1
Exhibit 4.2
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of September
15, 1997, between Cityscape Financial Corp., a Delaware corporation
("Cityscape"), and each person executing a counterpart of the signature page of
this Agreement (each individually an "Investor" and collectively the
"Investors").
W I T N E S S E T H:
WHEREAS, Cityscape desires to issue and sell to the Investors, and the
Investors wish to purchase from Cityscape, an aggregate of 5,000 shares of
Cityscape's 6% Convertible Preferred Stock, Series B, par value $0.01 per share
(the "Series B Preferred Stock"), having the rights, designations and
preferences set forth in the Certificate of Designations of Cityscape (the
"Certificate of Designations") in form of Exhibit A attached hereto, and
warrants (the "Warrants") to purchase 500,000 shares of Common Stock (as defined
below) in the form attached as Exhibit B (the shares of Common Stock issuable
upon the exercise of Warrants are hereinafter called the "Warrant Shares"), on
the terms and conditions set forth herein; and
WHEREAS, the Series B Preferred Stock will be convertible into shares
(the "Common Shares") of common stock, par value $0.01 per share, of Cityscape
(the "Common Stock"), pursuant to the terms of the Certificate of Designations,
and the holders of Series B Preferred Stock will have registration rights with
respect to such Common Shares and Warrant Shares pursuant to the terms of the
Registration Rights Agreement to be entered into between Cityscape and the
Investors (the "Registration Rights Agreement");
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
PURCHASE AND SALE OF SERIES B PREFERRED STOCK
Section 1.1 Purchase and Sale of Series B Preferred Stock. Subject to
the terms and conditions set forth herein (including, without limitation, the
provisions of Article IV hereof), Cityscape hereby agrees to issue and sell to
each of the Investors severally, and each of the Investors severally hereby
agrees to purchase from Cityscape on the date hereof (the "Closing Date") such
number of shares of Series B Preferred Stock as are indicated next to such
Investor's name on the counterpart of the signature page executed by such
Investor, and (ii) such number of related Warrants as are indicated next to such
Investor's name on the counterpart of the signature page executed by such
Investor against payment of the aggregate Purchase Price therefor, as provided
in Section 1.2 hereof. Cityscape shall issue and sell to the Investors an
aggregate of 5,000 shares of Preferred Stock.
2
Section 1.2 Purchase Price. The purchase price for the Series B
Preferred Stock (and the related Warrants) (the "Purchase Price") shall be
$10,000 per share of Series B Preferred Stock.
Section 1.3 The Closing. (a) The closing of the purchase and sale of
the shares of Series B Preferred Stock and the Warrants (the "Closing") shall
take place at the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP, at 10:00 a.m., local
time on the date hereof, provided that all of the conditions set forth in
Article IV hereof and applicable to the Closing shall have been fulfilled or
waived in accordance herewith.
(b) On the Closing Date, Cityscape shall execute, issue and deliver to
each Investor (i) certificates representing the shares of Series B Preferred
Stock purchased hereunder by such Investor registered in the name of such
Investor or its nominee and (ii) certificates representing the related Warrants
purchased hereunder by such Investor registered in the name of Investor or its
nominee, in each case in such denominations as reasonably requested by such
Investor, and such Investor shall deliver to Cityscape the aggregate Purchase
Price for the number of shares of Series B Preferred Stock (and related
Warrants) purchased by such Investor hereunder by wire transfer in immediately
available funds to an account designated in writing by Cityscape. The delivery
for payment by each Investor of the Purchase Price applicable to it shall
constitute a payment delivered to Cityscape in satisfaction of such Investor's
obligation to pay the Purchase Price hereunder. In addition, Cityscape shall
deliver evidence of filing with, and acceptance by, the Secretary of State of
the State of Delaware of the Certificate of Designations, and each party shall
deliver all documents, instruments and writings required to be delivered by such
party pursuant to this Agreement at or prior to the Closing.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Cityscape. Cityscape
hereby makes the following representations and warranties to each of the
Investors as of the date hereof and as of the Closing Date:
(a) Organization and Qualifications; Material Adverse Effect. Each of
Cityscape and its subsidiaries is a corporation duly incorporated and existing
in good standing under the laws of its jurisdiction of incorporation and has the
requisite corporate power to own and operate its properties and to carry on its
business as now being conducted. Each of Cityscape and its subsidiaries is duly
qualified as a foreign corporation to do business and is in good standing in
every jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary other than those in which the
failure so to qualify would not have a Material Adverse Effect. "Material
Adverse Effect" means any adverse effect on the business, operations, properties
or financial condition of Cityscape and which is material to Cityscape and its
subsidiaries taken as a whole, or any material adverse effect on Cityscape's
ability to consummate the transactions contemplated hereby, and to execute,
deliver and perform its obligations under each of this Agreement, the
Registration Rights Agreement, the Certificate of Designations and the Warrants.
2
3
(b) Authorization; Enforcement. (i) Cityscape has the requisite
corporate power and authority to enter into and perform its obligations under
each of this Agreement, the Registration Rights Agreement, the Certificate of
Designations and the Warrants and to issue the Series B Preferred Stock and the
Warrants in accordance with the terms hereof and thereof, (ii) the execution and
delivery of this Agreement and the Registration Rights Agreement, the issuance
and delivery of the Series B Preferred Stock and the Warrants and the filing of
the Certificate of Designations by Cityscape and the consummation and
performance by it of the transactions contemplated hereby and thereby, including
the resolutions contained in the Certificate of Designations, have been duly
authorized by all necessary corporate action, and no further consent or
authorization of Cityscape or its Board of Directors or stockholders is required
(other than any shareholder approval as may be required by the rules applicable
to companies whose common stock is traded on the Nasdaq National Market
("Nasdaq")), (iii) this Agreement, the Registration Rights Agreement, the
Warrants, the Certificate of Designations and the Series B Preferred Stock have
been duly executed and delivered by Cityscape, and (iv) this Agreement, the
Registration Rights Agreement, the Warrants, the Certificate of Designations and
the Series B Preferred Stock constitute valid and binding obligations of
Cityscape enforceable against Cityscape in accordance with their terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to or affecting
generally the enforcement of creditors' rights and remedies, or by other
equitable principles of general application.
(c) Capitalization. The authorized capital stock of Cityscape consists
of 100,000,000 shares of Common Stock and 10,000,000 shares of preferred stock;
there were 32,585,403 shares of Common Stock and 2,910 shares of the Company's
6% Convertible Preferred Stock, Series A (the "Series A Preferred Stock") issued
and outstanding as of August 31, 1997. Except as set forth in the SEC Documents
(defined below), Cityscape has no other authorized, issued or outstanding equity
securities or securities containing any equity features, or any other securities
convertible into, exchangeable for or entitling any person to otherwise acquire
any other securities of Cityscape containing any equity features. All of the
outstanding shares of Cityscape Common Stock have been validly issued and are
fully paid and nonassessable. The Series B Preferred Stock, the Common Shares,
the Warrants and the Warrant Shares have been duly and validly authorized. When
issued against payment therefor as provided in this Agreement, the Series B
Preferred Stock will be validly issued, fully paid and nonassessable and will
entitle the holders thereof to the rights established in the Certificate of
Designations and the Warrants will be validly issued. A sufficient number of
shares of Common Stock has been duly reserved and will remain available for
issuance upon conversion of the Series B Preferred Stock and upon the exercise
of the Warrants. Except as set forth in this Agreement and in the SEC Documents,
there are no outstanding options, warrants, agreements, conversion rights,
subscription rights, preemptive rights, rights of first refusal or other rights
or agreements of any nature outstanding to subscribe for or to purchase any
shares of capital stock of Cityscape or any other securities of the Cityscape of
any kind. Except as otherwise required by law or as set forth in the Certificate
of Designations, Cityscape's Certificate of Incorporation (the "Charter") or
Cityscape's By-Laws, as in effect on the date hereof (the "By-Laws"), there are
no restrictions upon the voting or transfer of any shares of Cityscape's capital
stock pursuant to Cityscape's organizational and other governing documents or
any agreement or other instruments to which Cityscape is a party or by which
Cityscape or its
3
4
properties or assets are bound. The issuance of the Series B Preferred Stock and
the Warrants is not subject to any preemptive rights, rights of first refusal or
other similar limitation. There are no agreements or other obligations
(contingent or otherwise) that may require Cityscape to repurchase or otherwise
acquire any shares of its capital stock (other than its obligations with respect
to the Series A Preferred Stock and the Series B Preferred Stock). Cityscape has
no stockholder rights plan or similar agreements that contain poison pill
provisions.
(d) Corporate Documents. Cityscape has delivered to the Investors true
and correct copies of its Charter and the Certificate of Designations, each as
in effect on the date hereof, and Cityscape has furnished or made available to
the Investors true and correct copies of its By-Laws. The Certificate of
Designations has been duly filed with, and accepted for filing by, the Secretary
of State of the State of Delaware. The terms of the Certificate of Designations
are hereby expressly incorporated by reference herein, and the form of
certificate of Series B Preferred Stock is attached as Exhibit C.
(e) Issuance of Common Shares. Each of the Common Shares issuable upon
conversion of the Series B Preferred Stock pursuant to the Certificate of
Designations or the Warrant Shares issuable upon the exercise of the Warrants
are, or prior to issuance will be, duly authorized and, prior to issuance in
accordance with the terms of the Series B Preferred Stock or the Warrants, will
be reserved for issuance and, upon conversion in accordance with the Certificate
of Designations and/or exercise in accordance with the terms of the Warrants
such Common Shares and Warrant Shares, respectively, will be validly issued,
fully paid and non-assessable, free and clear of any and all preemptive rights,
rights of first refusal, liens, claims and encumbrances (other than those
created or suffered by the holder thereof), and eligible for inclusion on
Nasdaq, and the holders of such Common Shares and Warrant Shares shall be
entitled to all rights and preferences accorded to a holder of Common Stock. The
issuance of the Series B Preferred Stock, the Common Shares, the Warrants or the
Warrant Shares will not trigger any anti-dilution rights of any holders of
Cityscape's capital stock.
(f) No Conflicts. The execution, delivery and performance of this
Agreement, the Registration Rights Agreement, the Certificate of Designation and
the Warrants by Cityscape and the consummation by Cityscape of the transactions
contemplated hereby and thereby, including, without limitation, the issuance of
the Series B Preferred Stock, the Common Shares and the Warrant Shares, and the
filing of the Certificate of Designations, do not and will not (i) result in a
violation of Cityscape's Charter or By-Laws, (ii) conflict with, result in a
breach of, or constitute a default (or an event that with the giving of notice
or the passage of time, or both, would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture, or instrument to which Cityscape or any of its
subsidiaries is a party, that could reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect, or (iii) result in a violation
of any federal, state, local or foreign law, rule, regulation, order, judgment
or decree (including federal and state securities laws and regulations)
applicable to Cityscape or any of its subsidiaries or by which any property or
asset of Cityscape or any of its subsidiaries is bound or affected (except for
such conflicts, defaults, terminations, amendments, accelerations, cancellations
and violations as would not, individually or in the aggregate, have a Material
Adverse Effect) nor is Cityscape otherwise in violation of, conflict with or in
default under any of the foregoing; provided that, for purposes of such
4
5
representation as to federal, state, local or foreign law, rule or regulation,
no representation is made herein with respect to any of the same applicable
solely to the Investors and not to Cityscape. The business of Cityscape and its
subsidiaries is not being conducted in violation of any law, ordinance or
regulations of any governmental entity, except for violations which either
individually or in the aggregate do not and will not have a Material Adverse
Effect. Cityscape is not required under federal, state, local or foreign law,
rule or regulation to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under this Agreement, the
Registration Rights Agreement, the Certificate of Designations and the Warrants
or issue and sell the Series B Preferred Stock in accordance with the terms
hereof and issue the Common Shares upon conversion of the Series B Preferred
Stock or to issue and sell the Warrants in accordance with their terms or issue
the Warrants Shares upon exercise of the Warrants (other than any shareholder
approval as may be required by the rules applicable to companies whose common
stock is quoted on Nasdaq, and other than the registration statement which it is
required to file pursuant to the provisions of the Registration Rights
Agreement); provided that, for purposes of the representation made in this
sentence, Cityscape is assuming and relying upon the accuracy of the relevant
representations and agreements of the Investors herein.
(g) SEC Documents; Financial Statements. The Common Stock of Cityscape
is registered pursuant to Section 12(g) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and, since December 31, 1995, Cityscape has
filed all reports, schedules, forms, statements and other documents required to
be filed by it with the Securities and Exchange Commission ("SEC") pursuant to
the reporting requirements of the Exchange Act, including material filed
pursuant to Section 13(a) or 15(d) with the SEC (all of the foregoing including
filings incorporated by reference therein, the "SEC Documents"). Except as set
forth in the SEC Documents, as of their respective dates, the SEC Documents
complied in all material respects with the requirements of the Exchange Act and
the rules and regulations of the SEC promulgated thereunder and other federal,
state and local laws, rules and regulations applicable to such SEC Documents,
and none of the SEC Documents contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. Cityscape's annual report on Form 10-K for
the fiscal year ended December 31, 1996 (the "1996 10-K") and Cityscape's
quarterly report on Form 10-Q for the fiscal quarter ended June 30, 1997, as
filed with the SEC, contains all material information concerning Cityscape, and
no event or circumstance has occurred or exists since the date of the 1996 10-K
would require Cityscape to disclose such event or circumstance in order to make
the statements in the SEC Documents not misleading on the Closing Date but which
has not been so disclosed. The financial statements of Cityscape included in the
SEC Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC or
other applicable rules and regulations with respect thereto. Such financial
statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except (i)
as may be otherwise indicated in such financial statements or the notes thereto
or (ii) in the case of unaudited interim statements, to the extent they may not
include footnotes or may be condensed or summary statements), have been prepared
from, and are consistent with, the books and records of Cityscape and fairly
present in all material respects
5
6
the consolidated financial position, as at the dates thereof, and the
consolidated results of operations and cash flows of Cityscape and its
subsidiaries for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).
Neither Cityscape nor any of its subsidiaries had at June 30, 1997 any
material contingent liabilities, liabilities for taxes or long-term leases,
unusual forward or long-term commitments or unrealized or unanticipated losses
from any unfavorable commitments which are not reflected or reserved against in
the foregoing statements or in the notes thereto. No events that, individually
or in the aggregate, have had or could reasonably be expected to have a Material
Adverse Effect have occurred since June 30, 1997 except as reflected therein.
(h) Solvency.
(i) Cityscape's fair saleable value of its assets exceeds
the amount that will be required to be paid on or in respect of
Cityscape's existing debts and other liabilities (including contingent
liabilities) as they mature.
(ii) Cityscape's assets do not constitute unreasonably small
capital to carry out its business as now conducted and as proposed to
be conducted including Cityscape's capital needs taking into account
the particular capital requirements of the business conducted by
Cityscape, and projected capital requirements and capital availability
thereof.
(iii) Cityscape does not intend to incur debts beyond its
ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of its debt).
The cash flow together with the proceeds received from the liquidation
of Cityscape's assets after taking into account all anticipated uses of
the cash will at all times be sufficient to pay all amounts on or in
respect of its debt when such amounts are required to be paid.
(iv) Cityscape does not intend, and does not believe, that
final judgments against Cityscape in actions for money damages will be
rendered at a time when, or in an amount such that, Cityscape will be
unable to satisfy any such judgments promptly in accordance with their
terms (taking into account the maximum reasonable amount of such
judgments in any such actions and the earliest reasonable time at which
such judgments might be rendered). Cityscape's cash flow, after taking
into account all other anticipated uses of the cash (including the
payments on or in respect of debt referred to in paragraph (iii)
above), will at all times be sufficient to pay all such judgments
promptly in accordance with their terms.
(v) Neither Cityscape nor any of its subsidiaries is subject
to any bankruptcy, insolvency or similar proceeding.
(i) No Default. No event has occurred and is continuing that with
the giving of notice or passage of time, or both, constitutes an event of
default under any agreement to which Cityscape is a party or its assets are
bound, which default could reasonably be expected to have a Material Adverse
Effect.
6
7
(j) Principal Market. The principal market on which the Common Stock is
currently traded is Nasdaq.
(k) No Material Adverse Change. Since December 31, 1996, no Material
Adverse Effect has occurred or exists, except as otherwise disclosed or
reflected in other SEC Documents prepared through or as of a date subsequent to
December 31, 1996.
(l) No Undisclosed Liabilities. Cityscape and its subsidiaries have no
liabilities or obligations not disclosed in the SEC Documents, other than those
liabilities incurred in the ordinary course of Cityscape's or its subsidiaries'
respective businesses since December 31, 1996, which liabilities, individually
or in the aggregate, do not or would not have a Material Adverse Effect on
Cityscape.
(m) No General Solicitation. Neither Cityscape, nor any of its
affiliates, or, to its knowledge, any person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D under the Securities Act of 1933, as amended (the
"Act")) in connection with the offer or sale of the Series B Preferred Stock or
Common Shares.
(n) No Integrated Offering. Neither Cityscape, nor any of its
affiliates, nor to its knowledge any person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any security or solicited
any offers to buy any security other than pursuant to this Agreement, under
circumstances that would require registration under the Act of the Series B
Preferred Stock to be issued under this Agreement.
(o) Form S-3. Cityscape is eligible to use Form S-3 under the Act for a
primary issuance of its securities and to file the Registration Statement (as
defined in the Registration Rights Agreement) on Form S-3 and Form S-3 is
permitted to be used for the transactions contemplated hereby under the Act and
the rules promulgated thereunder.
(p) No Litigation. No litigation or claim (including those for unpaid
taxes), or environmental proceeding against Cityscape or any of its subsidiaries
is pending, threatened or, to Cityscape's best knowledge, contemplated and no
other event has occurred, which if determined adversely would have a Material
Adverse Effect on Cityscape or would materially adversely affect the
transactions contemplated hereby. There are no outstanding injunctions or
restraining orders prohibiting consummation of any of the transactions
contemplated by this Agreement and the Registration Rights Agreement.
(q) Brokers. Cityscape has taken no action which would give rise to any
claim by any person for brokerage commissions, finder's fees or similar payments
by any Investor relating to this Agreement or the transactions contemplated
hereby, except for amounts payable to CIBC Wood Gundy Securities Corp., which
amounts shall be paid by Cityscape pursuant to a separate agreement.
7
8
(r) Effectiveness of SEC Filings. The SEC has not issued any stop order
or other order suspending the effectiveness of any registration involving the
securities of Cityscape or its subsidiaries.
(s) No Investment Company. Cityscape is not an "investment company", or
an "affiliated person" of an "investment company", as such terms are defined in
the Investment Company Act of 1940, as amended.
(t) Environmental Matters. Except as otherwise disclosed in the SEC
Documents, Cityscape and each of its subsidiaries is in compliance in all
material respects with all applicable state and federal environmental laws and
no event or condition has occurred that may interfere with the compliance by
Cityscape or any of its subsidiaries with any environmental law or that may give
rise to any liability under any environmental law that, individually or in the
aggregate, would have a Material Adverse Effect.
(u) Permits. Cityscape and each of its subsidiaries have such
certificates, permits (including, without limitation environmental permits),
licenses, franchises, consents, approvals, authorizations and clearances that
are material to the condition (financial or otherwise), business or operations
of Cityscape and any of its subsidiaries, taken as a whole ("Permits"), and are
in compliance in all material respects with all applicable laws of all tribunals
as are necessary to own, lease or operate their respective properties and to
conduct their businesses in the manner as presently conducted and all such
Permits are valid and in full force and effect, except for any such Permits as
would not, individually or in the aggregate, have a Material Adverse Effect.
Cityscape and each of its subsidiaries is in compliance in all material respects
with its respective obligations under such Permits and no event has occurred
that allows, or after notice or lapse of time would allow, revocation or
termination of such Permits, except for any such revocation or termination as
would not, individually or in the aggregate, have a Material Adverse Effect.
(v) Senior Securities. Except for Series A Preferred Stock, none of
Cityscape's outstanding equity securities are senior to, or pari passu with, in
respect of dividends, redemption or liquidation, the Series B Preferred Stock.
(w) No Material Nonpublic Information. Cityscape has not disclosed to
the Investors any material nonpublic information relating to Cityscape or its
subsidiaries in connection with the negotiation and execution of this Agreement.
(x) Existence of Group. To the Cityscape's knowledge, no person or
group (as such term is used in Section 13 of the Exchange Act) is the beneficial
owner or is deemed to beneficially own (as described in Rule 13d-3 under the
Exchange Act without regard to the 60-day exercise period) in excess of 50% of
Cityscape's voting power of the capital stock of Cityscape normally entitled to
vote in the election of directors of Cityscape.
Section 2.2 Representations and Warranties of the Investors. Each of
the Investors, severally and not jointly, hereby makes the following
representations and warranties to Cityscape as of the Closing Date:
8
9
(a) Authorization; Enforcement. (i) Such Investor has the requisite
power and authority to enter into and perform this Agreement, the Registration
Rights Agreement and the Warrant delivered in connection herewith, and to
purchase the Series B Preferred Stock and the Warrants being sold hereunder and
to acquire the Common Shares and the Warrant Shares, (ii) the execution and
delivery of this Agreement and the Registration Rights Agreement by such
Investor and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate or partnership
action, and (iii) this Agreement and the Registration Rights Agreement
constitute valid and binding obligations of such Investor enforceable against
such Investor in accordance with their terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of creditors' rights and remedies or by other equitable principles of general
application.
(b) No Conflicts. The execution, delivery and performance of this
Agreement and the Registration Rights Agreement executed in connection herewith,
and the consummation by such Investor of the transactions contemplated hereby
and thereby, do not and will not (i) result in a violation of such Investor's
organizational documents, or (ii) conflict with any agreement, indenture or
instrument to which such Investor is a party, or (iii) result in a violation of
any law, rule, or regulation, or any order, judgment or decree of any court or
governmental agency applicable to such Investor. Such Investor is not required
to obtain any consent or authorization of any governmental agency in order for
it to perform its obligations under this Agreement and the Registration Rights
Agreement.
(c) Investment Representation. Such Investor is purchasing the Series B
Preferred Stock and acquiring the Warrants solely for its own account for the
purpose of investment and not with a view to distribution in violation of any
securities laws. Such Investor has no present intention to sell the Series B
Preferred Stock, the Warrants, the Common Shares or the Warrant Shares and such
Investor has no present arrangement (whether or not legally binding) to sell the
Series B Preferred Stock, the Warrants, the Common Shares or the Warrant Shares
to or through any person or entity; provided, however, that by making the
representations herein, such Investor does not agree to hold the Series B
Preferred Stock, the Warrants, the Common Shares or the Warrant Shares for any
minimum or other specific term and reserves the right to dispose of the Series B
Preferred Stock, the Warrants, the Common Shares or the Warrant Shares at any
time in accordance with federal and state securities laws applicable to such
disposition.
(d) Accredited Investor. Such Investor is an "accredited investor" as
defined in Rule 501 under the Act. The Investor has such knowledge and
experience in financial and business matters in general and investments in
particular, so that such Investor is able to evaluate the merits and risks of an
investment in the Series B Preferred Stock and the Warrants and to protect its
own interests in connection with such investment. In addition (but without
limiting the effect of Cityscape's representations and warranties contained
herein), such Investor has received such information as it considers necessary
or appropriate for deciding whether to purchase the Series B Preferred Stock and
the Warrants.
(e) Rule 144. Such Investor understands that there is no public trading
market for the Series B Preferred Stock or the Warrants, that none is expected
to develop, and that Series B
9
10
Preferred Stock and the Warrants must be held until such Series B Preferred
Stock and Warrants are converted pursuant to the terms of the Certificate of
Designations, or exercised in accordance with its terms, respectively, or
registered under the Act or an exemption from registration is available. Such
Investor has been advised or is aware of the provisions of Rule 144 under the
Act.
(f) Brokers. Such Investor has taken no action which would give rise to
any claim by any person for brokerage commissions, finder's fees or similar
payments by Cityscape relating to this Agreement or the transactions
contemplated hereby, except for amounts payable to CIBC Wood Gundy Securities
Corp., which amounts shall be paid by Cityscape pursuant to a separate
agreement.
(g) Manner of Sale. At no time was the Investor presented with or
solicited by or through any leaflet, public promotional meeting, television
advertisement or any other form of general solicitation or advertising.
ARTICLES III
COVENANTS
Section 3.1 Registration and Listing; Effective Registration. Until
such time as no shares of Series B Preferred Stock, Common Shares, Warrants or
Warrant Shares are subject to resale restrictions (as to time, volume, manner or
otherwise) under Rule 144 under the Act, Cityscape shall cause the Common Stock
to continue to be registered under Section 12(g) of the Exchange Act, will
comply in all material respects with its reporting and filing obligations under
the Exchange Act, and will not take any action or file any document (whether or
not permitted by the Exchange Act or the rules thereunder) to terminate or
suspend such reporting and filing obligations. Until such time as there are no
shares of Series B Preferred Stock or Warrants outstanding, Cityscape shall
continue the listing or trading of the Common Stock on Nasdaq, NYSE or AMEX and
comply in all respects with Cityscape's reporting, filing and other obligations
under the bylaws or rules of Nasdaq, NYSE or AMEX, as applicable, the exchange
on which the Common Stock is then trading. Cityscape shall undertake its best
efforts to obtain the stockholder approval referenced in Section 2.1(b) and
2.1(f) as may be required for the issuance of the Common Shares issued upon
conversion of the Series B Preferred Stock or Warrant Shares issuable upon
exercise of the Warrant as promptly as practicable. As used herein and in the
Registration Rights Agreement, the Certificate of Designations and the Warrants
the term "Effective Registration" shall mean that all registration obligations
of Cityscape pursuant to the Registration Rights Agreement have been satisfied,
such registration is not subject to any suspension or stop order, the prospectus
for the resale of the Common Shares issuable upon conversion of the Series B
Preferred Stock and the Warrant Shares issuable upon exercise of the Warrants
complies in all material respects with the requirements of the Act and does not
and will not contain an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and such Common Shares and Warrant Shares are listed for trading on
Nasdaq, NYSE or AMEX, as applicable, the exchange on which the Common Stock is
then trading, and such trading has not been suspended for any reason.
10
11
Section 3.2 Certificates on Conversion and Warrants on Exercise. (a)
Upon any conversion by an Investor (or then holder of Series B Preferred Stock)
of the Series B Preferred Stock pursuant to the Certificate of Designations,
Cityscape shall issue and deliver to such Investor (or holder) within three (3)
trading days of the Conversion Date (as defined in the Certificate of
Designations) a new certificate or certificates for the number of Series B
Preferred Stock which such Investor (or holder) has not yet elected to convert
but which are evidenced in part by the certificate(s) submitted to Cityscape in
connection with such conversion (with the number of and denomination of such new
certificate(s) designated by such Investor or holder).
(b) In the alternative to physical delivery of certificates for Common
Shares pursuant to Section 3(b) of the Certificate of Designations, if delivery
of the Common Shares pursuant to any conversion thereunder may be effectuated by
electronic book-entry through Depository Trust Company ("DTC"), then delivery of
Common Shares pursuant to such conversion shall, if requested by such Investor
(or holder of Common Shares), settle by book-entry transfer through DTC by the
third trading day following the Conversion Date. The parties agree to coordinate
with DTC to accomplish this objective.
(c) Upon any partial exercise by an Investor (or then holder of the
Warrants) of the Warrants, Cityscape shall issue and deliver to such Investor
(or holder) within three (3) trading days of the Exercise Date (as defined in
the Warrants) a new Warrant or Warrants, representing the number of adjusted
Warrant Shares, in accordance with the terms of Section 2 of the Warrants.
Section 3.3 Replacement Certificates and Warrants. (a) The
certificate(s) representing the Series B Preferred Stock held by any Investor
(or then holder) may be exchanged by such Investor (or such Holder) at any time
and from time to time for certificates with different denominations representing
an equal aggregate number of Series B Preferred Stock, as reasonably requested
by such Investor (or such holder) upon surrendering the same. No service charge
will be made for such registration or transfer or exchange.
(b) The Warrants are exchangeable at the option of the Investor (or
then holder of the Warrants) at the office of Cityscape for other Warrants of
different denominations entitling the holder thereof to purchase in the
aggregate the same number of Warrant Shares as are purchasable under such
Warrants. No service charge will be made for such transfer or exchange.
Section 3.4 Expenses. Cityscape shall pay, at the Closing (or at such
later date as it shall be invoiced by Xxxxxx Xxxxxx & Xxxxxxx) and promptly upon
receipt of any further invoices relating to the Closing, all reasonable due
diligence fees and expenses and reasonable attorneys' fees and expenses of
Xxxxxx Xxxxxx & Xxxxxxx, including, without limitation, costs and expenses
incurred in connection with review of Cityscape's registration statement on Form
S-3 with respect to the resale of the Common Shares and the Warrant Shares, and
other due diligence activities relating to the effectiveness of such
registration statement, incurred by the Investors in connection with the
preparation, negotiation, execution and delivery of this Agreement, the
Registration Rights Agreement, the Certificate of Designations and the Warrants
and the related agreements and documents and the transactions contemplated
hereunder and thereunder and in connection with the Closing.
11
12
Section 3.5 Securities Compliance. Cityscape shall notify each of the
SEC and Nasdaq, in accordance with their respective requirements, of the
transactions contemplated by this Agreement, the Certificate of Designations,
the Registration Rights Agreement and the Warrants and shall take all other
necessary action and proceedings as may be required and permitted by applicable
law, rule and regulation, for the legal and valid issuance of the Series B
Preferred Stock hereunder, the Common Shares issuable upon conversion thereof
and the Warrant Shares issuable upon exercise of the Warrants.
Section 3.6 Notices. Cityscape agrees to provide all holders of Series
B Preferred Stock with copies of all notices and information, including without
limitation notices and proxy statements in connection with any meetings, that
are provided to the holders of shares of Common Stock, contemporaneously with
the delivery of such notices or information to such Common Stock holders.
Section 3.7 Use of Proceeds. Cityscape agrees that the proceeds
received by Cityscape from the sale of the Series B Preferred Stock hereunder
shall be used for working capital purposes, including the funding of future
acquisitions.
Section 3.8 Reservation of Common Stock Issuable Upon Conversion of the
Series B Preferred Stock and Upon Exercise of the Warrants. Cityscape shall at
all times reserve and keep available out of its authorized but unissued Common
Stock, solely for the purpose of effecting the conversion of the Series B
Preferred Stock and the exercise of the Warrants, free from preemptive rights
such number of shares of its Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding Series B Preferred Stock
and the exercise of the Warrants, and if at any time the number of authorized
but unissued shares of Common Stock reserved for such purposes shall not be
sufficient to effect the conversion of all the then outstanding Series B
Preferred Stock and the exercise of the Warrants, Cityscape will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued Common Stock to such number of shares as shall be
sufficient for such purpose, including without limitation engaging in best
efforts to obtain the requisite stockholder approval.
Section 3.9 Corporate Existence. Cityscape will take all steps
necessary to preserve and continue its corporate existence.
Section 3.10 Issue Taxes. Cityscape shall pay any and all issue and
other taxes that may be payable in respect of any issue of Common Shares upon
conversion of Series B Preferred Stock in accordance with the Certificate of
Designations.
Section 3.11 Stockholder Rights Plan. Cityscape agrees that the
acquisition of shares of Common Stock pursuant to the conversion of Series B
Preferred Stock or the exercise of the Warrants will in no event under any
circumstance trigger any poison pill provisions of any stockholders rights plan
or similar agreement.
12
13
ARTICLE IV
CONDITIONS
Section 4.1 Conditions Precedent to the Obligation of Cityscape to Sell
the Series B Preferred Stock. The obligation hereunder of Cityscape to issue
and/or sell the Series B Preferred Stock and Warrants to the Investors is
subject to the satisfaction, at or before the Closing, of each of the conditions
set forth below. These conditions are for Cityscape's sole benefit and may be
waived by Cityscape at any time in its sole discretion.
(a) Accuracy of the Investors' Representations and Warranties. The
representations and warranties of each Investor shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
particular date).
(b) Performance by the Investors. Each Investor shall have performed
all agreements and satisfied all conditions required to be performed or
satisfied by such Investor at or prior to the Closing.
(c) Payment of Purchase Price. At the Closing, each Investor shall
deliver the Purchase Price as indicated next to such Investor's name on the
counterpart of the signature page executed by such Investor as provided in
Article I hereof.
(d) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement, the Registration Rights Agreement, the Certificate of Designations
and the Warrants.
Section 4.2 Conditions Precedent to the Obligation of the Investors to
Purchase the Series B Preferred Stock. The obligation hereunder of each Investor
to acquire and pay for the Series B Preferred Stock and acquire the Warrants is
subject to the satisfaction, at or before the Closing, of each of the conditions
set forth below. These conditions are for the Investors' sole benefit and may be
waived by the Investors at any time in their sole discretion.
(a) Accuracy of Cityscape's Representations and Warranties. The
representation and warranties of Cityscape shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
particular date).
(b) Performance by Cityscape. Cityscape shall have performed,
satisfied, and complied in all material respects with all covenants, agreement
and conditions required to be performed or satisfied by Cityscape on or prior to
the Closing.
(c) Nasdaq. As of the Closing Date, trading in Cityscape's Common Stock
shall not have been suspended by the SEC or Nasdaq, and trading in securities
generally as reported by
13
14
Nasdaq shall not have been suspended or limited, and the Common Stock shall not
have been delisted from any exchange or market where they are currently listed.
(d) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of or materially adversely affects any of the
transactions contemplated by this Agreement, the Registration Rights Agreement,
the Certificate of Designations or the Warrants and no proceeding shall have
been commenced which is reasonably likely to have the effect of prohibiting or
adversely affecting any of the transactions contemplated by this Agreement, the
Registration Rights Agreement, the Certificate of Designations or the Warrants.
(e) Opinion of Counsel. At the Closing the Investors shall have
received an opinion of Xxxxxx, Xxxx & Xxxxxxxx LLP, counsel to Cityscape in the
form attached hereto as Exhibit D.
(f) Other Documents. At the Closing the Investors shall have received
such other certificates and documents as the Investors or their counsel shall
reasonably require.
(g) Registration Rights Agreement. Cityscape shall have executed and
delivered to the Investors the Registration Rights Agreement.
(h) Officer's Certificate. Cityscape shall have delivered to the
Investors a certificate in form and substance of Exhibit E executed by an
officer of Cityscape.
(i) Certificate of Designations Filed. The Investors shall have
received copies of the filed Certificate of Designations.
(j) Certificates. The Investors shall have received certificates
evidencing the Series B Preferred Stock and the Warrants.
(k) Adverse Changes. Since June 30, 1997 and except as disclosed in the
SEC Documents, no event which had or is likely to have a Material Adverse Effect
on Cityscape shall have occurred.
ARTICLE V
LEGEND; RESTRICTIONS ON TRANSFER
Each certificate representing the Series B Preferred Stock, the Common
Shares, the Warrants and the Warrant Shares shall be stamped or otherwise
imprinted with a legend substantially in the following form:
"THE SECURITIES EVIDENCED OR CONSTITUTED BY THIS CERTIFICATE HAVE BEEN
ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") AND MAY NOT BE SOLD, OFFERED FOR SALE OR
TRANSFERRED WITHOUT REGISTRATION UNDER THE ACT UNLESS EITHER (i) THE
COMPANY
14
15
HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT REGISTRATION IS NOT
REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR (ii) THE SALE OF SUCH
SECURITIES IS MADE PURSUANT TO RULE 144 PROMULGATED UNDER THE ACT."
Each Investor agrees that it shall not sell, offer for sale, transfer,
pledge or hypothecate any of the Series B Preferred Stock, the Common Shares,
the Warrants and the Warrant Shares without registration under the Act unless
either (i) Cityscape has received an opinion of counsel, in form and substance
reasonably satisfactory to Cityscape, to the effect that registration is not
required in connection with such disposition or in connection with the
conversion or exercise of the securities so disposed or (ii) such disposition
involves the sale of Common Shares or Warrant Shares and is made pursuant to
Rule 144 promulgated under the Act. Nothing herein shall limit the Investor's
right to pledge the Series B Preferred Stock, Common Shares, Warrants or Warrant
Shares pursuant to a bona fide margin account or lending arrangement, provided
any such lender shall be subject to all of the restrictions that are applicable
to the Investor.
Cityscape agrees to reissue certificates representing the Series B
Preferred Stock, Common Shares, Warrants and Warrant Shares without the legend
set forth above at such time as (i) the holder thereof is permitted to dispose
of such Series B Preferred Stock, Common Shares, Warrants and/or Warrant Shares
pursuant to Rule 144(k) under the Act, (ii) such Series B Preferred Stock,
Common Shares, Warrants and/or Warrant Shares are sold to a purchaser or
purchasers who (in the opinion of counsel to the seller or such purchaser(s), in
form and substance reasonably satisfactory to Cityscape and its counsel) are
able to dispose of such securities publicly without registration under the Act,
or (iii) such Series B Preferred Stock, Common Shares, Warrants and/or Warrant
Shares are sold in a registered offering under the Act.
If on a Conversion Date (as defined in the Certificate of
Designations), or within three (3) trading days after such Conversion Date, the
Investor notifies Cityscape that it has resold Common Shares underlying the
Series B Preferred Stock being converted, so long as the Registration Statement
(as defined in the Registration Rights Agreement) is effective, Cityscape agrees
to issue certificates representing such Common Shares resold by the Investor
without the legend set forth above to or upon the instructions of the Investor.
Upon the sale of any Common Shares sold pursuant to an effective
Registration Statement, Cityscape or its transfer agent, shall promptly, but no
later than three trading days thereafter, issue new certificates representing
such Common Shares free and clear of any legends, transfer restrictions and stop
orders. In order to facilitate this, Cityscape agrees to deliver to its transfer
agent, upon the Registration Statement being declared effective, instructions
authorizing the transfer agent to effect the transfer of, and removal of legend
from, any Common Shares sold pursuant to the Registration Statement.
Cityscape shall pay all stamp taxes levied in connection with the
issuance of the Series B Preferred Stock pursuant hereto, the Common Shares
issued upon conversion thereof and the Warrant Shares issuable upon exercise of
the Warrants.
15
16
ARTICLE VI
MISCELLANEOUS
Section 6.1 Specific Enforcement; Consent to Jurisdiction.
(a) Cityscape and the Investors acknowledge and agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent or cure breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which any of them may be entitled by
law or equity.
(b) Cityscape and each of the Investors (i) hereby irrevocably submits
to the exclusive jurisdiction of the United States District Court, the New York
State courts and other courts of the United States sitting in New York county,
New York for the purposes of any suit, action or proceeding arising out of or
relating to this Agreement and (ii) hereby waives, and agrees not to assert in
any such suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of such court, that the suit, action or proceeding is
brought in an inconvenient forum or that the venue of the suit, action or
proceeding is improper. Cityscape and each of the Investors consents to process
being served in any such suit, action or proceeding by mailing a copy thereof to
such party at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing in this paragraph shall affect or limit any right to
serve process in any other manner permitted by law.
Section 6.2 Entire Agreement. This Agreement, together with the
Registration Rights Agreement, the Warrants and the Certificate of Designations
and the agreements and documents executed in connection herewith and therewith,
contains the entire understanding of the parties with respect to the matters
covered hereby and thereby and, except as specifically set forth herein or
therein, neither Cityscape nor any Investor makes any representation, warranty,
covenant or undertaking with respect to such matters.
Section 6.3 Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be effective upon
actual receipt of such mailing, facsimile or personal delivery. The addresses
for such communications shall be:
to Cityscape: Cityscape Financial Corp.
000 Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000-0000
Fax: (000) 000-0000
Attn: Chief Executive Officer
General Counsel
16
17
with copies to: Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: Xxxx X. Xxxxxxxxx, Esq.
to the Investor: at the address and/or fax number set forth
on Schedule I of this Agreement
Any party hereto may from time to time change its address for notices by giving
at least 10 days' written notice of such changed address to the other parties
hereto.
Section 6.4 Indemnity. Each party shall indemnify each other party
against any loss, cost or damages (including reasonable attorney's fees but
excluding consequential damages) incurred as a result of such parties' breach of
any representation, warranty, covenant or agreement in this Agreement.
Section 6.5 Amendments; Waivers. Any term of this Agreement may be
amended and the observance of any term hereof may be waived (either generally or
in a particular instance and either retroactively or prospectively), only with
the written consent of Cityscape and the holders of more than 66-2/3% of the
Series B Preferred Stock. Any amendment or waiver effected in accordance with
this Section shall be binding upon each holder of any securities purchased under
this Agreement at the time outstanding (including securities into which such
securities are convertible), each future holder of all such securities and
Cityscape; provided, however, that no conditions set forth in Section 4.2 may be
waived with respect to an Investor without such Investor's prior written
consent.
Section 6.6 Headings. The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
Section 6.7 Successors and Assigns. Except as otherwise provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns. Cityscape may not assign
this Agreement or any rights or obligations hereunder without the prior written
consent of all Investors (which consent may be withheld for any reason in their
sole discretion), except that Cityscape may assign this Agreement in connection
with the sale of all or substantially all of its assets provided that Cityscape
is not released from any of its obligations hereunder, such assignee assumes all
obligations of Cityscape hereunder, and appropriate adjustment of the provisions
contained in this Agreement, the Registration Rights Agreement, the Certificate
of Designations and the Warrants is made, in form and substance satisfactory to
the Investors, to place the Investors in the same position as they would have
been but for such assignment, in accordance with the terms of the Certificate of
Designations and the Warrants. Any Investor may assign this Agreement (in whole
or in part) or any rights or obligations hereunder without the consent of
Cityscape in connection with any sale or transfer of all or any portion of the
Series B Preferred Stock or the Warrants held by such Investor, provided such
sale or transfer is in compliance with Article V hereof and that no
17
18
Investor may assign this Agreement prior to the Closing Date without Cityscape's
prior written consent except to an affiliate or affiliates of such Investor,
provided such affiliate or affiliates agrees in writing to be bound by the terms
hereof.
Section 6.8 No Third Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
Section 6.9 Governing Law. This Agreement shall be governed by,
interpreted under, and construed and enforced in accordance with the internal
laws of the State of New York without regard to any state's principles of
conflict of laws.
Section 6.10 Survival. The representations and warranties and the
agreements and covenants of Cityscape and each Investor contained herein shall
survive the Closing.
Section 6.11 Execution. This Agreement may be executed in counterparts,
all of which shall be considered one and the same agreement, it being understood
that all parties need not sign the same counterpart.
Section 6.12 Publicity. Cityscape agrees that it will not disclose, and
will not include in any public announcement the name of any Investor without its
express written consent, unless and until such disclosure is required by law or
applicable regulation, and then only to the extent of such requirement. Except
as may be required by law, Cityscape and each Investor shall consult with each
other before issuing any press release or otherwise making any public statements
with respect to this Agreement and shall not issue any press release or make any
such public statement prior to such consultation.
Section 6.13 (a) Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that such severability shall be
ineffective if it materially changes the economic benefit of this Agreement to
any party.
(b) Obligations Several and Not Joint. The parties acknowledge and
agree that the Investors are not agents, affiliates or partners of each other,
that all representations, warranties, covenants and agreements of the Investors
hereunder are several and not joint, that no Investor shall have any
responsibility or liability for the representations, warrants, agreements, acts
or omissions of any other Investor, and that any rights granted to "Investors"
hereunder shall be enforceable by each Investor hereunder.
Section 6.14 Covenant of the Investor. Each of the Investors, severally
and not jointly, hereby covenants and agrees that if it, directly or through an
affiliate creates the "lowest trading price" (as defined in the Certificate of
Designations) for the Common Stock on any of the four (4) (or fifteen (15) if
applicable) consecutive trading days immediately preceding the day of delivery
by such Investor of a Conversion Notice (as defined in the Certificate of
Designations), then such trading price shall, as to such Investor, not be
considered in determining the Conversion Price (as
18
19
defined in the Certificate of Designations) applicable to such Conversion
Notice; provided however, that transactions in the Common Stock (which are not
principal transactions) effected in the ordinary course of business by an
Investor or its affiliates as broker or otherwise as market marker shall be
exempt from the provisions of this Section 6.14.
Section 6.15 Limitations on Investor's Right to Convert Shares of
Series B Preferred Stock. Notwithstanding anything to the contrary contained
herein, no shares of Series B Preferred Stock may be converted by an Investor to
the extent that, after giving effect to Common Shares to be issued pursuant to a
Conversion Notice (as such term is defined in the Certificate of Designations),
the total number of Common Shares deemed beneficially owned (as such term is
defined in the Exchange Act) by such Investor (but excluding shares otherwise
deemed beneficially owned by virtue of the ownership of the Series B Preferred
Stock, the Warrants or other securities having similar limitations on the right
to acquire shares of Common Stock to the extent of such limitations), together
with all Common Shares deemed beneficially owned by the Investor's "affiliates"
(as defined in Rule 144 of the Act) that would be aggregated for purposes of
determining whether a group under Section 13(d) of the Exchange Act, would
exceed 4.9% of the total issued and outstanding shares of Cityscape's Common
Stock, provided that each Investor shall have the right to waive this
restriction, in whole or in part, immediately in the case of a pending Change of
Control Transaction (as such term is defined in the Certificate of Designations)
and in any other case upon 61 days prior notice to Cityscape. The delivery of a
Conversion Notice by any Investor shall be deemed a representation by such
Investor that it is in compliance with this paragraph.
Section 6.16 Ineffective Conversion of Shares of Series B Preferred
Stock. A conversion by an Investor of shares of Series B Preferred Stock into
Common Shares shall be deemed ineffective, pursuant to an election by such
Investor, to the extent that, during the period commencing on the date such
Common Shares are delivered to the Investor upon such conversion and ending 5
trading days thereafter (i) such Investor is unable to resell all or a portion
of such Common Shares because the Registration Statement shall, for any reason,
not be available or (ii) Cityscape notifies the Investors of its intent to
purchase, in accordance with Sections 3(h)(2) or 3(h)(5) of the Certificate of
Designations, all of the outstanding shares of Series B Preferred Stock held by
the Investors at the time of such notice. The Investor shall promptly, but no
later than 5 trading days from the end of the 5 trading day period specified in
the preceding sentence, give Cityscape notice of an election pursuant to this
Section 6.16. Cityscape shall, upon receipt of such notice of election from the
Investor, re-issue shares of Series B Preferred Stock to such Investor as
promptly as practicable upon surrender by the Investor of the Common Shares held
by such Investor which are the subject of this Section 6.16.
Section 6.17 Like Treatment of Holders. Neither Cityscape nor any of
its affiliates shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee, payment for redemption or
exchange of shares of Series B Preferred Stock, or otherwise, to any holder of
such shares, for, as an inducement to or in connection with the solicitation of
such holder's consent, waiver or agreement to amend, if such consent, waiver or
amendment is binding on all holders of shares of Series B Preferred Stock,
relating to any terms or provisions of the Series B Preferred Stock or this
Agreement or the Registration Rights Agreement or the Warrants, unless such
consideration is required to be paid to all holders of shares of Series B
19
20
Preferred Stock bound by such consent, waiver or amendment, whether or not such
holders so consent, waive or agree to amend and whether or not such holders
tender their shares of Series B Preferred Stock for redemption or exchange.
Cityscape shall not, directly or indirectly, redeem any shares of Series B
Preferred Stock unless such offer of redemption is made pro rata to all holders
of Series B Preferred Stock on identical terms.
20
21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
CITYSCAPE FINANCIAL CORP.
By: /s/ Xxxxxx X. Patent
--------------------------------------
Name: Xxxxxx X. Patent
Title: Executive Vice President
INVESTOR:
By:
--------------------------------------
Name:
Title:
Number of shares of Series B Preferred Stock
Purchased at the Closing:
-----------
Number of Warrants Purchased:
--------------
Address for Notices:
------------------------
Telephone:
------------------------
Facsimile:
------------------------
21
22
EXHIBITS
Exhibit A Certificate of Designations of Cityscape
Exhibit B Form of Warrant
Exhibit C Form of Certificate of Series B Preferred Stock
Exhibit D Form of Opinion of Counsel
Exhibit E Form of Officer's Certificate
23
Xxxxxxx Associates, L.P.
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: General Partner
Number of shares of Series B Preferred Stock Purchased at the Closing: 900
Shares.
Number of Warrants Purchased: 90,000
Westgate International, L.P.
By: Martley International, Inc., as Attorney-in-Fact
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: President
Number of shares of Series B Preferred Stock Purchased at the Closing: 900
Shares.
Number of Warrants Purchased: 90,000
RGC International Investors, LDC
By: Xxxx Xxxx Capital Management, L.P.
By: RGL General Partner Corp.
By: /s/ Xxxxx X. Block
Name: Xxxxx X. Block
Title: Managing Director
Number of shares of Series B Preferred Stock Purchased at the Closing: 200
Shares.
Number of Warrants Purchased: 20,000
Salomon Brothers Inc.
By: /s/ Xxxxxxx Xxxxxxxxxx
Name: Xxxxxxx Xxxxxxxxxx
Title: V.P.
Number of shares of Series B Preferred Stock Purchased at the Closing: 400
Shares.
Number of Warrants Purchased: 40,000
High View Fund, L.P.
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: President
Number of shares of Series B Preferred Stock Purchased at the Closing: 139
Shares.
Number of Warrants Purchased: 13,900
High View Fund
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: President
Number of shares of Series B Preferred Stock Purchased at the Closing: 53
Shares.
Number of Warrants Purchased: 5,300
High View SSFI Fund, LDC
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: President
Number of shares of Series B Preferred Stock Purchased at the Closing: 8 Shares.
Number of Warrants Purchased: 800
Greenlight Capital, L.P.
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Managing Member of General Partner
Number of shares of Series B Preferred Stock Purchased at the Closing: 66
Shares.
Number of Warrants Purchased: 6,600
24
Greenlight Capital Offshore, Ltd.
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Managing Member of Investment Advisor
Number of shares of Series B Preferred Stock Purchased at the Closing: 29
Shares.
Number of Warrants Purchased: 2,900
The Seedling Fund, L.P.
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Managing Member of Investment Advisor
Number of shares of Series B Preferred Stock Purchased at the Closing: 5 Shares.
Number of Warrants Purchased: 500
CIBC Wood Gundy Securities Corp.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Managing Director
Number of shares of Series B Preferred Stock Purchased at the Closing: 2,300
Shares.
Number of Warrants Purchased: 230,000
2
