Exhibit No. 5.3
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY (AS
DEFINED IN THE INDENTURE) OR A NOMINEE THEREOF. UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS
GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY, OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
(AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. R-18,000,000 Debentures
CUSIP No. 000000000
AMBAC FINANCIAL GROUP, INC.
7.08% Debentures Due March 31, 2098
Principal Amount Per Debenture: $25.00
Ambac Financial Group, Inc., a Delaware corporation (hereinafter
called the "Company", which term includes any successor corporation under
the Indenture referred to below), for value received, hereby promises to
pay to Cede & Co., or registered assigns, the Principal Amount of each
Debenture evidenced hereby (Two Hundred Million Dollars ($200,000,000) in
the aggregate) on March 31, 2098, and to pay interest thereon from April 6,
1998 or from the most recent date to which interest has been paid or duly
provided for, quarterly on March 31, June 30, September 30 and December 31
in each year (each, an "Interest Payment Date"), commencing June 30, 1998,
at the rate of 7.08% per annum, until the Principal Amount of each
Debenture evidenced hereby is paid or duly made available for payment.
Interest on the Debentures shall be calculated on the basis of a 360-day
year consisting of twelve 30-day months. The interest so payable and
punctually paid or duly provided for on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this
Certificate (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall
be the March 15, June 15, September 15 or December 15 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest which is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date shall forthwith cease to be
payable to the registered Holder hereof on the relevant Regular Record Date
by virtue of having been such Holder, and may be paid to the Person in
whose name this Certificate (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest to be fixed by the Company, notice
whereof shall be given to each Person in whose name a Certificate
evidencing Debentures (defined below) is registered not less than 10 days
prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Debentures may be listed, and upon such notice as may
be required by such exchange, all as more fully provided in such Indenture.
Payment of the principal of and the interest on the Debentures
evidenced hereby will be made at the office or agency of the Company
maintained for that purpose in Newark, New Jersey, in such coin or currency
of the United States of America as at the time of payment is legal tender
for payment of public and private debts; provided, however, that, at the
option of the Company, interest may be paid by check mailed to the address
of the Person entitled thereto as such address shall appear in the Security
Register; provided, further, that payment to DTC or any successor
depositary may be made by wire transfer to the account designated by DTC or
such successor depositary in writing.
This Certificate evidences part of a duly authorized issue of
unsecured and unsubordinated indebtedness of the Company (the "Securities")
issued and to be issued in one or more series under an Indenture dated as
of April 1, 1998 (herein called, together with all indentures supplemental
thereto, the "Indenture") between the Company and First Union National
Bank, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Certificate evidences Securities of the
series designated on the face hereof (each, a "Debenture"), limited
(subject to exceptions provided in the Indenture) to the aggregate
principal amount specified in the resolutions of the Special Securities
Committee of the Board of Directors of the Company adopted on April 1, 1998
(the "Resolutions") establishing the terms of the Debentures pursuant to
the Indenture.
Upon the occurrence of a Tax Event (as defined below), the Company
will have the right to shorten the maturity of the Debentures to the
minimum extent required, in the opinion of nationally recognized
independent tax counsel experienced in such matters ("Tax Counsel"), such
that, after the shortening of the maturity, interest paid on the Debentures
will be deductible for United States federal income tax purposes or, if
such counsel is unable to opine definitively as to such a minimum period,
the minimum extent so required as determined in good faith by the Board of
Directors of the Company, after receipt of an opinion of such counsel
regarding the applicable legal standards.
In the event that the Company elects to exercise its right to shorten
the maturity of the Debentures upon the occurrence of a Tax Event, the
Company will mail a notice of the shortened maturity to each Person in
whose name a Certificate evidencing Debentures is registered (as the owner
of the Debentures evidenced thereby) by first-class mail not more than 60
days after the occurrence of such Tax Event, stating the new maturity date
of the Debentures. Such notice shall be effective immediately upon mailing.
"Tax Event" means the receipt by the Company of an opinion of Tax
Counsel to the effect that, as a result of the occurrence of any of the
following events on or after April 1, 1998, there is more than an
insubstantial increase in the risk that interest paid by the Company on the
Debentures is not, or will not be, deductible, in whole or in part, by the
Company for United States federal income tax purposes: (i) any amendment
to, clarification of, or change (including any announced prospective
amendment, clarification or change) in any law, or any regulations of the
United States, (ii) any judicial decision, official administrative
pronouncement, ruling, regulatory procedure, notice or announcement
(including any notice or announcement of intent to adopt or promulgate any
ruling, regulatory procedure or regulation, and including the issuance of
proposed regulations) (each an "Administrative or Judicial Action"), or
(iii) any amendment to, clarification of, or change in any official
position with respect to, or any interpretation of, an Administrative or
Judicial Action or law or regulation of the United States that differs from
the position or interpretation that was previously generally accepted.
Except as set forth below, the Debentures are not redeemable prior to
March 31, 2003. On or after March 31, 2003, the Company, at its option, may
redeem the Debentures, in whole at any time or in part from time to time,
at 100% of their Principal Amount, plus accrued interest to the date of
redemption.
If a Tax Event occurs and in the opinion of Tax Counsel, there would,
notwithstanding the shortening of the maturity of the Debentures, be more
than an insubstantial risk that interest paid by the Company on the
Debentures is not, or will not be, deductible, in whole or in part, by the
Company for United States federal income tax purposes, the Company will
have the right, within 90 days following the occurrence of such Tax Event,
to redeem the Debentures in whole (but not in part) at a redemption price
equal to 100% of the Principal Amount of such Debentures, plus accrued
interest thereon to the date of redemption.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Person in whose name a
Certificate evidencing Debentures to be redeemed is registered at its
registered address. Unless the Company defaults in payment of the
redemption price, on and after the redemption date interest will cease to
accrue on such Debentures called for redemption.
Except as provided above, the Debentures are not redeemable by the
Company prior to maturity and are not subject to any sinking fund.
If an Event of Default with respect to the Debentures shall occur and
be continuing, the Principal Amount of the Debentures may be declared due
and payable in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders of the Securities of each series
issued under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of not less than a majority in aggregate
principal amount of the Securities at the time Outstanding of each series
affected thereby. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the
Securities of any series at the time Outstanding, on behalf of the Holders
of all Securities of such series, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder
of this Certificate shall be conclusive and binding upon such Holder and
upon all future Holders of this Certificate and of any Debentures evidenced
by a Certificate issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Certificate.
No reference herein to the Indenture and no provision of this
Certificate or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on the Debentures evidenced by this Certificate, at the times,
place and rate, and in the coin or currency, herein and in the Indenture
prescribed.
As provided in the Indenture and subject to certain limitations set
forth therein and in this Certificate, the transfer of the Debentures
evidenced by this Certificate may be registered on the Security Register
upon surrender of this Certificate for registration of transfer at the
office or agency of the Company maintained for the purpose in any place
where the principal of and interest on the Debentures are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or by his attorney duly authorized in writing, and
thereupon one or more new Certificates evidencing Debentures of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or
transferees.
The Debentures are issuable only in registered form without coupons
in the denominations specified in the Resolutions establishing the terms of
the Debentures, all as more fully provided in the Indenture and such
Resolutions. As provided in the Indenture and in such Resolutions, and
subject to certain limitations set forth in the Indenture, such Resolutions
and in this Certificate, this Certificate is exchangeable for a like
aggregate principal amount of Debentures of this series in different
authorized denominations, as requested by the Holders surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith,
other than in certain cases provided in the Indenture.
Prior to due presentment of this Certificate for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Certificate is registered
as the owner of the Debentures evidenced hereby for all purposes, whether
or not such Debentures be overdue, and neither the Company, the Trustee nor
any such agent shall be affected by notice to the contrary.
The Indenture contains provisions whereby (i) the Company may be
discharged from its obligations with respect to the Debentures (subject to
certain exceptions) or (ii) the Company may be released from its obligation
under specified covenants and agreements in the Indenture, in each case if
the Company irrevocably deposits with the Trustee money or U.S. Government
Obligations sufficient to pay and discharge the entire indebtedness on all
Debentures of this series, and satisfies certain other conditions, all as
more fully provided in the Indenture.
This Certificate shall be governed by and construed in accordance
with the laws of the State of New York.
All terms used in this Certificate which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee under the Indenture by the manual signature of
one of its authorized signatories, this Certificate shall not be entitled
to any benefits under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
[SEAL] AMBAC FINANCIAL GROUP, INC.
Attest: ________________________ By: __________________________________
Name: Xxxx X. Xxxx Name: Xxxxx X. Xxxxxx
Title: Vice President, Counsel Title: Executive Vice President, Chief
and Assistant Secretary Financial Officer and Treasurer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
Dated: April 6, 1998 FIRST UNION NATIONAL BANK,
as Trustee
By: _________________________________
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT--______ Custodian ______
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right Under Uniform Gifts to Minors
of survivorship and not as Act _______________________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_____________________________
___________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
___________________________________________________________________________
the Debentures evidenced by the within Certificate and all rights
thereunder, hereby irrevocably constituting and appointing
___________________________________________________________________________
to transfer said Debentures on the books of the Company with full power of
substitution in the premises.
Dated:_____________________________
Notice: The signature to this assignment must correspond with the name as
it appears upon the face of the within Certificate in every particular,
without alteration or enlargement or any change whatever.
