Ambase Corporation, f.k.a. The Home Group Inc. - Page 8




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          HGI requested and received the consent of each of the banks to              
          the issuance of the 1977 HGI note, as required by the revolving             
          credit agreement.                                                           
               City prepared an offering circular for prospective                     
          purchasers of the notes to be sold by Finance in 1977 which                 
          disclosed that City’s $13,200,000 capital contribution to Finance           
          would be lent by Finance to HGI and that Finance’s capital                  
          thereafter included the 1977 HGI note.  The audited financial               
          statements of both City and HGI were included in the offering               
          circular.                                                                   
          2. Finance’s 1977 Issuance of Notes                                         
               On May 5, 1977, Finance was the named issuer of $30 million            
          of 8-3/4-percent notes on the Eurobond market, due May 1, 1984              
          (8-3/4-percent notes).  Interest on the notes at the stated rate            
          was payable annually.  The 8-3/4-percent notes also provided that           
          the issuer would, in general, indemnify the holders with respect            
          to any withholding taxes that might be imposed by the United                
          States or the Netherlands Antilles with respect to the payments             
          under the 8-3/4-percent notes, by providing for the payment of              
          additional interest sufficient to make the interest payment equal           
          to the stated rate.4  Finance’s obligations to make principal and           



               4 The 8-3/4-percent notes further provided the issuer with a           
          right to redeem in the event that the foregoing additional                  
          interest became payable.                                                    





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