EXHIBIT (p)
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT is entered into as of the 26th day of March
1997, between the ContiFinancial STRYPES Trust, a business trust organized
pursuant to the Business Trust Act of the State of Delaware (Chapter 38, Title
12, of the Delaware Code, 12 Del. C. (Sections 3801 et seq.)) (such trust and
the trustees thereof acting in their capacity as such being referred to herein
as the "Trust"), and ML IBK Positions, Inc. and Bear, Xxxxxxx & Co. Inc. (each a
"Purchaser" and, collectively the "Purchasers").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF THE STRYPES
1.1 SALE AND ISSUANCE OF UNITS. Subject to the terms and conditions of
this Agreement, the Trust agrees to sell to each Purchaser, severally and not
jointly, and each Purchaser, severally and not jointly, agrees to purchase from
the Trust, one Structured Yield Product Exchangeable for Stock(Service Xxxx),
representing an undivided beneficial interest in the Trust (a "STRYPES"), at a
purchase price per STRYPES of $50,000.
1.2 CLOSING. The purchase and sale of the STRYPES shall take place at the
offices of Xxxxx & Xxxx LLP, Xxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at
9:00 a.m., New York City time, on March 27, 1997, or at such other time
("Closing Date") and place as the Trust and the Purchasers mutually agree upon.
At or after the Closing, the Trust shall deliver to each Purchaser a certificate
representing the STRYPES purchased by such Purchaser, registered in the name of
such Purchaser or its nominee. Payment for the STRYPES shall be made on the
Closing Date by each Purchaser by bank wire transfer or by delivery of a
certified or official bank check, in either case in immediately available funds,
of an amount equal to the purchase price of the STRYPES purchased by such
Purchaser.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF EACH PURCHASER. Each
Purchaser hereby represents and warrants to, and covenants for the benefit of,
the Trust that:
2.1 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made by the
Trust with such Purchaser in reliance upon such Purchaser's representation to
the Trust, which by such Purchaser's execution of this Agreement such Purchaser
hereby
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(ServiceMark) Service Xxxx of Xxxxxxx Xxxxx & Co., Inc
confirms, that the STRYPES are being acquired for investment for such
Purchaser's own account, and not as a nominee or agent and not with a view to
the resale or distribution by such Purchaser of any of the STRYPES, and that
such Purchaser has no present intention of selling, granting any participation
in, or otherwise distributing the STRYPES, in either case in violation of any
securities registration requirement under applicable law, but subject
nevertheless, to any requirement of law that the disposition of its property
shall at all times be within its control. By executing this Agreement, such
Purchaser further represents that such Purchaser does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to any of the
STRYPES.
2.2 INVESTMENT EXPERIENCE. Such Purchaser acknowledges that it can bear
the economic risk of the investment for an indefinite period of time and has
such knowledge and experience in financial and business matters (and
particularly in the business in which the Trust operates) as to be capable of
evaluating the merits and risks of the investment in the STRYPES. Such
Purchaser is an "accredited investor" as defined in Rule 501(a) of Regulation D
under the Securities Act of 1933, as amended (the "Securities Act").
2.3 RESTRICTED SECURITIES. Such Purchaser understands that the STRYPES
are characterized as "restricted securities" under the United States securities
laws inasmuch as they are being acquired from the Trust in a transaction not
involving a public offering and that under such laws and applicable regulations
such STRYPES may be resold without registration under the Securities Act only in
certain circumstances. In this connection, such Purchaser represents that it
understands the resale limitations imposed by the Securities Act and is
generally familiar with the existing resale limitations imposed by Rule 144.
2.4 FURTHER LIMITATIONS ON DISPOSITION. Such Purchaser further agrees not
to make any disposition directly or indirectly of all or any portion of the
STRYPES unless and until:
(a) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is
made in accordance with such registration statement; or
(b) Such Purchaser shall have furnished the Trust with an opinion of
counsel, reasonably satisfactory to the Trust, that such disposition will
not require registration of such STRYPES under the Securities Act.
Notwithstanding the provisions of subsections (a) and (b) above, no such
registration statement or opinion of counsel shall be necessary for a transfer
by such Purchaser to any affiliate of such Purchaser, if the transferee agrees
in writing to be subject to the terms hereof to the same extent as if it were an
original Purchaser hereunder.
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2.5 LEGENDS. It is understood that the certificate evidencing the STRYPES
may bear either or both of the following legends:
(a) "These securities have not been registered under the Securities
Act of 1933, as amended. They may not be sold, offered for sale, pledged or
hypothecated in the absence of a registration statement in effect with
respect to the securities under such Act or an opinion of counsel
reasonably satisfactory to the Trustees of ContiFinancial STRYPES Trust
that such registration is not required."
(b) Any legend required by the laws of any other applicable
jurisdiction.
Each Purchaser and the Trust agree that the legend contained in the
paragraph (a) above shall be removed at a holder's request when it is no longer
necessary to ensure compliance with federal securities laws.
2.6 SPLIT OF STRYPES. Each Purchaser consents to the split of such
Purchaser's STRYPES. Subsequent to the determination of the public offering
price per STRYPES and related underwriting discount for the STRYPES to be sold
to the Underwriters (as defined in the Amended and Restated Trust Agreement of
the Trust dated as of March 26, 1997, by ML IBK Positions, Inc. and Bear,
Xxxxxxx & Co. Inc., as sponsors, and the trustees named therein) but prior to
the sale of the STRYPES to the Underwriters, each STRYPES purchased hereby shall
be split into a greater number of STRYPES so that immediately following such
split the value of each STRYPES held by the Purchasers will equal the aforesaid
public offering price per STRYPES.
2.7 COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and
the same instrument.
2.8 GOVERNING LAW. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York applicable to
agreements and to be performed wholly within such state.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
CONTIFINANCIAL STRYPES TRUST
By __________________________________
Xxxxxx X. Xxxxxxx, as Managing Trustee
ML IBK POSITIONS, INC.
By ___________________________________
Name:
Title:
BEAR, XXXXXXX & CO. INC.
By ___________________________________
Name:
Title:
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