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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 31, 1998
CITYSCAPE FINANCIAL CORP.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-27314 11-2994671
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State or Other Jurisdiction Commission File (IRS Employer Identification
of Incorporation Number No.)
565 Taxter Road, Elmsford, New York 10523-2300
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(Address of Principal Executive Offices) Zip Code
Registrant's telephone number, including area code: (914)592-6677
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Former name or former address,
if changed since last report
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Item 2. Disposition of Assets.
(a) Cityscape Financial Corp. (the "Company") has entered into definitive
agreements, dated March 31, 1998, with Ocwen Financial Corporation ("Ocwen") for
the sale of substantially all of the businesses and assets, and certain
liabilities of the UK operations of City Mortgage Corporation Limited
("CSC-UK"), the Company's indirect wholly-owned subsidiary. The acquisition
includes the purchase of CSC-UK's whole loan portfolio, securitized loan
residuals and loan origination and servicing businesses for a price of
approximately pound sterling 285.0 million, subject to adjustment as of closing
based on an agreed upon formula (currently estimated to result in an upward or
downward adjustment of approximately pound sterling 5 million). Closing, which
is anticipated to occur in April 1998, is subject to satisfaction of a number of
conditions, including obtaining rating agency consents and various substitutions
in connection with the transfer of the securitized residual and related
servicing rights (which will require the consents of the trustees of several
securitizations). As a result, there can be no assurance that the transaction
will be consummated. As a result of the Company's adoption of a plan to
institute the UK Sale, the Company expects to receive net proceeds of
approximately $102 million, less costs of $16.4 million related to the disposal
of UK discontinued operations.
A copy of the Agreement for the Sale and Purchase of the Business of
CSC-UK and its Subsidiaries and the Entire Issued Share Capital of City
Mortgage Receivables 7 Plc has been filed with this Form 8-K as Exhibit 2.1 and
is hereby incorporated by reference.
(b) Not applicable
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
2.1 Agreement for the Sale and Purchase of the Business of
CSC-UK and its Subsidiaries and the Entire Issued Share Capital of
City Mortgage Receivables 7 Plc dated March 31, 1998 by and among
CSC-UK, J&J Securities Limited, City Mortgage Financial Services
Limited, Greyfriars Group Limited, Greyfriars Financial Services
Limited, Assured Funding Corporation Limited, Cityscape (UK) Limited,
Home and Family Finance Limited, Home Funding Corporation Limited,
Home Mortgage Corporation Limited, Home Mortgages Limited, Homestead
Finance Limited, Homeowners Finance Limited, Mortgage
Management Limited, Secured Funding Limited, City Mortgage Servicing
Limited, Midland & General Direct Limited, Ocwen, the Company, City
Mortgage Funding 1 Limited and City Mortgage Collateral Reserve No. 1
Limited.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
CITYSCAPE FINANCIAL CORP.
(Registrant)
By: /s/ Tim S. Ledwick
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Name: Tim S. Ledwick
Title:VP-CFO
Dated: April 3, 1998
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31 MARCH 1998
(1) THE SELLERS
(2) OCWEN FINANCIAL CORPORATION
(3) CITYSCAPE FINANCIAL CORPORATION
(4) CITY MORTGAGE FUNDING 1 LIMITED
AGREEMENT FOR THE SALE AND PURCHASE OF THE BUSINESS OF CITY MORTGAGE
CORPORATION LIMITED AND ITS SUBSIDIARIES AND THE ENTIRE ISSUED SHARE
CAPITAL OF CITY MORTGAGE RECEIVABLES 7 PLC
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CONTENTS
CLAUSE PAGE
1. INTERPRETATION..........................................................1
2. SALE AND PURCHASE......................................................13
3. CONDITIONS.............................................................14
4. PURCHASE PRICE.........................................................17
5. COMPLETION.............................................................19
6. OFFICE OF FAIR TRADING.................................................19
7. WARRANTIES.............................................................19
8. CONTRACTS AND LIABILITIES..............................................20
9. EMPLOYEES..............................................................22
10. VALUE ADDED TAX........................................................23
11. POST-COMPLETION OBLIGATIONS............................................24
12. INTELLECTUAL PROPERTY..................................................24
13. ANNOUNCEMENTS..........................................................24
14. FURTHER UNDERTAKINGS BY FINANCIAL......................................25
15. COMPETITION............................................................25
16. COSTS..................................................................26
17. GENERAL................................................................26
18. ENTIRE AGREEMENT.......................................................26
19. ASSIGNMENT.............................................................27
20. NOTICES................................................................27
21. GOVERNING LAW AND JURISDICTION.........................................28
22. COUNTERPARTS...........................................................29
SCHEDULE 1 - THE SELLERS......................................................37
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SCHEDULE 2 - THE ASSETS.......................................................39
SCHEDULE 3 - COMPLETION OBLIGATIONS...........................................45
SCHEDULE 4 - EXCLUDED ASSETS..................................................49
SCHEDULE 5 - CALCULATION OF PURCHASE PRICE AND INTERIM PURCHASE PRICE.........50
SCHEDULE 6 - WARRANTIES.......................................................55
SCHEDULE 7 - LIMITATIONS ON THE SELLER'S LIABILITY............................65
SCHEDULE 8 - LIABILITIES......................................................69
SCHEDULE 9 - ASSIGNMENT OF BUILDINGS POLICIES.................................71
SCHEDULE 10 - ASSIGNMENT OF LIFE POLICIES.....................................73
SCHEDULE 11 - ASSIGNMENT OF LAS POLICIES......................................75
SCHEDULE 12 - INSURANCE POLICIES..............................................77
SCHEDULE 13 - DELIBERATELY LEFT BLANK.........................................78
SCHEDULE 14 - FORM OF TRANSFER (REGISTERED LAND) - ENGLAND AND WALES..........79
SCHEDULE 15 - FORM OF TRANSFER (UNREGISTERED LAND) - ENGLAND AND WALES........82
SCHEDULE 16 - FORM OF TRANSFER (REGISTERED LAND) - SCOTLAND...................85
SCHEDULE 17 - FORM OF TRANSFER (SASINE REGISTER) - SCOTLAND...................87
SCHEDULE 18 - BUYER'S POWER OF ATTORNEY.......................................89
SCHEDULE 19 - THE COLLECTION ACCOUNTS.........................................92
SCHEDULE 20 - INSTRUCTION LETTER..............................................94
SCHEDULE 21 - DEED OF CHARGE..................................................96
SCHEDULE 22 - DEED OF SUBSTITUTION...........................................101
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THIS AGREEMENT is made on 31 March 1998
BETWEEN
(1) THE PERSONS details of which are set out in Schedule 1 (together the
"Sellers" and each one a "Seller");
(2) OCWEN FINANCIAL CORPORATION, a company incorporated in the state of
Florida whose principal place of business is at The Forum, 1675 Palm
Beach Lakes Boulevard, West Palm Beach, Florida 33401 (the "Buyer");
(3) CITYSCAPE FINANCIAL CORPORATION, a company incorporated in the state of
Delaware, whose principal place of business is at 565 Taxter Road,
Elmsford, New York ("Financial"); and
(4) CITY MORTGAGE FUNDING 1 LIMITED (Company No. 3299937) whose registered
office is at Cityscape House, Croxley Business Park, Watford WD1 8YF
("CMF").
THE PARTIES AGREE as follows:
1. INTERPRETATION
1.1 In this Agreement:
"Accounts" means the draft consolidated accounts of CMC for the year
ended 31 December 1996, a copy of which is annexed to the Disclosure
Letter;
"Accrued Interest" means, in relation to a Loan and at any date,
interest which has accrued but is not due;
"Act" means the Companies Act 1985;
"AFC" means Assured Funding Corporation Limited (Company No. 2102520);
"Arrears of Interest" means, in relation to a Loan, and at any date,
interest which has accrued and has become due and payable but remains
unpaid;
"Assets" means all the property and assets agreed to be sold and
purchased under this Agreement as set out in Schedule 2;
"Assignment of Buildings Policies" means the assignment of the Third
Party Buildings Policies and the Block Buildings Policies substantially
in the form set out in Schedule 9;
"Assignment of Life Policies" means the assignment of the Life Policies
substantially in the form set out in Schedule 10;
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"Assignment of LAS Policies" means an assignment of the LAS Policies
substantially in the form set out in Schedule 11;
"Block Buildings Policies" means the block buildings insurance policies
listed in part I of Schedule 12;
"Block Life Policy" means the block life policy listed in Part III of
Schedule 12;
"Borrower" means, in relation to a Loan, the individual or individuals
named as such in the relevant Mortgage or Mortgage Conditions and to
whom such Loan is advanced together with the individual or individuals
(if any) from time to time assuming an obligation (other than as surety
or guarantor) to repay such Loan or any part of it;
"Building Policies" means the Block Building Policies and the Third
Party Building Policies;
"Business" means the respective businesses and undertakings, including
the business of mortgage broking, mortgage origination, mortgage
underwriting, mortgage servicing, insurance broking and any activities
ancillary thereto carried on by any of the Sellers and agreed to be
sold and purchased under this Agreement;
"Business Day" means a day (other than a Saturday or Sunday) on which
banks are open for business in London;
"Buyer's Group Company" means the Buyer, any subsidiary of the Buyer,
and any holding company of the Buyer or any subsidiary of any holding
company of the Buyer;
"Buyer's Notification Letter" means a joint letter from the Buyer and
CMC to the Borrowers in relation to the Loans comprised in the
Portfolio in the agreed form;
"Buyer's Power of Attorney" means a power of attorney substantially in
the form set out in Schedule 18;
"CCA" means the Consumer Credit Act 1974;
"Charge" means an assignment or assignation to, or, as the case may be,
deposit with, any Seller by a Borrower, by way of security, of a Life
Policy;
"CMC" means City Mortgage Corporation Limited (Company No. 3043776);
"CMC Group Undertaking" means CMC, or an undertaking which is, on or at
any time after the date of this Agreement, a subsidiary undertaking or
parent undertaking of CMC or a subsidiary undertaking of a parent
undertaking of CMC;
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"CMCR" means City Mortgage Collateral Reserve No. 1 Limited (Company
No. 3437349);
"CMC Securitisations" means, collectively, the CMR1 Securitisation, the
CMR2 Securitisation, the CMR3 Securitisation, the CMR4 Securitisation,
the CMR5 Securitisation and the CMR6 Securitisation;
"CMF Loans" means those of the Loans in which CMF has any interest;
"CMH" means City Mortgage Holdings Limited (Company No. 3126743);
"CMR1" means City Mortgage Receivables 1 Plc (Company No. 3126751);
"CMR1 Reserve Novation Agreement" means the novation agreement dated 8
December 1997 made between CMC, CMCR, CMR1, City Mortgage Trustees 1
Limited, CMS, Chase Manhattan Trustees Limited, Guardian Mortgage
Services Limited, GIL and National Westminster Bank Plc;
"CMR1 Securitisation" means the securitisation of mortgage loans
originated or purchased by certain of the Sellers, effected through the
sale of those mortgage loans to CMR1 as issuer on 21 March 1996;
"CMR2" means City Mortgage Receivables 2 Plc (Company No. 3245450);
"CMR2 Securitisation" means the securitisation of mortgage loans
originated or purchased by certain of the Sellers, effected through
sales of those mortgage loans to CMR2 as issuer on 18 October 1996;
"CMR3" means City Mortgage Receivables 3 Plc (Company No. 3245445);
"CMR3 Securitisation" means the securitisation of mortgage loans
originated or purchased by certain of the Sellers, effected through
sales of those mortgage loans to CMR3 as issuer on 31 October 1996;
"CMR4" means City Mortgage Receivables 4 Plc (Company No. 3246090);
"CMR4 Securitisation" means the securitisation of mortgage loans
originated or purchased by certain of the Sellers, effected through
sales of those mortgage loans to CMR4 as issuer on 31 January 1997;
"CMR5" means City Mortgage Receivables 5 Plc (Company No. 3304205);
"CMR5 Securitisation" means the securitisation of mortgage loans
originated or purchased by certain of the Sellers, effected through
sales of those mortgage loans to CMR5 as issuer on 31 January 1997;
"CMR6" means City Mortgage Receivables 6 Plc (Company No. 3328209);
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"CMR6 Securitisation" means the securitisation of mortgage loans
originated or purchased by certain of the Sellers, effected through the
sales of mortgage loans to CMR6 as issuer on 30 April 1997;
"CMR7" means City Mortgage Receivables 7 Plc (Company No. 3389478);
"CMR7 Shares" means the 50,000 ordinary shares of pound sterling 1 each
paid up as to 25 pence each comprising the whole of the issued share
capital of CMR7;
"CMS" means City Mortgage Servicing Limited (Company No. 3043775);
"Collection Accounts" means the collection accounts listed in Schedule
19;
"Completion" means completion of the sale and purchase of the Business
and the Assets in accordance with this Agreement;
"Completion Date" means the date upon which Completion occurs;
"Contracts" means all the contracts to which any Seller is a party and
are unperformed (wholly or partly) at the Effective Time including,
without limitation, finance leases, operating leases and hire and hire
purchase agreements but excluding the Loans, employment contracts with
the Employees, the Watford Lease and the Wolverhampton Lease,
agreements relating to borrowing (whether to or from a Seller) or
contracts relating to the CMC Securitisations and "CONTRACT" means any
one of the Contracts;
"Data Tape" means the compact disc signed by the parties hereto for
identification and dated the date of this Agreement;
"DCR" means Duff & Phelps Credit Rating Co. and includes any successor
to its rating business;
"Deed of Charge" means the charge substantially in the form set out in
Schedule 21;
"Deed of Consent" means, in relation to a Loan (other than a Scottish
Loan) and its related Mortgage, the deed (if any) whereby an occupier
of Property aged seventeen years or over made known to the relevant
Originator who is not the relevant Borrower has agreed to postpone his
interest (if any) in the relevant Property so that it ranks for
repayment after the interest created by, and the sums secured under,
such related Mortgage;
"Deed of Postponement" means, in relation to a Loan and its related
Mortgage, any deed of postponement or ranking agreement whereby an
existing mortgagee or heritable creditor of the relevant Property at
the date of creation of the relevant Mortgage consents and agrees that
the sums secured from time to time by the
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relevant existing mortgage or standard security will rank for repayment
after or, as the case may be, before the sums secured by the relevant
Mortgage;
"Deed of Variation" means the deed of variation in respect of the CMC
Securitisations dated 27 February 1998;
"Disclosure Letter" means the letter from Financial to the Buyer in
relation to the Warranties having the same date as this Agreement;
"Effective Time" means the close of business in London on the day on
which Completion occurs;
"Employees" means the employees employed by any Seller at the Effective
Time;
"Encumbrance" means a mortgage, charge, pledge, lien, option,
restriction, right of first refusal, right of pre-emption, third-party
right or interest, other encumbrance or security interest of any kind,
or another type of preferential arrangement (including, without
limitation, a title transfer or retention arrangement) having similar
effect;
"Excluded Assets" means the assets set out in Schedule 4;
"Final Portfolio Completion Statement" means the statement and data
disk agreed pursuant to Part 1 of Schedule 5;
"Fitch" means Fitch Investors Service, LP and includes any successor to
its ratings business;
"Further Advance" means, in relation to a Loan and its related
Mortgage, any advance of further moneys to the relevant Borrower on the
security of the relevant Mortgage after the date of completion of such
Mortgage, including advances of any Retention but excluding however any
capitalised expenses;
"Further Loan" means each mortgage loan originated on or after the date
hereof and before Completion in accordance with clause 4.11.2;
"GIL" means Greenwich International, Ltd.;
"GIL Releases" means:
(a) a deed of release in respect of the charges created by the
Debenture Creating Fixed and Floating Charges made between
MML, GIL and CMC dated 27 February 1998;
(b) a deed of release in respect of the charge created by the
Debenture creating a Floating Charge postponed to all other
Security Interests made between CMC and GIL dated 27 February
1998;
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(c) a deed of release in respect of the charge created by CMC
creating fixed charges and assignments over certain
securitisation residual interests vested in CMC dated 27
February 1998;
(d) a reassignment of the accounts in the name of MML and all
amounts standing to the credit thereto which were assigned to
GIL pursuant to the bank account assignment dated 27 February
1998 between MML and GIL; and
(e) a reassignment of the account in the name of CMC and all
amounts standing to the credit thereto which was assigned to
GIL pursuant to the bank account assignment dated 27 February
1998 between CMC and GIL;
"Goodwill" means the goodwill of the Business and the Buyer's right to
use the name of any Seller or under which any Seller has traded and to
represent itself as operating the Business in succession to any Seller;
"HFC" means Home Funding Corporation Limited (Company No. 1967932);
"HMC" means Home Mortgage Corporation Limited (Company No. 2000967);
"Holdback" means the aggregate of pound sterling 3.5 million and the
amount of the cash received by the Sellers from any of the Residuals
during the period commencing at the close of business on the
Preparation Date and ending at the close of business on the Completion
Date, as certified to the Buyer by an officer of CMC on or prior to the
Completion Date;
"Initial Portfolio" means any mortgage loan the beneficial interest in
respect of which is vested in a Seller or CMF on the date hereof;
"Instruction Letter" means a letter from each applicable Seller to the
Seller's Conveyancing Solicitors in relation to certain of the Loans
comprised in the Portfolio in the form set out in Schedule 20;
"Intellectual Property" means patents, trade marks, service marks,
registered designs, applications for any of those rights, trade and
business names, unregistered trade marks and service marks, copyrights,
know-how, rights in designs and inventions and rights under licences in
relation thereto such rights;
"Intellectual Property Rights" means all Intellectual Property owned by
any Seller at the Effective Time;
"Interim Portfolio Completion Statement" means the statement and disk
agreed pursuant to Part 2 of Schedule 5;
"J&J" means J&J Securities Limited (Company No. 1335672);
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"LAS Policies" means the local search indemnity policy or policies
listed in Part II of Schedule 13;
"Last Accounting Date" means 31 December 1996;
"Lending Criteria" means the lending criteria used by an Originator in
connection with its activities as lender in the agreed form;
"Letter of Offer" means each letter or letters of offer or agreement or
agreements to make a Loan or Further Advance including the terms and
conditions incorporated therein;
"Liabilities" means the amounts owing or to become due to those
creditors of the Sellers identified or otherwise described in Schedule
8 which, in the case of leased assets, shall be any amounts falling due
for the residue of the term of the leases thereof at the Effective Time
or, for the purposes of Part 2 of Schedule 5 only, at the Preparation
Date;
"Liabilities Statement" means the statement and data disk designated as
such pursuant to Part 1 of Schedule 5;
"Life Policies" means any policy or policies of life assurance and/or
term assurance assigned to, or deposited with, any Seller by way of
collateral security for repayment of a Loan and the Block Life Policy
and "LIFE POLICY" means each of them;
"Loan" means each of the loans comprised in the Initial Portfolio and
all rights and entitlements of any Seller in relation thereto as set
out in clause 2.1 and each Further Loan;
"Loan File" means, in relation to a Loan, the customer file maintained
by an Originator or its agents on its behalf (excluding, for the
avoidance of doubt, the Title Deeds);
"MGD" means Midland & General Direct Limited (Company No. 2560230)
"MHA Documentation" means (in relation to any Scottish Loan) any
consent, renunciation or affidavit granted in terms of the Matrimonial
Homes (Family Protection) (Scotland) Act 1981 as amended;
"MIRAS Scheme" means the Mortgage Interest Relief at Source scheme
provided for in Sections 369 to 379 of the Income and Corporation Taxes
Act 1988;
"MML" means Mortgage Management Limited (Company No. 2002263);
"MML Loans" means those of the Loans in which MML has any interest;
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"Mortgage" means a charge by way of legal mortgage in England and Wales
or by way of Standard Security in Scotland over a residential property
and, in relation to a Loan, means the mortgage or Standard Security
securing that Loan including, in each case, all principal sums,
interest, costs, charges, expenses and other moneys secured or intended
to be secured by that mortgage or Standard Security;
"Mortgagee" means at any time in respect of a Loan, the person in whom
or which the rights and powers of the mortgagee are from time to time
vested;
"Mortgage Conditions" means, in relation to each Loan and the Mortgage
relating thereto, the terms and conditions subject to which such Loan
and the security for the repayment thereof is currently outstanding
including each Letter of Offer;
"Mortgage Payment Day" means each day on which the Borrower is obliged,
pursuant to the relevant Mortgage Conditions, to make payments on the
relevant Loan;
"Mortgages Trustee" means each of City Mortgage Trustees 1 Limited,
City Mortgage Trustees 2 Limited and City Mortgage Trustees 3 Limited;
"Motor Vehicles" means the motor vehicles used by any Seller at the
Effective Date, a list of which is annexed to the Disclosure Letter;
"Non-Mortgage Assets" means the assets set out in Part 3 of Schedule 2;
"OAIC" means Ocwen Asset Investment Corporation, a company incorporated
in the Commonwealth of Virginia whose principal place of business is at
The Forum, 1675 Palm Beach Lakes Boulevard, West Palm Beach, Florida
33401;
"OAIC Group Company" means OAIC or any subsidiary of OAIC from time to
time;
"Office Equipment" means the office equipment and furnishings, computer
equipment, telecommunications equipment and other similar articles used
by any Seller at the Effective Time;
"OFT" means the Office of Fair Trading;
"Originator" means any of the Sellers which has originated and/or which
currently originates Loans;
"Portfolio" means, as at Completion, the Loans (after excluding any
Loan which shall have been repaid in full prior to Completion);
"Preparation Date" means seven Business Days before the Completion
Date;
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"Principal" means the outstanding principal amount of any advances made
to a Borrower under a Mortgage;
"Property" means, in relation to a Loan and its related Mortgage, the
freehold, heritable or leasehold property upon which the repayment of
such Loan is secured and "PROPERTIES" means all of them;
"Rating Agencies" means DCR, S&P and Fitch and/or any other rating
agency from time to time retained by any of CMR1, CMR2, CMR3, CMR4,
CMR5 or CMR6 for the purpose of providing a rating of that company's
ability to meet its obligations in respect of any notes;
"Records" means all of the books and records of any Seller relating to
the Business including, without limitation, data stored electronically,
the Loan Files and the Title Deeds;
"Reading Leases" means
(a) the Lease dated 23 July 1986 between Guardian Assurance plc
(1) and Heritable Finance Limited (2) of 35-43 (odd numbers)
Greyfriars Road, Reading; and
(b) the Lease between London and Provincial Poster Group Limited
(1) Heritable Finance Limited (2) and The Heritable and
General Investment Bank Limited (3) of the third floor Summit
House, 51 Greyfriars Road, Reading, Berkshire, the tenant's
copy of which is undated;
"Registered Land" means land in England or Wales title to which is, or
following a relevant dealing is required to be, registered at H.M. Land
Registry;
"Registered Transfer" shall have the meaning ascribed to it in Part 1
of Schedule 2;
"Registers of Scotland" means the Land Register of Scotland and/or the
General Register of Sasines;
"Regulated Loan Agreement" means a regulated loan agreement within the
meaning given to that expression under the CCA;
"Related Security" means, in relation to a Loan, the Mortgage and
Charge relating thereto and all other collateral security for, and
rights in respect of, such Loan including any relevant Deeds of
Consent, MHA Documentation, Deeds of Postponement and any rights
against any person or persons in connection with the origination and
completion of such Loan;
"Relevant Claim" means a claim by the Buyer involving or relating to
breach of clause 7.1 or 7.2;
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"Report on Title" means the report or certificate of title (forming
part of the Standard Documentation) obtained by the relevant Originator
in respect of a Property;
"Residuals" means the entitlement of CMC and CMS to any amounts
deriving from the rights described in Part 1 of Schedule 3;
"Retention" means an amount or amounts to be advanced under a Mortgage
but retained as at the Completion Date pending satisfaction of certain
conditions (as described in the relevant Letter of Offer);
"Right-To-Buy Mortgage Loan" means a Loan in respect of a Property made
in whole or in part to a Borrower for the purpose of enabling that
Borrower to exercise his right to buy the relevant Property under:
(a) Section 156 of the Housing Act 1985 (in the case of any Loan
other than a Scottish Loan) excluding however such Loan in
respect of which the statutory charge referred to in section
155 of the Housing Act 1985 has expired; or
(b) Section 61 of the Housing (Scotland) Act 1987 (in the case of
any Scottish Loan) excluding however such Scottish Loan in
respect of which the period during which the Landlord's
Standard Security referred to in Section 72 of the Housing
(Scotland) Act 1987 has expired;
"S&P" means Standard & Poor's Rating Services, a division of The
McGraw-Hill Companies Inc., and includes any successor to its rating
business;
"Scottish Loan" means a Loan secured by a Mortgage over Property
situated in Scotland;
"Scottish Transfer" shall have the meaning ascribed to it in Part 1 of
Schedule 2;
"Securitised Loans" means, at any time, those mortgage loans
beneficially owned by or held on trust by the Mortgages Trustees (in
the case of the CMR1 Securitisation, the CMR2 Securitisation and the
CMR3 Securitisation), CMR4, CMR5 and CMR6 and respectively charged in
favour of each of the Trustees in respect of the CMR Securitisations;
"Sellers' Conveyancing Solicitors" means Messrs. Bernard Elliston
Sandler & Co, Messrs. Tomlinsons and Messrs Turner, Macfarlane & Green;
"Software Licence" means the Software Licence relating to loan
servicing software between (1) Equity Management Group Limited, (2) CMC
and (3) CMS to be dated on or prior to the Completion Date the benefit
of which shall be passed to the Buyer (or at its direction to a Buyer's
Group Company) acquiring the Business or part thereof;
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"Standard Documentation" means the documents which have been used by
the relevant Originator from time to time in connection with its
activities as lender and on which the Loans and their related Mortgages
have been granted or are outstanding, a copy of which initialled by the
parties by way of identification have been delivered to the Buyer;
"Standard Security" means a standard security in terms of the
Conveyancing and Feudal Reform (Scotland) Act 1970;
"Taxes Act" means the Income and Corporation Taxes Act 1988;
"Third Party Buildings Policies" means the buildings insurance policies
(other than the Block Buildings Policies) referable to each Property;
"Title Deeds" means in relation to a Loan, the agreement or agreements
for such Loan and the documents of title to the relevant Property and
to the relevant Related Security;
"Transfers" means the Registered Transfers, the Unregistered Transfers
and the Scottish Transfers;
"Trustee" means The Chase Manhattan Bank (in its capacity as trustee
for the holders of notes issued in respect of the CMR1 Securitisation)
and Chase Manhattan Trustees Limited (in its capacity as trustee for
the holders of notes issued in respect of each of the CMC
Securitisations (other than the CMR1 Securitisation));
"Unpaid Principal Balance" means, as at any date, the initial principal
amount of the Loan plus any Further Advance (together, in each case,
with any amounts properly capitalised and added to that Loan (not being
amounts payable by way of fees, interest or penalties on arrears), or
as the case may be, Further Advance on the date of its advance) less
any amount received in respect of that Loan or, as the case may be,
Further Advance prior to that date, and required or permitted to be
appropriated to the reduction of that principal amount;
"Unregistered Land" means land in England or Wales title to which is
not, and is not required to be, registered at H.M. Land Registry, or
Land Registry;
"Unregistered Transfer" shall have the meaning ascribed to it in Part 1
of Schedule 2;
"Unregulated Loan" means a Loan which is not a regulated loan agreement
within the meaning given to that expression in the CCA;
"Valuation Report" means the valuation report or reports for mortgage
purposes obtained by the relevant Originator from a Valuer in respect
of each Property;
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"Valuer" means a valuer approved by any Seller (being a fellow or
associate of the Royal Institution of Chartered Surveyors or the
Incorporated Society of Valuers and Auctioneers) for the valuation of a
Property;
"VATA" means, in the United Kingdom, the Value Added Tax Act 1994 and,
in a jurisdiction outside the United Kingdom, any equivalent
legislation;
"Warranty" means a statement contained in Schedule 6 and "WARRANTIES"
means all those statements;
"Watford Lease" means, the Lease dated 18 September 1996 between The
Standard Life Assurance Company (1), CMS (2) and CMC (3) for the
property known as Malvern House, Croxley Business Park, Watford,
Hertfordshire, title number HD351159;
"Wolverhampton Lease" means the Lease dated 23 May 1997 between
Rumney-Manor Limited (1) and CMC (2) for the premises situated on the
ground floor, part of the first floor and part of the third floor of St
David's Court, Union Street, Wolverhampton;
"L", "pounds sterling", "p" and "pence" each denote the lawful currency
of the United Kingdom; and
"$" denotes the lawful currency of the United States.
1.2 In this Agreement, a reference to:
1.2.1 a "subsidiary undertaking" or "parent undertaking" is to be construed
in accordance with section 258 of the Act and a "subsidiary" or
"holding company" is to be construed in accordance with section 736 of
the Act;
1.2.2 a document in the "agreed form" is a reference to a document in a form
approved and for the purposes of identification signed by or on behalf
of each party;
1.2.3 a statutory provision includes a reference to the statutory provision
as modified or re-enacted or both from time to time before the date of
this Agreement and any subordinate legislation made under the statutory
provision before the date of this Agreement;
1.2.4 a person includes a reference to a body corporate, association or
partnership;
1.2.5 a person includes a reference to that person's legal personal
representatives and successors; and
1.2.6 a clause, paragraph, Schedule or annexure unless the context otherwise
requires, is a reference to a clause or paragraph or annexure of or
Schedule to this Agreement.
1.3 The headings in this Agreement do not affect its interpretation.
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1.4 For the purposes of clause 7.1 only, where in a Warranty or the
Disclosure Letter:
1.4.1 any one of the terms "Contracts", "Employees", "Intellectual Property
Rights", "Motor Vehicles" or "Office Equipment", is used or referred
to, that term is to be construed as if the words "Effective Time" in
its definition in clause 1.1 were replaced with the words "date of this
Agreement"; and
1.4.2 the term "Assets" is used or referred to, that term is to be construed
as if the terms "Contracts", "Employees", "Intellectual Property
Rights", "Motor Vehicles" and "Office Equipment", were construed in
accordance with clause 1.4.1.
1.5 A reference in clause 7 and Schedule 6 to a person's knowledge,
information, belief or awareness is deemed to refer to the actual
knowledge of John Kohler, Michael Moss, Marc Parrott, Peter Walker,
Colin Sanders and David Johnson.
1.6 In relation to Properties in Scotland, references in this Agreement to
legislation or procedures shall be deemed to apply to the most nearly
equivalent legislation or procedures applicable in the relevant
jurisdiction.
1.7 Where any Seller or CMF has entered into an obligation in favour of the
Buyer pursuant to this Agreement such obligation shall be deemed to be
entered into by Financial as primary obligor as well as such Seller or
CMF
2. SALE AND PURCHASE
2.1 The Sellers agree to sell and Financial agrees to procure the sale in
each case with full title guarantee and free from any Encumbrance and
the Buyer agrees to buy (or procure another Buyer's Group Company or
any OAIC Group Company to buy), in each case with effect from the
Effective Time, the following assets:
2.1.1 the rights, title and entitlements of the Sellers in and associated
with the Loans as set out in Part 1 of Schedule 2;
2.1.2 the rights, title and entitlements of the Sellers in and associated
with the Residuals as set out in Part 2 of Schedule 2; and
2.1.3 the assets set out in Part 3 of Schedule 2.
2.2 CMF agrees to sell with full title guarantee and free from any
Encumbrance and the Buyer agrees to buy (or procure another Buyer's
Group Company or any OAIC Group Company to buy) its rights, title and
entitlement in and associated with the CMF Loans as set out in Part 1
of Schedule 2 and CMF's rights (if any) to Residuals.
2.3 CMC agrees to procure the sale with full title guarantee free from any
Encumbrance and the Buyer agrees to buy (or procure another Buyer's
Group Company or any
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OAIC Group Company to buy) prior to and as a condition of Completion
the CMR7 Shares.
2.4 The Buyer agrees from the Effective Time that it shall assume and
discharge (as and when due) the Liabilities.
2.5 The Excluded Assets are not included in the sale of the Assets.
2.6 Immediately following execution of this Agreement:
2.6.1 the Buyer shall deliver to the Seller an opinion in the agreed form
from the Buyer's US counsel in relation to the capacity and authority
of the Buyer to enter into this Agreement, due execution of this
Agreement by the Buyer and the binding effect of this Agreement in
accordance with its terms on the Buyer. For the avoidance of doubt such
opinion will not enquire as to whether the Buyer's entering into or
performing its obligations under this Agreement conflicts with any
other obligation of the Buyer;
2.6.2 the Buyer and CMS shall enter into an agreement in the agreed form in
relation to the Watford Lease;
2.6.3 the Buyer and CMC shall enter into an agreement in the agreed form in
relation to the Wolverhampton Lease; and
2.6.4 Financial shall deliver to the Buyer an opinion in the agreed form of
Financial's US counsel in relation to the capacity and authority of
Financial to enter into this Agreement, due execution of this Agreement
by Financial and the binding effect of the Agreement in accordance with
its terms on Financial. For the avoidance of doubt such opinion will
not enquire as to whether Financial's entering into or performing its
obligations under the Agreement conflicts with any other obligations of
Financial.
2.7 Financial shall procure the prompt and effective performance of all
obligations of each Seller and CMF hereunder.
3. CONDITIONS
3.1 Completion is conditional upon:
3.1.1 the release of each Seller which is a party to the CMC Securitisations
from each of its obligations, covenants and agreement under each of the
CMC Securitisations;
3.1.2 the substitution of the Buyer and/or a Buyer's Group Company and/or
OAIC and/or an OAIC Group Company for any Seller in respect of the
obligations, covenants or agreements referred to in clause 3.1.1;
3.1.3 each of the Rating Agencies having consented to the substitution
referred to in clause 3.1.2;
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3.1.4 CMC procuring that CMH delivers a duly executed stock transfer form in
the sum of pound sterling 1 for the CMR7 Shares to the Buyer together
with a share certificate for the CMR7 Shares and procuring the waiver
of all rights of pre-emption over the CMR7 Shares howsoever conferred;
and
3.1.5 CMC delivering the executed Software Licence to the Buyer for the
benefit of the Buyer (or at its direction a Buyer's Group Company
acquiring the Business or part thereof) in each case subject to the
Buyer or that Buyer's Group Company entering into the relevant deed of
confirmation in respect thereof.
3.2 CMC shall make all reasonable efforts to procure the satisfaction of
the conditions set out in clauses 3.1.1 to 3.1.5 (inclusive) as soon as
possible before the date set for Completion in clause 5.1.
3.2.1 The Buyer shall make all reasonable efforts to achieve satisfaction of
the conditions set out in clauses 3.1.1, 3.1.2 and 3.1.3 as soon as
possible before the date set for Completion in clause 5.1 including
without limitation:
(a) meeting the Trustee and each of the Rating Agencies to provide
information and details of the Buyer and of the entity or
entities to be substituted under clause 3.1.2;
(b) providing that such entity or entities which are to be
substituted under clause 3.1.2 are of no lesser financial
standing and reputation to that of CMC and/or CMS at the dates
on which they respectively entered into the CMC
Securitisations; and
(c) procuring that the entity or entities which are to be
substituted under clause 3.1.2 enter into deeds of novation in
respect of the CMC Securitisations substantially in the agreed
form or such other form as the Rating Agencies or the Trustee
may reasonably require.
3.3 If at any time the Buyer or CMC becomes aware of a fact or circumstance
that might prevent a condition set out in clause 3.1 being satisfied,
it shall immediately inform the other party.
3.4 If any of the conditions set out in clauses 3.1.2 to 3.1.5 (inclusive)
has not been satisfied by the close of business in London on the Second
Business Day prior to the date set for Completion in clause 5.1, the
Buyer may on that date by notice to CMC:
3.4.1 waive that condition; or
3.4.2 postpone Completion to the date 15 Business Days after the date set for
Completion in clause 5.1.
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3.5 If any of the conditions set out in clauses 3.1.2 to 3.1.5 (inclusive)
has not been satisfied by the close of business in London on the Second
Business Day prior to the date set for Completion in clause 3.4.2, the
Buyer may on that date by notice to CMC:
3.5.1 waive the condition;
3.5.2 postpone Completion to a date not more than 10 Business Days after the
date set for Completion in clause 3.4.2; or
3.5.3 terminate this Agreement.
3.6 If the condition set out in clause 3.1.1 has not been satisfied by the
close of business in London on the Second Business Day prior to the
date set for Completion in clause 5.1, CMC may on that date by notice
to the Buyer:
3.6.1 waive the condition; or
3.6.2 postpone Completion to the date 15 Business Days after the date set for
Completion in clause 5.1.
3.7 If the condition set out in clause 3.1.1 has not been satisfied by the
close of business in London on the Second Business Day prior to the
date set for Completion in clause 3.6.2, the CMC may on that date by
notice to the Buyer:
3.7.1 waive the condition;
3.7.2 postpone Completion to a date not more than 10 Business Days after the
date set for Completion in clause 5.1; or
3.7.3 terminate this Agreement.
3.8 If either party postpones Completion to another date in accordance with
clause 3.5.2 or clause 3.7.2, the provisions of this Agreement apply
(other than clauses 3.4 or 3.6 and except that the references in
clauses 3.5 and 3.7 to clauses 3.4.2 and 3.6.2 respectively shall in
each case be construed as a reference to clause 5.1) as if that other
date is the date set for Completion in clause 5.1.
3.9 Notwithstanding any of the other provisions of this clause 3, if any of
the conditions set out in clauses 3.1.1 to 3.1.5 (inclusive) has not
been satisfied by the date 2 calendar months after the date set for
Completion pursuant to clause 5.1 and Completion has not occurred by
that date either party may terminate this Agreement.
3.10 If either party terminates this Agreement pursuant to clauses 3.5.3,
3.7.3 or 3.9, each party's further rights and obligations cease
immediately on termination, but termination does not affect a party's
accrued rights and obligations at the date of termination.
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4. PURCHASE PRICE
4.1 The purchase price for the assets to be bought and sold pursuant to
this Agreement shall be the sum determined in accordance with Part 1 of
Schedule 5 (the "Purchase Price") and the assumption of the
Liabilities.
4.2 At Completion the Buyer shall pay to CMC on account of the Purchase
Price the sum determined in accordance with Part 2 of Schedule 5 (the
"Interim Purchase Price") less the Holdback.
4.3 Two Business Days after the Final Portfolio Completion Statement has
been agreed or is deemed to have been agreed:
4.3.1 the Buyer will pay to CMC in pounds sterling the amount, if any, by
which the sum of "A", "E" and "F" minus "B" (as these terms are defined
in paragraph 12 of Part 1 of Schedule 5) exceeds the sum of "A" and "F"
minus "B" (as these terms are defined in paragraph 12 of Part 2 of
Schedule 5); or (as the case may be)
4.3.2 CMC will repay to the Buyer in pounds sterling the amount, if any, by
which the sum of "A" and "F" minus "B" (as these terms are defined in
paragraph 12 of Part 2 of Schedule 5) exceeds the sum of "A", "E" and
"F" minus "B" (as these terms are defined in paragraph 12 of Part 1 of
Schedule 5)
in either case plus interest at the rate of three per cent a year over
the base rate of National Westminster Bank plc from the Completion Date
until the date of payment.
4.4 Two Business Days after the Liabilities Statement has been agreed or is
deemed to have been agreed:
4.4.1 the Buyer will pay to CMC the amount, if any, by which the aggregate
amount of the Liabilities as shown in the Interim Portfolio Completion
Statement as agreed or deemed to have been agreed by the Buyer and CMC
(the "Interim Liabilities") exceeds the aggregate amount of the
Liabilities as shown in the Liabilities Statement as agreed or deemed
to have been agreed by the Buyer and CMC (the "Final Liabilities"); or
4.4.2 CMC will repay to the Buyer the amount, if any, by which the Final
Liabilities exceed the Interim Liabilities.
4.5 At Completion the Buyer shall pay the Holdback into a separate bank
account of CMC with National Westminster Bank plc, set up solely for
this purpose and the mandate of which shall stipulate that any payment
made from such account will require the written authorisation of one
person nominated by the Buyer and one person nominated by CMC (the
"Account"). CMC and the Buyer agree to operate the Account in
accordance with the provisions of this Agreement and will respectively
use their reasonable endeavours to procure that such bank acknowledges
that it will operate the Account in accordance with that mandate.
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4.6 At Completion CMC and the Buyer shall execute the Deed of Charge to
secure the obligation of CMC to apply the proceeds of the Account in
accordance with clauses 4.7 and 4.8. Interest payable on the Holdback
accrues to the Account and shall be subject to the Deed of Charge.
4.7 Two Business Days after the Final Portfolio Completion Statement has
been agreed or deemed to have been agreed pursuant to the provisions of
Schedule 5 the Buyer and CMC shall pay from the Account to the Buyer
the lesser of the amount of the Holdback and the amount, if any,
payable by CMC to the Buyer pursuant to clause 4.3.2, when such payment
will be treated as the payment of a like sum by CMC to the Buyer
pursuant to clause 4.3.2.
4.8 Two Business Days after the Liabilities Statement has been agreed or
deemed to have been agreed pursuant to the provisions of Schedule 5 the
Buyer and CMC shall pay from the Account as follows:
4.8.1 to the Buyer the lesser of the balance standing to the credit of the
Account at that time and the amount, if any, payable by CMC to the
Buyer pursuant to clause 4.4.2 when such payment shall be treated as
the payment of a like sum by CMC to the Buyer pursuant to clause 4.4.2;
and
4.8.2 to CMC the amount, if any, of the Holdback which remains after the
payment pursuant to clause 4.8.1, if any, when for the avoidance of
doubt such payment will not be treated as the payment of a like sum by
the Buyer to CMC pursuant to clause 4.4.1.
4.9 An amount not paid under this Agreement on the due date for payment of
the amount bears interest. For this purpose only, any payment due from
CMC to the Buyer pursuant to either clause 4.3.2 or 4.4.2 shall be
regarded as being due on the Completion Date. Interest accrues:
4.9.1 from day to day (before and after judgement) at the rate of three per
cent. a year over the base rate of National Westminster Bank plc; and
4.9.2 from the day after the due date for payment of the amount to and
including the day of actual payment of the amount (or the next Business
Day if the day of actual payment is not a Business Day), compounded
quarterly.
4.10 Any payment to be made under clause 4 shall be made by banker's draft
or, if the party to receive the payment gives the other party not later
than two Business Days before the due date for payment notice that
payment is to be made to a specified bank account (giving all necessary
details), by transfer of funds to the specified account.
4.11 Between the date of this Agreement and Completion, the Sellers and CMF
shall not, without the prior consent of the Buyer, which consent shall
not be unreasonably withheld or delayed:
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4.11.1 change the rate of interest applicable to the Loans comprised in the
Portfolio (or any of them); or
4.11.2 make, or make any further offer of, a Loan to a Borrower or potential
borrower, save for:
(a) any Retention advanced pursuant to any obligation which
existed prior to the date of this Agreement; or
(b) any other loan made in the ordinary course of business of a
Seller.
4.12 CMC shall, no later than two Business Days following Completion provide
to the Buyer a complete list of all Letters of Offer despatched between
the date of this Agreement and Completion.
5. COMPLETION
5.1 Completion shall take place at the office of Clifford Chance, 200
Aldersgate Street, London, EC1A 4JJ on 16 April 1998 and the Buyer and
CMC shall each comply with the provisions of Schedule 3.
5.2 At Completion the Buyer shall pay the amount stated in clause 4.2.
5.3 Any payment made to CMC in accordance with this Agreement shall
constitute a good discharge for the Buyer of its obligations to pay the
Purchase Price and the Buyer shall not be concerned to see that the
funds are applied in payment to any other Seller, CMF or any other
person. Each Seller (other than CMC) and CMF hereby appoints CMC as its
agent to receive on its behalf that part of the Purchase Price to which
such person is entitled.
6. OFFICE OF FAIR TRADING
Within two Business Days of the Completion Date, the Buyer shall notify
the OFT that it has acquired the entire issued share capital of CMR7
and shall take such steps as are requested by the OFT in connection
with the change of control of CMR7.
7. WARRANTIES
7.1 Financial warrants to the Buyer as set out in Schedule 6.
7.2 At the Effective Time, Financial further warrants to the Buyer that
each Warranty (other than in paragraphs 3.1.2 and 5.2 of Schedule 6) is
true, accurate, complete and not misleading at the Effective Time. For
this purpose only, where in a Warranty there is an express or implied
reference to the "date of this Agreement", that reference is to be
construed as a reference to the "Effective Time".
7.3 At the Effective Time Financial shall give the Warranties set out in
paragraphs 3.1.2 and 5.2 of Schedule 6 as if the words "at the date of
this Agreement" had
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been replaced with the words "at the Effective Time" and the words "are
annexed to the Disclosure Letter" or "is annexed to the Disclosure
Letter" were replaced in each case with the words "have been delivered
to the Buyer at Completion".
7.4 The Warranties are only qualified by the facts and circumstances
disclosed in the Disclosure Letter.
7.5 Between the execution of this Agreement and Completion the Sellers
shall and Financial shall procure that the Sellers:
7.5.1 operate the Business in accordance with all undertakings given in
writing to the OFT and having effect at the date of this Agreement,
and, otherwise, in the ordinary and normal course;
7.5.2 do not alter the locations from which any Seller carries on the
Business;
7.5.3 do not acquire any assets other than in the ordinary course of
business;
7.5.4 do not dispose of any Assets other than in the ordinary course of
business;
7.5.5 do not dismiss any employees engaged in the Business (whether for
redundancy or otherwise) without the Buyer's prior consent (which shall
not be unreasonably withheld or delayed in any case of gross
misconduct); and
7.5.6 provide such information about the Business and the Assets and such
access to the Records and the Employees in each case during normal
working hours as the Buyer may reasonably request to CMC.
7.6 The Buyer shall only be entitled to rescind this Agreement before
Completion if there is a breach of clause 7 the effect of which is
materially adverse to the value of the Business and the Assets and the
Buyer shall not be entitled to rescind this Agreement, whether before
or after Completion, in any other circumstances.
7.7 If any potential Relevant Claim shall arise by reason of a liability
which is contingent only, then the Buyer shall not be entitled to
enforce such Relevant Claim until the contingent liability ceases to be
contingent and becomes actual.
7.8 The provisions of Schedule 7 shall apply in relation to any Relevant
Claim.
8. CONTRACTS AND LIABILITIES
8.1 Subject to clause 8.2.3, after the Effective Time the Buyer shall:
8.1.1 perform all of each Seller's obligations under each Contract in
accordance with the terms of the Contract; and
8.1.2 indemnify each Seller against each loss, liability and cost which that
Seller may incur as a result of the Buyer's performance of that
Seller's obligations under each
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Contract to the extent that the loss, liability or cost is attributable
to the Buyer's act or omission after the Effective Time (including,
without limitation, each loss, liability and cost incurred as a result
of defending or settling a claim alleging such a liability).
8.2 If a Contract cannot be transferred to the Buyer except by an
assignment made with a specified person's consent or by a novation
agreement:
8.2.1 this Agreement does not constitute an assignment or an attempted
assignment of the Contract if the assignment or attempted assignment
would constitute a breach of the Contract;
8.2.2 both before and after the Effective Time each party shall make all
reasonable efforts to obtain the person's consent to the assignment, or
achieve the novation, of the Contract; and
8.2.3 until the consent is obtained or novation is achieved, the applicable
Seller shall as the Buyer's agent and at the Buyer's sole cost and risk
do each act and thing reasonably requested of it by the Buyer to enable
performance of the Contract and to provide for the Buyer the benefits
of the Contract (including, without limitation, enforcement of a right
of such Seller against another party to the Contract arising out of its
termination by the other party or otherwise).
8.3 The Buyer shall indemnify each Seller against each loss, liability and
cost which that Seller may incur as a result of the Buyer's failure to
comply with its obligations under clause 2.4 including, without
limitation, each loss, liability or cost incurred by that Seller as a
result of defending or settling a claim alleging such a liability
provided that:
8.3.1 the Buyer shall have received notice of any such claim having been made
against that Seller;
8.3.2 that Seller shall take any action, institute any proceedings and give
any information and assistance as the Buyer may reasonably request to:
(a) dispute, resist, appeal, compromise, defend, remedy or
mitigate the matter;
(b) enforce against a person the Buyer's rights in relation to the
matter; or
(c) enable the Buyer to have conduct of any proceedings in respect
of the matter including the right to commence and/or continue
proceedings in the name(s) of the relevant Seller(s)
in each case on the basis that the Buyer shall fully indemnify that
Seller for all reasonable costs incurred as a result of such a request
by the Buyer; and
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8.3.3 that Seller shall not admit liability in respect of, or compromise or
settle, the matter without the prior written consent of the Buyer (not
to be unreasonably withheld or delayed)
8.4 The Buyer:
8.4.1 is responsible for all liabilities incurred in connection with the
Buyer's operation of the Business and ownership of the Assets after the
Effective Time;
8.4.2 is responsible for all liabilities arising after Completion in relation
to the Loans, whether or not such liabilities arise as a result of any
act or omission prior to Completion; and
8.5 shall indemnify the Seller against each loss, liability and cost which
the Seller may incur as a result of the Buyer's failure to comply with
its obligations under clause 8.4.1 and 8.4.2 including, without
limitation, each loss, liability or cost incurred as a result of
defending or settling a claim alleging such a liability.
9. EMPLOYEES
9.1 Each of the Sellers shall indemnify the Buyer against each loss,
liability and cost which the Buyer may incur in connection with the
deemed transfer of any Seller's liabilities to the Buyer by regulation
5 of the Transfer of Undertakings (Protection of Employment)
Regulations 1981 and anything done by or in relation to any Seller
which is deemed to have been done by or in relation to the Buyer by
that regulation.
9.2 For the avoidance of doubt, the Buyer shall be responsible for any
loss, liability and cost in respect of employees as a result of action
taken by the Buyer on or after Completion.
9.3 As soon as reasonably practicable after Completion the parties shall
send letters to the Employees in the agreed form.
9.4 The Buyer and CMC shall at, or as soon as reasonably practicable after,
Completion:
(a) procure that the relevant Buyer's Group Company and CMC shall
execute; and
(b) shall use their reasonable endeavours to procure the trustees
of the Greyfriars Pension Scheme (the "Scheme") execute,
a deed of substitution of principal employer in relation to the Scheme
in substantially the form set out in Schedule 22.
9.5 The Buyer shall procure that the relevant Buyer's Group Company shall
at, or as soon as reasonably practicable after, Completion enter into
such documents as are required by the trustees of the Standard Life
"StanPlan A" pension plan (plan
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number H80568) in which MGD currently participates (the "Plan") to
enable the relevant Buyer's Group Company to become a participating
employer in the Plan with effect on and from Completion in respect of
those Employees who are employed by MGD and who are members of the Plan
immediately before Completion.
10. VALUE ADDED TAX
10.1 The Sellers and the Buyer intend that the transfer of the Business
pursuant to this Agreement shall be treated as a transfer of the
businesses of the Sellers as a going concern within the meaning of
Section 49 of the VATA and Article 5 of the Value Added Tax (Special
Provisions) Order 1995 and should be treated as neither a supply of
goods nor a supply of services for the purposes of the VATA.
10.2 The Buyer undertakes to the Sellers that, immediately after Completion,
it shall use the Assets in carrying on the same kind of business,
whether or not as part of any existing business of the Buyer, as that
carried on by the Sellers.
10.3 The Buyer represents and warrants to the Sellers that any company other
than OAIC or an OAIC Group Company incorporated outside of the United
Kingdom which is to acquire any of the Assets pursuant to clause 2 is
registered for the purposes of the VATA or will become no later than
the Completion Date a taxable person for value added tax purposes.
10.4 Financial represents and warrants to the Buyer that each Seller other
than MML and Cityscape (UK) Limited is or shall be at Completion
registered for the purposes of the VATA.
10.5 Subject to written confirmation from HM Customs & Excise to CMC and/or
any other Seller dispensing the Sellers from the requirement to deliver
to the Buyer those records of the Business relating to value added tax
which would otherwise be required by Section 49(1)(b) of the VATA to be
delivered to the Buyer (each such record being a "VAT Record"), CMC
shall at Completion deliver or procure the delivery to the Buyer of the
VAT Records. The Buyer shall preserve each VAT Record for a period of
not less than 6 years from its date (or for such longer period as may
be required by law) and during that period shall permit CMC or its
agents to inspect such VAT Records and at CMC's expense make copies of
such records.
10.6 The Sellers and the Buyer shall use all reasonable endeavours to secure
that the sale of the Business is treated as a transfer of a going
concern for value added tax purposes and the Sellers and the Buyer
shall agree the form of a letter to be sent by CMC to the HM Customs &
Excise office responsible for the value added tax affairs of the
Sellers and copied to such office as is (or will be) responsible for
the value added tax affairs of the Buyer on or before Completion,
seeking a written ruling confirming that the sale is to be so treated.
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10.7 If by Completion a ruling has been obtained that the sale of the
Business does constitute the transfer of a going concern, then no value
added tax will be charged on the transfer of the Business on
Completion.
10.8 If by Completion a ruling has been obtained that part of the sale of
the Business does not constitute the transfer of a going concern, then
the Seller shall pay to H.M. Customs & Excise such value added tax as
is chargeable on the transfer of that part of the Business carried on
by that Seller which does not constitute the transfer of a going
concern and the price for such part of the Business shall be inclusive
of such value added tax.
11. POST-COMPLETION OBLIGATIONS
11.1 If title to any of the Assets is not effectively vested in the Buyer at
Completion, the applicable Seller holds those Assets in trust for the
Buyer until title is effectively vested in the Buyer. Each Seller
hereby irrevocably appoints the Buyer as its attorney with effect from
Completion to take any steps which may be necessary to vest title to
any of the Assets in the Buyer.
11.2 Each party shall immediately give to any other all payments, notices,
correspondence, information or enquiries in relation to the Business or
the Assets which it receives after Completion and which belong to that
other.
11.3 For a period of three years after Completion the Buyer will give access
to the Records to any CMC Group Undertaking promptly upon notice to the
Buyer by a CMC Group Undertaking and will provide reasonable assistance
to the CMC Group Undertaking to locate any individual Record(s). The
Buyer will allow the CMC Group Undertaking to take copies of any Record
(at the expense of the CMC Group Undertaking). If the Buyer wants to
destroy or expunge any Record it will notify Financial. Financial will
indicate to the Buyer whether it wishes to collect the Record from the
Buyer. If Financial does not give such indication within 20 Business
Days of notification, indicates that it does not wish to collect such
Record or fails to collect such Record within two months of indicating
its intention to do so, the Buyer will be entitled to destroy or
expunge such Record. Notwithstanding the foregoing the Buyer shall not
be entitled to serve such a notice on Financial until the third
anniversary of the Completion Date.
12. INTELLECTUAL PROPERTY
The Buyer shall not use or display the name "Cityscape" or any name
likely to be confused with such name in relation to any goods or
services provided by the Buyer.
13. ANNOUNCEMENTS
13.1 Subject to clauses 9.3 and 13.2, neither party may, before or after
Completion, make or send an announcement, communication or circular
concerning the
24
<PAGE> 28
transactions referred to in this Agreement unless it has first obtained
the other party's written consent (not to be unreasonably withheld or
delayed).
13.2 Clause 13.1 does not apply to an announcement, communication or
circular:
13.2.1 required by law or a regulation of a stock exchange provided that where
a party has made or is required to make such a disclosure (the
"Disclosing Party"), the Disclosing Party will:
(a) notify the other party of that fact and provide a copy of the
proposed disclosure to the other as far in advance as is
reasonably practical of the date when such disclosure is
required; and
(b) agree to incorporate such other party's reasonable amendments
provided always that such amendments are received by the
Disclosing Party in sufficient time to incorporate them into
such disclosure within the period in which disclosure is
required to be made; or
13.2.2 made in connection with any discussions between Financial and any of
its debt and/or equity holders when it shall be submitted privately to
them and labelled "Private and Confidential" and state that it has not
been approved by the Buyer and that the Buyer accepts no liability for
any inaccuracies therein.
13.3 The Buyer and CMC shall make a joint press release following the
execution of this Agreement in the agreed form.
14. FURTHER UNDERTAKINGS BY FINANCIAL
14.1 None of the Sellers nor Financial may directly or indirectly operate,
or be engaged, concerned or interested in, or assist, a business which
competes, directly or indirectly, with the Business as operated at the
date of this Agreement in a territory in which the Business is operated
at that date, whether alone or jointly with, through or as manager,
adviser, consultant or agent for another person. Such restriction shall
cease to apply from the earliest of:
(a) the date upon which, there is a change in control of
Financial;
(b) the sale of substantially all of the assets or undertaking of
Financial; and
(c) one year following the date of this Agreement.
14.2 Financial shall procure that each subsidiary of Financial complies with
clause 14.1.
15. COMPETITION
If there are provisions of this Agreement (or of an agreement or
arrangement of which it forms part) by virtue of which particulars of
this Agreement (or of an agreement or arrangement of which it forms
part) are, at the date of this
25
<PAGE> 29
Agreement, required to be furnished to the Director General of Fair
Trading under the Restrictive Trade Practices Acts 1976 and 1977 those
provisions do not take effect until the day after those particulars
have been furnished.
16. COSTS
Except where this Agreement provides otherwise, each party shall pay
its own costs relating to the negotiation, preparation, execution and
implementation by it of this Agreement and of each document referred to
in it.
17. GENERAL
17.1 A variation of this Agreement is valid only if it is in writing and
signed by or on behalf of CMC, the Buyer and Financial.
17.2 The failure to exercise or delay in exercising a right or remedy
provided by this Agreement or by law does not constitute a waiver of
the right or remedy or a waiver of other rights or remedies. No single
or partial exercise of a right or remedy provided by this Agreement or
by law prevents further exercise of the right or remedy or the exercise
of another right or remedy.
17.3 The Buyer's rights and remedies contained in this Agreement are
cumulative and not exclusive of rights or remedies provided by law.
17.4 Except to the extent that they have been performed and except where
this Agreement provides otherwise, the obligations contained in this
Agreement remain in force after Completion.
18. ENTIRE AGREEMENT
18.1 This Agreement and the agreements referred to in clauses 2.6.2 and
2.6.3 (the "Property Agreements") set out the entire agreement and
understanding between the parties in respect of the transactions
described herein. It is agreed that:
18.1.1 no party has entered into this Agreement or the Property Agreements in
reliance upon any representation, warranty or undertaking of any other
party (or any other person) which is not expressly set out or referred
to in this Agreement or the Property Agreements; and
18.1.2 no party shall have any remedy in respect of misrepresentation or
untrue statement made by any other party (or any other person) unless
and to the extent that a claim lies for breach of the Warranties under
this Agreement or the Property Agreements.
provided that this clause shall not exclude any liability for
fraudulent misrepresentation.
26
<PAGE> 30
19. ASSIGNMENT
19.1 A party may not assign or transfer or purport to assign or transfer any
of its rights or obligations under this Agreement.
19.2 Notwithstanding the provisions of clause 19.1 the Buyer may assign all
of its rights under clause 7 to any Buyer's Group Company or an OAIC
Group Company provided that prior to any event following which such
assignee ceases to be a Buyer's Group Company or an OAIC Group Company,
such assignee will assign its rights to another Buyer's Group Company
or another OAIC Group Company.
20. NOTICES
20.1 A notice or other communication under or in connection with this
Agreement shall be in writing and shall be delivered personally or sent
by first class post pre-paid recorded delivery (or air mail if
overseas) or by fax, to the party due to receive the notice or
communication, at the following addresses or another address specified
by that party by written notice to the other in accordance with this
clause:
To any of the Sellers and to CMF:
Harcourt House
19 Cavendish Square
London W1A 2AW
Attention: The Company Secretary
Facsimile:
With a copy to: Cityscape Financial Corporation
565 Taxter Road
Elmsford
New York
USA
Attention: Legal Counsel
Facsimile: 001 914 592 7060
To the Buyer:
The Forum
1675 Palm Beach Lakes Boulevard
West Palm Beach
Florida 33401
USA
Attention: The Secretary
27
<PAGE> 31
Facsimile: 001 561 682 8177
With a copy to: Joseph Dlutowski/George Fraser
Facsimile: 001 561 682 8163
To Financial:
565 Taxter Road
Elmsford
New York
USA
Attention: Legal Counsel
Facsimile: 001 914 592 7060
20.2 In the absence of evidence of earlier receipt, a notice or other
communication is deemed given:
20.2.1 if delivered personally, when left at the address referred to in clause
20.1;
20.2.2 if sent by post except air mail, two days after posting it;
20.2.3 if sent by air mail, six days after posting it; and
20.2.4 if sent by fax, on completion of its transmission.
21. GOVERNING LAW AND JURISDICTION
21.1 This Agreement is governed by English law provided that terms
particular to Scots law shall be construed in accordance with Scots
law.
21.2 The courts of England have exclusive jurisdiction to hear and decide
any suit, action or proceedings, and to settle any disputes, which may
arise out of or in connection with this Agreement (respectively,
"Proceedings" and "Disputes") and, for these purposes, each party
irrevocably submits to the jurisdiction of the courts of England.
21.3 Each party irrevocably waives any objection which it might at any time
have to the courts of England being nominated as the forum to hear and
decide any Proceedings and to settle any Disputes and agrees not to
claim that the courts of England are not a convenient or appropriate
forum.
21.4 The Buyer hereby appoints Edge & Ellison, 18 Southampton Place, London
WC1A 2AJ or such other person as the Buyer may nominate in writing to
CMC from time to time as its agent to receive service of process on its
behalf in England. Any such process will be delivered to the agent at
an address in the United Kingdom specified
28
<PAGE> 32
to CMC. Such appointment is without prejudice to any other means by
which process may lawfully be served on the Buyer.
21.5 Financial hereby appoints CMC as its agent to receive service of
process on its behalf in England. Any such process will be delivered to
CMC at its address set out in this Agreement or another address in the
United Kingdom specified to the Buyer. Such appointment is without
prejudice to any other means by which process may lawfully be served on
Financial.
22. COUNTERPARTS
This Agreement may only be executed in one counterpart.
EXECUTED AS A DEED the day first above written.
29
<PAGE> 33
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) -----------------------------
CITY MORTGAGE ) (as attorney for CITY MORTGAGE
CORPORATION LIMITED ) CORPORATION LIMITED)
/s/ Joel Ziff
Signature of Witness -----------------------------
Joel Ziff
Name of Witness -----------------------------
200 Aldersgate St.
Address of Witness -----------------------------
-----------------------------
-----------------------------
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) -----------------------------
J&J SECURITIES LIMITED ) (as attorney for J&J SECURITIES
LIMITED)
/s/ Joel Ziff
Signature of Witness -----------------------------
Joel Ziff
Name of Witness -----------------------------
200 Aldersgate St.
Address of Witness -----------------------------
-----------------------------
-----------------------------
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) -----------------------------
CITY MORTGAGE ) (as attorney for CITY MORTGAGE
FINANCIAL SERVICES ) FINANCIAL SERVICES
LIMITED ) LIMITED)
/s/ Joel Ziff
Signature of Witness -----------------------------
200 Aldersgate St.
Name of Witness -----------------------------
-----------------------------
Address of Witness -----------------------------
-----------------------------
30
<PAGE> 34
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) -----------------------------
GREYFRIARS GROUP ) (as attorney for GREYFRIARS GROUP
LIMITED ) LIMITED)
/s/ Joel Ziff
Signature of Witness -----------------------------
Joel Ziff
Name of Witness -----------------------------
200 Aldersgate St.
Address of Witness -----------------------------
-----------------------------
-----------------------------
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) -----------------------------
GREYFRIARS FINANCIAL ) (as attorney for GREYFRIARS
SERVICES LIMITED ) FINANCIAL SERVICES LIMITED)
/s/ Joel Ziff
Signature of Witness -----------------------------
Joel Ziff
Name of Witness -----------------------------
200 Aldersgate St.
Address of Witness -----------------------------
-----------------------------
-----------------------------
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) -----------------------------
ASSURED FUNDING ) (as attorney for ASSURED FUNDING
CORPORATION LIMITED ) CORPORATION LIMITED)
Signature of Witness /s/ Joel Ziff
-----------------------------
Name of Witness Joel Ziff
-----------------------------
Address of Witness 200 Aldersgate St.
-----------------------------
-----------------------------
-----------------------------
31
<PAGE> 35
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) -----------------------------
CITYSCAPE (UK) LIMITED ) (as attorney for CITYSCAPE (UK)
LIMITED)
/s/ Joel Ziff
Signature of Witness -----------------------------
Joel Ziff
Name of Witness -----------------------------
Joel Ziff
Address of Witness -----------------------------
200 Aldersgate St.
-----------------------------
-----------------------------
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) -----------------------------
HOME AND FAMILY ) (as attorney for HOME AND FAMILY
FINANCE LIMITED ) FINANCE LIMITED)
/s/ Joel Ziff
Signature of Witness -----------------------------
Joel Ziff
Name of Witness -----------------------------
200 Aldersgate St.
Address of Witness -----------------------------
-----------------------------
-----------------------------
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) -----------------------------
HOME FUNDING ) (as attorney for HOME FUNDING
CORPORATION LIMITED ) CORPORATION LIMITED)
Signature of Witness /s/ Joel Ziff
-----------------------------
Name of Witness Joel Ziff
-----------------------------
Address of Witness 200 Aldersgate St.
-----------------------------
-----------------------------
-----------------------------
32
<PAGE> 36
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) ______________________________
HOME MORTGAGE ) (as attorney for HOME MORTGAGE
CORPORATION LIMITED ) CORPORATION LIMITED)
Signature of Witness /s/ Joel Ziff
______________________________
Name of Witness Joel Ziff
______________________________
Address of Witness 200 Aldersgate St
______________________________
______________________________
______________________________
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) ______________________________
HOME MORTGAGES ) (as attorney for HOME MORTGAGES
LIMITED ) LIMITED)
Signature of Witness /s/ Joel Ziff
______________________________
Name of Witness Joel Ziff
______________________________
Address of Witness 200 Aldersgate St
______________________________
______________________________
______________________________
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) ______________________________
HOMSTEAD FINANCE ) (as attorney for HOMESTEAD FINANCE
LIMITED ) LIMITED)
Signature of Witness /s/ Joel Ziff
______________________________
Name of Witness Joel Ziff
______________________________
Address of Witness 200 Aldersgate St
______________________________
______________________________
______________________________
33
<PAGE> 37
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) ______________________________
HOMEOWNERS FINANCE ) (as attorney for HOMEOWNERS FINANCE
LIMITED ) LIMITED)
Signature of Witness /s/ Joel Ziff
______________________________
Name of Witness Joel Ziff
______________________________
Address of Witness 200 Aldersgate St
______________________________
______________________________
______________________________
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) ______________________________
MORTGAGE ) (as attorney for MORTGAGE
MANAGEMENT LIMITED ) MANAGEMENT LIMITED)
Signature of Witness /s/ Joel Ziff
______________________________
Name of Witness Joel Ziff
______________________________
Address of Witness 200 Aldersgate St
______________________________
______________________________
______________________________
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) ______________________________
SECURED FUNDING ) (as attorney for SECURED FUNDING
LIMITED ) LIMITED)
Signature of Witness /s/ Joel Ziff
______________________________
Name of Witness Joel Ziff
______________________________
Address of Witness 200 Aldersgate St
______________________________
______________________________
______________________________
34
<PAGE> 38
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) ______________________________
CITY MORTGAGING ) (as attorney for CITY MORTGAGING
SERVICING LIMITED ) SERVICING LIMITED)
Signature of Witness /s/ Joel Ziff
______________________________
Name of Witness Joel Ziff
______________________________
Address of Witness Joel Ziff
______________________________
200 Aldersgate St
______________________________
______________________________
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) ______________________________
MIDLAND & GENERAL ) (as attorney for MIDLAND & GENERAL
DIRECT LIMITED ) DIRECT LIMITED)
Signature of Witness /s/ Joel Ziff
______________________________
Name of Witness Joel Ziff
______________________________
Address of Witness 200 Aldersgate St
______________________________
______________________________
______________________________
Executed as a deed by )
OCWEN FINANCIAL )
CORPORATION )
Acting by )
/s/ Joseph A. Dlutowski
_____________________________
JOSEPH A. DLUTOWSKI
SENIOR VICE PRESIDENT
35
<PAGE> 39
Signed as a deed by ) /s/ Steve Miller
STEVE MILLER for ) ______________________________
CITYSCAPE FINANCIAL )
CORPORATION )
Signature of Witness /s/ Peter S. Kucma
______________________________
Name of Witness Peter S. Kucma
______________________________
Address of Witness 565 Taxter Road
______________________________
Elmsford N.Y. 10523
______________________________
______________________________
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) ______________________________
CITY MORTGAGE ) (as attorney for CITY MORTGAGE
FUNDING 1 LIMITED ) FUNDING 1 LIMITED)
Signature of Witness /s/ Joel Ziff
______________________________
Name of Witness Joel Ziff
______________________________
Address of Witness 200 Aldersgate St
______________________________
______________________________
______________________________
Signed as a deed by )
JOHN KOHLER ) /s/ John Kohler
as attorney for ) ______________________________
CITY MORTGAGE ) (as attorney for CITY MORTGAGE
COLLATERAL RESERVE ) COLLATERAL RESERVE
NO. 1 LIMITED ) NO. 1 LIMITED)
Signature of Witness /s/ Joel Ziff
______________________________
Name of Witness Joel Ziff
______________________________
Address of Witness 200 Aldersgate St
______________________________
______________________________
______________________________
36
<PAGE> 40
In addition to the schedules that follow, the Agreement for the Sale of
the Business of CSC-UK included the following schedules, a copy of which the
Company will furnish to the Commission upon request:
<TABLE>
<CAPTION>
Schedule No. Description
<S> <C>
1 The Sellers
9 Assignment of Building Policies
10 Assignment of Life Policies
11 Assignment of LAS Policies
12 Insurance Policies
13 deliberately left blank
14 Transfer of Charges Form
15 Transfer of Mortgages Form
16 Form of Transfer (Scotland)
17 Form of Transfer (Sasine Register) (Scotland)
18 Buyer's Power of Attorney
19 The Collection Accounts
20 Instruction Letter
21 Deed of Charge
22 Deed of Substitution
</TABLE>
<PAGE> 41
SCHEDULE 2
TO THE FOREGOING AGREEMENT AMONG (1) THE SELLERS (AS DEFINED
THEREIN), (2) OCWEN FINANCIAL CORPORATION, (3) CITYSCAPE FINANCIAL
CORPORATION AND (4) CITY MORTGAGE FUNDING 1 LIMITED
THE ASSETS
PART 1 - THE LOANS
1. Subject to the subsisting rights of redemption of Borrowers, all right,
title, interest and benefit of any of the Sellers and/or CMF in the
Portfolio and their related Mortgages including, for the avoidance of
doubt:
(a) the right to demand, sue for, recover and give receipts for
all principal moneys payable under such Loans and related
Mortgages or the unpaid part thereof and the interest due, or
to become due thereon together with costs and expenses;
(b) the benefit of Mortgages and the right to sue on, all
covenants with, and obligations to, the relevant Seller and/or
CMF in each related Mortgage and the right to exercise all
powers of the relevant Seller and/or CMF in relation to each
related Mortgage;
(c) all the estate and interest in the related Properties vested
in the Sellers and/or CMF subject to redemption or lesser; and
(d) all Accrued Interest and all Arrears of Interest thereon.
2. Subject to the subsisting rights of redemption of Borrowers, all right,
title, interest and benefit of any Seller and/or CMF in the Life
Policies related to the Portfolio including, for the avoidance of
doubt, the benefit of, and the right to sue on, all covenants with, and
obligations to the relevant Seller and/or CMF in or relating to each
related Charge and the right to exercise all powers of the relevant
Seller and/or CMF in relation to each such Charge.
3. All right, title, interest and benefit of any Seller and/or CMF under
the Buildings Policies in respect of the Loans comprised in the
Portfolio including the rights to demand, receive, sue for and recover
the proceeds of any claim thereunder.
4. All right, title, interest and benefit of any Seller and/or CMF in and
to the LAS Policies to the extent that they relate to the Portfolio.
5. The benefit of all securities (including any guarantees, Deeds of
Consent, MHA Documentation and Deeds of Postponement) for all principal
moneys payable under the Loans comprised in the Portfolio and their
related Mortgages and interest and all costs and expenses relating
thereto due on or to become due thereon.
<PAGE> 42
6. All causes and rights of action (both present and future) of any Seller
and/or CMF against any person in connection with the Report on Title or
Valuation Report or any other report, valuation, opinion, certificate
or other statement of fact or opinion given in connection with any Loan
comprised in the Portfolio or its Related Security or affecting the
relevant Originator's decision to make any such Loan.
7. For the purposes of this Schedule each Seller and CMF (as applicable)
agrees to transfer and assign, and the Buyer agrees to take a transfer
and assignation of, the legal estate, ownership and title in the Loans
comprised in the Portfolio and their relevant Related Security.
8. Subject in each case to paragraph 9 below:
8.1 the sale and purchase of the Mortgages referred to in paragraphs 1 to 6
including the transfer of the benefit of the matters referred to in
paragraph 1(b) above shall:
8.1.1 in the case of Property in England and Wales which comprises Registered
Land, be effected by a separate transfer for each Land Registry (each a
"Registered Transfer") in the form set out in Schedule 19 or in such
other form as may be acceptable to HM Land Registry in the case of
Property in England and Wales;
8.1.2 in the case of Property in England and Wales which comprises
Unregistered Land, be effected by a transfer (the "Unregistered
Transfer") in the form set out in Schedule 15 in the case of Property
in England and Wales;
8.1.3 in the case of Property in Scotland which comprises Property registered
or in course of registration in the Land Register, be effected by an
assignation in the form set out in Schedule 16; and
8.1.4 in the case of Property in Scotland which comprises Property recorded
or in course of being recorded in the Sasine Register, be effected by
an assignation in the form set out in Schedule 17 (Schedules 16 and 17
being together the "Scottish Transfers");
8.2 the transfer of the benefit of the matters referred to in paragraph 2
above shall be effected by the Assignment of Life Policies;
8.3 the transfer of the benefit of the matters referred to in paragraph 3
above shall be effected by the Assignment of Buildings Policies; and
8.4 the transfer of the benefit of the matters referred to in paragraph 4
above shall be effected by the Assignment of LAS Policies.
9. If at any time after Completion any Seller or CMF holds, or there is
held to its order, or it receives, or there is received to its order,
any property, interest, right or benefit hereby agreed to be sold
and/or the proceeds thereof (including, without limitation, the
proceeds of any claim under the Buildings Policies or the LAS
<PAGE> 43
Policies), that Seller or CMF (as applicable) undertakes with the Buyer
that it will forthwith remit, assign or transfer the same to the Buyer,
as the case may require, and until it does so or to the extent that
that Seller or CMF is unable to effect such remittance, assignment or
transfer that Seller or CMF (as applicable) undertakes to hold such
property, interest, right or benefit and/or the proceeds thereof upon
trust for the Buyer as the beneficial owner thereof or as the Buyer may
direct.
10. Following the Completion Date, in respect of each Loan and its Related
Security, until the legal title to the particular Loan and its Related
Security is transferred to the Buyer, each Seller will hold the legal
title to each Loan and its Related Security then vested in it as bare
trustee for the Buyer.
PART 2 - THE RESIDUALS
1. All of the right, title and interest of CMC and CMS under and in
respect of the CMC Securitisations, being:
(a) All of the right, title and interest of CMC under the
following securitisation purchase agreements:
(i) Mortgage Sale Agreement dated 21 March 1996 between
CMC, CMR1, City Mortgage Trustees 1 Limited, CMS and
Chemical Bank;
(ii) Mortgage Sale Agreement dated 18 October 1996 between
CMC, CMR2, City Mortgage Trustees 2 Limited, CMS and
the Trustee;
(iii) Mortgage Sale Agreement dated 31 October 1996 between
CMC, CMR3, City Mortgage Trustees 3 Limited, CMS and
the Trustee;
(iv) Mortgage Sale Agreement dated 31 January 1997 between
CMC, CMR4, CMS and the Trustee;
(v) Mortgage Sale Agreement dated 31 January 1997 between
CMC, CMR5, CMS and the Trustee;
(b) all of the right, title and interest of CMC and CMS under the
following securitisation receivables trusts:
(i) Mortgages Trust Deed dated 21 March 1996 between CMC,
CMR1, City Mortgage Trustees 1 Limited, CMS and
Chemical Bank;
(ii) Mortgages Trust Deed dated 18 October 1996 between
CMC, CMR2, City Mortgage Trustees 2 Limited, CMS and
the Trustee;
(iii) Mortgages Trust Deed dated 31 October 1996 between
CMC, CMR3, City Mortgage Trustees 3 Limited, CMS and
the Trustee;
<PAGE> 44
(c) all of the right, title and interest of CMC under the
following subordinated loan agreements:
(i) Subordinated Loan Agreement dated 21 March 1996
between CMC, CMR1, CMS and Chemical Bank;
(ii) Subordinated Loan Agreement dated 18 October 1996
between CMC, CMR2, CMS and the Trustee;
(iii) Subordinated Loan Agreement dated 31 October 1996
between CMC, CMR3, CMS and the Trustee;
(iv) Subordinated Loan Agreement dated 31 January 1997
between CMC, CMR4, CMS and the Trustee;
(v) Subordinated Loan Agreement dated 31 January 1997
between CMC, CMR5, CMS and the Trustee;
(d) all of the right, title and interest of CMC and CMS under the
following deeds of charge:
(i) Deed of Charge and Assignment dated 21 March 1996
between CMR1, City Mortgage Trustees 1 Limited,
Chemical Bank, CMC, CMS and Guardian Mortgage
Services Limited;
(ii) Deed of Charge and Assignment dated 18 October 1996
between CMR2, City Mortgage Trustees 2 Limited, the
Trustee, CMC, CMS, Guardian Mortgage Services Limited
and the Liquidity Facility Provider (as defined
therein);
(iii) Deed of Charge and Assignment dated 31 October 1996
between CMR3, City Mortgage Trustees 3 Limited, the
Trustee, CMC, CMS, Guardian Mortgage Services Limited
and the Liquidity Facility Provider (as defined
therein);
(iv) Deed of Charge and Assignment dated 31 January 1997
between CMR4, the Trustee, CMC, CMS and Guardian
Mortgage Services Limited and the Liquidity Facility
Provider (as defined therein);
(v) Deed of Charge and Assignment dated 31 January 1997
between CMR5, the Trustee, CMC, CMS and Guardian
Mortgage Services Limited;
(e) all of the right, title and interest of CMC and CMS under the
following administration agreements:
<PAGE> 45
(i) Administration Agreement dated 21 March 1996 between
CMC, CMR1, City Mortgage Trustees 1 Limited, CMS, CMH
and Chemical Bank;
(ii) Administration Agreement dated 18 October 1996
between CMC, CMR2, City Mortgage Trustees 2 Limited,
CMS and the Trustee;
(iii) Administration Agreement dated 31 October 1996
between CMC, CMR3, City Mortgage Trustees 3 Limited,
CMS and the Trustee;
(iv) Administration Agreement dated 31 January 1997
between CMC, CMR4, CMS and the Trustee;
(v) Administration Agreement dated 31 January 1997
between CMC, CMR5, CMS and the Trustee;
(f) all right, title and interest of CMC under the following
facility agreements:
(i) Facility Agreement dated 21 March 1996 between CMC
and CMH;
(ii) Facility Agreement dated 18 October 1996 between CMC
and CMH;
2. All of the right, title and interest of MML, CMF and CMS under and in
respect of the CMR6 Securitisation, being:
(a) all of the right, title and interest of MML and (as
applicable) CMF under the Mortgage Sale Agreement date 30
April 1997 between CMF, CMR6, CMS and the Trustee;
(b) all of the right, title and interest of MML under the
Subordinated Loan Agreement dated 30 April 1997 between the
Seller, CMR6, CMS and the Trustee;
(c) all of the right, title and interest of MML and (as
applicable) CMF and CMS under the Deed of Charge and
Assignment dated 30 April 1997 between CMR6, the Trustee, CMF,
CMS, Guardian Mortgage Services Limited, the Seller and the
Liquidity Facility Provider (as defined therein);
(d) all of the right, title and interest of MML and CMS under the
Administration Agreement dated 31 April 1997 between CMF,
CMR6, CMS and the Trustee;
(e) all of the right, title and interest of CMC under the Facility
Agreement dated 30 April 1997 between CMF and CMH;
3. Any other right, title or interest of any other Seller or CMF under or
in respect of the CMC Securitisations.
<PAGE> 46
4. Bank balances held by CMCR in connection with the CMC Securitisations.
PART 3 - THE NON-MORTGAGE ASSETS
Asset
The Contracts
The Goodwill
The Intellectual Property Rights
The Motor Vehicles
The Office Equipment
The Records
All other property and assets owned by any Seller at the Effective Time
(wherever located).
<PAGE> 47
SCHEDULE 3
TO THE FOREGOING AGREEMENT AMONG (1) THE SELLERS (AS DEFINED
THEREIN), (2) OCWEN FINANCIAL CORPORATION, (3) CITYSCAPE FINANCIAL
CORPORATION AND (4) CITY MORTGAGE FUNDING 1 LIMITED
COMPLETION OBLIGATIONS
PART 1 - THE LOANS
At Completion:
1. CMC shall deliver (or cause to be delivered) to the Buyer or as it may
direct:
1.1 Transfers of the Loans, duly executed by the applicable Seller as deeds
together with the annexures thereto duly completed;
1.2 Transfers of the Securitised Loans, duly executed by the relevant
Originators as deeds together with the annexures thereto duly
completed;
1.3 an Assignment of Life Policies, duly executed by each of MML and CMF as
deeds;
1.4 an Assignment of Buildings Policies, duly executed by each of MML and
CMF as deeds;
1.5 the Assignment of LAS Policies, duly executed by each of MML and CMF as
deeds;
1.6 a letter from each relevant Originator or (as applicable) MML or CMF in
a form satisfactory to H.M. Land Registry confirming that all mortgages
relating to the title numbers specified in the annexures to the
Registered Transfers and of which that relevant Originator or CMF is or
is entitled to be registered as proprietor are being transferred by the
respective Registered Transfers;
1.7 the Title Deeds relating to the Portfolio or their location where held
to the order of any of the Sellers or CMF;
1.8 the Loan Files relating to each of the Loans comprised in the
Portfolio;
1.9 certified copies of the LAS Policies;
1.10 certified copies of the Block Buildings Policies;
1.11 a notice signed by the relevant Seller to each insurer under the LAS
Policies that the benefit of the Loans has been assigned to the Buyer;
1.12 the GIL Releases; and
<PAGE> 48
1.13 an undertaking from the Seller's Conveyancing Solicitors in the agreed
form in relation to Retention monies respectively held by them.
2. If, at the meeting for Completion, the relevant Seller and/or CMF (as
applicable) shall have in its possession only some of the Title Deeds
in respect of the Loans beneficially owned by it which are comprised in
the Portfolio, such Title Deeds (and any documents relative to the
Property or its related Mortgage which are kept with the Title Deeds)
and that Seller's or (as applicable) CMF's right to require those of
such documents as it does not have in its possession to be forwarded to
it shall, with effect from Completion, be held by that Seller to the
order of or, as the case may require, for the benefit of the Buyer or
as it may direct. That Seller or CMF shall return to the Buyer all
Title Deeds received by it which are held to the order of that Seller
or CMF within 10 Business Days of receipt. That Seller or CMF shall
within five Business Days of Completion notify any Seller's
Conveyancing Solicitor holding deeds or documents, cash constituting
retentions or any other matter, act or thing the subject of
undertakings in favour of that Seller or CMF in the format set out in
the Instruction Letter of the transfer of the relevant Mortgage to the
Buyer. Pending receipt of any new undertakings from such solicitors,
that Seller or CMF shall hold those undertakings already given to it on
trust for the Buyer.
3. Subject to Completion, each Seller shall, forthwith account to the
Buyer or, where so required by the Inland Revenue, to the Inland
Revenue for all sums (if any) received by that Seller from the Inland
Revenue under the MIRAS Scheme in respect of the Loans comprised in the
Portfolio insofar as such sums relate to any time after the date of
Completion.
4. The Buyer shall account to CMC or, where so required by the Inland
Revenue, to the Inland Revenue for all sums (if any) received by the
Buyer after Completion from the Inland Revenue under the MIRAS Scheme
in respect of any of the Mortgages insofar as such sums relate to any
time up to and including the date of Completion.
5. Within five (5) Business Days after Completion, the Buyer will despatch
to each Borrower in respect of the Loans comprised in the Portfolio the
Buyer's Notification Letter.
6. The Sellers shall hold the benefit of any claims under any applicable
insurance contracts and the Block Buildings Policies on trust for the
Buyer.
7. The Buyer will (with the assistance of CMC or, at the option of CMC,
CMS but at the Buyer's cost and expense) at the same time as the
despatch to each Borrower of the Buyer's Notification Letter, send to
the Borrower a letter in the agreed form together with a direct debit
(the "Payment Instruction") to be completed by each such Borrower in
favour of the Buyer. The Payment Instruction will be prepared by the
Buyer.
<PAGE> 49
8. It shall be the responsibility of the Buyer to ensure the effectiveness
and operation of the procedures outlined in paragraph 7 above.
9. To assist the Buyer, CMC or, at the option of CMC, CMS will permit the
Buyer to generate direct debit claims (with respect to the Mortgages
where the relevant Originator holds current direct debit instructions
under their BACS user number) for the two Mortgage Payment Dates to
occur next after the Completion Date (including re-presents for unpaid
collections) and shall close the Collection Accounts immediately
thereafter. The direct debits will be paid into the Collection
Accounts. Thereafter, neither CMC nor CMS nor any other Originator
shall have any obligation to continue to maintain in force the
Collection Accounts.
10. Each Seller shall hold all amounts received by it relating to the Loans
comprised in the Portfolio (whether by cheque, standing order or
otherwise) and all amounts standing to the credit of the Collection
Account on trust for the Buyer. Any amounts received by any Seller
relating to the Loans comprised in the Portfolio which are not standing
to the credit of the Collection Account shall be paid by that Seller to
the Buyer within two Business Days of receipt thereof (subject to such
amounts received being cleared and available) together with a statement
of the name of the Borrower, the account number, the amount received
and the payment method.
11. The Buyers shall forthwith deliver to HM Land Registry or the Registers
of Scotland (as the case may be) with duly completed applications
together with all fees in connection therewith those of the Registered
Transfers and Scottish Transfers comprised in paragraphs 1.1 to 1.3
above and shall deal expeditiously with requisitions and other queries
raised in respect thereof.
PART 2 - THE RESIDUALS
1. At Completion, the Buyer shall deliver to CMC:-
(a) the written acknowledgements respectively required by an
Assignee (as defined in the Deed of Variation) in clause 21.3
of each of the Deeds of Charge and Assignment relating to the
CMC Securitisations.
(b) a deed, duly executed by the parties thereto (other than CMC
and CMS) in form and substance satisfactory to CMC and CMS
releasing CMC and CMS from their respective obligations under
the CMC Securitisations.
PART 3 - THE OTHER ASSETS
1. At Completion CMC shall:
1.1 give the Buyer or procure that the Buyer is given possession of those
Assets which are transferable by delivery;
<PAGE> 50
1.2 give the Buyer or procure that the Buyer is given (if it so requests)
an executed assignment of, those Assets (other than the Loans,
Mortgages and the Residuals) which are not transferable by delivery and
give the Buyer a release or certificate of non-crystallisation in a
form reasonably satisfactory to the Buyer in respect of any Encumbrance
affecting any of such Assets;
1.3 procure the convening of Board Meeting of CMR7 at which the directors
of CMR7:
1.3.1 vote in favour of the registration of the Buyer or its nominee(s) as
member(s) of such company in respect of the CMR7 Shares (subject to the
production of properly stamped transfers);
1.3.2 change CMR7's registered office to a place nominated by the Buyer;
1.3.3 change CMR7's accounting reference date to a date nominated by the
Buyer; and
1.3.4 appoint persons nominated by the Buyer as directors, secretary and
auditors of CMR7 with effect from the end of the meeting;
1.4 procure that the Buyer is given resignation letters from each of the
directors and secretary of CMR7 in a form reasonably satisfactory to
the Buyer;
1.5 procure that the Buyer is given a letter from the auditors of CMR7
resigning their office with effect from Completion and containing the
statement referred to in Section 394 of the Act;
1.6 give the Buyer or procure that the Buyer is given the common seal and
all of the statutory and other books or registers of each of CMR7; and
1.7 procure the resignation of each director whom CMC has appointed of
CMR1, CMR2, CMR3, CMR4, CMR5, CMR6, City Mortgage Trustees 1 Limited,
City Mortgage Trustees 2 Limited, City Mortgage Trustees 3 Limited and
CMH with effect from Completion provided that the Buyer shall procure
that a replacement for each such director is appointed immediately
following such resignations.
<PAGE> 51
SCHEDULE 4
TO THE FOREGOING AGREEMENT AMONG (1) THE SELLERS (AS DEFINED
THEREIN), (2) OCWEN FINANCIAL CORPORATION, (3) CITYSCAPE FINANCIAL
CORPORATION AND (4) CITY MORTGAGE FUNDING 1 LIMITED
EXCLUDED ASSETS
1. Any cash held by any of the Sellers at the Effective Time received in
respect of Residuals within the two Business Days prior to the
Effective Time plus the cash book balance of the Sellers up to a
maximum of pound sterling 2 million in respect of cash in hand or cash
at bank held by any of the Sellers at the Effective Time (other than
any such cash received in respect of Residuals).
2. The Reading Leases.
3. Any sums payable at any time to any Seller by way of refund of tax
accrued or earned (whether or not paid) for the period prior to the
Effective Time.
4. The Wolverhampton Lease.
5. The Watford Lease.
6. The shares in any of the Sellers.
7. The libel action issued by CMC against Times Newspapers Limited
referred to in the Disclosure Letter.
<PAGE> 52
SCHEDULE 5
TO THE FOREGOING AGREEMENT AMONG (1) THE SELLERS (AS DEFINED
THEREIN), (2) OCWEN FINANCIAL CORPORATION, (3) CITYSCAPE FINANCIAL
CORPORATION AND (4) CITY MORTGAGE FUNDING 1 LIMITED
CALCULATION OF PURCHASE PRICE AND INTERIM PURCHASE PRICE
PART 1 - CALCULATION OF PURCHASE PRICE
1. Following Completion CMC shall prepare a statement and disk (the "Draft
Final Portfolio Completion Statement") setting out:
1.1 the amount of the Unpaid Principal Balances of the Loans other than the
New Loans in pounds sterling as of the Completion Date;
1.2 the amount of the Unpaid Principal Balances of the Consistent New Loans
in pounds sterling at the Completion Date provided that, in calculating
such Unpaid Principal Balances as of the Completion Date, there shall
be disregarded any Loan originated after 31 December 1997 with respect
to which the first payment has not been made within 59 days of the
applicable Mortgage Payment Day;
1.3 the fair market value as agreed in good faith by the Buyer and the
Sellers of the Inconsistent New Loans at the Completion Date, other
than those secured by mortgages over property the use of which is not
primarily residential; and
1.4 the aggregate amount of cash in pounds sterling received by the Sellers
at the Completion Date from any of the Residuals since 31 December
1997.
2. CMC will provide the Draft Final Portfolio Statement to the Buyer no
later than five Business Days after the Completion Date and will
provide the Buyer with all reasonable assistance and co-operation to
enable the Buyer to verify the Draft Final Portfolio Completion
Statement.
3. Within 15 Business Days of receiving the Draft Final Portfolio
Completion Statement, the Buyer will indicate to CMC whether or not it
agrees with the figures contained therein and if it so agrees, the
Draft Final Portfolio Completion Statement will constitute the Final
Portfolio Completion Statement. If the Buyer fails to so indicate, the
Draft Final Portfolio Completion Statement will be deemed to constitute
the Final Portfolio Completion Statement.
4. If the Buyer indicates to CMC that it disagrees with the Draft Final
Portfolio Completion Statement the Buyer and CMC will negotiate in good
faith to try and resolve such disagreement.
5. If the Buyer and CMC are unable to resolve the disagreement within a
further 20 Business Days, the matter shall be referred to a firm of
Chartered Accountants
<PAGE> 53
appointed by agreement between the Buyer and CMC (or failing agreement
within 10 days, by the President for the time being of the Institute of
Chartered Accountants in England and Wales) (the "Accountant"). The
Accountant:
5.1 shall be instructed by the Buyer and CMC to resolve the matters in
dispute and to make a final determination of the Final Portfolio
Completion Statement;
5.2 shall be provided with such information and access to books, records
and other information as he may require;
5.3 shall act as expert and not arbitrator and his decision shall in the
absence of manifest error be final and binding.
6. The cost of the Accountant shall be borne by the Buyer and CMC equally
unless he shall determine otherwise.
7. Following Completion the Buyer shall prepare a statement (the "Draft
Liabilities Statement") setting out details of the Liabilities by the
name of payee, amount due or paid by or on behalf of the Buyer and any
applicable invoice or statement number.
8. The Buyer will provide the Draft Liabilities Statement to CMC no later
than 35 Business Days after the Completion Date and will provide CMC
with all reasonable assistance and co-operation to enable CMC to verify
the Draft Liabilities Statement.
9. Within 15 Business Days of receiving the Draft Liabilities Statement,
CMC will indicate to the Buyer whether or not it agrees with the
figures contained therein and if it so agrees, the Draft Liabilities
Statement will constitute the Liabilities Statement. If CMC fails to so
indicate, the Draft Liabilities Statement will be deemed to constitute
the Liabilities Statement.
10. If CMC indicates to the Buyer that it disagrees with the Draft
Liabilities Statement the Buyer and the Seller will negotiate in good
faith to try and resolve such disagreement.
11. If the Buyer and the Seller are unable to resolve the disagreement
within a further 20 Business Days, the matter shall be referred to a
firm of Chartered Accountants appointed by agreement between the Buyer
and CMC (or failing agreement within 20 Business Days, by the President
for the time being of the Institute of Chartered Accountants in England
and Wales) (the "Second Accountant"). The Second Accountant:
11.1 shall be instructed by the Buyer and CMC to resolve the matters in
dispute and to make a final determination of the Liabilities Statement;
11.2 shall be provided with such information and access to books, records
and other information as he may require;
<PAGE> 54
11.3 shall act as expert and not arbitrator and his decision shall be in the
absence of manifest error be final and binding.
12. The cost of the Second Accountant shall be borne by the Buyer and CMC
equally unless he shall determine otherwise.
13. The Purchase Price shall be determined in accordance with the following
formula:
P = 253,000,000 + A - B - C + D + E + F
Where
P is the Purchase Price in pounds sterling
A is equal to 104.5% multiplied by the lesser of:
(a) 35,000,000; and
(b) the aggregate of the amounts referred to in
paragraphs 1.1 and 1.2 of this Part 1 less
211,075,219 (the resulting amount being the "Final
Balance")
B is equal to the amount referred to in paragraph 1.4 of this
Part 1
E is equal to the amount referred to in paragraph 1.3 of this
Part 1
F is the Final Balance minus 35,000,000 but only if the result
is a positive number
each as set out in the Final Portfolio Completion Statement
C is equal to the amount by which the aggregate amount of the
Liabilities in pounds sterling at the Completion Date exceeds
7,511,000 and shall be zero if the Liabilities in pounds
sterling at the Completion Date do not exceed 7,511,000
D is equal to the amount by which the aggregate amount of the
Liabilities in pounds sterling at the Completion Date is less
than 7,511,000 and shall be zero if the amount of the
Liabilities in pounds sterling at the Completion Date is
7,511,000 or more
each as determined in the Liabilities Statement.
14. In this Part 1 of Schedule 5:
"New Loans" shall mean the Consistent New Loans and the Inconsistent
New Loans;
<PAGE> 55
"Consistent New Loans" shall mean those of the Loans and Further Loans
completed on or after 1 January 1998 and prior to Completion:
(a) in respect of which taken together as a portfolio
(other than those which have been redeemed during
such period):
(i) the weighted average rate of interest;
(ii) the weighted average loan-to-value ratio;
and
(iii) the relative percentages (by number)
respectively of first and subsequent ranking
Mortgages securing repayment,
is consistent in all material respects with the Loans
completed during October, November and December 1997
disregarding however any effect of any alterations in
the terms of any Loans as a result of any agreement
or undertaking given to or made with the OFT; and
(b) which individually comply in all material respects
with the loan underwriting guidelines and origination
criteria in effect at 31 December 1997; and
"Inconsistent New Loans" means those of the Loans and Further Loans
completed on or after 1 January 1998 and prior to Completion, (other
than those which have been redeemed during such period) which are not
Consistent New Loans;
PART 2 - CALCULATION OF INTERIM PURCHASE PRICE
1. On the Preparation Date the Seller shall prepare the Interim Portfolio
Completion Statement setting out:
1.1 the amount of the Unpaid Principal Balances of the Loans other than the
New Loans in pounds sterling as of the Preparation Date;
1.2 the amount of the Unpaid Principal Balances of the Consistent New Loans
in pounds sterling as of the Preparation Date, provided that, in
calculating such Unpaid Principal Balances as of the Preparation Date,
there shall be disregarded any Loan originated after 31 December 1997
with respect to which the first payment due is not made within 59 days
of the applicable Mortgage Payment Day;
1.3 the fair market value as agreed in good faith by the Buyer and the
Sellers of the Inconsistent New Loans at the Preparation Date, other
than those secured by mortgages over property the use of which is not
primarily residential;
1.4 the aggregate amount of cash in pounds sterling received by the Sellers
at the Preparation Date in respect of any of the Residuals since 31
December 1997; and
<PAGE> 56
1.5 the amount of the Liabilities as at the Preparation Date.
2. The Seller will provide the Interim Portfolio Completion Statement to
the Buyer no later than five Business Days before the Completion Date
and will provide the Buyer will all reasonable assistance and
co-operation to enable the Buyer to verify the Draft Portfolio
Completion Statement prior to the Completion Date.
3. The Interim Purchase Price shall be determined in accordance with the
following formula:
I = 253,000,000 + A - B - C + D + E + F
Where
I is the Interim Purchase Price in pounds sterling
A is equal to 104.5% multiplied by the lesser of:
(a) 35,000,000; and
(b) the aggregate of the amounts referred to in
paragraphs 1.1 and 1.2 of this Part 2 above less
211,075,219 (the resulting amount being the "Interim
Balance")
B is equal to the amount referred to in paragraph 1.4 of this
Part 2 above, which such Seller shall retain in full
C is equal to the amount by which the amount referred to in
paragraph 1.5 of this Part 2 exceeds 7,511,000 and shall be
zero if the amount referred to in paragraph 1.5 of this Part 2
does not exceed 7,511,000
D is equal to the amount by which the amount referred to in
paragraph 1.5 of this Part 2 is less than 7,511,000 and shall
be zero if the amount referred to in paragraph 1.5 of this
Part 2 is 7,511,000 or more
E is equal to the amount referred to in paragraph 1.3 of this
Part 2
F is the Interim Balance minus 35,000,000 but only if the result
is a positive number
each as determined in the Initial Portfolio Completion Statement.
<PAGE> 57
SCHEDULE 6
TO THE FOREGOING AGREEMENT AMONG (1) THE SELLERS (AS DEFINED
THEREIN), (2) OCWEN FINANCIAL CORPORATION, (3) CITYSCAPE FINANCIAL
CORPORATION AND (4) CITY MORTGAGE FUNDING 1 LIMITED
WARRANTIES
1. CAPACITY AND AUTHORITY
1.1 INCORPORATION AND EXISTENCE
Each Seller is a limited company incorporated under English law and has
been in continuous existence since incorporation.
1.2 RIGHT, POWER, AUTHORITY AND ACTION
1.2.1 Each Seller has the right, power and authority and has taken all action
necessary to execute and deliver, and to exercise its rights and
perform its obligations under, this Agreement and each document to be
executed at or before Completion.
1.2.2 Each Seller has the right, power and authority to own those of the
Assets which it owns and operate that part of the Business which it
operates.
1.3 BINDING AGREEMENTS
Each Seller's obligations under this Agreement and each document to be
executed by it at or before Completion are, or when the relevant
document is executed will be, enforceable in accordance with their
terms.
2. ACCOUNTS
2.1 GENERAL
2.1.1 The Accounts have been prepared and audited on a proper and consistent
basis in accordance with the law and applicable standards, principles
and practices generally accepted in the United Kingdom.
2.1.2 The Accounts show a true and fair view of the assets, liabilities and
state of affairs as at the Last Accounting Date and of the profits and
losses for the financial year ended on the Last Accounting Date of the
Seller and its Subsidiary Undertakings at that time.
3. NON-MORTGAGE ASSETS
3.1 TITLE AND CONDITION
3.1.1 Each of the Non-Mortgage Assets is:
<PAGE> 58
(a) legally and beneficially owned by a Seller free from any
Encumbrance;
(b) where capable of possession, in the possession or under the
control of a Seller; and
(c) situated in the United Kingdom.
3.1.2 Details of Motor Vehicles and Office Equipment at the date of this
Agreement are annexed to the Disclosure Letter.
3.1.3 CMR7 is a wholly owned subsidiary of CMH.
3.1.4 The CMR7 Shares comprise the whole of the allotted and issued share
capital of CMR7, have been properly allotted and issued and are fully
paid or credited as fully paid.
3.1.5 There is no Encumbrance in relation to any of the CMR7 Shares.
3.1.6 CMR7 has not since incorporation carried on any business or acquired
any assets.
3.2 INTELLECTUAL PROPERTY
3.2.1 Each of the Intellectual Property Rights is:
(a) valid and enforceable and nothing has been done or omitted to
be done by which it may cease to be valid and enforceable;
(b) beneficially owned by, licensed to or validly granted to, a
Seller; and
(c) not, and will not be, the subject of any challenge from a
person (including, without limitation, an employee of a
Seller) as to title, validity, enforceability, entitlement or
otherwise.
3.2.2 The details of the Intellectual Property Rights annexed to the
Disclosure Letter are accurate in all material respects.
3.2.3 So far as any Seller is aware, there is no infringement of any of the
Intellectual Property Rights.
3.2.4 The Intellectual Property Rights are the only Intellectual Property
used by the Sellers.
<PAGE> 59
4. REAL PROPERTY
4.1 PROPERTY COMPRISES ALL LAND
The Watford Lease and the Wolverhampton Lease (the "Business Property")
comprise all land and premises owned, occupied or used by, or in the
possession of, any Seller in connection with the Business.
4.2 ADVERSE INTERESTS
There is no person in possession or occupation of, or who has or claims
a right or interest of any kind in, the Business Property adversely to
any Seller's interest. The Seller is entitled to and has exclusive
vacant possession of the Business Property.
4.3 LEASES
There is no fact or circumstance currently subsisting which could
entitle or require a person (including, without limitation, a landlord
or licensor) to forfeit or enter on, or take possession of, or occupy,
the Business Property.
5. CONTRACTS
5.1 VALIDITY OF CONTRACTS
5.1.1 No Seller has any knowledge of the invalidity of, or a ground for
termination, avoidance or repudiation of, a Contract. No party to a
Contract has given notice of its intention to terminate, or has sought
to repudiate or disclaim, the Contract.
5.1.2 No Seller is in material breach of a Contract and to the best of each
Seller's knowledge no other party to a Contract is in material breach
of that Contract. To the best of each Seller's knowledge no fact or
circumstance exists which might give rise to a breach of this type.
5.2 DETAILS OF CONTRACTS
A copy of each of the written Contracts is annexed to the Disclosure
Letter. To the best of each Seller's knowledge a summary of any oral
Contract at the date of this Agreement is annexed to the Disclosure
Letter.
6. TERMS OF TRADE AND BUSINESS
6.1 SUPPLIERS AND CUSTOMERS
6.1.1 No Seller has entered into an agreement or arrangement with a customer
or supplier of the Business on terms materially different to its
standard terms of business, a copy of which is annexed to the
Disclosure Letter.
<PAGE> 60
6.1.2 No person (either individually or jointly with another person) has
bought from or sold to a Seller in connection with the Business, either
in the financial year of that Seller ended on the Last Accounting Date
or since the Last Accounting Date, more than ten per cent. of the total
amount of all purchases or sales made by the Business in that financial
year or since the Last Accounting Date.
6.2 COMPUTER RECORDS
None of the records, systems, data or information of the Business is
recorded, stored, maintained, operated or otherwise wholly or partly
dependent on or held or accessible by any means (including, without
limitation, an electronic, mechanical or photographic process
computerised or not) which are not included among the Assets.
6.3 DATA PROTECTION
6.3.1 The applicable Seller has obtained and maintained in force each
registration under the Data Protection Act 1984 necessary or
appropriate in relation to the Business or the Assets including,
without limitation, each registration relating to the obtaining,
holding, processing, transfer and disclosure of personal data effected
by the applicable Seller (including, without limitation, to the Buyer).
6.3.2 The applicable Seller has in respect of personal data relating to the
Business at all times complied with the Data Protection Principles
contained in Schedule 1 to the Data Protection Act 1984.
7. EMPLOYEES
7.1 GENERAL
7.1.1 The Disclosure Letter contains details of:
(a) the total number of Employees including those who are on
maternity leave or absent because of disability or other
long-term leave of absence, and have or may have a right to
return to work in the Business;
(b) the name, date of start of employment, period of continuous
employment, salary, grade and age of each of the Employees
and, where any of the Employees has been continuously absent
from work for more than one month, the reason for the absence;
and
(c) the terms of the contract of each of the Employees entitled to
remuneration at an annual rate, or an average annual rate over
the last three financial years, of more than pound sterling
35,000.
7.1.2 There is no agreement or arrangement between any Seller and any of the
Employees or a former employee of any Seller in connection with the
Business with respect to
<PAGE> 61
his employment, his ceasing to be employed or his retirement which is
not included in the written terms of his employment or previous
employment. No Seller has provided, or agreed to provide, a gratuitous
payment or benefit to any of the Employees or to his dependants.
8. INSOLVENCY, WINDING UP ETC.
8.1 WINDING UP AND ADMINISTRATION
No order has been made or resolution passed for the winding up of any
Seller or CMF or for the appointment of a provisional liquidator to any
Seller or CMF or for an administration order in respect of any Seller
or CMF. No petition for the winding up or administration of any Seller
or CMF has been served on any Seller or CMF and no resolution to wind
up any Seller or CMF has been passed by the shareholder(s) of that
company.
8.2 RECEIVERSHIP
No receiver or receiver and manager has been appointed of the whole or
part of any Seller's business or assets.
8.3 VOLUNTARY ARRANGEMENTS
No voluntary arrangement has been proposed under section 1 of the
Insolvency Act 1986 in respect of any Seller. No compromise or
arrangement has been proposed, agreed to or sanctioned under section
425 of the Act in respect of any Seller.
8.4 PAYMENT OF DEBTS
No Seller has stopped paying its debts as they fall due.
8.5 DISTRESS ETC.
No distress, execution or other process has been levied on any of the
Non-Mortgage Assets.
9. PENSIONS AND OTHER BENEFITS
9.1 DEFINITIONS
For the purposes of paragraphs 9.2 and 9.3, "Disclosed Schemes" means
the Greyfriars Pension Scheme established by an interim deed dated 31
October 1996 and the Standard Life "StanPlan A" scheme so far as it
relates to the participation of MGD under number H80568.
<PAGE> 62
9.2 SCHEMES - GENERAL
Other than the Disclosed Schemes there are not in operation as at the
date of this Agreement and no proposal has been announced to enter into
or establish, any legally enforceable agreement, arrangement, custom or
practice for the payment of, or payment of a contribution towards, a
pension, allowance, lump sum or other similar benefit on retirement,
death or termination of employment (whether voluntary or not), for the
benefit of the Employees. No Seller operates or is a participant in any
permanent health insurance scheme, private health insurance scheme,
accident benefit or any other scheme or arrangements benefiting
Employees.
9.3 FUNDING OF DISCLOSED SCHEMES
9.3.1 No contribution due to the Disclosed Schemes is unpaid.
9.3.2 The Greyfriars Pension Scheme is fully funded in that the market value
of the Greyfriars Pension Scheme's assets exceeds the value of the
Greyfriars Pension Scheme's accrued liabilities determined using the
same actuarial assumptions as used for the initial actuarial valuation
of the Greyfriars Pension Scheme as at November 1996.
9.3.3 The Standard Life "StanPlan A" scheme is a defined contribution scheme.
10. LITIGATION AND COMPLIANCE WITH LAW
10.1 LITIGATION
10.1.1 No Seller is involved in a civil, criminal, arbitration, administrative
or other proceeding in any jurisdiction. No civil, criminal,
arbitration, administrative or other proceeding in any jurisdiction in
relation to the Business or any of the Assets is threatened by or
against any Seller other than in the ordinary course of the Business.
10.1.2 There is no outstanding judgement, order, decree, arbitral award or
decision of a court, tribunal, arbitrator or governmental agency in any
jurisdiction against any Seller.
11. LOANS
11.1 The particulars of the Loans set against those fields on the Data Tape
which are listed in the annexure are in all material respects true and
accurate and the particulars of the Loans in the Initial Portfolio
Completion Statement will be in all material respects true and
accurate.
11.2 Each Loan arose from the ordinary course of the applicable Seller's
residential secured lending facilities.
<PAGE> 63
11.3 Each Loan and its Related Security was made on the terms of the
Standard Documentation without any material variation thereto.
11.4 All of the Borrowers are individuals.
11.5 No Borrower is an employee of the relevant Mortgagee.
11.6 The amount outstanding under each Loan is a valid debt due to the
applicable Seller from the relevant Borrower.
11.7 No Loan is unenforceable as a result of any non-compliance with the CCA
or the Unfair Terms in Consumer Contracts Regulations 1994.
11.8 The relevant Seller has maintained the appropriate licences under the
CCA at all relevant times in relation to the carrying on of its lending
business.
11.9 No agreement for any Mortgage or related agreement constitutes an
extortionate credit bargain (within the meaning of Section 137 and 138
of the CCA or any modification or re-enactment thereof).
11.10 No Unregulated Loan is a consumer credit agreement (as defined in
Section 8 of the CCA) or constitutes any other agreement regulated or
partly regulated by the CCA (other than Sections 137 to 140 of the CCA)
or any modification or re-enactment thereof.
11.11 In relation to any Right-to-Buy Mortgage Loan the relevant Originator
was, at the time of origination, an approved lending institution within
the meaning given to that expression in the Housing Act 1985 or, as the
case may be, the Housing (Scotland) Act 1987.
11.12 There are no outstanding obligations on any Seller to make any Further
Advances to any Borrower.
12. VALUATION
In the case of each Loan, not more than six months prior to the grant
of the relevant Mortgage, the relevant Originator caused to be made on
its behalf a valuation of the relevant Property by a Valuer.
13. THE PROPERTIES
13.1 The Properties are in England, Wales or Scotland.
13.2 Prior to making a Loan to a Borrower, the relevant Originator:
13.2.1 caused its solicitors to carry out in relation to the relevant Property
all investigations, searches and other actions and enquiries which a
reasonably prudent mortgage lender or its solicitors normally make
(other than local authority searches)
<PAGE> 64
when lending to an individual on the security of residential property,
as the case may be, in England, Wales or Scotland; and
13.2.2 received a Report on Title relating to such Property and the results
thereof (together with such further information that the relevant
Originator considered appropriate) were such as would be acceptable to
a reasonably prudent mortgage lender.
13.3 Where any Property is leasehold:
13.3.1 if the Property is in England or Wales the relevant lease has created a
subsisting term of years absolute in possession which will expire not
less than 30 years after the term of the relevant Mortgage; and
13.3.2 if the Property is in Scotland the relevant lease was entered into
prior to 1974 and will expire no fewer than 30 years after the term of
the relevant Mortgage; and
13.3.3 the relevant lease contains no provision whereby it may be forfeited on
the bankruptcy of the lessee.
14. THE MORTGAGES
14.1 Each Loan is secured by a Mortgage.
14.2 Each Mortgage constitutes (i) in the case of English Loans, a valid
first, second or subsequent ranking legal mortgage of the relevant
Property subject only in certain cases to registration of the relevant
Mortgage Deed at HM Land Registry or (ii) in the case of the Scottish
Loans, a valid and enforceable first, second or subsequent ranking
Standard Security over the relevant Property subject only in certain
cases to registration or recording of the relevant Mortgage Deed in the
Registers of Scotland, in either case duly executed by the Borrower
named in the relevant Mortgage Deed.
15. ADDITIONAL SECURITY
Prior to the making of the relevant mortgage advance, enquiry was made
of each Borrower as to the identity of the persons in actual occupation
of the Property and (i) in the case of English Mortgage Loans, any
person who at the date when the advance was made had attained the age
of 18 and who was identified in writing to the relevant Originator or
its solicitor by the Borrower as residing or being about to reside in
the relevant Property is either named as joint Borrower on the relevant
Mortgage Deed or has signed a Deed of Postponement in respect of all
rights and entitlements to which such person may be entitled in the
Property to the interests, rights and entitlements of the Mortgagee of
the Property from time to time, such agreement in a form as was
satisfactory to such solicitor, and (ii) in the case of Scottish
Mortgage Loans, prior to the making of the advance, the relevant
Originator or its solicitor obtained all necessary validly executed MHA
Documentation so as to ensure that neither the relevant Mortgage Loan
nor the
<PAGE> 65
relevant Property was subject to or affected by any statutory right of
occupancy in favour of a non-entitled spouse.
16. INSURANCE-BUILDINGS
16.1 Every Property was, at the date of completion of the relevant Loan,
insured:
(a) (i) under the Buildings Policies;
(ii) with a reputable insurance company approved by a Seller;
(iii) against all risks usually covered by a reasonably
prudent mortgage lender in England, Scotland or Wales,
as applicable, advancing money on the security of
residential property; and
(b) to an amount not less than the full reinstatement cost as
determined by the relevant Valuer.
16.2 There is no claim outstanding under any of the Buildings Policies
(save, in relation to the Buildings Policies, minor claims not
involving the destruction of a Property).
17. SELLER'S TITLE
17.1 Save for Title Deeds held at HM Land Registry or the Registers of
Scotland all the Title Deeds and the mortgage files and computer tapes
and other means of electronic data storage relating to each of the
Loans and their Related Security are held by:
(a) a Seller or its agents; or
(b) by the Seller's Conveyancing Solicitors to the order of that
Seller,
and the Title Deeds held at HM Land Registry or the Registers of
Scotland have been sent to it on the basis that any such Title Deeds
will be returned to a Seller, its agents or a Seller's Conveyancing
Solicitors.
17.2 A Seller or (as applicable) CMF has good title to, and is the absolute
unencumbered legal and beneficial owner of, each Loan and its Related
Security subject only to this Agreement, the Borrowers' equity or other
rights of redemption and (in the case of Mortgages over Registered Land
or land in Scotland) subject to registration at HM Land Registry or the
Registers of Scotland (as the case may be) of a Seller or CMF (as
applicable) as proprietor of the relevant Mortgage.
<PAGE> 66
18. OUTSTANDING OFFERS
No Letter of Offer is outstanding (other than Letters of Offer dated
less than three months prior to the date hereof) in respect of which
the relevant Loan has not been completed.
19. THE RESIDUALS
19.1 CMCR is not in breach of any of its obligations pursuant to CMR1
Reserve Novation Agreement.
19.2 In relation to the aggregate of the mortgage loans beneficially owned
by the Mortgages Trustees, CMR4 and CMR6 (the "Securitised Portfolio"),
between 1 January 1998 and Completion the annualised principal loss
rates for the Securitised Portfolio does not exceed 0.6% per annum.
19.3 So far as any of the Sellers is aware there is no material breach of
any of the agreements relating to the CMC Securitisations.
20. DATA ROOM INDEX
To the best of each Seller's knowledge the copies of the documents
listed in the Data Room Index (as defined in the Disclosure Letter)
supplied or made available to the Buyer are true and fair copies.
<PAGE> 67
SCHEDULE 7
TO THE FOREGOING AGREEMENT AMONG (1) THE SELLERS (AS DEFINED
THEREIN), (2) OCWEN FINANCIAL CORPORATION, (3) CITYSCAPE FINANCIAL
CORPORATION AND (4) CITY MORTGAGE FUNDING 1 LIMITED
LIMITATIONS ON THE SELLER'S LIABILITY
1. Financial is not liable in respect of a Relevant Claim unless and until
the amount that would be recoverable from Financial in respect of that
Relevant Claim, when aggregated with any other amount or amounts
recoverable in respect of other Relevant Claims, exceeds pound sterling
250,000.
2. Financial's total liability in respect of all Relevant Claims is
limited to pound sterling 10,000,000. The maximum liability for a
Relevant Claim arising in respect of a Loan shall not exceed that part
of the consideration payable in respect of such Loan at the date of
Completion.
3. Financial is not liable in respect of a Relevant Claim unless the Buyer
has given Financial written notice of the Relevant Claim (stating in
reasonable detail the nature of the Relevant Claim and, if practicable,
the amount claimed) on or before the first anniversary of the date of
this Agreement.
4. A Relevant Claim notified in accordance with paragraph 3 and not
satisfied, settled or withdrawn is unenforceable against Financial on
the expiry of the period of twelve months starting (if either the Buyer
or a Seller is acting in compliance with paragraph 7.4 or paragraph 8
respectively) on the Determination Date referred to in paragraph 9,
and, otherwise, starting on the day of notification of the Relevant
Claim, unless proceedings in respect of the Relevant Claim have been
issued and served on Financial.
5. Financial is not liable in respect of a Relevant Claim:
5.1 to the extent that the matter giving rise to the Relevant Claim would
not have arisen but for:
5.1.1 an act or omission after Completion by or involving a Buyer's Group
Company or a director, employee or agent of a Buyer's Group Company;
5.1.2 the passing of, or a change in, after the date of this Agreement a law,
rule or regulation, of a government, governmental department, agency or
regulatory body or an increase in the tax rates or an imposition of
tax, in each case not actually or prospectively in force at the date of
this Agreement or a change, after such date of the judicial
interpretation or application of the law;
<PAGE> 68
5.2 to the extent that the matter giving rise to the Relevant Claim arises
wholly or partially from an act or omission at the request or direction
of, or with the deliberate consent of, a Buyer's Group Company;
5.3 to the extent that the matter giving rise to the Relevant Claim is an
amount for which the Buyer has a right of recovery against, or an
indemnity from, a person other than a CMC Group Undertaking, whether
under a provision of applicable law, insurance policy or otherwise
howsoever or would have had that right or indemnity but for a change in
law or the terms of its insurance after Completion; and
5.4 to the extent that the matter giving rise to the Relevant Claim can be
or has been remedied by a payment under clause 4.7 or clause 4.8.1.
6. The Buyer is not entitled to recover more than once in respect of any
one matter giving rise to a Relevant Claim.
7. If the Buyer becomes aware of a matter which might give rise to a
Relevant Claim:
7.1 the Buyer shall as soon as it is reasonably practicable, advise
Financial in writing of the matter and shall consult with Financial
with respect to the matter;
7.2 the Buyer shall, and shall ensure that each Buyer's Group Company will,
provide to Financial and its advisers reasonable access to premises and
personnel and to relevant assets, documents and records within each
Buyer's Group Company's power or control for the purposes of
investigating the matter and enabling Financial to take the action
referred to in paragraph 8.1;
7.3 Financial (at its cost) may take copies of the documents or records,
and photograph the premises or assets, referred to in paragraph 7.2;
7.4 the Buyer shall and shall ensure that each Buyer's Group Company will
take any action and institute any proceedings, and give any information
and assistance, as Financial may reasonably request to:
(a) dispute, resist, appeal, compromise, defend, remedy or
mitigate the matter; or
(b) enforce against a person (other than a CMC Group Undertaking)
the Buyer's rights in relation to the matter; and
(c) obtain the consent of Financial (such consent not to be
unreasonably withheld or delayed) to the use of advisers
nominated by the Buyer in connection with proceedings related
to the matter,
in each case on the basis that Financial shall fully indemnify the
Buyer for all reasonable costs incurred as a result of a request or
nomination by Financial;
<PAGE> 69
7.5 the Buyer shall not admit liability in respect of, or compromise or
settle, the matter without the prior written consent of Financial (not
to be unreasonably withheld or delayed); and
7.6 a failure by the Buyer to comply with its obligations under paragraph 7
shall not relieve Financial from liability in respect of a Relevant
Claim except to the extent that the Relevant Claim is aggravated or
increased as a result of the Buyer's failure to do so save for a breach
of paragraphs 7.4(a) or (b) or 7.5.
8. To the extent that any matter giving rise to a Relevant Claim is the
amount for which a Seller has a right of recovery against, or an
indemnity from a person other than the Buyer, whether under a provision
of applicable law, insurance policy or otherwise howsoever then such a
Seller shall at its sole discretion either assign such right to the
Buyer (when the provisions of paragraph 7 shall apply) or:
8.1 take expeditiously all reasonable steps (including taking legal
proceedings) to exercise such rights of recovery or enforce such
indemnity; and
8.2 keep the Buyer informed, at such times and in such manner as the Buyer
may reasonably require of the steps being so taken and the progress
thereof,
and the recovery of any amount by any Seller through the exercise of
the rights of recovery or indemnity in paragraph 8 shall cause there to
be a restriction in the amount of the Relevant Claim of any amount
commensurate with the amount so recovered.
9. If either (i) the Buyer is acting in compliance with paragraph 7.4(a)
or (b) or (ii) any Seller is acting in compliance with paragraph 8.1
the expression "Determination Date" shall mean the day after the day
upon which, as applicable, the Buyer or any Seller has made recovery
against the relevant third party or the applicable legal proceedings
brought by either the Buyer or any Seller have been finally determined
or withdrawn.
10. In assessing any damages or other amounts recoverable for a Relevant
Claim there shall be taken into account any corresponding savings by,
or net benefit to, the Buyer.
11. If any Seller pays to a Buyer's Group Company an amount in respect of a
Relevant Claim and a Buyer's Group Company subsequently recovers from
another person an amount which is referable to the matter giving rise
to the Relevant Claim if the aggregate of the Sum Recovered and the
amount paid by any Seller in respect of the Relevant Claim exceeds the
Buyer's loss arising out of the applicable Relevant Claim, the Buyer
shall immediately pay the amount of such excess to that Seller.
12. For the purposes of clause 11, "Sum Recovered" means an amount equal to
the total of the amount recovered from the other person plus any
interest in respect of the amount recovered from the person less any
tax computed by reference to the
<PAGE> 70
amount recovered from the person payable by the Buyer and less all
reasonable costs incurred by the Buyer in recovering the amount from
the person.
13. Nothing in this Schedule restricts or limits the Buyer's general
obligation at law to mitigate any loss or damage which it may incur in
consequence of a matter giving rise to a Relevant Claim.
14. If at any time after the date of this Agreement a Seller wants to
insure against its liabilities in respect of Relevant Claims, the Buyer
shall provide any information as a prospective insurer may reasonably
require before effecting the insurance.
15. The Buyer shall preserve all documents, records, correspondence,
accounts and other information whatsoever relevant to a matter which
may give rise to a Relevant Claim.
<PAGE> 71
SCHEDULE 8
TO THE FOREGOING AGREEMENT AMONG (1) THE SELLERS (AS DEFINED
THEREIN), (2) OCWEN FINANCIAL CORPORATION, (3) CITYSCAPE FINANCIAL
CORPORATION AND (4) CITY MORTGAGE FUNDING 1 LIMITED
LIABILITIES
1. All Trade Creditors owed less than pound sterling 5,000
2. The following:
Alcatel Telecom
BDO Stoy Hayward
Cable & Wireless
Clifford Chance
Computer Futures (personnel agency)
C Osborne
Crusader Security
Denton Hall
Fox Williams
Gama Aviation
Hillier Parker
Howard Kennedy (solicitors)
Maidenhead Electrical
Matrix Direct Mktg
P&I Data Services
PML Consultants
Powerline
Project Office Furniture
Sidley & Austin
SJA Direct
Wolanski & Co
Bernard Elliston (solicitors)
Blatchfords (solicitors)
Marketplace Appointment (personnel agency)
White Horse Mortgage Services
DK Computing
London Bridge software
Michael Moss (in respect of Exit Payment)
3. All items owing to insurers
4. All items owing to providers of advertising and marketing services
5. MIRAS creditor amounts
<PAGE> 72
6. All mortgage broker commission override accruals
7. All other commission payable to mortgage brokers
8. Accrued bonus due to T Benjamin to a maximum of pound sterling 75,000
9. Outstanding legal and professional fees due in respect of loan
originations
10. Mortgage Indemnity Guarantee repayments
11. British United Providence Association
12. Property valuation fees in respect of loan originations
13. Legal fees incurred by Midland & General Direct Limited
14. Insurance
15. PAYE and National Insurance in respect of the PAYE month in which
Completion takes place.
16. Client loan retentions (other than any already disbursed and held
subject to undertakings from Sellers Conveyancing Solicitors in favour
of any Seller)
17. Audit and tax fees in respect of the 1997 statutory audit and
corporation tax advice for 1997
18. Liabilities to Lombard Business Finance (lease contracts numbered 1 to
7 inclusive)
19. Finance lease liability to IBM in respect of 45400 File Server
20. The Associates (in respect of car leases number 1 to 7 inclusive)
21. Operating lease/contract hire liabilities to Schroders regarding
photocopier leases
22. Operating lease/contract hire liabilities to Hertz leasing regarding
motor vehicles
23. Operating lease/contract hire liabilities to Lex leasing regarding
motor vehicles
24. Operating lease/contract hire liabilities to Pallas leasing regarding
telephone systems
25. Liabilities to Landlord due but unpaid on or before the Effective Time.
NOTE: items 18 to 24 inclusive have been calculated by taking the residue of
the relevant lease term and multiplying by the number of periodical
payments to be made during the residue of such term.
