Ambase Corporation, f.k.a. The Home Group Inc. - Page 11




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          would include the 1977 and 1979 HGI notes.  The audited financial           
          statements of both City and HGI were included in the offering               
          circular.                                                                   
               4. 1979 Issuance of Notes                                              
               On August 1, 1979, Finance was the named issuer of $50                 
          million of floating rate notes (FR notes) on the Eurobond market,           
          due August 1, 1986.  Interest on the FR notes was payable                   
          semiannually at a rate equal to one-half percent above the London           
          interbank offered rate for 6-month Eurodollar deposits.  The FR             
          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 Notes, by providing for the               
          payment of additional interest sufficient to make the interest              
          payment equal to the stated rate.5  Finance’s obligations to make           
          principal and interest payments under the FR notes were                     
          unconditionally guaranteed by City.                                         
               On the same day the FR notes were issued, Finance                      
          transferred the $50 million proceeds to City.  City issued a                
          promissory note to Finance in the principal amount of $50 million           
          (1979 promissory note).  As with the 1977 promissory note, the              
          1979 promissory note provided that the principal amount owed                


               5 The FR notes further provided the issuer with a right to             
          redeem in the event that the foregoing additional interest became           
          payable.                                                                    





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