EX-4.1



 Exhibit 4.1 
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 THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS. 
 WARRANT 

to purchase 
 9,942,458

 Shares of Common Stock 
 dated as of May 6, 2013 
 MBIA INC. 

a Connecticut Corporation 

Issue Date: May 6, 2013 
  

	1.	Definitions. Unless the context otherwise requires, when used herein the following terms shall have the meanings indicated. 


“Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control
with, such other person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) when used with respect to any Person, means the
possession, directly or indirectly, of the power to cause the direction of management or policies of such person, whether through the ownership of voting securities by contract or otherwise. 

“Applicable Price” means the greater of the Market Price per share of outstanding Common Stock on (i) the date on which the
Company issues or sells any Common Stock other than Excluded Stock or (ii) the first date of the announcement of such issuance or sale. 
 “Appraisal Procedure” means a procedure whereby two independent appraisers, one chosen by the Company and one by the Warrantholder (or if there is more than one Warrantholder, a majority in
interest of Warrantholders), shall mutually agree upon the determinations then the subject of appraisal. Each party shall deliver a notice to the other appointing its appraiser within fifteen (15) days after the Appraisal Procedure is invoked.
If within thirty (30) days after appointment of the two appraisers they are unable to agree upon the amount in question, a third independent appraiser shall be chosen within ten (10) days thereafter by the mutual consent of such first two
appraisers or, if such first two appraisers fail to agree upon the appointment of a third appraiser, such appointment shall be made by the American Arbitration Association, or any organization successor thereto, from a panel of arbitrators having
experience in the appraisal of the subject matter to be appraised. The decision of the third appraiser so appointed and chosen shall be given within thirty (30) days after the selection of such third appraiser. If three appraisers shall be
appointed and the determination of one appraiser is disparate from the middle determination by more than twice the amount by which the other determination is disparate from the middle determination, then the determination of such appraiser shall be
excluded, the remaining two determinations shall be averaged and such average shall be binding and conclusive on the Company and the Warrantholder; otherwise, the average of all three determinations shall be binding and conclusive on the Company and
the Warrantholder. The costs of conducting any 








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Appraisal Procedure shall be borne by the Warrantholder requesting such Appraisal Procedure, except (A) the fees and expenses of the appraiser appointed by the Company and any other costs
incurred by the Company shall be borne by the Company and (B) if such Appraisal Procedure shall result in a determination that is disparate by 5% or more from the Company’s initial determination, all costs of conducting such Appraisal
Procedure shall be borne by the Company. 
 “Beneficially Own,” “Beneficial Owner” and
“Beneficial Ownership” are defined in Rules 13d-3 and 13d-5 of the Exchange Act. 
 “Board” means the
Board of Directors of the Company. 
 “Business Combination” means a merger, consolidation, statutory share exchange or
similar transaction that requires adoption by the Company’s stockholders. 
 “Business Day” means any day except
Saturday, Sunday and any day that shall be a legal holiday or a day on which banking institutions in the State of New York generally are authorized or required by law or other governmental actions to close. 

“Capital Stock” means (A) with respect to any Person that is a corporation or company, any and all shares, interests,
participations or other equivalents (however designated) of capital or capital stock of such Person and (B) with respect to any Person that is not a corporation or company, any and all partnership or other equity interests of such Person.

 “Change of Control” means, with respect to the Company, the occurrence of any one of the following events: 

 

	 	(A)	the Incumbent Directors cease for any reason to constitute at least a majority of the Board; provided, that any person becoming a director subsequent to the date of the
Investment Agreement whose election or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the relevant party in which
such person is named as a nominee for director, without written objection to such nomination) shall be an Incumbent Director (except that no individuals who were not directors at the time any agreement or understanding with respect to any Business
Combination or contested election is reached shall be treated as Incumbent Directors for the purposes of clause (C) below with respect to such Business Combination or this paragraph in the case of a contested election);


  

	 	(B)	any Person (other than the Investor and its Affiliates) is or becomes a Beneficial Owner, directly or indirectly, of 50% of the aggregate voting power of the Voting Securities;
provided, however, that the event described in this clause (B) will not be deemed a Change of Control by virtue of any holdings or acquisitions: (i) by the Company or any of its Subsidiaries, (ii) by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries; provided, that such holdings or acquisitions by any such plan (other than any plan maintained under Section 401(k) of the Internal Revenue Code of
1986, as amended) do not exceed 50% of the then outstanding Voting Securities, (iii) by any underwriter temporarily holding securities pursuant to an offering of such securities or (iv) pursuant to a Non-Qualifying Transaction;



  
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	 	(C)	a Business Combination, to the extent it is not a Non-Qualifying Transaction; 

  

	 	(D)	the consummation of a Transfer; 

  

	 	(C)	a plan of liquidation or dissolution of the Company; 

  

	 	(D)	a De-Listing; or 

  

	 	(E)	a sale of all or substantially all of the Company’s assets. 

 “Common Stock” means the Company’s common stock, par value $1.00 per share, and any Capital Stock for or into which such Common Stock hereafter is exchanged, converted, reclassified or
recapitalized by the Company or pursuant to an agreement or Business Combination to which the Company is a party. 

“Company” means MBIA Inc., a Connecticut corporation. 
 “De-Listing” means the voluntary de-listing of the Common Stock from the New York Stock Exchange or the NASDAQ Stock Market other than in connection with a listing of the Common Stock on a national
securities exchange. 
 “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute,
and the rules and regulations promulgated thereunder. 
 “Excluded Stock” means (A) shares of Common Stock issued by
the Company as a stock dividend payable in shares of Common Stock, or upon any subdivision or split-up of the outstanding shares of Capital Stock in each case which is subject to Section 13(B), or upon conversion of shares of Capital Stock (but
not the issuance of such Capital Stock which will be subject to the provisions of Section 13(A)) and (B) shares of Common Stock to be issued to employees, consultants and advisors of the Company pursuant to options granted prior to the
date of issuance of this Warrant and pursuant to options granted after the date of issuance of this Warrant if the exercise price per share of Common Stock on the date of such grant equals or exceeds the Market Price of a share of Common Stock on
the date of such grant. 
 “Exercise Price” has the meaning given to it in Section 2. 

“Expiration Time” has the meaning given to it in Section 3. 

“Governmental Entities” means any governmental or regulatory federal, state, local and foreign authorities, agencies, courts,
commissions or other entities, including stock exchanges and other self-regulatory organizations. 
 “Group” means a group
as contemplated by Section 13(d)(3) of the Exchange Act. 
 “Incumbent Directors” means individuals who on the date
of the Investment Agreement constitute the Board and any other individuals deemed to be Incumbent Directors as set forth in clause (A) of the definition of “Change of Control” above. 

“Investment Agreement” means the Investment Agreement, of even date herewith, between the Company and the Investor, including all
schedules and exhibits thereto. 
 “Investor” means Blue Ridge Investments, L.L.C. 

  
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 “Market Price” means, with respect to a particular security, on any given day,
the last reported sale price regular way or, in case no such reported sale takes place on such day, the average of the last closing bid and ask prices regular way, in either case on the principal national securities exchange on which the applicable
securities are listed or admitted to trading, or if not listed or admitted to trading on any national securities exchange, (A) the closing sale price for such day reported by the Nasdaq Stock Market if such security is traded over-the-counter
and quoted in the Nasdaq Stock Market, or (B) if such security is so traded, but not so quoted, the average of the closing reported bid and ask prices of such security as reported by the Nasdaq Stock Market or any comparable system, or
(C) if such security is not listed on the Nasdaq Stock Market or any comparable system, the average of the closing bid and ask prices as furnished by two members of the National Association of Securities Dealers, Inc. selected from time to time
by the Company for that purpose. If such security is not listed and traded in a manner that the quotations referred to above are available for the period required hereunder, the Market Price per share of Common Stock shall be deemed to be the fair
value per share of such security as determined in good faith by the Board of Directors of the Company. 
 “National” means
National Public Finance Guarantee Corporation. 
 “Non-Qualifying Transaction” means any Business Combination that
satisfies all of the following criteria: (A) more than 50% of the total voting power of the surviving corporation resulting from a Business Combination, or, if applicable, the ultimate parent corporation that directly or indirectly has
beneficial ownership of 100% of the voting securities eligible to elect directors of the surviving corporation, is represented by Voting Securities that were outstanding immediately before such Business Combination (or, if applicable, is represented
by shares into which such Voting Securities were converted pursuant to such Business Combination) and (B) at least a majority of the members of the board of directors of the parent corporation (or, if there is no parent corporation, the
surviving corporation) following the consummation of the Business Combination were Incumbent Directors at the time the Company’s Board approved the execution of the initial agreement providing for such Business Combination. 

“Person” has the meaning given to it in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of
the Exchange Act. 
 “Preliminary Control Event” means, with respect to the Company, the earlier of (i) the execution
of definitive documentation for a transaction that, if consummated, would result in a Change of Control, (ii) the recommendation that stockholders tender in response to a tender or exchange offer, that, if consummated, would result in a Change
of Control upon consummation, (iii) the filing of a registration statement with the Securities and Exchange Commission in respect of a Transfer, (iv) the making of a public disclosure of a decision by the Company to consummate a Transfer,
(v) the public announcement by the Company that it intends to effect a De-Listing, and (v) the actual consummation of a Change of Control. 
 “Securities” means Common Stock, the Warrants and any other securities (including shares of Common Stock into which any of the foregoing are converted, exchanged or exercised in accordance with the
terms hereof). 
 “Securities Act” means the Securities Act of 1933, as amended, or any successor statute, and the rules
and regulations promulgated thereunder. 
 “Shares” is defined in Section 2. 

  
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 “Transfer” means the transfer, distribution (by dividend, exchange or any other
means) or disposition, in one transaction or a series of related transactions, to the Company’s stockholders or to any Person or Group of 50% or more of the Capital Stock or consolidated assets of (i) National or (ii) a Subsidiary or
Subsidiaries of the Company that own, directly or indirectly, 50% or more of the consolidated assets of the Company. 

“Subsidiary” of a Person means those corporations, banks, savings banks, associations and other Persons of which such Person owns
or controls 51% or more of the outstanding equity securities either directly or through an unbroken chain of entities, as to each of which 51% or more of the outstanding equity securities is owned directly or indirectly by its parent; provided,
however, that there shall not be included any such entity to the extent that the equity securities of such entity were acquired in satisfaction of a debt previously contracted in good faith or are owned or controlled in a bona fide
fiduciary capacity. 
 “Voting Securities” means the Company’s then outstanding securities eligible to vote for
the election of directors. 
 “Warburg Warrants” means the warrants issued to Warburg Pincus Private Equity X, LP
(“Warburg”) and its affiliates pursuant to (i) that certain Warrant Agreement, dated as of January 30, 2008, between the Company and Warburg, (ii) that certain B Warrant Agreement, dated as of January 30, 2008,
between the Company and Warburg, (iii) that certain B2 Warrant Agreement, dated as of January 30, 2008, between the Company and Warburg, and (iv) that certain B2 Warrant Agreement, dated as of January 30, 2008, between the
Company and Warburg Pincus X Partners, L.P. 
 “Warrantholder” has the meaning given to it in Section 2. 

“Warrants” means this Warrant, issued to the Investor pursuant to the Investment Agreement. 

 

	2.	Number of Shares; Exercise Price. This certifies that, for value received, Investor, its affiliates or its registered assigns (the “Warrantholder”) is
entitled, upon the terms and subject to the conditions hereinafter set forth, to acquire from the Company, in whole or in part, up to an aggregate of 9,942,458 fully paid and nonassessable shares of Common Stock, par value $1.00 per share (the
“Shares”), of the Company, at a purchase price of $9.59 per Share (the “Exercise Price”). The number of Shares and the Exercise Price are subject to adjustment as provided herein, and all references to
“Shares,” “Common Stock” and “Exercise Price” herein shall be deemed to include any such adjustment or series of adjustments. 


 

	3.	 Exercise of Warrant; Term. To the extent permitted by applicable laws and regulations, including but not limited to the insurance laws of the State of New
York, the right to purchase the Shares represented by this Warrant are exercisable, in whole or in part by the Warrantholder, at any time or from time to time after 9:00 a.m., New York City time, on the date hereof, but in no event later than 11:59
p.m., New York City time, on the fifth anniversary of the date of issuance of the Warrant (the “Expiration Time”), by (A) the surrender of this Warrant and delivery of the Notice of Exercise annexed hereto, duly completed and
executed on behalf of the Warrantholder, to the Company via e-mail or to the office of the Company in Armonk, New York (or such other office or agency of the Company in the United States as it may designate by notice in writing (including by e-mail)
to the Warrantholder at the address of the Warrantholder appearing on the books of the Company), and (B) payment of the Exercise Price for the Shares thereby purchased by having the Company withhold shares of Common Stock issuable upon exercise
of the Warrant equal in value to the aggregate Exercise Price as to which this Warrant is so exercised based on the Market Price 



  
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of the Common Stock on the trading day prior to the date on which the last of this Warrant and the Notice of Exercise is delivered to the Company. If the Warrantholder does not exercise this
Warrant in its entirety, the Warrantholder will be entitled to receive from the Company within a reasonable time, and in any event not exceeding three (3) Business Days, a new warrant in substantially identical form for the purchase of that
number of Shares equal to the difference between the number of Shares subject to this Warrant and the number of Shares as to which this Warrant is so exercised. 


 

	4.	Issuance of Shares; Authorization; Listing. Certificates for Shares (or book entry shares) issued upon exercise of this Warrant will be issued in such name or names as the
Warrantholder may designate and will be delivered to such named Person or Persons within a reasonable time, not to exceed three (3) Business Days after the date on which this Warrant has been duly exercised in accordance with the terms of this
Warrant, subject to prior or simultaneous surrender of this Warrant at the Company’s office designated in accordance with Section 3. The Company hereby represents and warrants that any Shares issued upon the exercise of this Warrant in
accordance with the provisions of Section 3 will, upon such exercise, be duly and validly authorized and issued, fully paid and nonassessable and free from all taxes, liens and charges (other than liens or charges created by the Warrantholder
or taxes in respect of any transfer occurring contemporaneously therewith). The Company agrees that the Shares so issued will be deemed to have been issued to the Warrantholder as of the close of business on the date on which the last of this
Warrant and payment of the Exercise Price is delivered to the Company in accordance with the terms of this Warrant, notwithstanding that the stock transfer books of the Company may then be closed or certificates representing such Shares may not be
actually delivered on such date. The Company will at all times reserve and keep available, out of its authorized but unissued Common Stock, solely for the purpose of providing for the exercise of this Warrant, the aggregate number of shares of
Common Stock issuable upon exercise of this Warrant; provided that nothing in this Section 4 shall preclude the Company from satisfying its obligations in respect of the exercise of this Warrant by delivery of shares of Common Stock that are
held in the treasury of the Company. The Company will (i) procure, at its sole expense, the listing of the Shares and other securities issuable upon exercise of this Warrant, including but not limited to those Shares issuable pursuant to
Section 13 of this Warrant, subject to issuance or notice of issuance on all stock exchanges on which the Common Stock are then listed or traded and (ii) maintain the listing of such Shares after issuance for so long as the Common Stock is
listed on such stock exchanges. The Company will use commercially reasonable efforts to ensure that the Shares may be issued without violation of any applicable law or regulation or of any requirement of any securities exchange on which the Shares
are listed or traded. 

  

	5.	No Fractional Shares or Scrip. No fractional Shares or scrip representing fractional Shares shall be issued upon any exercise of this Warrant. In lieu of any fractional
Share to which the Warrantholder would otherwise be entitled, the Warrantholder shall be entitled to receive a cash payment equal to the Market Price of the Common Stock less the Exercise Price for such fractional share. 


 

	6.	No Rights as Shareholders; Transfer Books. This Warrant does not entitle the Warrantholder to any voting rights or other rights as a shareholder of the Company prior to
the date of exercise hereof. The Company will at no time close its transfer books against transfer of this Warrant in any manner which interferes with the timely exercise of this Warrant. 


 

	7.	Charges, Taxes and Expenses. Issuance of certificates for Shares to the Warrantholder upon the exercise of this Warrant shall be made without charge to the Warrantholder
for any issue or transfer tax or other incidental expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company. 


  
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	8.	Transfer/Assignment. 

  

	 	(A)	Without obtaining the consent of the Company to assign or transfer this Warrant, from and after the earlier of (x) the six-month anniversary of the issuance of this Warrant
and (y) the consummation by the Company of a registered public offering of equity or equity linked Securities of the Company (other than Excluded Stock), this Warrant and all rights hereunder shall be transferable, in whole or in part, upon the
books of the Company by the registered holder hereof in person or by duly authorized attorney, and a new warrant shall be made and delivered by the Company, of the same tenor and date as this Warrant but registered in the name of the transferee,
upon surrender of this Warrant, duly endorsed, to the office or agency of the Company described in Section 2. All expenses (other than stock transfer taxes, if any) and other charges payable in connection with the preparation, execution and
delivery of the new warrants pursuant to this Section 8 shall be paid by the Company. 

  

	 	(B)	Notwithstanding anything herein to the contrary, nothing shall prevent any hedging transactions by the Warrantholder or its transferees.  


 

	9.	Exchange and Registry of Warrant. This Warrant is exchangeable, upon the surrender hereof by the Warrantholder to the Company, for a new warrant or warrants of like tenor
and representing the right to purchase the same aggregate number of Shares. The Company shall maintain a registry showing the name and address of the Warrantholder as the registered holder of this Warrant. This Warrant may be surrendered for
exchange or exercise, in accordance with its terms, at the office of the Company, and the Company shall be entitled to rely in all respects, prior to written notice to the contrary, upon such registry. 


 

	10.	Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and in the case of any such loss, theft or destruction, upon receipt of an indemnity or security reasonably satisfactory to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the
Company shall make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same aggregate number of Shares as provided for in such lost, stolen, destroyed or
mutilated Warrant. 

  

	11.	Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a
Business Day, then such action may be taken or such right may be exercised on the next succeeding day that is a Business Day. 

  

	12.	 Rule 144 Information. The Company covenants that it will use its commercially reasonable efforts to timely file all reports and other documents required
to be filed by it under the Securities Act and the Exchange Act and the rules and regulations promulgated by the U.S. Securities and Exchange Commission thereunder (or, if the Company is not required to file such reports, it will, upon the request
of any Warrantholder, make publicly available such information as necessary to permit sales pursuant to Rule 144), and it will use commercially reasonable efforts to take such further action as any Warrantholder may reasonably request, all to the
extent required from time to time to enable such holder to sell the Warrants without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such




  
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Rule may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the Securities and Exchange Commission. Upon the written request of any Warrantholder, the
Company will deliver to such Warrantholder a written statement that it has complied with such requirements. 

  

	13.	Adjustments and Other Rights. The Exercise Price and the number of Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as
follows; provided, that no single event shall be subject to adjustment under more than one subsection of this Section 13 so as to result in duplication: 


 

	 	(A)	Common Stock Issued at Less than the Applicable Price. If the Company issues or sells any Common Stock other than Excluded Stock for consideration per share less than 85%
of the Applicable Price, then the Exercise Price in effect immediately prior to each such issuance or sale will immediately (except as provided below) be reduced to the price determined by multiplying the Exercise Price in effect immediately prior
to such issuance or sale by a fraction, (x) the numerator of which shall be (1) the number of shares of Common Stock outstanding immediately prior to such issuance or sale plus (2) the number of shares of Common Stock which the
aggregate consideration received by the Company for the total number of such additional shares of Common Stock so issued or sold would purchase at the Applicable Price, and (y) the denominator of which shall be the number of shares of Common
Stock outstanding immediately after such issuance or sale. In such event, the number of shares of Common Stock issuable upon the exercise of this Warrant shall be increased to the number obtained by dividing (x) the product of (1) the
number of Shares issuable upon the exercise of this Warrant before such adjustment and (2) the Exercise Price in effect immediately prior to the issuance or sale giving rise to this adjustment, by (y) the new Exercise Price determined in
accordance with the immediately preceding sentence. For the avoidance of doubt, no adjustment of the Exercise Price or the number of Shares issuable upon exercise of this Warrant shall be made pursuant to this Section 13(A) in connection with
any change in the number of shares of Common Stock deliverable upon exercise of any Warburg Warrant that results from the anti-dilution provisions of such Warburg Warrant. For the purposes of any adjustment of the Exercise Price and the number of
Shares issuable upon exercise of this Warrant pursuant to this Section 13(A), the following provisions shall be applicable, provided, however, no increase in the Exercise Price or reduction in the number of Shares issuable upon
exercise of this Warrant shall be made pursuant to subclauses (i) or (ii) of this Section 13(A): 

  

	 	(i)	In the case of the issuance or sale of Common Stock for cash, the amount of the consideration received by the Company shall be deemed to be the amount of the gross cash proceeds
received by the Company for such Common Stock before deducting therefrom any discounts or commissions allowed, paid or incurred by the Company for any underwriting or otherwise in connection with the issuance and sale thereof.


  

	 	(ii)	 In the case of the issuance or sale of Common Stock (otherwise than upon the conversion of shares of Capital Stock or other securities of the Company) for a
consideration in whole or in part other than cash, including securities acquired in exchange therefor (other than securities by their terms so exchangeable), the consideration other than cash shall be deemed to be the fair value thereof as
determined by the Board, before deducting therefrom any discounts or commissions allowed, paid or incurred by the Company for any underwriting or 



  
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otherwise in connection with the issuance and sale thereof, provided, however, that such per share fair value as determined by the Board shall not exceed the Applicable Price.


  

	 	(iii)	In the case of the issuance of (1) options, warrants or other rights to purchase or acquire Common Stock (whether or not at the time exercisable) or (2) securities by
their terms convertible into or exchangeable for Common Stock (whether or not at the time so convertible or exchangeable) or options, warrants or rights to purchase such convertible or exchangeable securities (whether or not at the time
exercisable): 

  

	 	(1)	The aggregate maximum number of shares of Common Stock deliverable upon exercise of such options, warrants or other rights to purchase or acquire Common Stock shall be deemed to
have been issued at the time such options, warrants or rights are issued and for a consideration equal to the consideration (determined in the manner provided in Section 13(A)(i) and (ii)), if any, received by the Company upon the issuance or
sale of such options, warrants or rights plus the minimum purchase price provided in such options, warrants or rights for the Common Stock covered thereby. 


 

	 	(2)	The aggregate maximum number of shares of Common Stock deliverable upon conversion of or in exchange for any such convertible or exchangeable securities, or upon the exercise of
options, warrants or other rights to purchase or acquire such convertible or exchangeable securities and the subsequent conversion or exchange thereof, shall be deemed to have been issued at the time such securities were issued or such options,
warrants or rights were issued and for a consideration equal to the consideration, if any, received by the Company for any such securities and related options, warrants or rights (excluding any cash received on account of accrued interest or accrued
dividends), plus the additional consideration (in each case, determined in the manner provided in Section 13(A)(i) and (ii)), if any, to be received by the Company upon the conversion or exchange of such securities, or upon the exercise of any
related options, warrants or rights to purchase or acquire such convertible or exchangeable securities and the subsequent conversion or exchange thereof. 

  

	 	(3)	On any change in the number of shares of Common Stock deliverable upon exercise of any such options, warrants or rights or conversion or exchange of such convertible or
exchangeable securities or any change in the consideration to be received by the Company upon such exercise, conversion or exchange, but excluding changes resulting from the anti-dilution provisions thereof (to the extent comparable to the
anti-dilution provisions contained herein), the Exercise Price and the number of Shares issuable upon exercise of this Warrant as then in effect shall forthwith be readjusted to such Exercise Price and number of Shares as would have been obtained
had an adjustment been made upon the issuance or sale of such options, warrants or rights not exercised prior to such change, or of such convertible or exchangeable securities not converted or exchanged prior to such change, upon the basis of such
change. 


  
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	 	(4)	On the expiration or cancellation of any such options, warrants or rights (without exercise), or the termination of the right to convert or exchange such convertible or
exchangeable securities (without exercise), if the Exercise Price and the number of Shares issuable upon exercise of this Warrant shall have been adjusted upon the issuance or sale thereof, the Exercise Price and the number of Shares issuable upon
exercise of this Warrant shall forthwith be readjusted to such Exercise Price and number of Shares as would have been obtained had an adjustment been made upon the issuance or sale of such options, warrants, rights or such convertible or
exchangeable securities on the basis of the issuance of only the number of shares of Common Stock actually issued upon the exercise of such options, warrants or rights, or upon the conversion or exchange of such convertible or exchangeable
securities. 

  

	 	(5)	If the Exercise Price and the number of Shares issuable upon exercise of this warrant shall have been adjusted upon the issuance or sale of any such options, warrants, rights or
convertible or exchangeable securities, no further adjustment of the Exercise Price and the number of Shares issuable upon exercise of this Warrant shall be made for the actual issuance of Common Stock upon the exercise, conversion or exchange
thereof; provided, however, that no increase in the Exercise Price or reduction in the number of Shares issuable upon exercise of this Warrant shall be made pursuant to subclauses (1) or (2) of this Section 13(A)(iii).


  

	 	(B)	Stock Splits, Subdivisions, Reclassifications or Combinations. If the Company shall (i) declare a dividend or make a distribution on its Common Stock in shares of
Common Stock, (ii) subdivide or reclassify the outstanding shares of Common Stock into a greater number of shares, or (iii) combine or reclassify the outstanding Common Stock into a smaller number of shares, the number of Shares issuable
upon exercise of this Warrant at the time of the record date for such dividend or distribution or the effective date of such subdivision, combination or reclassification shall be proportionately adjusted so that the Warrantholder after such date
shall be entitled to purchase the number of shares of Common Stock which such holder would have owned or been entitled to receive after such date had this Warrant been exercised immediately prior to such date. In such event, the Exercise Price in
effect at the time of the record date for such dividend or distribution or the effective date of such subdivision, combination or reclassification shall be adjusted to the number obtained by dividing (x) the product of (1) the number of
Shares issuable upon the exercise of this Warrant before such adjustment and (2) the Exercise Price in effect immediately prior to the issuance giving rise to this adjustment by (y) the new number of shares issuable upon exercise of the
Warrant determined pursuant to the immediately preceding sentence. 

  

	 	(C)	 Other Distributions. In case the Company shall fix a record date for the making of a distribution to all holders of shares of its Common Stock (i) of
shares of any class other than its Common Stock, (ii) of evidence of indebtedness of the Company or any Subsidiary, (iii) of assets (including without limitation cash dividends, but excluding dividends or distributions referred to in
Section 13(B), or (iv) of rights or warrants (excluding those referred to in Section 13(B)), in each such case, the Exercise Price in 



  
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effect prior thereto shall be reduced immediately thereafter to the price determined by dividing (x) an amount equal to the difference resulting from (1) the number of shares of Common
Stock outstanding on such record date multiplied by the Exercise Price per Share on such record date, less (2) the fair market value (as reasonably determined by the Board) of said shares or evidences of indebtedness or assets or rights or
warrants to be so distributed, by (y) the number of shares of Common Stock outstanding on such record date; such adjustment shall be made successively whenever such a record date is fixed. In such event, the number of shares of Common Stock
issuable upon the exercise of this Warrant shall be increased to the number obtained by dividing (x) the product of (1) the number of Shares issuable upon the exercise of this Warrant before such adjustment, and (2) the Exercise Price
in effect immediately prior to the issuance giving rise to this adjustment by (y) the new Exercise Price determined in accordance with the immediately preceding sentence. In the event that such distribution is not so made, the Exercise Price
and the number of Shares issuable upon exercise of this Warrant then in effect shall be readjusted, effective as of the date when the Board determines not to distribute such shares, evidences of indebtedness, assets, rights or warrants, as the case
may be, to the Exercise Price that would then be in effect and the number of Shares that would then be issuable upon exercise of this Warrant if such record date had not been fixed. 


 

	 	(D)	Business Combinations. Subject to Section 14 of this Warrant, in case of any Business Combination or reclassification of Common Stock (other than a reclassification
of Common Stock referred to in Section 13(B)), any Shares issued or issuable upon exercise of this Warrant after the date of such Business Combination or reclassification, shall be exchangeable for the number of shares of stock or other
securities or property (including cash) to which the Common Stock issuable (at the time of such Business Combination or reclassification) upon exercise of this Warrant immediately prior to such Business Combination or reclassification would have
been entitled upon such Business Combination or reclassification; and in any such case, if necessary, the provisions set forth herein with respect to the rights and interests thereafter of the Warrantholder shall be appropriately adjusted so as to
be applicable, as nearly as may reasonably be, to any shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant. In determining the kind and amount of stock, securities or the property receivable upon
consummation of such Business Combination, if the holders of Common Stock have the right to elect the kind or amount of consideration receivable upon consummation of such Business Combination, then the Warrantholder shall have the right to make a
similar election upon exercise of this Warrant with respect to the number of shares of stock or other securities or property which the Warrantholder will receive upon exercise of this Warrant. 


 

	 	(E)	Rounding of Calculations; Minimum Adjustments. All calculations under this Section 13 shall be made to the nearest one-tenth (1/10th) of a cent or to the nearest
one-hundredth (1/100th) of a share, as the case may be. Any provision of this Section 13 to the contrary notwithstanding, no adjustment in the Exercise Price or the number of Shares into which this Warrant is exercisable shall be made if
the amount of such adjustment would be less than $0.01 or one-tenth (1/10th) of a share of Common Stock, respectively, but any such amount shall be carried forward and an adjustment with respect thereto shall be made at the time of and together
with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate $0.01 or 1/10th of a share of Common Stock, respectively, or more. 


  
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	 	(F)	Timing of Issuance of Additional Common Stock Upon Certain Adjustments. In any case in which the provisions of this Section 13 shall require that an adjustment shall
become effective immediately after a record date for an event, the Company may defer until the occurrence of such event (i) issuing to the Warrantholder of this Warrant exercised after such record date and before the occurrence of such event
the additional shares of Common Stock issuable upon such exercise by reason of the adjustment required by such event over and above the shares of Common Stock issuable upon such exercise before giving effect to such adjustment and (ii) paying
to such Warrantholder any amount of cash in lieu of a fractional share of Common Stock; provided, however, that the Company upon request shall deliver to such Warrantholder a due bill or other appropriate instrument evidencing such
Warrantholder’s right to receive such additional shares, and such cash, upon the occurrence of the event requiring such adjustment. 

  

	 	(G)	Adjustment for Unspecified Actions. If the Company takes any action affecting the Common Stock, other than actions described in this Section 13, which in the opinion
of the Board would adversely affect the exercise rights of the Warrantholder, the Exercise Price for the Warrants and/or the number of Shares received upon exercise of the Warrant shall be adjusted for the Warrantholder’s benefit, to the extent
permitted by law, (i) if any of the Warburg Warrants is then outstanding, in the same manner, and at the same time, as the Board determines to adjust the exercise price under such Warburg Warrants and/or number of Shares received upon exercise
of such Warburg Warrants as a result of such action (and, if the Board determines not to make any adjustment under the Warburg Warrants as a result of such action, no adjustment shall be made under this Warrant), or (ii) if none of the Warburg
Warrants is then outstanding, or if each holder of any Warburg Warrant then outstanding has waived its right to any adjustment as a result of such action, in such manner, and at such time, as such Board after consultation with the Investor shall
reasonably determine to be equitable in the circumstances. Failure of the Board to provide for any such adjustment will be evidence that the Board has determined that it is equitable to make no such adjustments in the circumstances.


  

	 	(H)	Statement Regarding Adjustments. Whenever the Exercise Price or the number of Shares into which this Warrant is exercisable shall be adjusted as provided in
Section 13, the Company shall forthwith file at the principal office of the Company a statement showing in reasonable detail the facts requiring such adjustment and the Exercise Price that shall be in effect and the number of Shares into which
this Warrant shall be exercisable after such adjustment, and the Company shall also cause a copy of such statement to be sent by e-mail and by mail, first class postage prepaid, to each Warrantholder at the address appearing in the Company’s
records. 

  

	 	(I)	 Notice of Adjustment Event. In the event that the Company shall propose to take any action of the type described in this Section 13 (but only if the
action of the type described in this Section 13 would result in an adjustment in the Exercise Price or the number of Shares into which this Warrant is exercisable or a change in the type of securities or property to be delivered upon exercise
of this Warrant), the Company shall give notice to the Warrantholder, in the manner set forth in Section 13(H), which notice shall specify the record date, if any, with respect to any such action and the approximate date on which such action is
to take place. Such notice shall also set forth the facts with respect thereto as shall be reasonably necessary to indicate the effect on the Exercise Price and the number, kind or class of shares or other securities or property which shall be
deliverable upon exercise of this Warrant. In the case of any action which would require the fixing of a record date, such notice shall be given at least 10 days prior to the date so fixed, and




  
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in case of all other action, such notice shall be given at least 15 days prior to the taking of such proposed action. Failure to give such notice, or any defect therein, shall not affect the
legality or validity of any such action. 

  

	 	(J)	No Impairment. The Company will not, by amendment of its Amended and Restated Articles of Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist
in the carrying out of all the provisions of this Warrant and in taking of all such action as may be necessary or appropriate in order to protect the rights of the Warrantholder. 


 

	 	(K)	Proceedings Prior to Any Action Requiring Adjustment. As a condition precedent to the taking of any action which would require an adjustment pursuant to this
Section 13, the Company shall take any action which may be necessary, including obtaining regulatory, New York Stock Exchange or stockholder approvals or exemptions, in order that the Company may thereafter validly and legally issue as fully
paid and nonassessable all shares of Common Stock that the Warrantholder is entitled to receive upon exercise of this Warrant pursuant to this Section 13. 


 

	 	(L)	Adjustment Rules. Any adjustments pursuant to this Section 13 shall be made successively whenever an event referred to herein shall occur. If an adjustment in
Exercise Price made hereunder would reduce the Exercise Price to an amount below par value of the Common Stock, then such adjustment in Exercise Price made hereunder shall reduce the Exercise Price to the par value of the Common Stock.


  

	14.	Change of Control. Within 30 calendar days following the occurrence of a Preliminary Control Event, the Warrantholder may deliver a written notice to the Company, electing
to cause the Company to purchase any Warrant, in whole or in part, acquired hereunder that the Warrantholder then holds, at a valuation based on a computation of the option value of the Warrant using Black-Scholes calculation methods and making the
assumptions described in the Black-Scholes methodology described in Exhibit A. Payment by the Company to the Warrantholder of such purchase price shall be in cash due only upon the occurrence of the Change in Control and on the date of the
occurrence of the Change of Control and simultaneous therewith and with surrender by the Warrantholder of such Warrant, subject to the mechanics described in the last paragraph of Exhibit A. If the Warrantholder does not elect to have the Company
purchase any Warrant in its entirety, the Warrantholder will be entitled to receive from the Company within a reasonable time, and in any event not exceeding three (3) Business Days, a new warrant in substantially identical form for the
purchase of that number of Shares subject to the outstanding portion of such Warrant. The Company agrees that it will not take any action resulting in a Preliminary Control Event in the absence of definitive documentation providing for such election
right of the Warrantholder pursuant to this Section 14. Under no circumstances shall the Warrantholder be restricted from engaging in any hedging or derivative program reasonably necessary in the opinion of the Warrantholder to secure the
option value of this Warrant so adjusted. 

  

	15.	Contest and Appraisal Rights. 

  

	 	(A)	 If any determination of Market Price or fair market value is to be made hereunder, and, at such time, a similar determination of “Market Price” or
“fair market value” is made under any Warburg Warrant then outstanding, the determination of Market Price or fair market 



  
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value, as the case may be, hereunder shall be the same as the final determination made with respect to the “Market Price” or “fair market value,” as the case may be, under
such Warburg Warrant. Upon such final determination under such Warburg Warrant, the Company shall promptly deliver notice thereof to the Warrantholder. 

  

	 	(B)	If any determination of Market Price or fair market value is to be made hereunder but no similar determination of “Market Price” or “fair market value” is
made under any Warburg Warrant then outstanding, or if no Warburg Warrant is outstanding at such time, the provisions in this Section 15(B) shall apply. Upon each determination of Market Price or fair market value, as the case may be,
hereunder, the Company shall promptly give notice thereof to the Warrantholder, setting forth in reasonable detail the calculation of such Market Price or fair market value, and the method and basis of determination thereof, as the case may be. If
the Warrantholder (or if there is more than one Warrantholder, a majority in interest of Warrantholders) shall disagree with such determination and shall, by notice to the Company given within fifteen (15) days after the Company’s notice
of such determination, elect to dispute such determination, such dispute shall be resolved in accordance with this Section 15(B). In the event that a determination of Market Price, or fair market value (if such determination solely involves
Market Price), is disputed, such dispute shall be submitted, at the Company’s expense, to a New York Stock Exchange member firm selected by the Company and acceptable to the Warrantholder, whose determination of Market Price or fair market
value, as the case may be, shall be binding on the Company and the Warrantholder. In the event that a determination of fair market value, other than a determination solely involving Market Price, is disputed, such dispute shall be resolved through
the Appraisal Procedure. 

  

	16.	Governing Law. This Warrant shall be binding upon any successors or assigns of the Company. This Warrant shall constitute a contract under the laws of New York and for all
purposes shall be construed in accordance with and governed by the laws of New York, without giving effect to the conflict of laws principles. 

  

	17.	Attorneys’ Fees. In any litigation, arbitration or court proceeding between the Company and the Warrantholder as the holder of this Warrant relating hereto, the
prevailing party shall be entitled to reasonable attorneys’ fees and expenses incurred in enforcing this Warrant. 

  

	18.	Amendments. This Warrant may be amended and the observance of any term of this Warrant may be waived only with the written consent of the Company and the Warrantholder.


  

	19.	Notices. All notices hereunder shall be in writing and shall be effective (A) on the day on which delivered if delivered personally or transmitted by facsimile
transmission or e-mail with evidence of receipt and with, in the case of e-mail, a copy mailed on the same day in the manner provided in clause (B) or (C), (B) one Business Day after the date on which the same is delivered to a nationally
recognized overnight courier service with evidence of receipt, or (C) five Business Days after the date on which the same is deposited, postage prepaid, in the U.S. mail, sent by certified or registered mail, return receipt requested, and
addressed to the party to be notified at the address indicated below (or at such other address and/or facsimile number and/or e-mail address and/or to the attention of such other person as the Company or the Warrantholder may designate by ten-day
advance written notice): 

  

	 	(1)	if to the Company: 

  

			
	MBIA Inc.
	113 King Street
	Armonk, New York 10504
	Attention:	 	Ram Wertheim, General Counsel
	Facsimile:	 	(914) 765-3919
	E-mail: Ram.Wertheim@mbia.com


  
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	with a copy to:
	
	Debevoise & Plimpton LLP
	919 Third Avenue
	New York, New York 10022
	Attention:	 	Andrew L. Bab
		 	Steven J. Slutzky
	Facsimile:	 	(212) 919-6836
	E-mail: albab@debevoise.com
	            sjslutzky@debevoise.com

  

	 	(2)	if to the Warrantholder, at the address for the Warrantholder set forth in the registry maintained by the Company pursuant to Section 9. 


 

	20.	Prohibited Actions. The Company agrees that it will not take any action which would entitle the Warrantholder to an adjustment of the Exercise Price if the total number of
shares of Common Stock issuable after such action upon exercise of this Warrant, together with all shares of Common Stock then outstanding and all shares of Common Stock then issuable upon the exercise of all outstanding options, warrants,
conversion and other rights, would exceed the total number of shares of Common Stock then authorized by its Amended and Restated Articles of Incorporation. 


 

	21.	Entire Agreement. This Warrant and the forms attached hereto, and the Investment Agreement, contain the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior and contemporaneous arrangements or undertakings with respect thereto. 

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 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by a duly authorized
officer. 
 Dated: May 6, 2013 
  

			
	MBIA INC.
		
	By:	 	 /s/ Ram Wertheim

	Name:	 	Ram Wertheim
	Title:	 	Executive Vice President,
		 	Chief Legal Officer and Secretary


  

					
	Attest:
		
	By:	 	 /s/ David Griffiths

	Name:	 	David Griffiths
	Title:	 	Attorney
	
	Acknowledged and Agreed:
	
	BLUE RIDGE INVESTMENTS, L.L.C.
		
	By:	 	 /s/ Neil Cotty

		 	Name:	 	Neil Cotty
		 	Title:	 	Executive Vice President

 [Signature Page to Warrant] 








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 [Form Of Notice Of Exercise] 

Date:                      

TO: MBIA Inc. 
 RE: Election to Subscribe for and Purchase Common
Stock 
 The undersigned, pursuant to the provisions set forth in the attached Warrant, hereby agrees to subscribe for and purchase the
number of shares of the Common Stock set forth below covered by such Warrant. The undersigned, in accordance with Section 3 of the Warrant, hereby agrees to pay the aggregate Exercise Price for such shares of Common Stock in the manner set
forth in the Warrant. A new warrant evidencing the remaining shares of Common Stock covered by such Warrant, but not yet subscribed for and purchased, if any, should be issued in the name set forth below. 

 

											
	Number of Shares of Common Stock:	 		  		  	  
	  	
		
	Name and Address of Person to be	  	


											
	Issued New Warrant:	 	  
	  	
		 	  
	  	
		 	  
	  	
		 	  
	  	

  

			
	Holder:	 	  

		
	By:	 	  

	Name:	 	  

	Title:	 	  











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 Exhibit A 
 Black-Scholes Assumptions 
 For the purpose of this Exhibit A: 

“Acquiror” means (a) the third party that has entered into definitive document for a transaction, or (b) the offeror in the event of a
tender or exchange offer, that could reasonably result in a Change of Control upon consummation. 
  

			
	Underlying Security Price:	  	 In the event of a merger or acquisition, (A) in the event of an “all cash” deal, the cash per share offered to the Company’s
shareholders by the Acquiror; (B) in the event of an “all stock” deal, (1) in the event of a fixed exchange ratio transaction, the product of (i) the average of the Market Price of the Acquiror’s common stock for the ten (10) trading
day period ending on the day preceding the date of the Preliminary Control Event and (ii) the number of Acquiror’s shares being offered for one share of Common Stock and (2) in the event of a fixed value transaction, the value offered by the
Acquiror for one share of Common Stock; (C) in the event of a transaction contemplating various forms of consideration for each share of Common Stock, the cash portion, if any, shall be valued as clause (A) above and the stock portion shall be
valued as clause (B) above and any other forms of consideration shall be valued by the Company in good faith, without applying any discounts to such consideration.
  

In the event of all other Change of Control events, the average of the Market Price of the Common Stock for the five (5) trading day period beginning on the date of
the Preliminary Control Event.

		
	Exercise Price:	  	The Exercise Price as adjusted and then in effect for the Warrant at the time of the Preliminary Control Event.
		
	Dividend Rate:	  	The Company’s annualized dividend yield as of the date of the Preliminary Control Event
		
	Interest Rate:	  	The applicable U.S. 5-year treasury note risk free rate as of the date of the Preliminary Control Event
		
	Model Type:	  	Black-Scholes
		
	Exercise Type:	  	American
		
	Put or Call:	  	Call
		
	Trade Date:	  	The date of the Preliminary Control Event
		
	Expiration Date:	  	Expiration Time
		
	Settle Date:	  	The date of the Preliminary Control Event
		
	Exercise Delay:	  	0
		
	Volatility:	  	The average annual volatility over the last 3 years of the Common Stock as listed by Bloomberg L.P., as of the date of the Preliminary Control Event

 [Signature Page to Warrant] 








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 Such valuation of the Warrant based on the Black-Scholes methodology shall not be discounted in any way. If the
Warrantholder disputes such Black-Scholes valuation pursuant to this Exhibit A as calculated by the Company, the Company and the Warrantholder will choose a mutually-agreeable firm to compute the valuation of the Warrant using the guidelines
above, and such valuation shall be final. The fees and expenses of such firm shall be borne equally by the Company and the Warrantholder. 
 The Company
covenants that it will not close the Change of Control transaction or otherwise facilitate the closing of a tender or exchange offer as referenced above until giving the Warrantholder at least five (5) Business Days to sell or distribute the
Common Stock to be received in an exchange and will cooperate with the Warrantholder to ensure that there is an effective registration statement available to facilitate such a sale during such five (5) Business Day period or an effective
opportunity is provided in the case of a tender or exchange offer as referenced above to tender such shares in to the offer. 

  
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