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Exhibit 10.62
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AMENDMENT NO. 2
Dated as of October 30, 1996
to the
PURCHASE AND SALE AGREEMENT
Dated as of February 2, 1996, as amended,
between
CITYSCAPE CORP.
and
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
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THIS AMENDMENT NO. 2, dated as of October 30, 1996 to the PURCHASE
AND SALE AGREEMENT, dated as of February 2, 1996, as heretofore amended by
Amendment No. 1 thereto dated as of August 30, 1996 (the "Purchase Agreement"),
is between Cityscape Corp., as seller (the "Seller"), and Greenwich Capital
Financial Products, Inc., as purchaser (the "Purchaser").
W I T N E S S E T H
WHEREAS, the Seller and the Purchaser have heretofore entered into
the Purchase Agreement;
WHEREAS, the Seller and the Purchaser desire to amend the Purchase
Agreement to include certain additional terms;
WHEREAS, Section XVIII of the Purchase Agreement permits the
amendment of the Purchase Agreement by written agreement of the Seller and the
Purchaser;
NOW, THEREFORE, in consideration of the mutual covenants herein and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto agree as follows:
SECTION 1. Defined Terms.
For purposes of this Amendment, unless the context clearly
requires otherwise, all capitalized terms which are used but not otherwise
defined herein shall have the respective meanings ascribed to such terms in the
Purchase Agreement.
SECTION 2. The Amendments.
(i) Section VIII of the Purchase Agreement is hereby amended by
inserting at the end of such Section, after the end of Section
8.03, a new Section as follows:
"8.04 Pass-Through Transfer After October 30, 1996.
(a) Unless the parties hereto otherwise agree in
writing, any disposition of Mortgage Assets accomplished
pursuant to this Agreement on or after October 30, 1996
will be structured as a Pass-Through Transfer in a manner
similar in all material respects to the structure of
Cityscape Home Equity Loan Trust, Series 1996-3, as such
structure relates to the residual interest therein to be
held by the Seller or a subsidiary or affiliate thereof.
(b) The Seller agrees that in connection with any
such Pass-Through Transfer on or after the execution by
Cityscape Corp. of a Senior Secured Credit Agreement with
CIBC Wood Gundy Securities Corp, as agent ("CIBC"),
(expected to be consummated on or about October 30, 1996,
the "Bridge Loan"; the actual date of such execution,
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the "Bridge Loan Date"), and during the term of the Bridge
Loan, (i) the residual interest issued in connection with
such Pass-Through Transfer will be issued to and held by a
newly-formed special purpose corporation, which is a direct
wholly-owned subsidiary of the Seller and having a charter
in form and substance substantially the same in all
material respects as the charter of Cityscape Funding
Corporation II (an "SPC"), except as otherwise agreed in
writing by the Purchaser, and (ii) the Seller will pledge
to the Purchaser in the manner provided in Section 27.02(a)
all of the capital stock of such SPC to secure the
Designated Obligations (as defined herein) under this
Agreement up to the Performance Assurance Amount (as
defined herein), which capital stock will be held by a
third party custodian appointed by the Seller, with the
consent of the Purchaser, subject to a security interest in
favor of and for the benefit of the Purchaser, pursuant to
such terms and conditions as the Purchaser, the Seller and
such custodian agree to in a tri-party custody agreement to
be entered into upon selection of such custodian. Unless
otherwise agreed in writing by the Purchaser, each such SPC
formed shall hold such residual interests of only one such
Pass-Through Transfer.
The "Performance Assurance Amount" means as of the
date of determination the sum of (x) the lesser of (A) 4.5%
of the aggregate unpaid principal balance of all mortgage
loans sold by the Purchaser or securitized pursuant to this
Agreement on or after October 30, 1996 and (B) the
aggregate amount of any Proceeds Shortfall hereunder
related to all mortgage loans sold by Purchaser or
securitized pursuant to this Agreement on or after October
30, 1996, each computed as of such date of determination
and (y) such amount, not to exceed $10.0 million, as is
equal to the product of 0.28 multiplied by the aggregate
unpaid principal balance of all loans held by the Purchaser
under this Agreement that, as of such date of determination
are more than 59 days delinquent, in each case under
clauses (x) and (y) above to the extent the amount
calculated under any of such clauses is not paid by the
Seller to the Purchaser on or prior to such date of
determination. The Performance Assurance Amount shall be
calculated by the Purchaser in good faith, and such
calculation shall be binding on both parties hereto.
(c) The capital stock of any SPC pledged pursuant to
Section 8.04(b)(ii) shall be released from such pledge upon
the substitution in pledge by
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the Seller to the Purchaser of all of the capital stock of
a separate, SPC created in connection with a subsequent
Pass-Through Transfer pursuant to this Section 8.04 and
satisfying the criteria set forth in Section 8.04(b), to be
held by a custodian appointed pursuant to Section 8.04(b)
to hold the residual interest from such subsequent
Pass-Through Transfer (a "Subsequent Residual"), provided
that such Subsequent Residual has a fair market value
(determined based upon the assumptions used by the Seller
in valuing the Subsequent Residual for GAAP gain-on-sale
purposes consistent with the Seller's past valuation
methodology and practices) equal to at least the
Performance Assurance Amount at the time of such proposed
release. The Seller shall cooperate with the Purchaser in
calculating the fair market value of each Subsequent
Residual.
(d) The custodian holding the capital stock of any
SPC pursuant to this Section 8.04 shall also hold the
certificates relating to the residual interest of such SPC
for the benefit of SPC and shall release such residual
interest to SPC or its designee (i) in connection with the
creation of a yield maintenance trust created to support
any interest-only instrument purchased by Purchaser or its
affiliate in such Pass-Through Transfer, on terms and
conditions satisfactory to the Seller and the Purchaser,
(ii) upon release of such capital stock pursuant to Section
8.04(c) or (iii) otherwise with the consent of the
Purchaser and CIBC.
(e) The Seller shall pay the fees and expenses of any
custodian appointed pursuant to Section 8.04(b).
(f) Notwithstanding the pledge of capital stock by
Seller to Purchaser as contemplated by this Section 8.04,
Purchaser reserves the right at any time consistent with
the terms of this Agreement to require Seller to perform
any obligation of Seller hereunder, including by way of
illustration and without limitation the obligation to pay
to Purchaser any Recourse Amount pursuant to Section 4.03,
to pay to Purchaser any Proceeds Shortfall pursuant to
Section 4.05, to repurchase Eligible Assets pursuant to
Section 6.04 and to pay to Purchaser additional fees and
expenses as provided in Section 8.01 and Section 10.07."
(ii) Section XVII of the Purchase Agreement is hereby amended by
inserting at the end of and as part of the second sentence thereof
the following:
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"; provided, however, that this Agreement may be assigned
at any time, without the prior consent of the Seller, to
Greenwich Capital Markets, Inc. ("GCM"), an affiliate of
Purchaser."
(iii) Section XVII of the Purchase Agreement is hereby further
amended by inserting at the end of such Section the following:
"To the extent that any such assignment to GCM has been
made, the Purchaser shall, within five (5) Business Days
thereafter, give the Seller written notice thereof and
shall provide to the Seller a copy of any written
instrument of such assignment. The Seller hereby
acknowledges that if the Purchaser does at any time so
assign this Agreement to GCM, that GCM may, but shall not
be required to, simultaneously therewith or subsequent
thereto, enter into one or more purchase and sale
agreements with Purchaser (each a "GCM Sale Agreement")
with respect to any Tranche hereunder, and that in such
case (i) the Purchaser, as purchaser from GCM (in such
capacity, "GCFP"), shall have all rights during the term of
such GCM Sale Agreement to enforce this Agreement with
respect to such Tranche (and the Mortgage Assets included
therein), as if specifically a party hereto, (ii) the
Seller will deal directly with GCFP in connection with the
sale of any Tranche hereunder and (iii) to the extent GCFP
agrees to purchase any Tranche from the Seller, the Seller
will look only to GCFP to satisfy any obligations under
this Agreement related to such Tranche (or the Mortgage
Assets included therein). The Seller and the Purchaser and
GCM, to the extent it is an assignee of the Purchaser,
agree to cooperate with each other to execute such
documents and instruments and make such filings as shall be
necessary to carry out the intent of the foregoing."
(iv) Section XXVII of the Purchase Agreement is hereby amended by
inserting at the end of and as part of the caption thereof the
following: "; Security for Payment" and by inserting prior to the
text of such Section the following: "27.01".
(v) Section XXVII of the Purchase Agreement is hereby further
amended by inserting at the end of such Section the following:
"27.02 (a) As security for the prompt and complete payment
and performance when due of all of the Designated
Obligations of the Seller hereunder up to the Performance
Assurance Amount, the Seller simultaneously with the
consummation of any Pass-
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Through Transfer pursuant to Section 8.04 shall grant to
the Purchaser a continuing first priority security interest
in, and lien on, all of the Seller's right, title and
interest in and to all of the ownership interests,
including all capital stock, equity securities and
ownership rights, which the Seller has in the SPC that
holds the residual interest in connection with such
Pass-Through Transfer and shall deliver the capital stock
thereof in pledge to such custodian, to be held by such
custodian as agent for the Purchaser, together with any
other property, rights and interests of the Seller in such
SPC which at any time relate to, arise out of or in
connection with the ownership of such SPC by the Seller or
which shall come into the possession or custody or under
the control of the Seller or any of its agents,
representatives, associates or correspondents, and all
products and proceeds thereof (collectively, the "Ownership
Interests").
The "Designated Obligations" means the obligations of
the Seller under this Agreement (i) to pay to the Seller
the amount of any Proceeds Shortfall due hereunder, and
(ii) to repurchase from the Seller or otherwise make the
Seller whole with respect to any Mortgage Asset purchased
by the Seller hereunder and not disposed of by the Seller
and the Purchaser, including by way of example but without
limitation, (x) where such Mortgage Asset was not at the
time of purchase hereunder or at any time thereafter an
Eligible Asset, (y) where any representation or warranty by
Seller with respect to such Mortgage Asset was not true
when made, is no longer true or has been breached or (z)
where the Market Value of any such Mortgage Asset as of any
date of determination is determined to be less than the
amount paid by the Purchaser hereunder.
(b) The Seller hereby agrees to enter into any and
all documentation reasonably required by Purchaser to
evidence the pledge created hereby, including, without
limitation, a separate pledge agreement; provided, however,
that in the absence of a separate pledge agreement, this
agreement shall serve as a pledge and security agreement in
respect of the obligations referred to in this Section
27.02.
(c) The Seller, shall simultaneously with the
consummation of any Pass-Through Transfer, deliver to the
custodian provided for in Section 8.04 any and all
certificates evidencing the Ownership Interests, together
with a stock power endorsed in blank, to be held by such
custodian during the term
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of this Agreement, subject to prior release upon the terms
set forth in Section 8.04.
(d) To the extent that, within five (5) Business Days
of written notification to the Seller by the Purchaser of
any Designated Obligations being due and payable, either
(i) such Designated Obligations or any portion thereof have
not been paid in full to Purchaser or (ii) as to any unpaid
amount thereof, Seller shall not have provided to the
Purchaser an unconditional firm commitment from a financial
institution (which commitment and financial institution
must be acceptable to Purchaser in its sole discretion) to
fund such unpaid Designated Obligations in full within ten
(10) Business Days thereafter, or such commitment is not
funded in full on or before the date designated for funding
in such commitment (the "Committed Funding Date", and the
period of time from the date set forth for payment pursuant
to (i) above through the Committed Funding Date being
referred to as the "Commitment Period"), the Purchaser
shall have the right to (x) retain and apply any
distributions with respect to the Ownership Interests to
the Designated Obligations, (y) exercise all the rights and
remedies of a secured party on default under the Uniform
Commercial Code as in effect in the State of New York at
that time and/or (z) foreclose upon and sell or otherwise
dispose of the Ownership Interests. In the event that the
unpaid Designated Obligations are not paid in full on or
prior to the Committed Funding Date and the Ownership
Interests shall have diminished in value during the
Committment Period, then the amount of any such diminution
in value, up to the amount of the excess of the Performance
Assurance Amount over the amount received by the Purchaser
upon sale or liquidation of the Ownership Interests, shall
be paid to the Purchaser by the Seller on demand and shall
continue, until paid, to be an unsecured obligation of the
Seller. For purposes of calculating any diminution in value
of the Ownership Interests pursuant to the immediately
preceding sentence, the Purchaser shall select (and the
Seller shall pay the fees, expenses and costs of) an
independent third party broker-dealer, reasonably
acceptable to the Seller, to perform such calculation, and
any such calculation by such broker-dealer shall be binding
on both the Seller and the Purchaser.
(e) For so long as this Agreement shall be in effect
and so long as the capital stock of any SPC is pledged to
the Purchaser, the Seller shall be required to obtain the
prior written consent of the
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Purchaser (i) with respect to all voting rights relating
to the Ownership Interests related to any such SPC and
(ii) prior to any declaration of dividends by any such
SPC or other distribution by any such SPC of its assets,
other than a dividend or distribution to Seller for the
sole purpose of, and which is applied to, outstanding
obligations of Seller to Purchaser.
(vi) In all other respects the Purchase Agreement remains in
full force and effect.
SECTION 3. Effect of Amendments
Upon execution of this Amendment, the Purchase Agreement shall be,
and be deemed to be, modified and amended in accordance herewith and the
respective rights, limitations, obligations, duties, liabilities and immunities
of the Seller and the Purchaser shall hereafter be determined, exercised and
enforced subject to all respects to such modifications and amendments, and all
the terms and conditions of this Amendment shall be, and be deemed to be, part
of the terms and conditions of the Purchase Agreement for any and all purposes.
SECTION 4. Governing Law.
This Amendment shall be construed in accordance with the laws of
the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
SECTION 5. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Amendment shall be for any reason whatever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Amendment and shall
in no way affect the validity or enforceability of the other provisions of this
Amendment.
SECTION 6. Binding Effect.
The provisions of this Amendment shall be binding upon and inure to
the benefit of the respective successors and assigns of the parties hereto.
SECTION 7. Section Headings.
The section headings herein are for convenience of reference only,
and shall not limit or otherwise affect the meaning hereof.
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SECTION 8. Counterparts.
This Amendment may be executed in several counterparts, each of
which shall be an original and all of which shall constitute but one and the
same instrument.
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Amendment to be duly executed by their respective officers thereunto duly
authorized, all as of the day and year first above written.
CITYSCAPE CORP., as Seller
By_____________________________
Name:
Title:
GREENWICH CAPITAL FINANCIAL
PRODUCTS, INC., as Purchaser
By_____________________________
Name:
Title:
