Exhibit 1
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-1 8,000,000 Debentures
CUSIP No. 000000000
Ambac Financial Group, Inc.
7% Debentures Due October 17, 2051
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 October 17, 2051,
and to pay interest thereon from October 17, 2001 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 December 31, 2001, at the rate of 7% 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 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 is registered at the close of business on
a Special Record Date for the payment of such Defaulted Interest to be
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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 New York, New York, 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 August 24, 2001
(herein called, together with all indentures supplemental thereto, the
"Indenture") between the Company and The Chase Manhattan 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 Pricing Committee
of the Board of Directors of the Company adopted on October 10, 2001 (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 October 10, 2001 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,
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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
October 17, 2006. On or after October 17, 2006, 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.
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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.
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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: Xxxxxx X. Xxxxx
Title: First Vice President, Title: Managing Director and
Secretary and Assistant Treasurer
General Counsel
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
Dated: October 17, 2001 THE CHASE MANHATTAN BANK,
as Trustee
By:_________________________
Authorized Signatory
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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 Under Uniform Gifts to Minors
right of survivorship Act______________________
and not as tenants in common (State)
Additional abbreviations may also be used though not in the above list.
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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
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PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
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the Debentures evidenced by the within Certificate and all rights thereunder,
hereby irrevocably constituting and appointing
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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.
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