Employment Agreement

EMPLOYMENT AGREEMENT


THIS AGREEMENT, dated this 24th day of April, 1997 is by and between Cityscape Corp., a Delaware corporation (hereinafter "Employer") and Gregg L. Armbrister (hereinafter "Employee").


WITNESSETH:


WHEREAS, the Company desires to hire and retain the Employee as an employee to perform certain services for the Company.


NOW, THEREFORE, in consideration of the mutual covenants contained herein and on the attached Schedule, and for other good and valuable consideration the receipt of which is hereby acknowledged, the Company and the Employee hereby agree as follows:


1. EMPLOYMENT OF EXECUTIVE.


(a) The Company hereby employs the Employee in the capacity and for the position set forth in Item 1 of the Schedule attached hereto. Employee hereby accepts such employment with the Company upon the terms and conditions hereinafter set forth.


(b) The duties of the Employee shall include the duties and services described in Item 2 of the Schedule, which duties and services shall at all times be subject to the direction, approval and control of the Company and shall include such other duties, as may be assigned by the Board of Directors of the Company commensurate with the responsibilities normally associated with Employee's position.


2. SERVICES TO BE RENDERED.


The Employee will devote Employee's full time and efforts to the business and affairs of the Company and shall not during the term of this Agreement be engaged in any other businesses; provided that the Employee may engage in passive investments in businesses in which the Employee does not participate. Notwithstanding the foregoing, the Employee may retain his ownership interest in the firm K. M'Kenzie And Associates, Inc., a Georgia corporation, but shall not take part in the active management of the same while in the employ of Employer. The 2 Employee will always use Employee's best efforts to promote the interests of the Company.


3. TERM.


The term of this Agreement (the "Term") shall commence on May 1, 1997, and shall continue until April 30, 2001, unless (i) extended by the mutual agreement of the Company and the Employee or (ii) terminated as hereinafter provided. Until May 1, 1997, Employee shall serve as a consultant to Employer under the usual terms and conditions between the parties and Employee shall devote approximately sixty per cent (60%) to Employer's business pursuits during this time.


4. COMPENSATION.


(a) The Employee shall receive a salary as set forth on Schedule 3. Effective May 1, 1997, the salary due and payable under Schedule Item 3 shall be increased each January by the percentage increase, if any, in the Consumer Price Index defined in subsection (c) below between November 1996 and November 1997 for the first increase and between November 1997 and November 1998 for the second increase, and November 1998 and November 1999 for the third increase. The increases shall be cumulative, that is the base salary upon which a CPI increase is that which is in effect at the end of each year. In no event shall the salary be reduced because of a percentage decline in the Consumer Price Index.


(b) Each January, commencing with January 1998, the Board of Directors of the Company shall review Employee's performance and the Board of Directors may, in its sole discretion, elect to increase the salary then paid to Employee; however, there shall be absolutely no obligation to do so.


(c) Consumer Price Index shall mean the Index published by the United States Department of Labor for all Urban Consumers U.S. City Average N.Y., N.J., CT. 1982-1984 = 100 or such successor Index as may be published which most closely corresponds to this Index.


5. BENEFITS.


The employee shall be entitled to participate in the regular pension, profit sharing, health, disability, and other benefit 3 programs of the Company in effect from time to time on the same basis that other senior officers of the Company participate therein. To the extent possible, without incurring additional expense and without adversely affecting the right of any other employee, the Company shall endeavor to eliminate or waive any waiting period with respect to profit sharing and/or pension benefits as well as health insurance benefits. The Employee shall be entitled, for the term hereof, to annual vacations to be taken in accordance with the policies of the Company in effect from time to time for senior officers but in no case less than two (2) weeks paid vacation for each year while employed beginning on and including the first year of employment.


6. EXPENSES.


The Company shall reimburse the Employee against appropriate vouchers or other receipts for business expenses reasonably incurred by Employee in the performance of Employee's duties pursuant to the terms hereof. In addition, upon the submission of appropriate vouchers or other receipts, the Company shall reimburse Employee for gas, tolls, and car phone charges. Employee shall submit vouchers or other receipts once per calendar month and shall be reimbursed by Company within thirty (30) days of submission. Expenses shall further include reimbursement for reasonable monthly car rental or car purchase payments not exceeding Four Hundred Fifty Dollars ($450).


7. DEATH AND DISABILITY.


In the event of the death of the Employee during the Term, the Employee's employment hereunder shall automatically terminate. In the vent of the total disability of the Employee, the Employee's employment hereunder may terminate at the option of the board of Directors of the Company. For purposes of this Agreement, "total disability" shall mean the Employee's inability to perform Employee's regular and customary duties on behalf of the Company for a period of no less than 120 consecutive days, or any 180 days during an twelve (12) month period, with such "total disability" being established by a written certification submitted by the medical doctor agreed to by the Employee and the Company. In the absence of agreement, the Company and the Employee shall each nominate a qualified doctor and these two (2) doctors shall select a third qualified medical doctor, which third doctor shall make the determination as to total disability. During the aforementioned 120 and 180 day periods, Employee shall receive his 4 regular salary less any Company provided disability insurance proceeds Employee may receive. After the termination of these time periods, no salary will be payable.


8. CAUSE.


By notice to the Employee, the President or the Board of Directors of the Company may terminate this Agreement for Cause. As used herein, "Cause" shall be defined as: (a) the refusal or failure by the Employee to carry out specific directions of the Board of Directors which are of a material nature and consistent with Employee's position described in the Schedule, or the refusal or failure by the Employee to perform a material part of the Employee's duties hereunder; (b) the commission by the Employee of a breach of any of the provisions of this Agreement; (c) the commission by the Employee of a fraudulent or dishonest act in Employee's relations with the Company or any of its affiliates, or with any customer or business contact of the Company or any of its affiliates ("dishonest" for these purposes shall mean that Employee knowingly or recklessly made a material misstatement or omission for Employee's personal benefits); (d) the conviction of the Employee for any crime involving an act of moral turpitude; (e) any act of insubordination or the willful failure to carry out a written directive of the board of Directors which does not violate the terms of this Agreement; (f) any breach under Sections 9 and 10 of this Agreement; of (g) the Employee's gross incompetence. Notwithstanding the foregoing, no "Cause" for termination shall be deemed to exist with respect to the Employee's acts described in clauses (a) or (b) above, unless the Company shall have given written notice to the Employee specifying the "Cause" with reasonable particularity and, within ten (10) business days after such notice, Employee shall not have cured or eliminated the problem or thing giving rise to such "Cause"; provided, however, that (i) any periodic breach or continual breaching after notice and cure of any provision of clauses (a) or (b) above, or (ii) a repeated breach after notice and cure, of any provisions of clause (a) or (b) above, involving the same or substantially similar actions or conduct, shall be grounds for termination for cause without any additional notice from the Company. The parties hereto agree that three (3) separate instances of a breach by the Employee of the provisions of this Agreement during the Term shall be considered periodic, continual or repeated and shall constitute "Cause" within the meaning of this Section 8. 5
9. NON-COMPETITION.


(a) During the Term and for six (6) months after the expiration of the Terms, except if the Employee terminates Employee's employment hereunder as a result of a Continued Company Breach (as such term is defined in [(c)] below) the Employee agrees that Employee will not, directly or indirectly, enter into or participate (whether as owner, partner, shareholder, officers, director, salesman, consultant, employee, principal, or in any other relationship or capacity) in any business operating or providing services in any State in which the company or its affiliates are operating or providing services as of the date of termination which is, or owns, manages or performs the following business activities and services: residential and commercial and real estate lending; servicing loan portfolios and/or mortgage or real estate brokerage services (a "Competing Entity); provided, that the Employee may own up to one percent (1%) of the outstanding equity securities of any Competing Entity that is subject to the public reporting requirements of the Securities Exchange Act of 1934.


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