Document:

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                                                                    EXHIBIT 4.04

                                    MBIA INC.

                                       to

                          BANK ONE TRUST COMPANY, N.A.
        (as successor in interest to The First National Bank of Chicago)

                             SUPPLEMENTAL INDENTURE

                           Dated as of August 22, 2002

                           6.40% Senior Notes due 2022

<PAGE>

                                    MBIA INC.

                                TABLE OF CONTENTS

Recitals ..................................................................... 1

                                   ARTICLE I

                         Issuance of 6.40% Senior Notes

Section 1.1  Limit on Aggregate Principal Amount ............................. 1
Section 1.2  Principal Payments and Principal Payment Dates .................. 1
Section 1.3  Interest Rate and Interest Payment Dates ........................ 2
Section 1.4  Computation of Interest ......................................... 2
Section 1.5  Optional Redemption ............................................. 2
Section 1.6  Redemption Upon Death of a Beneficial Owner ..................... 2
Section 1.7  Sinking Fund Obligations ........................................ 6
Section 1.8  Denomination and Form of Notes .................................. 6
Section 1.9  Paying Agent, etc ............................................... 6
Section 1.10 Initial Depositary .............................................. 6
Section 1.11 Defeasance and Covenant Defeasance .............................. 7

                                   ARTICLE II

                                 Miscellaneous

Section 2.1  Counterparts .................................................... 7
Section 2.2  Headings ........................................................ 7
Section 2.3  Ratification and Incorporation of Indenture ..................... 7
Section 2.4  Successor and Assigns ........................................... 7
Section 2.5  Separability .................................................... 7
Section 2.6  Benefits of Indenture ........................................... 7
Section 2.7  Governing Law ................................................... 7
Section 2.8  Trustee ......................................................... 7

EXHIBIT A .................................................. Form of Global Note

                                       i

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         FIRST SUPPLEMENTAL INDENTURE (the "Supplemental Indenture"), dated as
of August 22, 2002, between MBIA INC., a Connecticut corporation (the "Issuer"),
and BANK ONE TRUST COMPANY, N.A. (as successor in interest to The First National
Bank of Chicago), a national banking association as Trustee (the "Trustee").

                                    Recitals
                                    --------

         In accordance with Section 2.1, 2.3 and 8.1 of the Indenture, dated as
of August 1, 1990, between the Issuer and the Trustee (the "Indenture") this
Supplemental Indenture is being entered into in order to establish the terms of
a new series of Debt Securities to be issued under the Indenture, to be
designated as the Issuer's 6.40% Senior Notes due 2022.

         All capitalized terms used herein without definition shall have the
meanings specified in the Indenture. For purposes of this Supplemental
Indenture, "Business Day" shall mean any day, other than Saturday or Sunday,
that is not a day on which banking institutions are authorized by law or
regulation to close in The City of New York.

         For and in consideration of the premises, it is mutually covenanted and
agreed as follows:

                                   ARTICLE I

                         Issuance of 6.40% Senior Notes
                         ------------------------------

         There shall be a series of debt securities designated the "6.40% Senior
Notes due 2022" (the "Notes") and such Notes shall have the following terms in
accordance with the provisions of the Indenture and this Supplemental Indenture:

         Section 1.1 Limit on Aggregate Principal Amount. The aggregate
                     -----------------------------------
principal amount of the Notes which may be authenticated and delivered shall be
$300,000,000 principal amount of Notes; provided, however, that the Issuer may,
without the consent of Holders, create and issue additional notes having the
same terms and conditions as the Notes in all respects, except for issue date,
issue price and, if applicable, the first payment of interest thereon.
Additional notes issued in this manner will be consolidated with and will form a
single series with the previously outstanding Notes.

         Section 1.2 Principal Payments and Principal Payment Dates. Except as
                     ----------------------------------------------
set forth below in Sections 1.5 and 1.6, the principal amount of the Notes
outstanding (together with any accrued and unpaid interest thereon) shall be
payable in a single installment on August 15, 2022.

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         Section 1.3 Interest Rate and Interest Payment Dates. The interest rate
                     ----------------------------------------
for the Notes shall be 6.40% per annum accruing from the most recent Interest
Payment Date (as defined below) to which interest has been paid or, if no
interest has been paid on the Notes, from August 22, 2002. Interest shall be
payable quarterly in arrears on February 15, May 15, August 15 and November 15
of each year commencing November 15, 2002 (each an "Interest Payment Date") and
at maturity or redemption, as the case may be. If an Interest Payment Date falls
on a day that is not a Business Day, interest will be payable on the next
succeeding Business Day with the same force and effect as if made on such
Interest Payment Date. Interest accrued on the Notes will, subject to certain
exceptions provided in the Indenture, be paid to the person in whose name each
Note is registered at the close of business on the date fifteen calendar days
prior to such Interest Payment Date, whether or not such date is a Business Day,
provided that interest paid at maturity or redemption will be paid to the person
to whom principal is payable as a result of maturity or redemption, as the case
may be.

         Section 1.4 Computation of Interest. Interest will be calculated on the
                     -----------------------
basis of a 360-day year, consisting of twelve 30-day months.

         Section 1.5 Optional Redemption. The Issuer will have the right to
                     -------------------
redeem the Notes, in whole or in part, on or any time after August 15, 2006, at
a redemption price equal to 100% of the principal amount of the Notes to be
redeemed, plus accrued and unpaid interest to the redemption date. The Issuer
will provide not less than 30 nor more than 45 days' notice mailed to each
registered Holder of the Notes to be redeemed. If the redemption notice is given
and funds deposited as required, then interest will cease to accrue on and after
the redemption date on the Notes or portions of such Notes called for
redemption. In the event that any redemption date is not a Business Day, the
Issuer will pay the redemption price on the next Business Day without any
interest or other payment due to the delay.

         Section 1.6 Redemption Upon Death of a Beneficial Owner. Unless the
                     -------------------------------------------
Notes have been declared due and payable prior to their maturity by reason of an
Event of Default under the Indenture, or have been previously redeemed or
otherwise repaid, the personal representative or other person authorized to
represent a deceased beneficial owner of Notes (that is, one who has the right
to sell, transfer or otherwise dispose of an interest in a Note and the right to
receive the proceeds from the Note, as well as the interest and principal
payable to the holder of the Note) has the right to request redemption prior to
stated maturity of all or part of his or her interest in such Notes, and the
Issuer will be obligated to redeem such Notes. However, during the period from
August 22, 2002 through and including August 15, 2003, the "initial period", and
during any twelve month period that ends on and includes each subsequent August
15, each a "subsequent period", the Issuer will not be obligated to redeem:

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          o    on behalf of a deceased beneficial owner, any interest in the
               Notes that exceeds $25,000 principal amount, or

          o    interests in the Notes exceeding $6,000,000 in aggregate
               principal amount for all representatives requesting redemption
               upon the death of beneficial owners.

         The Issuer may, at its option, redeem interests of any deceased
beneficial owner in the Notes in the initial period or any subsequent period in
excess of the $25,000 limitation. Any such redemption by the Issuer, to the
extent it exceeds the $25,000 limitation for any deceased beneficial owner, will
not be included in the computation of the $6,000,000 aggregate limitation for
the Notes for the initial period or the applicable subsequent period, as the
case may be, or for any succeeding subsequent period. The Issuer may, at its
option, redeem interests of deceased beneficial owners in the Notes in the
initial period or any subsequent period in an aggregate principal amount
exceeding the $6,000,000 aggregate limitation. Any such redemption by the
Issuer, to the extent it exceeds the $6,000,000 aggregate limitation, will not
reduce the aggregate limitation for any subsequent period. If the Issuer decides
to redeem Notes in excess of the $25,000 limitation or the $6,000,000 aggregate
limitation, the Issuer will redeem such Notes redeemed in the order of receipt
of redemption requests by the Trustee. If in the future the Issuer issues
additional notes that are consolidated with and form a single series with these
Notes, the $6,000,000 aggregate limitation would be increased by 2% of the
aggregate principal amount of the additional notes.

         A representative of a deceased beneficial owner may initiate a request
for redemption at any time and in any principal amount, provided that the
principal amount is in integral multiples of $1,000. The representative must
deliver its request to the participant (an institution that has an account with
the Depositary for the Notes) through which the deceased beneficial owner owned
such interest, in form satisfactory to the participant, together with evidence
of the death of the beneficial owner, evidence of the authority of the
representative satisfactory to the participant, any waivers, notices or
certificates as may be required under applicable state or federal law and any
other evidence of the right to the redemption as the participant requires. The
request must specify the principal amount of the interest in the Notes to be
redeemed, which amount must be in integral multiples of $1,000. Subject to the
rules and arrangements of the Depositary, the participant will then deliver to
the Depositary, a request for redemption in substantially the same form as Annex
A to the Form of Global Note attached hereto as Exhibit A (a "Redemption
Request").

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            The Trustee is hereby required to maintain records with respect to
Redemption Requests received by it, including the date of receipt, the name of
the participant filing the Redemption Request and the status of each Redemption
Request with respect to the $25,000 limitation and the $6,000,000 aggregate
limitation. The Trustee is hereby required to immediately file with the Issuer
each Redemption Request it receives, together with the information regarding the
eligibility of the Redemption Request with respect to the $25,000 limitation and
the $6,000,000 aggregate limitation. The Issuer, the Depositary and the Trustee:

          o    may conclusively assume, without independent investigation, that
               the statements contained in each Redemption Request are true and
               correct; and

          o    will have no responsibility:

               o    for reviewing any documents submitted to the participant by
                    the representative or for determining whether the applicable
                    decedent is in fact the beneficial owner of the interest in
                    the Notes to be redeemed or is in fact deceased; and

               o    for determining whether the representative is duly
                    authorized to request redemption on behalf of the applicable
                    beneficial owner.

         Subject to the $25,000 limitation and the $6,000,000 aggregate
limitation, the Issuer will, after the death of any beneficial owner, redeem the
interest of such beneficial owner in the Notes within 60 days following the
Issuer's receipt of a Redemption Request from the Trustee. If Redemption
Requests exceed the aggregate limitation on Notes required to be redeemed during
the initial period or during any subsequent period, then excess Redemption
Requests will be applied, in the order received by the Trustee, to successive
subsequent periods, regardless of the number of subsequent periods required to
redeem such interests. The Issuer may, at any time, notify the Trustee that it
will redeem, on a date not less than 30 nor more than 45 days after the date of
such notice, all or any lesser amount of Notes for which Redemption Requests
have been received but that are not then eligible for redemption by reason of
the $25,000 limitation or the $6,000,000 aggregate limitation. Such Notes will
be redeemed in the order of receipt of Redemption Requests by the Trustee.

         The Issuer will pay 100% of the principal amount plus any unpaid
interest accrued to (but excluding) the redemption date for the Notes it redeems
pursuant to a Redemption Request of a representative of a deceased beneficial
owner. Subject to arrangements with the Depositary, payment for interests in the
Notes to be redeemed will be made to the Depositary in the aggregate principal
amount specified in the Redemption

                                       4

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Requests submitted to the Trustee by the Depositary that are to be fulfilled in
connection with such payment upon presentation of the Notes to the Trustee for
redemption. The principal amount of any Notes acquired or redeemed by the Issuer
other than by redemption at the request of any representative of a deceased
beneficial owner will not be included in the computation of either the $25,000
limitation or the $6,000,000 aggregate limitation for the initial period or for
any subsequent period.

         An interest in a Note held in tenancy by the entirety, by joint tenancy
or by tenants in common will be deemed to be held by a single beneficial owner,
and the death of a tenant by the entirety, joint tenant or tenant in common will
be deemed the death of a beneficial owner. The death of a person who, during his
or her lifetime, was entitled to substantially all of the rights of a beneficial
owner of an interest in the Notes will be deemed the death of the beneficial
owner, regardless of the recordation of the interest on the records of the
participant, if such rights can be established to the satisfaction of the
participant. Such interests will be deemed to exist in typical cases of nominee
ownership, ownership under the Uniform Gifts to Minors Act or the Uniform
Transfers to Minors Act, community property or other similar joint ownership
arrangements, including individual retirement accounts or Keogh H.R. 10 plans
maintained solely by or for the decedent or by or for the decedent and any
spouse, and trust and certain other arrangements where one person has
substantially all of the rights of a beneficial owner during such person's
lifetime.

         In the case of a Redemption Request that is presented on behalf of a
deceased beneficial owner and that has not been fulfilled at the time the Issuer
gives notice of its election to redeem the Notes in part, the Notes that are the
subject of such pending Redemption Request will be redeemed prior to any other
Notes.

         Any Redemption Request may be withdrawn by the person(s) presenting
such request upon delivery of a written request for withdrawal given by the
participant on behalf of such person(s) to the Depositary and by the Depositary
to the Trustee not less than 30 days prior to the redemption payment.

         During any time in which the Notes are not represented by a Registered
Global Security and are issued in definitive form:

          o    all references in this Note to participants and the Depositary,
               including the Depositary's governing rules, regulations and
               procedures, will not be applicable;

          o    all determinations that the participants are required to make as
               described in this Note will be made by the Issuer (including,
               without limitation, determining whether the applicable decedent
               is in fact the beneficial

                                       5

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               owner of the interest in the Notes to be redeemed or is in
               fact deceased and whether the representative is duly
               authorized to request redemption on behalf of the applicable
               beneficial owner); and

          o    all Redemption Requests, to be effective, must:

               o    be delivered by the representative to the Trustee, with a
                    copy to the Issuer;

               o    if required by the Trustee and the Issuer, be in the form
                    specified by the Issuer (with appropriate changes mutually
                    agreed to by the Trustee and the Issuer to reflect the fact
                    that the Redemption Request is being executed by a
                    representative (including provision for signature
                    guarantees)); and

               o    be accompanied by the Note that is the subject of the
                    Redemption Request and, if applicable, a properly executed
                    assignment or endorsement, in addition to all documents that
                    are otherwise required to accompany a Redemption Request. If
                    the record interest in the Note is held by a nominee of the
                    deceased beneficial owner, a certificate or letter from the
                    nominee attesting to the deceased's ownership of a
                    beneficial interest in the Note must also be delivered.

         Section 1.7 Sinking Fund Obligations. There is no provision for a
                     ------------------------
sinking fund applicable to the Notes.

         Section 1.8 Denomination and Form of Notes. The Notes shall be fully
                     ------------------------------
registered, without coupons, and issued in denominations of $1,000 and any
integral multiples thereof. Except as provided in Section 2.12 of the Indenture,
the Notes shall be issuable only as Registered Securities in global form
representing the entire aggregate principal amount of the Notes and shall be
substantially in the form attached as Exhibit A hereto.

         Section 1.9 Paying Agent, etc. The Trustee shall initially serve as
                     -----------------
authentication agent, paying agent, transfer agent and registrar with respect to
the Notes, with the place of payment being at 55 Water Street, 1st Floor,
Jeanette Park Entrance, New York, New York 10041.

         Section 1.10 Initial Depositary. The initial depositary for the Notes
                      ------------------
shall be The Depository Trust Company ("DTC").

                                       6

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         Section 1.11 Defeasance and Covenant Defeasance. The provisions of
                      ----------------------------------
Article 13 of the Indenture relating to defeasance and covenant defeasance shall
apply to the Notes.

                                   ARTICLE II

                                  Miscellaneous
                                  -------------

         Section 2.1 Counterparts. This Supplemental Indenture may be executed
                     ------------
in any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one instrument.

         Section 2.2 Headings. The Article and Section headings herein are for
                     --------
convenience only and shall not affect the construction hereof.

         Section 2.3 Ratification and Incorporation of Indenture. As
                     -------------------------------------------
supplemented hereby, the Indenture is in all respects ratified and confirmed,
and the Indenture and this Supplemental Indenture shall be read, taken and
construed as one and the same instrument.

         Section 2.4 Successor and Assigns. All the covenants, stipulations,
                     ---------------------
promises and agreements in this Supplemental Indenture contained by or in behalf
of the Company shall bind its successors and assigns, whether so expressed or
not.

         Section 2.5 Separability. In case any provision of this Supplemental
                     ------------
Indenture, the Notes or the Indenture shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

         Section 2.6 Benefits of Indenture. Nothing in this Supplemental
                     ---------------------
Indenture and the Notes, expressed or implied, shall give to any Person, other
than the parties hereto and their successors hereunder and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Supplemental
Indenture.

         Section 2.7 Governing Law. This Supplemental Indenture shall be deemed
                     -------------
to be a contract under the laws of the State of New York, and for all purposes
shall be construed in accordance with the laws of such State, except as may
otherwise be required by mandatory provisions of law.

         Section 2.8 Trustee. The Trustee shall not be responsible in any manner
                     -------
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or the due execution thereof by the Company. The recitals of fact
contained herein shall

                                       7

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be taken as the statements solely of the Company, and the Trustee assumes no
responsibility for the correctness thereof.

                                       8

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         IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the day and year first above written.

                                        MBIA, INC.

                                        By:  /s/: Joseph L. Sevely
                                            -----------------------------
                                            Name:  Joseph L. Sevely
                                            Title: Treasurer

[CORPORATE SEAL]

Attest:

By:  /s/: Richard L. Weill
    ------------------------------
    Name:  Richard L. Weill
    Title: Secretary
                                        BANK ONE TRUST COMPANY, N.A. (as
                                        successor in interest to The First
                                        National Bank of Chicago), as Trustee

                                        By:  /s/: Mary R. Fonti
                                            -----------------------------------
                                            Name:  Mary R. Fonti
                                            Title: Vice President

[CORPORATE SEAL]

Attest:

By:  /s/:  Sandra Whalen
    ------------------------------
    Name:  Sandra Whalen
    Title: Vice President

                                       9

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                                   EXHIBIT A

                             [FORM OF GLOBAL NOTE]

         If this Senior Note ("Note") is registered in the name of The
Depository Trust Company (the "Depositary") (55 Water Street, New York, New
York) or its nominee, this Note 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 and until this Note is exchanged in whole or in part for Notes in
definitive form. Unless this certificate is presented by an authorized
representative of the Depositary to the Issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
representative of the Depositary and any payment is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.

         This Note is a Registered Global Security within the meaning of the
Indenture referred to on the reverse hereof. Except as otherwise provided in
Section 2.12 of the Indenture referred to on the reverse hereof, this Registered
Global Security may be transferred, in whole but not in part, by the Depositary
to a nominee of such Depositary or by a nominee of such Depositary or by such
Depositary or any such nominee to a successor Depositary or to a nominee of such
successor Depositary. Unless this Registered Global Security is presented by an
authorized representative of the Depositary to the Issuer or its agent for
registration of transfer, exchange or payment, and in the case of any transfer
or exchange, any Registered Global Security issued in exchange therefor is
registered in the name of the Depositary or such other name as requested by an
authorized representative of the Depositary and, in the case of any payment,
such payment is made to the Depositary or the Depositary's nominee, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL since Cede & Co. has an interest herein.

REGISTERED

No. A-1                                                          $300,000,000
CUSIP:  55262C AH 3

                                    MBIA INC.

                           6.40% Senior Notes due 2022

         MBIA Inc., a Connecticut corporation (the "Issuer"), for value
received, hereby promises to pay to CEDE & CO., or its registered assigns, at
the office or agency of the Issuer in the Borough of Manhattan, The City of New
York, the principal sum of THREE

                                      A-1

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HUNDRED MILLION Dollars ($300,000,000) on August 15, 2022, 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 in arrears on February 15, May 15, August 15 and November 15 of each
year, commencing November 15, 2002, each an "interest payment date", and at
maturity or redemption, on said principal sum, in like coin or currency, at the
rate of 6.40% per annum. Interest on this Note will accrue from the most recent
interest payment date to which interest has been paid or, if no interest has
been paid on this Note, from August 22, 2002, until payment of said principal
sum has been made or duly provided for at said office or agency. If any Notes of
this series are no longer Registered Global Securities, interest shall be paid
by check mailed to or upon the written order of the Holders entitled thereto as
they shall appear on the registry books of the Issuer. If an interest payment
date falls on a day that is not a Business Day, interest will be payable on the
next succeeding Business Day with the same force and effect as if made on such
interest payment date. Interest accrued on the Notes will, subject to certain
exceptions provided in the Indenture referred to on the reverse hereof, be paid
to the person in whose name this Note is registered at the close of business on
the date fifteen calendar days prior to such interest payment date, whether or
not such date is a Business Day, provided that interest paid at maturity or
redemption will be paid to the person to whom principal is payable as a result
of maturity or redemption, as the case may be. Interest will be calculated on
the basis of a 360-day year, consisting of twelve 30-day months.

         Reference is made to the further provisions of this Note 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 Note 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.

                                      A-2

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         IN WITNESS WHEREOF, MBIA Inc. has caused this instrument to be signed
by its duly authorized officers and has caused its corporate seal to be affixed
hereunto or imprinted hereon.

Dated:  August 22, 2002

                                          MBIA INC.

                                          By:
                                             --------------------------------

                                          By:
                                             --------------------------------

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Notes of the series designated herein referred to in
the within-mentioned Indenture.

                                         BANK ONE TRUST COMPANY, N.A. (as
                                         successor in interest to The First
                                         National Bank of Chicago), as Trustee

                                         By:
                                            -----------------------------------
                                             Authorized Officer

                                      A-3

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                             [REVERSE SIDE OF NOTE]

                                    MBIA INC.

                           6.40% Senior Notes due 2022

         This Note 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 August 1, 1990 (the "Base
Indenture"), as supplemented by the First Supplemental Indenture, dated as of
August 22, 2002 (the "Supplemental Indenture" and together with the Base
Indenture, the "Indenture"), duly executed and delivered by the Issuer to Bank
One Trust Company, N.A. (as successor in interest to The First National Bank of
Chicago), 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 Notes. Debt Securities issued
under the Indenture 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 provided in the
Indenture. This Note is one of a series designated as the 6.40% Senior Notes due
2022 of the Issuer (the "Notes"), in aggregate principal amount of $300,000,000,
the terms of which were established in the Supplemental Indenture, pursuant to
Section 2.3 of the Base Indenture. The Issuer may, from time to time, without
the consent of existing Holders of Notes, create and issue additional Debt
Securities having the same terms and conditions as the Notes in all respects,
except for issue date, issue price and, if applicable, the first payment of
interest thereon. Additional Debt Securities issued in this manner will be
consolidated with and will form a single series with the previously outstanding
Notes.

         In case an Event of Default, as defined in the Indenture, with respect
to the Notes 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, with the consent of the Holders of more than 50% in aggregate principal
amount of the Debt Securities at the time Outstanding of all series to be
affected (voting as one class), evidenced as provided in the Indenture, 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

                                      A-4

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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
Securities, 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 reduce
any amount payable on redemption thereof, 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 Holders of which are required to consent to
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) waive any such past default or Event of Default
and its consequences. The preceding sentence shall not, however, apply to a
default in respect of a covenant or provision of the Indenture which cannot be
modified or amended without the consent of the Holder of each Debt Security
affected. Any such consent or waiver by the Holder of this Note (unless revoked
as provided in the Indenture) shall be conclusive and binding upon such Holder
and upon all future Holders and owners of this Note and any Note which may be
issued in exchange or substitution herefor, irrespective of whether or not any
notation thereof is made upon this Note or such other Notes.

         No reference herein to the Indenture and no provision of this Note 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 Note in the manner, at the respective times, at the rate and in the coin
or currency herein prescribed.

         The Notes are issuable in registered form without coupons in
denominations of $1,000 and integral multiples thereof. Upon presentment at the
office or agency of the Issuer in the Borough of Manhattan, The City of New
York, in the manner and subject to the limitations provided in the Indenture,
but without the payment of any service charge, Notes may be exchanged for a like
aggregate principal amount of Notes of other authorized denominations.

         The Issuer will have the right to redeem the Notes, in whole or in
part, on or at any time after August 15, 2006, at a redemption price equal to
100% of the principal amount of the Notes to be redeemed, plus accrued and
unpaid interest to the redemption date. The Issuer will provide not less than 30
nor more than 45 days' notice mailed to each Holder of the Notes to be redeemed.
If the redemption notice is given and funds deposited as required, then interest
will cease to accrue on and after the redemption date on the Notes or portions
of such Notes called for redemption. In the event that any

                                      A-5

<PAGE>

redemption date is not a Business Day, the Issuer will pay the redemption price
on the next Business Day without any interest or other payment due to the delay.

         Unless the Notes have been declared due and payable prior to their
maturity by reason of an Event of Default under the Indenture, or have been
previously redeemed or otherwise repaid, the personal representative or other
person authorized to represent a deceased beneficial owner of Notes (that is,
one who has the right to sell, transfer or otherwise dispose of an interest in a
Note and the right to receive the proceeds from the Note, as well as the
interest and principal payable to the holder of the Note) has the right to
request redemption prior to stated maturity of all or part of his or her
interest in such Notes, and the Issuer will be obligated to redeem such Notes.
However, during the period from August 22, 2002 through and including August 15,
2003, the "initial period", and during any twelve month period that ends on and
includes each subsequent August 15, each a "subsequent period", the Issuer will
not be obligated to redeem:

          o    on behalf of a deceased beneficial owner, any interest in the
               Notes that exceeds $25,000 principal amount, or

          o    interests in the Notes exceeding $6,000,000 in aggregate
               principal amount for all representatives requesting redemption
               upon the death of beneficial owners.

         The Issuer may, at its option, redeem interests of any deceased
beneficial owner in the Notes in the initial period or any subsequent period in
excess of the $25,000 limitation. Any such redemption by the Issuer, to the
extent it exceeds the $25,000 limitation for any deceased beneficial owner, will
not be included in the computation of the $6,000,000 aggregate limitation for
the Notes for the initial period or the applicable subsequent period, as the
case may be, or for any succeeding subsequent period. The Issuer may, at its
option, redeem interests of deceased beneficial owners in the Notes in the
initial period or any subsequent period in an aggregate principal amount
exceeding the $6,000,000 aggregate limitation. Any such redemption by the
Issuer, to the extent it exceeds the $6,000,000 aggregate limitation, will not
reduce the aggregate limitation for any subsequent period. If the Issuer decides
to redeem Notes in excess of the $25,000 limitation or the $6,000,000 aggregate
limitation, the Issuer will redeem such Notes redeemed in the order of receipt
of Redemption Requests (as defined herein) by the Trustee. If in the future the
Issuer issues additional Debt Securities that are consolidated with and form a
single series with these Notes, the $6,000,000 aggregate limitation would be
increased by 2% of the aggregate principal amount of the additional Notes.

         A representative of a deceased beneficial owner may initiate a request
for redemption at any time and in any principal amount, provided that the
principal amount is in integral multiples of $1,000. The representative must
deliver its request to the

                                      A-6

<PAGE>

participant (an institution that has an account with the Depositary for the
Notes) through which the deceased beneficial owner owned such interest, in form
satisfactory to the participant, together with evidence of the death of the
beneficial owner, evidence of the authority of the representative satisfactory
to the participant, any waivers, notices or certificates as may be required
under applicable state or federal law and any other evidence of the right to the
redemption as the participant requires. The request must specify the principal
amount of the interest in the Notes to be redeemed, which amount must be in
integral multiples of $1,000. Subject to the rules and arrangements of the
Depositary, the participant will then deliver to the Depositary a request for
redemption substantially in the form attached hereto as Annex A (a "Redemption
Request"). On receipt of a Redemption Request, it is the customary procedure of
the Depositary to forward the request to the Trustee. The Trustee is required to
maintain records with respect to Redemption Requests received by it, including
the date of receipt, the name of the participant filing the Redemption Request
and the status of each Redemption Request with respect to the $25,000 limitation
and the $6,000,000 aggregate limitation. The Trustee will immediately file with
the Issuer each Redemption Request it receives, together with the information
regarding the eligibility of the Redemption Request with respect to the $25,000
limitation and the $6,000,000 aggregate limitation. The Issuer, the Depositary
and the Trustee:

          o    may conclusively assume, without independent investigation, that
               the statements contained in each Redemption Request are true and
               correct; and

          o    will have no responsibility:

               o    for reviewing any documents submitted to the participant by
                    the representative or for determining whether the applicable
                    decedent is in fact the beneficial owner of the interest in
                    the Notes to be redeemed or is in fact deceased; and

               o    for determining whether the representative is duly
                    authorized to request redemption on behalf of the applicable
                    beneficial owner.

         Subject to the $25,000 limitation and the $6,000,000 aggregate
limitation, the Issuer will, after the death of any beneficial owner, redeem the
interest of such beneficial owner in the Notes within 60 days following the
Issuer's receipt of a Redemption Request from the Trustee. If Redemption
Requests exceed the aggregate limitation on Notes required to be redeemed during
the initial period or during any subsequent period, then excess Redemption
Requests will be applied, in the order received by the Trustee, to successive
subsequent periods, regardless of the number of subsequent periods required to
redeem such interests. The Issuer may, at any time, notify the Trustee that it
will

                                      A-7

<PAGE>

redeem, on a date not less than 30 nor more than 45 days after the date of such
notice, all or any lesser amount of Notes for which Redemption Requests have
been received but that are not then eligible for redemption by reason of the
$25,000 limitation or the $6,000,000 aggregate limitation. Such Notes will be
redeemed in the order of receipt of Redemption Requests by the Trustee.

         The Issuer will pay 100% of the principal amount plus any unpaid
interest accrued to (but excluding) the redemption date for the Notes it redeems
pursuant to a Redemption Request of a representative of a deceased beneficial
owner. Subject to arrangements with the Depositary, payment for interests in the
Notes to be redeemed will be made to the Depositary in the aggregate principal
amount specified in the Redemption Requests submitted to the Trustee by the
Depositary that are to be fulfilled in connection with such payment upon
presentation of the Notes to the Trustee for redemption. The principal amount of
any Notes acquired or redeemed by the Issuer other than by redemption at the
request of any representative of a deceased beneficial owner will not be
included in the computation of either the $25,000 limitation or the $6,000,000
aggregate limitation for the initial period or for any subsequent period.

         An interest in a Note held in tenancy by the entirety, by joint tenancy
or by tenants in common will be deemed to be held by a single beneficial owner,
and the death of a tenant by the entirety, joint tenant or tenant in common will
be deemed the death of a beneficial owner. The death of a person who, during his
or her lifetime, was entitled to substantially all of the rights of a beneficial
owner of an interest in the Notes will be deemed the death of the beneficial
owner, regardless of the recordation of the interest on the records of the
participant, if such rights can be established to the satisfaction of the
participant. Such interests will be deemed to exist in typical cases of nominee
ownership, ownership under the Uniform Gifts to Minors Act or the Uniform
Transfers to Minors Act, community property or other similar joint ownership
arrangements, including individual retirement accounts or Keogh H.R. 10 plans
maintained solely by or for the decedent or by or for the decedent and any
spouse, and trust and certain other arrangements where one person has
substantially all of the rights of a beneficial owner during such person's
lifetime.

         In the case of a Redemption Request that is presented on behalf of a
deceased beneficial owner and that has not been fulfilled at the time the Issuer
gives notice of its election to redeem the Notes in part, the Notes that are the
subject of such pending Redemption Request will be redeemed prior to any other
Notes.

         Any Redemption Request may be withdrawn by the person(s) presenting
such request upon delivery of a written request for withdrawal given by the
participant on behalf of such person(s) to the Depositary and by the Depositary
to the Trustee not less than 30 days prior to the redemption payment.

                                      A-8

<PAGE>

         During any time in which the Notes are not represented by a Registered
Global Security and are issued in definitive form:

          o    all references in this Note to participants and the Depositary,
               including the Depositary's governing rules, regulations and
               procedures, will not be applicable;

          o    all determinations that the participants are required to make as
               described in this Note will be made by the Issuer (including,
               without limitation, determining whether the applicable decedent
               is in fact the beneficial owner of the interest in the Notes to
               be redeemed or is in fact deceased and whether the representative
               is duly authorized to request redemption on behalf of the
               applicable beneficial owner); and

          o    all Redemption Requests, to be effective, must

               o    be delivered by the representative to the Trustee, with a
                    copy to the Issuer;

               o    if required by the Trustee and the Issuer, be in the form
                    specified by the Issuer (with appropriate changes mutually
                    agreed to by the Trustee and the Issuer to reflect the fact
                    that the Redemption Request is being executed by a
                    representative (including provision for signature
                    guarantees)); and

               o    be accompanied by the Note that is the subject of the
                    Redemption Request and, if applicable, a properly executed
                    assignment or endorsement, in addition to all documents that
                    are otherwise required to accompany a Redemption Request. If
                    the record interest in the Note is held by a nominee of the
                    deceased beneficial owner, a certificate or letter from the
                    nominee attesting to the deceased's ownership of a
                    beneficial interest in the Note must also be delivered.

         There is no provision for a sinking fund applicable to the Notes.

         The Indenture contains provisions for defeasance at any time of the
entire indebtedness of the Notes or certain covenants with respect to the Notes,
in each case upon compliance with certain conditions set forth therein.

         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 Note

                                      A-9

<PAGE>

(whether or not this Note 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 Note, 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.

                                      A-10

<PAGE>

                      ANNEX A -- FORM OF REDEMPTION REQUEST

                                    MBIA INC.

             $300,000,000 6.40% Senior Notes due 2022 (the "Notes")

                             CUSIP NO.: 55262C AH 3

         The undersigned,                     (the "Participant"), does hereby
certify, pursuant to the provisions of the certain Senior Indenture dated as of
August 1, 1990, as amended, modified or supplemented from time to time (the
"Indenture"), between MBIA Inc. (the "Issuer") and Bank One Trust Company (as
successor in interest to The First National Bank of Chicago), as trustee (the
"Trustee"), to The Depository Trust Company (the "Depositary"), to the Issuer
and to the Trustee that:

          1. [Name of deceased Beneficial Owner] is deceased.

          2. [Name of deceased Beneficial Owner] had a $ interest in the
     above-referenced Notes.

          3. [Name of Representative] is [Beneficial Owner's personal
     representative/other person authorized to represent the estate of the
     Beneficial Owner/surviving joint tenant/surviving tenant by the
     entirety/trustee of a trust] of [Name of deceased Beneficial Owner] and has
     delivered to the undersigned a request for redemption in form satisfactory
     to the undersigned, requesting that $ in principal amount of said Notes be
     redeemed pursuant to said Indenture. The documents accompanying such
     request, all of which are in proper form, are in all respects satisfactory
     to the undersigned and [Name of Representative] is entitled to have the
     Notes to which this redemption request relates redeemed.

          4. The Participant holds the interest in the Notes with respect to
     which this redemption request is being made on behalf of [Name of deceased
     Beneficial Owner].

          5. The Participant hereby certifies that it will indemnify and hold
     harmless the Depository, the Trustee and the Issuer (including their
     respective officers, directors, agents, attorneys and employees), against
     all damages, losses, costs, expenses (including reasonable attorneys' and
     accountants' fees), obligations, claims or liability incurred by the
     indemnified party or parties as a result of or in connection with the
     redemption of Notes to which this redemption request relates. The
     Participant will, at the request of the Issuer, forward to the Issuer a
     copy of the documents submitted by [Name of Representative] in support of
     the request for redemption.

                                      A-11

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this redemption
request as of             , 20__.

                                              [PARTICIPANT NAME]

                                              By:
                                                 ------------------------------
                                                  Name:
                                                  Title:

                                      A-12<PAGE>

                                                                    EXHIBIT 4.05

         If this Senior Note ("Note") is registered in the name of The
Depository Trust Company (the "Depositary") (55 Water Street, New York, New
York) or its nominee, this Note 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 and until this Note is exchanged in whole or in part for Notes in
definitive form. Unless this certificate is presented by an authorized
representative of the Depositary to the Issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
representative of the Depositary and any payment is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.

         This Note is a Registered Global Security within the meaning of the
Indenture referred to on the reverse hereof. Except as otherwise provided in
Section 2.12 of the Indenture referred to on the reverse hereof, this Registered
Global Security may be transferred, in whole but not in part, by the Depositary
to a nominee of such Depositary or by a nominee of such Depositary or by such
Depositary or any such nominee to a successor Depositary or to a nominee of such
successor Depositary. Unless this Registered Global Security is presented by an
authorized representative of the Depositary to the Issuer or its agent for
registration of transfer, exchange or payment, and in the case of any transfer
or exchange, any Registered Global Security issued in exchange therefor is
registered in the name of the Depositary or such other name as requested by an
authorized representative of the Depositary and, in the case of any payment,
such payment is made to the Depositary or the Depositary's nominee, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL since Cede & Co. has an interest herein.

REGISTERED
No. A-1                                                           $300,000,000
CUSIP:  55262C AH 3

                                    MBIA INC.

                           6.40% Senior Notes due 2022

         MBIA Inc., a Connecticut corporation (the "Issuer"), for value
received, hereby promises to pay to CEDE & CO., or its registered assigns, at
the office or agency of the

<PAGE>

Issuer in the Borough of Manhattan, The City of New York, the principal sum of
THREE HUNDRED MILLION Dollars ($300,000,000) on August 15, 2022, 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 in arrears on February 15, May 15, August 15 and November 15 of each
year, commencing November 15, 2002, each an "interest payment date", and at
maturity or redemption, on said principal sum, in like coin or currency, at the
rate of 6.40% per annum. Interest on this Note will accrue from the most recent
interest payment date to which interest has been paid or, if no interest has
been paid on this Note, from August 22, 2002, until payment of said principal
sum has been made or duly provided for at said office or agency. If any Notes of
this series are no longer Registered Global Securities, interest shall be paid
by check mailed to or upon the written order of the Holders entitled thereto as
they shall appear on the registry books of the Issuer. If an interest payment
date falls on a day that is not a Business Day, interest will be payable on the
next succeeding Business Day with the same force and effect as if made on such
interest payment date. Interest accrued on the Notes will, subject to certain
exceptions provided in the Indenture referred to on the reverse hereof, be paid
to the person in whose name this Note is registered at the close of business on
the date fifteen calendar days prior to such interest payment date, whether or
not such date is a Business Day, provided that interest paid at maturity or
redemption will be paid to the person to whom principal is payable as a result
of maturity or redemption, as the case may be. Interest will be calculated on
the basis of a 360-day year, consisting of twelve 30-day months.

         Reference is made to the further provisions of this Note 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 Note 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.

                                       2

<PAGE>

         IN WITNESS WHEREOF, MBIA Inc. has caused this instrument to be signed
by its duly authorized officers and has caused its corporate seal to be affixed
hereunto or imprinted hereon.

Dated:  August 22, 2002

                                       MBIA INC.

                                       By:
                                          ------------------------------------

                                       By:
                                          ------------------------------------

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Notes of the series designated herein referred to in
the within-mentioned Indenture.

                                       BANK ONE TRUST COMPANY, N.A. (as
                                       successor in interest to The First
                                       National Bank of Chicago), as Trustee

                                       By:
                                          ------------------------------------
                                             Authorized Officer

                                       3

<PAGE>

                             [REVERSE SIDE OF NOTE]

                                    MBIA INC.

                           6.40% Senior Notes due 2022

         This Note 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 August 1, 1990 (the "Base
Indenture"), as supplemented by the First Supplemental Indenture, dated as of
August 22, 2002 (the "Supplemental Indenture" and together with the Base
Indenture, the "Indenture"), duly executed and delivered by the Issuer to Bank
One Trust Company, N.A. (as successor in interest to The First National Bank of
Chicago), 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 Notes. Debt Securities issued
under the Indenture 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 provided in the
Indenture. This Note is one of a series designated as the 6.40% Senior Notes due
2022 of the Issuer (the "Notes"), in aggregate principal amount of $300,000,000,
the terms of which were established in the Supplemental Indenture, pursuant to
Section 2.3 of the Base Indenture. The Issuer may, from time to time, without
the consent of existing Holders of Notes, create and issue additional Debt
Securities having the same terms and conditions as the Notes in all respects,
except for issue date, issue price and, if applicable, the first payment of
interest thereon. Additional Debt Securities issued in this manner will be
consolidated with and will form a single series with the previously outstanding
Notes.

         In case an Event of Default, as defined in the Indenture, with respect
to the Notes 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, with the consent of the Holders of more than 50% in aggregate principal
amount of the Debt Securities at the time Outstanding of all series to be
affected (voting as one class), evidenced as provided in the Indenture, 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
                                         --------  -------

                                       4

<PAGE>

supplemental indenture shall (i) extend the final maturity of any Debt
Securities, 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 reduce
any amount payable on redemption thereof, 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 Holders of which are required to consent to
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) waive any such past default or Event of Default
and its consequences. The preceding sentence shall not, however, apply to a
default in respect of a covenant or provision of the Indenture which cannot be
modified or amended without the consent of the Holder of each Debt Security
affected. Any such consent or waiver by the Holder of this Note (unless revoked
as provided in the Indenture) shall be conclusive and binding upon such Holder
and upon all future Holders and owners of this Note and any Note which may be
issued in exchange or substitution herefor, irrespective of whether or not any
notation thereof is made upon this Note or such other Notes.

         No reference herein to the Indenture and no provision of this Note 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 Note in the manner, at the respective times, at the rate and in the coin
or currency herein prescribed.

         The Notes are issuable in registered form without coupons in
denominations of $1,000 and integral multiples thereof. Upon presentment at the
office or agency of the Issuer in the Borough of Manhattan, The City of New
York, in the manner and subject to the limitations provided in the Indenture,
but without the payment of any service charge, Notes may be exchanged for a like
aggregate principal amount of Notes of other authorized denominations.

         The Issuer will have the right to redeem the Notes, in whole or in
part, on or at any time after August 15, 2006, at a redemption price equal to
100% of the principal amount of the Notes to be redeemed, plus accrued and
unpaid interest to the redemption date. The Issuer will provide not less than 30
nor more than 45 days' notice mailed to each Holder of the Notes to be redeemed.
If the redemption notice is given and funds deposited as required, then interest
will cease to accrue on and after the redemption date on the Notes or portions
of such Notes called for redemption. In the event that any redemption date is
not a Business Day, the Issuer will pay the redemption price on the next
Business Day without any interest or other payment due to the delay.

                                       5

<PAGE>

         Unless the Notes have been declared due and payable prior to their
maturity by reason of an Event of Default under the Indenture, or have been
previously redeemed or otherwise repaid, the personal representative or other
person authorized to represent a deceased beneficial owner of Notes (that is,
one who has the right to sell, transfer or otherwise dispose of an interest in a
Note and the right to receive the proceeds from the Note, as well as the
interest and principal payable to the holder of the Note) has the right to
request redemption prior to stated maturity of all or part of his or her
interest in such Notes, and the Issuer will be obligated to redeem such Notes.
However, during the period from August 22, 2002 through and including August 15,
2003, the "initial period", and during any twelve month period that ends on and
includes each subsequent August 15, each a "subsequent period", the Issuer will
not be obligated to redeem:

          o    on behalf of a deceased beneficial owner, any interest in the
               Notes that exceeds $25,000 principal amount, or

          o    interests in the Notes exceeding $6,000,000 in aggregate
               principal amount for all representatives requesting redemption
               upon the death of beneficial owners.

         The Issuer may, at its option, redeem interests of any deceased
beneficial owner in the Notes in the initial period or any subsequent period in
excess of the $25,000 limitation. Any such redemption by the Issuer, to the
extent it exceeds the $25,000 limitation for any deceased beneficial owner, will
not be included in the computation of the $6,000,000 aggregate limitation for
the Notes for the initial period or the applicable subsequent period, as the
case may be, or for any succeeding subsequent period. The Issuer may, at its
option, redeem interests of deceased beneficial owners in the Notes in the
initial period or any subsequent period in an aggregate principal amount
exceeding the $6,000,000 aggregate limitation. Any such redemption by the
Issuer, to the extent it exceeds the $6,000,000 aggregate limitation, will not
reduce the aggregate limitation for any subsequent period. If the Issuer decides
to redeem Notes in excess of the $25,000 limitation or the $6,000,000 aggregate
limitation, the Issuer will redeem such Notes redeemed in the order of receipt
of Redemption Requests (as defined herein) by the Trustee. If in the future the
Issuer issues additional Debt Securities that are consolidated with and form a
single series with these Notes, the $6,000,000 aggregate limitation would be
increased by 2% of the aggregate principal amount of the additional Notes.

         A representative of a deceased beneficial owner may initiate a request
for redemption at any time and in any principal amount, provided that the
principal amount is in integral multiples of $1,000. The representative must
deliver its request to the participant (an institution that has an account with
the Depositary for the Notes) through which the deceased beneficial owner owned
such interest, in form satisfactory to the participant, together with evidence
of the death of the beneficial owner, evidence of the authority of the
representative satisfactory to the participant, any waivers, notices or

                                       6

<PAGE>

certificates as may be required under applicable state or federal law and any
other evidence of the right to the redemption as the participant requires. The
request must specify the principal amount of the interest in the Notes to be
redeemed, which amount must be in integral multiples of $1,000. Subject to the
rules and arrangements of the Depositary, the participant will then deliver to
the Depositary a request for redemption substantially in the form attached
hereto as Annex A (a "Redemption Request"). On receipt of a Redemption Request,
it is the customary procedure of the Depositary to forward the request to the
Trustee. The Trustee is required to maintain records with respect to Redemption
Requests received by it, including the date of receipt, the name of the
participant filing the Redemption Request and the status of each Redemption
Request with respect to the $25,000 limitation and the $6,000,000 aggregate
limitation. The Trustee will immediately file with the Issuer each Redemption
Request it receives, together with the information regarding the eligibility of
the Redemption Request with respect to the $25,000 limitation and the $6,000,000
aggregate limitation. The Issuer, the Depositary and the Trustee:

          o    may conclusively assume, without independent investigation, that
               the statements contained in each Redemption Request are true and
               correct; and

          o    will have no responsibility:

               o    for reviewing any documents submitted to the participant by
                    the representative or for determining whether the applicable
                    decedent is in fact the beneficial owner of the interest in
                    the Notes to be redeemed or is in fact deceased; and

               o    for determining whether the representative is duly
                    authorized to request redemption on behalf of the applicable
                    beneficial owner.

         Subject to the $25,000 limitation and the $6,000,000 aggregate
limitation, the Issuer will, after the death of any beneficial owner, redeem the
interest of such beneficial owner in the Notes within 60 days following the
Issuer's receipt of a Redemption Request from the Trustee. If Redemption
Requests exceed the aggregate limitation on Notes required to be redeemed during
the initial period or during any subsequent period, then excess Redemption
Requests will be applied, in the order received by the Trustee, to successive
subsequent periods, regardless of the number of subsequent periods required to
redeem such interests. The Issuer may, at any time, notify the Trustee that it
will redeem, on a date not less than 30 nor more than 45 days after the date of
such notice, all or any lesser amount of Notes for which Redemption Requests
have been received but that are not then eligible for redemption by reason of
the $25,000 limitation or the $6,000,000 aggregate limitation. Such Notes will
be redeemed in the order of receipt of Redemption Requests by the Trustee.

                                       7

<PAGE>

         The Issuer will pay 100% of the principal amount plus any unpaid
interest accrued to (but excluding) the redemption date for the Notes it redeems
pursuant to a Redemption Request of a representative of a deceased beneficial
owner. Subject to arrangements with the Depositary, payment for interests in the
Notes to be redeemed will be made to the Depositary in the aggregate principal
amount specified in the Redemption Requests submitted to the Trustee by the
Depositary that are to be fulfilled in connection with such payment upon
presentation of the Notes to the Trustee for redemption. The principal amount of
any Notes acquired or redeemed by the Issuer other than by redemption at the
request of any representative of a deceased beneficial owner will not be
included in the computation of either the $25,000 limitation or the $6,000,000
aggregate limitation for the initial period or for any subsequent period.

         An interest in a Note held in tenancy by the entirety, by joint tenancy
or by tenants in common will be deemed to be held by a single beneficial owner,
and the death of a tenant by the entirety, joint tenant or tenant in common will
be deemed the death of a beneficial owner. The death of a person who, during his
or her lifetime, was entitled to substantially all of the rights of a beneficial
owner of an interest in the Notes will be deemed the death of the beneficial
owner, regardless of the recordation of the interest on the records of the
participant, if such rights can be established to the satisfaction of the
participant. Such interests will be deemed to exist in typical cases of nominee
ownership, ownership under the Uniform Gifts to Minors Act or the Uniform
Transfers to Minors Act, community property or other similar joint ownership
arrangements, including individual retirement accounts or Keogh H.R. 10 plans
maintained solely by or for the decedent or by or for the decedent and any
spouse, and trust and certain other arrangements where one person has
substantially all of the rights of a beneficial owner during such person's
lifetime.

         In the case of a Redemption Request that is presented on behalf of a
deceased beneficial owner and that has not been fulfilled at the time the Issuer
gives notice of its election to redeem the Notes in part, the Notes that are the
subject of such pending Redemption Request will be redeemed prior to any other
Notes.

         Any Redemption Request may be withdrawn by the person(s) presenting
such request upon delivery of a written request for withdrawal given by the
participant on behalf of such person(s) to the Depositary and by the Depositary
to the Trustee not less than 30 days prior to the redemption payment.

         During any time in which the Notes are not represented by a Registered
Global Security and are issued in definitive form:

          o    all references in this Note to participants and the Depositary,
               including the Depositary's governing rules, regulations and
               procedures, will not be applicable;

                                       8

<PAGE>

          o    all determinations that the participants are required to make as
               described in this Note will be made by the Issuer (including,
               without limitation, determining whether the applicable decedent
               is in fact the beneficial owner of the interest in the Notes to
               be redeemed or is in fact deceased and whether the representative
               is duly authorized to request redemption on behalf of the
               applicable beneficial owner); and

          o    all Redemption Requests, to be effective, must

               o    be delivered by the representative to the Trustee, with a
                    copy to the Issuer;

               o    if required by the Trustee and the Issuer, be in the form
                    specified by the Issuer (with appropriate changes mutually
                    agreed to by the Trustee and the Issuer to reflect the fact
                    that the Redemption Request is being executed by a
                    representative (including provision for signature
                    guarantees)); and

               o    be accompanied by the Note that is the subject of the
                    Redemption Request and, if applicable, a properly executed
                    assignment or endorsement, in addition to all documents that
                    are otherwise required to accompany a Redemption Request. If
                    the record interest in the Note is held by a nominee of the
                    deceased beneficial owner, a certificate or letter from the
                    nominee attesting to the deceased's ownership of a
                    beneficial interest in the Note must also be delivered.

         There is no provision for a sinking fund applicable to the Notes.

         The Indenture contains provisions for defeasance at any time of the
entire indebtedness of the Notes or certain covenants with respect to the Notes,
in each case upon compliance with certain conditions set forth therein.

         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 Note (whether or not this Note 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.

                                       9

<PAGE>

         No recourse under or upon any obligation, covenant or agreement of the
Issuer in the Indenture or any indenture supplemental thereto or in any Note, 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.

                                       10

<PAGE>

                      ANNEX A -- FORM OF REDEMPTION REQUEST

                                    MBIA INC.

             $300,000,000 6.40% Senior Notes due 2022 (the "Notes")

                             CUSIP NO.: 55262C AH 3

         The undersigned,              (the "Participant"), does hereby certify,
pursuant to the provisions of the certain Senior Indenture dated as of August 1,
1990, as amended, modified or supplemented from time to time (the "Indenture"),
between MBIA Inc. (the "Issuer") and Bank One Trust Company (as successor in
interest to The First National Bank of Chicago), as trustee (the "Trustee"), to
The Depository Trust Company (the "Depositary"), to the Issuer and to the
Trustee that:

          1. [Name of deceased Beneficial Owner] is deceased.

          2. [Name of deceased Beneficial Owner] had a $        interest in the
     above-referenced Notes.

          3. [Name of Representative] is [Beneficial Owner's personal
     representative/other person authorized to represent the estate of the
     Beneficial Owner/surviving joint tenant/surviving tenant by the
     entirety/trustee of a trust] of [Name of deceased Beneficial Owner] and has
     delivered to the undersigned a request for redemption in form satisfactory
     to the undersigned, requesting that $ in principal amount of said Notes be
     redeemed pursuant to said Indenture. The documents accompanying such
     request, all of which are in proper form, are in all respects satisfactory
     to the undersigned and [Name of Representative] is entitled to have the
     Notes to which this redemption request relates redeemed.

          4. The Participant holds the interest in the Notes with respect to
     which this redemption request is being made on behalf of [Name of deceased
     Beneficial Owner].

          5. The Participant hereby certifies that it will indemnify and hold
     harmless the Depository, the Trustee and the Issuer (including their
     respective officers, directors, agents, attorneys and employees), against
     all damages, losses, costs, expenses (including reasonable attorneys' and
     accountants' fees), obligations, claims or liability incurred by the
     indemnified party or parties as a result of or in connection with the
     redemption of Notes to which this redemption request relates. The
     Participant will, at the request of the Issuer, forward to the Issuer a
     copy of the documents submitted by [Name of Representative] in support of
     the request for redemption.

         IN WITNESS WHEREOF, the undersigned has executed this redemption
request as of             , 20__.

                                                [PARTICIPANT NAME]

                                                By:
                                                   -----------------------------
                                                    Name:
                                                    Title:

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