This is a Registered Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a depositary or a
nominee thereof. This security may not be exchanged in whole or in part for a
note registered, and no transfer of this security in whole or in part may be
registered, in the name of any person other than such depositary or a nominee
thereof, except in the limited circumstances described in the Indenture. Unless
this certificate is presented by an authorized representative of the Depository
Trust Company, a New York corporation ("DTC"), to Financial Security Assurance
Holdings Ltd. or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is 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. 1
Cusip No. 31769P308
4,000,000 Senior Quarterly Income
Debt Securities (Senior QUIDS),
$25 principal amount each
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
6.950% Senior Quarterly Income Debt Security due 2098
Financial Security Assurance Holdings Ltd., a New York corporation
(the "Issuer"), for value received, hereby promises to pay to Cede & Co. or
registered assigns, at the office or agency of the Issuer in the Borough of
Manhattan, the City of New York, the principal sum of One Hundred Million
Dollars on November 1, 2098, in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest, quarterly on February 1, May 1,
August 1 and November 1 of each year, commencing February 1, 1999, on said
principal sum at said office or agency, in like coin or currency, at the rate
per annum specified in the title of this Debt Security from the February 1, May
1, August 1 or November 1, as the case may be, next preceding the date of this
Debt Security to which interest has been paid, unless the date hereof is a date
to which interest has been paid, in which case from the date of this Debt
Security, or unless no interest has been paid on these Debt Securities, in which
case from November 13, 1998, until payment of said principal sum has been made
or duly provided for; provided, that payment of interest may be made at the
option of the Issuer by check mailed to the address of the person entitled
thereto as such address shall appear on the security register and provided
further, that if the Issuer shall default in the payment of interest due on such
February 1, May 1, August 1 or November 1, then this Debt Security shall bear
interest from the next preceding February 1, May 1, August 1 or November 1, to
which interest has been paid or, if no interest has been paid on these Debt
Securities, from November 13, 1998. The interest so payable on any February 1,
May 1, August 1 or November 1 will, subject to certain exceptions provided in
the Indenture referred to on the reverse hereof, be paid to the person in whose
name this Debt Security is registered at the close of business on the January
15, April 15, July 15, or October 15, as the case may be, next preceding such
February 1, May 1, August 1, or November 1.
2
Reference is made to the further provisions of this Debt Security
set forth on the reverse hereof. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This Debt Security shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been signed by
the Trustee under the Indenture referred to on the reverse hereof.
3
IN WITNESS WHEREOF, Financial Security Assurance Holdings Ltd. has
caused this instrument to be signed by facsimile by its duly authorized officers
and has caused a facsimile of its corporate seal to be affixed hereunto or
imprinted hereon.
Dated: November 13, 1998
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.
By: _____________________________________
Name:
Title:
By: _____________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
FIRST UNION NATIONAL BANK, as
Trustee
By: _____________________________________
Authorized Officer
4
REVERSE OF DEBT SECURITY
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
6.950% Senior Quarterly Income Debt Security due 2098
This Debt Security is one of a duly authorized issue of debentures,
notes, bonds or other evidences of indebtedness of the Issuer (hereinafter
called the "Debt Securities") of the series hereinafter specified, all issued or
to be issued under and pursuant to an indenture dated as of September 15, 1997
as supplemented by the First Supplemental Indenture thereto dated as of November
13, 1998 (herein called the "Indenture"), duly executed and delivered by the
Issuer to First Union National Bank, as Trustee (herein called the "Trustee"),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, the Issuer and the Holders of the Debt
Securities. The Debt Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may be
subject to different redemption provisions (if any) may be subject to different
sinking, purchase or analogous funds (if any) and may otherwise vary as in the
Indenture provided. This Debt Security is one of a series designated as the
6.950% Senior Quarterly Income Debt Securities due 2098 of the Issuer, limited
in aggregate principal amount to $100,000,000.
In case an Event of Default, as defined in the Indenture, with
respect to the 6.950% Senior Quarterly Income Debt Securities due 2098 shall
have occurred and be continuing, the principal hereof may be declared, and upon
such declaration shall become, due and payable, in the manner, with the effect
and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, (a) without the consent of the Holders, to execute certain supplemental
indentures, and (b) with the consent of the Holders of more than 50% in
aggregate principal amount of the Debt Securities at the time Outstanding (as
defined in the Indenture) of all series to be affected (voting as one class),
evidenced as in the Indenture provided, to execute supplemental indentures
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or modifying in any
manner the rights of the Holders of the Debt Securities of each such series;
provided, however, that no such supplemental indenture shall (i) extend the
final maturity of any Debt Security, or reduce the principal amount thereof or
any premium thereon, or reduce the rate or extend the time of payment of any
interest thereon, or impair or affect the rights of any Holder to institute suit
for the payment thereof, without the consent of the Holder of each Debt Security
so affected or (ii) reduce the aforesaid percentage of Debt Securities, the
consent of the Holders of which is required for any such supplemental indenture,
without the consent of the Holder of each Debt Security affected. It is also
provided in the Indenture that, with respect to certain defaults or Events of
Default regarding the Debt Securities of any series, prior to any declaration
accelerating the maturity of such Debt Securities, the Holders of a majority in
aggregate principal amount Outstanding of the Debt Securities of such series
(or, in the case of certain defaults or Events of Default, all or certain series
of the Debt Securities) may on behalf of the Holders of all the Debt Securities
of such series (or all or certain series of the Debt Securities, as the case may
be) waive any such past default or
5
Event of Default and its consequences. The preceding sentence shall not,
however, apply to a default in the payment of the principal of or premium, if
any, or interest on any of the Debt Securities. Any such consent or waiver by
the Holder of this Debt Security (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such Holder and upon all future Holders and
owners of this Debt Security and any Debt Securities which may be issued in
exchange or substitution herefor, irrespective of whether or not any notation
thereof is made upon this Debt Security or such other Debt Securities.
No reference herein to the Indenture and no provision of this Debt
Security or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and any premium and
interest on this Debt Security in the manner, at the respective times, at the
rate and in the coin or currency herein prescribed.
The Debt Securities are issuable in registered form without coupons
in denominations of $25 and any multiple of $25 at the office or agency of the
Issuer in the Borough of Manhattan, The City of New York, and in the manner and
subject to the limitations provided in the Indenture, but without the payment of
any service charge Debt Securities may be exchanged for a like aggregate
principal amount of Debt Securities of other authorized denominations.
The Debt Securities may be redeemed at the option of the Issuer
without premium or penalty, as a whole, or from time to time in part, on any
date on or after November 1, 2003 and prior to maturity, upon mailing a notice
of such redemption not less than 20 nor more than 60 days prior to the date
fixed for redemption to the Holders of Debt Securities at their last registered
addresses, all as further provided in the Indenture, at 100% of the principal
amount thereof.
If a Tax Event (as defined below) has occurred and is continuing,
the Debt Securities may be redeemed at the option of the Issuer without premium
or penalty, as a whole but not in part, on any date within 90 days following the
occurrence of such Tax Event, upon a mailing of a notice of such redemption not
less than 20 nor more than 60 days prior to the date fixed for redemption to the
Holders of Debt Securities at their last registered addresses, all as further
provided in the Indenture, at 100% of the principal amount thereof.
"Tax Event" means that the Issuer shall have received an Opinion of
Counsel (which, for this purpose, may be counsel to the Issuer or an affiliate
but not an employee thereof) experienced in such matters to the effect that, as
a result of any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein affecting taxation,
or as a result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such pronouncement or decision is announced on or after the date of
original issuance of the Debt Securities, there is more than an insubstantial
risk that interest payable by the Issuer on the Debt Securities is not, or will
not be, deductible by the Issuer for United States Federal income tax purposes
and the Issuer shall have delivered to the Trustee an Officers' Certificate
stating that, based on such opinion, the
6
Issuer is entitled to redeem the Debt Securities.
Upon due presentment for registration of transfer of this Debt
Security at the office or agency of the Issuer in the Borough of Manhattan, The
City of New York, a new Debt Security or Debt Securities of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange therefor, subject to the limitations provided in the
Indenture, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Issuer, the Trustee and any authorized agent of the Issuer or
the Trustee may deem and treat the registered Holder hereof as the absolute
owner of this Debt Security (whether or not this Debt Security shall be overdue
and notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and
premium, if any, and, subject to the provisions on the face hereof, interest
hereon, and for all other purposes, and neither the Issuer nor the Trustee nor
any authorized agent of the Issuer or the Trustee shall be affected by any
notice to the contrary.
No recourse under or upon any obligation, covenant or agreement of
the Issuer in the Indenture or any indenture supplemental thereto or in any Debt
Security, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as
such, of the Issuer or of any successor corporation, either directly or through
the Issuer or any successor corporation, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise, all such liability being expressly waived
and released by the acceptance hereof and as part of the consideration for the
issue hereof.
Terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.