $5,000.
Section 5. Sale of Note Following Default. The provisions of Section 11.06
of the Agreement notwithstanding, from and after the occurrence of an Event of
Default, a Bank may, without the consent of the Loan Parties, the Agent or any
Bank, sell all or any portion of its Loans under the Agreement and its Note upon
payment to the Agent, for the Agent's account, of a fee of Three Thousand
Dollars ($3,000).
Section 6. Representations of the Loan Parties. The Loan Parties represent
and warrant that no default or Event of Default exists under the Agreement and
that all other terms, conditions and/or covenants contained in the Agreement are
ratified and confirmed. Except as amended hereby, the Agreement continue in full
force and effect in accordance with its terms.
Section 7. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be identical and all of which, when taken
together, shall constitute one and the same instrument, and any of the parties
hereto may execute this Amendment by signing any such counterpart.
Section 8. Binding Effect. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
Section 9. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Pennsylvania.
Section 10. Corporate Action, etc. The Borrower and the Guarantor have
each taken all corporate action necessary to authorize the execution, delivery
and performance of this Amendment. This Amendment is a valid and legally binding
obligation of the Borrower and of Guarantor enforceable in accordance with its
terms. The Borrower hereby ratifies and reaffirms the representations and
warranties contained in the Agreement as being true and correct as of the date
hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed as of the date set forth above.
CORESTATES BANK, N.A., as a CITYSCAPE CORP.
Bank and as Agent
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxx
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Its: Vice President Its: President
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XXXXXX TRUST AND SAVINGS BANK
By: /s/ Xxxxxxx X. Xxxxxxxx
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Its: Vice President
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CONSENT OF GUARANTOR
Cityscape Financial Corp., Guarantor, hereby consents to the foregoing
Amendment and acknowledges and reaffirms its obligations as set forth in the
Guarantee.
CITYSCAPE FINANCIAL CORP.
By: /s/ Xxxxxx Xxxxxxx
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Its: Chairman
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